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Buy Anaconda on the Cannons. Sell on the TrumpetsBob Moriarty We appear to be in an instant repeat of the financial events of 2008. I am seeing forced liquidity across the board where individuals and funds are dumping whatever is the easiest to get rid of just to get more liquid. In the last two months crude has fallen off a cliff going from about $77 a barrel to about $50. Junior resources companies have fared no better as many have tumbled to new yearly lows on tiny volume. Some holders have to sell but everyone seems terrified to step up and buy. We will almost certainly have new lows for shares as the Tax Loss Silly Season moves into high gear. Many writers are calling for new lows for both gold and silver over the next month or so. I cannot disagree. Anaconda Mining needs to move their entire project and facilities to northern BC. If they were located in the Golden Triangle, they would be $1 a share. On far less good news the company hit a high of $.56 in January of 2018 but just hit a new low of $.18, down 67% in eleven months. I guess shareholders should be thankful they have accomplished so much in the last year or the share price might be zero. From May of 2017 until May of 2018 Anaconda drilled about 12,000 meters at Goldboro in Northeast Nova Scotia. They now report a 1,056,000-ounce high grade gold 43-101 with 602,700 ounces in M&I an additional 453,200 ounces in inferred. Anaconda continues another 10,000-meter drill program scheduled for completion by December 31st. It’s a saddle reef style deposit. That paper is about the Dufferin Mine, which appears to be on the same anticline structure as Goldboro. Resource Capital Gold (RCG-V) tried to bring the Dufferin back into production but due to incompetent management they seem to have taken the project into the verge of bankruptcy. Anaconda is getting great results at Goldboro with the champion hole being 8.79 g/t Au over 8 meters. The M&I resource is 4.96 g/t Au; the inferred resource is 6.63 g/t. The deposit is still open in all directions. Anaconda would like to build a mill for processing in Nova Scotia with upfront capital for beginning to mine an open pit being estimated at $47 million. Anaconda has mines and a mill in Newfoundland with production at Pont Rousse hitting a record high of 5,099 ounce of gold in Q3 and on track for production of over 18,000 ounces for the year. AISC capital for Point Rousse is right at $1,102 USD an ounce. Investors as well as management of other resource companies can be highly irrational at times. The leadership at Anaconda is young and forward thinking. They were in discussions with management of RCG over a year ago at doing a merger. RCG is controlled by Eric Sprott but the potential and mine is not big enough to even qualify as hobby mining. RCG had an inflated view of what they were worth and are now functionally insolvent. While Eric Sprott may think of having the Dufferin mine as collateral for his $5 million investment, to me it looks a lot more like a liability than an asset. And Anaconda made a pass at Maritime (MAE-V) where they offered what looked like a substantial premium to the price of MAE shares but “management” at Maritime wanted to continue milking shareholders for as long as possible and rejected the bid. They felt that the best interests of Maritime shareholders would be served by having a $.08 price rather than a $.175 price for their shares. I’m still trying to figure out just how that math works out. It seemed to me at the time that Maritime had life in a blender. They continue to dilute their long-suffering shareholders to the moon. Anaconda is a simple story. They are in production with positive cash flow. They have over $7 million in cash and inventory. A 43-101 resource for Point Rousse shows an additional 200,000 ounces of gold over the million plus ounces at Goldboro. If you take their current cash assets and subtract it from their market cap investors are buying a mill and two gold mines for about $10 ounce. That’s absurd. Buy on the sound of cannons where everyone is fearful of the future. Sell on the sound of the trumpets when victory is at hand. Now if Anaconda could just move all their projects and mill to the Golden Triangle, they might get some respect and a decent price for their shares. Meanwhile it’s a really cheap call on the price of gold. Anaconda is an advertiser. I like them a lot. Management is forward thinking and continues to move the company in the right direction. If the management of both RCG and MAE hadn’t been so bone headed, Anaconda would be even better. They understand the benefits of consolidation even if those other idiots didn’t. Do your own due diligence. Anaconda Mining ### Bob Moriarty 321gold Ltd |
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