Erik Wetterling – Value Proposition For Silver47, Callinex Mines, and I-80 Gold
Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins me to discuss three junior gold, silver, and zinc companies with recent news out to the market; where he is attracted to the current value proposition.
We start off discussing the exploration upside, prospective project, and recent drill results, at Silver47 Exploration Corp. (TSXV: AGA). Highlights from hole DC24-106 include 2.48 meters of 61.44% ZnEq or 2,938.5 g/t AgEq (14.95 g/t gold 249.50 g/t silver, 21.97% zinc, 7.03% lead, 0.42% copper). While this was near known mineralization it is an impressive high-grade hit, and Erik is interested in seeing more follow-up drilling.
Next we reviewed Callinex Mines (TSXV: CNX) (OTCQX: CLLXF) ongoing fully funded 2024 exploration campaign at the 100% owned Pine Bay Project located within the Flin Flon Mining District of Manitoba. This project is near infrastructure and the nearby Hudbay 777 mine and processing center that is currently sitting idle, and where this project may be a potential source of mill feed if an economic deposit can be delineated.
We wrap up discussing the news out last week on November 12th, i-80 Gold Corp (TSX: IAU) (NYSE American: IAUX) where in the process of reporting its operating and financial results, the Company announced it envisages a two-step recapitalization process which will include demonstrating a viable path to generating free cash flow, and rescheduling and/or refinancing the existing debt obligations. The company also declared that it is no longer proceeding with the Ruby Hill Base Metal Joint Venture, and considering the potential value of the existing gold resources in a rising gold price environment and taking into account the limited understanding of the base metal potential, it has elected to prioritize more advanced staged gold and silver projects with established resources and technical studies.
(IAU.TO) sold off from $1.32 down to $0.47 on this news on November 13th, but has started to bounce back some this week. We question whether the big miss in production guidance, the Base Metals JV being called off, the dilutive C$115million raised in May at much higher prices, and now this company restructuring are all too many red flags to recover. Conversely we are curious to see how the new CEO Richard Young, famous for selling Teranga to Endeavor Mining, and recently Argonaut to Alamos Gold, is preparing to right-size and restructure the company, and if there is the potential their board may decide to sell of part or all of the company to a larger producer, where this could be a compelling opportunity to be positioning in the company.
* In full disclosure, the companies mentioned by Erik in this interview, are positions held in his personal portfolio, and also may be site sponsors of The Hedgeless Horseman website at the time of this recording. Additionally, Shad holds a position in I-80 Gold at the time of this recording.
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Good morning, I don’t think we have ever had a post from nobody, but there are a lot of nobody’s here. You have pointed out something different from the analysis on 1-80 that we usually get on this board. Your thoughts are welcome here and I’m sure somebody will reply to them in due time, and I’m sure I know who that somebody is. Cheers, DT
Hi, DT. I haven’t chimed in here since around CAD$3. 😉
I would say……… that is a great comment…. FROM NOBODY…….
DD,… is always required….
Regardless who “nobody” might be…. good thoughts on why the MAJORS, might not want someone…JMO
Yes, DD is required indeed…
People can have any theory and it can sound reasonable…but that doesn’t mean it holds water…
Hi Nobody, interesting comment.
Yes, the projects were previously held by majors, but they weren’t really “cast offs.” I’ve talked with the prior CEO Ewan about how they were able to get the Lone Tree Processing Center (quite an amazing asset to be held by a junior — 1 of only 3 processing centers that can process refractory ore and worth $1.3 Billion to rebuild and permit today), and Barrick did NOT want to give it up initially…. but they wanted I-80’s Robertson concessions and horse-traded for it.
It is quite probable that another major would want that Tier One asset in a Tier One jurisdiction, or the permitted Ruby Hill processing center, or 14.5+ million ounces of gold and a 100 million ounces of silver. Then there are the 3 polymetallic assets in Hilltop, Blackjack, and FAD that could be monetized or spun out down the road.
They are going to have to do something major to get their ship turned around and so partial asset sales or eventually sale of the whole company to one of the big boys is not out of the question by any stretch….especially after bringing in the cleanup man Richard Young as the new CEO.
About a year ago everything was lining up too good to be true for I-80. Double digit g/t hits one after another, continuously. I wanted to buy it but didn’t thankfully.
Jason Shapiro advises..if you are positive on PM’s just buy the metal..simple. Too many things can go wrong with pm stocks.
Yeah it’s a another sad turn of events as the drill intercepts I-80 Gold kept hitting at multiple projects were very impressive indeed.
The issue is not with the quality of the projects mineral endowment, or the resources, or the infrastructure in place.
The issue was with the corporate strategy going into production not working as planned, and in specific how the management team and board both raised and managed capital the last couple years.
Also the whole plan to do the Ruby Hill base metals JV was presented to the market as the solution and they never executed, and worse didn’t say anything about it after failing at their guidance. I knew something had gone wrong and smelled fishy when they raised that $115million in May.
It is nuts that it took them until November to finally update the market on the restructuring and not going ahead bringing in the strategic in the JV.
I sold when the news slowed and the shorts came in. It seemed excessive to the alternating day scenario. Same treatment Sitka is getting, but can be reversed with drill results. More along the walk back Emo got but Emo has been putting out good drill results despite the intervention. Sometimes the intervention can be due to success and sometimes for greed and sometimes because of no credible news. The boot is still on the neck, but it is going to be hard to avoid some strong interest in the area when the public becomes aware of the mess things are in by managed money and their benefactors.
Great POINT TERRY……………..ON………. PHYZ……..
https://www.tradingview.com/x/UXKOqMf4/
Silver : Pull Back Complete?
https://www.tradingview.com/x/X7S6UcjW/
Silver : Bearish Gartley Formation?
https://www.tradingview.com/x/tqFBi5r0/
Silver : Unresolved, So Far.
Philadelphia Fed Manufacturing Index down 5.5 points when it was guessed to go up 7.4 points and is rated as an important indicator but the USD is up… hmmmm
https://tinyurl.com/bddmb9wj
NatGas : Possible Top
I caught the top quite close but didn’t have the nerve to go short and missed a big move. Probably already at a short term buy at where it started at yesterday close.
Possible, but hold off for a bit.
https://www.tradingview.com/x/mTgnDzT6/
NatGas : Natural Buy Back Area
https://www.tradingview.com/x/mxglLSPf/
NatGas : Elevator Down
Target Hit
In my opinion, it”s something of a canard to suggest that I-80 will be able to sell properties to a major. The fact is that Lone Tree and Cove were previously owned by Newmont, while Granite Creek and Ruby Hill were formerly Barrick projects. These properties are cast-offs with serious technical problems and there is little chance that the likes of Newmont and Barrick would come back for seconds.
I’m not sure Mr. Young will be able to turn this around without additional significant pain for shareholders.