Erik Wetterling – Big Disconnect In Current Market Cap Valuations Versus The Sum Of Their Parts

Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins me to review the ridiculous valuations seen in the resource stocks as the sector sentiment remains depressed. We see the persistent trend of retail investors and institutions continuing to shrug off good news and further value-creation by the resource companies, which he sees as opportunities hiding in plain sight.


 Erik points to a few examples of the major disconnect in 3 resource stocks, with regards to their market caps in relation to the sum of the all the parts within company projects and ongoing value creation from a string of solid newsflow.  The companies referenced are Briton Metals (BBB.V) (BBBXF), District Metals (DMX.V) (DMXCF), and I-80 Gold (IAU.TO) (IAUX).*


*In full disclosure, the companies mentioned by Erik in this interview include personal positions in his portfolio, and they may also be site sponsors on The Hedgeless Horseman website at the time of this recording.   Additionally, Shad has a position in I-80 Gold at the time of this recording.





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    Jan 25, 2024 25:05 PM

    (IAU) (IAUX) i-80 Gold Reports High-Grade Drill Results from the FAD Deposit at Ruby Hill

    25 Jan 2024

    – 9.0 g/t Au, 92.4 g/t Ag, 12.2 % Zn & 1.0 % Pb over 14.6 meters

    – 3.9 g/t Au, 185.6 g/t Ag, 11.1 % Zn, & 3.6% Pb over 25.4 meters

    “FAD is one of several polymetallic deposits drilled at Ruby Hill in 2023 for the completion of initial resource estimates for the FAD, Blackjack and Hilltop deposits. The Ruby Hill Property represents the core land package within the Eureka District of Nevada, one of the world’s premier re-emerging Carbonate Replacement Deposit (CRD) districts.”

    Jan 25, 2024 25:10 PM

    (DMX) (DMXCF) District Closes Acquisition to Consolidate 100% of the Viken Energy Metals Deposit in Sweden, which contains an Historical Inferred Resource of 1.15 Billion Pounds of U3O8

    15 Jan 2024

    Jan 25, 2024 25:11 PM

    (BBB) (BBBXF) Brixton Metals Provides 2023 Summary and a 2024 Outlook

    10 Jan 2024

      Jan 25, 2024 25:10 PM

      Re: Brixton. Its about Hole 150…for me. In 2019 Brixton released Thorn assays from #150 which were spectacular and the next day Eric Sprott bought ten percent announcing on his podcast, and i quote ‘It sure looks like they’ve got the goods’.

      Now five years later BHP has taken down its own piece of the company. That makes it–with Sprott, and Robert Freidland’s Hog Heaven involvement–two mining hall of famers and the biggest miner in the world all interested in BBB.

      Very impressive indeed!

      I respect the Hedgeless Horseman BUT note that he’s interested in Brixton at these prices even if it’s only ‘five percent’ likely they find something.

      I wouldn’t go near BBB with a ten foot pole. Because after Sprotts endorsement management has chosen to go NOWHERE near hole 150. No 50 meter step out, 100 meter, 200…nothing. My emails to mgmt asking ‘just when will you follow up 150 with a program of stepouts?’went unanswered.

      Brixton has chosen to ignore Thorn hole #150 pivoting their drilling interest in the intervening five years to their other properties.

      I consider Brixton a lifestyle company. They[re not serious explorers–just very talented promoters–though i do enjoy their naming the various Thorn zones of interest after single malt whiskies.

      I recommend investors sell the stock and buy the booze.


    Jan 25, 2024 25:13 PM

    So far my Cosigo Resources is still beating my i-80 gold by about 35%. It doesn’t mean i-80 won’t win; I am just keeping score. DT

      Jan 25, 2024 25:49 PM

      Yeah, recently i-80 has continued to put out great news, but it has been a liquidity event like in so many other stocks, and has been under pressure to the downside. Way to go on Consigo, but it is a different stage and risk profile.

      As outlined today with Erik, the valuation in IAUX is ridiculous considering their Lone Tree Processing Center would be valued at $1.3 Billion in today’s environment, the Ruby Hill processing center would be $150Million-$300Million to build today, they have 14.5 million ounces of Gold in the old estimate (not counting all the drilling they’ve done at McCoy/Cove, Granite Creek, and Ruby Hill), they have 180 million ounces of Silver, and then all the exploration success at their CRD deposits at Ruby Hill via Hilltop & Blackjack, and the FAD deposit (they picked up from acquiring Paycore). All-in that is about $2.5-$3Billion in assets trading for a $467 Million US valuation. Logical? Nope… but that is the kind of market we are in. Could it get rerated higher in a 2x-5x move in a better market? We’ll see how it goes…

        Jan 25, 2024 25:01 PM

        Hi Ex, those are staggering numbers I’m sure it will be re-rated in the future much higher. The game I like to play is percentages, sometimes the markets follow similar previous trends, I just think that this time we could see money flow into the juniors before the producers. We have never had a set-up in a long time unless I look back at 1929 where there have been so many poor people and a few ultra rich, that could be a game changer. Time will tell. DT

          Jan 25, 2024 25:40 PM

          Good thoughts DT. Yeah I asked Jordan Roy-Byrne yesterday if we could see some of the junior developers and explorer’s bounce first, just for technical reasons, because they’re so beaten down. Jordan reiterated that he thinks the producers will still be the place to be for the initial breakout in gold and the next wave higher in the secular PM bull.

          That generally tracks with what we’ve seen since the major low in gold in Dec 2015… that at turns the producers tend to take off first. The initial outperformance of the producers over the juniors at turns has also been seen on the last few rallies the last few years. I outlined recently 5 different times in the last 3 years where we saw double-digit or triple-digit gains in the small to mid-tier producers.

          Producers can most immediately monetize higher gains in the metal prices, where it is not as germane for explorers and only somewhat to the developers since they are nowhere close to pulling metal out of the ground for revenues.

    Jan 25, 2024 25:40 PM

    Fun as usual.

      Jan 25, 2024 25:47 PM

      Yes agreed Lakedweller2. The discussions with Erik are usually pretty fun, and we have a hoot of a time before we start recording and after we record. We are blessed to have him as a guest on the KER each week.

    Jan 26, 2024 26:22 AM

    Tesla, One of The Magnificent Seven is down over 30% in just one month. DT

    Jan 26, 2024 26:31 AM


    What will they do today… against the sheeple… humm

      Jan 26, 2024 26:56 AM

      DIng Dong BIden Friday…………….
      Biden Set To Announce New LNG Export Ban After White House Met With Gen-Z Climate Warrior

      BY TYLER DURDEN…..zerohedge
      FRIDAY, JAN 26, 2024 – 07:45 AM
      Global warming warriors in the White House plan to announce a new strategy later today: freeze new export permits for liquified natural gas (LNG) until the Department of Energy (DoE) can figure out climate impacts.

      In a statement released on the White House briefing website, President Biden said early Friday:

        Jan 26, 2024 26:13 AM

        Is it my imagination or did someone post an article about turning Natural Gas into petroleum. Maybe it has something to do with that.

          Jan 26, 2024 26:22 AM

          Good question….

          But, according to what I heard yesterday….. The US.. is going to be the leader in Nat.Gas, or already is…

        Jan 26, 2024 26:14 AM

        German Industry is relocating, and I expect The US is by far the biggest beneficiary, this will only speed up those relocation efforts. I think it is by design. For instance, The German chemical industry is huge, and it runs on nothing but Nat Gas. DT

        Jan 26, 2024 26:25 AM

        That proposed policy ban on LNG exports from the Biden Administration is absolutely clueless. The world is hungry for more nat gas, and the US has huge reserves. The delta in pricing in US Nymex and Europe, Asia, or South America is hefty, so why block that for climate change impacts when they are going to revert to coal (like they have been) if they can’t source enough nat gas?

        Ultimately those other countries are just going to find nat gas suppliers from other sources, and it only hurts US energy companies. Energy policy cluelessness on display once again.

          Jan 26, 2024 26:52 AM

          NWO….. stuff…… bringing the sheeple of the usofamerica ….. down…
          Let’s face it, …Biden is a sick man…. too much hair sniffing …