Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins us to discuss opportunities he is seeing emerge in advanced gold developers as they enter the second wave higher of the Lassonde Curve.
We discuss the potential rerating opportunities present in company valuations, considering the higher underlying gold prices, improving economics of development-stage projects, and the potential for higher profit margins and quicker payback periods if these deposits can be fast-tracked into producing mines.
Erik mentions a number of nuances that he looks for or avoids as not all development-stage companies are on equal footing. We discuss deposit size, grade, jurisdiction, what stage of economic study a project is at, strategic investments from larger producers, and the ability of management teams to either build or sell projects at a certain point in the commodities cycle.
During the course of the conversation we discuss examples of companies with compelling development-stage projects like the recent buyout of Barrick’s position by John Paulson to team up with Nova Gold (NYSE American, TSX: NG) at Donlin Creek, Integra Resources (TSXV: ITR) (NYSE American: ITRG), Cabral Gold (TSXV: CBR) (OTCQX: CBGZF), Amex Exploration (TSXV: AMX) (OTCQX: AMXEF), Skeena Resources (TSX:SKE)(NYSE:SKE), and Troilus Gold (TSX: TLG) (OTCQX: CHXMF).