   | |||
Sitka Strikes the Gold MotherlodeBob Moriarty “I'd rather have lucky generals than good ones” is a quote often attributed to Napoleon Bonaparte. It makes no difference if he said it or not. If he didn’t, he should have. You can beat skill but you can never beat luck. Ignore the barn burning assays the company just released. That’s skill but Snowline has the near identical Valley gold deposit with similar intercepts nearby. Snowline also has a market cap seven times higher and is about to regain a $1 billion market cap. But Sitka has luck. On June 24, 2024, after a long and fruitful discussion with Victoria Gold, Sitka managed to purchase their Clear Creek gold project located next to the RC Gold Project operated by Sitka. It wasn’t a cheap deal. Sitka forked over just short of 22 million shares and committed to paying $11 million over the next three years in addition to a 5% NSR that can be bought down to a 2% NSR for a one-time cash payment of $10 million. Also, should Sitka report gold reserves as defined in NI 43-101 of over two million ounces another $10 million must be shoveled to Victoria Gold. The deal closed on June 24th. On the morning of June 25th, 2024 Victoria Gold reported a tailing dam failure that ended up putting Victoria Gold into bankruptcy. In time, no doubt we will find that there was some poor engineering study that simply failed but the event put a giant damper on gold juniors in that belt. Victoria Gold and their Eagle mine led the pack until their unfortunate engineering failure. It will not end gold mining in the belt but it slowed things down for some time. The best story so far has been from Snowline Gold with their 7.4-million-ounce Valley Reduced Intrusion-Related Gold system. President and CEO Scott Berdahl has led Snowline from a $.30 a share stock in 2021 to today’s $6.04 a share with a highly aggressive drill program at Valley. Snowline’s Valley deposit has some warts. It’s off the beaten path in eastern Yukon and lacks infrastructure in the form of road access and energy. While the project is technically similar to that of Sitka, Valley has been scraped off by glacial erosion and the Sitka Gold RC project appears to be intact. That said, the project is so rich and has so much potential that the majors that have been consuming their young for years will be forced to start picking up promising juniors with real assets. Snowline will get taken out for billions. Sitka is another Snowline in the Yukon. It’s been run for years in the same way most juniors are run. Raise money, pick up a bunch of projects, spend money, get nothing, raise money, spend more money. Rinse and repeat. I am not a fan. The company lacked focus. They had good projects but no focus. I am a giant fan of management like Scott Berdahl who raises money, drills the shit out of a good project, hits gold and makes his investors rich. The biggest difference I value between the two companies is the share structure, SGD has half the number of shares as SIG has. While Sitka has finally hit big and seems to understand the importance of what they have, the most brilliant thing they have done is to buy the Clear Creek deposit from Victoria Gold literally in the nick of time. The assays released on October 21st show what a giant project they own but Clear Creek appears to be the sweet spot and a mandatory addition to their stable. New core drilling on the Rhosgobel (I hate that name, I not only can’t spell it, I can’t possibly pronounce it) portion of the Clear Creek acquisition shows visible gold in the core. For the first time, SIG management is drilling deep and hitting big. One apparent problem that I have seen mentioned on the chat boards is the depth of the high-grade gold at RC. It’s not a problem. There is a mining method named Block Caving at a cost of 1/10th of other underground mining methods. The best description I have seen is to call it “an underground version of open pit mining.” The fact that the richest ore is deep is not a problem but a benefit. Sitka is on track. I hate the share structure, when they do a $30-$50 million raise in the future after showing a lot of ounces in the ground, they need to do a roll back and get their share structure back under control. In my opinion Sitka will be bigger that Snowline and since it comes with far superior infrastructure, they will also get taken out for billions in time. Meanwhile the company reports 43 million warrants at an average price of $.25 that are all in the money. Drilling will end this month while the Sitka technical people review the information they have learned from this year’s drill program. Assays will continue to come in. I expect drilling to resume early in the new year. I’d like to see the company doing 150–200-meter step outs and drilling deep. There is gold near surface but the motherlode is down deep. Investing in gold junior lottery tickets has been a slow form of financial suicide for years but the tide has turned and many juniors are going to be up thousands of percent in the next few years if we can avoid World War III. Sitka has doubled in the last thirty days but it has not reached as high as its going to go. Sitka is an advertiser. I have participated in a private placements in the past and bought a lot of shares in the open market. I am biased so do your own due diligence. Their presentation is here. Sitka Gold Corp ### Bob Moriarty 321gold Ltd |
Copyright ©2001-2024 321gold Ltd. All Rights Reserved