Bob MoriartyI've been accumulating SA since I heard this interview on the Korelin Economics report on August 8. It is still archived on the site. It is between Al Korelin and Bob Moriarty. He tells a good storey and it sounds like a real undiscovered gem. Here is the bulk of the interview:
AK:...I am here today with my friend Bob Moriarty. Bob...is also the originator, along with his wife Barbara, of 321 Gold. 321 Gold...is one of the best if not the best web sites out there dealing with gold, silver, political issues, etc. Bob, thans so much for joining me, I appreciate it.
BM: Hi, how are you doing Al?
AK:...we have, as you know, from listeners, alot of requests to talk more about specific companies than macro issues. You follow alot of companies so you're the guy to start with. So what company do you like out there right now Bob and which company to you think our listeners should take a look at?
BM:OK, let me give you my standard proviso, Al. First of all, there's 3000 juniors out there. Nobody can cover them all. There are some really wonderful, wonderful stories... that said, my favorite storey right now, and I must disclose I've got a substantial position that I've taken in the company over the last 3 or 4 months - I'm still buying the stock - is in Souther Arc...It's run by John Prowse (sp?) and I was over in Indonesia visiting them in I think March or April.
AK: OK
BM: The company is focused on Indonesia. Let me just give you a little background on Indonesia first of all. Some of the biggest mines in the World are in Indonesia. It is right on the Pacific Ring of Fire and the same thing that causes earthquakes and volcanoes and sunamis, causes big mining deposits.
AK: OK
BM: Newmont has I think the 7th largest gold mine in the World at Botahedu (sp?) which is one island over. I was there in March. Hamish Campbell escorted me around. It was the best tour that I had ever been on...we drove for mile after mile after mile. When we came to a road cut, we coud see the mineralization. We'd drive for another mile or two, come to another road cut and see the same mineralization. Newmont was there in the 1990's. They spent 16 million dollars on exploration. They did a really tremendous program and all the indications were they had a substantial deposit. Their term was, it had Botahedu potential. Botahedu is producing 750,000 oz of gold a year and half a billion pounds of copper.
AK: But Bob I have to ask you a question, and that is, Newmont is a very serious company. They've got some very bright and sophisticated technical people. Why did they leave?
BM: Well for two reasons. First of all, the price of gold and copper were down. Second of all, Indonesian law requires you to either mine it or give it up. You can start off with a 100X land position and every year you have to give so much up. Even though Newmont realized it was valuable, they were forced to give it up because they were spending a billiion dollars developing Botahedu...they did'nt give it up because they didn't want it. They gave it up because they had to. Souther Arc was smart enough to step in a immediately pick it up. And they were even smarter in that they went to Newmont and said look...if you give us the data, we'll give you an NSR". So they picked up the value of 16 million dollars worth of data. Now, I'm going to claim that I'm the guy who discovered Southern Arc and its going to be one of the biggest projects in this ten year cycle.
AK: ...your're pretty good but discovered Southern Arc? Why?
BM: Modest to!...Doug Casey and Bob Bishop, both of whom I have alot of respect for, had covered Southern Arc and they mentioned it a year ago but nothing appeared to be going on so they dropped their coverage. I was actually the first newsletter writer to go over there and I went over earlier this year and I looked at it and I just said "holly cow!". The stock was .30/share even though they had the value of 16million dollars worth of exploration done 10 years ago. The whole company could be baught for 15 million. So I said "this is absurd". ..They're doing deep drilling now. They've drilled 4 major wholes that averaged about 400m apiece...these are just giant discoveries...if you looked at 10,000 drill results, 1/10,000 would be 400m or bigger.
AK:... So where is the stock trading now...
BM:... The stock went from .30 to 2.48. It came back to about 1.38. I think it's 1.58 right now. They keep releasing drill wholes and, I want to be nice about it but they just didn't do a very good job of telling the public what they had. And the public did'nt realize the drill wholes were as significant as they were...they're going to take a tour over about a month from now. They're going to take a bunch of analysts and a bunch of newsletter writers. Once the news gets out, institutions will start coming into the stock and the stock will go up alot higher. It's got 53milliion shares outstanding and the stock's 1.58. So you've got about an 80 million dollar market cap and that's cheap.
AK: How are they fixed for capital Bob?...Do they need to raise more money?...
BM: They will soon. When you're dealing with a project like this, this is a copper-gold porphyry, about 2/3 of the value is in the copper 1/3 in the gold...This is like Pebble. Nothern Dynasty has spent 200 million dollars drilling Pebble. Nova Gold and Placerdome spent 50-100 million dollars up at Donelin Creek. They've got cash in the bank right now. But at some point soon...in the next 3-6 months, they will be doing a placement.
Then Al Korelin closes the interview by saying how Bob Moriarty makes alot of money because he is very unemotional about his investmentsl.