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Underestimating Eloro

Bob Moriarty
Archives
Jul 12, 2021

We seem to be in the midst of a minor correction in gold stocks. Gold goes down a little and the gold stocks go down a lot more. It must make sense to someone but not to me. In any case, we are due our typical summer low soon as I talked about in an interview recently.

We are moving into the strongest period of the year for the general stock market in the next few weeks. I expect the S&P and NAZ to shoot higher on the DSI, now 84 and 85 into the peak followed by a decline into September/October and a major crash. By almost every measure, the overall stock market is at peak stupidity. Once it starts going downhill, nothing will stop it. A lot of paper resources are about to disappear permanently.

Eloro Resources (ELO-V) put out a brilliant press release last week that clearly no one understood. The stock dropped by 10% over the next few days and is down about 30% from its all time high in February.

That’s nuts. Eloro is quoting the intercepts in silver equivalent basis that creates part of the confusion. It’s actually a silver/zinc rich tin system. Drilling to date in 43 holes has all taken place over a 2km by 1.2km area but the system is obviously far larger. The Covid issue in Peru has led to 2,600 samples sitting gathering dust waiting to be tested in Lima. Eloro is told things are improving but instead of having three drill rigs turning, the company should have fifteen, it is that big.

Hole DSB-08 showed a massive 252.89 meters of 69.89 silver eq. I’m going to convert it to gold because people are a lot more comfortable thinking gold in grams than silver in grams. I’m going to show you two different ways of determining just how good a drill hole is compared to others.

I think most of my readers are familiar by now with the concept of gram/meters. Multiply grams in gold times intercept length in meters to get a number. For hole DSB-08 I’m going to use 1 g/t Au since that is almost exactly the ratio to silver right now. So hole DSB-08 would be an easy 253 gram/meters and anything over 100 g/m is a giant home run.

I use another way of measuring really deep holes because it shows investors just how important long intercepts are. I’m going to cube the hole that is 253 to the 3rd power. Then give it a SG of about 2.7, in grams we will use a factor of 1 for the assay in grams of gold and divide by 31.1 to get ounces and times the price of gold.

If instead of a simple drill hole of 252.89 meters we had a cube of 252.89 meters with the same grade, that single hole would have a value of $2,541,928,701 in USD. Of course we do not have a cube but it will show in relative terms just how valuable long intercepts are to a resource.

Now lets use hole DSB-10 with an incredible 29 different mineralization intercepts over the 1019 metres of the full hole. The best intercept was 56.12 meters of 114.96 grams silver eq. I’m going to use a figure of 1.64 g/t gold to reflect the intercept in gold rather than silver. That would give a gram/meter reading of just over 92 in gold terms. Not quite as barn burning as hole DSB-08 but considering it was one of 29 different intercepts of mineralization, hole 10 is a giant home run.

So again we cube 56.12, multiply by 1.64 since we have converted silver grams to gold grams, then 2.7 for SG, divide by 31.1 to get ounces and multiply by $1808 for the current POG. That makes the 56-meter hole in theory worth $27.7 million in USD if it were a cube.

On this intercept we are going to use the 74.39 meters cubed with a gold conversion from silver grams of 1.14 g/t Au, same SG of 2.7, divide by 31.1 and times POG of $1808. In gram meters, it is about 85 compared to 92 for the previous hole.

Here is where it gets really interesting and valuable to an investor. While the intercept is only about 18 meters longer, the grade is lower by about 35% but working out the theoretical cubic value of $64.6 million in USD. Investors tend to think that grade is key but in fact to a mining engineer, the length of an intercept is much more important. Two intercepts with similar gram meter measurements show one is more than twice as valuable as the other because of the length of the intercept.

With really giant mines, mining and milling costs drop a lot with tonnage. Tonnage is far more important than grade. $68 rock may not seem like much but at the end of the day when they start putting numbers on the back side of an envelope I suspect mining and milling will be in the $20-$25 range in USD. There will be a lot of economies of scale here. This is going to be a great mine.

I think Eloro should have said something about the total length of the 29 intercepts in the 1019-meter hole. It would be interesting to know if 30% of the hole was mineralized or 70%.

By using the two methods I have suggested, I think investors can come up with a reasonable idea of the value of drill intercepts. To a certain extent the company may have overplayed the hole 10 and created a buy the rumor, sell the news situation. However I happen to be the most bullish on this company’s potential. Every hole they have drilled has hit mineralization. Every single hole. And there are some real world class intercepts.

While Eloro has rocketed higher in the past year, I think the future is even brighter. I’ve pounded the table again and again with management. With a project of this size they need a lot more drilling going on. But when a company does exploration, they have to have the data from prior holes before knowing how to position their rigs. The 2,600 overdue assays are the only thing holding the stock price and exploration back. And someday the labs will catch up.

I happen to believe the company will end up with 1-2 billion tonnes of $100+ rock. Being far more professional, the company will never say that even if they do think it. By the end of the year when they come out with an initial 43-101 resource, the majors will be lined up with checks in their hands wanting to partner with Eloro.

The single most important purpose of any drill program is to fill or kill. Is this a mine or should we kill it? Eloro is way past that point. I think this is going to end up in the top five projects worldwide discovered in the last ten years. It is a giant project to anyone who can both see and think at the same time. That may be its saving grace. Certainly resource nationalism is a problem in Peru, Chile, Ecuador and even the Dominican Republic. But this is going to be so big and make such an important contribution to the government of Bolivia that I think they will keep their hands off.

Eloro has no problems other than 2600 assays gathering dust in Lima. They are well cashed up with $25 million in the bank. Run by a great team of the strongest geologists in South America on this sort of system and they continue to deliver excellent results under trying circumstances.

Eloro is an advertiser. I have a big position I have taken part in prior placements and bought a lot of shares in the open market. The success will continue. Someday investors will realize they have a tiger by the tail. Do your own due diligence.

Eloro Resources Ltd
ELO-V $4.00 (Jul 09, 2021) 
ELRRF-OTCQX 61.7 million shares
Eloro website

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Bob Moriarty
President: 321gold
Archives

321gold Ltd

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Junior Mining Precious Metals

Rover to Re-Option Up Town Gold Property


Press Release


Corporate Presentation

 

JudsonCulter, CEO at Rover Metals, statestiming and execution of this transaction couldn’t be better. The offloading of approx. $1.4MM, of what would have been current liabilities, related to the Up Town Gold project, allows us to focus on our core Cabin Lake group of gold projects. On November 24, 2020, we announced a continuous gold drill intercept of 32 meters of 13.6 g/t Au at Cabin Lake. We want to get back in there and get to work as soon as possible. Our new deal with Melius Capital, allows Rover Metals the right to retain a 25% ownership interest in the Up Town at a future date. Rover Metals plans to play an ongoing supportive role to Melius Capital to assist them in advancing the gold potential of Up Town Gold.”

For further information, please contact:
Judson Culter
Email: judson@rovermetals.com
Phone: (604) 449-5347

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Junior Mining

Taiga Partner SKRR Plans Winter Drilling at Leland Gold Project, Saskatchewan


Press Release


https://youtu.be/9hsXCQLcC60

About Taiga Gold Corp

Taiga Gold Corp was created through a plan of arrangement with Eagle Plains Resources Ltd. and owns 6 projects targeting gold in the area near the Seabee Gold Operation, owned and operated by SSR Mining Inc. (formerly Silver Standard Resources Inc.) (“SSRM”).  Taiga’s flagship “Fisher” property is currently being explored by SSRM under option from Taiga.   

Taiga’s objective is to focus on the exploration and development of its gold projects located adjacent to the Seabee Gold Operation and along the Tabbernor Fault structure in eastern Saskatchewan, a highly-prospective mining jurisdiction which was recently recognized by the Fraser Institute as the second best place in the world in terms of Investment Attractiveness.  Throughout the exploration and development process, our mission is to help maintain prosperous communities by exploring for and discovering resource opportunities while building lasting relationships through honest and respectful business practices. 

For further information on TGC, please contact Mike Labach at 1 866 HUNT ORE (486 8673)
Email: info@taigagold.com(link sends e-mail) or visit our website at www.taigagold.com

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Energy Junior Mining

Dolly Varden Closes $7,000,000 Flow-Through Private Placement


Press Release


Corporate Presentation

About Dolly Varden Silver Corporation

Dolly Varden Silver Corporation is a mineral exploration company focused on exploration in northwestern British Columbia. Dolly Varden has two projects, the namesake Dolly Varden silver property and the nearby Big Bulk copper-gold property. The Dolly Varden property is considered to be highly prospective for hosting high-grade precious metal deposits, based on its similar structural and stratigraphic setting to other high-grade deposits (Eskay Creek, Brucejack) in the region. The Big Bulk property is prospective for porphyry and skarn style copper and gold mineralization similar to other such deposits in the region (Red Mountain, KSM, Red Chris).

Contact Information:  

Shawn Khunkhun 
CEO & Director  
1-604-602-1440  
​​​​​​​www.dollyvardensilver.com

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Junior Mining

Minera Alamos Announces C$14 Million Royalty/Equity Construction Package with Osisko Gold Royalties


Press Release

Minera Alamos

(TSX.V: MAI)

“We appreciate the ongoing support and backing that our operating team has received from Osisko Gold Royalties”, stated Darren Koningen, CEO. “This financing package allows the Company to begin its transition from gold project developer to gold producer. Today’s news sets the stage for an extremely busy and exciting 2020 as our team executes our business plan to the benefit of all our shareholders.”

Corporate and Market Relations

Doug Ramshaw, President
Tel: 604.600.4423
Email: dramshaw@mineraalamos.com


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Exclusive Interviews Junior Mining Precious Metals

Tristar Gold Project in Brazil Offers ‘Simplicity and Potential Scale’

Tristar Gold (TSX.V: TSG)

In this exclusive interview, Maurice Jackson of Proven and Probable sits down with Nick Appleyard the CEO of Tristar Gold discuss the value proposition on their flagship Castelo De Sonhos Gold Project located in Para State, Brazil. This is the most comprehensive interview to date on Tristar Gold. Castelo de Sonhos offers simplicity and potential scale for speculators.
For Direct Inquiries on Tristar Gold:
Telephone: +1-480-794-1244
Email: info@tristargold.com

Transcript



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Base Metals Energy Exclusive Interviews Junior Mining Precious Metals Project Generators

VIDEO | Mickey Fulp – These Metals Have My Attention

In this exclusive interview Mickey Fulp the Mercenary Geologist sits down with Maurice Jackson the founder of Proven and Probable to discuss a wide range of topics from Precious Metals to Base Metals and best value propositions available for you the speculator.

Before you make your next precious metals purchase, call me at 855.505.1900 or email maurice@milesfrankin.com

https://youtu.be/VdaLxAji8hA

Transcript