Portfolio strategy for junior gold stocks that have already rebounded over 100%

April 30, 2020

Erik Wetterling joins me to share his strategy when it comes to investing in junior metals stocks. Many juniors have rebounded over 100% in the past 5 weeks but still have not gotten back to the levels they were at before the COVID shutdown. Remaining upside is the biggest question mark.

When it comes to analyzing the stocks we outline what we think is a reasonable return and a time frame that allows exploration plays to get the work done that’s needed to drive value.

Click here to visit Erik’s website – The Hedgeless Horseman.

    Apr 30, 2020 30:31 AM
      Apr 30, 2020 30:40 AM

      SILJ’s advance paused at Fibonacci fan and MA resistance:

      Apr 30, 2020 30:41 AM
      Apr 30, 2020 30:01 PM

      Matthew – regarding First Majestic (AG) it does look like it is has run into some short-term resistance, at that speed line, and some of the moving averages on that bigger picture chart.

      This appears to be the case with a number of silver stocks, and where I’m torn is whether they’ll pull back as group, or if they suddenly break through this resistance they may surprise investors and squeeze the shorts.

      What are your thoughts on a short to medium term basis in the Silver miners – are they just pausing and correcting, or could they break through this resistance for an upside lunge?

        Apr 30, 2020 30:39 PM

        Ex, I think (and hope) the miners fall another 5%+ tomorrow to fill all the gaps from the 22nd and provide the possibility of a low that holds. The daily chart oscillators might point to even more downside than that but the weekly chart oscillators look much better so it will be interesting to see what happens. I think the shallower pullback is more likely based on all the strength we’ve had lately even on down days for the metals.

        The miners are very cheap unless gold is about to crash and I don’t see that happening at all. Profit-taking and other selling makes perfect sense here from a short term perspective but I expect longer term bigger money buying to step in on the buy side soon and in a big way.


        Apr 30, 2020 30:00 PM

        Very short term (days, not weeks), I think we’re going lower. Then I’m bullish.

        SIL daily:

          May 01, 2020 01:43 AM

          Thanks for that feedback Matthew. I’m in the same basic camp, and pulled profits the last 3 weeks in various companies to raise cash, and I’m considering deploying some tomorrow or next week if we see the PMs and miners pull back a bit more.

            May 01, 2020 01:42 AM

            What is your take on this technicians cycle approach and where he sees Silver approaching it’s Daily Cycle Low?

            norvast @ColinSt30481392 on Twitter:

            “Silver is unlikely to print a DCL until day 47+ or mid-late next week as you can see it prints daily cycles 47-55 calendar days low-low. It has broken the 10 day MA and daily inclining trend line & is now in decline until it hosts a DCL”


            May 01, 2020 01:50 AM

            It looks like a fine approach but I’d like to know how often a DCL happens before day 47. Is it 5% of the time? 10%? Never?

            May 01, 2020 01:08 PM

            Yeah, I’ve only followed a few folks that used a cycles process, like Gary Savage, but don’t know how often the DCL happens before the mid-point in the timing “left-translated” or after the mid-point “right-translated.”

            I just thought it was interesting he felt Silver may put in a short term bottom the middle of next week, which kind of lined up with the discussion we were having.

    Apr 30, 2020 30:01 PM

    Hi Erik, glad to hear you think Irving, Novo, and Lion 1 can double in 2 years. I bought more LOMLF yesterday@.87. If gold goes to $3000 in 2 years and they prove up 20 million ounces of gold I am sure their price will more than double! In fact it might go to 30 or 40.
    The poor people of Hollandia are in mourning today as Royal Dutch Shell slashed its dividend by over 2/3. They had not cut their dividend since Hitler invaded.

      Apr 30, 2020 30:11 PM

      That is my base case, and I personally think they will do much better than that (especially if gold heads higher). But still, 50%/year is more than anyone could ask for and is almost impossible to keep up in the long term (but fingers crossed!)… The Shell cut is another sign of the times. We are truly living in historic times for better or for worse! Best regards

        Apr 30, 2020 30:48 PM

        I’ve got a position in Lion One Metals for much more than just a double, and if they keep hitting in that alkaline system, their deposit could grow multi-fold, as will their valuation. If Tuvatu grows to be a 10-30 Million ounce deposit like a few comparable deposits have, by drilling down deep, then it could end up becoming a Tier 1 world-class deposit.

        I know Erik is quite aware of this, but for people new to their story, Lion One now finally has the rights to the whole caldera which is 7 KMs in diameter, and to date they’ve only explored at tiny section of it and haven’t gone nearly as deep as an alkaline system to can go. If they start proving out Quinton’s thesis, then many eyeballs of the major producers will shift to Lion One’s project for a takeover. (obviously I hope that is still about 2 years away as I’d like to see them grow, grow, grow their deposit first into these rising gold prices.)

          Apr 30, 2020 30:51 PM

          (LIO) (LOMLF) Lion One Mobilizing Three Drills for Aggressive 2020 Dry Season Exploration Campaign at Tuvatu, Fiji

          by @newsfile on 30 Apr 2020

          “Three drill rigs to focus on exciting new targets, new potentially mineralized structural zones, and depth extensions of known gold lode mineralization”

          > Drill Rig One: this Company-owned rig has been operational throughout the latest seasonal wet season in Fiji, and is currently drill testing down dip extensions at Tuvatu West; 1500m depth capability drilling NQ-sized core

          > Drill Rig Two: this Company-owned rig has been reconditioned and is currently ready for mobilization to the Kingston-Biliwi prospect 2km north of Tuvatu in the newly acquired tenements covering the northern half of the Navilawa caldera; 250m depth capability drilling NQ-sized core

          > Drill Rig Three: recently purchased rig (anticipated 6-week delivery from South Korea) designated for new targets within the new Navilawa tenements including Banana Creek, a Tuvatu-style target displaying multiple high-grade outcropping lodes; 1500m depth capability drilling NQ-sized core

          “Exciting pipeline of drill targets to further confirm large-scale alkaline gold system within the Navilawa Caldera”

      May 01, 2020 01:08 AM

      Holding IRV, LIO and NVO. Biggest concern on all markets is Lack of Regulation. Hard to plan or speculate.

    Apr 30, 2020 30:11 PM

    novo,lion 1,irving double in 2 years? why do I own those dogs?

    If thats all they do I will consider them dead money.

      Apr 30, 2020 30:14 PM

      One man’s dead money is another man’s dream returns. Personally I don’t see that many miners out there that have a relatively high probability of doubling in two years if gold goes down.

        Apr 30, 2020 30:42 PM

        The Headless Horseman,

        I’ll take my chances on AU. It’s a tier-one asset, follow the money.

          May 01, 2020 01:24 AM

          Who said anything about AU?

            May 01, 2020 01:35 AM

            The Hedgeless Horseman, you said if gold goes down. I’m not even concerned about it whatsoever. All the risk is in debt based fiat currencies especially the DYX has a synthetic artificial short against it. Read my comments below because no one really understands what the outcomes going to be the emperor is really wearing no clothes at all. The entire gold space is on sale especially the junior minors. I’m all in with everything and all my positions are completely paid for so unless these Junior miners go bankrupt and disappear I have no plans on selling no matter what prices they print including AU.

            May 02, 2020 02:14 AM


            Gotcha. I thought you meant the ticker AU (Aurion) which made me think you were mad because I didn’t mention it or something. My bad, apologies. Yes, physical AU is the only real safe harbour in the storm. Everything else is speculation to different degrees. Best regards

            May 02, 2020 02:44 AM

            The Hedgeless Horseman, your comments are well-received apparently AU is a Canadian listed symbol. No apologies in order I’ll assume the responsibility because I should have been more specific. When I feel like stacking I’m out visiting several coin dealers these guys have been around the business forever. All I receive is blank looks I’m very cordial I mention AU or Old Yeller they don’t have any idea what I’m talking about. They don’t understand the Dynamics of the market either retail investors are few and far between. So we know who’s buying and supporting the market and like I said follow the money. Not only that these guys are like visiting the IRS office. When it comes to privacy they go far and beyond they want you on the red list. I could keep going and probably never stop how this society has totally capitulated to The Establishment. I’ll keep pressing on even so because it might come in very handy one day to get me out of real bad situation like in World War II those who escaped to safer countries used their AU saving their lives and family. All the very best my apologies for the misunderstanding.

    Apr 30, 2020 30:15 PM

    There is a artificial synthetic short against the DYX. If only kinfolk out there really understood the way the real world operates. Everyone that has dipped their toes in the gold space treacherous waters the odds are probably 98% have experienced a lot of red ink. No exceptions either including so-called experts.

    Its not a question of if, but when that synthetic short against a DYX brakes no one, I repeat no one will have an opportunity to get in.

    Picture an event like Hoover dam going through a garden hose it’s going to be spectacular.

    Unfortunately, the kinfolk have a lot of catching up to do if they don’t want to walk around with holes in their shoes.

    May 01, 2020 01:47 AM

    Matt, my call wasnt so bad after all.
    We should see some more selling here. Im eager to get in those stocks I sold for new highs.
    How deep do you guys see this correction?

    May 01, 2020 01:24 AM

    (MAI) (MAIFF) Minera Alamos Intersects 248 Metres of 0.60 G/t Gold Ending in Mineralization from Ongoing Drilling at the Santana Gold Project, Sonora, Mexico

    by @newsfile on 30 Apr 2020

      May 01, 2020 01:39 AM

      248 meters of anything is impressive.

        May 01, 2020 01:56 AM

        (MAI) Mineral Alamos is a very well run company, and near term producer, so finding long intercepts like that just makes their open pit scenario look that much more robust.

          May 01, 2020 01:58 AM

          Here was another good drill hit yesterday by Balmoral (being acquired by Wallbridge)

          (BAR) Balmoral Intersects 308 g/t Gold (8.98 Oz/Ton) Over 2.97 Metres, Including 858 g/t (25.03 Oz/Ton) Gold Over 1.06 Metres, at New Reaper Gold Discovery, Fenelon Property, Quebec

          by @nasdaq on 30 Apr 2020

            May 01, 2020 01:00 AM

            It was the reverse kind of exploration success, a more narrow intercept but incredibly high grade gold. Normally that kind of headline gets more attention due to the grade, but long low grade intercepts can be profitable too as most of the heap leach projects are less then 1 g/t gold but there has to be a lot of disseminated gold to justify the open pit. However, with underground mining, it is much more expensive so having high grade is a requirement.

            Regardless, nice to see some good results from a few companies doing the good work.

            May 01, 2020 01:09 AM

            Balmoral looks good. I may add to Wallbridge as looks like they will take over Balmoral.

            May 01, 2020 01:21 AM

            Yes, it is looking like the transaction will go through where Wallbridge takes over Balmoral. I owned Balmoral and sold out initially when the news broke, and considered getting back in BAR for the arbitrage trade that existed at one point, but now I’m considering just getting into Wallbridge and waiting for them to finish taking over Balmoral.

            Ironically, Balmoral spun out their land package to Wallbridge that became the successful Fenelon project, and now Wallbridge is buying Balmoral for all the surrounding land they have there and near the Detour Gold mine that Kirkland Lake just bought.

            It’s a very mineral rich system there and after the Detour Gold news broke, both Wallbridge and Balmoral hit the limelight again as well. It is interesting that what got me into Balmoral was interest in their Grasset Nickel project, which I believe they’ll likely spin out into a new company or sell post merger.

          May 01, 2020 01:02 AM

          I looked at the NR and all hits low grade but consistent good width. A little different from the norm, but open pit is cheaper, particularly with oil less cost…if anyone will produce it.

            May 01, 2020 01:17 AM

            Yes, that is par for the course with open pit heap leach mines.

            Most of the big Gold projects in Nevada are .40 -.60 g/t Gold, and they are quite economical. Compared to high grade underground mining in Canada where the norm is 4 – 7+ g/t Gold those kinds of news releases are often misunderstood by investors that only chase high grade.

            Minera Alamos has 2 different projects going into production, the small one first to start generating revenues, and then the larger mine second.

            I’ve been invested for some time, but think the world of Doug Ramshaw the president and director and feel he is one of the most humble, level-headed, and transparent company executives in the business. I also have a lot of respect for their CEO Darren Koningen, who proved his metal with Castle Gold that Argonaut bought. I’m also a big fan of (AR) Argonaut still to this day.

            Minera Alamos got their La Fortuna project from Argonaut a few years back, and then later acquired Corex Gold where they got their Santana project, and that is where Doug came into the picture to work with Darren.

            As a kicker Osisko Gold Royalties came in to support Minera Alamos with financing and as a strategic investor, so they have access to their specialized knowledge as well.

            I’m very confident in their projects moving forward into production as a result, and if Argonaut didn’t already have so many great development projects in the works, I’d have pegged them as a suitor to takeover MAI, and maybe they still will further down the road, once they get their mines up and producing.

            May 01, 2020 01:38 AM

            Here is an encouraging comment from $RIO CEO Alex Black on the recent drill results from $MAI Minera Alamos:

            Alex Black @Rio2Limited on Twitter:

            “I think the market is missing the significance of these drilling results.
            As an experienced gold heap leach miner, all I can say is that these results are SPECTACULAR!!”

            “Fenix Gold Project has similar drill results and it has 5m oz of M&I and 1.4m oz of Inf.”


    May 01, 2020 01:31 AM

    Silver Demand vs Gold Demand

    by @TheTechnicalTraders on 29 Apr 2020

    Chris Vermeulen talks with Jim Goddard at HoweStreet radio about gold, silver, miners, the dollar, among other things.