I’m not a geologist. I am not a mining engineer. I am not a “trained” finance guy even though I studied economics in university…

On paper I guess I shouldn’t be successful when it comes to mining investing…

However I have been pretty successful and I think there are two main reasons for that…

One is my background in poker which cemented the Risk/Reward concept. At the end of the day everything comes down to Price. The best project in the world is a sell at some point and the worst project in the world is theoretically a buy at some point. Paying little for a company is akin to playing a hand of poker that does not cost you much. In that case the odds of winning can be very poor and it still could be a no brainer bet. This is what has helped me to stay rational and buy when things get cheap instead of panic selling like a lot of people seem to do. In other words I get greedy when something becomes cheap because the Risk/Reward gets exponentially better all else equal. The cheaper something gets the less likely it is that one is making a mistake by buying it. It is also beneficial from a reward stand point for a couple of reasons. One is of course that there is more upside potential if something starts out really cheap. The second is that given how the marginal investor behaves it is easier to move a cheap stock (costs less, looks cheap by default etc). A tiny micro cap company could double and it would still often be hard for anyone to say it’s “grossly overvalued”. Even if the project has not become better it sometime is enough for someone to sneeze at the stock and one could be sitting on a double. Personally I don’t go hunting for any dog shit stock that has a sub C$10 M Market Cap in order to wait for “the sneeze” but it is probably a strategy that could work well. I prefer cheap AND high quality because in that case I could “win” via “the sneeze” and/or a justified revaluation higher because of the positive fundamental trend.

Another thing is that I think I am good at understanding and appreciating the weighted value of information. For example I closely follow what Quinton Hennigh and Crescat Capital is doing. Why? Because when one of the best geologists in the world believes that a project has merits then that is some of the most valuable information a mining investor could get (for free to boot). In other words I can be damn sure that whatever project Crescat (QH) gets involved with has strong geological fundamentals. Furthermore it should be obvious to anyone who has ever watched a Crescat presentation with Quinton that he likes to “go big” and always considers the “end game” aka how the project could be monetized (He is an economic geologist after all)…

Early Stage Examples:

  1. New Found Gold was considered overvalued by many right off the bat. Well, it recently reached a Market Cap of $2 B because the company has kept on hitting super high-grade gold.
  2. Labrador Gold was able to hit high-grade Epizonal Gold on the first tries.
  3. Eskay Mining was able to identify numerous geophysical targets and had incredible results on the first drill campaign at TV/Jeff.
  4. Eloro Resources looks like it has one of the largest polymetallic systems in the world.
  5. Cabral Gold just keeps on finding more gold.
  6. Tombill Mines hit the F-Zone on the first try.
  7. Lion One hit a bonanza grade intercept at depth at pretty much the first try.
  8. Defiance Silver’s silver project is confirmed to be wide open and has seen thick intercepts at depth.
  9. Novo Resources has confirmed conglomerate gold in all corners of Pilbara.
  10. Gold Mountain was partially a play on New Gold’s appetite for gold and voila New Gold has recently signed a LOI to increase its “Tonnage Limit in its Ore Purchase Agreement”
  11. Irving Resources identified three major LSE-systems at Omu via CSAMT surveys.
  12. etc

… These are all stories where Crescat (QH) came in early, had visions, and where said visions are materializing. New Found Gold looks like one of the most exciting discoveries in Canada today. Eloro Resources looks like one of the biggest discoveries in the world. Eskay Mining has some of the biggest absolute potential I have seen (which is further confirmed by BLEG samples). These are not your everyday (potential) “wins”. These are remarkable and extremely rare outcomes. Any one of these remarkable stories could have paid for numerous failed investments. The “hit rate” so far for Crescat (QH) is obscene. Especially given how long the odds are in exploration to begin with. I pity anyone who can’t appreciate what gifts Crescat and Quinton Hennigh are. Personally I think the combo is the best thing that has happened to this sector since I started.

When Crescat (QH) enters a play one could say that at face value it is just “one of many funds” and just “one of many geologists” that happen to like a particular stock…

In other words some might notice the event, shrug, and don’t pay much attention to it (aka not appreciating the information).

In contrast, this is what I see…

The value add I see when Crescat (QH) enters a play:

  1. Confirmation that the target(s) is legitimate
  2. Assurance that there are ways to monetize success
  3. Capital infusion which allows the company to create value
  4. Guidance to make sure the ROI on the capital infusion goes up

… In other words it usually completely changes my view of a case.  Not only does a Crescat entry confirm that there is high quality potential but it also helps bring forward said potential in time (geological  guidance, strategic guidance and capital to create value ASAP). Furthermore it usually results in even more money wanting to enter the play which has the added benefit of more exposure and even future lower cost of capital. All in all, the signal value (and actual value) provided by the Crescat/QH combo sometimes makes it feel like I’m investing with cheat codes. How many experts out there share so much information publicly and try to educate people as well? You think I would have been early into so many success stories if it wasn’t for Crescat/QH? No way. I would not appreciate the value of Epizonal Gold Systems. I would not have appreciated the value of Iska Iska. I would not have appreciated the value of owning the entire Eskay Creek VMS district etc etc.

I honestly think I could “retire” today and just diversify my portfolio across all the Crescat plays or simply invest in the Crescat Precious Metals Fund and handedly beat the market without doing a lick of due diligence myself. I know for sure that my results so far would not be as good if not for QH and Crescat. In short I consider myself incredibly lucky that these guys are around AND that I was “smart enough” to appreciate just how much value they provide (directly and indirectly). On that note I think these guys are making most newsletters obsolete (including myself for better or for worse).


Note: This is not investment advice.

Best regards,

The Hedgeless Horseman


14 thoughts on “THH: The Value of Knowing the Value of Information

  1. Jlo says:

    Great article! The crescat presentation is the highlight of the week lol 🙂

  2. phil morris says:

    I totally agree with you Eric. Crescat and Quinton Henningh are primarily responsible for the outstanding performance i have enjoyed this past year and a half. You yourself also has been a key. Congratulations and here is hope for more success

  3. jimh says:


    Understanding value vs cost is all one needs to be a good investor. The trick is to not listen to many of the ‘experts’ as they all get indoctrinated into the same thought system. So they will as a group always move together like a school of fish with some outliers but the vast majority stay with the group. Most of the ‘experts’ on tv and in print are Keynesians so they all think the same way and in the same direction.

    Understanding pot odds and being able to apply it outside of the poker table is a valuable tool. It is essentially what all analysts are doing when they make a recommendation, but they have all these fancy technical charts and earnings estimates 5 years out to justify what they already believe because most people need something they can grab onto to let go of the cash and risk it on a bet. They think or believe that there is less risk in the market than really exists not realizing that all ‘investments’ in the market are just bets. However some of them have a better chance of payout than others.

    1. Marshall says:

      Good points Jim H

  4. Theophilus Punuval says:

    So making so much sense! You’re going to provoke so much apoplexy in the stupid and the obtuse there will be cerebral aneurysms on a pandemic scale. People HATE the truth when it ISN’T what they want to here. ( Human Nature 101 )

  5. Theophilus Punuval says:

    You know what the real “secret sauce” is here, though? Goldspot Discoveries. Most still don’t understand OR appreciate the paradigm shift they bring to the table in the way they are applying AI to the methodology of prospecting. This is similar to the way 3D seismic was a game-changer in The Oil Patch several decades ago, only on an even bigger scale.

    1. Marshall says:

      Goldspot is truly a disruptive technology for mining. I agree with Theo. However it is best used when there is a lot of data to input. Many of the early juniors don’t have enough drill results, trenching, IP, LIDAR, etc to profit from Goldspot’s technology.

  6. Erik, you are 100% correct. Without QH I probably would not have bought ELO, Cabral, Condor, TLRS, ESK, NFG, DOLLF, LAB, Enduro, Strikepoint, Inflection, White Rock, Irving, LIO, FOXX last year. I have owned Novo for several years because of Moriarity. And I have hopes of making a fortune on NUG this year because of QH. He is a treasure. I hope and pray he has not made the mistake of taking the Bill Gates depopulation jabs. I was so sorry to hear Eric Sprott say last Friday that he has both shots and now regrets it after hearing what Dr. Bridel of Guelph U. said. I would not take one of those jabs for all the gold in Newfoundland, Japan, Finland, Fiji, Bolivia, Nevada, and the Pilbara. We must pray for Eric.

  7. bonzo barzini says:

    I forgot that I also own White Gold, Goliath, and KUYA because of QH.

  8. Warren says:

    Great thoughts. Surround yourself with intellectual people. They say to be a master of your art, you require 10,000 hours in that field or trade. I say ride those coattails with a ace up your sleeve if need be.

  9. Marshall says:

    For DD and R/R you forgot one important source: Crescat + QH + HH

  10. shoora says:

    Crescat Gets Activist On Gold!!! Absolute MUST watch every week! “Its Like Investing with a cheat code” Love it! wish i was in on some of these stories earlier, but i believe they still have much more to run. thanks for your common sense Erik

    shoora in San Diego

  11. ursel doran says:

    NFG is something the world has never ever seen!
    When they come out with the PEA, with the ore reserve on open pitting a few million tons of One Ounce gold, plus or minus then reality will set in. The drill hole speculator will do OK in the mean time.
    Sprott is buying the dips.

  12. Paul Cernac says:

    Congrats HH! I just saw that this post made it to 321gold.com. You both are my first stops in the morning.

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