Good points DT. I think Novo got caught up in the reduction of shares during the GDXJ rebalancing from comments I saw over at ceo.ca. As for Snowline Gold, they are in a more remote part of the Yukon, very close to where Fireweed Metals is exploring, and so projects in those infrastructure challenged areas, do need to “go big or go home” to make sure the economics work with higher prices of extraction and labor and the seasonal nature of the area.

In addition to all of that, and to your point, and the points raised in the interview today with Erik, resource investors are notoriously fickle and skittish and scatter as the first sign of any potential doubt.

Like Rick Rule often muses, most mining stock investors have trouble even holding their stocks over a long weekend… much less giving the companies they claim they have a 2-3 year time horizon on anywhere close to that amount of time to see if the thesis does in fact play out.

Personally, as more active short-term swing-trader, and medium-term position trader, this is the advantage to buying and selling in tranches around a core position. If a stock has just run too far too fast, then I’m fine trimming off 15%-40% to book some profits if it’s really gone screaming higher, while keeping a core position in place in case the move just keeps accelerating higher. Then if that same stock corrects down by 20%+ then I’ll happily by that same position back at a better price point than I sold it for when taking profits. Conversely, it is also true when I’m building up position-sizing in a particular stock, that I may do it in 2-3 trances or may add in many more 5-7 tranches, to average into a good overall cost basis in the full position. I’ve never understood why so many investors feel they need to buy the whole position or sell the whole position all in one lump.

Regardless, I thought Erik made a great point by mentioning that Volatility is the currency of choice for resource stock investors. It is that very volatility that allows for scaling into positions, fading out of positions, or just swing trading the whipsaw pricing environment to scalp base-hits. Gotta love it!

A fair point Jetty. Even after the big sell-off today in SGD, it still has a $393 Million market cap. That’s a lot larger than many multi-mine producers or advanced developers that have millions of ounces in the ground already defined. It was the same with ESK earlier in the year, and even several multiples of that with NFG (that had well over a $1.4 Billion market cap not too long ago pre-resource).

When I see much further advanced and derisked companies, on the clearance sale rack, for just a fraction of where some of these drill plays are valued, it’s hard to chase the drill assays narratives much higher, and far easier to simply bet on companies that I know have gold, silver, or base metals well defined in the vault of the Earth, and that will have big optionality to rising metals prices.

Of course, I wish all companies all the success that they deserve and can earn in the marketplace, but there are some real fire-sale values out there today in the developers or producers categories, that haven’t run nearly so high. Most of them have ounces in the ground valuations that are bordering on silly at this point in the cycle.

Also, as we’ve pointed out in prior interviews, think about all the permitting, construction work, and sunk costs it took many producers to get their mines into production, and what it will cost new companies to replicate that in today’s inflationary environment. Companies with economic mines and good operations teams are going to be a highly sought after commodity in their own right, and this is why most of the M&A action we’ve seen over the last few years has been mainly producers merging with or taking over other producers.

One more point, that we’ve made over and over again for many years is that when we see turns in the market, it is almost always the mid-tier and smaller producers that move first, because they can immediately monetize the higher metals prices and it instantly expands their profit margins. Then the higher prices are factored into development-stage companies project economics and they start getting a bid. Finally, as the bull market picks up steam, it is the smaller explorers that get the bid, and while a select group of the better explorers often have the most extreme moves to the upside, it isn’t a guarantee across all drill plays, and there can be a lag factor. This is why it is a good strategy to have a diversified portfolio across different stages of companies, and different commodity sectors, to capture upside in different areas as they each get their moment in the sun.

Hi Ex, Eric Sprott moved almost 8 million shares of a risky junior from his private holdings to The Sprott Foundation which he also controls, I would view that as a favorable move for the junior company, what do you say? DT