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Warren Buffett’s Barrick Gold Investment Signals Major Gold and Silver Investing Rush

by | Oct 5, 2020

Economic uncertainty has sent precious metal prices skyrocketing and triggered a rush of activity in gold and silver investing. News that the famously gold-adverse Warren Buffett’s Berkshire Hathaway had invested in major gold company Barrick Gold (NYSE:GOLD) (TSX:ABX) grabbed international headlines and served as a bellwether for big days in the gold stock market. The Berkshire Hathaway investment has been far from the only noteworthy activity in the gold and silver stock market of late. Canadian billionaire Eric Sprott has been actively investing in companies like Vizsla Resources Corp. (TSXV:VZLA) (OTCQB:VIZSF), Orefinders Resources Inc. (TSXV:ORX), and Pure Gold Mining Inc. (TSXV:PGM). Meanwhile, resource mogul Robert Friedland is taking a larger share of his Ivanhoe Mines Ltd (TSX:IVN).

With the global health crisis sending the economy into a tailspin, investors are rushing to precious metals as a safe haven. Gold has hovered above $1,900 per ounce since late July and according to some analysts could reach as high as $3,000 per ounce before the crisis is over. Silver has consistently outperformed gold, rising by 50% since the beginning of the year.

As long as the overall economic future remains uncertain, precious metals will likely remain high. With gold prices remaining high, the market continues to be abuzz with precious metals mining investments.

Eric Sprott Invests in Vizsla Resources

On July 30, Vizsla Resources Corp. (TSXV:VZLA) (OTCQB:VIZSF) announced that Sprott had acquired 5,348,000 Units in the company under a brokered offering for a total of C$10,000,760.

Sprott’s investment in Vizsla came after the company managed to consolidate all 9,386.5 hectares of the district-scale Panuco silver-gold epithermal vein project of southern Sinaloa, Mexico, which Vizsla has an option to acquire. The district already has infrastructure in place for production and Vizsla has the option of an accelerated $23 million pathway to production. This sort of potential might provide a clue as to why Sprott chose this silver stock.

On September 3, Vizsla Resources Corp. announced that the company had made its fourth discovery at Panuco. The company’s drilling highlights included results of 1,808 g/t silver equivalent over 4.5 meters (“m”) from 75.90m including 3,581 g/t silver equivalent over 1.15m from 78.65m.

“The Company has now made four high-grade discoveries since July 2020,” Vizsla President and CEO, Michael Konnert, said in the company’s release. “The Tajitos discovery is the latest demonstration of Panuco’s district potential. Vizsla is in a solid position to unlock significant value in a district that has never seen systematic exploration.”

With Sprott’s investment, Vizsla Resources Corp. has more than C$30 million in its treasury to continue exploration at Panuco.

But Sprott’s investing ventures haven’t stopped there. In May, Pure Gold Mining Inc. (TSXV:PGM) announced a non-brokered private placement from Eric Sprott. As per the agreement, Sprott received 9,868,421 charity flow-through common shares at a price of $1.52 per FT Share for a total of $15,000,000.

In March, Orefinders Resources Inc. (TSXV:ORX) announced that the company had closed the flow-through portion of its non-brokered private placement from Eric Sprott. Sprott  acquired 8,842,856 units from Orefinders at a price of $0.07 per Flow-Through Unit for a total of $618,999.92.

Warren Buffett Shocks the Investing World

In mid-August, Warren Buffett’s Berkshire Hathaway revealed that the firm had made a sizable investment in Barrick Gold (NYSE:GOLD) (TSX:ABX), one of the world’s top gold companies. According to Berkshire Hathaway’s second-quarter 13F filing, the firm acquired 1.2% (20.9 million shares) of Barrick Gold stock valued at approximately $564 million.

This made analysts do a double-take because the famed hedge fund manager had not been shy about his disdain for gold investing in the past. The fact that Berkshire is putting money in gold now can be taken as an indication that Buffett expects gold prices to stay high in the long-term because Berkshire Hathaway is not known for quick flip investments.

Robert Friedland Regains Shares in Ivanhoe Mines

Billionaire financier Robert Friedland announced in December that he has regained control over a sizable portion of shares in Ivanhoe Mines Ltd (TSX:IVN). Friedland regained direction and control over 25m common shares, valued at $63 million that were previously pledged as security for a loan. This timing is fortunate for Friedland, as the company owns the gold-producing Platreef Project in South Africa.

Precious metals are the investing story of 2020, hence the interest from billionaire investors like Warren Buffett and Eric Sprott. This is a highly advantageous set of circumstances for gold and silver explorers like Vizsla Resources Corp.

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