'Major Risk' Ahead For Markets But THESE Mining Stocks Will Outperform: Mining Stock Monkey
Summary
Get 25% off your first year of Jordan’s research: https://miningstockmonkey.com/products/vip?promo=CC25MAY Jordan from …
Transcript
Which mining stocks will perform best in the current economic environment? My guest today, Jordan from Mining Stock Monkey, brings his top picks in the mining sector, and explains why he sees massive value in all of them up ahead, along with breaking down his overall views on the gold and silver space, the general economy, and why he thinks a debt crisis could be brewing in the government bond market. Let's dive into it. Jordan, it is great to have you back on Commodity Culture. Now, you mentioned last time you were on the show that silver scared you due to how far and fast it had moved, and you were also cautious on gold, noting the length of the current cycle compared to previous bull markets. Do you still maintain this view? And what would it take for you to feel like it's game on again for precious metals? >> Yes, I do maintain that view, but it's all about time horizon. So maybe I can give a a little little bit more nuance this time. And if you compare this B gold bull market compared to previous gold bull markets since the US government took uh away the $35 price fix, there's been a bull market of 9 years, a bull market of three years, another bull market of 10 years. So thi this one um based on how I look at the charts, this one started in late 2015 when when gold bottomed out there at around $1,000 and50 or $1,50 per ounce. So 10 and a half years into it, it's looking pretty mature, but I mean you you take a you take a bigger step out and over the last hundred years or so, the dollar has lost 97% of its value. And I I see there's no end in sight there. Uh so perhaps over the next hundred years, the dollar lose loses another 97% of its remaining value. And as as the dollar trends towards zero, the theoretical limit of where gold or any other hard asset can be is literally infinite if you're pricing it in dollars. So, so yes, I do think this gold bull market looks mature, but also on the other hand, I wouldn't be surprised at all to see 50,000 or $100,000 gold in my lifetime because of the devaluation of the dollar. Now, what that $50,000 or $100,000 will buy you in today's world? Well, I mean, that that's a that's another that's a totally other question and probably not nearly what it buys you today. But I think overall in general, gold preserves its its purchasing power. And what else? Um, so, so I see that over the longer term that it's probably going much, much higher. But considering this 10 and a half year bull run we've been in, I also wouldn't be surprised at all to see several years of sideways movement, consolidation, maybe down a bit. And it also wouldn't surprise me at all to see a quick run to $10,000 with a blowoff top like we had back in late 1979 and into January 1980. So, uh, that that's just an overall way to say, Jesse, I have no earthly idea where where gold is going to go next. But I I would like to say that where where I've made the real money in my life is is not trying to predict where a commodity goes next. Where I've made the real money is finding a company where I see an a major upcoming catalyst or a series of upcoming catalysts. And if those catalysts play out how I think they will, the riskreward there is very promising. And it's all about riskreward when when I'm looking at these things like how much potential upside is there and how much potential downside is there and what's the likelihood of each scenario. And when I see a really asymmetric bet towards the upside, I bet big. And that's where I've that's where I've made most of the money in my life, not trying to predict what gold will do over the next few months or what silver will do. And I I answered that question based on on gold, but gold and silver kind of trade in lock step. So you can basically apply that to silver, too. >> Yeah, some great thoughts there. Are you of the same mind when it comes to gold and silver mining stocks? Because at these levels, the producers are reporting massive earnings and yet the market reaction has been largely muted and even somewhat bearish in the aftermath of record earnings by these big companies such as Agniko Eagle and Newmont. Why do you think that disconnect exists and what are your overall thoughts on gold and silver miners here? >> Yeah, sure. So, if you look at Agniko, it's trading at about 16x forward free cash flow. Look at Pneumont about 12x forward free cash flow. And that's 10 years into a bull market at at a fairly high commodity price. So if you're if you're looking at that as an investor like it's going to buying Numont it gold prices have to stay at this level for 12 years or they have to maintain this profit level for 12 years for me to essentially make my money back as if thinking as if you're buying the whole company. That that's where this that's where this thinking is coming from, right? 12 12 years of free cash flow to to get my money back. Now, what what are the chances gold stays at these levels for another 12 years? I mean, I I think it's pretty likely that within the next 12 years, we we see lower prices at some point and potentially much lower prices. Now, yes, the these companies are are posting record numbers as they should with this gold price and but like Pneumont for example, they came out and great great headline numbers. Um out outstanding cash flow and earnings and a really good AISC if you include the the credits they get from for example silver and copper. Uh close to close to $1,000 AISC. uh without those credits it's more like 1,700 but u that that's another topic now but they said they management came out and they said hey we see higher costs going forward and market really doesn't like to hear that higher costs are coming so I I think that helped to to mute the reaction of to those blowout earning numbers now when I when I I talked about riskreward in my last answer and when I looked Look at the riskreward of something like Pneumont or Agico Eagle here. If if the gold price goes up $2,000 an ounce, like the bull run keeps continuing, we go from $4,500 to $6,500 as an investor in those companies, you're probably going to get about a double. You'll probably double your money. But if you look at it the other way and if the gold price goes down $2,000 and falls from $4,500 to $2,500, you're probably looking at at least a 70% drop in the share prices of those companies. And when I because because margins would collapse. So, not just the price that they're selling their their product for, the price of gold collapses, their margins collapse even further than that. And plus, the sentiment will probably turn from bullish to largely bearish in a situation like that, which would probably compress the multiples they get. So, right now, Newmont's getting a 12x free cash flow or future free cash flow multiple. Maybe maybe it compresses to 10x plus those margins getting squeezed. So I think that results in at least a 70% drop in the share price. And now weighing weighing a potential double against a potential 70% drop in the share price. I don't like that riskreward at at this point in time in the bull market. And if you if you lose 70% on a stock, it doesn't take 70% gain to get back to where you started. It takes a 233% gain to get back to where you started. And th those gains are are tough to get. So, uh that's that's why a lot of times, well, my my investing philosophy focuses on managing my downside risk first because if I do, the upside takes care of itself. >> Great answer. Now, last time you were on, you also gave a really epic breakdown of risks in the global economy, and now we're seeing government bond yields at alarming levels. Have you been watching this? Do you think there's a risk of a crisis in sovereign debt markets? And if so, how could that affect financial markets in general in your view? >> I do think there's a pretty big risk and uh I to be fair, I've thought that for quite a while, but I I think that I think that risk is growing every month that passes. If I can, let me let me roll in my whiteboard to help illustrate something better. >> Yeah. >> Okay. So, this this is going to be a representation of the US government. So, uh this is going to be Sam, but instead of talking in the trillions of dollars like like I would have to talking about the US government, I'm going to break this down as if this is one person's budget. Okay? So Sam, he brings in 55,000 a year. That represents the US government's $5.5 trillion of revenue. $55,000 a year in income. But Sam spends $70,000 a year. Actually, it's 71,000. So that that leaves Sam with an annual deficit of $16,000. Every year he spends $16,000 more than he makes. And every year the balance on his American Express card increases. So, right now, as of May 2026, his balance on his AMX is $400,000. So, he makes $55,000 a year, but he spends more than he makes and he owes American Express $400,000 plus interest. But but that's not all because Sam uh has also been receiving weekly payments from his parents and grandparents for years. And Sam promised his parents and grandparents that he would fund their retirement if if they made him if they gave him those small weekly payments. So Sam's obligation, the net present value of his obligation to his parents and grandparents who are depending on this money in retirement is $1 million. So that's parents retirement. So, if you're if you break down the the US national debt and unfunded liabilities here into a household budget, you have somebody who's making $55,000 a year, who spends $71,000 a year, who owes $400,000 to AMX, and who own owes $1 million to fund people's retirement. Okay. So Sam realizes, hey, I can't pay the entrance on my debt unless I borrow more money. Sam's insolvent. So Sam has to borrow more money. So Sam calls up Ammex and Am and says, "Hey Ammex, I I need to borrow more money from you so I can pay the interest that I owe you on the debt that I have with you." And AMX says, 'Well, let's look at your personal balance sheet here and look at your income statement. Okay, so you earn $55,000 a year, you spend $71,000 a year, and you have $1.4 million in debt. Now, Sam, for for me to even consider lending more money to you, I need to know how you how you plan to reduce your expenditures because you need to be able to service this debt with your income. and right now you're just spending way too much money. And Sam says, "You know what? That that's ridiculous. This is just how things work. We we always we always spend this much money. In fact, my old friend Massie, I didn't realize how much of an idiot this guy was, but he wanted me to spend less money. So, I got I got rid of him as a friend, and I I replaced him with some better friends who actually understand the value of spending money." And Amx is going to say to Sam, "Sam Sam, there's no way that we can lend you more money. In fact, we're going to slash all of your credit lines until you can start paying us back and prove to us that you can be responsible with your debt." And then Sam says, "Fine, Amx. I'll just go ask Visa for the money." So, this is what the US government has been doing for years. they they've been saying to they've been paying their AMX with their Visa card or even paying their AMX with their AMX and and continuing to fund their budget like this. So when when you're loaning money to somebody like this, there is huge risk here and savers, investors, even institutions view loaning money to Sam as risk-free. risk-free. What? Sam's insolvent. And you think it's risk-f free and you're holding billions and billions of dollars on your company's balance sheet in Sam's debt? Now, yes. Yes, Sam has managed to pay his AMX bill with his AMX for decades or pay his AMX bill with his visa for decades. But that works until the day it doesn't because one day the US government may decide, hey, right now we're spending 25% of our annual revenue on interest. We can't do this anymore. Screw these bond holders. Well, let's tell them we're not going to pay them. or or at least have a major restructuring instead of defaulting all at once. Maybe maybe we have a restructuring where we say, "Hey, we'll pay you 30 cents on the dollar. You owned a $10,000 bond. Now it's like you own a $3,000 bond and be happy we're going to pay you that because well, we we just can't afford it anymore." Now, somebody when I make this argument, somebody would probably say, "But Jordan, you just don't get it. You don't get it because the government can print money. So this household budget that you have here, it doesn't matter because they can print their way out of it. They can just create new money and then pay off their their old debtors with that. Now, yes. Yes, they they've been able to do that. But at what point do these bond holders say, "We're not going to buy any more bonds or we're going to demand a much higher interest rate to buy the bonds because we either don't think we're going to get paid back or don't think we're going to get paid back in dollars that are as valuable as they are today." One of those two things. So, I think that's why you see you're seeing interest rates increase because th these are Sam's lenders saying, "Hey, we demand a higher interest rate because you're insolvent." So, whether whether it's an honest default and they say, "Hey, the government says, "Hey, we can't pay you all that we owe you and and you're going to get 30 cents on the dollar." or whether it's a dishonest default and they just default through inflation where the money that the bond holders receive is worth less than it was. Either one is a default. Now, if you're loaning the government, the US government money at 5% a year and the the annual the things of the stuff you buy goes up by 10% a year, you're not getting 5%. You're losing the difference. you're losing 5% a year. So, uh yeah, all that all that's to say is uh breaking that down into a household budget, I think there's there's major risk in the sovereign debt market. M maybe it's maybe it's not an outright default or major restructuring. Maybe it's just default through inflation, but I think either way it ends in default because Uncle Sam is sol insolvent. >> Yeah. And some great points there. I mean, if I was going to park capital with the US government for 30 years, I would certainly need more than 5% return on that. And and I think that's a big part of the point you're making. Now, I'm wondering how your current view on the war in Iran kind of affects your investment outlook at present. Obviously, the closure of the straight of Hormuz has already had a massive impact on energy prices. uh how do you see it potentially impacting financial markets, the global economy, precious metals, commodities, the broad market, assuming that it continues to drag on for for longer than many are expecting. Yeah, the the straight of Hormuz closure is a major issue and it it's already I think dragged on longer than than many were expecting and the international energy agency has said this is the biggest disruption of oil supply or energy supply in in the history of oil markets. So, you know, I if this goes on and reserves around the world just dwindle even more than they already have and and they they trend towards zero, those countries, they have to become buyers of energy. And people are pretty price inelastic with energy because in our in our modern world, energy is is life. Energy is what it takes to survive. So people will pay just about any price they have to for energy. So I mean we could we could see oil prices bid way way up. I mean if if this drags on through let's say through the end of summer for three or six more months I would not be surprised to see $200 oil. Now now what what would that do? or or even extended period of a $100 oil. Oil and energy is an input to everything. Even if you're not buying gas directly at the pump, this it applies to everything. You you go into Target and you you buy some green beans. You go into Walmart and you buy a kids toy. Energy goes into everything. Not not just transporting it, but if it's if it's food, farming it, all the all the farming equipment to to get that there. and uh to transport everything everywhere. So when when the cost of an input to everything shoots way up that puts a lot of pressure on businesses on the consumer. So I mean I think that has potential for a worldwide recession to to be the trigger of a worldwide recession. And in terms of the war, I mean, as I as I talked about in my last answer, the the US government is insolvent and and they have to fund this war. So how do they fund it? They they fund it through inflation. They fund it. They fund it by printing more money, which is very inflationary for gold, silver, any other commodity, any other hard asset. So, uh, I mean, the more inflation there is, the more you're going to see the stock market go up, the more you're going to see commodities go up, the more you're going to see house prices go up, all else equal. >> Let's dive into some specific stock ideas now, and I want to talk about an idea you've been discussing on your channel. You've done some in-depth coverage on Hercules Metals. They put out some news this morning, and the market is way Sorry, I'll do that one again. Let's dive into some specific stocks now. And I want to talk about one you've been doing some in-depth coverage of on your channel. That's Hercules Metals. They put out some news this morning and the market is way up on these assay results. Do you have any opinion on that drill hole and what it might mean for the company? >> Yeah, Hercules is an interesting company. They had a brand new copper discovery um back in late 2023 where they discovered a new copper district that people didn't know existed and it created a big staking rush with uh Riotinto coming in and staking ground with Bareric coming in and staking a ground. Uh Bareric ended up taking a a pretty significant stake in Hercules as well. And you you've seen lot lots of big names and the big copper producers in investing into the area. And Hercules was previously drilling out what they were calling their Leviathan deposit. And depending on the cutoff grade used, you're probably looking at between 300 to 800 million tons of copper there at Leviathan that they found so far. And that continues to be expanded. They haven't put it out an official mineral resource estimate. Um but that's something they're working on this year. The importance of this drill hole was from today is that they they confirmed a new poor free discovery uh a few kilometers south of Leviathan. Now the these aren't these aren't grades that are going to work at least not from this drill hole because the the copper that was intersected was at something like 900 meters downhole. So this is way too deep for an open pit. This is this would have to be a block cave and it was only a little over half a percent copper or so. So they have to find higher grades for this to work as a block cave. But it confirms that there's more porefree on their land. And we we thought there were going to be more porefree there because they have these geoysics. They did some IP surveys. They did an MT survey and these geoysics are overlapping with the existing mineralization they've already found and it it's illuminating some other areas on their property that that look to be other pfuries and this drill hole confirmed that it was another pfery but I mean they're going to try to vector towards towards the center of that towards a pa to towards a potassic center and if they find much higher grades like one one and a half% copper that that could be huge and um that could uh rerate the company uh overnight much much higher. And they have some other targets on their property. Their Pegasus target, their hook target, what they're calling the footwall zone at Leviathan that all look like another potential porefree. So I think there's going to be additional porefree discoveries this year on their property. Um but but yeah, so that's what the market is excited about and and and yeah, it's what it shows that what is currently m let's call it 500 million tons has has potential to be in the multi-billion tons. Uh if if these are pfreeze and if they can keep drilling those out and and prove that there there's more mineralization there that's potentially uh economically extractable. Last time on the show, you also talked about Altius Minerals, calling it a very highquality company with a phenomenal management team, but you thought the shares were a bit richly valued when they were trading up around 37 to $38 a share. Given the macro shifts and where commodity prices are sitting right now, what is your take on Altius today? My views haven't changed a lot, but the the revenues are are really starting to pick up, especially after their acquisition of Lithium Royalty Corp. And the lithium prices have really picked up now. Lithium when when they acquired the rest of Lithium Royalty Corp that they didn't already own, they this was a significant investment for them and it it resulted in lithium being their biggest market segment. So, Altius is a diversified royalty company. So, they don't just have lithium. They also have renewable royalties and royalties on nickel and copper and gold and silver and iron ore and um some some other cobalt and maybe maybe some others that are slipping my mind at the moment. So diversified across many commodities, very high quality company, really great management team, super long mine lives, um very high quality assets, just just a great company all around. Now, when they did that lithium Royalty Corp transaction, lithium the lithium price was still pretty low. But since then and that transaction just closed maybe I forget when the exact closing date was but maybe six months ago the lithium price has almost doubled since then. So um the the future revenues from those mines that are already online and and are coming online and ramping up. There's there's an enormous uh difference from what it was supposed to be when when they bought Lithium Royalty Corp. Now, I'm I'm currently revaluating my my valuation on that. And yeah, I I think it I think it's a better buy even though the stock is about the same price as the 37 $38 you mentioned. I I do think it's it's a better buy today than I previously thought because well that that lithium revenue is so strong and the copper prices are really strong. So their their copper pre revenue is picking up a lot and they also have their renewable royalty revenue that's picking up a lot because there's a lot of expansions there. But with Altius, it's it's all about your time frame because if you have a five or 10 year time frame, Altius is going to see a tremendous amount of growth in their revenue. But if you have a 12-month time frame, I mean, you could easily see a 30% pullback in the stock sometime within the next year. So like, yeah, 10 year time frame, I think you're going to make a lot of money. 12 month time frame, I don't know. It it's hit or miss. You've also been a very vocal bull on royal gold for a number of months now, presenting a really compelling growth thesis. Looking at the charts lately, the stock price has shown some definite weakness, pulling back from its recent highs. Do you have a take on why the market is punishing this stock right now? And has anything changed in your underlying thesis for royal gold? I mean, you look at any gold stock pretty much all all the royalty companies, all the producers, they're they're pretty much all well off from their highs. And it's largely because of the gold price. The gold price ran up to 5,500 and now it's bouncing around 4,500. and the the gold price has been weak over the last few weeks and that has caused uh a lot of the that's that's caused a lowering of some of the multiples in the in the companies which has brought down the stock prices. So w with this with Royal and and other high quality companies too. I I think it's throwing the baby out with the bathwater and um no my bull thesis has not changed and if anything I I think it's gotten stronger. For example, one of the overhangs with the company was their 30% equity stake in Hod Moden and uh they they just renegotiated that and and turned half of that into a royalty and they al also have an option to buy another royalty um that that came out of that deal and then also they have a first right of refusal on another royalty on on the same asset. So now they only own a 15% equity stake and have traded it for a topline royalty which decreases the capex they have to spend with during the mine build and it it basically just is is higher quality cash flow because it comes right off the top line instead of being a percentage of profits after the mine is built. So, no, my my thesis hasn't changed at all. And I one of the first lessons I I learned as a kid when it comes to investing is you buy low and you sell high. Um, and that's been ingrained in me from an early age. And I I really like to buy low. So, I've been an aggressive buyer of royal gold here and and for the for the previous several months as well. >> Now, what if we're pivoting to the other two giants in the royalty space, the gold and silver royalty space? If you had to deploy capital into one of them today, would it be Franco Nevada or Weeden Precious Metals? >> Yeah. And I I didn't mention in my Royal Gold answer that also part of my thesis is not just the growth they have, but also they're trading at a pretty significant discount to their peers. And not just the peers you just mentioned, Franco and Weaton, but also smaller peers like Triple Flag precious metals and OS gold or what what's now o royalties. uh they're trading at a discount to those companies on most metrics, even though Royal Gold is about four times the size. Now, if if I had to choose between Franco Nevada and Weed and Precious Metals, look, you can't go wrong with either company. They're they're both great companies, but we're we're we're 10 years into this bull market. So, I mean, if if the gold price continues falling continues to fall, yeah, this the stock prices are going to fall. But if you look at the long-term chart of those companies, they go from the bottom left to the top right because they have a great business model and they're run by great people and uh well, they they just have a a business model that works that that grows their cash flow over time. And of course, there's some ups and downs along the way, but if you're a patient long-term holder over decades, it's very likely that you will do very well with either one of those stocks. Now, if I was forced to choose between them, I would probably choose Wheaton Precious Metals because they have a lot more growth that's already built in. Now, Franco Nevada, the argument for them is, hey, they they've they've been around longer, even though their stock chart doesn't go back as far because they were bought and spun out. So that that created a a gap in their stock chart, but they they go back quite a few decades now and they've made very good investments over that period of time. So they're they've really proven that they're able to recycle their cash flow into new great investments. And Wheaton has a great track record too, but their track record isn't as long. So, um, also Franco Nevada has a bigger war chest because they h they have a stronger balance sheet because Weaten just did a huge transaction with BHP buying a huge silver stream on Antamina. So, uh, Franco Nevada has a much bigger war chest with money they can deploy, not only in the form of cash, but also in the form of their revolving credit facility. Um, but Franco doesn't have as much growth built in. Now they have Cobra Panama which was shut down a few years ago by the Panameanian government and that will probably come back online and if it does that does help their growth profile a lot but aside from Frank uh Cobra Panama they don't have they only have about 15% growth over the next five years or so whereas Weat and Precious Metals has 50% growth. So Wheat and Precious Metals has way more growth plus they're a very high quality company. uh and and I think they're going to continue to buy more assets and uh people other companies love working with wheat and precious metals because every time uh wheat and precious metals announces that they they're doing a stream with a mining company well then that that is looked at very positively for the from the market because Weaten has such a great history of deploying capital into the these various projects and it if Weaten's investing in it well then hey it must be a great project and and th those stocks usually end up performing pretty well after Weaten Invests. But yeah, if I had to choose between the two, it'd be Wheaten. And the main reason is because of their growth, but also because on most metrics, they're a little bit cheaper. They're they're maybe 10, 15, 20% cheaper on on most metrics. >> Well, for those who want to dive deeper into everything you presented today, as well as uh some other stock ideas uh that you present, how how can people sign up for Mining Stock Monkey? tell us about that and how people can follow your work there. >> Yeah, sure. So, researching mining stocks is what I do full-time. And if you like the way I think and want to know how I'm investing my own money, for anyone watching this, you can get 25% off your first year. However, this is limited to the first 15 subscribers who sign up or the first 48 hours, whichever comes first. And if you click on the link down in the comment or description below, and if the the discount doesn't show after you click on that link, that means the offer is already sold out. >> Great. Well, I'll put that link in the description. And if you're watching on YouTube, it will also be a pinned comment. Jordan, as always, greatly appreciate your insights and thank you for coming on the show. >> Thanks for having me, Jesse. Happy to be back again. >> Commodity Culture is a series on commodities and natural resources. If you would like to see more, be sure to subscribe and hit the bell notification so you're always up todate with the latest episodes.
'Major Risk' Ahead For Markets But THESE Mining Stocks Will Outperform: Mining Stock Monkey
Summary
Get 25% off your first year of Jordan’s research: https://miningstockmonkey.com/products/vip?promo=CC25MAY Jordan from …Transcript
Which mining stocks will perform best in the current economic environment? My guest today, Jordan from Mining Stock Monkey, brings his top picks in the mining sector, and explains why he sees massive value in all of them up ahead, along with breaking down his overall views on the gold and silver space, the general economy, and why he thinks a debt crisis could be brewing in the government bond market. Let's dive into it. Jordan, it is great to have you back on Commodity Culture. Now, you mentioned last time you were on the show that silver scared you due to how far and fast it had moved, and you were also cautious on gold, noting the length of the current cycle compared to previous bull markets. Do you still maintain this view? And what would it take for you to feel like it's game on again for precious metals? >> Yes, I do maintain that view, but it's all about time horizon. So maybe I can give a a little little bit more nuance this time. And if you compare this B gold bull market compared to previous gold bull markets since the US government took uh away the $35 price fix, there's been a bull market of 9 years, a bull market of three years, another bull market of 10 years. So thi this one um based on how I look at the charts, this one started in late 2015 when when gold bottomed out there at around $1,000 and50 or $1,50 per ounce. So 10 and a half years into it, it's looking pretty mature, but I mean you you take a you take a bigger step out and over the last hundred years or so, the dollar has lost 97% of its value. And I I see there's no end in sight there. Uh so perhaps over the next hundred years, the dollar lose loses another 97% of its remaining value. And as as the dollar trends towards zero, the theoretical limit of where gold or any other hard asset can be is literally infinite if you're pricing it in dollars. So, so yes, I do think this gold bull market looks mature, but also on the other hand, I wouldn't be surprised at all to see 50,000 or $100,000 gold in my lifetime because of the devaluation of the dollar. Now, what that $50,000 or $100,000 will buy you in today's world? Well, I mean, that that's a that's another that's a totally other question and probably not nearly what it buys you today. But I think overall in general, gold preserves its its purchasing power. And what else? Um, so, so I see that over the longer term that it's probably going much, much higher. But considering this 10 and a half year bull run we've been in, I also wouldn't be surprised at all to see several years of sideways movement, consolidation, maybe down a bit. And it also wouldn't surprise me at all to see a quick run to $10,000 with a blowoff top like we had back in late 1979 and into January 1980. So, uh, that that's just an overall way to say, Jesse, I have no earthly idea where where gold is going to go next. But I I would like to say that where where I've made the real money in my life is is not trying to predict where a commodity goes next. Where I've made the real money is finding a company where I see an a major upcoming catalyst or a series of upcoming catalysts. And if those catalysts play out how I think they will, the riskreward there is very promising. And it's all about riskreward when when I'm looking at these things like how much potential upside is there and how much potential downside is there and what's the likelihood of each scenario. And when I see a really asymmetric bet towards the upside, I bet big. And that's where I've that's where I've made most of the money in my life, not trying to predict what gold will do over the next few months or what silver will do. And I I answered that question based on on gold, but gold and silver kind of trade in lock step. So you can basically apply that to silver, too. >> Yeah, some great thoughts there. Are you of the same mind when it comes to gold and silver mining stocks? Because at these levels, the producers are reporting massive earnings and yet the market reaction has been largely muted and even somewhat bearish in the aftermath of record earnings by these big companies such as Agniko Eagle and Newmont. Why do you think that disconnect exists and what are your overall thoughts on gold and silver miners here? >> Yeah, sure. So, if you look at Agniko, it's trading at about 16x forward free cash flow. Look at Pneumont about 12x forward free cash flow. And that's 10 years into a bull market at at a fairly high commodity price. So if you're if you're looking at that as an investor like it's going to buying Numont it gold prices have to stay at this level for 12 years or they have to maintain this profit level for 12 years for me to essentially make my money back as if thinking as if you're buying the whole company. That that's where this that's where this thinking is coming from, right? 12 12 years of free cash flow to to get my money back. Now, what what are the chances gold stays at these levels for another 12 years? I mean, I I think it's pretty likely that within the next 12 years, we we see lower prices at some point and potentially much lower prices. Now, yes, the these companies are are posting record numbers as they should with this gold price and but like Pneumont for example, they came out and great great headline numbers. Um out outstanding cash flow and earnings and a really good AISC if you include the the credits they get from for example silver and copper. Uh close to close to $1,000 AISC. uh without those credits it's more like 1,700 but u that that's another topic now but they said they management came out and they said hey we see higher costs going forward and market really doesn't like to hear that higher costs are coming so I I think that helped to to mute the reaction of to those blowout earning numbers now when I when I I talked about riskreward in my last answer and when I looked Look at the riskreward of something like Pneumont or Agico Eagle here. If if the gold price goes up $2,000 an ounce, like the bull run keeps continuing, we go from $4,500 to $6,500 as an investor in those companies, you're probably going to get about a double. You'll probably double your money. But if you look at it the other way and if the gold price goes down $2,000 and falls from $4,500 to $2,500, you're probably looking at at least a 70% drop in the share prices of those companies. And when I because because margins would collapse. So, not just the price that they're selling their their product for, the price of gold collapses, their margins collapse even further than that. And plus, the sentiment will probably turn from bullish to largely bearish in a situation like that, which would probably compress the multiples they get. So, right now, Newmont's getting a 12x free cash flow or future free cash flow multiple. Maybe maybe it compresses to 10x plus those margins getting squeezed. So I think that results in at least a 70% drop in the share price. And now weighing weighing a potential double against a potential 70% drop in the share price. I don't like that riskreward at at this point in time in the bull market. And if you if you lose 70% on a stock, it doesn't take 70% gain to get back to where you started. It takes a 233% gain to get back to where you started. And th those gains are are tough to get. So, uh that's that's why a lot of times, well, my my investing philosophy focuses on managing my downside risk first because if I do, the upside takes care of itself. >> Great answer. Now, last time you were on, you also gave a really epic breakdown of risks in the global economy, and now we're seeing government bond yields at alarming levels. Have you been watching this? Do you think there's a risk of a crisis in sovereign debt markets? And if so, how could that affect financial markets in general in your view? >> I do think there's a pretty big risk and uh I to be fair, I've thought that for quite a while, but I I think that I think that risk is growing every month that passes. If I can, let me let me roll in my whiteboard to help illustrate something better. >> Yeah. >> Okay. So, this this is going to be a representation of the US government. So, uh this is going to be Sam, but instead of talking in the trillions of dollars like like I would have to talking about the US government, I'm going to break this down as if this is one person's budget. Okay? So Sam, he brings in 55,000 a year. That represents the US government's $5.5 trillion of revenue. $55,000 a year in income. But Sam spends $70,000 a year. Actually, it's 71,000. So that that leaves Sam with an annual deficit of $16,000. Every year he spends $16,000 more than he makes. And every year the balance on his American Express card increases. So, right now, as of May 2026, his balance on his AMX is $400,000. So, he makes $55,000 a year, but he spends more than he makes and he owes American Express $400,000 plus interest. But but that's not all because Sam uh has also been receiving weekly payments from his parents and grandparents for years. And Sam promised his parents and grandparents that he would fund their retirement if if they made him if they gave him those small weekly payments. So Sam's obligation, the net present value of his obligation to his parents and grandparents who are depending on this money in retirement is $1 million. So that's parents retirement. So, if you're if you break down the the US national debt and unfunded liabilities here into a household budget, you have somebody who's making $55,000 a year, who spends $71,000 a year, who owes $400,000 to AMX, and who own owes $1 million to fund people's retirement. Okay. So Sam realizes, hey, I can't pay the entrance on my debt unless I borrow more money. Sam's insolvent. So Sam has to borrow more money. So Sam calls up Ammex and Am and says, "Hey Ammex, I I need to borrow more money from you so I can pay the interest that I owe you on the debt that I have with you." And AMX says, 'Well, let's look at your personal balance sheet here and look at your income statement. Okay, so you earn $55,000 a year, you spend $71,000 a year, and you have $1.4 million in debt. Now, Sam, for for me to even consider lending more money to you, I need to know how you how you plan to reduce your expenditures because you need to be able to service this debt with your income. and right now you're just spending way too much money. And Sam says, "You know what? That that's ridiculous. This is just how things work. We we always we always spend this much money. In fact, my old friend Massie, I didn't realize how much of an idiot this guy was, but he wanted me to spend less money. So, I got I got rid of him as a friend, and I I replaced him with some better friends who actually understand the value of spending money." And Amx is going to say to Sam, "Sam Sam, there's no way that we can lend you more money. In fact, we're going to slash all of your credit lines until you can start paying us back and prove to us that you can be responsible with your debt." And then Sam says, "Fine, Amx. I'll just go ask Visa for the money." So, this is what the US government has been doing for years. they they've been saying to they've been paying their AMX with their Visa card or even paying their AMX with their AMX and and continuing to fund their budget like this. So when when you're loaning money to somebody like this, there is huge risk here and savers, investors, even institutions view loaning money to Sam as risk-free. risk-free. What? Sam's insolvent. And you think it's risk-f free and you're holding billions and billions of dollars on your company's balance sheet in Sam's debt? Now, yes. Yes, Sam has managed to pay his AMX bill with his AMX for decades or pay his AMX bill with his visa for decades. But that works until the day it doesn't because one day the US government may decide, hey, right now we're spending 25% of our annual revenue on interest. We can't do this anymore. Screw these bond holders. Well, let's tell them we're not going to pay them. or or at least have a major restructuring instead of defaulting all at once. Maybe maybe we have a restructuring where we say, "Hey, we'll pay you 30 cents on the dollar. You owned a $10,000 bond. Now it's like you own a $3,000 bond and be happy we're going to pay you that because well, we we just can't afford it anymore." Now, somebody when I make this argument, somebody would probably say, "But Jordan, you just don't get it. You don't get it because the government can print money. So this household budget that you have here, it doesn't matter because they can print their way out of it. They can just create new money and then pay off their their old debtors with that. Now, yes. Yes, they they've been able to do that. But at what point do these bond holders say, "We're not going to buy any more bonds or we're going to demand a much higher interest rate to buy the bonds because we either don't think we're going to get paid back or don't think we're going to get paid back in dollars that are as valuable as they are today." One of those two things. So, I think that's why you see you're seeing interest rates increase because th these are Sam's lenders saying, "Hey, we demand a higher interest rate because you're insolvent." So, whether whether it's an honest default and they say, "Hey, the government says, "Hey, we can't pay you all that we owe you and and you're going to get 30 cents on the dollar." or whether it's a dishonest default and they just default through inflation where the money that the bond holders receive is worth less than it was. Either one is a default. Now, if you're loaning the government, the US government money at 5% a year and the the annual the things of the stuff you buy goes up by 10% a year, you're not getting 5%. You're losing the difference. you're losing 5% a year. So, uh yeah, all that all that's to say is uh breaking that down into a household budget, I think there's there's major risk in the sovereign debt market. M maybe it's maybe it's not an outright default or major restructuring. Maybe it's just default through inflation, but I think either way it ends in default because Uncle Sam is sol insolvent. >> Yeah. And some great points there. I mean, if I was going to park capital with the US government for 30 years, I would certainly need more than 5% return on that. And and I think that's a big part of the point you're making. Now, I'm wondering how your current view on the war in Iran kind of affects your investment outlook at present. Obviously, the closure of the straight of Hormuz has already had a massive impact on energy prices. uh how do you see it potentially impacting financial markets, the global economy, precious metals, commodities, the broad market, assuming that it continues to drag on for for longer than many are expecting. Yeah, the the straight of Hormuz closure is a major issue and it it's already I think dragged on longer than than many were expecting and the international energy agency has said this is the biggest disruption of oil supply or energy supply in in the history of oil markets. So, you know, I if this goes on and reserves around the world just dwindle even more than they already have and and they they trend towards zero, those countries, they have to become buyers of energy. And people are pretty price inelastic with energy because in our in our modern world, energy is is life. Energy is what it takes to survive. So people will pay just about any price they have to for energy. So I mean we could we could see oil prices bid way way up. I mean if if this drags on through let's say through the end of summer for three or six more months I would not be surprised to see $200 oil. Now now what what would that do? or or even extended period of a $100 oil. Oil and energy is an input to everything. Even if you're not buying gas directly at the pump, this it applies to everything. You you go into Target and you you buy some green beans. You go into Walmart and you buy a kids toy. Energy goes into everything. Not not just transporting it, but if it's if it's food, farming it, all the all the farming equipment to to get that there. and uh to transport everything everywhere. So when when the cost of an input to everything shoots way up that puts a lot of pressure on businesses on the consumer. So I mean I think that has potential for a worldwide recession to to be the trigger of a worldwide recession. And in terms of the war, I mean, as I as I talked about in my last answer, the the US government is insolvent and and they have to fund this war. So how do they fund it? They they fund it through inflation. They fund it. They fund it by printing more money, which is very inflationary for gold, silver, any other commodity, any other hard asset. So, uh, I mean, the more inflation there is, the more you're going to see the stock market go up, the more you're going to see commodities go up, the more you're going to see house prices go up, all else equal. >> Let's dive into some specific stock ideas now, and I want to talk about an idea you've been discussing on your channel. You've done some in-depth coverage on Hercules Metals. They put out some news this morning, and the market is way Sorry, I'll do that one again. Let's dive into some specific stocks now. And I want to talk about one you've been doing some in-depth coverage of on your channel. That's Hercules Metals. They put out some news this morning and the market is way up on these assay results. Do you have any opinion on that drill hole and what it might mean for the company? >> Yeah, Hercules is an interesting company. They had a brand new copper discovery um back in late 2023 where they discovered a new copper district that people didn't know existed and it created a big staking rush with uh Riotinto coming in and staking ground with Bareric coming in and staking a ground. Uh Bareric ended up taking a a pretty significant stake in Hercules as well. And you you've seen lot lots of big names and the big copper producers in investing into the area. And Hercules was previously drilling out what they were calling their Leviathan deposit. And depending on the cutoff grade used, you're probably looking at between 300 to 800 million tons of copper there at Leviathan that they found so far. And that continues to be expanded. They haven't put it out an official mineral resource estimate. Um but that's something they're working on this year. The importance of this drill hole was from today is that they they confirmed a new poor free discovery uh a few kilometers south of Leviathan. Now the these aren't these aren't grades that are going to work at least not from this drill hole because the the copper that was intersected was at something like 900 meters downhole. So this is way too deep for an open pit. This is this would have to be a block cave and it was only a little over half a percent copper or so. So they have to find higher grades for this to work as a block cave. But it confirms that there's more porefree on their land. And we we thought there were going to be more porefree there because they have these geoysics. They did some IP surveys. They did an MT survey and these geoysics are overlapping with the existing mineralization they've already found and it it's illuminating some other areas on their property that that look to be other pfuries and this drill hole confirmed that it was another pfery but I mean they're going to try to vector towards towards the center of that towards a pa to towards a potassic center and if they find much higher grades like one one and a half% copper that that could be huge and um that could uh rerate the company uh overnight much much higher. And they have some other targets on their property. Their Pegasus target, their hook target, what they're calling the footwall zone at Leviathan that all look like another potential porefree. So I think there's going to be additional porefree discoveries this year on their property. Um but but yeah, so that's what the market is excited about and and and yeah, it's what it shows that what is currently m let's call it 500 million tons has has potential to be in the multi-billion tons. Uh if if these are pfreeze and if they can keep drilling those out and and prove that there there's more mineralization there that's potentially uh economically extractable. Last time on the show, you also talked about Altius Minerals, calling it a very highquality company with a phenomenal management team, but you thought the shares were a bit richly valued when they were trading up around 37 to $38 a share. Given the macro shifts and where commodity prices are sitting right now, what is your take on Altius today? My views haven't changed a lot, but the the revenues are are really starting to pick up, especially after their acquisition of Lithium Royalty Corp. And the lithium prices have really picked up now. Lithium when when they acquired the rest of Lithium Royalty Corp that they didn't already own, they this was a significant investment for them and it it resulted in lithium being their biggest market segment. So, Altius is a diversified royalty company. So, they don't just have lithium. They also have renewable royalties and royalties on nickel and copper and gold and silver and iron ore and um some some other cobalt and maybe maybe some others that are slipping my mind at the moment. So diversified across many commodities, very high quality company, really great management team, super long mine lives, um very high quality assets, just just a great company all around. Now, when they did that lithium Royalty Corp transaction, lithium the lithium price was still pretty low. But since then and that transaction just closed maybe I forget when the exact closing date was but maybe six months ago the lithium price has almost doubled since then. So um the the future revenues from those mines that are already online and and are coming online and ramping up. There's there's an enormous uh difference from what it was supposed to be when when they bought Lithium Royalty Corp. Now, I'm I'm currently revaluating my my valuation on that. And yeah, I I think it I think it's a better buy even though the stock is about the same price as the 37 $38 you mentioned. I I do think it's it's a better buy today than I previously thought because well that that lithium revenue is so strong and the copper prices are really strong. So their their copper pre revenue is picking up a lot and they also have their renewable royalty revenue that's picking up a lot because there's a lot of expansions there. But with Altius, it's it's all about your time frame because if you have a five or 10 year time frame, Altius is going to see a tremendous amount of growth in their revenue. But if you have a 12-month time frame, I mean, you could easily see a 30% pullback in the stock sometime within the next year. So like, yeah, 10 year time frame, I think you're going to make a lot of money. 12 month time frame, I don't know. It it's hit or miss. You've also been a very vocal bull on royal gold for a number of months now, presenting a really compelling growth thesis. Looking at the charts lately, the stock price has shown some definite weakness, pulling back from its recent highs. Do you have a take on why the market is punishing this stock right now? And has anything changed in your underlying thesis for royal gold? I mean, you look at any gold stock pretty much all all the royalty companies, all the producers, they're they're pretty much all well off from their highs. And it's largely because of the gold price. The gold price ran up to 5,500 and now it's bouncing around 4,500. and the the gold price has been weak over the last few weeks and that has caused uh a lot of the that's that's caused a lowering of some of the multiples in the in the companies which has brought down the stock prices. So w with this with Royal and and other high quality companies too. I I think it's throwing the baby out with the bathwater and um no my bull thesis has not changed and if anything I I think it's gotten stronger. For example, one of the overhangs with the company was their 30% equity stake in Hod Moden and uh they they just renegotiated that and and turned half of that into a royalty and they al also have an option to buy another royalty um that that came out of that deal and then also they have a first right of refusal on another royalty on on the same asset. So now they only own a 15% equity stake and have traded it for a topline royalty which decreases the capex they have to spend with during the mine build and it it basically just is is higher quality cash flow because it comes right off the top line instead of being a percentage of profits after the mine is built. So, no, my my thesis hasn't changed at all. And I one of the first lessons I I learned as a kid when it comes to investing is you buy low and you sell high. Um, and that's been ingrained in me from an early age. And I I really like to buy low. So, I've been an aggressive buyer of royal gold here and and for the for the previous several months as well. >> Now, what if we're pivoting to the other two giants in the royalty space, the gold and silver royalty space? If you had to deploy capital into one of them today, would it be Franco Nevada or Weeden Precious Metals? >> Yeah. And I I didn't mention in my Royal Gold answer that also part of my thesis is not just the growth they have, but also they're trading at a pretty significant discount to their peers. And not just the peers you just mentioned, Franco and Weaton, but also smaller peers like Triple Flag precious metals and OS gold or what what's now o royalties. uh they're trading at a discount to those companies on most metrics, even though Royal Gold is about four times the size. Now, if if I had to choose between Franco Nevada and Weed and Precious Metals, look, you can't go wrong with either company. They're they're both great companies, but we're we're we're 10 years into this bull market. So, I mean, if if the gold price continues falling continues to fall, yeah, this the stock prices are going to fall. But if you look at the long-term chart of those companies, they go from the bottom left to the top right because they have a great business model and they're run by great people and uh well, they they just have a a business model that works that that grows their cash flow over time. And of course, there's some ups and downs along the way, but if you're a patient long-term holder over decades, it's very likely that you will do very well with either one of those stocks. Now, if I was forced to choose between them, I would probably choose Wheaton Precious Metals because they have a lot more growth that's already built in. Now, Franco Nevada, the argument for them is, hey, they they've they've been around longer, even though their stock chart doesn't go back as far because they were bought and spun out. So that that created a a gap in their stock chart, but they they go back quite a few decades now and they've made very good investments over that period of time. So they're they've really proven that they're able to recycle their cash flow into new great investments. And Wheaton has a great track record too, but their track record isn't as long. So, um, also Franco Nevada has a bigger war chest because they h they have a stronger balance sheet because Weaten just did a huge transaction with BHP buying a huge silver stream on Antamina. So, uh, Franco Nevada has a much bigger war chest with money they can deploy, not only in the form of cash, but also in the form of their revolving credit facility. Um, but Franco doesn't have as much growth built in. Now they have Cobra Panama which was shut down a few years ago by the Panameanian government and that will probably come back online and if it does that does help their growth profile a lot but aside from Frank uh Cobra Panama they don't have they only have about 15% growth over the next five years or so whereas Weat and Precious Metals has 50% growth. So Wheat and Precious Metals has way more growth plus they're a very high quality company. uh and and I think they're going to continue to buy more assets and uh people other companies love working with wheat and precious metals because every time uh wheat and precious metals announces that they they're doing a stream with a mining company well then that that is looked at very positively for the from the market because Weaten has such a great history of deploying capital into the these various projects and it if Weaten's investing in it well then hey it must be a great project and and th those stocks usually end up performing pretty well after Weaten Invests. But yeah, if I had to choose between the two, it'd be Wheaten. And the main reason is because of their growth, but also because on most metrics, they're a little bit cheaper. They're they're maybe 10, 15, 20% cheaper on on most metrics. >> Well, for those who want to dive deeper into everything you presented today, as well as uh some other stock ideas uh that you present, how how can people sign up for Mining Stock Monkey? tell us about that and how people can follow your work there. >> Yeah, sure. So, researching mining stocks is what I do full-time. And if you like the way I think and want to know how I'm investing my own money, for anyone watching this, you can get 25% off your first year. However, this is limited to the first 15 subscribers who sign up or the first 48 hours, whichever comes first. And if you click on the link down in the comment or description below, and if the the discount doesn't show after you click on that link, that means the offer is already sold out. >> Great. Well, I'll put that link in the description. And if you're watching on YouTube, it will also be a pinned comment. Jordan, as always, greatly appreciate your insights and thank you for coming on the show. >> Thanks for having me, Jesse. Happy to be back again. >> Commodity Culture is a series on commodities and natural resources. If you would like to see more, be sure to subscribe and hit the bell notification so you're always up todate with the latest episodes.