For those not familiar, Eric Sprott is a major name in the mining industry. In fact, he’s sufficiently major that, on his Forbes billionaire report, he claims to hold 90% of his assets (aside from Sprott Inc.) in gold and silver. And he’s put his core holdings where his money is, as he made another big play into the Canadian mining market with a Galleon Gold (TSE:GGO) purchase. It didn’t much help shares, though, as other investors sold off and sent shares down over 2.5% in Tuesday morning’s trading.
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Reports note that Sprott picked up 750 “debenture units” that Galleon Gold issued just recently, for C$750,000. That, in turn, hiked his ownership of Galleon Gold from 20.8% to 28.3% of outstanding shares, though that’s on a partially diluted basis. Galleon Gold is currently working on a gold project near Timmins in Ontario, and the early word suggests that that project could potentially yield a million ounces of gold. At today’s market price, that’s roughly $2.3 billion worth of gold, though that number changes regularly.
Gold Spree
That by itself would be interesting to note, but it’s part of a larger pattern. Sprott put an extra slug of cash into one Canadian miner, yes, but just yesterday, reports emerged that he dropped C$2,000,115 to add an additional 5,128,500 shares of Rio2 (TSE:RIO) into his portfolio. Rio2 is a junior miner that’s currently building a project in Chile known as the Fenix project.
Fenix is projected to produce a hefty 6.6 million ounces of gold, which is roughly $12 billion in gold at today’s prices. In addition, Rio2’s track record is actually pretty sound, reports note, but the key takeaway here is that Eric Sprott is on a buying spree when it comes to junior miners.
Is GGO Stock a Good Buy?
A look at the last month of trading for GGO shows that it’s on the rise and fairly substantially. It hasn’t been a linear upward path, but it’s been trending upward nonetheless. In fact, GGO is up 18.75% over the last month.
