End of Petrodollar Means GOLD Must Be Part of Monetary Reset
Summary
Gold Market Overview: Brad Ror discusses the macro trends in the gold market, highlighting the impact of massive money printing and central banks' increasing gold purchases as signals of potential monetary shifts.
Petrodollar and Global Currency Dynamics: The shift from the petrodollar system, with BRICS nations trading gold for oil, suggests a potential revaluation of global currencies and the need for a monetary reset involving gold.
Gold Revaluation Debate: The podcast explores the possibility of the US revaluing its gold reserves, with implications for the national debt and currency valuation, though the complexities of such a move remain uncertain.
Gold Mining Sector Performance: Despite lagging behind gold prices, gold equities like GDX and GDXJ are beginning to outperform, suggesting a potential bull market in gold equities driven by strong free cash flows and well-managed companies.
Scotty Resources Overview: Thomas Mumford provides an overview of Scotty Resources, highlighting its strategic location in the Golden Triangle, existing infrastructure, and focus on direct shipping ore models to capitalize on nearby deep-water ports.
Project Portfolio and Progress: Scotty Resources is advancing multiple projects, including the Scotty Goldmine project, with significant drilling activities and a focus on transitioning towards production, supported by strong infrastructure and environmental planning.
Financial Position and Future Plans: The company maintains a strong cash position with no debt, plans to leverage financing options for future development, and anticipates significant news flow from ongoing drilling and bulk sample results.
Upcoming Catalysts: Shareholders can expect updates on drill results, bulk sample outcomes, and a preliminary economic assessment (PEA) that will highlight the project's economic potential and strategic advantages.
Transcript
Hello everybody and welcome in to commodity culture where our goal is to make you a better investor in the commodities sector. My name is Jesse Day. Before we dive in, standard disclaimer, nothing here is investment advice. Do your own due diligence. And today I'm welcoming two guests to the program. Brad Ror, CEO and Thomas Mumford, president of Scotty Resources, a company focused on near mine high-grade gold targets in the Golden Triangle of British Columbia. Gentlemen, it is great to have you both on the program. Thanks, Jess. Thanks for having me. Appreciate the time. Well, let's start off with the macro of gold. And Brad, we'll go to you for this. Um, I'd love to get your current overview of the gold space. What are the main trends and catalysts that you think have brought us to where we are today? And if you had to venture a guess, which inning of this gold bull market do you think we're in right now? So, my view on gold is uh I've never was typically a gold bug, but in 2015 when I first got involved in here, I had a view on gold because it had, you know, about four or five years and I thought it was time to come in into unloved sector. Here I am 10 years later. But I think the thesis was correct and gold was $1,100 in 2015 when when I first dipped my toe or wrote my first check to this project. And you know what I saw is massive amounts of money printing and that would have been the Obama era and there was an extremely amount of money being printed and I'm a pretty simple guy and I was like okay well gold's going up as so is my phone and my car and everything else but you know and gold has always been a a way to protect your wealth not to grow your wealth. Well gosh, you could have grown your wealth buying gold, but that's not what how I viewed gold at that time. And I was really interested back then because the Basil 3 is something that we talked or read about for a long time and it had stages, but you knew that final stage of Basil 3 was going to happen and and I think I in my mind I probably thought it was going to happen earlier than that final stage cuz it was probably only a couple years ago. And again, not a super expert, but you know, follow follow these trends. And you know the the basis of that is you can value an ounce of gold at its market price from a central bank balance sheet which in the past it would you know it's about 50% if I'm correct now it might have been staged up but I I saw that as something that was very interesting to me because is that going to with all the money printing going on all over the place at the time but it was Obama really just doubled that that uh debt much like we've done to Canada as well. So that's what kind of got me interested in and and then central banks started buying gold at around that time and now that's accelerated and and so that's what I look at you know right now I go and I we're going to talk about a whole bunch of theories that may or may not happen but the fact that these central banks around the world and particularly ones outside of the G7 are all starting to uh repatriate their gold buy gold and to me that's a big signal you're going okay something's going to happen here. Um, you know, things that have happened, you're going some of these catalysts that are different. Now, I come from an energy background. I had my success in energy. Uh, and you know, the petro dollar was why the reserve currency is what it is because of the deals they made to Saudi Arabia long time ago. But also within this time of when, you know, now we're getting a little bit closer to recent, you know, the United States took Russia off the Swift system, which I went, uh-oh, I understand what you're trying to do and and and such. And I have no view, and I'm not going to portray whatever my views are, but I was going, "Uh-oh, that's you're going to force somebody to go find an alternative." uh you know if you can't trade in and within that you know the swift system which is the international way of moving money around so to speak to make it simple uh you force the brick nations and one of the things again being an energy guy they started trading gold for oil and that has never happened before and I don't I don't think we speak enough about it and you know or that this is what excites me or or or not not excites me but just really makes me sit up straight so these are things that have happened that have never happened before. Um, yeah. Yeah. And I I think that's big changes here because if we're trading if if those brick nations are actually trading oil for for gold, that is going to accelerate, you know, the inevitable. I mean all currencies fail when they're fiat currencies and you know but I don't take this view that it happens tomorrow and and griefstricken poverty is everywhere but it is the winds are shifting and that dominant currency we're all going to have to come together as a world and decide on on what we whenever whatever units uh come but that these things are going to happen and it's going to happen in my lifetime now it could be as early as 2 years 3 years or 6 years I don't know uh but I see that moving moving in in that direction. So, I'm very happy to to personally own gold. Uh, and it's done a lot better uh than I've ever could have imagined. That being said, my equities haven't done anything. So, uh, you know, these are things that can drive one crazy at night. But I think those, you know, the catalysts that are really driving that price of of gold right now. And I would say that, you know, I was asked last year for predictions. I can't make predictions. cuz I'm wrong all the time, but I've been making predictions for 35 years with my own money and uh so you know, I've won and I've lost a lot of things. Uh you know, but I remember perfectly last year around October, someone said, "Oh, your price of gold, I don't know." But I just said, you know, $3,300. And the reason I said that was I just took 24% of which that's what the gold uh price was in in 2024. I just added 24%. And I'm going well you know gold shouldn't went down as far as all the educated people last year in 2024 because interest rates are going up and so is gold. Another thing that's very interesting but what we can be assure is or I believe or I bet lots on interest rates are going to go down which is historically a bullish thing for gold. So, we didn't get penalized when interest rates moved up, but I do think the party continues or or the the underpinning of what that that commodity is going to be worth is as as we see interest rates going down. So, I think that answers your your your first question. I'll I'll leave it there. Yeah, absolutely. And and that's interesting to note that gold went up in the face of both a strong US dollar and rising interest rates. Um both things that traditionally are not the case. And I also agree that when rate cuts do happen, that is going to add fuel to the fire. Now, the question of gold revaluation has come up with some people I've spoken to recently. I've had a lot of varying opinions on this matter. Everybody from Alistair Mloud who said it's never going to happen. Forget about it to Vince Lansancy who says it must happen, it will happen, and everywhere in between. Now, the Federal Reserve recently released a note called official reserve revaluations, the international experience, which described how five different nations use gains in their gold reserves to raise funds. This has led to speculation that the Fed is considering the same thing. In your opinion, is revaluing the US gold reserves a realistic proposition. And what would the implications of such a move be? So, the answer is yes, and I've been thinking about that a long time now. the implications whatever I say you know there's a lot of unanswered questions I can't you know and I've put a lot of thought into these things so uh I just going to look at I wrote down some news so yeah so we have these other countries that have have kind of repriced their gold on their balance sheets but there you know and I'm not an expert on that but I I know like I think Italy, Belgium you know and a couple other small countries but Italy only took a small portion of their gold and moved it into some pot. I think yes because gold's valued at $42 or or what be the 8,000 tons or 26 million ounces that the US, you know, says that they have. So what I can't get my head around is sure it's an easy we all want the keep things simple. Hey, you could revalue your gold and let's just pick a number because again, you know, there's a hundred numbers out there because there's a lot of people that talk about this, but I'll just make it real easy math. that there's 26 million ounces of gold and and we revalued it to $20,000. I'm just picking that number out, that gives you $5.2 trillion. Okay, that doesn't fix the problem of a $37 trillion uh uh uh debt, but it is a pathway to perhaps solving a few problems. What I can't get my head around is the government just can't revalue the gold because at the end of the day you, me, Thomas, we all have at least 10 ounces of gold in our house, right? Anyways, you know, certainly so gold goes to 10,000, 20,000, whatever. Or let's just go spot. If you go spot, is that float then? Does your balance sheet float? That doesn't make sense to me. But if you did charge, let's say they tried to revalue the gold, call it 20,000. Again, I'm just picking that number out. It's probably be way less than that. Um, that means or I believe and if somebody else, come on. Well, then I'm going to just go sell my gold that day, right? Or or you know, and so how do they buy the gold? they sell more treasuries or they print more money, which is an interesting thought because if the US wanted to devalue their dollar, no better way than print a whole bunch of money and buy as much gold. So, could they? So, it's unprecedented. It's never happened before. And it's a theory, but you know, eventually there's going to have to be a reset because of the petro dollars changing. That's that's my big that's my real underlying theory. And the US isn't going to get the dictate, you know, now they're going to have a bunch of influence, but you have the other side of that equation, which is China, of which probably has more gold than than we think that they have. Uh so yes, there could be that revaluation. So everyone's on a fair playing field. But as you can see, and you know, the president of United States, he's projecting he wants to devalue the dollar. How you going to pay your debts? It makes a lot of sense. Other countries have done it our whole lives. Japan, China and and and such, right? It's a beneficial. Now, as Canadians, we should be really scared. And again, not enough Canadians are talking about if they devalue the US dollar. It is really a big problem for Canada cuz we can't compete at a 70cent dollar right now. So, the answer is yes. But, but at what price? And and I just, you know, this is the part I can't get my head around because if I am right, then they'd have to start buying gold from everybody because you you go too high. Why wouldn't I sell it, right? Uh so that that's the part. But I do believe it's a really complex problems. I mean, a trillion dollars isn't even a real number and we got $37 trillion in debt in the US. Um so it's complicated and I'm sure there's a lot of real smart people working on that. But I do believe gold is rare. Much like a Van Go costs a whole bunch of money because it's rare. You know, gold is rare. There's about a half ounce per person on the earth. And that's kind kind of the same uh for the last couple thousand years. So I think it's a great abacus or a great stone to to to put value on. But again, we're not going back to a gold standard by any stretch of the imagination. But I think there will be some sort of unit and commodities in general will probably have a a lot to do with the revaluation of how we're going to trade in the future. But these things could take a long while before they play out. But yes, revaluation of gold makes sense. Uh just at what price, I'm not sure. Well, let's pivot to the gold mining sector because for the last few years, the complaint has been that it's not keeping pace the way it normally does. It's not providing a levered play on the gold price. It's kind of dragging its heels as gold reaches all-time highs. It appears that that started to change this year because year to date both the GDX and the GDXJ are outperforming gold by quite a wide margin and massively outperforming the broad market. Do you see this as potentially the beginning of a major bull market in gold equities? And if so, how long and how high do you think it could go? Sure. So again, difficult questions. Uh we probably been in a gold bull run compared to who you talk to since 2000, right? I mean, if you look at the last 25 years, gold's outperformed the S&P. Now, what inning are we in now? Gold has really rapidly gone up since we broke 1374 in 2019 or something like that. And that that gold price has moved quite well. So from that point of view, what inning are we in now? Yes, GDX and GDXJ have uh woken up in the last year, but as they're still just catching up to the actual commodity price. So we're early from from that point of view. I I I think uh lot more room to run. You know, is it only Newmont or is it Beric? I'm going to get this wrong. There's only one company in in uh the S&P, right? And you go, fund managers are not buying gold. Most fund managers are are younger than me. My my next birthday birthday is 60, but you know, look at who's running money in in New York. These kids have never bought a a gold stock before. Now, they've been living quite well with their bonuses on the Mag 7. This is turning. They're going to be forced to buy these fund man in my opinion are going to be forced to buy gold equities on the simple fact that the free cash flow is is extraordinary and these majors and mid-tiers are extremely well-run which is a total departure from perhaps 10 or 15 years ago where they were just a bunch of minors and and and going you know spending money like it was crazy. So I think we're early innings. I believe, you know, that GDXJ is just a signal, right? They're kind of catching up to an extraordinary uh uh run in the price of the of the actual commodity. And so, yeah, I feel good about those things. And then you have to look at all the companies like ours. We we're not in the GDXJ. I mean, at the end of the day, those are mid-tier companies. And so, you know, there's a lot of room for good run smaller companies like us that are going to fight to get ourselves in into that indices because that supports you uh so much that having that passive money uh uh training. So, I think you know there's a whole host of great companies out there that were not getting recognized but that trickle down effect because of just the free cash flow. Lots of M&As are happening where it's getting harder to see who's going to take over who these days, right? because there has been a lot of action in in that. So I think you know we are at the beginning uh stages uh you know now I can't see 5 years ahead but in in in 3 years I'm going I don't see this uh getting taught any lessons I get taught lessons all the time but uh you know I just don't see because I just see more money printing coming. there's just there's no other way out of it and and the Fed's trapped, right? I mean, we've been saying this forever, but I mean, I think we're in the ninth inning of that uh part of the game and and you know, lots of room to to grow here because you know, we've got these basket of seven companies that are pretty much the whole market. And you know, they're rolling over a bit. There's still, you know, the difference between 2000 and now is gold was low and all these tech companies were were very high. I actually ran an online grocery store before the.com bust and I but I came from mining so I kind of have this view. But now the gold price is 10 times 15 times what the gold price was in 2000. But the the other difference is tech companies make money and they didn't make money back then. So but there's just a lot of hype on on on these things and a lot of uneducated people. It's it's just computers trading now. And so I think uh yeah, the future's uh good and I think real value hard assets is everything that I'm in and I'm an anti- debt guy at this stage because I don't know what's going to happen. So I think you know we uh could go a lot longer now. How far can it go? I don't know. I'll have a new piece of information tomorrow that news will tell me and I'll adjust my my thinking. So, but I think in the next 3 years, I just don't see where I get derailed on my theories. Yeah, I I completely follow you there. And it's interesting to note the broad market. You know, you have a lot of people talking about how overvalued it is. It does seem to keep grinding higher, but by all rat, you look at the cape ratio, the Buffett indicator. I mean, there's so many things you can look at. Howard Marx in his latest memo actually came out and said he finds current valuations worrisome which is actually incredible for Howard Marks to say because he's usually very recitant to make any definitive statements. Um he's very careful that he couches his statement. So I think that's significant. Why don't we shift now to discussing Scotty resources and perhaps start by giving us an overview of the company. Um Thomas, did you want to handle this one? Sure. Yeah. So we are a junior mining explorer right now. We're a gold targeted company. We're located up in BC in the Golden Triangle area. So, we're in the southern portion of the Golden Triangle. We're in an area that has multiple mines uh operating in the area. So, we've got Ascot to the south of us. We've got Bruce Jack, which is owned by Pneumont just to the north of us. Those are our two largest neighbors. One of the things that changes us or differs us from the others in the area is that we have um we're kind of, you know, coming into an an area that already has the infrastructure built in. So, one of the biggest impediments to any project operating in the Golden Triangle is you got to put this power line in. You've got to build this road. Um, that's already done for us. So, the road goes right up to our site and you know, we're drilling right off of the road where our new deposit is found. So, it's called a Blueberry contact zone. So, we're we're in an area that has exceptional infrastructure. And then one of the the things that really differentiates us is that we're looking at a direct shipping ore model. So, shipping a product out without having to mill it, without having a tailings facility. And what allows us the opportunity to do that is that there's a deep water shipping port just 40 kilometers down that road I was I was mentioning. So we've got the infrastructure in place. We've got this exceptional opportunity and our deposit supports it. Um so that that's where Scotty sits right now. Can you guide us through your main portfolio of projects and highlight the progress made so far, next steps for them as well? And also if you could provide a little more background on the golden triangle and its history as a gold producing region as well that would be great. Okay. So you know the Scotty portfolio of projects all our projects are located in the Stewart area which is the the mining camp in the area. It's road accessible from the rest of British Columbia there. Starting at the kind of the most grassroots stage we would have our Cambria project which is a large land package. The big status on that is we're doing grassroots exploration. We're doing field sampling. we're out there mapping and doing geohysical surveys on that. And so that's a more of a poly metallic system that we're exploring for. So multiple commodities like you're looking at silver, copper, lead, zinc, that that's the what we're looking for on that project. The next most advanced one, which I would say is at like a an early drilling stage. So it was a pass producing mine. It's called the Georgia River project. Uh it's a classic quartz vein system. It's got super high-grade gold. you know, there's a non-compliant resource of 200,000 ounces at 20 grams a ton on that. And so, we've drilled that for a few seasons, and the next the next round of exploration on that would be further drilling on that and trying to expand the and and get a compliant resource out of that project. But really, our biggest our biggest project is what we call our Scotty Goldmine project. And that's where 90% 95% of all our exploration dollars go into these days. And that's what we've been really leaning on over the last few years. And that project has advanced very rapidly over the last three years. And now we're turning a corner and we're now looking outwards and going, you know, is this going to be a producer? And we're making that transition now to say like how do we get there? What does that look like in terms of exploration work? Um we are right now we've got four drills at site turning. Uh so we're drilling 25 to 30,000 meters this year. We're permitted for a bulk sample. So we've done our first blast on that bulk sample. We're going to do a second. Just for context, the size of the bulk sample is about 10,000 tons. And we're hoping to generate, you know, in the order of 3,000 tons of mineralized ore from that. And then, you know, we're planning to operate it just as we would a DSO project. So, a direct shipping ore, we're going to ship that that mineralized rock down to the port and Stewart and try to ship it out from there and capitalize on that. Um, we've started baseline environmental. So, looking ahead to like what is it going to take to be permitted in the area? We are going to have to advance on that front and one of the ways to do that is do the environmental studies to understand the impact on the on the nature in the area and that that informs the permitting process with the government. So that's been initiated. That's a minimum of two years in environmental work before you can get a a permit amendment. And then the other thing is we're looking at the economics and the engineering of actually developing this project. So that's going to form the base of a of a PA, a preliminary economic assessment and that'll be due out in Octoberish this year. We'll have the news release out for that and then the final product from that will be out in December. So the engineering, the economics are we're right in the middle of that this season. Fantastic. And any background you could provide on the Golden Triangle as a historic gold mining district. And you you mentioned uh the the requirements to get a permit there. What is your relationship like with the the local government and community? Yeah, the Golden Triangle has been a like worldclass bite to to find and exploit u mineral deposits in the area uh for over a hundred years. So, right, I mean you have Es Creek which was one of the big mining staking rushes uh in in its day. It was one of the highest it at the time it was the highest grade producing mine in the world. Um, and now you've got the other side of that, which is KSM, uh, Seab Bridges Deposit, which is the world's largest undeveloped gold deposit, which is, I don't know what the number is. It's over 90 million ounces of gold in in the project now. It's just unfathomable, really large. Um, so you've got this area that has worldass grade and worldclass size. And these aren't even all the same deposits. U in terms of geological models. You've got one that's copper pryer. You've got another BMS. You know, you've got epiothermal gold systems like the Bruce Jack mine, which is one of the highest grade uh producing mines, underground mines. And then you've got Scotty underground uh intrusion related gold. So, you've got all these worldclass deposits of varying different styles. It's just a very fruitful area to look for geology. Um in terms of permitting and the First Nations and our local partners there. So, you know, it's an area that things get done. Like, you've got a lot of new projects going on. You've got a lot of advancement. You've got a lot of people spending a lot of money pushing things along. You've got two big First Nations in the area would be the Talllan and the Nishka nation. We are south of the Tallan. And so, we're in in in the Nishka territory. And that's that's who our main partners are. We're about 10 to 15% of our workforce has been with the Nishka over the last few years and a great relationship with them. So, we're in the process of formalizing that uh walking towards having like an IBA agreement in place so that when we go to that permitting stage that everybody knows what their stake is. Fantastic. Well, what is the company's current cash position? How do you plan to put that cash to work? What does your debt situation look like? And how will you raise more capital when needed in the future? So, current cash position is probably in the order of 12 to$13 million in the bank right now. We are in the middle of closing various tranches of a financing. So, we've basically filled our our $16.8 million financing that's been underway. Um, we are spending money right now as we're drilling. This is the busiest part of our season. So, like I said, we have four drills turning. So, it's kind of in flux there, but I think uh the last time I spoke with the CFO, we were about 12 million in the bank. And so, that'll run us through well into the fall uh into early winter with that. And then we're hoping for some proceeds from the bulk sample as well to generate some revenue from that. Um when we look forward, sorry, on the debt side, we have no debt. We we're fully paid for. All our land is paid for. Um we have a 2% royalty with Franco Nevada that they put on a couple years ago or a year and a half ago and and gave us that in exchange for equity and some cash. Um we have just closed a deal with Ocean Partners, which is a metal trading operation. um they they put in 8.4 of the $16.8 million that we were just closing. And in addition to that, they've provided us a construction and cost overrun facility uh worth $25 uh million US. Um but that's for the last mile of the mine production or mine construction. So like we're we're we're not opening that that package up yet. That's for like cost overruns when the mine gets built. And so that'll be post pea when we look at what's the next funding solution to go as we advance the project. I mean we won't be doing any funding until we're well past the pea stage. So we'll be able to value our our ounces in the ground. And so the next the next uh tranches of funding probably look a bit of a combination between equity um debt maybe traditional debt or a convertible and then maybe an additional royalty or a stream on top of it to get us into that construction level financing package. Well, what are the main catalysts and upcoming news flow that you would like to highlight that shareholders of Scotty Resources can look forward to for the remainder of this year and into 2026? So, the obvious one is that we're drilling a lot right now. So, 25 to 30,000 meters. So, we've got drill results going to be starting to come out here very shortly. We started drilling at the start of July. So, we're just about to be getting our assay back and then be able to release those out. So, we'll have a strong news flow of drill results starting in the coming weeks and then all the way through the through the fall into the early winter. So, that'll be the first one. The next one will be the the results from our bulk sample. So, that's in progress. We've done our first blast. We're prepping up for the second blast and then we're hoping to ship that out and looking for a renumeration in October, November this year. So that bulk sample will be a big confidence boost for us and showing that this DSO project uh concept works and that could show the valuation associated with it. The biggest news coming out for us will be in the October realm where we have our pea coming out which will be the first opportunity we've had to really show the high the value of the gold in the ground and the margin associated with that. So because we don't have all these these large initial capital costs associated with building a road, you don't have to put the the you know the p the port in, you don't have to power lines like a lot of it is already built. You don't have to build a mill or a tailings facility. The capital cost goes way down and so that pushes up on your NPV um dramatically and so we're really excited to show that. Excellent. Well, I'm going to put a link in the description below to the Scotty Resources website as well as social media so people can follow along with the company. Brad and Thomas, this has been a fantastic conversation. Thank you so much for coming on the show. Thanks, Jesse. 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 to date with the latest episodes.
End of Petrodollar Means GOLD Must Be Part of Monetary Reset
Summary
Transcript
Hello everybody and welcome in to commodity culture where our goal is to make you a better investor in the commodities sector. My name is Jesse Day. Before we dive in, standard disclaimer, nothing here is investment advice. Do your own due diligence. And today I'm welcoming two guests to the program. Brad Ror, CEO and Thomas Mumford, president of Scotty Resources, a company focused on near mine high-grade gold targets in the Golden Triangle of British Columbia. Gentlemen, it is great to have you both on the program. Thanks, Jess. Thanks for having me. Appreciate the time. Well, let's start off with the macro of gold. And Brad, we'll go to you for this. Um, I'd love to get your current overview of the gold space. What are the main trends and catalysts that you think have brought us to where we are today? And if you had to venture a guess, which inning of this gold bull market do you think we're in right now? So, my view on gold is uh I've never was typically a gold bug, but in 2015 when I first got involved in here, I had a view on gold because it had, you know, about four or five years and I thought it was time to come in into unloved sector. Here I am 10 years later. But I think the thesis was correct and gold was $1,100 in 2015 when when I first dipped my toe or wrote my first check to this project. And you know what I saw is massive amounts of money printing and that would have been the Obama era and there was an extremely amount of money being printed and I'm a pretty simple guy and I was like okay well gold's going up as so is my phone and my car and everything else but you know and gold has always been a a way to protect your wealth not to grow your wealth. Well gosh, you could have grown your wealth buying gold, but that's not what how I viewed gold at that time. And I was really interested back then because the Basil 3 is something that we talked or read about for a long time and it had stages, but you knew that final stage of Basil 3 was going to happen and and I think I in my mind I probably thought it was going to happen earlier than that final stage cuz it was probably only a couple years ago. And again, not a super expert, but you know, follow follow these trends. And you know the the basis of that is you can value an ounce of gold at its market price from a central bank balance sheet which in the past it would you know it's about 50% if I'm correct now it might have been staged up but I I saw that as something that was very interesting to me because is that going to with all the money printing going on all over the place at the time but it was Obama really just doubled that that uh debt much like we've done to Canada as well. So that's what kind of got me interested in and and then central banks started buying gold at around that time and now that's accelerated and and so that's what I look at you know right now I go and I we're going to talk about a whole bunch of theories that may or may not happen but the fact that these central banks around the world and particularly ones outside of the G7 are all starting to uh repatriate their gold buy gold and to me that's a big signal you're going okay something's going to happen here. Um, you know, things that have happened, you're going some of these catalysts that are different. Now, I come from an energy background. I had my success in energy. Uh, and you know, the petro dollar was why the reserve currency is what it is because of the deals they made to Saudi Arabia long time ago. But also within this time of when, you know, now we're getting a little bit closer to recent, you know, the United States took Russia off the Swift system, which I went, uh-oh, I understand what you're trying to do and and and such. And I have no view, and I'm not going to portray whatever my views are, but I was going, "Uh-oh, that's you're going to force somebody to go find an alternative." uh you know if you can't trade in and within that you know the swift system which is the international way of moving money around so to speak to make it simple uh you force the brick nations and one of the things again being an energy guy they started trading gold for oil and that has never happened before and I don't I don't think we speak enough about it and you know or that this is what excites me or or or not not excites me but just really makes me sit up straight so these are things that have happened that have never happened before. Um, yeah. Yeah. And I I think that's big changes here because if we're trading if if those brick nations are actually trading oil for for gold, that is going to accelerate, you know, the inevitable. I mean all currencies fail when they're fiat currencies and you know but I don't take this view that it happens tomorrow and and griefstricken poverty is everywhere but it is the winds are shifting and that dominant currency we're all going to have to come together as a world and decide on on what we whenever whatever units uh come but that these things are going to happen and it's going to happen in my lifetime now it could be as early as 2 years 3 years or 6 years I don't know uh but I see that moving moving in in that direction. So, I'm very happy to to personally own gold. Uh, and it's done a lot better uh than I've ever could have imagined. That being said, my equities haven't done anything. So, uh, you know, these are things that can drive one crazy at night. But I think those, you know, the catalysts that are really driving that price of of gold right now. And I would say that, you know, I was asked last year for predictions. I can't make predictions. cuz I'm wrong all the time, but I've been making predictions for 35 years with my own money and uh so you know, I've won and I've lost a lot of things. Uh you know, but I remember perfectly last year around October, someone said, "Oh, your price of gold, I don't know." But I just said, you know, $3,300. And the reason I said that was I just took 24% of which that's what the gold uh price was in in 2024. I just added 24%. And I'm going well you know gold shouldn't went down as far as all the educated people last year in 2024 because interest rates are going up and so is gold. Another thing that's very interesting but what we can be assure is or I believe or I bet lots on interest rates are going to go down which is historically a bullish thing for gold. So, we didn't get penalized when interest rates moved up, but I do think the party continues or or the the underpinning of what that that commodity is going to be worth is as as we see interest rates going down. So, I think that answers your your your first question. I'll I'll leave it there. Yeah, absolutely. And and that's interesting to note that gold went up in the face of both a strong US dollar and rising interest rates. Um both things that traditionally are not the case. And I also agree that when rate cuts do happen, that is going to add fuel to the fire. Now, the question of gold revaluation has come up with some people I've spoken to recently. I've had a lot of varying opinions on this matter. Everybody from Alistair Mloud who said it's never going to happen. Forget about it to Vince Lansancy who says it must happen, it will happen, and everywhere in between. Now, the Federal Reserve recently released a note called official reserve revaluations, the international experience, which described how five different nations use gains in their gold reserves to raise funds. This has led to speculation that the Fed is considering the same thing. In your opinion, is revaluing the US gold reserves a realistic proposition. And what would the implications of such a move be? So, the answer is yes, and I've been thinking about that a long time now. the implications whatever I say you know there's a lot of unanswered questions I can't you know and I've put a lot of thought into these things so uh I just going to look at I wrote down some news so yeah so we have these other countries that have have kind of repriced their gold on their balance sheets but there you know and I'm not an expert on that but I I know like I think Italy, Belgium you know and a couple other small countries but Italy only took a small portion of their gold and moved it into some pot. I think yes because gold's valued at $42 or or what be the 8,000 tons or 26 million ounces that the US, you know, says that they have. So what I can't get my head around is sure it's an easy we all want the keep things simple. Hey, you could revalue your gold and let's just pick a number because again, you know, there's a hundred numbers out there because there's a lot of people that talk about this, but I'll just make it real easy math. that there's 26 million ounces of gold and and we revalued it to $20,000. I'm just picking that number out, that gives you $5.2 trillion. Okay, that doesn't fix the problem of a $37 trillion uh uh uh debt, but it is a pathway to perhaps solving a few problems. What I can't get my head around is the government just can't revalue the gold because at the end of the day you, me, Thomas, we all have at least 10 ounces of gold in our house, right? Anyways, you know, certainly so gold goes to 10,000, 20,000, whatever. Or let's just go spot. If you go spot, is that float then? Does your balance sheet float? That doesn't make sense to me. But if you did charge, let's say they tried to revalue the gold, call it 20,000. Again, I'm just picking that number out. It's probably be way less than that. Um, that means or I believe and if somebody else, come on. Well, then I'm going to just go sell my gold that day, right? Or or you know, and so how do they buy the gold? they sell more treasuries or they print more money, which is an interesting thought because if the US wanted to devalue their dollar, no better way than print a whole bunch of money and buy as much gold. So, could they? So, it's unprecedented. It's never happened before. And it's a theory, but you know, eventually there's going to have to be a reset because of the petro dollars changing. That's that's my big that's my real underlying theory. And the US isn't going to get the dictate, you know, now they're going to have a bunch of influence, but you have the other side of that equation, which is China, of which probably has more gold than than we think that they have. Uh so yes, there could be that revaluation. So everyone's on a fair playing field. But as you can see, and you know, the president of United States, he's projecting he wants to devalue the dollar. How you going to pay your debts? It makes a lot of sense. Other countries have done it our whole lives. Japan, China and and and such, right? It's a beneficial. Now, as Canadians, we should be really scared. And again, not enough Canadians are talking about if they devalue the US dollar. It is really a big problem for Canada cuz we can't compete at a 70cent dollar right now. So, the answer is yes. But, but at what price? And and I just, you know, this is the part I can't get my head around because if I am right, then they'd have to start buying gold from everybody because you you go too high. Why wouldn't I sell it, right? Uh so that that's the part. But I do believe it's a really complex problems. I mean, a trillion dollars isn't even a real number and we got $37 trillion in debt in the US. Um so it's complicated and I'm sure there's a lot of real smart people working on that. But I do believe gold is rare. Much like a Van Go costs a whole bunch of money because it's rare. You know, gold is rare. There's about a half ounce per person on the earth. And that's kind kind of the same uh for the last couple thousand years. So I think it's a great abacus or a great stone to to to put value on. But again, we're not going back to a gold standard by any stretch of the imagination. But I think there will be some sort of unit and commodities in general will probably have a a lot to do with the revaluation of how we're going to trade in the future. But these things could take a long while before they play out. But yes, revaluation of gold makes sense. Uh just at what price, I'm not sure. Well, let's pivot to the gold mining sector because for the last few years, the complaint has been that it's not keeping pace the way it normally does. It's not providing a levered play on the gold price. It's kind of dragging its heels as gold reaches all-time highs. It appears that that started to change this year because year to date both the GDX and the GDXJ are outperforming gold by quite a wide margin and massively outperforming the broad market. Do you see this as potentially the beginning of a major bull market in gold equities? And if so, how long and how high do you think it could go? Sure. So again, difficult questions. Uh we probably been in a gold bull run compared to who you talk to since 2000, right? I mean, if you look at the last 25 years, gold's outperformed the S&P. Now, what inning are we in now? Gold has really rapidly gone up since we broke 1374 in 2019 or something like that. And that that gold price has moved quite well. So from that point of view, what inning are we in now? Yes, GDX and GDXJ have uh woken up in the last year, but as they're still just catching up to the actual commodity price. So we're early from from that point of view. I I I think uh lot more room to run. You know, is it only Newmont or is it Beric? I'm going to get this wrong. There's only one company in in uh the S&P, right? And you go, fund managers are not buying gold. Most fund managers are are younger than me. My my next birthday birthday is 60, but you know, look at who's running money in in New York. These kids have never bought a a gold stock before. Now, they've been living quite well with their bonuses on the Mag 7. This is turning. They're going to be forced to buy these fund man in my opinion are going to be forced to buy gold equities on the simple fact that the free cash flow is is extraordinary and these majors and mid-tiers are extremely well-run which is a total departure from perhaps 10 or 15 years ago where they were just a bunch of minors and and and going you know spending money like it was crazy. So I think we're early innings. I believe, you know, that GDXJ is just a signal, right? They're kind of catching up to an extraordinary uh uh run in the price of the of the actual commodity. And so, yeah, I feel good about those things. And then you have to look at all the companies like ours. We we're not in the GDXJ. I mean, at the end of the day, those are mid-tier companies. And so, you know, there's a lot of room for good run smaller companies like us that are going to fight to get ourselves in into that indices because that supports you uh so much that having that passive money uh uh training. So, I think you know there's a whole host of great companies out there that were not getting recognized but that trickle down effect because of just the free cash flow. Lots of M&As are happening where it's getting harder to see who's going to take over who these days, right? because there has been a lot of action in in that. So I think you know we are at the beginning uh stages uh you know now I can't see 5 years ahead but in in in 3 years I'm going I don't see this uh getting taught any lessons I get taught lessons all the time but uh you know I just don't see because I just see more money printing coming. there's just there's no other way out of it and and the Fed's trapped, right? I mean, we've been saying this forever, but I mean, I think we're in the ninth inning of that uh part of the game and and you know, lots of room to to grow here because you know, we've got these basket of seven companies that are pretty much the whole market. And you know, they're rolling over a bit. There's still, you know, the difference between 2000 and now is gold was low and all these tech companies were were very high. I actually ran an online grocery store before the.com bust and I but I came from mining so I kind of have this view. But now the gold price is 10 times 15 times what the gold price was in 2000. But the the other difference is tech companies make money and they didn't make money back then. So but there's just a lot of hype on on on these things and a lot of uneducated people. It's it's just computers trading now. And so I think uh yeah, the future's uh good and I think real value hard assets is everything that I'm in and I'm an anti- debt guy at this stage because I don't know what's going to happen. So I think you know we uh could go a lot longer now. How far can it go? I don't know. I'll have a new piece of information tomorrow that news will tell me and I'll adjust my my thinking. So, but I think in the next 3 years, I just don't see where I get derailed on my theories. Yeah, I I completely follow you there. And it's interesting to note the broad market. You know, you have a lot of people talking about how overvalued it is. It does seem to keep grinding higher, but by all rat, you look at the cape ratio, the Buffett indicator. I mean, there's so many things you can look at. Howard Marx in his latest memo actually came out and said he finds current valuations worrisome which is actually incredible for Howard Marks to say because he's usually very recitant to make any definitive statements. Um he's very careful that he couches his statement. So I think that's significant. Why don't we shift now to discussing Scotty resources and perhaps start by giving us an overview of the company. Um Thomas, did you want to handle this one? Sure. Yeah. So we are a junior mining explorer right now. We're a gold targeted company. We're located up in BC in the Golden Triangle area. So, we're in the southern portion of the Golden Triangle. We're in an area that has multiple mines uh operating in the area. So, we've got Ascot to the south of us. We've got Bruce Jack, which is owned by Pneumont just to the north of us. Those are our two largest neighbors. One of the things that changes us or differs us from the others in the area is that we have um we're kind of, you know, coming into an an area that already has the infrastructure built in. So, one of the biggest impediments to any project operating in the Golden Triangle is you got to put this power line in. You've got to build this road. Um, that's already done for us. So, the road goes right up to our site and you know, we're drilling right off of the road where our new deposit is found. So, it's called a Blueberry contact zone. So, we're we're in an area that has exceptional infrastructure. And then one of the the things that really differentiates us is that we're looking at a direct shipping ore model. So, shipping a product out without having to mill it, without having a tailings facility. And what allows us the opportunity to do that is that there's a deep water shipping port just 40 kilometers down that road I was I was mentioning. So we've got the infrastructure in place. We've got this exceptional opportunity and our deposit supports it. Um so that that's where Scotty sits right now. Can you guide us through your main portfolio of projects and highlight the progress made so far, next steps for them as well? And also if you could provide a little more background on the golden triangle and its history as a gold producing region as well that would be great. Okay. So you know the Scotty portfolio of projects all our projects are located in the Stewart area which is the the mining camp in the area. It's road accessible from the rest of British Columbia there. Starting at the kind of the most grassroots stage we would have our Cambria project which is a large land package. The big status on that is we're doing grassroots exploration. We're doing field sampling. we're out there mapping and doing geohysical surveys on that. And so that's a more of a poly metallic system that we're exploring for. So multiple commodities like you're looking at silver, copper, lead, zinc, that that's the what we're looking for on that project. The next most advanced one, which I would say is at like a an early drilling stage. So it was a pass producing mine. It's called the Georgia River project. Uh it's a classic quartz vein system. It's got super high-grade gold. you know, there's a non-compliant resource of 200,000 ounces at 20 grams a ton on that. And so, we've drilled that for a few seasons, and the next the next round of exploration on that would be further drilling on that and trying to expand the and and get a compliant resource out of that project. But really, our biggest our biggest project is what we call our Scotty Goldmine project. And that's where 90% 95% of all our exploration dollars go into these days. And that's what we've been really leaning on over the last few years. And that project has advanced very rapidly over the last three years. And now we're turning a corner and we're now looking outwards and going, you know, is this going to be a producer? And we're making that transition now to say like how do we get there? What does that look like in terms of exploration work? Um we are right now we've got four drills at site turning. Uh so we're drilling 25 to 30,000 meters this year. We're permitted for a bulk sample. So we've done our first blast on that bulk sample. We're going to do a second. Just for context, the size of the bulk sample is about 10,000 tons. And we're hoping to generate, you know, in the order of 3,000 tons of mineralized ore from that. And then, you know, we're planning to operate it just as we would a DSO project. So, a direct shipping ore, we're going to ship that that mineralized rock down to the port and Stewart and try to ship it out from there and capitalize on that. Um, we've started baseline environmental. So, looking ahead to like what is it going to take to be permitted in the area? We are going to have to advance on that front and one of the ways to do that is do the environmental studies to understand the impact on the on the nature in the area and that that informs the permitting process with the government. So that's been initiated. That's a minimum of two years in environmental work before you can get a a permit amendment. And then the other thing is we're looking at the economics and the engineering of actually developing this project. So that's going to form the base of a of a PA, a preliminary economic assessment and that'll be due out in Octoberish this year. We'll have the news release out for that and then the final product from that will be out in December. So the engineering, the economics are we're right in the middle of that this season. Fantastic. And any background you could provide on the Golden Triangle as a historic gold mining district. And you you mentioned uh the the requirements to get a permit there. What is your relationship like with the the local government and community? Yeah, the Golden Triangle has been a like worldclass bite to to find and exploit u mineral deposits in the area uh for over a hundred years. So, right, I mean you have Es Creek which was one of the big mining staking rushes uh in in its day. It was one of the highest it at the time it was the highest grade producing mine in the world. Um, and now you've got the other side of that, which is KSM, uh, Seab Bridges Deposit, which is the world's largest undeveloped gold deposit, which is, I don't know what the number is. It's over 90 million ounces of gold in in the project now. It's just unfathomable, really large. Um, so you've got this area that has worldass grade and worldclass size. And these aren't even all the same deposits. U in terms of geological models. You've got one that's copper pryer. You've got another BMS. You know, you've got epiothermal gold systems like the Bruce Jack mine, which is one of the highest grade uh producing mines, underground mines. And then you've got Scotty underground uh intrusion related gold. So, you've got all these worldclass deposits of varying different styles. It's just a very fruitful area to look for geology. Um in terms of permitting and the First Nations and our local partners there. So, you know, it's an area that things get done. Like, you've got a lot of new projects going on. You've got a lot of advancement. You've got a lot of people spending a lot of money pushing things along. You've got two big First Nations in the area would be the Talllan and the Nishka nation. We are south of the Tallan. And so, we're in in in the Nishka territory. And that's that's who our main partners are. We're about 10 to 15% of our workforce has been with the Nishka over the last few years and a great relationship with them. So, we're in the process of formalizing that uh walking towards having like an IBA agreement in place so that when we go to that permitting stage that everybody knows what their stake is. Fantastic. Well, what is the company's current cash position? How do you plan to put that cash to work? What does your debt situation look like? And how will you raise more capital when needed in the future? So, current cash position is probably in the order of 12 to$13 million in the bank right now. We are in the middle of closing various tranches of a financing. So, we've basically filled our our $16.8 million financing that's been underway. Um, we are spending money right now as we're drilling. This is the busiest part of our season. So, like I said, we have four drills turning. So, it's kind of in flux there, but I think uh the last time I spoke with the CFO, we were about 12 million in the bank. And so, that'll run us through well into the fall uh into early winter with that. And then we're hoping for some proceeds from the bulk sample as well to generate some revenue from that. Um when we look forward, sorry, on the debt side, we have no debt. We we're fully paid for. All our land is paid for. Um we have a 2% royalty with Franco Nevada that they put on a couple years ago or a year and a half ago and and gave us that in exchange for equity and some cash. Um we have just closed a deal with Ocean Partners, which is a metal trading operation. um they they put in 8.4 of the $16.8 million that we were just closing. And in addition to that, they've provided us a construction and cost overrun facility uh worth $25 uh million US. Um but that's for the last mile of the mine production or mine construction. So like we're we're we're not opening that that package up yet. That's for like cost overruns when the mine gets built. And so that'll be post pea when we look at what's the next funding solution to go as we advance the project. I mean we won't be doing any funding until we're well past the pea stage. So we'll be able to value our our ounces in the ground. And so the next the next uh tranches of funding probably look a bit of a combination between equity um debt maybe traditional debt or a convertible and then maybe an additional royalty or a stream on top of it to get us into that construction level financing package. Well, what are the main catalysts and upcoming news flow that you would like to highlight that shareholders of Scotty Resources can look forward to for the remainder of this year and into 2026? So, the obvious one is that we're drilling a lot right now. So, 25 to 30,000 meters. So, we've got drill results going to be starting to come out here very shortly. We started drilling at the start of July. So, we're just about to be getting our assay back and then be able to release those out. So, we'll have a strong news flow of drill results starting in the coming weeks and then all the way through the through the fall into the early winter. So, that'll be the first one. The next one will be the the results from our bulk sample. So, that's in progress. We've done our first blast. We're prepping up for the second blast and then we're hoping to ship that out and looking for a renumeration in October, November this year. So that bulk sample will be a big confidence boost for us and showing that this DSO project uh concept works and that could show the valuation associated with it. The biggest news coming out for us will be in the October realm where we have our pea coming out which will be the first opportunity we've had to really show the high the value of the gold in the ground and the margin associated with that. So because we don't have all these these large initial capital costs associated with building a road, you don't have to put the the you know the p the port in, you don't have to power lines like a lot of it is already built. You don't have to build a mill or a tailings facility. The capital cost goes way down and so that pushes up on your NPV um dramatically and so we're really excited to show that. Excellent. Well, I'm going to put a link in the description below to the Scotty Resources website as well as social media so people can follow along with the company. Brad and Thomas, this has been a fantastic conversation. Thank you so much for coming on the show. Thanks, Jesse. 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 to date with the latest episodes.