Erik Wetterling - The Hedgeless Horseman – Thu 3 Sep, 2020

A discussion on gold stock valuations after the run higher and during this correction

Erik Wetterling joins me today to share his thoughts on the valuations of precious metals stocks now that pretty much everything has at least doubled in the last couple months. Erik also shares some stocks that have news on the horizon that he thinks could be good catalysts.

The stocks mentioned are the following: Novo Resources, White Rock Minerals , TriStar Gold, and Lion One Metals.

Please email me with any companies you would like Erik and I to discuss in future interviews – Fleck@kereport.com.

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

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Comments:
  1. On September 3, 2020 at 10:34 am,
    OOTB Jerry says:

    Buffett …….might have purchased this silver mining stock……anyone know anything…
    https://www.sumitomocorp.com/en/jp/business/case/group/232

    • On September 3, 2020 at 10:38 am,
      OOTB Jerry says:

      Some research required….but here ya go……
      Warren Buffett’s Berkshire Hathaway has acquired a slightly more than 5% stake in each of the five leading Japanese trading companies.
      Berkshire acquired the holdings in Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co., and Sumitomo Corp. over a roughly 12-month period through regular purchases on the Tokyo Stock Exchange.

      • On September 3, 2020 at 10:42 am,
        The Hedgeless Horseman says:

        It’s an intriguing tip of the hat from Berkshire, that’s for sure

        • On September 3, 2020 at 10:45 am,
          OOTB Jerry says:

          Yes indeed……….

      • On September 3, 2020 at 10:54 am,
        OOTB Jerry says:

        Will be hard for the US GOVT……..to control Japanese silver …..
        And do a 1933 Roosevelt act….lol

    • On September 3, 2020 at 5:52 pm,
      OOTB Jerry says:

      People are going to miss this one………..Buffett buying large Japanese miners…..in SILVER…….Bix Weir has some insight on this also…..

  2. On September 3, 2020 at 11:16 am,
    CFS says:

    izsla drills 1.15 m of 3,581 g/t AgEq at Panuco

    2020-09-03 06:36 ET – News Release

    Mr. Michael Konnert reports

    VIZSLA MAKES FOURTH DISCOVERY, DRILLING 3,581 G/T SILVER EQUIV. OVER 1.15 METRES WITHIN 4.5 METRES OF 1,808 G/T SILVER EQUIV. AT TAJITOS VEIN AT PANUCO, MEXICO

    • On September 3, 2020 at 10:07 pm,
      Excelsior says:

      Very nice results for Vizsla on exploration success #4. The market is not reacting nearly as much as on the first 2 initial news releases, but the stock has surged in a big way, and likely is digesting this info to validate the rise in market cap. Overall though, the Vizsla team has been executing nicely on their exploration campaign in 2020.

  3. On September 3, 2020 at 11:18 am,
    CFS says:

    2020-09-03 09:38 ET – News Release

    Mr. Ivan Bebek reports

    AURYN ACCELERATES PURCHASE OF SOMBRERO CONCESSIONS FROM ALTURAS

    Auryn Resources Inc. has completed the purchase of six Sombrero copper-gold concessions in southern Peru that had been optioned in 2016 from Alturas Minerals SA. The final option payment of US$5,000,000 due to Alturas was reduced to approximately US$3,000,000 in consideration of early exercise of the option. Payment will be made through the issuance of 1,100,000 Auryn common shares negotiated at C$2.90 and US$621,466 in cash. The shares are subject to a 4-month resale restricted period in Canada and will not be registered in the United States.

    • On September 3, 2020 at 6:31 pm,
      Wolfster says:

      Well kodiak showed that if your drill results are great the market will acknowledge it. Up 122.67% on over 4.7M shares. Based on the CC after the close I wouldn’t be surprised if it breaks $2 on the open.

      • On September 3, 2020 at 9:49 pm,
        Excelsior says:

        Another big mover today was East Asia Minerals – up 50% on the day with the news that they received their highly anticipated environmental approval for their proposed gold project.

        There is some bigger news still moving the markets here and there, but there has been a lot of good news all this week from many companies that was either ignored, or some companies even sold off as liquidity events when they put out good news; , so I wouldn’t say across the board that the markets are acknowledging all great drill results or positive news.

        Once you shared that Chris Taylor (of Great Bear fame) was behind Kodiak, that spoke a lot to why there was so much interest in their drill results. He has become a cult of personality since Great Bear’s assent, and many investors followed him from there into Kodiak. There are just certain management teams or individuals (for example: Ross Beaty, Robert Freidland, the Lundin Family, or the Oxygen Capital Group) that get a market premium and it shows in response to their news. If some lesser known copper company had put out the same results as Kodiak I seriously doubt it would have gone up 122% on the day.

        Regardless, congratulations Wolfster as you were banging on the drum about Kodiak the last few weeks and you absolutely nailed and cashed in and I’m very happy for you mate. I appreciate you highlighting Kodiak prominently in the copper discussions on here and that was some good due diligence on your behalf.

        My portfolio has benefited from copper companies like Regulus and Sun Metals the last few weeks but those gains pale in comparison to what Kodiak has done. Cheers!

        • On September 3, 2020 at 10:00 pm,
          Excelsior says:

          I’ve recently taken a punt on Filo Mining as another copper development story, and it has been rather lifeless the last few months and there is hardly any discussion about it. After writing that, I’m not sure why I decided to get involved (haha!), but it looks interesting and undervalued to me in the copper space.

          Has anyone else done any research on (FIL) Filo Mining, or does anyone else own it or follow it?

          Clearly Filo Mining is a sleeper copper stock, (the share price has been asleep for some time now), but it’s a Lundin Group company. As discussed above that quality “people” component is what got my attention, as the Lundin family tends to find fantastic assets all over the planet. Granted Argentina and Chile have had issues with Covid 19 (and Argentina has had a host of financial and currency issues as well, so they are likely getting penalized for jurisdiction, but their assets look really interesting).

          This quote from Lukas on page 5 of their slide deck really got my attention:

          Lukas Lundin commented:
          “…the potential size and scale of the Filo del Sol deposit is unparalleled to any
          project I have been involved with … Our drill results this season are truly exceptional, and rank amongst the best intercepts of my career.”

          >> (FIL) (FLMMF) Filo Mining Corporate Presentation from July:

          https://filo-mining.com/assets/docs/presentations/2020-07-27-CP-FIL.pdf//assets/docs/presentations/2020-07-27-CP-FIL.pdf

          • On September 3, 2020 at 11:01 pm,
            Excelsior says:

            Some of these drill intercepts for Filo are quite impressive:

            > FSDH032: total intercept of 1,009 meters @ 0.95% CuEq

            > FSDH034: total intercept of 1,034 meters @0.68% CuEq

            > FSDH038: highlight intercept of 73 meters @ 2.04% CuEq

          • On September 4, 2020 at 4:31 am,
            Wolfster says:

            Definitely a sleeper…..no messages at all on ceo or stockhouse……seen more chatter about cow pastures

          • On September 4, 2020 at 9:15 am,
            Excelsior says:

            Agreed. They need a PR person at Lundin to get the word out of projects like this with drill intercepts 4 times as long and rich as the ones Kodiak is getting so much traction with. When I came across Filo by following Lundin Group holdings, I was like – “Why in the world are they not getting the word out about this project?”

            I can see why Lukas Lundin said they were some of the best drill intercepts of his life, but if nobody knows about it then that isn’t doing him much good.

        • On September 4, 2020 at 4:20 am,
          Wolfster says:

          Thanks Ex….now I feel bad I didn’t emphasize enough the Chris Taylor Great Bear connection….I’m in virgin territory with this one…..other than during a takeover I’ve never experienced a pop like this…..don’t know how I kept myself from hitting the sell button so far….guess I keep looking at great bear and hope this is their copper version…

          • On September 4, 2020 at 9:16 am,
            Excelsior says:

            Congrats! It has been quite the pop in Kodiak, and C.T. is a solid leader to have at the helm.

      • On September 3, 2020 at 11:16 pm,
        Excelsior says:

        (KDK) (KDKCF) Kodiak Drills 282 m of 0.70% Copper and 0.49 g/t Gold (1.16% CuEq), Including 45.7 m of 1.41% Copper and 1.46 g/t Gold (2.75% CuEq)

        Sept 3, 2020

        https://kodiakcoppercorp.com/news/news-releases/kodiak-drills-282-m-of-0.70-copper-and-0.49-g-t-gold-1.16-cueq-including-45.7-m-of-1.41-copper-and-1.46-g-t-gold-2.75-cueq/

  4. On September 3, 2020 at 3:19 pm,
    Johnn says:

    Dear Erik,

    This Australian Does understand White Rock Minerals 🙂

    Cheers Mate

  5. On September 3, 2020 at 10:09 pm,
    Excelsior says:

    Karora Resources Closes Royalty Reduction Agreement with Maverix Metals

    by @newswire on 3 Sep 2020

    Karora Resources Inc. (KRR) is pleased to announce it has closed the previously announced agreement with Maverix Metals Inc. (MMX) to reduce the gold royalty at Karora’s Beta Hunt mine, aligning both parties in unlocking the significant value at Beta Hunt for their respective shareholders. Maverix has agreed with Karora to reduce the royalty on Beta Hunt gold production from 7.5% to 4.75% effective July 1, 2020. In consideration for the royalty reduction, as previously announced, Karora agreed to pay Maverix US$18 million in cash, US$15.5 million of which was paid at closing and US$2.5 million of which will be paid in January 2021. ”

    https://ceo.ca/@newswire/karora-resources-closes-royalty-reduction-agreement

    • On September 3, 2020 at 10:27 pm,
      Excelsior says:

      This is an interesting scenario I’ve noticed with a lot of the streaming and royalty deals on properties where they end up getting renegotiated if the producer feels they are prohibitive to successful mining. Often the shareholders of the producers cheer on this news and act like the streaming & royalty companies are the “bad guys” taking advantage, but those investors seem to have amnesia of the funds that the same companies brought to the table when said producers were struggling and flirting with imploding due to a lack of capital and when the traditional financing windows were closed. The companies didn’t just appreciate the capital injections back at those times, but they needed them to keep existing, but then years later they bellyache about the terms and need to renegotiate.

      We haven’t just seen this with Karora (formerly RNC Minerals) at Beta Hunt with Maverix, but we also saw this with Alexco at Keno Hill with their stream to Wheaton Precious Metals where it was renegotiated on a more fair sliding scale stream based on grade and silver price.

      We saw something similar with Sandstorm Gold on their streams on both Aurizona (that went from Luna Gold, to Trek Mining, and now are held by Equinox Gold) and on San Dimas (that went from Primero to First Majestic).

      We saw the stream on San Albino that Mako Mining is developing (and was formerly with Golden Reign) renegotiated and reduced when Marlin Gold spun out their royalties into Sailfish Royalties and then Marlin merged with Golden Reign to form Mako Mining.

      There are a few streams/royalties that Osisko Gold Royalties have had to tweak as well with partners to make things work for partners.

      We’ve also seen a number of companies purchase back their Net Smelter Royalties to get rid of them, and that is a mixed bag as the company has to fork over a larger up-front chunk of capital but saves in the longer term. Conversely, the royalty company gets a large chunk of capital in one lump sum that they can reinvest, but it also takes away the longer term payoff. In general I’m a fan of the company buying back their NSR when possible, but as an investor in royalty companies I have mixed feelings about losing a long-term paying asset for a quick score, so it’s a double-edged sword.

      It’s a very delicate dance as if there is too big of a royalty it may choke the life out of the producer and then nobody wins, but if the royalty company folds then the producer played them for the capital and the investors in the royalty co. get hosed. This is an area of risk to the royalty and streaming companies that isn’t discussed enough, and as these metals prices climb higher and higher, more people are eyeballing just how much the royalty companies are going to get paid, but they forget the lifeline that was extended when times were very tough which allowed the producing or developing company to stay in existence, so it is a 2-way street.

      • On September 3, 2020 at 10:33 pm,
        Excelsior says:

        Speaking of Maverix Metals – I’m a happy investor in their portfolio of royalties, and they have some excellent partner companies (Pan American Silver who owns 20%, Newmont who owns 23%, and Kinross who owns 9%), and over 100 net smelter royalties.

        >> (MMX) Maverix Metals Corporate Presentation:

        https://maverixmetals.com/site/assets/files/3752/mmx_presentation_august_2020_web.pdf

        • On September 3, 2020 at 10:41 pm,
          Excelsior says:

          ^^ Check out page 11 on the Maverix slide deck above, and note they have royalties with Coeur at Silvertip, Americas Gold & Silver at Relief Canyon, Argonaut at Florida Canyon, Karora at Beta Hunt, Barrick/Nemont at Cerro Casale, Endeavour Mining at Karma, Pan America Silver at La Colorada, Hecla at Friday, St Barbara at Touquoy (Moose River), TMAC (now owned by Chinese conglomerate) at Hope Bay, Polymetal at Omolon, Evolution Mining at Mt Carlton, Ramelius at Vivien, Fortuna at Taviche (San Jose), West Kirkland at Hasbrouck–Three Hills, and Northern Vertex at Moss just to name some of the bigger ones….

          That’s an impressive arsenal of royalties that Maverix holds.

          • On September 3, 2020 at 11:58 pm,
            Excelsior says:

            (MMX) Maverix Metals – The Cash Flow Machine Is Humming Along Nicely

            September 2, 2020 – Caesar’s Report

            “The Q2 cash flow was strong, but the Q3 cash flow should be even stronger as the gold price continues to move up and the attributable production should increase from the Q2 levels where COVID-19 restrictions had a negative impact on the output. Meanwhile, Maverix is trading 10% lower than where it started the year, which is surprising given the gold price is up 30% since the $1528/oz at the beginning of the year.”

            https://www.caesarsreport.com/reports/report-maverix-metals-the-cash-flow-machine-is-humming-along-nicely/

  6. On September 3, 2020 at 11:31 pm,
    Excelsior says:

    Ignore The Noise, This Is A Race To The Bottom – Peter Hug

    Kitco News – September 3, 2020 #VIDEO

    “With holidays and families preparing for the fall, there are not that many traders, which leads to all sorts of volatility, said Peter Hug, head of Kitco’s precious metal division.”

    https://youtu.be/ZJ7oYsJvqqM

    • On September 4, 2020 at 12:31 am,
      Excelsior says:

      Brian Hirschmann: The $6,000 Mother of All Gold Rallies

      Palisade Radio – Sept 4, 2020 #AudioInterview

      https://youtu.be/27yn2rJPfiA

  7. On September 4, 2020 at 12:42 am,
    Excelsior says:

    Interesting thoughts on the hourly engulfing candle from a technician over at ceo.ca:

    @Luca21 – “Bullish engulfing hourly candlestick for silver at daily support. A good trade may constitute placing a stop below initial swing low. As silver is now leading gold in this bull market it could be the beginning of an impulsive wave higher. #Gold #Silver $SILJ”

    http://cdn.ceo.ca/1fl3q6o-Screen%20Shot%202020-09-04%20at%205.10.34%20pm.png

  8. On September 4, 2020 at 1:30 am,
    Excelsior says:

    Making and Keeping Millions from Mining Stocks with Tommy Humphreys

    MiningStockEducation – (09/03/2020) #AudioInterview

    0:00 Introduction
    2:20 Using CEO.ca for mining stock due diligence
    6:06 How to use CEO.ca to find potential investment ideas
    8:49 Analyzing the conversations in CEO.ca chat rooms
    12:59 Market inefficiencies in junior resource sector
    15:29 Mining stock investing advice
    22:04 Making and keeping millions from mining stocks
    28:51 Vibe in Vancouver, the junior mining hub

    https://youtu.be/7GtXFTcRhfQ

  9. On September 4, 2020 at 5:58 am,
    David says:

    Premarket paper dump…again.

  10. On September 4, 2020 at 6:36 am,
    Charles says:

    Someone bought 5,000,000 shares of GSV premarket.

    • On September 4, 2020 at 7:41 am,
      bonzo says:

      That may have been Doc. Does anyone here own White Rock Minerals?

      • On September 4, 2020 at 8:46 am,
        David says:

        Probably not many as it appears to have only an ASX symbol.

      • On September 4, 2020 at 10:10 am,
        charles says:

        Good one Bonzo! Seriously does Doc own GSV? It was one of the first miners I purchased and regrettably I have held on all these years. What have you been buying these days? I have sold partial positions in high flyers and have been adding to the Quinton trifecta (Novo, Tristar and Lion One). I also added recently to ISVLF and USAS.

  11. On September 4, 2020 at 9:19 am,
    Excelsior says:

    SF Live Ep 74 – Minera Alamos Inc. (MAI) (MAIFF)

    Soar Financial – Originally live streamed on September 3rd, 2020 #VIDEO

    “Minera Alamos is advancing the Santana project towards production. It is expected to be in production by Q1 / 2021. We caught up with President Doug Ramshaw to discuss the acquisition of a pipeline asset and the recent closing of a financing. ”

    https://youtu.be/zqMZLHrlucE

    • On September 4, 2020 at 9:38 am,
      Excelsior says:

      (MAI) (MAIFF) Minera Alamos Inc. – Cash Infusion to Expedite Realization of Asset
      Upside and De-risk Santana Ramp-up

      NBCFM Research – National Bank of Canada – Sept 3, 2020

      – Santana Ramp-up De-Risked

      “We continue to expect construction to be completed at Santana around yearend with production ramping up in 1Q21. There is always some risk around
      early production levels at a new heap leach operation, so we view the added
      working capital buffer as a prudent move by management. The company
      will also use proceeds from the offering to drill the property and look for a
      second ore source, as well as define an optimized pit at the Nicho deposit.”

      http://cdn.ceo.ca.s3-us-west-2.amazonaws.com/1fl4hjk-NBF%20Sept%203rd%20-%20Outperform%20target%2090c.pdf

  12. On September 4, 2020 at 9:24 am,
    Excelsior says:

    Gold Has Been Activated To Expose The [CB], This Is Just The Beginning w/Rana Vig

    X22Report Spotlight – Sept 2, 2020

    “Rana Vig has over 30 years of business experience during which time he has helped launch five business ventures in private industry. He is the CEO of Blue Lagoon Resources. Rana discusses how the dollar is losing value and gold is in the beginning stages of taking off. As the dollar decreases in value gold will rise. The Fed is in trouble, it needs to give the appearance that it is controlling inflation, as inflation take off people will see the truth. ”

    https://youtu.be/HqGAwl5WqDA

  13. On September 4, 2020 at 10:53 am,
    Bill says:

    On September 4, 2020 at 12:31 am,
    Excelsior says: $6000

    $6k Not a chance. Any fool that makes these type of claims is a con man… I mentioned a few weeks ago people were way to bullish and many stocks are down huge now.
    Im not a gold bug. Thats a dangerous game. Take your profits always.

    • On September 4, 2020 at 11:48 am,
      Excelsior says:

      Bill – I didn’t say Gold was going to $6000, so please don’t post things out of context indicating they were my comments.

      > I posted an interview from Palisade with a guest that predicted that and he laid out his thesis, and he didn’t seem like a con man, and isn’t a gold insider but a generalist investor that is bearish on the general markets and most emerging markets due to all the debt most nations have racked up and the low to negative interest rate environment.

      __________________________________________
      Brian Hirschmann: The $6,000 Mother of All Gold Rallies

      Palisade Radio – Sept 4, 2020 #AudioInterview

      https://youtu.be/27yn2rJPfiA

  14. On September 4, 2020 at 11:32 am,
    Bill says:

    see…BUUUUUUBLE
    javascript:doEditChart(‘456595626′,’SC2′,’GLD $GOLD – Daily HLC Bars, 700′,’$GOLD’,’&p=D&yr=10&mn=0&dy=0&id=p89189193362&a=456595626′);

  15. On September 4, 2020 at 11:35 am,
    Bill says:
    • On September 4, 2020 at 11:39 am,
      Matthew says:

      That one doesn’t work either, Bill. Are you trying to say that gold is in a bubble?

    • On September 4, 2020 at 11:48 am,
      Matthew says:

      Regarding $6,000 gold, I’m curious about your reason(s) for saying not a chance. The case for $6,000 is actually much better than the case against it, unless we’re talking about it happening soon.

  16. On September 4, 2020 at 12:46 pm,
    Bill says:

    You maybe right but I always weigh on the cautious side of such estimates way out.
    Yes it was a spike need to be patient. Hel lof a run up.
    https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=10&mn=0&dy=0&id=p89189193362&a=456595626&listNum=1

    • On September 4, 2020 at 12:59 pm,
      Excelsior says:

      I agree with you Bill and don’t like the way out estimates either, but that was the title of the interview on Palisade Radio with the guy, and that was the title they ran with.

      The actual guts of the interview was actually pretty good, and the reason I posted it wasn’t for the wild gold price projection, but actually the points that the guest Brian made about sovereign debt, and that the FED wasn’t actually printing new money, but was in fact borrowing a low rates to buy assets that paid a higher rater of return, so they were doing their own internal carry trade. I thought that part of the interview had merit, but can’t help that they went with a click-bait title for it.

      Personally I don’t make any calls that far out, and my bullish stance is just waiting for the corrective move to give way to a rise up to the $2100-$2300 range on the next leg higher. Until we get there any other calls are just noise.

      • On September 4, 2020 at 5:17 pm,
        OOTB Jerry says:

        I am backing EX………..he never said $6000 , I can almost guarantee it….. Just for the record….

        • On September 4, 2020 at 5:18 pm,
          OOTB Jerry says:

          Just for the record……..I am a gold tard…. 🙂

          • On September 4, 2020 at 6:37 pm,
            Excelsior says:

            Thanks for having my back OOTB. You are correct that I never said $6000 Gold. It was the title of an interview on Palisade Radio, that was incorrectly attributed to me.

            I’m a gold tard as well… but a reasonable one. (lol)

    • On September 4, 2020 at 4:11 pm,
      Matthew says:

      Keep in mind that gold is “cheaper” today than it was in 2000 (@ $250) or even 1970 (@ $35) relative to the Fed’s funny money monetary base. So the upside is really vastly greater than $6,000 and the real fools and con men insist otherwise.
      https://www.munknee.com/gold-monetary-base-ratio-suggests-a-significant-monetary-event-on-the-horizon/

  17. On September 4, 2020 at 10:54 pm,
    Bill says:

    Yes gents all good points. I won’t argue them as the wild swings need to be bought a sold. Just way overbought a month ago I was nervous about temp valuations…..
    In time it will revert to the average mean and move up I think.
    ZIRP and brick on the gas peddle is good for hard assets. Its nuts now!! 🙂