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Gold Sale in Timmins, $9 an Ounce

Bob Moriarty
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Nov 19, 2012

I continue to be amazed at the prices of gold companies today. It really looks as if we had a major blowout last week with investors throwing out the baby with the bathwater. Gold is in excess of $1700 and silver in excess of $32 and resource investors are digging through dumpsters looking for rusty razor blades with which to slice their wrists. Are they nuts?

I got a call on Friday telling me about yet another absurdly priced gold stock, that of Moneta Porcupine (ME-T) with a market cap of about $37 million, a 43-101 resource of 4.29 million ounces, a PEA released two weeks ago showing a net present value of $748 million with a gold price of $1,350. If you use what is probably a more realistic figure for gold at $1,700, the NPV jumps to a blistering $1.5 billion. Why do I have this sneaking feeling that a market cap that is only 5% of NPV isn’t going to last long.

This is in Timmins for crying out loud. It’s one of the best mining camps in Canada; this isn’t on the moon or in a scene of “Dancing with the Penguins.” They plan on producing 288,000 ounces of gold a year with a 12-year mine life.

The company has about $2 million in the bank. Naturally they will have to do a financing in the next few months but with the Sprott Physical Silver Trust hitting a new all time low last Thursday, resource investors should be backing up the pickup and loading up. Gold shares are on sale but they won’t be for long.

I’m not a big fan of the name, I’m sure it means something to someone but it’s not me. I’m not even real sure of how it is pronounced. I like to feel that I can at least pronounce the name of a stock that is going to make my fortune. I’m not totally comfortable with the 167 million shares. They could do a roll back when they do their next financing and it wouldn’t hurt them at all.

We know the world is on the edge of a cliff financially and it’s going to be a long drop to the bottom. I’m only amazed that the crash hasn’t already happened. But it’s going to happen and at some point there is going to be a rush to real safety. The bond market is about to blow and when it does the crash starts in earnest. Buying gold in the ground for $9 is going to look like pretty wise investing very soon.

The shares are up 50% since the end of August in anticipation of the 43-110 and PEA but they aren’t anywhere near where they are going. Investors just don’t get it yet.

Moneta is not an advertiser, I don’t yet own shares and all the information I have is on their website. I can count and if you can, you should be looking at ME-T.

Moneta Porcupine
ME-T $.225 (Nov 16, 2012)
MPUCF-OTCBB 167.7 million shares
Moneta website

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Bob Moriarty
President: 321gold
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