Gold Industry Challenges: The podcast discusses the issue of gold miners lowering cutoff grades, leading to "profitless prosperity," which can erode profit margins.
Gold Market Sentiment: Despite strong earnings from gold companies, investor enthusiasm remains subdued due to the broader market's focus on tech and AI sectors.
Investment Opportunities: The conversation highlights potential for growth in gold equities as more retail and institutional investors enter the space, with expectations of margin expansion.
Company Strategies: Companies like Agnico are praised for maintaining cost discipline and returning capital to shareholders, while others are criticized for pursuing growth for growth's sake.
Geopolitical Risks: The podcast touches on the risks of resource nationalism in countries like Burkina Faso, affecting mining operations and investor confidence.
M&A Activity: There is a focus on disciplined M&A, with larger miners generating cash and considering buybacks over acquisitions unless they see strong economic rationale.
Gold Price Correlation: The gold price is closely tied to total federal debt, with expectations that it will continue to rise unless the U.S. addresses its debt situation.
Portfolio Management: The discussion includes strategies for managing a gold fund, emphasizing the importance of moving up the cap scale and focusing on larger, more stable companies.
Transcript
See, this is the problem with the gold industry. They lower the cutoff grade to profitless prosperity. What are you going to do with your your cutoff grade? You know, are you going to keep it the same in the coming year or keep lowering it to profitless prosperity? You know, if you are an investor, what you're looking for is you want to capture that margin. >> JD, gold is back. Gold's back. It's it's having it's having its you know it's coming back after a little bit of a little bit of time in the in the brief sin bin. It was very just a pause. It's back. The equities are um are roaring again. There's a little bit of excitement back in the market. Earning season has come out and everyone's realizing that these gold companies are making an absolute fortune at the moment. And um so very topically we've got we've got the very kind Greg Aurel who runs uh runs the OCM gold Fund. And mate, you've been doing this for for 30 odd years. you're so familiar with the gold and precious equities. We're um we're delighted to to have you joining us all the way from from uh the United States and um we're keen to talk everything gold equities with you today. >> All right, my pleasure. Looking forward to it. Enjoy your show. >> Great to hear, Greg. Uh it I think the the logical place to kick this one off is the the runup in gold equities and the the even more extreme runup in the gold price has um seen earnings like Trav said be quite strong. How have you sort of reflected on the profit margins and the the money being earned by miners across the globe really in in the past couple months of earnings? Yeah, I mean I think it's been a bit slow on the uptake by uh generalist investors really. Um if you if you look back at you know how this year has gone I mean every quarter you've seen an increase in the gold price and uh you know the though the the price of the shares have gone up you really haven't gotten the enthusiasm that you would normally would that it would be typically associated with bull markets. uh partly that is to do with you know the broader market continues to run and so you know gold is looked at as a defensive type of asset and so you know with the broader market running you know especially tech AI etc you haven't had um a lot of folks you know feel like they need to chase you into the gold space and so you know you've seen the GDX come in with you know 20% less shares than they've had you know at the beginning of the year which gives you an idea that, you know, money is still coming out of this space. So, um, you know, I I look at, you know, where we're going. Um, you know, there's more room to more room to run. Obviously, sitting in my seat, I'd like to think that. Um, but, you know, I still look at it and, uh, you know, believe that, you know, we're going to see more retail, we're going to see more institutional investors come into the space, and you'll see these margins start to press out. Um you know so you know what happens you know in a bull market you know the um the re the number of companies that you know really start taking off and you know start to you know see M&A at the top of a cycle you know you'll see you know the gold XAU ratio be somewhere you know north of uh you know six probably at a peak and you know you're still you know at a much lower level than at right now. And so, you know, what we're still seeing is a lot of, you know, still a lot of room to grow just by, you know, investors coming in. And so if you look at the cycles of you know when gold goes to you know at a peak um you know you'll you know the gold price will peak you know this is I'm you know looking back at you know 1980 and you know the gold price peaks and you know the shares don't really I mean they they fall off but then they have the real bull market run comes in that period that came afterwards and there you know there was a you know big bull market. I mean, that's when you, you know, pulled in, you know, the barracks that were created and, you know, the companies were created with, you know, settling at a higher gold price. And I still think we're going to what's going to happen is we're going to settle at you know a gold price that uh you know once the US can get its debt situation squared away is we're going to get a gold price that stabilizes you know at a you know pretty significant level that you know folks you know you know they're still looking back and saying oh well gold price can't handle you know it's not going to stay above 3,000. And I think right now when you start looking at these gold shares, you know that they're starting to get uh, you know, a feeling a base of, you know, okay, 33 $3,400, that's a that's a good base, you know, so um, you know, we're just kind of just getting our feet wet. Do >> do you think the consensus here is that gold can't hold above 3,000? >> I think that has been the consensus. Absolutely. Yeah. And I mean, the Aussies have been weak for a while. um you know they took off over the last month and I think that was finally some belief you know coming in for you know the the gold price is going to hold above 3,000 it's you know and you're starting to deliver whether it's a west gold or you know any of these companies you know they're starting to deliver you know some you know decent cash >> the the um it's it's what do you when you look back through history at the the periods where like gold miners have very substantial um like margin does do they actually have a sustained period of of strong margins typically or does inflation often kind of erode their their margin margins pretty quickly because that's the in the back of my mind like if inflation comes back pretty sharply like all of a sudden cost pressures just surely just eat into into the margins. >> Yeah. I mean you've seen some cost pressures and I mean right now you're starting to see you where the price of inputs has leveled off a bit. uh you know it's it's you know they're up and I you know if you look at all-in sustaining costs you know being up over the last uh year you know part of that is you know when you know the miners are making money you know they do put money back in under the ground that they they need to put back in you know which you know then allows them to sustain themselves you know when the gold price goes back down a bit but um yeah you do see a level of inflation that comes in. Everybody wants their peace whether it's governments or uh employees. Uh but you know what I've seen so far is that you know we have a you know a gold price that you know is allowing for margin expansion and you know the gold price you know at this port point in the cycle is going faster is moving faster than the inflation is and that's important you for margin expansion. >> Totally. The the the point you made on sentiment is is really interesting Greg. How do you reflect on the sentiment in the states? Cuz I see on the one hand like Walmart selling out of gold coins and stuff, but on the other hand to the point you made earlier, tech is the the consensus trade and all these sorts of things. So from your perspective in in that part of the world, how do people think about gold? >> Uh people, you know, they'll they like I said, they'll look at gold is from a defensive standpoint. and you you've had you know this money that's moved into crypto and um I think that uh you know at some point when you you know there's a high correlation between crypto and NASDAQ and once the NASDAQ does break I still think it will at some point I mean you got Nvidia and these stocks Palunteer that are trading you know at um you know multiples of you know their revenues and uh and earnings that you know typically mean that you know they they've reached a peak um because it takes years to go in and you know finally earn you those multiples and you know whether it was Cisco and you know the 2000 era or Sun Micro Systemystems you know Sun Micro Systemystems you know trading 10 times revenue um you know it's it just was you know it just gets to the point where it's too far and you know I I think we're getting that um now and you know the the cycle, but uh you know, still there's so much money that's been made in the NASDAQ um and the tech stocks, it's going to be a real tough uh to try to turn that and have people believe it's over. So um you know I I think that you know where sentiment is right now um you know in the gold space is that uh you know they still need to see the the market roll over and then you'll then you'll get you know some broader participation. You mentioned that like in the in the good times these gold companies they put the money back in in into the ground. I I'm noticing a lot of lowering of the cutoff grade occurring and and then and then to coincide with that there's a mill expansion study underway. So like you know these gold miners they've got excess capital but they're they're just lowering the cutoff grades doing the mill expansion and saying that costs are kind of be able to moderate from from um economies of scale with a bigger meal but then they're depleting their resource faster and once you've got a much bigger mill like you kind of you kind of always have to keep that thing full. It's a you can't go back after doing that. So, um, how do you how do you like weigh up your your views of just like discipline around not lowering the cutoff grade and and and and doing this sort of thing? >> Yeah. Stay away from those companies. >> Really? Why? Tell Yeah, please tell me why. Like why why why you believe that? >> I mean, look, see, this is the problem with the gold industry is that um, you know, they lower the cutoff grade to profitless prosperity. And so, you know, if you are um an investor, what you're looking for is you want to capture that margin. I mean, the story that, you know, in fund managers like to tell is that, okay, the gold price is, you know, it's it's $2,000 an ounce and it's going to $3,000 an ounce and our cost is a,000 and um look at we're going to have a 100% increase in our margin. And um and if you sit there and lower the cutoff grade to you know 0.000000001 you're going to be in a position to where you know that you know margin goes down to nothing. And this is historically what has been the problem with the gold miners is that they have destroyed you know the margins. And I think you know one of the things that you know I certainly preach in all the meetings is and ask um management are okay well what are you going to do with your your cuto off grade? you know, are you going to keep it the same in the coming year or, you know, or are you gonna, you know, keep lowering it to profitless prosperity? And, you know, they all say, oh, well, you know, we, you know, going to try to, you know, manage it and, you know, you know, try to keep the margins, um, but, you know, we want to make sure that we extend the mine lives because we already have the capital spent. Well, if you have that capital spent, um, you know, you don't necessarily, you know, you don't necessarily make more money by lowering the cutoff grade even though, you know, some of these guys think that they are going to. >> So, Travis, mate, I'm going to share something with you that that Greg shared with me before the interview. This little bit of insight into his checklist. Do you know what was the top of his checklist for investing in an underground gold mining company? It's not anything to do with lowering the cutoff grade is is a bad thing. That's like a >> not at all. The key detail is mate, the company has to use Sanvic ground support. >> Ah, yeah. Yeah. Yeah. Of course. >> And it makes sense, right? >> Yeah. >> Great companies want to work with great people and other great companies, companies that deliver great products. And why not work with the best in the industry in Sanvic ground support? >> It's a signal of the type of company you are. If you understand that using Sanvic ground support is going to save you time. Time is valuable. It's going to save you a lot of a lot of just like bandwidth knowing that you can depend on the product that's coming. And it's of course going to be as safe as there is humanly possible because of the R&D that goes into making this ground support a truly innovative product is essential for safety. >> We were speaking about this R&D before. Whether it's the resins, the easy 10, the latest bolts they've got, whether it's the app, they are innovating on every single front of the business. Not to mention, they are working in every single corner of the world so they can get that product to the mine site as quick as possible. And of all the things you mentioned in saving there, the biggest one is money. >> Mate, you know what? I can't wait to do I can't wait to go to Qale and see some of this innovation with the main man, Derek Kurd. I think it's going to happen later this month, you and I. We're going to Qale with Derek. I can't wait. Go Sanvic support. >> Go Sanvic. >> That's such an interesting Yeah. Such an interesting kind of reflection on the on the capital allocation decisions of management in the sector. And I think there's also just like a everyone thinks that they need to have growth in their portfolio. They they've got to have a they've either got to maintain production or have a growth project. And if you look at the the the gold company that commands the most the highest multiple in the space, they're ex growth. They don't have any growth, but they they do they have they have maintained margin like they have maintained their costs, right? Ago, of course. >> Yeah. Um, so Agno is, you know, and they're, you know, right now saying, hey, look, if we don't have any a good project to put money in, you know, we're going to give that money back to shareholders, you know, and that plays well, um, you know, for investors. And I I think, you know, that, you know, there are projects out there. I mean this is this is one of the things that is going to be tough because I mean when you look at a mining company when they acquire a a new project you know they have to look at it from the standpoint of of you know getting a return on that capital and whether it's issuing shares or issuing cash you have to get a return that is commensurate with real you know competitive returns in other industries and I think that's one of the problems s that historically the industry had is that you know you were in a bull market. You know it was growth for growth's sake and if you were um going out looking for a project you it just issued more shares you got bigger everybody got bigger salaries and everything was wonderful. I think, you know, what Agniko is is doing a good job of is, you know, they're telling, you know, investors out there, look, if we don't see anything good, we're we're not buying it. Um, you know, and, you know, they're, you know, also these miners are not comfortable yet with this gold price. You know, they're still sticking, you know, uh, you know, a much, you know, their cut off grades and everything. um based on what I can see right now are based on you know you lower gold prices. So you know they use consensus gold prices and you know consensus gold prices by the analysts are usually um you know pretty far behind because they're run by banks that you know don't want to see you know much higher gold prices. So >> how do you then forecast gold when you sort of build out your models or or think about it? that you just sort of do various levels of sensitivity analysis, various cases. >> Yeah, I mean our gold price assumption is um much right now it is lower uh just because um you know if you historically go back and look at um you know 10year trailing average gold price is I believe is probably the best number to look at. Um, and if you just take a a simple average over the last 10 years, you you get a a number that is significantly lower than the current gold price. But, you know, if you're a mining company and you maintain that, you're you're going to keep your margins throughout the, you know, many cycles. And um you know I think we're in a we're in an interesting period right now in that um you know the the gold price is really tied to total federal debt outstanding. And if you were to look at the gold price since Nixon closed the gold window, you'd see about a 93% correlation to you know the gold price and total federal debt outstanding. And so if we um you know the US could actually get its act together and start to slow the rise of total federal debt outstanding then you know the gold price would slow down. But you know it's going to continue to this upward trajectory as long as total federal debts going up. I think that um you know Trump he's a real estate developer and real estate de developers love debt and you know I I just really don't see him you know making a concerted effort to to lower the debt. So >> how would you think about positioning the fund if if you were to sort of see a slowdown in in gold or in the the sort of federal debt level? >> It's a gold fund mate. It's always a goat. >> But there's there's various >> Yeah. I mean you you certainly can um well one of the things you do I mean you know the first thing you do is you really start chopping off your um exploration and development companies. I mean that's that's where you you know the the axe comes first then and then you go on to your junior producers and uh what you do is you just move up scale and so you'll you'll be I mean if you know we have to be 85% invested in the uh in the space being a gold fund so um you know what you can do is you can buy bullion it doesn't go down as as fast and as hard as you know the minor ers go down. Um but you know what you will do is um you know look to have you know larger cap companies. So you just move up cap is what happens. So um you know what is you know what you haven't seen in this cycle is you haven't seen you know the big rush in you know exploration and development companies and you know the smaller miners are are you know catching a bit of a bid now. Um but you know the you know just the rush to of excitement that happens in a bull market you know where you know a drill hole comes out and it goes up a couple hundred%. Um you know we're not seeing that as much at least in the states we're not seeing it. I mean, you have a few here and there down in Australia um that have, you know, had some news nice moves, but um you know, it's still, you know, it's a it's a it's not an easy easy market to really gauge the prospects of um you know, who's going to be the next winner. >> Retail is is coming back here, but they're um yeah, it's not it's not like fever level pictures yet. The IPOs are on their way. there and they're a good a good a good thermometer. The cap raises are just um it's just cap cap raise season and that that just shows that there's like a lot of capital a like available for the sector right now and that's just just the observation I've got. Yeah, I mean you I mean certainly when you know Cam accord sits there and hits us with you know you know a deal a night you know type of um yeah you have to kind of say all right you know yeah maybe things are you know you know could get a bit frothy and you know look you know I I certainly believe that you know we are um you know due for you know some type of pull back um and then we go again. I mean, that's just, you know, what ends up happening is that, you know, you you got a lot of folks that, you know, aren't aren't in involved in the space at all that will get involved, but um, you know, there there is hot money that is in the space and so, yeah, you'll have 30% moves and then, okay, you'll pull back a bit and, you know, and then you go again. So, nothing nothing wrong with that. One of the other reasons or sort of factors that comes to mind is the more approach uh more disciplined approach to M&A this this time around versus 10 years ago and perhaps people thinking there's less odds of your junior kind of getting bored out. This ties in as well with the capital discipline, the margin discipline that you spoke about earlier. How do you consider the approach to M&A in this sort of bull market that we're in now? >> Right. I I think that um you know disciplined M&A is is really the approach. I mean that's what uh you know folks have been preaching you know for quite a while. uh that been in the space sitting in my seat. Uh you know that's what we've been telling companies is you know just don't go buy something with that doesn't have economic rationale and you know to you know obviously you know that you know if you have a company that has one asset and you know there's a short mind life you've got to do something um in order to keep in the your seat. So, um, yeah, it really depends individually on the situation, but, uh, I would say overall, you know, the bigger miners are are really generating significant cash right now. And so, you know, I think that they're been more apt to, you know, do buybacks than, um, buy companies, but, you know, they will buy companies. I mean that they have to get comfortable with the gold price assumptions before they do that. And so um you know I I'd like to see them uh really use um cash to buy assets versus shares. I think that's more accreative. Um, you know, the other thing to do is, you know, this is, you know, totally off topic, but, uh, is, you know, instead of, you know, selling every single ounce, paying taxes on it, why not, you know, really put that gold just in the vault? Yeah. You put it in the vault. It uh, you know, certainly holds up better than currency has for quite some time. >> Yeah. the one the one gold miner that's done that for a very long time here trades at negative EV uh Tribune and Rand I'm not sure if you're familiar familiar with with that company well it's two companies but they've got um they've got like a collectively owned 50% interest in the East Kandana joint venture with with with Evolution I think I think the amount of gold they've got involved is enormous like it's eye watering >> uhhuh and I I just think at some point you know, they become ETFs. So, um, you know, there there's nothing wrong with that approach and I I think, you know, the the industry has been, you know, because everybody does everything on, you know, pees and uh they've been, you know, not willing to accept companies to, you know, put the gold on their balance sheet. >> Yeah. >> But, >> yeah, it's a great point. Great point. >> Should we talk stocks with you, Greg? we'd love to kind of peel into um some of the names within your within your portfolio and also >> outside of your portfolio if you've got some spicy views on them. Um >> yeah, sure. >> Let's let's start with with Anglo Gold Ashanti. Uh lots of making lots of news and talking big big aspirations in relation to the the uh the silicon project area in um in in Nevada there. Are you um pretty buoyant about that that growth opportunity and also how do you how do you see their re like their rethink of other other assets as a result of that? Um you know look I think that Anglo um you know they you know what what they've done is you know redomiciled into into the US um you know the you know I think that was important you know I think you know the fact that they you know basically are no longer a South African company though yet trade you know similar to goldfields on a lot of days um yeah I think that they're in a a real good spot to you know finally grow this company. I mean and you know they're um have been you know you know if you if you look at the assets you know they have been uh shaving off some um so they could be in a position to uh you know build a Silicon Valley Silicon project and um you know and I think that's you know that's what they're really looking towards is you know trying to close the gap with their North American peers and u you know we've had that stock for a long time and uh you know there's been you know some some pain involved but I I think that the new CEO he's he's doing a he's doing a good job and um you know getting the getting the company on the right path. So uh yeah we're I do like uh I like the I like the trajectory that Anglo's on. >> Yeah. Do you think they'll um like even even their acquisition of sentiment like a year ago? It seemed like that'll pay itself off pretty quickly at where gold prices are right now, you'd imagine. And they they didn't it was a pretty undemanding price that they paid there. So yeah, that that um that'll I think that looks pretty a pretty great deal um right now. And and do you think that they'll they'll rationalize like their Australian portfolio as they kind of you know refocus their their capital towards silicon? Um, you know, I I think that they want to maintain a presence in Australia. Um, so, you know, I think that the um the the assets in um in Australia, you know, will will be there. Um I don't think they're for sale at this time. I I really don't, you know, so you I think I still think that they believe that, you know, there's, you know, there's margin there. um you know some growth and you know I you know I don't know what you know what the growth is outside of their asset base you know that's I don't think I don't know that they're thinking that and and I think that's you know when you when you look at Australia um yeah you're kind of looking at okay you know you know where are the growth opportunities and um you know there are we have Oz gold and a few other Saturn and a few of these development projects in the portfolio and um you know they're they're coming along but you know those are not Anglo Gold type of assets you know they're they're really not so >> should we jump straight into to those two you've just mentioned there ogold had some good news recently on the on the sort of land front how are you sort of taking in the the the change in events there and how long have you kind of held the stock >> uh we've held it for um uh you know geez over a year or so since John got in there. Um and they did the raise. So you know that's been >> that's been quite a while. Um I think it's over a year I think he's been in there. >> Yeah. >> So um yeah. So you know we have it at much lower levels and I I think that you know it is it is a good project. It's it just needs some it has needed time. It's needed John and the team to go through that jump through the hoops. You know they clearly you know with doing the land deal got you know one of those hoops crossed off you know last week and uh you know the stock has reacted nicely and you know probably has more to go now. Um you know I I don't believe that you know John is in there to to build it. I really don't. So, we'll we'll see. >> That's uh that's that's an interesting perspective. We'll have to keep our eyes on who potential acquirers could be of that one. Um and then like Saturn, we've got big big scale, big tons. Um I I mean scale in terms of amount of amount of dirt dirt to move but production profile you know around the you know bit north of 100,000 ounces peranom but it's still got a bit of time before ahead of it like FY27 or 28 at the earliest this thing could be in production. >> Yeah. and you know so you know there haven't been a whole lot of deep leech you know projects down in in Australia and so I think there's probably is a bit of lack of understanding of you know what they're doing um but I I I think I do think that Ian is doing a good job of uh you know systematically you know approaching that I mean he's he really is a uh he likes to do expiration and so he's he's going at it. Um yeah, but yeah, it's it's probably yeah, it's it's a couple years away. Um but you know, and it's not at this point, I mean, he's finding more ounces. Um but you know, I I don't see it, you know, as a you know, it's not a 200,000 ounce a year mine. It's 100,000 ounce a year operation looks like. you know, so you know, who are the buyers for that? That's that'd be in Australia. Um, if if he doesn't build it, you know, one of the things that's happening is, you know, that you know, these mining companies that uh, you know, are find juniors that are finding ounces, you know, they are kind of growing, you know, to the point to where, you know, somebody it doesn't make sense for a company to buy them. Yeah. if their market caps go up too much. So, um, so then they get forced to build them, which, you know, that's not the worst thing in the world either. >> Do you think the heat leach risk is is overblown? >> The pardon me, >> the the heat leach nature of the the project. Do you think that risk here in Australia is overblown? >> I do. Yeah, I do. I I think in in certainly his um with his experience at Pneumont uh he's you know he's not afraid of it and you know I I don't I don't I don't think that uh you know from a capital standpoint I I think it's a good way to go. I mean we we'll see. I mean, they're starting to find some, you know, some higher grades, which they would need if they went to the mill route, uh, with a CIL, but I I don't think that I think they're still looking at starting it off with a heap leech. So, um, and that's, you know, in Australia, like I said, there's really isn't a lot of experience with heap leech. So I think that lack of understanding, you know, has created a bit of a a void, you know, for, you know, for investors to, you know, embrace the story more. If I'm not mistaken, Greg, you've um you've got an allocation to Ozone and they're currently in a trading halt right now on the back of news that uh that WF has received a bit of a shakeddown from the Bikina government. War Zone, also a Bikina gold producer. How are you feeling about uh about about this? I I I am I'm thankful that uh actually Orzone did uh trade it opened up late um today and went down about I think about 15% um and uh you know W is gonna trade you know on Monday um and they're going to be down 25% % probably at this point. Um I'm going to guess because you're down about um yeah, see with or or zone they have a little different uh uh mining uh code that they were in the 2025 I guess and so the government can't come back on them in Burkina. I I was thinking that you know the you know and I was I hadn't been in WAF for you know quite some time and I went back in um you know about a month ago and you you thinking okay I think that the the government's going to be happy with their 15%. they just gone from 10 to 15 and so, you know, the fact that now they want to go, you know, to to 50 is a little disconcerting. But, um, you know, I I think that, you know, WAF is, you know, probably going to try to negotiate pretty hard if they can. I don't know. I don't know what, you know, what they have to negotiate with. Um you know but you know the one of the things that is really um disconcerting for investors is you know when you have these minds and some of these armpit countries is that you know they they they want to go in and and take them and that resource nationalism is one of the big risks that you know is out there whether it's South America through and you do it you don't take over the mine entirely. You do it through taxation and increase royalties and you know that's why you get you know you know a lot of folks that are okay I I can be in Australia I can be in North America but you know you start going into these you know other countries and it gets a bit dicey. So, um, you know, I think when I look at WAF right now, um, you know, I'm not going to say what I'm going to do, but, um, you know, it's not a it's not a pleasant, um, it's not a pleasant scenario. If we just fly over quickly on the jurisdictional aspect, a couple of the other countries in the area that have significant miners, how are you thinking about the likes of uh Guinea and Ivory Coast and perhaps Sagal or other ones that you may have played in there previously? >> Yeah, Guinea has been a a good country. I mean, Civois these Sagal, they have been good countries so far. I mean, so, you know, I think, you know, when you're sitting in my seat, you're you're going, "Okay, well, we can have a a certain percentage in, you know, each one of these countries that, uh, as long as it doesn't blow up your portfolio." And so, um, so I have no problems, you know, taking a, you know, you know, being in, um, you know, Kodivo and Sagal and Guinea. um as long as it's you know doesn't make up uh you know 25% of the portfolio type of thing but you know a couple percent here and there it's okay. >> There's a couple interesting projects in Marley as well. Are you courageous enough to go there these days? Uh the only um the only uh real asset that um we have there is with Bareric and the and Bristo is being pretty tough with those guys um believing that they can't operate the mine which you know I don't think that they can but um that there I think what you know the Molly government wants to do is they want to try to bring in you know one of the other miners to to mine it. But uh you know we'll see if Ally >> they can't ask Resolute. >> Yeah Resolute I think I I think it's I if if it's anybody I I would imagine it would be Allied Peter Um but you know that's that's a pos that's a possibility. I I think that if you really were to um you know take that away from them u they would lose that in arbitration. Um but we we'll see. I mean yeah I I think of you know the the three assets that we have there are Bareric Robex has a small and allied Nevada. I mean not all Nevada but I mean allied gold. Yeah. >> Um, so >> I'm I'm curious what you've made of the run of of of London Gold. It's um it's truly truly phenomenal. You know, the uh like I mean Fred Delort has had tremendous exploration success and just the the ability to deliver that project in that part of the world. It's a 20 billion company like in Canadian dollars now. 20 billion for a single asset in Ecuador. Surely they're going to buy something soon. >> Uh yeah. I mean, yeah, the thought process had been that the Londont, >> you know, New Pneumont sitting there with a big piece that uh they got when the New Crest deal happened. Um, you know, so um you know, obviously, you know, that's a big chunk of capital that's sitting there. You know, what does New Pneumont do? I mean there has been speculation that pneumont you know would make a bid but you know at these prices uh you know that's become less likely. I mean this is this is what the market's doing. It's running in front of you know what would be would be acquirers and so I I don't see that um Newmont makes a bid for I at least I'd be surprised if Numont made a bid for Lundine. So you know where does that leave Lundine? So Lundine had made an an offer to to buy reunion um gold and so you know and I think that um you know I wouldn't be surprised if you know they step up and you know make an offer uh again but you know they're going to have to get pneumont to sign off on that. I mean that's one of the things that uh you know new or new crest wouldn't allow uh the London guys do to do is to to buy anything and so you know they put a kaibos on them because originally they were thinking you know newest um they were going be before they they bought uh the asset up in Canada you know they predium they were going to you know they were talking about making a bid for Londine And so the predium deal came up. So that put uh Lundine on the back burner, but they still had ideas that they were going to do the London deal. And so, you know, what ended up happening was um you know, New Pneumont stepped up and uh took out uh New Crest and uh you know, now Newmont's in that same seat of having 35% and saying, "Okay, well, you know, we're just going to let let this play out a little while longer, but don't buy anything." Um, you know, so these guys have blocks on the uh, you know, blocking votes on the board, I guess. So, >> and speaking of takeover dynamics, I im gold is is another one where you thought it was like pretty pretty undervalued for for a while, especially given what the value of CEK, you know, should should be, and in the last couple of months, it's it's really it's really had a a run. Um do you think that's on the back of speculative corporate action as well? >> I think yeah so far is in the still in the buildup phase. Um yeah so yeah there's no doubt in my mind that I am gold wants to be sold. Um so you know how that gets worked out is you know whether you you hive off what they have in Burkana and other assets and you know create separate entities. Um but you know I think there'll be some type of transaction that takes place there you know that would not surprise me but it's it's it's coming. Um you as soon as Cotay is just has to you know show itself a little bit more >> because these guys these guys are nervous about you know CEOs you know the last cycle especially you know every time that they do did a a takeover you know it didn't work out then they you know get hived off uh quite quickly. There's a few of those like, you know, pretty substantial um assets that are still, you know, proving their straps from a ramp up perspective like in addition to Cot you've got you've got the likes of um Artemis' Blackwater and you've you've got Equinox's Greenstone. Do you like do you think that once you know like if if as they do or if if they do kind of prove themselves that they become kind of like logical acquisitions at the right price for for the majors? Um, yeah, I think uh I mean there's no doubt in my mind that Artemis is for sale at some point. I think it probably needs to, you know, work on, you know, getting its debt level down just so it just needs to produce for a while um to do that. And you know, the the I think the big guys, you know, you know, they look at, you know, mines that can do a half a million ounces and there aren't that many of them. So, yeah, it's an attractive asset. um it's not necessarily that cheap uh when you take the debt into consideration, but um you know I I do believe that you know one of the big guys will make an effort there at some point. ju just to reflect back on the the share price movements of some of these bigger companies like to talk about Londine once more they've more than 10xed in in the last few years it's it's just incredible and I can't help but notice that their market cap is almost double that of some of the companies that have been sort of grouped as as major miners like how do you think about the the rationale for continuing to to hold a company like that with the the single asset risk in Ecuador Um that's a that's a good question. you know, um, you know, I I've always been of the belief that you run with your winners and, uh, you know, that the companies will, you know, continue to create value over time and, you know, right now I'm, you know, I'm still betting on the Lines. Um, you know, and fortunately, you know, what they're doing is, you know, they're being, you know, uh, very aggressive in terms of, okay, well, we're going to pay back cash to the shareholders and, you know, obviously Pneumont's a big shareholder, but, you know, so are the Lundines. you know, that's that's one of the reasons why I thought that, you know, you know, the Lundines wanted to cash out and you know, put the um you know, that cash down into the uh copper assets um that they have. But, um you know, I I still I'm still thinking that. But um at this point, you know, they're they're willing to let the you know, the free cash flow um you know, come back to shareholders, which you know, I I'm I'm a strong believer in, you know, investors participating in cash flow. And you know, this is one of the problems that, you know, we've seen with the gold mining industry is that um you know, investors haven't participated in the cash flows the way they should. And you know I have a very simple formula in that you know that this business needs to be basically a third a third a third and you know a third goes back into paying off the mine you know a third goes to the shareholders and a third goes to uh the next mine and uh if you do that you know everybody participates so um you know so that's you know the fact that the Londines are are are paying paying us back. You know, I'm certainly in for in favor of that. >> So, Barracks sell their 50% stake to their JV partner Novagold, who've been in that asset for for quite some time, and Novagold have a a runup that they haven't quite had in in a number of years, but there's still an enormous capex bill there. How do you think about the Dolan project? >> Um, yeah, I mean, there's a lot of gold there. Um and certainly Tom Kaplan and that group has been playing up the um okay well the gold in the ground is is fine is you know it's it's a asset and you know we don't have to mine it. Um, you know, I think now they're at the point where, you know, they've, you know, tired all those folks out and said, "Okay, well, we're going to have to build this eventually." And, uh, Bareric looked at it and said, "Okay, well, we're not going to get the return. We'll we'll sell it to these guys. Um, let them run with it. You know, we don't want to spend the management time to do do that." Uh, so it's uh, you know, I I think it's going to take a lot of capital clearly. Um, and you know, I I'm I'm not willing to go there at this point. Um, so you know, hats off to them really. So, uh, but yeah, it's a it's not an easy it's not an easy project. You know, you got to get the power up there. You know, you're going to do it with natural gas or however you're going to do it. I don't know. But, um, yeah, we'll see. But, there's a lot of gold up there. There is certainly a lot of gold there. one of one of the larger positions in the portfolio, Greg, is um Catalyst Medals, who who had a tremendous run last year, have retreated a bit, but um yeah, but proved their straps when they when they got their their hands on Platonic. Um I think they've got a bit more capex ahead of them now and the the the easy runs might be be over, but do you do you still have a pretty pretty strong outlook for for their ability to generate cash? uh you know um so James has got some work to do there. Um he's got a he's basically at this point now he's got to prove up the market cap that the market's given him. And so yeah, he's talked about getting to 200,000 ounces. He's got the Trident project. He's got Plutonic East. Um yeah, they you they're getting some good results on the plutonic I mean on that plutonic belt and you know with through trident uh so but you know the the question is you know is he going to be like his father and go out and buy things? Uh so you know my guess is that yes he will at some point. Um go here I dad I saw what you did but I'm going to do better. And you know, so far I actually think that uh I actually think he might be a bit more disciplined than his father was. So um maybe maybe he learned a bit at the the breakfast or the dinner table. Um but you know, one of the things that's interesting about Catalyst, I mean they waited a long time. He could have done that raise, >> you know, for, you know, I think brokers were beating on him for a long time and he didn't do it and didn't do it and he finally did it. Um, so, you know, the question is is okay, what is he doing with that money? And um, is he buying something or is it just there to, you know, keep a larger um, you know, buffer? Um, so yeah, I I I I don't know what the answer to that is yet, but you know, I do have confidence in his ability and you know, a lot of times, you know, you can sit there and you can sell assets, you know, when they've run um and then, you know, look to buy it back some other time. Um, you know, my, you know, I have historically been a pretty low turnover fund and have been, you know, if guys have been performing, I let them perform and continue to perform and I'll ride out the the ups and downs. Um, you know, that's, you know, the way we've operated. And so I I think that, you know, we'll, you know, at this point I'm willing to let James run with it until he shows otherwise. And you know once management starts doing things other than what they say you know then it's time to leave. >> I'm I'm really curious just to hear how you think about hedging in this environment. >> That's a it's a good question. Um so you know hedging is you know basically been a hedge for uh to not make money you know for a lot of uh a lot of companies they think they're hedging you know the top top line um they can't hedge any costs really you know they try to you know you can look at you know energy you know maybe they can hedge a little bit of that but you know for the most part you can't hedge your costs and then the costs keep going up and then the you know the you're stuck in a situation where you know you've you know sold forward and you know then the your your cost profile goes up and you know nobody wants to be in a company where you know the gold price is going up and uh you know they're locked in a $2,000 gold. I mean if you look at how many companies have um you know really and mostly the Australians have been the worst have really um you know died because you know they're you know their hedgebook portfolio is gone against them. Um, I mean clearly, uh, you know, obviously, uh, Belleview, um, you know, Regis, you know, they had a tough book. I mean, a lot of these companies that have had big books, you know, go against them. You know, they've, you know, it's it's been very detrimental. Um, so I I'm not big I'm not big on hedging. And, you know, one of the things that you look at now and say, "Okay, $5,000 plus gold." um you know if you know that's not a bad gold price in in Aussie terms at all. Um and so you have to have a view on what the Aussie currency is going to do. And so if you think that the Aussie currency is going to um get much stronger, you know, the gold price isn't going to do anything. And so uh you know that's one you know one view that you're going to have to take as management. I I would I think that you know companies have gotten better at uh looking at hedging more from okay well we're going to do options and you know we'll we will take the um you know take a little bit of money here and hedge ourselves on the downside and or you know they'll do some zero collars you know but you know for the most part if you look at you know the successful guys that been in the hedging game. You know, they've they've basically have bought puts and, you know, just written them off. So, >> could I could have guessed your views there. You want you want the miners to hold gold on their balance sheet, not deliver it to a to a counterparty. >> Yeah. Right. I mean I mean one one of the things that is you know when you look at you know you know the gold price uh you know it's that volatility that you know is in the share price you know so you know moving with the gold price. >> Yeah. >> Yeah. >> What's the uh what's the most undervalued gold company? Gold producer right now and then gold gold developer right now. >> Yeah. I I look at uh a lot of these companies um and say, "Okay, well, you know, where where are we going?" Um you know, and you know, I'd like to think that um you know, you I have got this small one that I've had for a while, Jaguar Mining, in the portfolio that had a a tailings issue. And um so you know once they get that squared away and then you are able to uh expand their operation you know that looks cheap to me. Um you know that the market's going to like it. The developers really in a position to where they can really make hay in this environment if they do it correctly and and but that's not blowing up their shareholders along the way entirely. just saying, "Okay, well, we need we need cash. So, you know, we're going to take cash every time we can we're offered because, you know, in a bull market, they'll be offered cash, you know, you know, every other day." So, you you have to make sure that, you know, you have managements that are not, you know, going to dilute you out. So, you that's one of the problems that you have with developers is, you know, that they will blow you out of the water, you know. So, you have to know that the management teams are there. uh understanding the you know the fact that you know they've got to keep a a close eye on you know ounces per share on on that sort of theme. Greg, I've got a a bunch of rapid fire questions that uh I want to fire towards you with the first one being who do you think is the best management team in the industry right now? >> Uh best management team is Ben Nico. They've been the best. >> I thought that might be the answer. Do you have a favorite gold mine that you've come across in your in your career? >> Uh favorite gold mine? Oh yeah. I mean my my favorite gold mines through the years have have been the Nevada gold mines that Beric and Newman had. Those have been the you know the best, you know, from I go back to early 1980s. So those have been some pretty spectacular mines. >> Yeah. Long long history there. How about the best jurisdiction to operate in the world right now? >> Yeah, I I'm gonna I'm gonna still say that you've got to be in North America and um you know, Canada. and Canada and Australia probably probably Australia is is getting more unfortunately more and more like uh um Canada and the US there's taking longer to permit um but you know from a sanctity of the um tenementss that's you know those are the the countries that you want to be in >> and most likely deal in the next 12 months. Yeah, I still think Lendine disappears somehow. Um, but they're I bet I think they buy an asset is probably my guess. >> That lending buys an asset first. >> Would you say in the Americas? >> Yes. >> Yeah. >> In the Americas. >> Yeah. Interesting one. >> How about the best site visit you've been on? >> Yeah, I'd say barracks. Barracks. have had a gold mine probably invest. I've been on um from a you know large cap mining company. So I mean I've been on a plenty of of you know go out and you know kick the dirt on you know but you know in terms of seeing an operation um you know that's probably you know you know you can see the most there. Last one for me is Agniko more likely to buy Oregon royalties or I am gold to get their hands on Cotay in some way, shape or form in the um I think that they would be uh more apt to buy Cot is probably uh my guess. you know, one of the one of the things that, you know, you know, they're certainly looking at is, you know, maintaining, you know, their jurisdiction uh profile. And I and I think that's, you know, one of the things that Cote offers them and so you're going to you're going to have to split up the um split off the BIA assets. >> Um >> so, >> yeah. So, I mean, they have no problem. They have a history of doing that. So yeah, I wouldn't be surprised if they make a joint bid with somebody or somehow they figure it out or just, you know, create a separate company. >> Fantastic, Greg. It's been an absolute pleasure to um to speak and get your insights on um on on the, you know, the gold equities and the gold market. And it was also enjoyable for us to talk about, you know, some of these North American gold miners that we don't spend heaps of time talking about. No, you spend all the time talking about the Aussies all the time. But I understand that you, you know, most of the time, you guys, mostly Aussies down there listening. So, >> yeah, we it's just local market bias, I think. You know, time zones do matter, obviously. And it's um yeah, it's kind of hard to force yourself to to pay attention to the other time zone, but but we're we you know, speaking to people like you, we're uh we're getting there. >> One step more educated now. >> Yeah. I know. Well, I think, you know, and I I do think that, you know, you do see the Aussies are, you know, they're they don't do a very good job when they come to uh North America. um then they probably should stay away from but uh but you know clearly down in Australia and um you know there's a couple guys down playing around down in South America um you know that you know you certainly could get a bid and you know I think that there's you know there is a market in Canada there's a market in Australia for resource um companies that's not there in the US And so, you know, that's, you know, that's a real positive for, you know, the industry overall. So, >> yeah, totally. There's still that appetite here. >> Yeah. No, no, there is. So, I mean, Camord is uh, you know, running the stuff up. >> It's very true. Thanks a bunch for joining us, Greg. Appreciate it. >> Yeah, my pleasure. Thanks, guys. >> And there we go, mate. A massive thank you to our fantastic partners for making it all happen. Sanvic ground support focus the platform by market tech axis mineral services and last but not least get your tickets to Africa down under next week. 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. [Music]
Gold Miners That Actually Compound (Greg Orrell)
Summary
Transcript
See, this is the problem with the gold industry. They lower the cutoff grade to profitless prosperity. What are you going to do with your your cutoff grade? You know, are you going to keep it the same in the coming year or keep lowering it to profitless prosperity? You know, if you are an investor, what you're looking for is you want to capture that margin. >> JD, gold is back. Gold's back. It's it's having it's having its you know it's coming back after a little bit of a little bit of time in the in the brief sin bin. It was very just a pause. It's back. The equities are um are roaring again. There's a little bit of excitement back in the market. Earning season has come out and everyone's realizing that these gold companies are making an absolute fortune at the moment. And um so very topically we've got we've got the very kind Greg Aurel who runs uh runs the OCM gold Fund. And mate, you've been doing this for for 30 odd years. you're so familiar with the gold and precious equities. We're um we're delighted to to have you joining us all the way from from uh the United States and um we're keen to talk everything gold equities with you today. >> All right, my pleasure. Looking forward to it. Enjoy your show. >> Great to hear, Greg. Uh it I think the the logical place to kick this one off is the the runup in gold equities and the the even more extreme runup in the gold price has um seen earnings like Trav said be quite strong. How have you sort of reflected on the profit margins and the the money being earned by miners across the globe really in in the past couple months of earnings? Yeah, I mean I think it's been a bit slow on the uptake by uh generalist investors really. Um if you if you look back at you know how this year has gone I mean every quarter you've seen an increase in the gold price and uh you know the though the the price of the shares have gone up you really haven't gotten the enthusiasm that you would normally would that it would be typically associated with bull markets. uh partly that is to do with you know the broader market continues to run and so you know gold is looked at as a defensive type of asset and so you know with the broader market running you know especially tech AI etc you haven't had um a lot of folks you know feel like they need to chase you into the gold space and so you know you've seen the GDX come in with you know 20% less shares than they've had you know at the beginning of the year which gives you an idea that, you know, money is still coming out of this space. So, um, you know, I I look at, you know, where we're going. Um, you know, there's more room to more room to run. Obviously, sitting in my seat, I'd like to think that. Um, but, you know, I still look at it and, uh, you know, believe that, you know, we're going to see more retail, we're going to see more institutional investors come into the space, and you'll see these margins start to press out. Um you know so you know what happens you know in a bull market you know the um the re the number of companies that you know really start taking off and you know start to you know see M&A at the top of a cycle you know you'll see you know the gold XAU ratio be somewhere you know north of uh you know six probably at a peak and you know you're still you know at a much lower level than at right now. And so, you know, what we're still seeing is a lot of, you know, still a lot of room to grow just by, you know, investors coming in. And so if you look at the cycles of you know when gold goes to you know at a peak um you know you'll you know the gold price will peak you know this is I'm you know looking back at you know 1980 and you know the gold price peaks and you know the shares don't really I mean they they fall off but then they have the real bull market run comes in that period that came afterwards and there you know there was a you know big bull market. I mean, that's when you, you know, pulled in, you know, the barracks that were created and, you know, the companies were created with, you know, settling at a higher gold price. And I still think we're going to what's going to happen is we're going to settle at you know a gold price that uh you know once the US can get its debt situation squared away is we're going to get a gold price that stabilizes you know at a you know pretty significant level that you know folks you know you know they're still looking back and saying oh well gold price can't handle you know it's not going to stay above 3,000. And I think right now when you start looking at these gold shares, you know that they're starting to get uh, you know, a feeling a base of, you know, okay, 33 $3,400, that's a that's a good base, you know, so um, you know, we're just kind of just getting our feet wet. Do >> do you think the consensus here is that gold can't hold above 3,000? >> I think that has been the consensus. Absolutely. Yeah. And I mean, the Aussies have been weak for a while. um you know they took off over the last month and I think that was finally some belief you know coming in for you know the the gold price is going to hold above 3,000 it's you know and you're starting to deliver whether it's a west gold or you know any of these companies you know they're starting to deliver you know some you know decent cash >> the the um it's it's what do you when you look back through history at the the periods where like gold miners have very substantial um like margin does do they actually have a sustained period of of strong margins typically or does inflation often kind of erode their their margin margins pretty quickly because that's the in the back of my mind like if inflation comes back pretty sharply like all of a sudden cost pressures just surely just eat into into the margins. >> Yeah. I mean you've seen some cost pressures and I mean right now you're starting to see you where the price of inputs has leveled off a bit. uh you know it's it's you know they're up and I you know if you look at all-in sustaining costs you know being up over the last uh year you know part of that is you know when you know the miners are making money you know they do put money back in under the ground that they they need to put back in you know which you know then allows them to sustain themselves you know when the gold price goes back down a bit but um yeah you do see a level of inflation that comes in. Everybody wants their peace whether it's governments or uh employees. Uh but you know what I've seen so far is that you know we have a you know a gold price that you know is allowing for margin expansion and you know the gold price you know at this port point in the cycle is going faster is moving faster than the inflation is and that's important you for margin expansion. >> Totally. The the the point you made on sentiment is is really interesting Greg. How do you reflect on the sentiment in the states? Cuz I see on the one hand like Walmart selling out of gold coins and stuff, but on the other hand to the point you made earlier, tech is the the consensus trade and all these sorts of things. So from your perspective in in that part of the world, how do people think about gold? >> Uh people, you know, they'll they like I said, they'll look at gold is from a defensive standpoint. and you you've had you know this money that's moved into crypto and um I think that uh you know at some point when you you know there's a high correlation between crypto and NASDAQ and once the NASDAQ does break I still think it will at some point I mean you got Nvidia and these stocks Palunteer that are trading you know at um you know multiples of you know their revenues and uh and earnings that you know typically mean that you know they they've reached a peak um because it takes years to go in and you know finally earn you those multiples and you know whether it was Cisco and you know the 2000 era or Sun Micro Systemystems you know Sun Micro Systemystems you know trading 10 times revenue um you know it's it just was you know it just gets to the point where it's too far and you know I I think we're getting that um now and you know the the cycle, but uh you know, still there's so much money that's been made in the NASDAQ um and the tech stocks, it's going to be a real tough uh to try to turn that and have people believe it's over. So um you know I I think that you know where sentiment is right now um you know in the gold space is that uh you know they still need to see the the market roll over and then you'll then you'll get you know some broader participation. You mentioned that like in the in the good times these gold companies they put the money back in in into the ground. I I'm noticing a lot of lowering of the cutoff grade occurring and and then and then to coincide with that there's a mill expansion study underway. So like you know these gold miners they've got excess capital but they're they're just lowering the cutoff grades doing the mill expansion and saying that costs are kind of be able to moderate from from um economies of scale with a bigger meal but then they're depleting their resource faster and once you've got a much bigger mill like you kind of you kind of always have to keep that thing full. It's a you can't go back after doing that. So, um, how do you how do you like weigh up your your views of just like discipline around not lowering the cutoff grade and and and and doing this sort of thing? >> Yeah. Stay away from those companies. >> Really? Why? Tell Yeah, please tell me why. Like why why why you believe that? >> I mean, look, see, this is the problem with the gold industry is that um, you know, they lower the cutoff grade to profitless prosperity. And so, you know, if you are um an investor, what you're looking for is you want to capture that margin. I mean, the story that, you know, in fund managers like to tell is that, okay, the gold price is, you know, it's it's $2,000 an ounce and it's going to $3,000 an ounce and our cost is a,000 and um look at we're going to have a 100% increase in our margin. And um and if you sit there and lower the cutoff grade to you know 0.000000001 you're going to be in a position to where you know that you know margin goes down to nothing. And this is historically what has been the problem with the gold miners is that they have destroyed you know the margins. And I think you know one of the things that you know I certainly preach in all the meetings is and ask um management are okay well what are you going to do with your your cuto off grade? you know, are you going to keep it the same in the coming year or, you know, or are you gonna, you know, keep lowering it to profitless prosperity? And, you know, they all say, oh, well, you know, we, you know, going to try to, you know, manage it and, you know, you know, try to keep the margins, um, but, you know, we want to make sure that we extend the mine lives because we already have the capital spent. Well, if you have that capital spent, um, you know, you don't necessarily, you know, you don't necessarily make more money by lowering the cutoff grade even though, you know, some of these guys think that they are going to. >> So, Travis, mate, I'm going to share something with you that that Greg shared with me before the interview. This little bit of insight into his checklist. Do you know what was the top of his checklist for investing in an underground gold mining company? It's not anything to do with lowering the cutoff grade is is a bad thing. That's like a >> not at all. The key detail is mate, the company has to use Sanvic ground support. >> Ah, yeah. Yeah. Yeah. Of course. >> And it makes sense, right? >> Yeah. >> Great companies want to work with great people and other great companies, companies that deliver great products. And why not work with the best in the industry in Sanvic ground support? >> It's a signal of the type of company you are. If you understand that using Sanvic ground support is going to save you time. Time is valuable. It's going to save you a lot of a lot of just like bandwidth knowing that you can depend on the product that's coming. And it's of course going to be as safe as there is humanly possible because of the R&D that goes into making this ground support a truly innovative product is essential for safety. >> We were speaking about this R&D before. Whether it's the resins, the easy 10, the latest bolts they've got, whether it's the app, they are innovating on every single front of the business. Not to mention, they are working in every single corner of the world so they can get that product to the mine site as quick as possible. And of all the things you mentioned in saving there, the biggest one is money. >> Mate, you know what? I can't wait to do I can't wait to go to Qale and see some of this innovation with the main man, Derek Kurd. I think it's going to happen later this month, you and I. We're going to Qale with Derek. I can't wait. Go Sanvic support. >> Go Sanvic. >> That's such an interesting Yeah. Such an interesting kind of reflection on the on the capital allocation decisions of management in the sector. And I think there's also just like a everyone thinks that they need to have growth in their portfolio. They they've got to have a they've either got to maintain production or have a growth project. And if you look at the the the gold company that commands the most the highest multiple in the space, they're ex growth. They don't have any growth, but they they do they have they have maintained margin like they have maintained their costs, right? Ago, of course. >> Yeah. Um, so Agno is, you know, and they're, you know, right now saying, hey, look, if we don't have any a good project to put money in, you know, we're going to give that money back to shareholders, you know, and that plays well, um, you know, for investors. And I I think, you know, that, you know, there are projects out there. I mean this is this is one of the things that is going to be tough because I mean when you look at a mining company when they acquire a a new project you know they have to look at it from the standpoint of of you know getting a return on that capital and whether it's issuing shares or issuing cash you have to get a return that is commensurate with real you know competitive returns in other industries and I think that's one of the problems s that historically the industry had is that you know you were in a bull market. You know it was growth for growth's sake and if you were um going out looking for a project you it just issued more shares you got bigger everybody got bigger salaries and everything was wonderful. I think, you know, what Agniko is is doing a good job of is, you know, they're telling, you know, investors out there, look, if we don't see anything good, we're we're not buying it. Um, you know, and, you know, they're, you know, also these miners are not comfortable yet with this gold price. You know, they're still sticking, you know, uh, you know, a much, you know, their cut off grades and everything. um based on what I can see right now are based on you know you lower gold prices. So you know they use consensus gold prices and you know consensus gold prices by the analysts are usually um you know pretty far behind because they're run by banks that you know don't want to see you know much higher gold prices. So >> how do you then forecast gold when you sort of build out your models or or think about it? that you just sort of do various levels of sensitivity analysis, various cases. >> Yeah, I mean our gold price assumption is um much right now it is lower uh just because um you know if you historically go back and look at um you know 10year trailing average gold price is I believe is probably the best number to look at. Um, and if you just take a a simple average over the last 10 years, you you get a a number that is significantly lower than the current gold price. But, you know, if you're a mining company and you maintain that, you're you're going to keep your margins throughout the, you know, many cycles. And um you know I think we're in a we're in an interesting period right now in that um you know the the gold price is really tied to total federal debt outstanding. And if you were to look at the gold price since Nixon closed the gold window, you'd see about a 93% correlation to you know the gold price and total federal debt outstanding. And so if we um you know the US could actually get its act together and start to slow the rise of total federal debt outstanding then you know the gold price would slow down. But you know it's going to continue to this upward trajectory as long as total federal debts going up. I think that um you know Trump he's a real estate developer and real estate de developers love debt and you know I I just really don't see him you know making a concerted effort to to lower the debt. So >> how would you think about positioning the fund if if you were to sort of see a slowdown in in gold or in the the sort of federal debt level? >> It's a gold fund mate. It's always a goat. >> But there's there's various >> Yeah. I mean you you certainly can um well one of the things you do I mean you know the first thing you do is you really start chopping off your um exploration and development companies. I mean that's that's where you you know the the axe comes first then and then you go on to your junior producers and uh what you do is you just move up scale and so you'll you'll be I mean if you know we have to be 85% invested in the uh in the space being a gold fund so um you know what you can do is you can buy bullion it doesn't go down as as fast and as hard as you know the minor ers go down. Um but you know what you will do is um you know look to have you know larger cap companies. So you just move up cap is what happens. So um you know what is you know what you haven't seen in this cycle is you haven't seen you know the big rush in you know exploration and development companies and you know the smaller miners are are you know catching a bit of a bid now. Um but you know the you know just the rush to of excitement that happens in a bull market you know where you know a drill hole comes out and it goes up a couple hundred%. Um you know we're not seeing that as much at least in the states we're not seeing it. I mean, you have a few here and there down in Australia um that have, you know, had some news nice moves, but um you know, it's still, you know, it's a it's a it's not an easy easy market to really gauge the prospects of um you know, who's going to be the next winner. >> Retail is is coming back here, but they're um yeah, it's not it's not like fever level pictures yet. The IPOs are on their way. there and they're a good a good a good thermometer. The cap raises are just um it's just cap cap raise season and that that just shows that there's like a lot of capital a like available for the sector right now and that's just just the observation I've got. Yeah, I mean you I mean certainly when you know Cam accord sits there and hits us with you know you know a deal a night you know type of um yeah you have to kind of say all right you know yeah maybe things are you know you know could get a bit frothy and you know look you know I I certainly believe that you know we are um you know due for you know some type of pull back um and then we go again. I mean, that's just, you know, what ends up happening is that, you know, you you got a lot of folks that, you know, aren't aren't in involved in the space at all that will get involved, but um, you know, there there is hot money that is in the space and so, yeah, you'll have 30% moves and then, okay, you'll pull back a bit and, you know, and then you go again. So, nothing nothing wrong with that. One of the other reasons or sort of factors that comes to mind is the more approach uh more disciplined approach to M&A this this time around versus 10 years ago and perhaps people thinking there's less odds of your junior kind of getting bored out. This ties in as well with the capital discipline, the margin discipline that you spoke about earlier. How do you consider the approach to M&A in this sort of bull market that we're in now? >> Right. I I think that um you know disciplined M&A is is really the approach. I mean that's what uh you know folks have been preaching you know for quite a while. uh that been in the space sitting in my seat. Uh you know that's what we've been telling companies is you know just don't go buy something with that doesn't have economic rationale and you know to you know obviously you know that you know if you have a company that has one asset and you know there's a short mind life you've got to do something um in order to keep in the your seat. So, um, yeah, it really depends individually on the situation, but, uh, I would say overall, you know, the bigger miners are are really generating significant cash right now. And so, you know, I think that they're been more apt to, you know, do buybacks than, um, buy companies, but, you know, they will buy companies. I mean that they have to get comfortable with the gold price assumptions before they do that. And so um you know I I'd like to see them uh really use um cash to buy assets versus shares. I think that's more accreative. Um, you know, the other thing to do is, you know, this is, you know, totally off topic, but, uh, is, you know, instead of, you know, selling every single ounce, paying taxes on it, why not, you know, really put that gold just in the vault? Yeah. You put it in the vault. It uh, you know, certainly holds up better than currency has for quite some time. >> Yeah. the one the one gold miner that's done that for a very long time here trades at negative EV uh Tribune and Rand I'm not sure if you're familiar familiar with with that company well it's two companies but they've got um they've got like a collectively owned 50% interest in the East Kandana joint venture with with with Evolution I think I think the amount of gold they've got involved is enormous like it's eye watering >> uhhuh and I I just think at some point you know, they become ETFs. So, um, you know, there there's nothing wrong with that approach and I I think, you know, the the industry has been, you know, because everybody does everything on, you know, pees and uh they've been, you know, not willing to accept companies to, you know, put the gold on their balance sheet. >> Yeah. >> But, >> yeah, it's a great point. Great point. >> Should we talk stocks with you, Greg? we'd love to kind of peel into um some of the names within your within your portfolio and also >> outside of your portfolio if you've got some spicy views on them. Um >> yeah, sure. >> Let's let's start with with Anglo Gold Ashanti. Uh lots of making lots of news and talking big big aspirations in relation to the the uh the silicon project area in um in in Nevada there. Are you um pretty buoyant about that that growth opportunity and also how do you how do you see their re like their rethink of other other assets as a result of that? Um you know look I think that Anglo um you know they you know what what they've done is you know redomiciled into into the US um you know the you know I think that was important you know I think you know the fact that they you know basically are no longer a South African company though yet trade you know similar to goldfields on a lot of days um yeah I think that they're in a a real good spot to you know finally grow this company. I mean and you know they're um have been you know you know if you if you look at the assets you know they have been uh shaving off some um so they could be in a position to uh you know build a Silicon Valley Silicon project and um you know and I think that's you know that's what they're really looking towards is you know trying to close the gap with their North American peers and u you know we've had that stock for a long time and uh you know there's been you know some some pain involved but I I think that the new CEO he's he's doing a he's doing a good job and um you know getting the getting the company on the right path. So uh yeah we're I do like uh I like the I like the trajectory that Anglo's on. >> Yeah. Do you think they'll um like even even their acquisition of sentiment like a year ago? It seemed like that'll pay itself off pretty quickly at where gold prices are right now, you'd imagine. And they they didn't it was a pretty undemanding price that they paid there. So yeah, that that um that'll I think that looks pretty a pretty great deal um right now. And and do you think that they'll they'll rationalize like their Australian portfolio as they kind of you know refocus their their capital towards silicon? Um, you know, I I think that they want to maintain a presence in Australia. Um, so, you know, I think that the um the the assets in um in Australia, you know, will will be there. Um I don't think they're for sale at this time. I I really don't, you know, so you I think I still think that they believe that, you know, there's, you know, there's margin there. um you know some growth and you know I you know I don't know what you know what the growth is outside of their asset base you know that's I don't think I don't know that they're thinking that and and I think that's you know when you when you look at Australia um yeah you're kind of looking at okay you know you know where are the growth opportunities and um you know there are we have Oz gold and a few other Saturn and a few of these development projects in the portfolio and um you know they're they're coming along but you know those are not Anglo Gold type of assets you know they're they're really not so >> should we jump straight into to those two you've just mentioned there ogold had some good news recently on the on the sort of land front how are you sort of taking in the the the change in events there and how long have you kind of held the stock >> uh we've held it for um uh you know geez over a year or so since John got in there. Um and they did the raise. So you know that's been >> that's been quite a while. Um I think it's over a year I think he's been in there. >> Yeah. >> So um yeah. So you know we have it at much lower levels and I I think that you know it is it is a good project. It's it just needs some it has needed time. It's needed John and the team to go through that jump through the hoops. You know they clearly you know with doing the land deal got you know one of those hoops crossed off you know last week and uh you know the stock has reacted nicely and you know probably has more to go now. Um you know I I don't believe that you know John is in there to to build it. I really don't. So, we'll we'll see. >> That's uh that's that's an interesting perspective. We'll have to keep our eyes on who potential acquirers could be of that one. Um and then like Saturn, we've got big big scale, big tons. Um I I mean scale in terms of amount of amount of dirt dirt to move but production profile you know around the you know bit north of 100,000 ounces peranom but it's still got a bit of time before ahead of it like FY27 or 28 at the earliest this thing could be in production. >> Yeah. and you know so you know there haven't been a whole lot of deep leech you know projects down in in Australia and so I think there's probably is a bit of lack of understanding of you know what they're doing um but I I I think I do think that Ian is doing a good job of uh you know systematically you know approaching that I mean he's he really is a uh he likes to do expiration and so he's he's going at it. Um yeah, but yeah, it's it's probably yeah, it's it's a couple years away. Um but you know, and it's not at this point, I mean, he's finding more ounces. Um but you know, I I don't see it, you know, as a you know, it's not a 200,000 ounce a year mine. It's 100,000 ounce a year operation looks like. you know, so you know, who are the buyers for that? That's that'd be in Australia. Um, if if he doesn't build it, you know, one of the things that's happening is, you know, that you know, these mining companies that uh, you know, are find juniors that are finding ounces, you know, they are kind of growing, you know, to the point to where, you know, somebody it doesn't make sense for a company to buy them. Yeah. if their market caps go up too much. So, um, so then they get forced to build them, which, you know, that's not the worst thing in the world either. >> Do you think the heat leach risk is is overblown? >> The pardon me, >> the the heat leach nature of the the project. Do you think that risk here in Australia is overblown? >> I do. Yeah, I do. I I think in in certainly his um with his experience at Pneumont uh he's you know he's not afraid of it and you know I I don't I don't I don't think that uh you know from a capital standpoint I I think it's a good way to go. I mean we we'll see. I mean, they're starting to find some, you know, some higher grades, which they would need if they went to the mill route, uh, with a CIL, but I I don't think that I think they're still looking at starting it off with a heap leech. So, um, and that's, you know, in Australia, like I said, there's really isn't a lot of experience with heap leech. So I think that lack of understanding, you know, has created a bit of a a void, you know, for, you know, for investors to, you know, embrace the story more. If I'm not mistaken, Greg, you've um you've got an allocation to Ozone and they're currently in a trading halt right now on the back of news that uh that WF has received a bit of a shakeddown from the Bikina government. War Zone, also a Bikina gold producer. How are you feeling about uh about about this? I I I am I'm thankful that uh actually Orzone did uh trade it opened up late um today and went down about I think about 15% um and uh you know W is gonna trade you know on Monday um and they're going to be down 25% % probably at this point. Um I'm going to guess because you're down about um yeah, see with or or zone they have a little different uh uh mining uh code that they were in the 2025 I guess and so the government can't come back on them in Burkina. I I was thinking that you know the you know and I was I hadn't been in WAF for you know quite some time and I went back in um you know about a month ago and you you thinking okay I think that the the government's going to be happy with their 15%. they just gone from 10 to 15 and so, you know, the fact that now they want to go, you know, to to 50 is a little disconcerting. But, um, you know, I I think that, you know, WAF is, you know, probably going to try to negotiate pretty hard if they can. I don't know. I don't know what, you know, what they have to negotiate with. Um you know but you know the one of the things that is really um disconcerting for investors is you know when you have these minds and some of these armpit countries is that you know they they they want to go in and and take them and that resource nationalism is one of the big risks that you know is out there whether it's South America through and you do it you don't take over the mine entirely. You do it through taxation and increase royalties and you know that's why you get you know you know a lot of folks that are okay I I can be in Australia I can be in North America but you know you start going into these you know other countries and it gets a bit dicey. So, um, you know, I think when I look at WAF right now, um, you know, I'm not going to say what I'm going to do, but, um, you know, it's not a it's not a pleasant, um, it's not a pleasant scenario. If we just fly over quickly on the jurisdictional aspect, a couple of the other countries in the area that have significant miners, how are you thinking about the likes of uh Guinea and Ivory Coast and perhaps Sagal or other ones that you may have played in there previously? >> Yeah, Guinea has been a a good country. I mean, Civois these Sagal, they have been good countries so far. I mean, so, you know, I think, you know, when you're sitting in my seat, you're you're going, "Okay, well, we can have a a certain percentage in, you know, each one of these countries that, uh, as long as it doesn't blow up your portfolio." And so, um, so I have no problems, you know, taking a, you know, you know, being in, um, you know, Kodivo and Sagal and Guinea. um as long as it's you know doesn't make up uh you know 25% of the portfolio type of thing but you know a couple percent here and there it's okay. >> There's a couple interesting projects in Marley as well. Are you courageous enough to go there these days? Uh the only um the only uh real asset that um we have there is with Bareric and the and Bristo is being pretty tough with those guys um believing that they can't operate the mine which you know I don't think that they can but um that there I think what you know the Molly government wants to do is they want to try to bring in you know one of the other miners to to mine it. But uh you know we'll see if Ally >> they can't ask Resolute. >> Yeah Resolute I think I I think it's I if if it's anybody I I would imagine it would be Allied Peter Um but you know that's that's a pos that's a possibility. I I think that if you really were to um you know take that away from them u they would lose that in arbitration. Um but we we'll see. I mean yeah I I think of you know the the three assets that we have there are Bareric Robex has a small and allied Nevada. I mean not all Nevada but I mean allied gold. Yeah. >> Um, so >> I'm I'm curious what you've made of the run of of of London Gold. It's um it's truly truly phenomenal. You know, the uh like I mean Fred Delort has had tremendous exploration success and just the the ability to deliver that project in that part of the world. It's a 20 billion company like in Canadian dollars now. 20 billion for a single asset in Ecuador. Surely they're going to buy something soon. >> Uh yeah. I mean, yeah, the thought process had been that the Londont, >> you know, New Pneumont sitting there with a big piece that uh they got when the New Crest deal happened. Um, you know, so um you know, obviously, you know, that's a big chunk of capital that's sitting there. You know, what does New Pneumont do? I mean there has been speculation that pneumont you know would make a bid but you know at these prices uh you know that's become less likely. I mean this is this is what the market's doing. It's running in front of you know what would be would be acquirers and so I I don't see that um Newmont makes a bid for I at least I'd be surprised if Numont made a bid for Lundine. So you know where does that leave Lundine? So Lundine had made an an offer to to buy reunion um gold and so you know and I think that um you know I wouldn't be surprised if you know they step up and you know make an offer uh again but you know they're going to have to get pneumont to sign off on that. I mean that's one of the things that uh you know new or new crest wouldn't allow uh the London guys do to do is to to buy anything and so you know they put a kaibos on them because originally they were thinking you know newest um they were going be before they they bought uh the asset up in Canada you know they predium they were going to you know they were talking about making a bid for Londine And so the predium deal came up. So that put uh Lundine on the back burner, but they still had ideas that they were going to do the London deal. And so, you know, what ended up happening was um you know, New Pneumont stepped up and uh took out uh New Crest and uh you know, now Newmont's in that same seat of having 35% and saying, "Okay, well, you know, we're just going to let let this play out a little while longer, but don't buy anything." Um, you know, so these guys have blocks on the uh, you know, blocking votes on the board, I guess. So, >> and speaking of takeover dynamics, I im gold is is another one where you thought it was like pretty pretty undervalued for for a while, especially given what the value of CEK, you know, should should be, and in the last couple of months, it's it's really it's really had a a run. Um do you think that's on the back of speculative corporate action as well? >> I think yeah so far is in the still in the buildup phase. Um yeah so yeah there's no doubt in my mind that I am gold wants to be sold. Um so you know how that gets worked out is you know whether you you hive off what they have in Burkana and other assets and you know create separate entities. Um but you know I think there'll be some type of transaction that takes place there you know that would not surprise me but it's it's it's coming. Um you as soon as Cotay is just has to you know show itself a little bit more >> because these guys these guys are nervous about you know CEOs you know the last cycle especially you know every time that they do did a a takeover you know it didn't work out then they you know get hived off uh quite quickly. There's a few of those like, you know, pretty substantial um assets that are still, you know, proving their straps from a ramp up perspective like in addition to Cot you've got you've got the likes of um Artemis' Blackwater and you've you've got Equinox's Greenstone. Do you like do you think that once you know like if if as they do or if if they do kind of prove themselves that they become kind of like logical acquisitions at the right price for for the majors? Um, yeah, I think uh I mean there's no doubt in my mind that Artemis is for sale at some point. I think it probably needs to, you know, work on, you know, getting its debt level down just so it just needs to produce for a while um to do that. And you know, the the I think the big guys, you know, you know, they look at, you know, mines that can do a half a million ounces and there aren't that many of them. So, yeah, it's an attractive asset. um it's not necessarily that cheap uh when you take the debt into consideration, but um you know I I do believe that you know one of the big guys will make an effort there at some point. ju just to reflect back on the the share price movements of some of these bigger companies like to talk about Londine once more they've more than 10xed in in the last few years it's it's just incredible and I can't help but notice that their market cap is almost double that of some of the companies that have been sort of grouped as as major miners like how do you think about the the rationale for continuing to to hold a company like that with the the single asset risk in Ecuador Um that's a that's a good question. you know, um, you know, I I've always been of the belief that you run with your winners and, uh, you know, that the companies will, you know, continue to create value over time and, you know, right now I'm, you know, I'm still betting on the Lines. Um, you know, and fortunately, you know, what they're doing is, you know, they're being, you know, uh, very aggressive in terms of, okay, well, we're going to pay back cash to the shareholders and, you know, obviously Pneumont's a big shareholder, but, you know, so are the Lundines. you know, that's that's one of the reasons why I thought that, you know, you know, the Lundines wanted to cash out and you know, put the um you know, that cash down into the uh copper assets um that they have. But, um you know, I I still I'm still thinking that. But um at this point, you know, they're they're willing to let the you know, the free cash flow um you know, come back to shareholders, which you know, I I'm I'm a strong believer in, you know, investors participating in cash flow. And you know, this is one of the problems that, you know, we've seen with the gold mining industry is that um you know, investors haven't participated in the cash flows the way they should. And you know I have a very simple formula in that you know that this business needs to be basically a third a third a third and you know a third goes back into paying off the mine you know a third goes to the shareholders and a third goes to uh the next mine and uh if you do that you know everybody participates so um you know so that's you know the fact that the Londines are are are paying paying us back. You know, I'm certainly in for in favor of that. >> So, Barracks sell their 50% stake to their JV partner Novagold, who've been in that asset for for quite some time, and Novagold have a a runup that they haven't quite had in in a number of years, but there's still an enormous capex bill there. How do you think about the Dolan project? >> Um, yeah, I mean, there's a lot of gold there. Um and certainly Tom Kaplan and that group has been playing up the um okay well the gold in the ground is is fine is you know it's it's a asset and you know we don't have to mine it. Um, you know, I think now they're at the point where, you know, they've, you know, tired all those folks out and said, "Okay, well, we're going to have to build this eventually." And, uh, Bareric looked at it and said, "Okay, well, we're not going to get the return. We'll we'll sell it to these guys. Um, let them run with it. You know, we don't want to spend the management time to do do that." Uh, so it's uh, you know, I I think it's going to take a lot of capital clearly. Um, and you know, I I'm I'm not willing to go there at this point. Um, so you know, hats off to them really. So, uh, but yeah, it's a it's not an easy it's not an easy project. You know, you got to get the power up there. You know, you're going to do it with natural gas or however you're going to do it. I don't know. But, um, yeah, we'll see. But, there's a lot of gold up there. There is certainly a lot of gold there. one of one of the larger positions in the portfolio, Greg, is um Catalyst Medals, who who had a tremendous run last year, have retreated a bit, but um yeah, but proved their straps when they when they got their their hands on Platonic. Um I think they've got a bit more capex ahead of them now and the the the easy runs might be be over, but do you do you still have a pretty pretty strong outlook for for their ability to generate cash? uh you know um so James has got some work to do there. Um he's got a he's basically at this point now he's got to prove up the market cap that the market's given him. And so yeah, he's talked about getting to 200,000 ounces. He's got the Trident project. He's got Plutonic East. Um yeah, they you they're getting some good results on the plutonic I mean on that plutonic belt and you know with through trident uh so but you know the the question is you know is he going to be like his father and go out and buy things? Uh so you know my guess is that yes he will at some point. Um go here I dad I saw what you did but I'm going to do better. And you know, so far I actually think that uh I actually think he might be a bit more disciplined than his father was. So um maybe maybe he learned a bit at the the breakfast or the dinner table. Um but you know, one of the things that's interesting about Catalyst, I mean they waited a long time. He could have done that raise, >> you know, for, you know, I think brokers were beating on him for a long time and he didn't do it and didn't do it and he finally did it. Um, so, you know, the question is is okay, what is he doing with that money? And um, is he buying something or is it just there to, you know, keep a larger um, you know, buffer? Um, so yeah, I I I I don't know what the answer to that is yet, but you know, I do have confidence in his ability and you know, a lot of times, you know, you can sit there and you can sell assets, you know, when they've run um and then, you know, look to buy it back some other time. Um, you know, my, you know, I have historically been a pretty low turnover fund and have been, you know, if guys have been performing, I let them perform and continue to perform and I'll ride out the the ups and downs. Um, you know, that's, you know, the way we've operated. And so I I think that, you know, we'll, you know, at this point I'm willing to let James run with it until he shows otherwise. And you know once management starts doing things other than what they say you know then it's time to leave. >> I'm I'm really curious just to hear how you think about hedging in this environment. >> That's a it's a good question. Um so you know hedging is you know basically been a hedge for uh to not make money you know for a lot of uh a lot of companies they think they're hedging you know the top top line um they can't hedge any costs really you know they try to you know you can look at you know energy you know maybe they can hedge a little bit of that but you know for the most part you can't hedge your costs and then the costs keep going up and then the you know the you're stuck in a situation where you know you've you know sold forward and you know then the your your cost profile goes up and you know nobody wants to be in a company where you know the gold price is going up and uh you know they're locked in a $2,000 gold. I mean if you look at how many companies have um you know really and mostly the Australians have been the worst have really um you know died because you know they're you know their hedgebook portfolio is gone against them. Um, I mean clearly, uh, you know, obviously, uh, Belleview, um, you know, Regis, you know, they had a tough book. I mean, a lot of these companies that have had big books, you know, go against them. You know, they've, you know, it's it's been very detrimental. Um, so I I'm not big I'm not big on hedging. And, you know, one of the things that you look at now and say, "Okay, $5,000 plus gold." um you know if you know that's not a bad gold price in in Aussie terms at all. Um and so you have to have a view on what the Aussie currency is going to do. And so if you think that the Aussie currency is going to um get much stronger, you know, the gold price isn't going to do anything. And so uh you know that's one you know one view that you're going to have to take as management. I I would I think that you know companies have gotten better at uh looking at hedging more from okay well we're going to do options and you know we'll we will take the um you know take a little bit of money here and hedge ourselves on the downside and or you know they'll do some zero collars you know but you know for the most part if you look at you know the successful guys that been in the hedging game. You know, they've they've basically have bought puts and, you know, just written them off. So, >> could I could have guessed your views there. You want you want the miners to hold gold on their balance sheet, not deliver it to a to a counterparty. >> Yeah. Right. I mean I mean one one of the things that is you know when you look at you know you know the gold price uh you know it's that volatility that you know is in the share price you know so you know moving with the gold price. >> Yeah. >> Yeah. >> What's the uh what's the most undervalued gold company? Gold producer right now and then gold gold developer right now. >> Yeah. I I look at uh a lot of these companies um and say, "Okay, well, you know, where where are we going?" Um you know, and you know, I'd like to think that um you know, you I have got this small one that I've had for a while, Jaguar Mining, in the portfolio that had a a tailings issue. And um so you know once they get that squared away and then you are able to uh expand their operation you know that looks cheap to me. Um you know that the market's going to like it. The developers really in a position to where they can really make hay in this environment if they do it correctly and and but that's not blowing up their shareholders along the way entirely. just saying, "Okay, well, we need we need cash. So, you know, we're going to take cash every time we can we're offered because, you know, in a bull market, they'll be offered cash, you know, you know, every other day." So, you you have to make sure that, you know, you have managements that are not, you know, going to dilute you out. So, you that's one of the problems that you have with developers is, you know, that they will blow you out of the water, you know. So, you have to know that the management teams are there. uh understanding the you know the fact that you know they've got to keep a a close eye on you know ounces per share on on that sort of theme. Greg, I've got a a bunch of rapid fire questions that uh I want to fire towards you with the first one being who do you think is the best management team in the industry right now? >> Uh best management team is Ben Nico. They've been the best. >> I thought that might be the answer. Do you have a favorite gold mine that you've come across in your in your career? >> Uh favorite gold mine? Oh yeah. I mean my my favorite gold mines through the years have have been the Nevada gold mines that Beric and Newman had. Those have been the you know the best, you know, from I go back to early 1980s. So those have been some pretty spectacular mines. >> Yeah. Long long history there. How about the best jurisdiction to operate in the world right now? >> Yeah, I I'm gonna I'm gonna still say that you've got to be in North America and um you know, Canada. and Canada and Australia probably probably Australia is is getting more unfortunately more and more like uh um Canada and the US there's taking longer to permit um but you know from a sanctity of the um tenementss that's you know those are the the countries that you want to be in >> and most likely deal in the next 12 months. Yeah, I still think Lendine disappears somehow. Um, but they're I bet I think they buy an asset is probably my guess. >> That lending buys an asset first. >> Would you say in the Americas? >> Yes. >> Yeah. >> In the Americas. >> Yeah. Interesting one. >> How about the best site visit you've been on? >> Yeah, I'd say barracks. Barracks. have had a gold mine probably invest. I've been on um from a you know large cap mining company. So I mean I've been on a plenty of of you know go out and you know kick the dirt on you know but you know in terms of seeing an operation um you know that's probably you know you know you can see the most there. Last one for me is Agniko more likely to buy Oregon royalties or I am gold to get their hands on Cotay in some way, shape or form in the um I think that they would be uh more apt to buy Cot is probably uh my guess. you know, one of the one of the things that, you know, you know, they're certainly looking at is, you know, maintaining, you know, their jurisdiction uh profile. And I and I think that's, you know, one of the things that Cote offers them and so you're going to you're going to have to split up the um split off the BIA assets. >> Um >> so, >> yeah. So, I mean, they have no problem. They have a history of doing that. So yeah, I wouldn't be surprised if they make a joint bid with somebody or somehow they figure it out or just, you know, create a separate company. >> Fantastic, Greg. It's been an absolute pleasure to um to speak and get your insights on um on on the, you know, the gold equities and the gold market. And it was also enjoyable for us to talk about, you know, some of these North American gold miners that we don't spend heaps of time talking about. No, you spend all the time talking about the Aussies all the time. But I understand that you, you know, most of the time, you guys, mostly Aussies down there listening. So, >> yeah, we it's just local market bias, I think. You know, time zones do matter, obviously. And it's um yeah, it's kind of hard to force yourself to to pay attention to the other time zone, but but we're we you know, speaking to people like you, we're uh we're getting there. >> One step more educated now. >> Yeah. I know. Well, I think, you know, and I I do think that, you know, you do see the Aussies are, you know, they're they don't do a very good job when they come to uh North America. um then they probably should stay away from but uh but you know clearly down in Australia and um you know there's a couple guys down playing around down in South America um you know that you know you certainly could get a bid and you know I think that there's you know there is a market in Canada there's a market in Australia for resource um companies that's not there in the US And so, you know, that's, you know, that's a real positive for, you know, the industry overall. So, >> yeah, totally. There's still that appetite here. >> Yeah. No, no, there is. So, I mean, Camord is uh, you know, running the stuff up. >> It's very true. Thanks a bunch for joining us, Greg. Appreciate it. >> Yeah, my pleasure. Thanks, guys. >> And there we go, mate. A massive thank you to our fantastic partners for making it all happen. 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