Erik Wetterling – A Discussion on the market values of Novo Resources and Eloro Resources

October 21, 2021

Erik Wetterling, Founder and Editor of The Hedgeless Horseman joins us for a look at Novo Resources and Eloro Resources, balancing the current market cap with Company fundamentals. Both of these stocks have sold off in very different ways and both have very different drivers moving forward. 




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

    Oct 21, 2021 21:02 PM

    I would add that it was the Santa Barbara Breccia Pipe that the mentioned analyst report focused on and NOT Huyara (Eloro)!


      Oct 21, 2021 21:20 PM

      Thanks for that Eloro update amigo.
      I’ll post a link to that news release from them below:

      (ELO) (ELRFF) Magnetic Inversion Model Confirms Extensive Mineralized System at Iska Iska Extending over 2.4 Kilometre Strike Length
      – 21 Oct 2021
      “Eloro is continuing mineral resource definition drilling on the Santa Barbara Target Area which includes the Santa Barbara Breccia Pipe (“SBBP”), the surrounding mineralized envelope and the potential northwest extension indicated by the magnetic anomaly. Additional drilling since the Company’s September 28, 2021, press release has further expanded the target area for definition of a maiden National Instrument 43-10 compliant mineral resource to more than 1,400m along strike…”

        Oct 21, 2021 21:09 PM

        My favorite comment on the interview today was when I asked Erik about the value proposition for Iska Iska at Eloro Resources, and his response was:
        “Yeah, just to be blunt…. I believe it’s going to be friggin’ huge.” 🙂

      Oct 21, 2021 21:59 PM

      NvO.. sounds like a buy to me !!Thanyou..HH and Ex and comment contributors

        Oct 21, 2021 21:06 PM

        Cheers Ann!

    Oct 21, 2021 21:30 PM

    Agree with HH. Novo is clearly one of the best values in the PM space. And sure, it could get a bit cheaper in a final washout. Novo is making money producing 100k ounces a year in year 1, and owns $175MM of New found Gold. Has $40mm in cash. Core holding. Market giving the company zero value for anything outside of Beaton’s Creek. All of the pieces of Novo will gel together in the next 12 months. Be right, and sit tight.

      Oct 21, 2021 21:39 PM

      Well-stated JustTruth.

      Oct 21, 2021 21:14 PM

      NFG could be part of NVO’s problem being as it may be way overvalued on their books.

    Oct 21, 2021 21:47 PM

    I already have too much Novo and New Gold so this week I have been adding to Irving, Eskay, and Lion One. I have some stink bids in on Royal Oak Mines and Dome Petroleum as well.

    Oct 21, 2021 21:35 PM

    How to Value Mining Stocks with Canada’s Top Gold Stock Fund Manager Kevin MacLean
    Mining Stock Education – Oct 20, 2021
    0:00 Introduction
    1:45 Kevin’s journey to becoming a gold stock fund manager
    6:25 The key quality you possess which produced your successful career?
    9:02 Incorporating a macro analysis into bottom-up investing
    10:53 How to value a producing mining company
    20:49 Why do generalist money managers buy gold stocks?
    24:42 Harvesting gold sector volatility
    26:53 How to value developers
    30:07 Role of site tours in due diligence
    32:51 Developers’ feasibility study cost inputs are inaccurate now
    34:30 How to value an exploration company
    40:42 Explorers and warrants
    43:04 Appropriate management compensation
    46:16 Role of royalty companies in mining sector
    49:46 Non-traditional questions you ask mining company management?
    55:20 Your biggest mistake and what did you learn?
    1:00:56 Macro-view of current gold stock investing opportunity
    1:04:16 Carbon markets

      Oct 21, 2021 21:37 PM

      Had a look at LAC chart after you mentioned swing trading it earlier. Damm that’s a nice chart for swing trading, well done. People should do more trading in a market such as we’ve had this year.

        Oct 21, 2021 21:12 PM

        Yeah, (LAC) Lithium Americas has been a great stock to swing trade for the last few years, and it’s really ramped higher over the last year or two as it’s development projects get closer to construction and eventual production.

    Oct 21, 2021 21:41 PM

    “Nibbled” some more on nsrpf last week because Bonzo loves that stock.

      Oct 21, 2021 21:21 PM

      Moriarity, Wetterling, and Jay Taylor love Novo too. Of course if Australia goes communist all bets are off.

        Oct 21, 2021 21:20 PM

        NVO listed in Canada and properties in Australia, with both countries heading in that direction so you got a double whammy there.

    Oct 21, 2021 21:56 PM

    Another well timed news release from NVO with important words from HH, “There are no guarantees.”
    To this I’ll add, “Buyer Beware.”

    Oct 21, 2021 21:07 PM
    Oct 21, 2021 21:12 PM

    The country of America appears to me to be in a business depression, nobody seems to be willing to face the grim reality. The failure of treatment by printing more money will only lead to more humiliation for The Biden Administration. When it comes to stocks like Novo, there is nothing to be disturbed about, but the economy in general is a grave concern.

      Oct 21, 2021 21:23 PM

      Strongly agree DT. I will point out that labour shortages are being reported as an incipient protest movement against an economy in which a third (or more) of all jobs are minimum wage ‘mcjobs’. I think there is something to it…and it’s not a commie plot.

      Oct 21, 2021 21:00 PM

      Lots of NVO sellers if/when it approaches $2, $2.25, $2.50….saying good riddance and getting some of their money back.

        Oct 21, 2021 21:15 PM

        There may be some that exit the NVO elevator at those levels in the mid $2’s to pull profits (for those that entered positions at much lower levels), or conversely, for those that bought at higher levels and want to sell into the bounce to maximize the recouping of their losses, but they’ll have sold too early. If it gets back up to those levels then it is signaling it is going to break up higher technically and would still be going much higher.
        Keep in mind for every side of trade with someone selling, there will be someone buying, and those investors will be stronger hands.

          Oct 21, 2021 21:33 PM

          Those traders entering at lower prices would be the exception, with most other people bottom fishing all the way down. Look at KER comments from people buying all the way down.

            Oct 21, 2021 21:15 PM

            There were some people that were buying as Novo has pulled back further, but many got their initial positions in place years ago, so their cost basis is likely much lower than where they added their last tranche.
            I first got positioned in Novo back in 2016 & 2017, and sold out in the big move up in 2017, for a nice win, and had I held onto those shares like some buy & hold investors on here have, then I’d still be well in the money at todays prices (and even if I had added more at higher prices). So, there are likely others in that boat that are still well in the money at present.
            Personally, I got back into NVO last year in 2020 in 2 tranches, and have added to my position in 2021 three more times, so I’m underwater about 14% on it overall with this newer stake, but a move into the mid $2’s would put me up over 20%. Again, that would be a nice place to harvest some gains, but if it breaks up to that level, then it is likely going to head a lot higher than that in the medium to longer term, and pulling all profits there would be quite short-sighted.

    Oct 22, 2021 22:11 AM

    Novo, Eloro, or EMO? Pretty easy to see where the most value is going to be in 2022. EMO is the rising star here, not Eloro. Basic risk/reward reveals that even at the current $400M+ valuation, EMO is by far the best value. Strange that the horseman hasn’t gotten into EMO given his great love for Eskay

    Oct 22, 2021 22:25 PM

    I got out of Novo too early for the 7$ spike and started buying back in too early. I only hold a few thousand shrs. My breakeven price would be about $2. I got back in because I like Bob Moriarty and his respect for Quinton. I hope all the positive things U guys are saying are right. This has been a rollercoaster ride in the precious metals.

    Oct 22, 2021 22:18 PM

    The problem is governance. Novo is an Aussie story without an ASX listing. This is totally dumb. The Canadians shareholders got bored with the story a long time ago and chased the cannabis stocks. All the haters are Aussies because Novo is seen as Canadian interlopers. Listing on the ASX opens the market. I have been writing to Leo about this for years and the only thing that changes is the dropping share price. A great opportunity to list would have been the first gold pour but they dropped the ball there.