Contrarian Bets: Brian Laks on Lithium, Coal & Uranium
Summary
Contrarian Investment Strategy: Brian Laks emphasizes the importance of being a contrarian investor, focusing on sectors that are currently out of favor but have strong long-term fundamentals, such as coal and lithium.
Commodity Focus: Laks discusses the potential in commodities like uranium, copper, and tin, highlighting the importance of identifying large, low-cost sources of supply and the timing of market cycles.
Uranium Market Insights: The uranium market has shifted from a contrarian play to a more mainstream investment, with significant price increases and market enthusiasm, suggesting a need for more selective investment strategies.
Portfolio Strategy: Old West Management employs a diversified approach, investing in a mix of currently profitable sectors and those expected to perform well in the future, ensuring a balanced risk-reward profile.
Market Dynamics: The discussion touches on the impact of geopolitical risks and jurisdictional challenges on investments, particularly in regions like Argentina and the Congo, affecting metals such as tin and copper.
Energy Sector View: Despite a background in energy, Laks prefers mining investments due to the longer lead times for supply adjustments, which can lead to more significant price spikes and investment opportunities.
Future Outlook: The conversation concludes with a focus on identifying future investment opportunities in sectors currently experiencing negative sentiment but with potential for long-term growth, such as lithium and coal.
Transcript
The hardest thing about being a contrarian is knowing when to allow the market to catch up to you. You all want to be a contrarian for contrarian's sake, right? How do you stay long enough at the party, especially when more and more of the return comes less from just that valuation normalization and more from how many people are going to jump into the pool? How high is this going to get? How frothy is it going to get? >> All right, money miners. We have a returning guest, Brian Lax of Old West Management, who when you last came on, we we dived into uranium tin, a whole bunch of niche kind of metals. You of course were very early and successful on on the uranium trade, Brian, and you're a self-professed contrarian, so I think that's the perfect spot to to start the conversation. What are you seeing out there that's really presenting the most amount of value to you at the moment? >> Yeah. I want to first of all thank you guys for having me and uh like we were joking before we started here I think we finally are in a in an environment where a lot of these things are working and so to to switch over to some of the things that aren't on the contrarian side I'm I'm h happy to do that as well but it's um you know it's it's it's quite a different environment than it was a few years ago where any commodity that you touched was kind of contrarian because everything was was out of favor especially 2022 into 2023 is you know they started raising raids, China shut down. I think here in in 2025, um we have seen a lot of things start working, especially gold and some of the other metals. Um but I think there are still a few areas that are out of favor. Um where we're really trying to get up the learning curve and um you know, maybe starting to dip a toe in. Uh I guess probably two off the top of my head would be maybe coal and lithium, which both had, you know, huge runs last few years. obviously gave a lot of that back um you know in the last year or so especially on the lithium side. You know, you never like to to call bottom on anything, but it does look like the long-term fundamentals are setting up pretty nicely and um still working through some short-term headwinds. >> I'm I'm so excited you've mentioned them because I I jotted them down as commodities that I haven't heard you speak about in the past. So, I'm curious to to start with, have you actually initiated some positions in in some of the the coal players or the lithium players or just doing your homework and and getting a feel for the space to start with? >> You know, a little bit of both. Um, dipping our toe in a little bit, kind of getting up to speed on on the whole environment, um, all the different players. But, you know, similar, I'm sure we'll talk about with other commodities. When we look at all of these different areas, we're looking for, okay, is there going to be a supply demand mismatch somewhere either now or in the future? And then who are going to be the companies that are able to supply into that? And with all these commodities, it's who's got scale and who's got grade. I mean, where are the large lowcost sources of supply? Because in the long run, that's really what's going to matter. And if we can buy into those types of uh companies when there's a short-term or you know multi-quarter kind of downturn I think that's where we get the best return. I we saw it in uranium five six seven years ago when all these things were were trading for nothing. And you know that's when we're usually doing the work, building positions and then you know fast forward 5 years. Um we're harvesting and uh you know I mean we still maintain a lot of the things that work but really looking to to rotate into some of these other areas that you know might reset the clock a little bit and give us a nice forward you know 2 three years. >> If you if you take that kind of yeah lens so you look for where the large large lowcost supplier might come from. Take take lithium for example, you know, the lowest cost producers that are western names. You got, you know, Albumal who's got the worst balance sheet in the sector. And then um SQM where, you know, you kind of need a resolution of of events with the Chilean government to to to see a maybe a a pathway where an invest a large investment can be comfortable in some respects. So, do you do you put a line through them for those reasons or do you actually think they're interesting situations for those reasons? You know, I mean, it really depends on, you know, how what sort of components of return you're looking for. I think when money starts flowing back into the space, it naturally gravitates to some of the bigger, more liquid names. I mean, we saw that in uranium looking like a camo where it didn't really see a pullback off the 2021 highs. It um it just kind of kept trucking along where some of the more junior uh projects, you know, did retrace and and and then took a second second shot higher. With lithium, I think we're looking at it kind of the same way. Are there big development projects? You know, who's got the big sources of supply? It might not necessarily have to be a producer today. Um, you know, and so I think the way we look at it is well, we're not really certain when the next cycle takes off, but we don't necessarily need to have someone in production today because um, you know, and you kind of go down the the producer developer curve, but where do we want to position oursel? um especially if we're not kind of jumping into the sector with both feet right away. And so I I think we do have the luxury of time. Um you know, I don't know if we're if we're near bottom, past the bottom, whatever it is. And I've heard some of your your recent guests opine on that, but I think this is a great time for someone who has a a longer term perspective, you know, a few years where they can wait to really say, okay, who are the largest lowcost sources of supply, whether in production today or in development, and what are they trading for? or what's baked in and and you know if we have a different view of what uh the pricing environment looks like a few years from now who's going to benefit the most given where they're they're being valued today. So you you really speak to this kind of top down approach, Brian. By that nature, do you do you always tend to play the portfolio approach when you when you come into the commodity and pick a handful of names? Like obviously some commodities that's harder. We spoke about tin previously where there's a very small number of companies you can play it in. But by and large, do you prefer that portfolio approach to it? >> You know, I I think um and that kind of goes with how far you are up the learning curve. Well, with uranium, it was different because the sector was so washed out that you really could just pick any of them. I mean, the whole all of them were, you know, $50 million market cap. I mean, there were a few larger ones. Um, but for the most part, everything was so distressed. I mean, this was when uranium was 20 or 30 bucks a pound, right? And so, you didn't really need these heroic assumptions. You said, "Hey, if we can get to 50 or 60, a lot of these things were trading very cheaply, and we didn't necessarily know which ones would um perform the best." I mean, I think there's a bit of a path dependency there. So, we did build a build a basket. You know, at the time there there weren't a lot of uh there was one ETF and it had some construction issues with it. Uh today, it's a lot different, at least for uranium where, you know, there's a half a dozen ETFs and you know, maybe 50 or 60 companies now. I can't even keep track of all of them. But for something like a lithium or a coal, I wouldn't call it building a basket. Um but, you know, maybe you maybe one or two stocks or three, I guess. I don't know if you want to call that a basket, but you know, who's a who's a big producer? that's that's down and out. Whereas what are a couple big development projects that you know might look terrible at today's price, but if you go to normalization, wow, these things actually look good and they're, you know, I think we like uh projects that turn into actual mines in production. I know people can probably make more with some torquy type of, you know, way out of the money. I mean, we saw that with uranium. Hey, those stocks did well, too. But um I I think for just the way we operate cuz we're a little bit larger now and so we we need to be able to move um kind of chunkier pieces of capital in and out of these things. I think you really want something that gives you more than one way to win. Not just hey we're going to get a levered play to the commodity reflation, but this thing might actually be a mine and in various assumptions, various scenarios, it actually looks um pretty compelling based on where it's trading today and what we think the environment might be, you know, a couple years from now. How do you how do you do that with coal? There's not too many new coal mines being permitted, >> you know. I always feel like a tourist when, you know, I listen to the coal guy talk and it's just, you know, um it's hard. I think there's a handful of names you think that are considered high quality. Um, you know, I think really it's just it's it's a very similar type of analysis, which is, you know, you had this big run a few years ago and then it all kind of came back down. you had a lot of things weighing on their end markets, China and steel particular. Um does that mean it's it's over or does that mean you know we need to chew through kind of this current environment before we can see demand pick up you know whatever it is in in a year or two um into the future. So you look at I mean it's it's very similar. Who are the who are the lowcost producers? Who are the large producers? Um you know where do you want to place your bets whether it's thermal or met. Uh you know I'm I'm no coal expert by any means. And so I'm sure you'll get a better answer talking to different people. But you know you ask where are the contrarian areas where I see current sentiment out of favor but I can make a case that the long term actually looks better. I think those are are two great examples and and partly because a lot of the stocks are down 60% off their highs of a couple years ago. >> So, if we reflect on the the uranium trade you've mentioned there a few times, Brian, this is like the best example of your guys strategy and how it can play out. Where do you think we are in in terms of it fully playing out right now? >> Well, I think you know it's it's definitely a different environment. Uh what a difference five years makes, right? I mean, a lot of these things are up fivefold, 10fold. Um, just sort of crazy amounts of enthusiasm, froth. I don't I don't think it's the contrarian trade that it used to be. Maybe doesn't have the same level of asymmetry unless you believe in some, you know, nuclear renaissance or we're going to start building hundreds of reactors around the world. You know, when we first got into it, and we did a lot of these types of podcasts, uh, you know, five, six, seven years ago as we were building positions there, we didn't we weren't baking in uh, the idea of a nuclear renaissance. It was just at the current, you know, slate of reactors, the the builds that were on the table, there's just not enough uranium and the price was too low for more supply to come online. And so it was a simple economic, hey, the price has to go up. Um, you know, at the time we were like, oh, 50 would be great, right? And 60. I I think that was uh a lot of these things looked really good. um you know so today you know with where the valuations are I think one you have to be a lot more selective and two you know you may have that same asymmetry if you do believe in uh just a huge nuclear renaissance which or a lot of flows of money into the sector and you get this kind of uh valuation expansion which we you may have as well because you know now all the tech community is getting getting involved in there and you see people saying oh my god you know we're going to have a reactor on every corner Um, if that's the case, yeah, you can probably make a picture for that much more upside, but you know, we've it was a big part of our portfolio 5 years ago when everything was washed out. We still own a lot of it, but I think it's more more concentrated kind of the higher quality names and we're not necessarily baking in, you know, all the extreme bullcase even though it might happen, right? Yeah, you got the $200, you know, all these people are crazy now about what they think is going to happen in the space. I think we own what we think are good high quality projects and you know it's gonna sound like a broken record here but who's got the big lowcost sources of supply that can come on you know now and into the you know next 5 10 years think those guys should do well because I think yeah the price has gone from 20 to wherever it is now 70 80 a pound um we think it probably still has to go higher I think you're going to start to see the long-term price start marching up and whoever can really sell into that is is going to do well um but you do have to be a little bit more selective I mean, it's pretty wild to see some of these companies that had, you know, 100 million, 200 million market cap 5 years ago now having, you know, 5 billion. Um, you know, it's just it's it's like the wild west out there. I I think, you know, there's a lot of these nuclear adjacent tech type names that are just seeing these crazy valuations. And so, you know, we're we're we kind of watch it and say, oh, you know, it's like seeing one of your kids grow up, right? It's a whole different uh environment, but um I think there's still there's still a long way to go for the whole uranium nuclear thing. We still think it's a great way to generate electricity. We're going to need a lot of electricity. It's going to be part of the part of the portfolio approach of generating that. Um the real question is what sort of environment is being baked into these valuations and do we want to participate there or do we think there's other parts of the commodity sphere where we can get you know better go forward returns? >> What what is your allocation to uranium and then non non-uranium commodities as a percentage? >> I'd have to check. I think I mean at one point you know it was we had to cap it was like 30% 35% and then that was before it started running and you know it was it was basically going up faster than we could trim it. Um today I think it's much more reasonable maybe 10% 15%. I mean I'd have to check we have a few different funds and and it varies but certainly not as large as it used to be. Um partly because yeah we did have a pretty large basket of them five years ago. I think now we've kind of cut that down to a handful of what we think are are the highest quality and you know they're the household names you think of the large producer, the large developer projects. Um I mean it's a it's not it's not rocket science here. I think yeah maybe you could get kind of cute and and go into some of these more niche areas and and try to squeeze something out, but again we're not trying to um speculate on a massive nuclear boom. I I think to get real significant upside out of a lot of these things uh you might need that especially given where some of them are trading. So I mean yeah we're we're I guess pretty conservative now in our allocation there but just because we see that same setup in a lot of other commodities that we saw 5 years ago and these other these other places are not nearly in the same level of reate that we've seen you know where some of these stocks are up 10fold. >> Whenever it is like a bottom for a commodity or you know max capitulation or whatnot there is always a narrative that is like big and loud about why things will get worse from where they are right now. um like how do you how do you get comfort, you know, um entering some of these like commodities when when when it kind of could be the bottom, but there's a lot of noise and and good reason to think things will get worse than where they are right now. >> Well, I I think that's the the contrarian nature right there. You have to be careful trying to call a bottom. You hands are scarred from from catching falling knives in a lot of these things. You know, uranium was a great a great example. I mean, it bottomed in 2020. we were building positions in 2018 and 2019 and losing money. And so it was like, you know, you got to have an investor base that kind of gives you the benefit of the doubt that you're doing the right work. You have to have have done the work to have conviction in where you think these things are going. And if you're correct and that long-term outlook uh doesn't change, well, you should be buying more as they're getting cheaper. And I think that's what you're seeing in some of these other areas that are washed out right now is yeah, I mean you might have had that bullish view on lithium a year ago and you know I think some of the stocks have been cut in half and so it's difficult to try and call the bottom which is why I think in these types of scenarios we usually leg into the positions. You know I think we're have enough humility to know we're not going to call the bottom to the day. So, if we can kind of build a positions on, you know, a few quarters before, a few quarters after, you're going to catch a nice average price in there. And if you're right about the potential upside, it's it's not really going to matter. I mean, I think you do have to have the investors that are not going to, you know, pull their money if you're down after a quarter or two quarters. Um, yeah, and now we have the benefit of having done it a few times where we've shown this kind of longer term thinking works. Um, and so we do have the investor base that'll give us patience. I mean, you know, just in the last year or so since we've talked, two of our our largest positions have been acquired. Um, FO and Adriatic, which I think we talked about on the last show. So, it's nice to kind of have a few things in succession where, you know, hey, we we made these bets, you know, 5 years ago, and then a few years go by and we harvest them, make new bets, and then a few years go by, we harvest them again. And I think you can show that repeatability there. Um, but yeah, for if you don't have that track record, it's going to be hard, you know, a year into the trade and you're down 20 30%. People like, you know, do you know what you're doing? Like, what's going on here? And so, I think you do have to have a bit of that mindset and, you know, set your expectations correctly. This is certainly not the multi-manager, what's going to happen next quarter, you know, try and game it. We don't do any of that stuff. In fact, we kind of like the ones where people are actively negative on because that's you typically means they're going down for some reason. Um, and if we can have a view that the the next few years looks better, um, well, that's when we probably start building positions. >> And uranium hasn't been all one way since it started going in your sort of favor. So, the last year has been a bit rough. Did you use that chance to to top up or you just sort of hold on to that core position? >> Yeah. No, we did. you know, we lightened up a lot in uh call it late 2021 when you had that first, you know, real frenzy, right? 2020 at the end of 2020 is kind of when the move started and then throughout 2021, SPR came into the market, you know, you kind of got into the summer fall in Northern Hemisphere and it was, you know, Wall Street Bets, it was on CNBC, you got the price going to like 50 and I think a lot of these things really had that first big impulse. Um, but we got to, you know, whatever that was, September, October, November time frame. And uh we just said, man, a lot of these things are already pricing in, you know, $70 or $80 of uranium. And remember, we had a huge waiting in it. So it was like, well, let's dial this back because these things may have already gotten ahead of themselves. And and sure enough, I mean, there was this big digestion period that happened, you know, kind of late 21 into call it 23, you know, then you started to have these things tick back up as the spot price, you know, caught up. And then you know early last year and it got above 100 and there was that kind of that wave of enthusiasm and then completely retraced that into earlier this year to where we saw sentiment as bad as it was you know back when we were you know looking at it in 2017 18 right and so we did take the opportunity to top up on some of these things because the way we looked at it was now wait a minute a lot of these stocks are you know this was call it you know first quarter of the year was a pretty bad quarter for uranium stocks a lot of them were trading below the levels that they set in 2021 and here we are, you know, three and a half years later. Um, and we So, well, now wait a minute, the price is much higher. Uh, and these companies are 3 years closer to production or wherever, you know, on their timeline and yet they're trading below where they were before. And so, we said, well, this doesn't make any sense anymore. And, you know, kind of like how I guess it's a little bit of zigging when the market's zagging, right? I mean, when the things were flying and they're they're all over TV, you know, we're we're lighting it up a bit. And when you know these diehard uranium investors are you know throwing in the towel then we're like wait a minute we'll take a little bit and add to that. And so I think that that's worked for us in the past. Um you know and so yeah it's you know now here we are again. Look I think um I think the uranium trade still has a lot of legs. It's just what sort of level of enthusiasm do I want to underwrite from here? You know, I think we do a lot of I would call sort of separating what our expected return components are going to come from, whether it's just the pure valuation or whether, you know, it's going to be money flowing in or multiple expansion. I think when you get to some of these frothier uh eras, you know, I think more of the return is going to come from those subjective things versus, you know, I don't want to call it the easy money because it was hard to be made, but kind of the early money off that very bottom kind of coming up into that first um that first inflection. I think that was captured and now it's a bit of a more balance riskreward from here. Like I say, you have to be more selective and then it's how how big of a renaissance do you want to um do you want to to expect? >> I' I'd love to hear your thinking around around this because yeah, the the best riskreward is to to be set up and waiting for that first inflection up in in any commodity, but often times you see that first inflection up, you didn't have um a sufficient allocation and you think, "Oh, damn it. I I I knew I should have bought like a month earlier or whatnot." Um but there's often still a long a lot of legs to go. like take um take that kind of PGM complex at the at the moment. You're seeing a lot of green shoots there and um and if if if people are you know don't have an allegation and think I've missed it but but then you know there's this pattern in quity cycles that you you see you see a little you know some legs up and it doesn't just like fizzle out there. You often get these boom bus kind of dynamics. >> Yeah. Well, and I think that's why we we do spend so much time looking at the ones that are out of favor because I think that's where you can actually spend time to learn the the industry. You can start to build positions. You might still be buying it on the downswing, but you know, I think um look, there's a a lot of different schools of thought there, right? Some people say, "I want to wait until it shows me that it's starting to work so I don't have to take that pain." You know, we had a lot of guys in the uranium thing, you know, it was 20 bucks saying, "Hey, call me when it's, you know, 30, right?" Like, let's I want to see it start working. So, I mean, there's different ways to to do it. How much pain threshold do you have? Are you willing to, you know, take get into something when it looks like maybe there's still a quarter or two of bad news ahead? We are. I think there's a lot of investors out there that do not want to take any sort of draw down. Um, and so they avoid these types of things, but I think that's how the mispricings get so severe is people are like, "Oh, I don't even want to look at this thing until it starts turning." Um, we're happy to start, like I said, we build positions over time and then we scale out of them over time, right? When the when the environment changes, look, we have to be right still. I mean, we have to say that, hey, today's environment is is going to look a lot different than the future. Um, you know, otherwise, yeah, you're catching the falling knife. But um I don't think we mind as much to um you know be a little bit early because if we're right you know we're probably buying just as much on on the early side of the bottom as we are you know coming out of it. >> How how do you think about the the changing incentive price in in uranium as well because that's sort of increased dramatically over the past five years as these restart projects have have struggled to come online and there's been delays in in new projects. So what's your thinking around that at the moment? >> Yeah, I think it just it just keeps marching higher. I mean, you see the inflation, you see all the on the capex side, opex, the delays, um you know, where we used to think, hey, 50 60 looks pretty good. Now you look at some of these higher cost projects, they probably need 80 or or north of that. And and we're kind of right around there, right? And so it's like, okay, well, you can give the green light to some of these projects, but then it's just a timing issue of how long it's going to take them to be built. And then we'll see if if that's truly what their break even is when it when the production comes on. I think we saw that a lot in in copper where these guys said, "Oh, you know, look at our deck and you make, you know, those great irriting, right? there cost overruns, timing overruns, and so you have to think whatever your idea is of that break even price. By the time you get to the production, it's probably going to be higher than that. And so I think it just continues to creep higher. I don't know. I mean 80, there's some companies that make great money at 80 here. And so that that and that kind of goes back to what we were just talking about, which is who are the lowcost suppliers. Sure, they're not going to have that crazy snap leverage of the guy who, you know, is break even today and goes infinite profit on the next dollar, but we don't need we can sleep better at night not not needing to worry about that kind of stuff. I I I think um you can have a little bit of that in your portfolio, but if you base load your portfolio with just the really high quality names that can make a buck in any environment, I think you're going to do well over the long time, especially if you're right on the on the commodity price. And so, you know, that's really how our portfolio looks today across all the different commodities we're in. And it's not like we we do have, you know, some of these more niche kind of development stage companies, but for the most part, it's it's what you would what you would expect. And so, I think more of the value is in saying, you know, when should we be in these different areas? Um, and I that's where it kind of goes to that kind of short-term contrarianism versus the long-term, you know, real strong fundamentals. And if you can layer in enough of these um types of payoffs so that they kind of overlap each other, you're not just having your entire portfolio waiting three years for everything to hit at once. You get this sort of sequential payoff structure where you can be harvesting in one area, deploying in another area, and it and it kind of smooths out the volatility. And so I think, you know, we like to have things in our portfolio that are currently working, that are about to work, that you know, might be a few years from working, things that are going down that we can keep buying. And so if you have a balance of all of that, you should kind of smooth it all out and then your long-term returns actually look pretty good. >> Let's talk about copper then, Brian, because you you identify as a contrarian, but I think you've got a consensus you want copper. >> What's that? That it's going higher. >> Yeah. >> You know, look, the hardest thing about being a contrarian is knowing when to allow the market to catch up to. >> You don't want to be contrarian for contrarian's sake, right? I think our And probably that's been the case is how do you stay long enough at the party, especially when more and more of the return comes less from just that valuation normalization and more from how many people are going to jump into the pool? How high is this going to get? How frothy is it going to get? And look, yeah, you probably want to have a little bit for that, but it's harder to justify a real solid waiting in something when more and more of that return component comes from subjective things like that. And so copper, yeah, maybe it is consensus, you know, I don't I don't know. I mean, I think copper looks great here. I think it's going to continue to surprise to the upside, especially like we were just talking about all these guys that claim, oh yeah, our project so low cost and and look at this and then you know who's making the money here, right? And so I I think you're going to need a Well, I mean, this is just kind of it goes for a lot of these commodities, but the demand continues to grow. Supply is is pretty shaky for a number of reasons. And so that's just a recipe, I think, for continued higher prices. And it's great. We love seeing these companies come out and be like, "Oh, you know, yeah, 450 is here, but we're not really doing too well there. Maybe we need five." And then, you know, let alone the the green field and, you know, brownfield expansion stuff. I I think um you're going to need higher copper prices. And if anything, I think what you know, what's the copper price up this year now than 10 15%. I mean, I I think where it has to go, you know, especially if you're looking out a few years, right? 3 years, 5 years, 10 years. Um, we're going to need a lot more copper. I don't think the current price is is enough for that. Um, and so I mean, look, we've we've we've placed our bet. We might be wrong. Yeah. I don't know. Maybe we're wrong. So, that's fine. I I think people agree with us as at least the ones that invest with us agree with us. And so, you know, and again, it's um we're not necessarily needing to call for, you know, these you remember was a year or two ago when they had all these crazy call at 40,000, you know, ton of copper and all this stuff. That's not us. I mean, look, that'd be great if it happened, but I think it just it has to go, you know, it has to go higher than we are today. You know, what's it 450? I don't know, 56, I think, would be a nice price to to really stimulate some some more production, but we still like the large lowcost sources of supply because they're going to do well today and and probably in that environment, too. you know, we always like these situations where you need the marginal projects because that means that the guys that are good projects, I mean, are going to earn that sort of bumper margin. Um, and so if you were to look through our copper portfolio, it's yeah, it's a lot of these large large lowc cost source of supply. I mean, we talked about Felo last time, they got acquired by Lendine, and so we still we still like what they're doing down in the Punia. I mean, I think that's a perfect example of how we look at things is that's going to be a hundred-year district. I mean, it's going to take a ton of capital. Who knows what the what the break evens are going to be, but it's very large, very high-grade. BHP's in there now. Um, I mean, I wouldn't be surprised if BHP ends up, you know, owning the whole thing at some point. Uh, you know, it's the Lond, you know, consolidating that whole region, putting all the pieces in place, kind of making sure all the entities have the different I mean, it it really is nice to see what they've done down there. >> NGX royalty as well, like of course. Well, so all people think, hey, is that mean that they're prepping themselves for >> I can say that, >> you know, loads looks great with as future feed for Caseronis, right? And and Lundine stepped up. They they exercised the option and so it's like all these little things in isolation don't, you know, they don't show anything, but kind of in aggregate, you can see them putting the pieces together. Yeah. And then obviously the NGX discovery is just, I mean, it's it's kind of absurd the grades that they're hitting there. I like your I like your theory there as well because because remember the talk about a potential royalty spin out of of Felo kind of in the leadup and and presumably BHB did not have any appetite for a royalty to be part of that deal. So if you need if you want to create a royalty spin out knowing that a consolidation is coming well you got to do it now as opposed to to to wait for a bid to come. So yeah, maybe >> that's right. And I think NGX is kind of in the same place FO was at a year or two ago where they keep putting out these barn burner results and the market's like, okay, well, you know, yeah, we get it. You got a lot of high-rade stuff there. Um, I think people are more concerned now, at least the market is, with what is the sequential path to development. What are the entities involved? Who swallows who? Who, you know, how how are the pieces put in place for this to actually get developed? Because it's going to be a I mean, it's a whole district, right? It's going to be a massive multi-mine multi-deade type of runway. Um, you know, our big question is does does Lundine Mining want to keep the Lundine out there and operate independently or, you know, look, BHP's made no secret of the fact that they want to get bigger into copper. Obviously, they've taken on this little toe hold there with the JV they're doing on Fileo. Um, I mean, it's a natural and you know, what's the market cap difference? I think BHP is like 140 billion and Lundine's 10. I mean, it'd be an easy tuck in for them. Um the real question is what price would they want to get and you know how did the NGX pieces come into play um before or after? I mean I think you do have to get all that settled before you get the kind of big development picture but um you know that's really the type the type of stuff we look for when we invest in because we can say we know this is going to be a multi-year type of path. We don't need to get too cute traded in out of these things. we can say, hey, we'll probably I mean, the Lendine position we have a lot of it's from investing in FO that we inherited from the acquisition. And so it's like if we can just continually roll these things up and you know 10 years from now we own BHP. I mean I think that that wouldn't be the worst outcome. Um but you know for now it's like hey I think we can sleep easy at night knowing this is a pretty high-grade I mean worldclass project and it's got deep pockets behind it. I mean, that's kind of a rarity in the in the mining sector. >> How do you stomach the the Argentina risk part of that? And I guess more broadly, how are you thinking more with separated supply chains and and a bifocated world in in terms of commodities? >> Yeah. I mean, hey, we don't we're uncomfortable with it. I think we're uncomfortable with a lot of things. I think you have to um kind of take the good with the bad. I mean, look, we own we own Alpha Men and Tin, right? So we definitely take jurisdiction risk um if we think that the asset quality supports it. Look, you're always going to take some sort of risk in your investments whether it's on the jurisdiction side, whether it's on the operational side, you know, and we always make the argument like look, yeah, you can be in a great jurisdiction and have other problems and do you really want a marginal project just because the jurisdiction's nice? And so I think we kind of and when we build out these portfolios, we want to have a mix of these types of risk. Okay. Yeah, maybe we'll take some elevated jurisdiction risk in one area if we believe the asset justifies it or maybe we'll, you know, lower our quality filter on a certain project if we think, oh, it's going to be a smooth path to production and, you know, there's no none of those other things that we have to worry about. I think if you kind of build a portfolio around all this stuff, um, you can kind of mitigate some of those idiosyncratic ones. Look, Argentina looks like it's going in the right direction here. um you know at least with the you know kind of late overtures you've heard the last maybe 6 12 months you know this whole um uh the Reggie the kind of legislative framework for foreign investment I think is going the right direction you know that's another reason we like you know kind of doing things like with the Londines is you know you got pictures of them with the presidents going back you know 40 years I think those types of relationships really help um it's probably a lot different if you're some you know two uh prospect generator trying to poke holes down there. I mean, there's it's a much longer path and you're probably going to be more at the more at the mercy of of of the political rumblings than if you you know have big half day and you already have those sorts of relationships. >> Yeah. And you and you mentioned uh the Congo and and Tin and Alphamin there before, so we've got to tuck into this one because there's a a pretty fiercely loyal fan base out there. How are you thinking about the tin market and the the evolution in that market since we spoke a year and a half ago? >> Yeah, well, I mean it's, you know, I mean, the tin price has actually been pretty resilient, holding around uh 35,000, I guess it is today. You know, Alphamin's one where gosh, it's it's hard to believe that it's basically the same price it was four years ago. There's been a lot of volatility for uh not a lot of movement there. >> Some good dividends along the way. >> You Okay, so you've got the dividends. Yeah. And I I we've kind of played it well, you know, had a kind of a core position that we've traded around. We we're very large in it a few years ago kind of after that first tin wash out. Um you know, and so, you know, we we we've done well there, but I think our the problem we have with that one is it's literally one of the best mining assets in the entire world. And no one really talks about the money asset. I mean, it's all about the all about the political situation. you know, I I follow the chat around and I you make a PhD in international relations just to sort of, you know, track along what are the the latest uh peace talks and this which rebel group's doing what and so, you know, it's kind of a distraction and I wonder if that will prevent it ever from getting sort of a a valuation rate or are we just going to have to make all of our money from the dividends and remember shareholder there now as well, which has been one of the big changes in the in the past few months. >> Yeah. So, um, we had, it was, uh, you know, Denim, which was a private equity company that had been in there for a while. You know, they I mean, for a while, since 10 10 15 years, I mean, since the thing was kind of built. Um, you know, I think that was getting long in the tooth there and they they wanted to do a continuation vehicle. I think that had been announced and, you know, kind of right around that time, you had all the troubles start to pick up. I mean, this was maybe end of last year and so maybe it went from a handful of parties down to, you know, yeah, just the just that Middle Eastern the Middle Eastern fund. Um, which is look, they don't normally have a lot of public companies. Uh, and so for us, it's like, okay, well, are they going to make a run for the for the rest of this company? Um, you know, that was pretty nice of them to they were able to pick up that block. I think there was some concern, hey, are they going to, you know, screw the minority shareholders or are they going to continue the dividends? And then, you know, we got a nice answer to that about a month or so ago when they when they paid the interim dividends. So, it kind of goes back to what I was saying. Um, you know, are we ever going to get a reate on this thing or is the political overhand going to be just languish there and we're just going to have to collect our return via via dividends? I don't know. Um whereas it used to be a very large position for us a few years ago when you know Tim was really washed out. I think it's more kind of middle of the pack now we think it's a a great you know riskreward but there's obviously some challenges to look like I said earlier I I like when there's a lot of ways to win. If one of the ways to win is a rerate multiple rerate I wonder if that uh that way to win has gotten a little bit more challenged. Not to say it can't get there. I I think especially since you know after earlier this year they shut the mine down. Um you know there were all these concerns and it looks like the international community especially the US stepped in and kind of give this implicit security guarantee. Look that was enough to get things back up and running but is that really enough to um kind of assuage investors fears and and let them put a higher multiple on this? I I don't know yet. Um you know the other problem is it's not that liquid. We we talk to the management team pretty regularly and it's you know hey can you guys do a another listing US Australia something um they don't need to raise money right and so there's no real there's no real reason for them to come out and um you know introduce new shares to the market so you're kind of in this limbo of yeah it doesn't really trade that much most of the float's locked up how do you get new institutions in there if there's no stock for sale I mean really that the thing that that that Denim transaction was kind of the the big transaction that you that you could talk potentially have. There had been some speculation before that that maybe Denim wouldn't exit completely. They would take, you know, 10 or 20% of their stake and float that to get your secondary listing. Um but, you know, we'll see. I think at least with the latest um news on on the dividend, it looks like uh the new owners are going to be shareholder friendly. Um but we'll see. Again, it's a whereas it was a very large position for us a few years ago, I think it's kind of more um sized appropriately for, you know, the riskreward here. >> How funny that he remembers the fully funded capital raises. You know what we talked about even more frequently than that with Adriatic >> Sanvic ground support. >> We did bring up Sanvic ground support. The perfect segue was always an Adriatic segment, mate, because Sanvic ground support, a supporting ground, and Adriatic had ground that needed support. So, it was just a no-brainer. >> This is true. Sanvic, a Swedish company, mixed with DSI, the champions from down under here to create Sanvic ground support, the global champions of ground support. So, if you're a uh underground miner in any neck of the woods, you should really get on the phone and give Derek Herd a call, shouldn't you, >> mate? If you got ground that needs supported or ground that should be supported or just ground in general and you know, it needs some support for safety, but Tampa ground support have the answer. It might come in the form of bolts. Might come in the form of of some of the the great chemical products that they have out there. >> It might come in the form of the digital systems that they've got in place. You can just hook these things on on the end of your sort of bolts there and you get a great understanding. All these things just hook in with your phone straight away or it could come in the form of the latest app that they've got to chuck in your orders. They are making your life as an underground operator easier every day. So, >> I reckon they can support water. >> You reckon? I wouldn't put it past this team, mate, because we know amongst everything else we just said there, they're at the cutting edge of R&D when it comes to underground mining technology. So, I wouldn't put it past them, mate. >> Absolutely no-brainer. Go stand under the ground support. Back to Brian. I I'm I'm I'm very curious, Brian. Like, if we rattled off a bunch of commodities, just just give it a a one one to 10. one one being like least like no no no no no no attractiveness whatsoever to to buy anything in that space and 10 being like yeah trying to trying to buy trying to get a full allocation into this commodity um >> I like this let's do it >> cobalt you know I I'm not I'm not the the smartest guy cobalt uh I don't even know what number I'd give it I mean I know that the there's been a lot of supply ramping up um what was that cobalt project in the US that they were trying to float that was a disaster. Uh, you know, I'd give it maybe a two or three with the caveat that I don't I don't really know. Don't follow it too closely. >> How about silver? >> Hey, I like silver maybe better than gold. Um, you know, I' I'll say maybe six, seven or higher. Um, you know, Adriatic was the other one that that that got taken out for us, which was a nice validation because um, you know, obviously that thing got delayed, delayed, delayed. you guys, you know, rightfully joked about all the fully funded raises they did. Um, you know, hey, we were in that for several years and did well and it was nice to to get the take out there. Um, you know, and that was always the joke with them was they should change their name to Adriatic Silver because all the silver companies had these crazy valuation premiums that they were trading at. So, yeah, look, I I like silver um of the precious metals the most because look, my problem always with gold has been what should the price be? It's not like any other commodity where you can use a cost curve and and go marginal cost. It's like, you know, a lot of companies are making huge money right here. What should the price of gold be? I don't know. Um, you know, probably higher just because on the margin all the things are moving in its favor, but what's to say it should be 3500 versus 3,000 4,000 more or less. I mean, I think with silver there is more of that industrial component to it. So, you can really look at at demand and there's going to be some real uh consumption there. And, you know, to you see the guys that talk about the gold silver ratio and all that stuff. I mean, if you believe in that voodoo, um, you probably probably should see silver do a bit of a catch-up. I think the gold bugs would hate if the catch-up came the other direction and gold came down to it, but um, you know, I would expect silver to do very well there and it's it's still a big a big part of our portfolio. >> Did did you top up your position in in silver with the Adriatic, you know, the the cash component of that sort of pivot that into some more silver plays out there? >> You know, we have some um that we've been kicking the tire. I mean, the problem is is there aren't a lot of silver companies, right? They have silver in their name, but they're mostly gold companies. They have some byproduct. And so, we've looked at that, you know, who's got the most exposure on a revenue basis or a profit basis. And, you know, kind of the sensitivity to that. And so, we have some some smaller cap plays there. You know, I think look, we're happy to inherit the Dundee. I mean, that thing's just a machine. What what a great operator they are. So, we basically taken that and, you know, I think on the margin, we're we're always on the lookout for it. But again, just and I guess precious metals in general, it's not it's not as contrarian as it was. We've been in in gold and silver for a long time, you know, over over a decade. Um, you know, you couldn't really give it away back then and now it's, you know, one of the best performers of the year and everyone wants to to jump in there. So, uh, you know, kind of the contrarian me gets a little nervous about that sort of shift in attitudes, but I still think these things have have a long way to go. And um yeah, if I had to pick one, probably silver or gold and yeah, six or seven, I don't know. I >> sink >> sink. Um I don't know. I mean, look, it's it was part of the Adriatic case. I have to like it. But um I you know, I don't I don't really know it that well. It's not something that we've kind of followed too in depth because we've really only owned it companies where it's kind of a byproduct or we haven't really looked to target it directly. And maybe now that I'm hearing myself say all this, it probably is worth worth a look. Um, but again, I think it's one of those things we probably wouldn't target directly. Uh, you know, and I I view it kind of kind of more niche. Um, you know, I mean, the one that we're looking at niche that you guys probably know is nobbium, which obviously the the big discovery there that was a few years ago. We we were in that one. We we quite like that. Um, >> really? You hold some WA1? >> What's that? >> WA1. >> Ding ding ding. Yeah. Yeah. Well, that I don't know how many other Nomianium companies there are, but you know, I feel like we, you know, kind of came on our radar with that big discovery a few years ago and yeah, it's, you know, there's a lot. That one's funny because obviously it kind of fits what we're looking for, which are these really high quality war bodies. Um, you know, they're calling it tier zero. It it it really is uh kind of a an anomaly, a geological anomaly. And and the questions are not necessarily about the quality of the deposit. It's, you know, okay, it's kind of a weird market, right? the Brazilians have 80 or 85% of that one private company and you know how much can they flex up how much can the market actually absorb. Um I mean I think it looks good on a kind of on a mind plan basis but you know can they get an offtake? I think that's probably the next step for them to to really derisk it. Um but yeah I mean as far as niche metals go that's probably that's probably the one that's um you know least least talked about. you know, some of the other ones, zinc, cobalt. Look, I we always say you can't kiss all the girls, right? I think you have to pick your spots. Um, we have the luxury of not needing to form an opinion on everything. I think that's uh kind of a tough concept for people to get their head around. Everyone thinks, okay, I need to know, you know, every single thing and I got to have a a strong opinion. Look, I I'll be the first to tell you. I don't know. I don't follow Zinc that closely. I don't follow Proalt that closely. And so, I'm not going to pretend that I do. I'm just gonna, you know, I can talk to you about the stuff that I that I do follow, but um, you know, for the most part, look, we try to keep kind of a broad overview on on on a lot of different things. And it's just our view in general that I mean, pull up the periodic table. Uh, there's a lot of those boxes on there that are going to be in short supply. Um, you know, and so we do a work on on a lot of different ones, but I think you can only own so many stocks. We don't run like 100, 200 names in the portfolio. So, we try to find things where, you know, it's that kind of ticks all the boxes that we look for and um, you know, we might be have four or five different metals at a time. >> A bit out of our wheelhouse, but how are you thinking about energy more broadly? >> Well, you know, I I think it's funny, we don't own a lot of energy. Um, and it's kind of ironic because I actually started as a as an energy analyst uh oil and gas um a long time ago, but you know, I I think the difference and why we prefer mining versus energy is just the the lead time to bring on new supply. I think it's uh very difficult to bring on supply of metals, right? It's it's years to get permitting, build a mine and do all that sort of thing. I think with oil and gas, I mean, you can you can drill wells in a in a pretty short time. Um, you know, and so really it's more of a I think the fact that there's a easier supply response leads us to get uh less enthusiastic about potential price spikes. Whereas in some of these niche metals, you know, if there ever is like a supply demand driven uh increase in the price, it's not going to get fixed that easily. Um, and I think there is this period of time where you're going to have scarcity pricing and you can earn those those bumper profits. That said, um, you know, spent too much time looking at at oil and gas wells to ignore it. And so I think that there probably is some opportunity there. You know what I what I kind of like in oil and gas now, you know, we own some Canadian natural, which is like an oil sands type play. I like that business model of not necessarily blowing and going on this treadmill that the shale guys are on where you got to keep plowing money back into the ground. You know, for the big oil stands producers, they they spent all that money. Now it's, you know, kind of uh it's just let the c the free cash flow roll in. You know, very minimal ongoing capex and a flat production profile. And then you get kind of the natural gas taker if if Canadian gas ever um you know, gets off the floor. And so that's the way we kind of look at it is anything and I guess you could even lump copper in there. Anything where there's more of a of a generic, you know, tied to the economy type of beta and, you know, you're going to get whipped around. It's it's less niche. It's not uranium. It's not some of these things that have their own real tight fundamentals. I think we want to approach those areas like having something where it's kind of tangential to it or you're not just, okay, it's a call on the oil price or call on the gas price. Um, you know, I think natural gas looks interesting here. it's been kind of washed out and uh you know especially given all the demand for energy for AI electricity I don't think we're going to solve it all you know with uh nuke plants in the short term we're probably going to still be burning coal still be burning natural gas and of the two you know natural gas seems to be the one that people think is cleaner so you'll probably see more gas demand there especially with the whole LG thing I mean we've we've done well with some LG adjacent type investments and so you know I I think within oil and gas we kind of pick our spots But um it's it's kind of a it's a smaller part of the portfolio much more so than than mining just because of that whole supply response thing. >> Yeah, that that that sort of makes sense. And if we we rattle off uh the last kind of couple or the last basket of metals I'm curious to hear your thoughts about uh some of the bulks. So you mentioned coal before, but do you take any interest in iron ore or aluminium? I mean, not not as much. I I think again, those are kind of the ones that are more tied to uh just general economic activity levels where, you know, I I'm not going to have a smarter view than than someone that stares at it all day. And so, I think it's it's harder to get an edge there. Yeah, maybe you can kind of time and and in and out uh a little bit better um and and make some money, but I think the knowledge curve is is so steep there. And again uh why do I need why do I need the headache of of uh of trying to understand that when look I understand enough of it as it fits in sort of the overall picture of you know iron or steel and the coal what's needed and all of that but you know am I going to make the smartest call on on where the bottom and iron is or where it's going to go probably not um I think you know we go a little bit more niche than that um but at the same time not so niche where you know some metal that we never heard of and there's three stocks and they they trade you know 10 bucks up today. >> Makes makes a lot of sense. Brian, it's been um been a privilege to to pick your brain. Is there is there anything on your mind lately that you haven't had the chance to uh to talk through so far? But you kind of just want to share >> I'm trying to think. I mean, I think we hit all the main stuff. You know, it's really, you know, where we're at right now is, yeah, uranium has done well. We're still in a little bit of it. I think probably copper would be our biggest metal that we're in. Um, just because there's so many more ways to play it, you know, I mean, Tin's a tough one. I'm surprised you didn't ask about Metals X because I know that's a big on the TIN side there. You know, I need to get your opinion whether you think they're ever going to get the uh get the cash back to the shareholders. But, um, >> I'm getting more I'm getting more comfortable with their capital allocation. Yeah, ding ding ding on the buy that buyback bid at 40 cents is probably still sitting out there. I'd love to see them raise that a little bit. Um, you know, now they're Wasn't it you that went to the their annual meeting? Yeah, I I did. I missed the one this year, but yeah, went went the year before. I I um yeah, it's always going to be a funky company and it's not for everyone, but um the capital allocation, which which I was once pretty scathing of, like I'm I'm I'm a lot more comfortable with it these days and I think I think it'll get better over time. >> For a company that's not a fund, I mean, they've done well, you know, building different companies. It's f I mean I think the you know the world's been clamoring for a 10 ETF and so if it turns out to be Metals X and maybe that's the way to go and the stock's done pretty well this year. >> I I I still don't know the like yeah I mean you can interpret that in a few different ways like one is one is one interpretation is they're just land banking future development projects which will actually prevent their development ultimately. Um, yeah. >> Well, and I look, I think in uranium, you kind of saw some people do that a while ago and they got laughed at for it. And if if if it plays out the next 5 years, like the last 5 years did in uranium where all of a sudden you get a re-rate on these things and there's, you know, all these 20 million, $50 million projects becoming the money because the tin price goes up a bunch. Well, they might look very smart for doing that. Um, the real question is is is that their real intention or you know, what is it? I think that's the problem is um you know without any sort of really explicit capital uh allocation framework you're kind of at the mercy of just guessing at it. But you know in the meantime it's you know it's done pretty well. It's pushing close to the kind of the you know 5year highs that it hit um you know several years ago. And so I think if it only trades as a proxy for the tin price in the meantime um we'd be very happy and then yeah you get a little bit of a bonus if they pay you back on that. But really, no, I think we hit on most of the things. I mean, yeah, copper um is probably our biggest one. And again, it's it's a lot of the I don't know if I'd call them household names, but we like the mid tiers, kind of the 10-15 billion caps, you know, like Ivono that has a very high quality project. I think you can do well finding these things. I mean, obviously, they had their troubles with the mine issues um earlier this year. In our experience, those have been great times to to, you know, pick off some some shares of a longer term story because whatever the short-term issues are that that people are concerned with. And then, you know, the rest of it, I mean, I think we're actually finding some interesting ideas outside of mining um that actually we got led into by doing the research online. You start researching all these niche metals and you see the applications they go into and you start learning about the applications, you're like, "Oh, wait a minute. some of these interesting technologies kind of the forefront of tech whether it's aerospace or you know lasers all this kind of crazy stuff it's like okay there's some interesting companies that are you know almost picks and shovels kind of going into those applications where I I would almost consider the metals as a pick and shovel play into some of those applications as well so you know it's um a lot going on we don't do a lot of these um these podcasts because the stuff doesn't really change uh you know from week to week if you think about it it's the same story you've been telling for very many years and now it you know, some of the stuff starts to work and people be like, "Oh my gosh, you know, not as dumb as a book." So, it's like, okay, um, real question. I think those are great questions about the contrarian stuff because that's really what we're doing is looking at the stuff that, you know, the seeds that we planted a few years ago that are all of a sudden bearing fruit. And now it's like, okay, if we want to trim trim some of these apples off a tree and make a pie, like, what's the what's the next area we're going to go into? I think it's some of those ones like a coal or a lithium where, you know, people hate it right now, but, you know, you can make a picture that maybe 3, five years from now looks different. I think I think you summarized it well. Perhaps when we last spoke by saying if we're not talking about this stuff in five years time, we've kind of done our job. >> Well, hopefully it's because we we harvested a game and not and we were completely wrong about it. But no, that's exactly what we said. You know, look, we I mean, we run a few different uh strategies. Um kind of our our our you know, more wider one is is about half uh 50% in in in metals and mining, which is a huge overweight for, you know, anybody, right? Um, and so we tell people, yeah, look, this is where we are today. That's where we see the value. But yeah, 5 years from now, I'd love nothing better than to not own any of this stuff because it means that the valuations, you know, really did what we thought they would do and we captured all that latent value and we're on to the next onto the next area. And so, you know, I I think at least with mining though, because it feeds into so many different areas, um, I think there's a long runway ahead. And so, you know, I mean, look, we we said the same thing about uranium, but then you get these these these short time periods where there's a frenzy and you get this quick valuation rate. I I think maybe you'll see that in some of these other areas. Um, you know, and then we keep kind of hopping around to where we see short-term weakness, long-term strength. And I mean, when those run out, uh, yeah, maybe it's something completely different. You guys won't invite me back anymore because I don't have any mining stocks. I'm sure you'll get a call up in uh in a year or so's time, Brian, to to check in on all these, but appreciate you making the time and and joining us and chatting about the portfolio. >> Thanks, bro. >> Fantastic, mate. I love chatting with Brian. I love chatting with generalist investors. Love chatting with contrarians. So, it's always great to sort of share the the thoughts of these smart people on money of mine. And it's all possible thanks to our fantastic partners Sanvic Ground support in the show as well as Focus the platform by Market Tech and IMAK. Get your tickets money miners. >> Hudoo. Now remember, I'm an idiot. JD is an idiot. If you thought any of this was anything other than entertainment, you're an idiot and you need to read out a disclaimer.
Contrarian Bets: Brian Laks on Lithium, Coal & Uranium
Summary
Transcript
The hardest thing about being a contrarian is knowing when to allow the market to catch up to you. You all want to be a contrarian for contrarian's sake, right? How do you stay long enough at the party, especially when more and more of the return comes less from just that valuation normalization and more from how many people are going to jump into the pool? How high is this going to get? How frothy is it going to get? >> All right, money miners. We have a returning guest, Brian Lax of Old West Management, who when you last came on, we we dived into uranium tin, a whole bunch of niche kind of metals. You of course were very early and successful on on the uranium trade, Brian, and you're a self-professed contrarian, so I think that's the perfect spot to to start the conversation. What are you seeing out there that's really presenting the most amount of value to you at the moment? >> Yeah. I want to first of all thank you guys for having me and uh like we were joking before we started here I think we finally are in a in an environment where a lot of these things are working and so to to switch over to some of the things that aren't on the contrarian side I'm I'm h happy to do that as well but it's um you know it's it's it's quite a different environment than it was a few years ago where any commodity that you touched was kind of contrarian because everything was was out of favor especially 2022 into 2023 is you know they started raising raids, China shut down. I think here in in 2025, um we have seen a lot of things start working, especially gold and some of the other metals. Um but I think there are still a few areas that are out of favor. Um where we're really trying to get up the learning curve and um you know, maybe starting to dip a toe in. Uh I guess probably two off the top of my head would be maybe coal and lithium, which both had, you know, huge runs last few years. obviously gave a lot of that back um you know in the last year or so especially on the lithium side. You know, you never like to to call bottom on anything, but it does look like the long-term fundamentals are setting up pretty nicely and um still working through some short-term headwinds. >> I'm I'm so excited you've mentioned them because I I jotted them down as commodities that I haven't heard you speak about in the past. So, I'm curious to to start with, have you actually initiated some positions in in some of the the coal players or the lithium players or just doing your homework and and getting a feel for the space to start with? >> You know, a little bit of both. Um, dipping our toe in a little bit, kind of getting up to speed on on the whole environment, um, all the different players. But, you know, similar, I'm sure we'll talk about with other commodities. When we look at all of these different areas, we're looking for, okay, is there going to be a supply demand mismatch somewhere either now or in the future? And then who are going to be the companies that are able to supply into that? And with all these commodities, it's who's got scale and who's got grade. I mean, where are the large lowcost sources of supply? Because in the long run, that's really what's going to matter. And if we can buy into those types of uh companies when there's a short-term or you know multi-quarter kind of downturn I think that's where we get the best return. I we saw it in uranium five six seven years ago when all these things were were trading for nothing. And you know that's when we're usually doing the work, building positions and then you know fast forward 5 years. Um we're harvesting and uh you know I mean we still maintain a lot of the things that work but really looking to to rotate into some of these other areas that you know might reset the clock a little bit and give us a nice forward you know 2 three years. >> If you if you take that kind of yeah lens so you look for where the large large lowcost supplier might come from. Take take lithium for example, you know, the lowest cost producers that are western names. You got, you know, Albumal who's got the worst balance sheet in the sector. And then um SQM where, you know, you kind of need a resolution of of events with the Chilean government to to to see a maybe a a pathway where an invest a large investment can be comfortable in some respects. So, do you do you put a line through them for those reasons or do you actually think they're interesting situations for those reasons? You know, I mean, it really depends on, you know, how what sort of components of return you're looking for. I think when money starts flowing back into the space, it naturally gravitates to some of the bigger, more liquid names. I mean, we saw that in uranium looking like a camo where it didn't really see a pullback off the 2021 highs. It um it just kind of kept trucking along where some of the more junior uh projects, you know, did retrace and and and then took a second second shot higher. With lithium, I think we're looking at it kind of the same way. Are there big development projects? You know, who's got the big sources of supply? It might not necessarily have to be a producer today. Um, you know, and so I think the way we look at it is well, we're not really certain when the next cycle takes off, but we don't necessarily need to have someone in production today because um, you know, and you kind of go down the the producer developer curve, but where do we want to position oursel? um especially if we're not kind of jumping into the sector with both feet right away. And so I I think we do have the luxury of time. Um you know, I don't know if we're if we're near bottom, past the bottom, whatever it is. And I've heard some of your your recent guests opine on that, but I think this is a great time for someone who has a a longer term perspective, you know, a few years where they can wait to really say, okay, who are the largest lowcost sources of supply, whether in production today or in development, and what are they trading for? or what's baked in and and you know if we have a different view of what uh the pricing environment looks like a few years from now who's going to benefit the most given where they're they're being valued today. So you you really speak to this kind of top down approach, Brian. By that nature, do you do you always tend to play the portfolio approach when you when you come into the commodity and pick a handful of names? Like obviously some commodities that's harder. We spoke about tin previously where there's a very small number of companies you can play it in. But by and large, do you prefer that portfolio approach to it? >> You know, I I think um and that kind of goes with how far you are up the learning curve. Well, with uranium, it was different because the sector was so washed out that you really could just pick any of them. I mean, the whole all of them were, you know, $50 million market cap. I mean, there were a few larger ones. Um, but for the most part, everything was so distressed. I mean, this was when uranium was 20 or 30 bucks a pound, right? And so, you didn't really need these heroic assumptions. You said, "Hey, if we can get to 50 or 60, a lot of these things were trading very cheaply, and we didn't necessarily know which ones would um perform the best." I mean, I think there's a bit of a path dependency there. So, we did build a build a basket. You know, at the time there there weren't a lot of uh there was one ETF and it had some construction issues with it. Uh today, it's a lot different, at least for uranium where, you know, there's a half a dozen ETFs and you know, maybe 50 or 60 companies now. I can't even keep track of all of them. But for something like a lithium or a coal, I wouldn't call it building a basket. Um but, you know, maybe you maybe one or two stocks or three, I guess. I don't know if you want to call that a basket, but you know, who's a who's a big producer? that's that's down and out. Whereas what are a couple big development projects that you know might look terrible at today's price, but if you go to normalization, wow, these things actually look good and they're, you know, I think we like uh projects that turn into actual mines in production. I know people can probably make more with some torquy type of, you know, way out of the money. I mean, we saw that with uranium. Hey, those stocks did well, too. But um I I think for just the way we operate cuz we're a little bit larger now and so we we need to be able to move um kind of chunkier pieces of capital in and out of these things. I think you really want something that gives you more than one way to win. Not just hey we're going to get a levered play to the commodity reflation, but this thing might actually be a mine and in various assumptions, various scenarios, it actually looks um pretty compelling based on where it's trading today and what we think the environment might be, you know, a couple years from now. How do you how do you do that with coal? There's not too many new coal mines being permitted, >> you know. I always feel like a tourist when, you know, I listen to the coal guy talk and it's just, you know, um it's hard. I think there's a handful of names you think that are considered high quality. Um, you know, I think really it's just it's it's a very similar type of analysis, which is, you know, you had this big run a few years ago and then it all kind of came back down. you had a lot of things weighing on their end markets, China and steel particular. Um does that mean it's it's over or does that mean you know we need to chew through kind of this current environment before we can see demand pick up you know whatever it is in in a year or two um into the future. So you look at I mean it's it's very similar. Who are the who are the lowcost producers? Who are the large producers? Um you know where do you want to place your bets whether it's thermal or met. Uh you know I'm I'm no coal expert by any means. And so I'm sure you'll get a better answer talking to different people. But you know you ask where are the contrarian areas where I see current sentiment out of favor but I can make a case that the long term actually looks better. I think those are are two great examples and and partly because a lot of the stocks are down 60% off their highs of a couple years ago. >> So, if we reflect on the the uranium trade you've mentioned there a few times, Brian, this is like the best example of your guys strategy and how it can play out. Where do you think we are in in terms of it fully playing out right now? >> Well, I think you know it's it's definitely a different environment. Uh what a difference five years makes, right? I mean, a lot of these things are up fivefold, 10fold. Um, just sort of crazy amounts of enthusiasm, froth. I don't I don't think it's the contrarian trade that it used to be. Maybe doesn't have the same level of asymmetry unless you believe in some, you know, nuclear renaissance or we're going to start building hundreds of reactors around the world. You know, when we first got into it, and we did a lot of these types of podcasts, uh, you know, five, six, seven years ago as we were building positions there, we didn't we weren't baking in uh, the idea of a nuclear renaissance. It was just at the current, you know, slate of reactors, the the builds that were on the table, there's just not enough uranium and the price was too low for more supply to come online. And so it was a simple economic, hey, the price has to go up. Um, you know, at the time we were like, oh, 50 would be great, right? And 60. I I think that was uh a lot of these things looked really good. um you know so today you know with where the valuations are I think one you have to be a lot more selective and two you know you may have that same asymmetry if you do believe in uh just a huge nuclear renaissance which or a lot of flows of money into the sector and you get this kind of uh valuation expansion which we you may have as well because you know now all the tech community is getting getting involved in there and you see people saying oh my god you know we're going to have a reactor on every corner Um, if that's the case, yeah, you can probably make a picture for that much more upside, but you know, we've it was a big part of our portfolio 5 years ago when everything was washed out. We still own a lot of it, but I think it's more more concentrated kind of the higher quality names and we're not necessarily baking in, you know, all the extreme bullcase even though it might happen, right? Yeah, you got the $200, you know, all these people are crazy now about what they think is going to happen in the space. I think we own what we think are good high quality projects and you know it's gonna sound like a broken record here but who's got the big lowcost sources of supply that can come on you know now and into the you know next 5 10 years think those guys should do well because I think yeah the price has gone from 20 to wherever it is now 70 80 a pound um we think it probably still has to go higher I think you're going to start to see the long-term price start marching up and whoever can really sell into that is is going to do well um but you do have to be a little bit more selective I mean, it's pretty wild to see some of these companies that had, you know, 100 million, 200 million market cap 5 years ago now having, you know, 5 billion. Um, you know, it's just it's it's like the wild west out there. I I think, you know, there's a lot of these nuclear adjacent tech type names that are just seeing these crazy valuations. And so, you know, we're we're we kind of watch it and say, oh, you know, it's like seeing one of your kids grow up, right? It's a whole different uh environment, but um I think there's still there's still a long way to go for the whole uranium nuclear thing. We still think it's a great way to generate electricity. We're going to need a lot of electricity. It's going to be part of the part of the portfolio approach of generating that. Um the real question is what sort of environment is being baked into these valuations and do we want to participate there or do we think there's other parts of the commodity sphere where we can get you know better go forward returns? >> What what is your allocation to uranium and then non non-uranium commodities as a percentage? >> I'd have to check. I think I mean at one point you know it was we had to cap it was like 30% 35% and then that was before it started running and you know it was it was basically going up faster than we could trim it. Um today I think it's much more reasonable maybe 10% 15%. I mean I'd have to check we have a few different funds and and it varies but certainly not as large as it used to be. Um partly because yeah we did have a pretty large basket of them five years ago. I think now we've kind of cut that down to a handful of what we think are are the highest quality and you know they're the household names you think of the large producer, the large developer projects. Um I mean it's a it's not it's not rocket science here. I think yeah maybe you could get kind of cute and and go into some of these more niche areas and and try to squeeze something out, but again we're not trying to um speculate on a massive nuclear boom. I I think to get real significant upside out of a lot of these things uh you might need that especially given where some of them are trading. So I mean yeah we're we're I guess pretty conservative now in our allocation there but just because we see that same setup in a lot of other commodities that we saw 5 years ago and these other these other places are not nearly in the same level of reate that we've seen you know where some of these stocks are up 10fold. >> Whenever it is like a bottom for a commodity or you know max capitulation or whatnot there is always a narrative that is like big and loud about why things will get worse from where they are right now. um like how do you how do you get comfort, you know, um entering some of these like commodities when when when it kind of could be the bottom, but there's a lot of noise and and good reason to think things will get worse than where they are right now. >> Well, I I think that's the the contrarian nature right there. You have to be careful trying to call a bottom. You hands are scarred from from catching falling knives in a lot of these things. You know, uranium was a great a great example. I mean, it bottomed in 2020. we were building positions in 2018 and 2019 and losing money. And so it was like, you know, you got to have an investor base that kind of gives you the benefit of the doubt that you're doing the right work. You have to have have done the work to have conviction in where you think these things are going. And if you're correct and that long-term outlook uh doesn't change, well, you should be buying more as they're getting cheaper. And I think that's what you're seeing in some of these other areas that are washed out right now is yeah, I mean you might have had that bullish view on lithium a year ago and you know I think some of the stocks have been cut in half and so it's difficult to try and call the bottom which is why I think in these types of scenarios we usually leg into the positions. You know I think we're have enough humility to know we're not going to call the bottom to the day. So, if we can kind of build a positions on, you know, a few quarters before, a few quarters after, you're going to catch a nice average price in there. And if you're right about the potential upside, it's it's not really going to matter. I mean, I think you do have to have the investors that are not going to, you know, pull their money if you're down after a quarter or two quarters. Um, yeah, and now we have the benefit of having done it a few times where we've shown this kind of longer term thinking works. Um, and so we do have the investor base that'll give us patience. I mean, you know, just in the last year or so since we've talked, two of our our largest positions have been acquired. Um, FO and Adriatic, which I think we talked about on the last show. So, it's nice to kind of have a few things in succession where, you know, hey, we we made these bets, you know, 5 years ago, and then a few years go by and we harvest them, make new bets, and then a few years go by, we harvest them again. And I think you can show that repeatability there. Um, but yeah, for if you don't have that track record, it's going to be hard, you know, a year into the trade and you're down 20 30%. People like, you know, do you know what you're doing? Like, what's going on here? And so, I think you do have to have a bit of that mindset and, you know, set your expectations correctly. This is certainly not the multi-manager, what's going to happen next quarter, you know, try and game it. We don't do any of that stuff. In fact, we kind of like the ones where people are actively negative on because that's you typically means they're going down for some reason. Um, and if we can have a view that the the next few years looks better, um, well, that's when we probably start building positions. >> And uranium hasn't been all one way since it started going in your sort of favor. So, the last year has been a bit rough. Did you use that chance to to top up or you just sort of hold on to that core position? >> Yeah. No, we did. you know, we lightened up a lot in uh call it late 2021 when you had that first, you know, real frenzy, right? 2020 at the end of 2020 is kind of when the move started and then throughout 2021, SPR came into the market, you know, you kind of got into the summer fall in Northern Hemisphere and it was, you know, Wall Street Bets, it was on CNBC, you got the price going to like 50 and I think a lot of these things really had that first big impulse. Um, but we got to, you know, whatever that was, September, October, November time frame. And uh we just said, man, a lot of these things are already pricing in, you know, $70 or $80 of uranium. And remember, we had a huge waiting in it. So it was like, well, let's dial this back because these things may have already gotten ahead of themselves. And and sure enough, I mean, there was this big digestion period that happened, you know, kind of late 21 into call it 23, you know, then you started to have these things tick back up as the spot price, you know, caught up. And then you know early last year and it got above 100 and there was that kind of that wave of enthusiasm and then completely retraced that into earlier this year to where we saw sentiment as bad as it was you know back when we were you know looking at it in 2017 18 right and so we did take the opportunity to top up on some of these things because the way we looked at it was now wait a minute a lot of these stocks are you know this was call it you know first quarter of the year was a pretty bad quarter for uranium stocks a lot of them were trading below the levels that they set in 2021 and here we are, you know, three and a half years later. Um, and we So, well, now wait a minute, the price is much higher. Uh, and these companies are 3 years closer to production or wherever, you know, on their timeline and yet they're trading below where they were before. And so, we said, well, this doesn't make any sense anymore. And, you know, kind of like how I guess it's a little bit of zigging when the market's zagging, right? I mean, when the things were flying and they're they're all over TV, you know, we're we're lighting it up a bit. And when you know these diehard uranium investors are you know throwing in the towel then we're like wait a minute we'll take a little bit and add to that. And so I think that that's worked for us in the past. Um you know and so yeah it's you know now here we are again. Look I think um I think the uranium trade still has a lot of legs. It's just what sort of level of enthusiasm do I want to underwrite from here? You know, I think we do a lot of I would call sort of separating what our expected return components are going to come from, whether it's just the pure valuation or whether, you know, it's going to be money flowing in or multiple expansion. I think when you get to some of these frothier uh eras, you know, I think more of the return is going to come from those subjective things versus, you know, I don't want to call it the easy money because it was hard to be made, but kind of the early money off that very bottom kind of coming up into that first um that first inflection. I think that was captured and now it's a bit of a more balance riskreward from here. Like I say, you have to be more selective and then it's how how big of a renaissance do you want to um do you want to to expect? >> I' I'd love to hear your thinking around around this because yeah, the the best riskreward is to to be set up and waiting for that first inflection up in in any commodity, but often times you see that first inflection up, you didn't have um a sufficient allocation and you think, "Oh, damn it. I I I knew I should have bought like a month earlier or whatnot." Um but there's often still a long a lot of legs to go. like take um take that kind of PGM complex at the at the moment. You're seeing a lot of green shoots there and um and if if if people are you know don't have an allegation and think I've missed it but but then you know there's this pattern in quity cycles that you you see you see a little you know some legs up and it doesn't just like fizzle out there. You often get these boom bus kind of dynamics. >> Yeah. Well, and I think that's why we we do spend so much time looking at the ones that are out of favor because I think that's where you can actually spend time to learn the the industry. You can start to build positions. You might still be buying it on the downswing, but you know, I think um look, there's a a lot of different schools of thought there, right? Some people say, "I want to wait until it shows me that it's starting to work so I don't have to take that pain." You know, we had a lot of guys in the uranium thing, you know, it was 20 bucks saying, "Hey, call me when it's, you know, 30, right?" Like, let's I want to see it start working. So, I mean, there's different ways to to do it. How much pain threshold do you have? Are you willing to, you know, take get into something when it looks like maybe there's still a quarter or two of bad news ahead? We are. I think there's a lot of investors out there that do not want to take any sort of draw down. Um, and so they avoid these types of things, but I think that's how the mispricings get so severe is people are like, "Oh, I don't even want to look at this thing until it starts turning." Um, we're happy to start, like I said, we build positions over time and then we scale out of them over time, right? When the when the environment changes, look, we have to be right still. I mean, we have to say that, hey, today's environment is is going to look a lot different than the future. Um, you know, otherwise, yeah, you're catching the falling knife. But um I don't think we mind as much to um you know be a little bit early because if we're right you know we're probably buying just as much on on the early side of the bottom as we are you know coming out of it. >> How how do you think about the the changing incentive price in in uranium as well because that's sort of increased dramatically over the past five years as these restart projects have have struggled to come online and there's been delays in in new projects. So what's your thinking around that at the moment? >> Yeah, I think it just it just keeps marching higher. I mean, you see the inflation, you see all the on the capex side, opex, the delays, um you know, where we used to think, hey, 50 60 looks pretty good. Now you look at some of these higher cost projects, they probably need 80 or or north of that. And and we're kind of right around there, right? And so it's like, okay, well, you can give the green light to some of these projects, but then it's just a timing issue of how long it's going to take them to be built. And then we'll see if if that's truly what their break even is when it when the production comes on. I think we saw that a lot in in copper where these guys said, "Oh, you know, look at our deck and you make, you know, those great irriting, right? there cost overruns, timing overruns, and so you have to think whatever your idea is of that break even price. By the time you get to the production, it's probably going to be higher than that. And so I think it just continues to creep higher. I don't know. I mean 80, there's some companies that make great money at 80 here. And so that that and that kind of goes back to what we were just talking about, which is who are the lowcost suppliers. Sure, they're not going to have that crazy snap leverage of the guy who, you know, is break even today and goes infinite profit on the next dollar, but we don't need we can sleep better at night not not needing to worry about that kind of stuff. I I I think um you can have a little bit of that in your portfolio, but if you base load your portfolio with just the really high quality names that can make a buck in any environment, I think you're going to do well over the long time, especially if you're right on the on the commodity price. And so, you know, that's really how our portfolio looks today across all the different commodities we're in. And it's not like we we do have, you know, some of these more niche kind of development stage companies, but for the most part, it's it's what you would what you would expect. And so, I think more of the value is in saying, you know, when should we be in these different areas? Um, and I that's where it kind of goes to that kind of short-term contrarianism versus the long-term, you know, real strong fundamentals. And if you can layer in enough of these um types of payoffs so that they kind of overlap each other, you're not just having your entire portfolio waiting three years for everything to hit at once. You get this sort of sequential payoff structure where you can be harvesting in one area, deploying in another area, and it and it kind of smooths out the volatility. And so I think, you know, we like to have things in our portfolio that are currently working, that are about to work, that you know, might be a few years from working, things that are going down that we can keep buying. And so if you have a balance of all of that, you should kind of smooth it all out and then your long-term returns actually look pretty good. >> Let's talk about copper then, Brian, because you you identify as a contrarian, but I think you've got a consensus you want copper. >> What's that? That it's going higher. >> Yeah. >> You know, look, the hardest thing about being a contrarian is knowing when to allow the market to catch up to. >> You don't want to be contrarian for contrarian's sake, right? I think our And probably that's been the case is how do you stay long enough at the party, especially when more and more of the return comes less from just that valuation normalization and more from how many people are going to jump into the pool? How high is this going to get? How frothy is it going to get? And look, yeah, you probably want to have a little bit for that, but it's harder to justify a real solid waiting in something when more and more of that return component comes from subjective things like that. And so copper, yeah, maybe it is consensus, you know, I don't I don't know. I mean, I think copper looks great here. I think it's going to continue to surprise to the upside, especially like we were just talking about all these guys that claim, oh yeah, our project so low cost and and look at this and then you know who's making the money here, right? And so I I think you're going to need a Well, I mean, this is just kind of it goes for a lot of these commodities, but the demand continues to grow. Supply is is pretty shaky for a number of reasons. And so that's just a recipe, I think, for continued higher prices. And it's great. We love seeing these companies come out and be like, "Oh, you know, yeah, 450 is here, but we're not really doing too well there. Maybe we need five." And then, you know, let alone the the green field and, you know, brownfield expansion stuff. I I think um you're going to need higher copper prices. And if anything, I think what you know, what's the copper price up this year now than 10 15%. I mean, I I think where it has to go, you know, especially if you're looking out a few years, right? 3 years, 5 years, 10 years. Um, we're going to need a lot more copper. I don't think the current price is is enough for that. Um, and so I mean, look, we've we've we've placed our bet. We might be wrong. Yeah. I don't know. Maybe we're wrong. So, that's fine. I I think people agree with us as at least the ones that invest with us agree with us. And so, you know, and again, it's um we're not necessarily needing to call for, you know, these you remember was a year or two ago when they had all these crazy call at 40,000, you know, ton of copper and all this stuff. That's not us. I mean, look, that'd be great if it happened, but I think it just it has to go, you know, it has to go higher than we are today. You know, what's it 450? I don't know, 56, I think, would be a nice price to to really stimulate some some more production, but we still like the large lowcost sources of supply because they're going to do well today and and probably in that environment, too. you know, we always like these situations where you need the marginal projects because that means that the guys that are good projects, I mean, are going to earn that sort of bumper margin. Um, and so if you were to look through our copper portfolio, it's yeah, it's a lot of these large large lowc cost source of supply. I mean, we talked about Felo last time, they got acquired by Lendine, and so we still we still like what they're doing down in the Punia. I mean, I think that's a perfect example of how we look at things is that's going to be a hundred-year district. I mean, it's going to take a ton of capital. Who knows what the what the break evens are going to be, but it's very large, very high-grade. BHP's in there now. Um, I mean, I wouldn't be surprised if BHP ends up, you know, owning the whole thing at some point. Uh, you know, it's the Lond, you know, consolidating that whole region, putting all the pieces in place, kind of making sure all the entities have the different I mean, it it really is nice to see what they've done down there. >> NGX royalty as well, like of course. Well, so all people think, hey, is that mean that they're prepping themselves for >> I can say that, >> you know, loads looks great with as future feed for Caseronis, right? And and Lundine stepped up. They they exercised the option and so it's like all these little things in isolation don't, you know, they don't show anything, but kind of in aggregate, you can see them putting the pieces together. Yeah. And then obviously the NGX discovery is just, I mean, it's it's kind of absurd the grades that they're hitting there. I like your I like your theory there as well because because remember the talk about a potential royalty spin out of of Felo kind of in the leadup and and presumably BHB did not have any appetite for a royalty to be part of that deal. So if you need if you want to create a royalty spin out knowing that a consolidation is coming well you got to do it now as opposed to to to wait for a bid to come. So yeah, maybe >> that's right. And I think NGX is kind of in the same place FO was at a year or two ago where they keep putting out these barn burner results and the market's like, okay, well, you know, yeah, we get it. You got a lot of high-rade stuff there. Um, I think people are more concerned now, at least the market is, with what is the sequential path to development. What are the entities involved? Who swallows who? Who, you know, how how are the pieces put in place for this to actually get developed? Because it's going to be a I mean, it's a whole district, right? It's going to be a massive multi-mine multi-deade type of runway. Um, you know, our big question is does does Lundine Mining want to keep the Lundine out there and operate independently or, you know, look, BHP's made no secret of the fact that they want to get bigger into copper. Obviously, they've taken on this little toe hold there with the JV they're doing on Fileo. Um, I mean, it's a natural and you know, what's the market cap difference? I think BHP is like 140 billion and Lundine's 10. I mean, it'd be an easy tuck in for them. Um the real question is what price would they want to get and you know how did the NGX pieces come into play um before or after? I mean I think you do have to get all that settled before you get the kind of big development picture but um you know that's really the type the type of stuff we look for when we invest in because we can say we know this is going to be a multi-year type of path. We don't need to get too cute traded in out of these things. we can say, hey, we'll probably I mean, the Lendine position we have a lot of it's from investing in FO that we inherited from the acquisition. And so it's like if we can just continually roll these things up and you know 10 years from now we own BHP. I mean I think that that wouldn't be the worst outcome. Um but you know for now it's like hey I think we can sleep easy at night knowing this is a pretty high-grade I mean worldclass project and it's got deep pockets behind it. I mean, that's kind of a rarity in the in the mining sector. >> How do you stomach the the Argentina risk part of that? And I guess more broadly, how are you thinking more with separated supply chains and and a bifocated world in in terms of commodities? >> Yeah. I mean, hey, we don't we're uncomfortable with it. I think we're uncomfortable with a lot of things. I think you have to um kind of take the good with the bad. I mean, look, we own we own Alpha Men and Tin, right? So we definitely take jurisdiction risk um if we think that the asset quality supports it. Look, you're always going to take some sort of risk in your investments whether it's on the jurisdiction side, whether it's on the operational side, you know, and we always make the argument like look, yeah, you can be in a great jurisdiction and have other problems and do you really want a marginal project just because the jurisdiction's nice? And so I think we kind of and when we build out these portfolios, we want to have a mix of these types of risk. Okay. Yeah, maybe we'll take some elevated jurisdiction risk in one area if we believe the asset justifies it or maybe we'll, you know, lower our quality filter on a certain project if we think, oh, it's going to be a smooth path to production and, you know, there's no none of those other things that we have to worry about. I think if you kind of build a portfolio around all this stuff, um, you can kind of mitigate some of those idiosyncratic ones. Look, Argentina looks like it's going in the right direction here. um you know at least with the you know kind of late overtures you've heard the last maybe 6 12 months you know this whole um uh the Reggie the kind of legislative framework for foreign investment I think is going the right direction you know that's another reason we like you know kind of doing things like with the Londines is you know you got pictures of them with the presidents going back you know 40 years I think those types of relationships really help um it's probably a lot different if you're some you know two uh prospect generator trying to poke holes down there. I mean, there's it's a much longer path and you're probably going to be more at the more at the mercy of of of the political rumblings than if you you know have big half day and you already have those sorts of relationships. >> Yeah. And you and you mentioned uh the Congo and and Tin and Alphamin there before, so we've got to tuck into this one because there's a a pretty fiercely loyal fan base out there. How are you thinking about the tin market and the the evolution in that market since we spoke a year and a half ago? >> Yeah, well, I mean it's, you know, I mean, the tin price has actually been pretty resilient, holding around uh 35,000, I guess it is today. You know, Alphamin's one where gosh, it's it's hard to believe that it's basically the same price it was four years ago. There's been a lot of volatility for uh not a lot of movement there. >> Some good dividends along the way. >> You Okay, so you've got the dividends. Yeah. And I I we've kind of played it well, you know, had a kind of a core position that we've traded around. We we're very large in it a few years ago kind of after that first tin wash out. Um you know, and so, you know, we we we've done well there, but I think our the problem we have with that one is it's literally one of the best mining assets in the entire world. And no one really talks about the money asset. I mean, it's all about the all about the political situation. you know, I I follow the chat around and I you make a PhD in international relations just to sort of, you know, track along what are the the latest uh peace talks and this which rebel group's doing what and so, you know, it's kind of a distraction and I wonder if that will prevent it ever from getting sort of a a valuation rate or are we just going to have to make all of our money from the dividends and remember shareholder there now as well, which has been one of the big changes in the in the past few months. >> Yeah. So, um, we had, it was, uh, you know, Denim, which was a private equity company that had been in there for a while. You know, they I mean, for a while, since 10 10 15 years, I mean, since the thing was kind of built. Um, you know, I think that was getting long in the tooth there and they they wanted to do a continuation vehicle. I think that had been announced and, you know, kind of right around that time, you had all the troubles start to pick up. I mean, this was maybe end of last year and so maybe it went from a handful of parties down to, you know, yeah, just the just that Middle Eastern the Middle Eastern fund. Um, which is look, they don't normally have a lot of public companies. Uh, and so for us, it's like, okay, well, are they going to make a run for the for the rest of this company? Um, you know, that was pretty nice of them to they were able to pick up that block. I think there was some concern, hey, are they going to, you know, screw the minority shareholders or are they going to continue the dividends? And then, you know, we got a nice answer to that about a month or so ago when they when they paid the interim dividends. So, it kind of goes back to what I was saying. Um, you know, are we ever going to get a reate on this thing or is the political overhand going to be just languish there and we're just going to have to collect our return via via dividends? I don't know. Um whereas it used to be a very large position for us a few years ago when you know Tim was really washed out. I think it's more kind of middle of the pack now we think it's a a great you know riskreward but there's obviously some challenges to look like I said earlier I I like when there's a lot of ways to win. If one of the ways to win is a rerate multiple rerate I wonder if that uh that way to win has gotten a little bit more challenged. Not to say it can't get there. I I think especially since you know after earlier this year they shut the mine down. Um you know there were all these concerns and it looks like the international community especially the US stepped in and kind of give this implicit security guarantee. Look that was enough to get things back up and running but is that really enough to um kind of assuage investors fears and and let them put a higher multiple on this? I I don't know yet. Um you know the other problem is it's not that liquid. We we talk to the management team pretty regularly and it's you know hey can you guys do a another listing US Australia something um they don't need to raise money right and so there's no real there's no real reason for them to come out and um you know introduce new shares to the market so you're kind of in this limbo of yeah it doesn't really trade that much most of the float's locked up how do you get new institutions in there if there's no stock for sale I mean really that the thing that that that Denim transaction was kind of the the big transaction that you that you could talk potentially have. There had been some speculation before that that maybe Denim wouldn't exit completely. They would take, you know, 10 or 20% of their stake and float that to get your secondary listing. Um but, you know, we'll see. I think at least with the latest um news on on the dividend, it looks like uh the new owners are going to be shareholder friendly. Um but we'll see. Again, it's a whereas it was a very large position for us a few years ago, I think it's kind of more um sized appropriately for, you know, the riskreward here. >> How funny that he remembers the fully funded capital raises. You know what we talked about even more frequently than that with Adriatic >> Sanvic ground support. >> We did bring up Sanvic ground support. The perfect segue was always an Adriatic segment, mate, because Sanvic ground support, a supporting ground, and Adriatic had ground that needed support. So, it was just a no-brainer. >> This is true. Sanvic, a Swedish company, mixed with DSI, the champions from down under here to create Sanvic ground support, the global champions of ground support. So, if you're a uh underground miner in any neck of the woods, you should really get on the phone and give Derek Herd a call, shouldn't you, >> mate? If you got ground that needs supported or ground that should be supported or just ground in general and you know, it needs some support for safety, but Tampa ground support have the answer. It might come in the form of bolts. Might come in the form of of some of the the great chemical products that they have out there. >> It might come in the form of the digital systems that they've got in place. You can just hook these things on on the end of your sort of bolts there and you get a great understanding. All these things just hook in with your phone straight away or it could come in the form of the latest app that they've got to chuck in your orders. They are making your life as an underground operator easier every day. So, >> I reckon they can support water. >> You reckon? I wouldn't put it past this team, mate, because we know amongst everything else we just said there, they're at the cutting edge of R&D when it comes to underground mining technology. So, I wouldn't put it past them, mate. >> Absolutely no-brainer. Go stand under the ground support. Back to Brian. I I'm I'm I'm very curious, Brian. Like, if we rattled off a bunch of commodities, just just give it a a one one to 10. one one being like least like no no no no no no attractiveness whatsoever to to buy anything in that space and 10 being like yeah trying to trying to buy trying to get a full allocation into this commodity um >> I like this let's do it >> cobalt you know I I'm not I'm not the the smartest guy cobalt uh I don't even know what number I'd give it I mean I know that the there's been a lot of supply ramping up um what was that cobalt project in the US that they were trying to float that was a disaster. Uh, you know, I'd give it maybe a two or three with the caveat that I don't I don't really know. Don't follow it too closely. >> How about silver? >> Hey, I like silver maybe better than gold. Um, you know, I' I'll say maybe six, seven or higher. Um, you know, Adriatic was the other one that that that got taken out for us, which was a nice validation because um, you know, obviously that thing got delayed, delayed, delayed. you guys, you know, rightfully joked about all the fully funded raises they did. Um, you know, hey, we were in that for several years and did well and it was nice to to get the take out there. Um, you know, and that was always the joke with them was they should change their name to Adriatic Silver because all the silver companies had these crazy valuation premiums that they were trading at. So, yeah, look, I I like silver um of the precious metals the most because look, my problem always with gold has been what should the price be? It's not like any other commodity where you can use a cost curve and and go marginal cost. It's like, you know, a lot of companies are making huge money right here. What should the price of gold be? I don't know. Um, you know, probably higher just because on the margin all the things are moving in its favor, but what's to say it should be 3500 versus 3,000 4,000 more or less. I mean, I think with silver there is more of that industrial component to it. So, you can really look at at demand and there's going to be some real uh consumption there. And, you know, to you see the guys that talk about the gold silver ratio and all that stuff. I mean, if you believe in that voodoo, um, you probably probably should see silver do a bit of a catch-up. I think the gold bugs would hate if the catch-up came the other direction and gold came down to it, but um, you know, I would expect silver to do very well there and it's it's still a big a big part of our portfolio. >> Did did you top up your position in in silver with the Adriatic, you know, the the cash component of that sort of pivot that into some more silver plays out there? >> You know, we have some um that we've been kicking the tire. I mean, the problem is is there aren't a lot of silver companies, right? They have silver in their name, but they're mostly gold companies. They have some byproduct. And so, we've looked at that, you know, who's got the most exposure on a revenue basis or a profit basis. And, you know, kind of the sensitivity to that. And so, we have some some smaller cap plays there. You know, I think look, we're happy to inherit the Dundee. I mean, that thing's just a machine. What what a great operator they are. So, we basically taken that and, you know, I think on the margin, we're we're always on the lookout for it. But again, just and I guess precious metals in general, it's not it's not as contrarian as it was. We've been in in gold and silver for a long time, you know, over over a decade. Um, you know, you couldn't really give it away back then and now it's, you know, one of the best performers of the year and everyone wants to to jump in there. So, uh, you know, kind of the contrarian me gets a little nervous about that sort of shift in attitudes, but I still think these things have have a long way to go. And um yeah, if I had to pick one, probably silver or gold and yeah, six or seven, I don't know. I >> sink >> sink. Um I don't know. I mean, look, it's it was part of the Adriatic case. I have to like it. But um I you know, I don't I don't really know it that well. It's not something that we've kind of followed too in depth because we've really only owned it companies where it's kind of a byproduct or we haven't really looked to target it directly. And maybe now that I'm hearing myself say all this, it probably is worth worth a look. Um, but again, I think it's one of those things we probably wouldn't target directly. Uh, you know, and I I view it kind of kind of more niche. Um, you know, I mean, the one that we're looking at niche that you guys probably know is nobbium, which obviously the the big discovery there that was a few years ago. We we were in that one. We we quite like that. Um, >> really? You hold some WA1? >> What's that? >> WA1. >> Ding ding ding. Yeah. Yeah. Well, that I don't know how many other Nomianium companies there are, but you know, I feel like we, you know, kind of came on our radar with that big discovery a few years ago and yeah, it's, you know, there's a lot. That one's funny because obviously it kind of fits what we're looking for, which are these really high quality war bodies. Um, you know, they're calling it tier zero. It it it really is uh kind of a an anomaly, a geological anomaly. And and the questions are not necessarily about the quality of the deposit. It's, you know, okay, it's kind of a weird market, right? the Brazilians have 80 or 85% of that one private company and you know how much can they flex up how much can the market actually absorb. Um I mean I think it looks good on a kind of on a mind plan basis but you know can they get an offtake? I think that's probably the next step for them to to really derisk it. Um but yeah I mean as far as niche metals go that's probably that's probably the one that's um you know least least talked about. you know, some of the other ones, zinc, cobalt. Look, I we always say you can't kiss all the girls, right? I think you have to pick your spots. Um, we have the luxury of not needing to form an opinion on everything. I think that's uh kind of a tough concept for people to get their head around. Everyone thinks, okay, I need to know, you know, every single thing and I got to have a a strong opinion. Look, I I'll be the first to tell you. I don't know. I don't follow Zinc that closely. I don't follow Proalt that closely. And so, I'm not going to pretend that I do. I'm just gonna, you know, I can talk to you about the stuff that I that I do follow, but um, you know, for the most part, look, we try to keep kind of a broad overview on on on a lot of different things. And it's just our view in general that I mean, pull up the periodic table. Uh, there's a lot of those boxes on there that are going to be in short supply. Um, you know, and so we do a work on on a lot of different ones, but I think you can only own so many stocks. We don't run like 100, 200 names in the portfolio. So, we try to find things where, you know, it's that kind of ticks all the boxes that we look for and um, you know, we might be have four or five different metals at a time. >> A bit out of our wheelhouse, but how are you thinking about energy more broadly? >> Well, you know, I I think it's funny, we don't own a lot of energy. Um, and it's kind of ironic because I actually started as a as an energy analyst uh oil and gas um a long time ago, but you know, I I think the difference and why we prefer mining versus energy is just the the lead time to bring on new supply. I think it's uh very difficult to bring on supply of metals, right? It's it's years to get permitting, build a mine and do all that sort of thing. I think with oil and gas, I mean, you can you can drill wells in a in a pretty short time. Um, you know, and so really it's more of a I think the fact that there's a easier supply response leads us to get uh less enthusiastic about potential price spikes. Whereas in some of these niche metals, you know, if there ever is like a supply demand driven uh increase in the price, it's not going to get fixed that easily. Um, and I think there is this period of time where you're going to have scarcity pricing and you can earn those those bumper profits. That said, um, you know, spent too much time looking at at oil and gas wells to ignore it. And so I think that there probably is some opportunity there. You know what I what I kind of like in oil and gas now, you know, we own some Canadian natural, which is like an oil sands type play. I like that business model of not necessarily blowing and going on this treadmill that the shale guys are on where you got to keep plowing money back into the ground. You know, for the big oil stands producers, they they spent all that money. Now it's, you know, kind of uh it's just let the c the free cash flow roll in. You know, very minimal ongoing capex and a flat production profile. And then you get kind of the natural gas taker if if Canadian gas ever um you know, gets off the floor. And so that's the way we kind of look at it is anything and I guess you could even lump copper in there. Anything where there's more of a of a generic, you know, tied to the economy type of beta and, you know, you're going to get whipped around. It's it's less niche. It's not uranium. It's not some of these things that have their own real tight fundamentals. I think we want to approach those areas like having something where it's kind of tangential to it or you're not just, okay, it's a call on the oil price or call on the gas price. Um, you know, I think natural gas looks interesting here. it's been kind of washed out and uh you know especially given all the demand for energy for AI electricity I don't think we're going to solve it all you know with uh nuke plants in the short term we're probably going to still be burning coal still be burning natural gas and of the two you know natural gas seems to be the one that people think is cleaner so you'll probably see more gas demand there especially with the whole LG thing I mean we've we've done well with some LG adjacent type investments and so you know I I think within oil and gas we kind of pick our spots But um it's it's kind of a it's a smaller part of the portfolio much more so than than mining just because of that whole supply response thing. >> Yeah, that that that sort of makes sense. And if we we rattle off uh the last kind of couple or the last basket of metals I'm curious to hear your thoughts about uh some of the bulks. So you mentioned coal before, but do you take any interest in iron ore or aluminium? I mean, not not as much. I I think again, those are kind of the ones that are more tied to uh just general economic activity levels where, you know, I I'm not going to have a smarter view than than someone that stares at it all day. And so, I think it's it's harder to get an edge there. Yeah, maybe you can kind of time and and in and out uh a little bit better um and and make some money, but I think the knowledge curve is is so steep there. And again uh why do I need why do I need the headache of of uh of trying to understand that when look I understand enough of it as it fits in sort of the overall picture of you know iron or steel and the coal what's needed and all of that but you know am I going to make the smartest call on on where the bottom and iron is or where it's going to go probably not um I think you know we go a little bit more niche than that um but at the same time not so niche where you know some metal that we never heard of and there's three stocks and they they trade you know 10 bucks up today. >> Makes makes a lot of sense. Brian, it's been um been a privilege to to pick your brain. Is there is there anything on your mind lately that you haven't had the chance to uh to talk through so far? But you kind of just want to share >> I'm trying to think. I mean, I think we hit all the main stuff. You know, it's really, you know, where we're at right now is, yeah, uranium has done well. We're still in a little bit of it. I think probably copper would be our biggest metal that we're in. Um, just because there's so many more ways to play it, you know, I mean, Tin's a tough one. I'm surprised you didn't ask about Metals X because I know that's a big on the TIN side there. You know, I need to get your opinion whether you think they're ever going to get the uh get the cash back to the shareholders. But, um, >> I'm getting more I'm getting more comfortable with their capital allocation. Yeah, ding ding ding on the buy that buyback bid at 40 cents is probably still sitting out there. I'd love to see them raise that a little bit. Um, you know, now they're Wasn't it you that went to the their annual meeting? Yeah, I I did. I missed the one this year, but yeah, went went the year before. I I um yeah, it's always going to be a funky company and it's not for everyone, but um the capital allocation, which which I was once pretty scathing of, like I'm I'm I'm a lot more comfortable with it these days and I think I think it'll get better over time. >> For a company that's not a fund, I mean, they've done well, you know, building different companies. It's f I mean I think the you know the world's been clamoring for a 10 ETF and so if it turns out to be Metals X and maybe that's the way to go and the stock's done pretty well this year. >> I I I still don't know the like yeah I mean you can interpret that in a few different ways like one is one is one interpretation is they're just land banking future development projects which will actually prevent their development ultimately. Um, yeah. >> Well, and I look, I think in uranium, you kind of saw some people do that a while ago and they got laughed at for it. And if if if it plays out the next 5 years, like the last 5 years did in uranium where all of a sudden you get a re-rate on these things and there's, you know, all these 20 million, $50 million projects becoming the money because the tin price goes up a bunch. Well, they might look very smart for doing that. Um, the real question is is is that their real intention or you know, what is it? I think that's the problem is um you know without any sort of really explicit capital uh allocation framework you're kind of at the mercy of just guessing at it. But you know in the meantime it's you know it's done pretty well. It's pushing close to the kind of the you know 5year highs that it hit um you know several years ago. And so I think if it only trades as a proxy for the tin price in the meantime um we'd be very happy and then yeah you get a little bit of a bonus if they pay you back on that. But really, no, I think we hit on most of the things. I mean, yeah, copper um is probably our biggest one. And again, it's it's a lot of the I don't know if I'd call them household names, but we like the mid tiers, kind of the 10-15 billion caps, you know, like Ivono that has a very high quality project. I think you can do well finding these things. I mean, obviously, they had their troubles with the mine issues um earlier this year. In our experience, those have been great times to to, you know, pick off some some shares of a longer term story because whatever the short-term issues are that that people are concerned with. And then, you know, the rest of it, I mean, I think we're actually finding some interesting ideas outside of mining um that actually we got led into by doing the research online. You start researching all these niche metals and you see the applications they go into and you start learning about the applications, you're like, "Oh, wait a minute. some of these interesting technologies kind of the forefront of tech whether it's aerospace or you know lasers all this kind of crazy stuff it's like okay there's some interesting companies that are you know almost picks and shovels kind of going into those applications where I I would almost consider the metals as a pick and shovel play into some of those applications as well so you know it's um a lot going on we don't do a lot of these um these podcasts because the stuff doesn't really change uh you know from week to week if you think about it it's the same story you've been telling for very many years and now it you know, some of the stuff starts to work and people be like, "Oh my gosh, you know, not as dumb as a book." So, it's like, okay, um, real question. I think those are great questions about the contrarian stuff because that's really what we're doing is looking at the stuff that, you know, the seeds that we planted a few years ago that are all of a sudden bearing fruit. And now it's like, okay, if we want to trim trim some of these apples off a tree and make a pie, like, what's the what's the next area we're going to go into? I think it's some of those ones like a coal or a lithium where, you know, people hate it right now, but, you know, you can make a picture that maybe 3, five years from now looks different. I think I think you summarized it well. Perhaps when we last spoke by saying if we're not talking about this stuff in five years time, we've kind of done our job. >> Well, hopefully it's because we we harvested a game and not and we were completely wrong about it. But no, that's exactly what we said. You know, look, we I mean, we run a few different uh strategies. Um kind of our our our you know, more wider one is is about half uh 50% in in in metals and mining, which is a huge overweight for, you know, anybody, right? Um, and so we tell people, yeah, look, this is where we are today. That's where we see the value. But yeah, 5 years from now, I'd love nothing better than to not own any of this stuff because it means that the valuations, you know, really did what we thought they would do and we captured all that latent value and we're on to the next onto the next area. And so, you know, I I think at least with mining though, because it feeds into so many different areas, um, I think there's a long runway ahead. And so, you know, I mean, look, we we said the same thing about uranium, but then you get these these these short time periods where there's a frenzy and you get this quick valuation rate. I I think maybe you'll see that in some of these other areas. Um, you know, and then we keep kind of hopping around to where we see short-term weakness, long-term strength. And I mean, when those run out, uh, yeah, maybe it's something completely different. You guys won't invite me back anymore because I don't have any mining stocks. I'm sure you'll get a call up in uh in a year or so's time, Brian, to to check in on all these, but appreciate you making the time and and joining us and chatting about the portfolio. >> Thanks, bro. >> Fantastic, mate. I love chatting with Brian. I love chatting with generalist investors. Love chatting with contrarians. So, it's always great to sort of share the the thoughts of these smart people on money of mine. And it's all possible thanks to our fantastic partners Sanvic Ground support in the show as well as Focus the platform by Market Tech and IMAK. Get your tickets money miners. >> Hudoo. Now remember, I'm an idiot. JD is an idiot. 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