Erik Wetterling – Riding The Resource Sector Down To The Abyss For The Eventual Outsized Gains When Sentiment Turns

Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins us to review how he is reshuffling his portfolio and adding in more beta optionality plays and small micro-cappers, in addition to the traditional quality alpha plays.    He points out that you don’t want to be in beta optionality plays at the end of a long uptrend, but that is not where we find ourselves at present.  Conversely, when there has been a long corrective move lower in the gold and silver stocks, and we see extremely depressed valuations for cashed up developers with ounces in the ground or even producers, that getting into more of these call options on higher metals prices and a sentiment turn can be a rewarding experience.


We discuss that many that have been waiting for breakouts in mining stocks before taking positions have been perpetually wrong-footed after a series of false breakouts, and that they’d have been better served buying into the downturns when sentiment readings were near their lows. He believes it is important to find companies with quality teams and projects that have the access to capital to survive this low sentiment, so that they can thrive when sentiment improves.


Some of the quality “alpha” companies discussed that have weathered the storm better were Western Alaska (WAM), Snowline Gold (SGD), Goliath Resources (GOT), Eloro Resources (ELO), K92 Mining (KNT), and i-80 Gold (IAU).   Some of the “beta” companies with optionality to rising prices and improving sentiment were Nighthawk Gold (NHK), Integra Resources (ITR), Wallbridge Mining (WM), Liberty Gold (LGD), and Bonterra (BTR).*


*Western Alaska, Goliath Resources, and Eloro Resources are sponsors of The Hedgeless Horseman website, and Erik has shares of many of the companies mentioned in this interview in his portfolio.


* Shad has shares in i-80 Gold, Integra Resources, Wallbridge Mining, and Liberty Gold.



Click here to visit Erik’s site.

    Oct 20, 2022 20:58 PM

    I completely agree with Erik that now is an ideal time to look at reshuffling one’s portfolio, and that the “beta” optionality plays (Developers with defined ounces in the ground and cash in the bank, or steady Producers) that will rise first with an increase in metals prices and improvement in investor sentiment makes a lot of sense.

    There are about 2-3 dozen Developers that have proved up solid deposits over the years, and often were the market darlings a few years back when they were earlier stage explorers, but now they are being valued like roadkill. Out of the ones he listed I personally own Integra Resources, Wallbridge Mining, and Liberty Gold, but he’s correct about Nighthawk Gold and Bonterra as well. I’d throw in that is the same thing with Treasury Metals, Chalice Gold, O3 Mining, Cartier, Troilus, Amex Exploration, Skeena, Montage, Newcore, ATAC, Probe, Maritime, US Gold, Freegold Ventures, etc… etc… We see the same thing in many of the beat up Silver developers with fantastic optionality to rising prices and improving sentiment like with Discovery Silver, Kootenay, Silver One, Dolly Varden, Silver Tiger, GoGold, Golden Minerals, Metallic Minerals, Defiance Silver, GR Silver, Bunker Hill, Orex, Silver Bull, etc….

    At one point, these ounces in the ground are going to be rerated much much higher, so there are solid opportunities to exploit the market inefficiencies when everyone has left the sector in despair and thrown their hands in the air in disgust. It is not the time to be selling out near lows in disgusts, but rather, picking one’s spot to accumulate into the blood in the streets.

      Oct 20, 2022 20:02 PM

      As for some of the quality growth oriented producers (like 1-80 gold or K92 Mining that Erik mentioned), or like Minera Alamos & Thor Explorations that we just interviewed in the last 2 days, or like Calibre, Karora, Orezone, Steppe Gold, Mako Mining, or someone had mentioned Asante yesterday…. they are at silly levels for multiple reasons. They are going to be expanding their production throughput, improving grade, and beefing up revenues regardless, not to mention all exploring aggressively to expand resources. To Erik’s point made in the last few interviews…. these companies growth is going to underpin better valuations eventually when they get rerated regardless of metals prices…. so if metals prices do rip higher eventually, then that will just be more optionality and upside torque beyond their growth trajectories.

      Oct 20, 2022 20:13 PM

      I appreciate the extended commentary/summary you’ve included above with company names, especially since I’m unable to download the audio from weekday shows here in China.

        Oct 21, 2022 21:43 AM

        Sure thing Terry. I like providing a bit more context in most of the daily editorials posted just in case people can’t listen due to time constraints (or hopefully to entice them to listen to the audio if they planned on skipping it).

        Short generic summaries do little to get most people interested in listening and are “meh”. It is usually some more specific detail that catches someone’s eye and gets them to listen. I also list the companies mentioned for disclosure purposes, and because it always drove me crazy personally when I’d listen to an interview discussing companies and one couldn’t understand the speakers pronunciation of the company names.

        Does the audio player above not work for you in China for just the “play” feature using the triangle icon , outside of the download down arrow link?

        Our podcast is also carrired on the Apple ITunes, Google play, Spotify, Pandora. I Heart Radio, and other outlets in case any of those may be an option for listening alternatively.

    Oct 20, 2022 20:04 PM

    FREAKY FRIDAY……………… AGAIN…………………….

      Oct 21, 2022 21:44 AM

      It is startling how quickly we looped back around to another Freaky Friday already. Time flies…

        Oct 21, 2022 21:38 AM

        Zipping along at breakneck speed…….

    Oct 21, 2022 21:46 AM

    Dollar up which means I will be down for the week no matter what miners I hold.

      Oct 21, 2022 21:03 AM

      Ready to be proven wrong.
      Early voter for “UnFreaking Fridays”.

        Oct 21, 2022 21:28 AM

        Dollar went from +.88 to +.34 5 mins before open. Bread crumbs maybe for the serfs….

        Oct 21, 2022 21:40 AM

        Can not UN DO…… FREAKY FRIDAY………….. 🙂
        Wait till the end of the DAY………..

      Oct 21, 2022 21:18 AM

      Yes Lake, at the moment all about the dollar, now consolidating for a month or so between dxy 110 and 114. Holding gold price hostage. Same case for hopeless sector equities.
      Pretty obvious stuff. Which way and when it breaks on a trend basis is anybody’s guess.

    Oct 21, 2022 21:54 AM

    Observation # 6489123: NG Energy hit a new well recently, but the price of NG is only good every other day. Free and fair markets, without intervention, only exist on deserted islands.

    Oct 21, 2022 21:32 AM

    It’s late 2015 again for NEM but better. Don’t let the ugly sentiment (irrational fear) of the 95% (aka the herd) fool you.

    Oct 21, 2022 21:46 AM
    Oct 21, 2022 21:10 PM

    Great charts Matthew!

    Brixton has held my .15 low call few weeks back when i had dialogue with green and he spoke about the moving averages. The divergence is very clear to me and now what I have been awaiting for in regards to hui/xau is happening. If they finish close to that green moving average in the monthly, it’s check mate. We will not get lower prices on these miners😀

    Just look across the board on a monthly and see the start of the w formation yet to be completed but just starting. The miners are clearly the place to be.

    Oct 21, 2022 21:36 PM

    Brixton seems to be under professional accumulation lately.
    Weekly bull hammer unless it drops in the final half hour:

    Oct 21, 2022 21:20 PM

    The dollar almost swung $2 today which made those algos buy some of my miners. Finished the week in a gut way.

    Oct 21, 2022 21:15 PM

    Thanks for getting us to this point and all the great charts over time.

      Oct 21, 2022 21:58 PM

      Ld2, you’re always welcome. Isn’t it something the way even a “normal/healthy” pullback is able to demolish new (and appropriate) bullish sentiment?

        Oct 21, 2022 21:49 PM

        You are right. I have a low tolerance for the miners ever to go down with the crap economy they throw at us. I stay fully invested despite it all … just because criminals suck … and your charts say it may be right and fundamentals say it makes sense. I have no tolerance for intervention. I don’t think intervention is anything but a coverup for theft.

          Oct 21, 2022 21:29 PM

          I hope you took my question as a general one because it certainly wasn’t directed at you in any way. I’ve just noticed a huge amount of despair on several sites lately that I don’t believe is/was warranted.

            Oct 22, 2022 22:06 AM

            Nope. Didn’t take it personal. Just commenting on uour correct observation. I lost my tolerance of lack of Regulation of Central Banking a long time ago. They may think they are over regulated, but there is still the Criminal Code which is totally ignored by the Justice Department. No “person” is “too big to fail”..

            Oct 22, 2022 22:39 PM

            Good. Since central banking is nothing but unsound morally and economically it should be regulated out of existence. Anything less leaves the greatest fraud in history intact along with the growing global tyranny which it underwrites.

    Oct 21, 2022 21:45 PM

    Looks like gold is double bottoming at a Schiff pitchfork support. Gold made a new price low this week but it wasn’t a new low relative to this fork support or the 100 week MA…