Muddy Waters Capital’s Carson Block makes rare long call in Canadian miner Snowline Gold

Muddy Waters Capital’s Carson Block, best known for his short-selling campaigns, took an unusually bullish stance at the Sohn London Investment Conference on Wednesday, pitching junior miner Snowline Gold as a top takeover candidate in the mining sector.

Snowline, valued at about C$2.1 billion, has made what Block called a “first-of-its-kind” discovery in Canada’s Yukon territory, a region with limited historical production but vast geological potential, he said. The company controls a large land package in an emerging district that Block said could eventually host a new multi-deposit gold camp.

The focus is the Rogue project’s Valley deposit, which holds an estimated 8 million ounces of gold in the measured and indicated category at an average grade of 1.21 grams per ton. While Snowline has other exploration targets, Block said Valley is likely the asset that will attract interest from major producers facing declining reserves.

“This is one of the few assets globally that can move the needle for a mid- or large-cap gold miner,” Block’s presentation materials stated, calling the firm “an elephant.”

Block expects Snowline to be acquired within the next three years. If a transaction comes in the next 12 months, he sees a potential valuation of C$4 billion to C$6 billion, and suggested the price could rise further as drilling continues.

“The longer it takes for this asset to be bought, the more expensive it will be,” he said.

Snowline shares have surged more than tenfold since early 2022, when the company drilled its initial discovery hole at Valley. Still, Block argued the stock doesn’t yet reflect the strategic value of the resource in a mining industry that has seen increasing consolidation.

The Canadian-listed stock popped more than 6% after Block made his call.

Carson Block will be on “The Exchange” with CNBC’s Jon Fortt at 1 p.m. ET.