Source: Maurice Jackson for Streetwise Reports 11/19/2019
Bob Moriarty of 321gold, in conversation with Maurice Jackson of Proven and Probable, expounds on his views of geopolitics, and discusses metal prices as well as a number of mining companies that he finds attractive right now.
Maurice Jackson: Joining us for a conversation is the founder of the websites 321Gold and 321energy.com, and a world-famous best-selling author, Bob Moriarty.
Mr. Moriarty is going to share what we believe is some critical information for you to know and to understand regarding price movements in precious metals, weak hands buying at tops and selling it bottoms, and how you may benefit financially. The world is in a tricky spot. We have political instability in the U.S. Protests are going on globally, and central banks are robbing citizens through currency debasement. We have sovereign and bank debt at all-time highs, but there is hope for the individual and that’s why we have you on the program here today. Bob, I know you study the markets and stay informed on geopolitics, what has your attention at the moment and why?
Bob Moriarty: Oh, boy, that’s a tough question. There are so many Black Swans circling, it’s scary. And I have been saying for six months that we have would have a crash in October. We kinda did. Okay, I’m going to say that I was wrong but I wasn’t all that wrong. In middle September, the Federal Reserve came out started flooding the banking system with cash. And the only reason they would possibly do that was something was seriously wrong. I think I was absolutely on track. I think that if the Federal Reserve had not poured hundred dollar bills onto a bonfire, I think we would have a crash. That’s one of those good news, bad news stories. The good news is, we didn’t have to crash.
The bad news is we’re going to have a crash and they just made it worse. You use the term debasing. They’re literally crapping on money. They’re destroying money. And the strange thing is people think I’m a gold bug. And I’m actually not a gold bug. I just like honest money. And when the only alternative is dishonest money, you have to go back to what has been the savior of individuals and cities and countries for 5,000 years, and that’s gold and silver.
Maurice Jackson: Now Bob, I want to stop there for a second here. We made it sound like printing has stopped, but actually they’re still printing and they’re not giving it a name. Is that correct?
Bob Moriarty: Well, that’s what’s so funny. Yeah, they did give it a name.
Maurice Jackson: What is that?
Bob Moriarty: The name is: It’s Not QE. It’s one of those things like, if it ain’t QE, what is it? It’s NOT QE. So it walks like a duck and it talks like a duck and it quacks like a duck, but it’s NOT DUCK. Oh, I get it, no problem.
Maurice Jackson: That’s easy logic to follow here. Bob, I want to share a quote from one of your most recent book, I should actually say this become my favorite book now, which is Basic Investing in Resource Stocks in which you stated on P. 17: “Young people today seem to think that their most important job is to save the world. Screw saving the world, save your family and yourself by taking the planet’s oldest and most dependable insurance plan.”
Twofold question here. What is the planet’s oldest and most dependable insurance plan? And why do so few people own it?
Bob Moriarty: Honest money. And here’s what’s crazy because I think it’s a bad question. When you say why did so few people own it? That implies that that’s a bad thing. And anybody who’s read my books understands that I’m a contrarian and a very successful contrarian. I love it when people don’t own something. That’s when I do want to own it. Making money in resources or investing in anything is as simple as buying when things are cheap and selling when they’re expensive. Now, if you want to be part of the herd, you’re going to get slaughtered. You’re always going to be buying at tops and selling at bottoms. I don’t know why people do that. But they want to be part of the herd, and they keep getting slaughtered. And they think it’s manipulation and it’s a conspiracy and it’s the evil banks and it’s the government.
You have alternatives, and if you pay attention, there’s so much good information now. In 1929, 321Gold didn’t exist. But one group knew what was going on. Joseph Kennedy knew going on, but the average guy at street did not have access to information. The average guy in the street today has access to more information they’ve ever had in history. So there’s no reason to be part of the herd. And there’s no reason to give your money away. Now, investing in gold and silver right now is actually not an investment. It’s actually an insurance policy, and the house is burning down. I think the number for the Federal Reserve pumping money into the system, I think they have pumped $350 or $360 billion in the system. And unbeknownst to most Americans, the EU is doing the same thing. Something is seriously wrong. Something that’s going to blow up, it will probably be Deutsche Bank, and it is going to be the biggest financial collapse in history. And you’re either prepared for it or not. If you don’t own some gold and silver, you’re going to be in trouble.
Maurice Jackson: Let’s take this conversation back two years ago, you talked about buying low and selling high. You and I were in Japan and we were at a site visit in Irving Resources. And we were in the taxi. I don’t know if you recall this going back to the airport, and you shared with me, Maurice, rhodium is a great buying opportunity. And at that time, rhodium was around, I want to say $850–$900, if I’m not mistaken, and the price of rhodium today, two years later, is over $5,500. That’s exactly why we have you on this program here, sir.
Bob Moriarty: Well, here’s what it’s interesting and what you have to do, because you had the alternative of investing in gold, or silver, or rhodium, or palladium, or platinum. Now of those five alternatives, which is gone up the most?
Maurice Jackson: And it was rhodium.
Bob Moriarty: It’s that simple. Okay, everybody wants to make it complicated. You don’t have to know where the price of rhodium is going or where the price of gold it’s going or where the price of silver it’s going. All you have to do is figure out what’s cheap. Now of those five metals today is rhodium cheap?
Maurice Jackson: No, sir.
Bob Moriarty: Is palladium cheap?
Maurice Jackson: It is not, sir.
Bob Moriarty: Is gold cheap?
Maurice Jackson: It’s not, no I’m going to say no on that one as well.
Bob Moriarty: Okay, is silver cheap?
Maurice Jackson: That is a definite yes, sir.
Bob Moriarty: Is platinum cheap?
Maurice Jackson: That is an absolute, sir.
Bob Moriarty: Okay. So the number one thing to buy today would be platinum, and the number one thing to sell today would be rhodium. Now you can make it complicated if you want. You could talk about diesel engines. You could talk about South Africa, and you could talk about problems with Russia. You could talk about production in Zimbabwe, it’s all bull. What’s cheap and what’s expensive? Buy what’s cheap. Sell what is expensive. Funny thing is, you know, of course, Barbara died. I was going through boxes of stuff that I hadn’t gone through for several years. And I came up with a rhodium bar and I thought rhodium is good. So I traded the rhodium bar for 5 ounces of platinum and I was absolutely thrilled to get it. Because when I bought it, rhodium was half the price of platinum. And when I sold, it was 10 times more valuable in relative terms. Investing is not complicated. Don’t let anybody make it complicated. It’s simple.
Maurice Jackson: I think we did a similar transaction and I think I got 100 ounces of silver and three ounces I believe of platinum of 3.1, 3.2 somewhere in there from that same transaction. So speaking of that, let’s introduce the concept of buying low and selling high for those that purchase physical precious metals. You’ve alluded to it but can you share the concept of using ratios to your advantage and what buying opportunities like I said, you already shared them with us. But let’s put those ratios into perspective for readers so they understand what to buy, when to buy and when to sell.
Bob Moriarty: Okay, now, that’s a good point. I’ve a done a lot of research in silver versus gold. Now in the last hundred years, for 50 of those years, silver was money. For the last 50 years, it was not money. The hundred year average ratio between silver and gold was 53 to 1. It got as low as 17 to 1, in January of 1980 when gold spiked to $875 and it got its high to 100 to 1 in 1993.
Recently, it got as high as 94 to 1. Now, these are all numbers that are in my book, and it’s very easy for people to take a look at the chart, the source is online where you can to follow it. But basically what that means is when the ratio is above 53 to 1, silver is cheap, gold is expensive. When it’s below 53 to 1, gold is cheap and silver is expensive. And you could trade the ratio every two or three years and consistently make money and add to your position. Everybody wants to talk about interest rates and the Fed and there’s going to be a coup against Trump and the Democrats and Jeffrey Epstein, it’s all bull. What’s cheap, what’s expensive. I think the ratio right now it’s about 82 or 83 to 1 so we’re still very cheap.
The best metal right now is platinum. Platinum is very cheap against rhodium, very cheap against palladium, and very historically cheap against gold. So I take the platinum in exact same position now that rhodium was when you and I were talking about it in the taxi.
Maurice Jackson: Let’s pause for second; you said something important, I think a lot of people skip over. You reference that you sold your rhodium and got ounces of platinum. You didn’t say something important that I often hear people say is they sold their rhodium and got cash. That’s very important.
Bob Moriarty: Yeah, it is. Of course.
Maurice Jackson: I mean, no, what I’m getting at is that most people, they don’t understand the importance of the precious metals and you’re actually making that insurance plan larger in weight in ounces whereas the average person, I think what they do is they if they come in here to the sector they purchase a metal, and it appreciates, they sell it into (cash) the debased currency, that currency is the debasing right now. So that’s a very critical point that I want our audience members to take note of is that you’re selling the metal to get another metal that is on sale.
Bob Moriarty: Well, and the key is how I view the metals. The metals are my insurance policy. And believe me, I can reach in my pocket or I can go to my bag that I carry with me all the time. I always have some physical gold. I always have some physical silver, and I always have some physical platinum. That’s just plain old common sense. There are a lot of people who believe Deutsche Bank is going to go under. Mathematically Deutsche Bank has to go under and their derivatives position is so high that it’s going to do exactly the same thing that the collapse of Credit-Anstalt did in 1931. It’s going to drag the entire financial system with it. If you don’t have two to three months of cash, or two to three months of physical silver or gold or platinum, you are putting literally your life at risk.
I don’t know how people are going to cope with the banks closing, but the chance of that happening is excellent. And you just need to be prepared for it. You need to be prepared for it emotionally, you need to be prepared for it and having some extra food. We live in extremely dangerous times.
Maurice Jackson: Let’s discuss President Trump.
Bob Moriarty: Okay. Can we describe what the FBI and the DOJ and the CIA have done against Trump as coup d’état that’s been in progress since 2016.
Maurice Jackson: Yes.
Bob Moriarty: Okay. I don’t care if you’re a Democrat, or Republican, or if you don’t vote or don’t care at all, no society has ever improved once the Deep State starts deciding they’re going to elect who the new emperor is going to be. If you want to understand what’s going on today, you need to go back to Gibbons’ Decline and Fall of the Roman Empire and what happened in 100 to 200 AD. It got to the point where their Praetorian Guard was determining who the emperor should be. We’re there today. Now, I’m not saying bad things about the Democrats. I’m not saying bad things about the Republicans because it doesn’t make any difference. Voting now it’s a total waste of time. We have a total corruption in our system.
Our medical system doesn’t work, our education system doesn’t work. Our political system clearly doesn’t work. Our banking system doesn’t work, and it doesn’t get better from here. It only gets worse until we have either a revolution or a civil war. And I would give the chance of a civil war, probably 80% and the chance to have a revolution at 20%. We’re so corrupt today that serving members of the military commit treason against the president. Now, I don’t like Trump. I think the man is a jackass. However, we’ve had jackasses as presidents before, and it didn’t make any difference. We survived that. What we cannot survive is treason in the ranks.
Now you know as a member of the military, the oath of office and the oath of office in the military that everybody takes and they take every time they get promoted, is to preserve, protect, and defend the Constitution of the United States against all enemies, foreign and domestic. The domestic enemies of the Constitution today are far greater than that for foreign enemies. Russia is not the enemy of the United States. Iran, it’s not the enemy of the United States. Libya was not the enemy of the United States. China is not the enemy of the United States. The United States, it’s the enemy of the United States. And we lack the leaders who have the courage to stand up and say, you don’t have to like Trump but he was selected fairly, so we have an absolute moral and legal obligation to do what he says, period.
Maurice Jackson: Bob, I’m sitting here shaking my head, you just said something I didn’t think about. I kind of twiddled with in my mind, but didn’t think about it in the same context, the United States is the enemy of the United States. That’s pretty deep, and that’s sad as well. And that’s the situation that we’re in right now. Which is truly, truly unfortunate.
Bob Moriarty: Well, life is unfortunate. Okay. You’re born, bad things happen, and you die. And nobody said it was going to be easy. Let me give you an analogy. I saw something today, it was so bizarre. I just couldn’t believe. A woman got on television and I thought it was the worst interview I have ever seen, and I would say is a young woman who is 22 or 23 or 25 years old, and she said some people are very sensitive to noise. So we need to eliminate people clapping. And I thought about that, And I thought, my God, have we turned into such wusses that, oh God, don’t clap in front of me. It hurts my poor ears.
When I was 20 years old, I was the youngest fighter pilot in the world. And I thought I had the world, by the short and curlies, I looked at guys and they were in their 60s and 70s. Damn, I don’t ever want to get to be that old. Well, I am that old now. And I look people in their 20s and I think damn I’m glad I’m not 20 years old.
Maurice Jackson: All right. Let’s get back on track here, which it’s part of the discussion that what we’ve just discussed, but let’s get back to buying low and selling high. You have identified a number of unique buying opportunities that you see now in the junior mining space. Let’s discuss some companies that have your attention.
Bob Moriarty: Okay, well, let’s backtrack just a little bit. The number of gold contracts outstanding and the number of silver contracts outstanding are either at or near record levels. And when that happens almost inevitably it is a top and you have a correction. A correction, that is not a bad thing. A correction, it’s a good thing. Federal Reserve it was going to throw bushel baskets of fresh hundred dollar bills up on a fire. You can guarantee at some point in time perhaps metals are going to up, typically at this time of year, we’re about five or six weeks away from the worst part of the tax loss silly season. Everybody gets bored with gold and silver going down. I don’t want to own any stocks.
Liquidity drops and draws up and prices go down. It is a wonderful opportunity to be buying attractive stocks and there are so many attractive stocks now. Name of some that are on your list that I can talk about.
Maurice Jackson: Well, let’s begin with in Australia with Novo Resources Corp. (NVO:TSX.V; NSRPF:OTCQX). I know you were there recently.
Bob Moriarty: Okay, I’m going to tell you something that they only two people in the world who are aware of this is Quinton Hennigh and myself. I went over there, Keith Barron was there, Erik from Hedgeless Horseman works there. I didn’t realize this, but they hadn’t been to all three projects. They had only been to Karratha. The Egina Gold Project was brand new to them and certainly Beaton’s Creek was brand new to them. And those are all totally different projects. Everybody listening remembers back to the Denver Gold Show two years ago where Quinton actually showed people doing metal detecting at Karratha in the middle of night.
I went to Egina. Novo has a 200,000 square kilometer position, that’s 720 square miles of alluvial floodplain and they are doing exactly what they were doing Karratha. They’re scraping the top layer off, they’re using metal detectors and they’re keeping track from all the numbers. And it occurred to me that the size of the gold, the quality of the gold, the grade of the gold was exactly the same in the gravel as it was in hard rock and that was an absolute shock to me because I would have thought there was a lot less gold in the gravel than it was on the hard rock. But you could have been looking at Karratha and the Denver Gold Show. And I’m looking at this thinking, this is really scary. Whereas Karratha was 125 kilometers away right from Egina and it could be mineralized the entire way.
Now Keith Barron happens to be one of the top alluvial specialists in the world. He has the largest sapphire mine in North America. It’s privately owned, he has financed the whole thing. And we were talking to Rob Humphreys, who is the CEO of Novo and Rob asked me what I thought the cost of processing at Egina would be and I said about five bucks cubic meter. And he asked Keith Barron exact same question and Keith said, about $5 a cubic meter.
The one surprise that we have is the grade of the gold at Egina, it’s a lot higher than we thought. Quinton and I would have been really happy to see 0.5, 0.6, 0.8 grams per cubic meter. It looks a lot more like 1 to 2 grams per cubic meter. So if you get 2 grams per cubic meter, you got $90 bucks worth of gold. It’s going to cost you about five bucks to process maybe $2 or $3 for reclamation. It will be period, end of story. Write it on a piece of paper. Take it to the bank and you can cash it, Egina can be the lowest cost gold project in the world.
Maurice Jackson: Wow, that says a lot and it says a lot coming from the source, which is you and Dr. Quinton Hennigh. And sticking with Dr. Quinton Hennigh. Let’s go to Japan, Irving Resources Inc. (IRV:CSE; IRVRF:OTCBB), one of my favorites.
Bob Moriarty: Quinton just announced the very best initial drill program that I have come across in 18 years, that the market still does get it, which I find very funny at the Omu Mine that you and I went to, they were getting ore grade intercept on 7 out of 8 holes and understand this was all done without the CSAMT data. They drilled first, and got the data second. Newmont sent their best technical guys from Australia over to do the study.
And what it means is that when Irving Resources was drilling blind, they were coming up with ore grade intercepts. And now they have a lot better data as to where the actual structure is. That’s going to be an extremely successful program. Now, shareholders or potential shareholders are a bit frustrated at the pace but you got to understand there hadn’t been any mining exploration in Japan since 1943. The few mines that exist are owned by major companies and they were accidents more than anything else. Gold mining is literally in its infancy in Japan. Irving had to drag drillers in from Canada to get the drill program going.
So they have been extremely successful, but they’re operating at about 10% or 15% of the speed of what you would do in Nevada or California or even Africa. So it’s not a function of bad management on Irving’s part. It’s a difficult country to work in because there hasn’t been any mining. They literally have to train the bureaucrats at the mines ministry and tell these guys what they need to do. It’s an interesting situation. But Irving is a home run out of the box. It’s going to be one of the best gold stories in 10 or 15 years now. Now Novo is bigger, but it’s going to take 50 years for people to realize how big Novo is. It’s going to take two or three years for people realize how big Irving is but Irving is a home run out of the box.
Maurice Jackson: And just let that sit in it for a second. They did blind drilling, 7 holes, 7 out of 8. High grade, not just mineralization. We’re talking about high grade here, and we definitely want to recognize the CEO, Akiko Levinson. She’s done a masterful job there. Let’s move now to Miramont Resources, another company associated with Dr. Quinton Hennigh.
Bob Moriarty: Snoring, that’s what I’m doing.
Maurice Jackson: What are your thoughts on Miramont Resources Corp. (MONT:CSE; MMRRF:OTC), sir?
Bob Moriarty: Someday, I’m going to wake up.
Maurice Jackson: But right now, obviously it does not have your attention at the moment. All right. Well, let’s move over to Prime Mining.
Bob Moriarty: Prime Mining Corp. (PRYM:TSX.V), down to Mexico, gold, Sinaloa. I think it’s going to be a very good story. There’s definitely gold there. They’ve got a resource. And I think it’s really cheap stock. They got like 60 million shares outstanding. It’s a good story.
Maurice Jackson: Yeah, they’re the new kid on the block. I think it just became public, if I’m not mistaken, September and had an opportunity to meet the CEO, which is Andrew Bowering, and Scott Koyich, who is investor relations, at the New Orleans Investment Conference. And I really liked the value proposition of Prime Mining. Let’s move on to another one you and I were just discussing before the program, Lion One Metals.
Bob Moriarty: Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX) is going to get me for murder, I’m afraid. Here’s the deal. And I have this conversation periodically with mining companies. And usually I’ve been smacking somebody up from the side of the head before I get started. When I do a story, or when somebody is an advertiser, my entire purpose is to educate the reader and to get them to go to the company’s website to read up on the story. The website has to buttress what I say. So they came out with an absolutely extraordinary press release and I went to their website to link to it and it wasn’t on their website. I mean, how can you come up with something that’s significant, and not even have it on your website? So I wrote the damn article and the article was in print, God, I don’t know, a day before they got around, put it on their website, and people don’t know this because they think Bob Moriarty is a nice guy. Actually you don’t want to cross me and getting pieces on your website, either get them up first, I’m cannot write about it.
Maurice Jackson: Well, I’ve had the same challenges, I’ve corresponded with the CEO there, Walter Berukoff, and shared with him. Hey, sir, I don’t see this press release on your website, but I do see it on other sites. So that’s unique. And by the way, there’s another name there that’s affiliated with Lion One Metals, and that again is Dr. Quinton Hennigh.
Bob Moriarty: Well, yeah, let’s go into it. I mean, I sit here running my mouth about him. I posted their press releases, which I hope they understand now. But Wally Berukoff is one of the most successful entrepreneurs, I won’t call him a promoter. You say entrepreneur in the mining space, and he’s had three or four extremely successful companies that he’s taken from nothing and were built and sold for billions of dollars. He’s going to do the same thing at Lion One. Now the problem with Lion One is they’ve been thinking their’s was an epithermal gold systems for years and talking about is as an epithermal gold systems and it’s not an epithermal gold system. It’s an alkaline deposit.
And the difference is epithermal gold systems tend to be 200 or 300 meters in vertical extent. And alkaline systems are very big and very deep. So Wally has been working on this project for 10 years, and it’s been very successful, he had money, he had a permit and to get ready to go into production. And somehow, he crossed paths with Quinton. And Quinton says, “Hey, Wally, I got some bad news for you, you ain’t got an epithermal gold system.” And Wally went, “What! I did yesterday. What’s just happened?” “You got an alkaline gold system and it’s a lot bigger and a lot deeper than you think it is.” Wally went, “Damn, is that good?” And Quinton says, “Well, yeah, it’s pretty good, but you got to spend some money to prove it.”
And Wally is a cheap son of a gun. I mean, I like the guy but face it, he’s cheap son of a gun. So Quinton said, you need to think about spending $5 or $10 million on the drilling program. So they did. They just finished the first deep hole, and we don’t have assays back, it will be another two or three weeks before they get the assay back. But they have hit exactly what Quinton suggested they would hit. And I’m going to tell you right now that the numbers are going to be extraordinary. So I think that the value of Lion One, it’s going to go up and I’ll be real candid. I went out yesterday in the open market and increased my position by 50%. If a monkey could figure it out. Lion One Metals is conducting a financing currently (press release).
Maurice Jackson: That speaks volumes because you certainly know the space. Let’s move over to Calibre Mining Corp. (CXB:TSX.V; CXBMF:OTC.MKTS).
Bob Moriarty: A really great story and you and I have not talked about it. Very few people know about it. I have actually been down there. I was going to do something in Nicaragua about 10 years ago. B2 Gold is there, they had two mines there and that’s how B2 got started, turned into a billion-dollar company. B2 has expanded to Africa and to the Philippines, and they got much bigger mines in Africa and Philippines. So they said, we don’t need our Nicaragua assets. And it turns out that there was a small junior down the earth that work for 10 years, it was called Calibre.
And B2 got together with them and they had a deal and basically B2 sold these two mines for $100 million total. Some of it in cash, some of it debenture, and some of it in shares, they’re going to own 29% or 30% of Calibre, but Calibre has been handed—not on a silver platter—Caliber has been handed on a golden platter two operating gold mines and where B2 they didn’t lose their focus. They just shifted their focus and Calibre is intensely focused on Nicaragua. And I know damn well because I’ve been on the property, there’s a hell of a lot more gold there that anybody realizes.
They’re not going to run out of gold anytime soon. So Calibre is going to be a big surprise. I think they’re going to be producers in the tune of 140,000 to 260,000 ounces a year. I think they’re all it sustaining costs would be under $1,000 an ounce and that means they’re going to have $75 or $80 million of free cash flow. So it’s going to be a good deal. I put a lot of money into Calibre.
Maurice Jackson: We certainly like to value preposition as well of Calibre. Let’s move over to Ethos Gold.
Bob Moriarty: