Carson Block, Muddy Waters Capital, at CNBC’s Delivering Alpha, Sept. 28, 2022.
Scott Mlyn | CNBC
Muddy Waters Capital’s Carson Block, finest identified for his short-selling campaigns, took an unusually bullish stance on the Sohn London Funding Convention on Wednesday, pitching junior miner Snowline Gold as a prime takeover candidate within the mining sector.
Snowline, valued at about C$2.1 billion, has made what Block referred to as a “first-of-its-kind” discovery in Canada’s Yukon territory, a area with restricted historic manufacturing however huge geological potential, he mentioned. The corporate controls a big land package deal in an rising district that Block mentioned might ultimately host a brand new multi-deposit gold camp.
The main target is the Rogue undertaking’s Valley deposit, which holds an estimated 8 million ounces of gold within the measured and indicated class at a median grade of 1.21 grams per ton. Whereas Snowline has different exploration targets, Block mentioned Valley is probably going the asset that may entice curiosity from main producers going through declining reserves.
“This is without doubt one of the few belongings globally that may transfer the needle for a mid- or large-cap gold miner,” Block’s presentation supplies acknowledged, calling the agency “an elephant.”
Block expects Snowline to be acquired inside the subsequent three years. If a transaction comes within the subsequent 12 months, he sees a possible valuation of C$4 billion to C$6 billion, and steered the worth might rise additional as drilling continues.
“The longer it takes for this asset to be purchased, the dearer will probably be,” he mentioned.
Snowline shares have surged greater than tenfold since early 2022, when the corporate drilled its preliminary discovery gap at Valley. Nonetheless, Block argued the inventory does not but replicate the strategic worth of the useful resource in a mining trade that has seen growing consolidation.
The Canadian-listed inventory popped greater than 6% after Block made his name.
Carson Block will likely be on “The Change” with CNBC’s Jon Fortt at 1 p.m. ET.
