Erik Wetterling – New Trump Executive Order Focused On Sourcing Domestic Critical Minerals Makes The US More Attractive As A Jurisdiction
Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins me to dig into the implications and potential benefits to the US as a mining jurisdiction on the back of the new executive order from Trump issued on March 20th; titled “Immediate Measures to Increase American Mineral Production.”
This executive order https://www.whitehouse.gov/presidential-actions/2025/03/immediate-measures-to-increase-american-mineral-production/ will utilize the Defense Production Act (DPA) to focus on sourcing more domestically mined, processed, or refined critical minerals and strategic mineral as a matter of national security. There appears to be a joint effort between the U.S. International Development Finance Corporation and the Department of Defense to provide investment support, loans, and possibly grant for mining projects. There is also an expedited priority on reviewing the permitting on projects seeking development from usual suspect metals like nickel and rare earths but also including gold, uranium, and aluminum.
Erik reviews a number of companies that have his attention in the US that may benefit including juniors like Integra Resources(TSXV: ITR) (NYSE American: ITRG), Stillwater Critical Minerals(TSX.V:PGE)(OTCQB:PGEZF), BCM Resources Corp (TSXV: B), and K2 Gold (TSX-V: KTO) (OTCQB: KTGDF). We also note the potential impact on long-stalled mega projects like Northern Dynasty’s Pebble, Trilogy’s Rambler road access to the Upper Kobuk mineral project, or Rio Tinto’s Resolution Mine in Arizona. We also discuss whether US projects will now get a premium, due to removing permitting bottlenecks or possibly providing government money to assist in the development of mineral projects.
*In full disclosure, many of the companies mentioned by Erik in this interview, are positions held in his personal portfolio, and they also may be site sponsors of The Hedgeless Horseman website at the time of this recording.
MRE – disappointing for NFGC, but I added again pre market @ $1.22, $1.10
NFGC- Steve @ THE DEEP DIVE on Y/T seems to have nailed it. He’s not a GEO PRO, but his analysis is quite reasonable. I wonder how Eric Sprott is handling this
I wonder if this( NFGC) weren’t all the time another Eloro, Novo of Quentin, but then only 1 of every 1000 ever get to production and make money.
We’ve noted many times that the valuation for New Found Gold, when it was up at CAD$1.5 billion in 2021 was simply insane and the market herd was getting way over its skis on that kind of a pre-resource, and pre-economic study valuation. It was valued more than large producers with active mines and 10 million ounces of gold in the ground. That never made sense.
The retail punters expectations for 10-20 million ounces of gold were just as nutty as when they expected that same thing for both Great Bear and Wallbridge. Even though both of those companies had 4+ million ounces at initial resources of gold (G.B. under Kinross for that resource) of gold, the market was way off as usual and in blue-sky fantasy land. If Great Bear had released their resource before Kinross drilled another 250,000 meters, then they would have had about 3 million ounces of gold and the market would have had a similar tantrum.
But because Great Bear was acquired with an unknown resource, they are seen as one of the biggest success stories today. It would have turned out very differently if Kinross hadn’t paid such a premium at the time and with those metals prices around $1800. BTW – those 4 million ounce deposits that G.B/Kinross and Wallbridge delineated were phenomenal by the way. Look what we saw when people assumed 3-5 million for Amex and they only had 1.6 million ounces. This selloff in New Found Gold because they have 2 million ounces is no different, and just the market finally equilibrating the valuation that has been bloated for 4 years.
Yes, there have been impressive drill hits for many years now by NFG, and their team has done a great job with exploration, which should be commended. Over the past few years as more and more drilling data has come in and the share price and market cap has gradually deflated, it was finally returning to Earth and finding gravity and reality.
Today’s valuation in the CAD$300 million is a much more sane valuation, and is still way more than many other 2 million ounce deposits. Wallbridge has over 5 million ounces now and is valued at CAD $72 million for example. Integra has 9 million ounces, 3 projects, and one of them is a producing gold mine where they are now generating revenues and they are only valued at CAD $320 million. When you compare Integra to New Found Gold, then ITR is still way undervalued, and NFG could still come down some…
NFG is finally closer to a fairly valued market cap versus known data and resource. If they keep doing solid work then they can grow the resource from here to 3 million and then maybe 4 million ounces over time. That is still a success, but now grounded and growing, versus overinflated and sinking. Ever Upward!
I never understood the fascination with highly overpriced non-producers, Santacruz has proven mines and a P/E ratio of less than one… which one would you rather own? BTW, I have sold half of my SCZ because of the weekly is outside the bolly bands and is currently overbought. will see where it is at the end of the week or so.
Speaking for myself the fascination is the exploration/discovery potential. NFGC is getting pounded because they didn’t drill enough to allow for a much more impressive MRE. If the press release is accurate and “the initial MRE sits within a less than 5% portion of the 110 km long strike” then there’s obviously still plenty of potential upside available and it might be many times what the company has at the moment. In addition, three quarters of the ounces in this MRE were of much higher grade than the whole since “73% of the ounces are contained in 24% of the tonnage in the indicated category…”
So is the company worth the current $137ish per indicated and inferred ounce? Based on the aforementioned potential it still has and the current market climate for the sector I think so but based on many holders’ experience with the stock this capitulation makes sense and could intensify.
It’s interesting that it fell right back into a fork that it broke out of on December 31st…
195 minute:
https://stockcharts.com/h-sc/ui?s=NFGC&p=195&yr=0&mn=5&dy=0&id=t2738893844c&a=1885132467&r=1742925070087&cmd=print
A different fork is also in play:
https://stockcharts.com/h-sc/ui?s=NFGC&p=195&yr=0&mn=9&dy=0&id=p21103052266&a=1920342946&r=1742926689096&cmd=print
That helps explain the attraction to NFG, I have trouble getting my head around it so I stay away but I certainly can see why braver investors go with it.
Good thoughts Dan. Yes, Santacruz Silver is still a very undervalued silver, zinc, lead, producer, generating good revenues at current prices, and it has had a few multibagger runs the last handful of years, and is in the process of another one over the last couple months.
In comparison New Found Gold has been a cult retail drillplay for a number of years. As a result of all that prior pumping from 2021 it has remained an extremely overvalued explorer for the last handful of years and has been gradually coming back down to Earth over time.
Their valuation is still a bit rich compared to many other multimillion ounce deposits that are trading for a tenth to a third of their insitu value at $10-$30 an ounce in the ground versus NFG’s $110+. So even in the pool of advanced explorers and developers I just see much better value out there to pick from.
Granted, NFG is at a more attractive valuation after today’s price action, and they can keep growing their resources to 3-4 million ounces, with more infill drilling.
I always has a tendency to silver investing as a subscriber to David Morgan’s – Silver-Investor in 1999 for 4 years, of course now called The Morgan report, and have had a handful of 20-40 baggers and another handful 3-10 baggers in that time, most of which I sold out way too early. Most fortunately, 80% of gains have been in my and the Mrs Roth IRA’s. So I missed all of Kirkland Lake, and now I only entered into NEWFOUND since it going sub $2. The market always has a way of keeping us humbled. NFGC maintained such good visibility and marketing, of course, $3500-$4000 gold such could remedy circumstances quite quickly.
Thanks Ex, I was never involved until 4th qtr of 2024 in NFGC simply because it wasn’t a silver play. Yet I think now NFGC could now touch down into the $.80s as Matthew has suggested
Hi Marty you always do a fantastic job with your trades. You’ve had many multi baggers that you’ve called here on this blog over the years, and you have a very good sense of picking up good stocks when they go on clearance sale and then riding them back up. Cheers!
PGE ready for another breakout, could hold here until April 2 and the tariffs are announced.
BTW, I doubled my position today in PGE.
This probably what we could call a “blow-off” bottom.
https://stockcharts.com/h-sc/ui?s=NFGC&p=D&yr=1&mn=3&dy=0&id=p77945769778&a=1922567465
Thanks for your updates, inputs and conclusions, Matthew
You’re welcome, Marty. And now I have to correct an error. NFGC’s gold is currently trading at a more appealing $112 per ounce, not the $137 that I mentioned earlier. And if we subtract the $40M they have in cash, the number drops to $92/oz. I must’ve been looking at the intraday market cap in Cdn$.
I thought it was interesting that roughly 145 million shares have traded since it lost the $4 level last year. That’s about 73% of the shares outstanding. And below $8 but above $4 it traded over 100 million shares. To be clear I’m only talking about trading after it fell from $12 not trading on the way up. This activity, especially under $4, makes me think the company is relatively free of weak hands at this point but of course the market will let us know.
Yes, thanks Matthew, guys like me who have never owned it other than a quick failed trade are turned off by it and would need a billboard in front of them before they bought into it again… so I can see it being unloved for now.
Dan, that’s very understandable considering it hit $12 less than 4 years ago. Luckily, my history with it is like Marty’s; I never gave it a second thought until it went under $2. It also helps that my position isn’t large so I have plenty of room (psychologically) to average down if I decide to.
Chasing big gains is rarely easy!
Regarding NFGC it should be noted that the market values gold ounces in the ground based on many factors. High grade gold that is cheap to mine and in a safe/stable jurisdiction will always command a higher valuation. During the bull market of the 2000s there were companies trading at less than ten bucks an ounce for their essentially worthless deposits but there were also those that fetched hundreds per ounce for various reasons, and deserved it.
When it comes to explorers there are more variables, obviously. On paper most are wildly overvalued until successful drilling makes them suddenly undervalued. Therefore, to value NFGC on its MRE alone is pretty ridiculous as it is hardly a reflection of what the company has going for it.
And of course Ucore which has doubled recently and I only sat and watch it. 🙄