Bob Moriarty of 321 Gold provides an update on an explorer that has been finding success at the drill bit.
I wrote about Viva Gold Corp. (VAU:TSX.V; VAUCF:OTCBB) in mid-May. I said the company was an easy triple from the $0.32 the company was selling for. The shares blasted higher to $0.33 up until they released results from the first four holes in their current 28-hole program.
In one of the more interesting days for a stock, on July 9th the shares advanced from $0.33 to $0.40 for a 20% increase. 19,000 shares traded in total. That’s $7600 Canadian. It’s like a very weird good news/bad news joke. The stock’s up 20% but only three people bought any. However it should give investors a sense of what will happen when the market gets it. I did mention in the May piece, “Visibility is a real problem.”
This company might as well be invisible. Part was due to them not having a U.S. symbol but they have fixed that last week. Now the shares are open to U.S. investors.
This is one of the most incredible stories I have ever heard that obviously no one else heard. Their property is called the Tonopah Gold Project in the Walker Lane District in Southern Nevada. They bought it out of bankruptcy for $25,000 after Midway Gold went teats up. It came with 641 drill holes and 93,903 meters of drilling and a 414,000 gold ounce 43-101 resource. The open pit would have a tiny 2:1 strip ratio. Viva intends to publish a PEA in the 2nd half of 2018.
If you are serious enough to work out the numbers, it makes gold worth about $10 an ounce in one of the best jurisdictions in the world. The company only paid $0.065 an ounce for gold in the ground. And obviously nobody buys a serious gold project for under $0.07 an ounce of gold.
There was this slight kicker and the reason the bankruptcy court couldn’t give the project away. There was the tiny matter of a 7% NSR. Over the years it grew and grew and you can’t mine gold anywhere in the world with taxes and a 7% NSR. So Viva management went to the NSR holders and held out an empty hand and said, “This is how much money you have made from your 7% NSR in the last twenty years.”
Then they held out their other empty hand and said, “This is how much you are going to make out of your 7% NSR in the next century.” The royalty holders got it and came down to a reasonable and proper 2% NSR, which means Viva can mine and actually have a chance of making money.
So Viva raised some money for a serious drill program and began to drill their approved 28 holes. On the 9th of July they released the first results from four holes including 1.5 meters of 138 g/t gold. That certainly qualifies as a bonanza intercept. That was within a 9.1-meter intercept of 25.4 g/t Au. Holy Smokes. And the market didn’t wake up long enough to even yawn. Another of the four holes showed 9.1 meters at 4.5 g/t gold.
Viva is a young company without any baggage but also with no visibility. The website was pretty much a disaster until I asked them to make some major changes. But when you drill 138 g/t intercepts, you should get some respect.
Viva has completed and sent to the lab samples from an additional seven holes. Expect results in about a month and there probably will be two press releases. After those results come back the company will spot the additional 17 holes.
Buying Viva at today’s price and paying $10 an ounce for gold in the ground is like stealing candy from a baby. There are no issues other than visibility. The website is much better now. The company can be bought by American investors and there will be more exciting results coming.
I liked the story enough to buy shares in the open market. It was really lonely out there but that’s not going to last for long. The stock would be still cheap at $1 a share. The company has 3.1 million warrants outstanding at $0.35 a share and management expects holders would be willing to exercise and that would pay for the next bit of the exploration program.
For months I have called for a low in the June/July timeframe. It’s here and I expect the summer rally to heat up soon taking Viva with it.
Viva is an advertiser. I own shares. Do your own due diligence.
Viva Gold Corp.
VAU-V $0.38 (Jul 11, 2018)
VAUCF-OTCBB 17.6 million shares
Viva Gold website.
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1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Viva Gold. Viva Gold is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
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From:: The Gold Report