Hello and welcome into the K.E. report. I'm your host Shad Markwood. So we're getting an update today from Eric Wetterling, also known as the Hedgelist Horseman. And we'll put a link to the Hedgelist Horseman down below so you can follow along with Eric's work. And Eric, great to get you on the show as always to talk about the junior resource investing space. We were talking about a couple of ideas off Mike. And one of the companies that we were zeroed in on and kind of diving through the corporate slide deck was First Nordic, traded on the TSXV under the ticker F&M. And they have a new presentation out that really makes a nice comparisons to the size of the strike of their mineralized area that they're covering 100 kilometers and what that actually would look like if it was in Canada or another jurisdiction. And they also dove into some of the projects people listening in will remember we've talked about this company before and had them on the show. They have the Barcell A deposit, which has a couple of million ounces of gold already. But they also have Paul Bakken and Storguketon, two other areas along this gold line belt where they're doing some interesting exploration work. I guess just give us a snapshot of what you're looking at now as far as an updated look at First Nordic. I mean, I really like this new presentation. I think the sheer scale of their land position in Sweden. I mean, first of all, they have probably the Finland as well. So it's like there's even more meat to these bones. But still, I think seeing a comparison like that was really good. I mean, you can see in Canada, for example, in the more explored greenstone belt. It's like, if you have, you know, 100 kilometers of strike host, a bunch of mines in Canada. And this is a very underexplored part of Sweden. It's like, that's the funny things like the gold line has barely been explored. It was Canada discovered in, I think it was the early 90s or something and not much stuff has happened. So that's like gives you a sense of scale. And then you have this slide 13 gold line belt geochemistry. So they show the geochemistry on top of the bar sled deposit, which is like, I mean, if you increase the cut off rate a bit, it's at three million ounces. I think it's going to go to five million plus. I mean, that's my guess, because they're only down to an average depth of like 550 meters. And these can go to two kilometers, for example. And then they compare that to the harpsund anomalies and the nipus anomaly at Storukton. And they're doing a lot of work. They put out the news release today, for example, showing that, you know, how much ground they are covering with a new geochemistry at Storukton, for example. So these are only the ones we know so far. And I mean, you can see the scale on these, it's like, they're absolutely massive. I mean, they're as large, if not larger than the bar sled geochemistry anomaly. And that's just to me, the way I see bar sleds, like the bar sled deposit alone, therefore, the five percent interest in it, other partner being Agnique Weigel, that more than underpins the current market cap. I mean, I think bar sleds is one of the better deposits out there. There's not 100% owned by a major. So I think they're the intrinsic value of 45% of the bar sled deposit alone or the bar sled project is multiples higher than the market cap. And then by definition, this will becomes like, quote, risk free adjusted potential or it's like optionality. Because if they don't find a single additional ounce, make no discoveries, I think bar sled, or first Nordic is cheap just based on their bar sled steak. But to have these very large targets, which obviously has not gone unnoticed by Agnico, I mean, I think that's the reason why they took, you know, 13.3% corporate steak. I mean, they appreciate how big this is. And if bar sled alone is not maybe big enough for the current version of Agnico, I mean, imagine if they find one or two, one million plus ounce deposits here, and then you can kind of have that have been spoke picture where it's like, okay, 100,000 ounces per year from one deposit, 100,000 a year from another deposit, and maybe 170,000 or something from bar sled, then you're getting to that Agnico scale. So it's like, yeah, to me, I love this kind of stuff, because it's kind of like, again, free optionality. I'm not paying for any of these anomalies the way I see it. It's like, if they miss on everything, I think first Nordic is cheap. If they hit on any of these, first Nordic could be enormous. Well, the other thing we were talking about is the cost differential in Sweden versus some jurisdictions. It's such a low jurisdiction for operating costs. We were making note of the latest release from G mining on the CapEx expense it's going to take to develop the reunion gold project in Guyana. And you had some good comments about what the development scenario would look like in Sweden and maybe why Agnico would be so interested in a project of the scale. Yeah, I mean, that's the thing. Usually if you find under or underexplored greenstone belts in Western jurisdictions, where do you find those? I mean, they're typically very remote, whereas there's no power nearby. Some of them don't have even roads close to the program. I mean, this entire land package here in Sweden has extremely good infrastructure. And the critical threshold for economic success is like ridiculously low. I mean, the swag lead and deposit, they put a plant there and mined 370,000 ounces. Both an exploration is putting a 20,000-ounce mine or 30,000-ounce mine into production. I mean, it's just unreal. I mean, in Canada, you would have, first of all, much higher cut off grades. And you might need in many places like two or three million ounces or something. I mean, here you could literally put a apparently a 30,000-ounce mine into production. So, I mean, it's hard to compare to most places. And then you have the typically low mining costs. I mean, the hydro power is like, I think Sweden has the cheapest power in all of Europe, for example. So, I mean, it's just, in my opinion, a remarkable setup. And add then that we now have a much more pro-mining government in Sweden. So, it's like, I think things have never been better in the last, I think, 20 years at least in Sweden for mining, maybe 10 years at least because I looked at some old Frasier Institute rankings and Sweden was very high back then. But I think Sweden is going to climb on the Frasier Institute ranking given the new government, for example. So, it's like, yeah, there's so many boxes ticked here that have a hard time finding a comparison. All right. Well, we'll keep following along with First Nordic Metals. And we'll try to get an update from Taj and Adam sometime soon just to get an update from their side on the company. But let's follow up on one we did discuss last week, Eric. We were talking about headwater gold traded on the CSE under the ticker HWG. We were noting that they'd gone out and stake two new properties in Nevada. But now they've got news out again this week that they have gotten a strategic investment by Centera Gold, which is a large producer taking on 9.9% of the outstanding chairs of the company. So, taking about a 10% stake in headwater gold. And it seems like even though they've had really good news catalysts, nobody's paying attention. Yeah, I mean, it just goes to show there's like, there is literally no competition out there in some of these juniors. So, it's like, we talked about when they stake two projects, royalty free projects in Nevada. And we talked about how good the team is. It's the same team that got a new crest and then obviously, by definition, new month involved. So, it's like, you got to appreciate that their staking abilities probably vary very high. Relatively speaking, compared to the average union, for example, it's like, I think there were like 400 shares traded, like 400, not 400,000 shares traded. And then a week later, Centera Gold comes in at a premium with no warrant. So, the enterprise value is actually going down. So, I would dare say that enterprise value is probably lower today than it were before the tune usually says. So, I mean, how do you make sense of this sector real? I mean, you can take your logic and rationality and throw it out the window. This is just the most obscene or stupid sector there is. I mean, this is for, again, a value investor. Let's say, even though this is highly speculative, of course, but it's like, there is no way that the value did not change if they stake two projects and get a major coming in, putting in cash at a premium. By definition, the enterprise value goes down. And obviously, if they stake projects, given their staking ability, their nodes for exploration, the value what to have gone up. So, price went down when value went up. I mean, you probably won't find this stuff in any other sector. I mean, when you listen to the generous billionaires, for example, talking about how it is to be a value investor in today's broader market. It's like, "Oh, it's hard because everything is highly valued. There's few opportunities. There's too many eyes on stuff." And it's like, we have the exact opposite in the junior sector right now. Yeah. And we could have probably picked other companies and made the exact same example where they've put out positive news that's building value. The company should have revalued higher, and yet nothing happened because of the sentiment run. So, that is an opportunity for people that can look ahead and see where this is all going. But it's frustrating for current investors, and it's a frustrating situation in the resource investing space right now where good news just isn't being rewarded. But there's an example of news that hit the market that people perceived as bad news, but it also could be an opportunity in disguise. And that's a company we were both talking about with each other just off Mike last week, and that's AMEX exploration traded on the TSXV under the ticker AMX. And they were slated to put out their maiden resource estimate on their parent project. They put it out, and they sold off by like 40%. They rebounded about 10% the next day, and then they sold off again hard today. And I think it's because the market was expecting more ounces. I've seen a lot of people weighing in on this on social media and in the blogosphere, you know, kind of ripping on it, but they still put out 594,000 measured and indicated at about 4.2 grams per tonne goal, which is solid grade, and that's about 600,000 ounces. But then they also have in the inferred category, over a million, you know, another big chunk there. They still have a lot of gold in this project, but it's one of those examples where bad news got punished. So, if good news is getting not recognized with headwater, if you put out news that disappoints, you really get creamed. I actually, in full disclosure, took out a position in AMX expiration on Friday during the sell-off, because I thought, you know what? I've been following it for a long time on my watch list, and it still looks like it has a chance of growing. And again, with their inferred ounces having over a million, they still got 1.6 million ounces of gold here. That gold's worth something, but they lost a lot of market cap. What's your reaction to the market reaction on AMX expiration? Yeah, I mean, I cannot share your sentiment. And I would just say this, like, I don't know the story that well. It's been on my watch list. I mean, it's hard to ignore some of the drill results that come out of AMX, but I don't know. Let's say I've been hoping for a dip, and all of a sudden you see this stuff happening. I think they're coming to stock for the conference later in September, and I hope to be speaking to them. I just know that it's like, holy crap, I mean, this stock is down, as you said, 40 or 50% or something. And it's like, you know, I looked into it a bit more and it's like, okay, I think it was slide or in some news release or something that they put like $100 million worth of drilling into this project. And after the sell-off, it almost was trading close to their sunk cost. So, I mean, all of a sudden, and we talked about this of Mike, I mean, there's overreactions too. Well, now it's typically more overreactions to the downside and no reaction to the upside, even if there's good news. So all of this volatility and non-volatility is creating opportunities, because it looks like this might have been too much of a sell-off. People became disappointed. And probably as always, people are catalyst hunters. So I bet a lot of people were buying expecting, let's say, upside surprise or something. So they were already planned to be selling after the catalyst, after the resource estimates. So it's like, when you have a lot of people that's already made up their mind, you know, hot money, for example, that's like, oh, I'm going to sell after this catalyst. I hope it's going to go up 50%. And I'm going to sell regardless after when it goes down, they'll stick to the plan. They're probably going to sell. So you have this pent up selling demand. And then maybe stop losses get hit. Maybe people get discouraged. Maybe some bashers join the fray and stuff like that. So all of a sudden, without price haircut like this, I actually did what you also did. And again, without really digging too much into the story. And I'm not putting a large amount in it. I would need to have much higher conviction to that. But I think this might be one of those cases where it's like, yeah, okay, it came in under expectations. But it's like, is it that bad that it should trade down to sunk cost, for example? I'm not sure about that. So I think it's at least one that might be worth looking into. Well, we'll keep following along with AMEX. I'm going to go meet them in Beaver Creek later this week and see about getting them on to introduce the story. But it just seems like one of those market disconnects where there is almost a market tantrum in response to news. And if it's not what the market expects, you really get penalized. But I can't believe that 40 to 50% of the company value just evaporated overnight. So it's definitely one to keep on the radar. But nice getting an update, Eric, on first Nordic headwater and AMEX. And we'll check in with you again next week and see what's on the radar. If people want to follow along with Eric's analysis, definitely check them out over at thehedgelesshorseman.com and also his YouTube channel. And we'll put links to those down below so you can follow along with Eric's work. Until next time, Eric, have a great rest of the week. And looking forward to our next conversation. Thanks, Chad. The same and consider me biased. I own shares of all companies and headwater is a sponsor. So yeah, twice biased there.
