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Marathon Gold Corp T.MOZ

Marathon Gold Corporation is a Canada-based gold exploration and development company. The Company’s primary business focus is the exploration and development of its flagship asset, the wholly owned Valentine Gold Project, located in Newfoundland and Labrador, Canada. The project comprises a series of five mineralized deposits along a 32- kilometer system. Its prospects are located along the Valentine Lake Shear Zone and include Frank Zone, Rainbow Zone, Triangle Zone, Victoria Bridge, Narrows, Victory Southwest, Victory Northeast, and the Berry Zone. In addition to the Valentine Gold Project in the Central Region of Newfoundland and Labrador, the Company holds 100% interests in the Bonanza Mine, a former mine located in Baker County in northeastern Oregon, the Gold Reef property, an exploration property consisting of approximately 12 hectares of claims located near Stewart, British Columbia; and a 2% net smelter returns royalty on precious metal sales by the Golden Chest mine in Idaho.


TSX:MOZ - Post by User

Post by AlwaysLong683on Oct 15, 2023 4:50am
280 Views
Post# 35684157

My Comments

My Comments
I suspect the main reason MOZ's share price has performed the way it has at this stage of the company's existence (even though the price of gold has not gone on a big run and most other Canadian small/ microcap gold companies are also down by quite a bit) is a lack of faith in management by the investment community to deliver this project on time and on budget, with the current interest rate and inflation environment only serving to increase the skepticism.  
 
I view higher interest rates as a negative for the price of gold as, given the current inerted yield curve, you can now by a one-year risk-free U.S. T-Bill with a yield of over 5% vs. an ounce of gold that pays zero yield and has more risk attached to it (i.e., the risk the price of gold decreases). 
 
Inflation is seen as a benefit for a gold company provided you are producing and selling ounces into a rising gold price. If you're still in the midst of building a mine and there's questions as to when exactly you will start pouring and selling ounces, the higher the inflation, the more likely you're going to be spending more to get up and running while all the while not being able to take advantage of a higher gold price since you're not producing and selling any ounces, and thus the more likely the company's share price won't experience a sustained run-up in such a scenario. In my view, the Lassonde Curve isn't a paint-by-numbers moneymaker where you notice, hey, Company A declared it has completed the permitting and financing of it's first project with feasibility study in hand and claims it's ready to build a mine, so this is the "buy" spot and somewhere around first pour is the "sell" spot.
 
As far as options go, I can't see an excuse as to why insiders are not (will not?) load up under 0.60 a share if they really believe in this company. If you check out page 14 of MOZ's June 30 2023 Financial Statements, you'll find that, as at June 30, 2023 about 14.5M of the 17.5M total options outstanding have an exercisse price between 1.10 and 3.64. Conversely, just over 2M have exercise prices between 0.20 and 0.99 with the weighted average exercise price among these lower priced options checking in at 0.88. In other words, almost all current options outstanding are way out of the money at the current share price of around 0.60, so why would a holder of these options want to spend more per share exercising their options in the future instead of simply buying shares in the open market right now for much less and letting those options expire if need be...? If they are going to be granted new options, the stirke price is usually set significantly higher than the current share price as the holder tends to get an expiry date a number of years in the future before they hae to decide whether they want to exercise those options. Again, much more profitable to buy on the open market when the price is apparently a real bargain that to hold new options with higher strike prices - unless insiders are spooked as to how this company will fare going forwared and don't want to commit any more of their own money just yet....?
 
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