Gold and silver shares have had quite a ride higher since the 15th
of December when the Daily
Sentiment Indicator from Jake Bernstein called the bottom to the day.
Anyone who reads my site knows that I am a contrarian. I loved gold in
December because everyone hated it. But I'm getting a little nervous now
because it's getting a trifle too popular. The speculators are running up the
spec longs in the COTs and I would be a lot happier if we had a correction
for a month or so.
So I have been looking for some low risk, high potential stocks that are
cheap now and would be even better if they went down. I found two that have
just released excellent results and the market still doesn't get it.
I wrote about RJK Explorations Ltd. (RJX.A:TSX.V) on the 18th
of January and told my readers to look out for drill results soon. The
shares were $0.15 then giving the company a $2.1 million market cap. I said
it was cheap.
On the 7th of February RJK released results showing excellent results from three
of the four-hole program including 0.5 meters of 36.84 g/t au in hole 17-01,
2.5 meters of 9.05 g/t au in hole 17-02 and 14.0 meters of 5.37 g/t gold in
hole 17-04. Those are what you want to see in a drill program. In
spite of those results, the company still has a market cap of only $3 million.
Buy cheap, sell dear.
It's still cheap but not nearly as cheap as it was then. They do have a
183,000 ounce gold resource already so ignoring the great results announced
on the 7th of February, the company has high grade gold at $20 an
ounce in the ground. There isn't much downside.
Another company I follow and own is named Winston Gold
Mining Corp. (WGC:CNX; WGMCF:OTCQB)) and is drilling their
primary project in the Winston Gold District located some 18 miles
southeast of Helena, Montana. The site has two former gold mines called the
Custer Mine and the Edna Mine.
Management intends to drill to develop a resource sufficient to begin
trial mining of somewhere between 150 to 230 tons per day. Prior historic
production of 100,000 ounces showed a production grade of 0.67 ounces per ton
or 22.8 g/t.
Winston Gold holds a lease on the property that requires a yearly payment
of $42,000 and exploration expenses of $200,000 yearly. There is a 2-3% NSR
on production based on either patented or unpatented ground.
The company released excellent results on the 9th of
February showing 1.34 meters of 18.8 g/t gold or 4.4 feet of 0.55 ozt in hole
1720. This was on top of other results back on January 23rd
including results from hole 1633 that showed 0.7 meters of 44.57 g/t gold or
2.3 feet of 1.3 ozt.
I started talking to the company a year or so ago, long before they became
an advertiser. I know one of their directors very well, Ben Porterfield.
Back in 2006 the renowned Bob Bishop and I flew up to Alaska to visit a new
company spun off from the Alaska assets of AngloGold called International
Tower Hill Mines Ltd. (ITH:TSX; THM:NYSE.MKT).
One of the projects we visited was the Terra Gold project where we literally broke off pieces of
10-20 ounce gold. It was remarkable material. The ugly white rock was
speckled with pinhead size pieces of gold (see image above).
Ben Porterfield and his partner, a former Korea USMC vet who was as deaf
as a stump, were mining 10 ounces a day from the vein with equipment you
couldn't give away to a Goodwill thrift shop. I estimated at the time that
you could replace the equipment for $10,000 and I was being expansive. I made
up my mind at the time that if he ever got involved with another small-scale
startup, I wanted to be part of it.
And interestingly enough, another company did a deal on Terra with International
Tower Hill and blew millions of dollars and didn't produce as much as Ben and
his partner did operating with little more than hand equipment. That was the
easiest to mine gold that I ever saw and two guys with $10,000 worth of equipment
could make money and a company with millions couldn't.
Winston Gold has been through an interesting year. The company peaked at
$0.63 in October and with the decline in gold prices and a big shareholder
unloading shares just as fast as he could, the shares dropped to $0.115 in
late January. I participated in the PP at $0.40 in November and thought the
shares were reasonably priced. When they tumbled to the new low three months
later, I loaded up the boat. If you like something at $0.40 and it goes to
$0.115 you have to like it more. Nothing at all has changed and the drill
results validate their theory. I believe they will go into production and I
want to be a shareholder when they do.
RJK and Winston Gold are advertisers and I have bought shares in the open
market and participated in the PP with Winston Gold. Please do your own due
diligence. I share in neither your profit nor your losses.
RJK Explorations RJX.A-V $.20 (Feb 09, 2017)
RJKAF-OTCBB 14.9 million shares
RJK Explorations website
Winston Gold WGC-C $.13 (Feb 09, 2017)
WGMCF-OTCBB 79.5 million shares
Winston Gold website
Bob and Barb Moriarty brought 321gold.com
to the Internet almost 16 years ago. They later added 321energy.com to
cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both
sites feature articles, editorial opinions, pricing figures and updates on
current events affecting both sectors. Previously, Moriarty was a Marine F-4B
and O-1 pilot with more than 832 missions in Vietnam. He holds 14
international aviation records.
Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own
shares of the following companies mentioned in this article: RJK Explorations
and Winston Gold. RJK Explorations and Winston Gold are advertisers on 321
Gold. I determined which companies would be included in this article based on
my research and understanding of the sector.
2) The following companies mentioned in the article are sponsors of
Streetwise Reports: None. Streetwise Reports does not accept stock in exchange
for its services. The information provided above is for informational
purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not
of Streetwise Reports or its officers. The author is wholly responsible for
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Image supplied by Bob Moriarty.
