Carson Block’s Muddy Waters Goes Long Snowline Gold - Implications For The Junior Mining Sector
An eye-opening pitch from Carson Block in London demonstrates that the junior gold mining sector has come a long way.
If we needed further confirmation that the bull market cycle in the gold mining sector is progressing to the juniors, we received more of it yesterday. At the 2025 Sohn London Conference, Carson Block made a noteworthy appearance: rather than continuing his traditional short-bias, he presented a long investment idea in the junior gold-exploration sector.
Block pitched Snowline Gold (TSX-V:SGD, OTC:SNWGF) as a true tier-1 gold discovery that could 5x with limited downside.
The gold mining sector isn’t new to Muddy Waters. The firm has previously taken long positions in GT Gold (bought by Newmont in 2021) and Mayfair Gold (TSX-V:MFG), among others.
The unusual aspect of Block’s long position in Snowline Gold is that Snowline isn’t exactly a “misunderstood” company. In fact, Snowline has been one of the darlings of the junior gold mining sector for the last few years and the SGD.V chart proves that:
SGD.V (Weekly)
Block’s bullish pitch appears to center on several key points:
Emphasized that Snowline’s project “works at $1,800 gold” with limited downside at current valuation, with spot gold quoted around US$4,070/oz.
Highlighted Rogue / “Rogue Valley” in the Yukon, described as holding ~8 Moz gold based on public reports, and framed it as a “True Tier 1 Freak Discovery” that could 5x.
Framed Snowline as using conservative growth / project assumptions, leaving upside if/when the market re-rates the asset.
Potential for majors competing for Valley and Snowline’s unique exploration upside–M&A premium if a major bids.
Block also noted Valley’s unique scale and upside potential. Very few assets can deliver a high-impact starter pit with the highest grade gold mineralization closer to surface.
In many ways, the geometry and mineralization profile at Valley is absolutely perfect; the higher-grade starter pit delivers payback of initial capex within 2-3 years, followed by a long-lived 20+ year mining operation that will produce 7-8 million ounces at an average grade of 1.34 g/t gold.
In addition to Valley, both Block and Snowline promote the geological potential of the Yukon and the fact that the discovery of the Valley Deposit proves the ‘fertility’ of this region of the Yukon.
Block sees Snowline being acquired within the next three years. If a transaction comes in the next 12 months, he sees 2x-3x upside from today. Meanwhile, he encouraged major producers to act sooner than later because “The longer it takes for this asset to be bought, the more expensive it will be.”
Like any great promoter Block injects urgency, emphasizes the upside potential, while minimizing the downside risk. The reality is that while the economics of Valley may “work” at US$1,800 gold, I can assure you that you will not want to be long Snowline shares if gold falls from today’s ~$4,000/oz to $1,800/oz at some future date.
While Snowline is truly one of the best gold discovery stories of the 21st century globally, we must be realistic as to the challenges. Even by the company’s own timelines (likely to be optimistic based on the history of the gold mining sector), Valley won’t be in production for at least 7-8 years. A lot can happen in eight years, both positively and negatively.
The biggest risks to Snowline have always been the remote location of the company’s projects, and the challenge of permitting in the Yukon (water license, First Nations agreements, etc.). To be clear, it is for these reasons that Snowline is valued at a C$2.1 billion market cap, and not at C$3 billion or C$4 billion.
As the project advances (all other things being equal), we would expect Snowline to trade closer to the Valley project NPV. I believe the two most important potential catalysts that could motivate a major to make a move before final mining permits and water licenses are received are:
Another significant discovery across the broader Rogue Project (Valley Deposit is within the Rogue Project)--this could generate competitive tension between the largest gold miners in the world and force a bidding war that results in a substantial M&A premium.
Greater certainty as to government, First Nations, and local support for the development of Snowline’s eastern Yukon gold assets.
Consider me neutral on Snowline shares at today’s valuation (C$13.15 per share). However, I believe it is likely that Valley (and Rogue) will find its way into the hands of a major mining company over time. The question investors must answer is “When? And at what valuation will a future transaction take place?”
Carson Block is doing what he does best: Encouraging the market to see things his way, and motivating a large company to make a move out of the fear of missing out on a once in a generation asset.
Bigger picture, I view Block’s Ira Sohn presentation as another piece of evidence that generalists are gradually moving down the food chain in the gold mining sector to the juniors. Considering that Mr. Block is no stranger to gold miners, I would still view this as a sign that we are early in the junior mining bull market cycle. I will reconsider this view when somebody like David Einhorn or Paul Tudor Jones begins pitching gold miner investment opportunities.
DISCLAIMER: The work included in this article is based on current events, technical charts, company news releases, corporate presentations and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. This article is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDARplus.ca for important risk disclosures. It’s your money and your responsibility.