Well-known gold bug Eric Sprott is signalling he plans to stick with his holdings in RNC Minerals after the Toronto-based company announced a “once-in-a-lifetime” gold discovery that sent its stock skyrocketing last week.
RNC shares soared 261 per cent to a near eight-month high of 32.5 cents over last Monday and Tuesday after the company announced on Sept. 9 that it uncovered 9,250 ounces of high-grade gold worth US$15-million at its Beta Hunt mine in Western Australia the week before.
The discovery captured global media attention from news outlets such as the Financial Times, the BBC and the Australian Broadcasting Corp. (ABC). “There’s a big potential here that this is not going to be a one-off,” Mr. Sprott said of the discovery on Friday on his weekly podcast, calling it “the biggest discovery in a small amount of tundra the world has ever witnessed.”
But the one analyst who covers the TSX-listed stock, as well as a Canadian geologist who is a veteran at examining new gold finds, say investors should use caution in thinking the gold find could lead to the discovery of a much larger, mineable deposit.
Mr. Sprott, believed to be the company’s largest shareholder, announced in late January that he sold off some of his stock at an average price of about 35 cents, reducing his stake to 9.8 per cent, assuming the exercise of warrants, down from 11.6 per cent.