You're (probably) Buying the Wrong Junior Mining Stocks
Summary
Top Pick: The guest pitches Royal Gold (RGLD) as his highest-conviction idea, citing low risk, diversification, and attractive valuation with potential upside even after recent gains.
Royalty Companies: Emphasis on precious metals royalty/streaming models for superior risk-adjusted returns, predictable cash flows, and financing flexibility versus traditional miners.
Commodity Preferences: Favors cheap commodities, highlighting Nickel and Potash where supply/demand dynamics and capital discipline create better value today.
Jurisdiction: West Africa framed as attractive for development certainty, faster permitting, and higher odds of on-time, on-budget builds despite political risks.
Project Evaluation: Skeptical of PEA/PFS headline NPVs; focuses on conservative price decks, discount rates, after-tax figures, and especially payback period for financing viability.
Financing Lens: Shorter payback, higher grades, and favorable strip-adjusted grades improve project financeability; royalty/streaming pre-funding can bridge early studies.
Risk Management: Notes frequent capex overruns and schedule slippage in developers; prefers large, liquid names for main portfolio and sizes speculative bets small.
Transcript
Today on resource talks, we're talking about advanced stage junior mining companies and specifically the ones who have an economic study of sorts such as for example a PA which I think a lot of us look at and think of as an absolute valuation tool. But in reality, at least in my brief experience, most of the times it's a a bit more of a fantasy than anything else. So yeah, hopefully we'll get to see a couple of examples. Um talk about a couple of uh expensive and a couple of potentially cheap examples as well. But luckily for you though, I'm not going to be doing much of the talking. Instead, I've invited someone else to do it. And it's um it's a monkey, I guess. Not really. It doesn't look like a monkey. It's special kind of monkey. Maybe it's a mining stock monkey. So it's uh time for me to shut up already. And Jordan, I'll let you do the talking. But first of all, thank you for being here. >> Hey, thanks. I'm happy to be here, Antonio. The pleasure is mine. Uh or hopefully will be mine because it's the first time you and I are are are chatting and uh at a certain point maybe in the future we're going to have to talk about the name that you've chosen there. Uh but this actually might be a good opportunity to start off uh with one of my favorite more annoying questions than usual. But you you so you write a a paid um a paid research platform where you talk about individual companies and and provide analysis and so on. Um, why though? If you like if your picss work, why not just make money off of them? >> Yeah. Um, that's a that's a perfectly fair question. So, if I can uh step back um since since graduating high school, I graduated in 2006, so it's been uh what is that 20 20 years ago now. Um I've been studying mining stocks, but that was always as a part-time thing. Like I I always had my own businesses. I I was never an employee. I had a online retail business. Ended up of all things uh doing like travel videos uh and grew grew a channel to be the the very biggest uh Mexico travel vlogger channel ever. Um, but yeah, so I I had a successful business, but I was getting married and we were going to have kids and I I thought it'd be difficult to travel with kids and also I never wanted to have my kids on on the video. I I sometimes felt like um parents would exploit their children like that and I I didn't want to do that. Uh so I was I was thinking, you know, what what can I do? I said, "Okay, well, I know how to make videos and I know a lot about mining stocks because I've been doing it for a long time." So, uh, I I made lots of mistakes, uh, when I started investing and basically spent my first 10 years losing money, uh, making all the mistakes that that I see, uh, beginner investors in the space making today. So, I thought, you know what, I I think I have a lot of stuff that I could teach people. And I was thinking, okay, well well, I'm giving up if I if I start doing that, I'm giving up a six-figure income from this other uh travel channel. And I that that income is going to collapse and it's going to turn into nothing. So So what can I do? And I I thought, well, perhaps maybe a little bit of YouTube ad revenue, maybe I'll take on some sponsorships. Did a couple of those. Uh ended up deciding, hey, I don't want anything to do with sponsorships. I just want to do 100% independent research. uh for my uh research service and uh then yeah the the third leg of that was going to be my research service and initially that was that was targeted towards retail investors like those that I I wanted to help avoid all the mistakes that I made. Uh over over the time uh since I started though that has more so uh moved from from retail to having uh quite a few professional money managers and and such um following my work. So now it's leaning more into institutional stuff. But yeah, I I mean I I was given up a a six-figure income and I I wanted something else to to replace that. And uh right now the research service is my main source of income and I I hope to eventually transition that into my investments being my main source of income. >> Yeah, that's a fair answer. Uh and and I think it's also important when it comes down to these things to talk about kind of incentive. Uh is what is the case for you? Like do you do you eat your own cooking? Is is is your money or most of your money invested in the mining space or is it what what portion of your portfolio would mining stocks be? >> It's practically all of it. >> Yeah. Yeah. It's it's rare you see that. I mean, same. Um and and I mean, yeah, again, it's rare that you see all that, especially when it comes down to mining, although I think you do like in general bigger companies than what I typically what I typically um invest or speculate in myself. What what is the portfolio breakdown for you right now in terms of u by metal maybe like what's gold, what's silver, what's copper. >> Uh well, mo a majority of it is precious metals. So, gold and silver. I don't want it to be though. Um like I wanted it to be back when gold was $2,000 an ounce and silver was 25 bucks. But now that silver is whatever it is, 80, 90, 100, I can't even keep track anymore. And gold is 5,000. I'm I'm slowly working my way out of that and trying to reduce the amount of precious metals in the portfolio. Uh I I have some copper exposure. I have some diversified metals exposure like um for example nickel, pot ash, uh lithium and um I I have a a copper explorer, some copper royalties, and yeah, what what else is in there? Um and then some some critical minerals as well. H you typically approach it top down or or bottom up because you said you don't want as much gold exposure, but is that just because you think this the stocks that you do own are kind of getting overvalued at this point or is it more like more of a macro call? >> Uh it's that I like to buy commodities that are cheap because when commodities are cheap there's lower risk. Uh, and so in regards to whether it's top up or bottom down, it's almost all looking at the price to value. But I try to go to specific commodities that I think are cheap at that point in time. So when when a commodity is cheap, uh, users of that commodity, they start to use more of it uh, in their production. For example, like let's say nickel. Right now nickel's cheap. So um people who use nickel in production well then they typically start using more of that uh when it's cheap and when it gets expensive they start using less of it. And um then the when it comes to the supply side the producers tend to produce less. They don't build new mines. They don't expand mines uh when the prices are low. Um but when the prices are high they do. So when the prices are low, eventually it results in in less supply helping to drive the price up. So you have both the demand and the supply side working for you when the commodity price is cheap. And they're typically both working against you when the commodity price goes up. And uh me wanting to reduce my exposure to precious metals is not necessarily because I think they're overvalued. My valuation models if using spot say they they're still a bit undervalued. However, when the prices are higher, you have more risk of the pro commodity price decreasing substantially. Um, and I I think there's just too much risk in my portfolio there. Uh, so I want to lower the risk and uh increase it in other commodities where I think it's a better value right now. For example, pot ash or nickel. >> Yeah, I do want to know more about that. But people listening should also want to know more about Terara Hutton, who doesn't only make the invisible investable, but they've made this video free of YouTube ads by sponsoring it. Terra Hutton is built for the people who are tired of going through boring PowerPoint decks and geological jargon when they're analyzing mining companies. It's a digital platform where the data, the story, and the context sit together so mining investors can use visuals to understand the why without needing a geology degree or a week off work. And if you're on the company side, it's a great way to present your project like a serious operator with everything investors keep asking for in one place. Contact them at terrauden.io. Yeah. Um that's a it's a fair point especially on nickel. That's something that we might end up touching upon as well because I think and again I kind of want to make this conversation about um junior mining companies that do have a at least some sort of a a resource or an economic study and a lot of the times you see those um you know being undervalued at least in my opinion or not. Again that's what we'll get to later on. What what is the portfolio breakdown by by segment? Is it because again I said I I think you mostly like kind of the bigger companies. I know you like royalty companies but so if you break it down producers, developers, explorers, and royalties, what's that breakdown? >> It's not necessarily that I like the bigger companies, but bigger companies are a majority of my portfolio largely because my clientele demands that liquidity. M >> uh like there there's there's a lot of money that follows my work and I I need stocks to be extremely liquid uh to to put them in my um main portfolio. >> But yeah, in terms of the breakdown though, uh my my preferred uh investment is typically royalties, prospect generators, um royalty generators, th those kinds of companies. some quality producers. Uh a lot of times I'm looking at uh junior or mid-tier producers who have growth coming and um to to a lesser extent exploration u and I have to be highly confident in an exploration project um because it's it's just not my expertise. So it I need to be extremely confident to invest in an exploration company. Uh and I I have to like the management and like everything about it, like the other investors in it and uh see that it has lots of potential and uh hopefully um things that protect my downside. >> But but yeah, that exploration would kind of be at the bottom of what I'm looking at. Well, you said you used to be a travel vlogger and um most of the exploration companies don't do much else besides travel. Like that's the only thing they do. That's the that's their business model as well. Uh it's a bit tongue and cheek, but but it um but but but there's also a little bit of truth to that. And and you're probably better served. I think you're um you're almost a decade older than me, but you look the same age. So I think people in junior mining or like on the exploration side, we age in dog years or we definitely age quicker than you have. Um but I actually want to focus again specifically on the the developer segment because of um you wrote something about that recently and that kind of piqu my interest. Uh with how much gold has run up, it seems like there might be valuation gaps between the real value of the of the underlying asset and the value shown on on the PA both on the upside and the downside. So maybe you can talk to me specifically about that when when a PA or or even another um economic study might be a PFS even or FS. When when that first crosses your desk, what's kind of the first first pass look? What does that look like for you? What are you are you looking at the MPV? And when you look at those numbers, what are you hoping to see there? >> I Well, first I'm I'm probably not even going to look at it unless I already like other things about the company. like I I already like the management team for example >> because if if you have a bad management team uh it doesn't really matter the results of the pea or or how good it is. So, um, yeah, like for example, B2 Gold put out a a PA on their Antelopee project in Namibia, which is, uh, next to their OICO mine, and they made a construction decision based on a PA, but it's that that's a high-quality mindbuilding team who has a lot of experience building mines, and and like that's the basically the only time I would ever trust that. And um when it comes to looking at a I would I would much prefer a prefeasibility study or a feasibility study because there's a lot more information that goes into that and there's a lot more uh a lot more engineering work and uh studies and basically a lot more money that's put into that. Um so those are those are much better studies typically than a pea. But I mean, I'm I'm the the some of the first things are are the numbers after tax because a lot of times they like to put it pre-tax and uh that that'd be great if we didn't have to pay the tax, but but that's not the reality. And what kind of discount rate are they using? What kind of what kind of assumptions are they using? Um commodity price assumptions. uh what kind of what's their cut off braid, things like that. Um but yeah, th those are some of the places that I start. But typically typically I'm looking at ones from a quality management team. And if a quality management team is putting it out, then it's it's much more trustworthy than than one that's from an unknown team. for example, >> finding quality management teams um at that stage of the market or at least once with proven track records that have done it before is hard. Um you don't see that too often. Um with the discount rate that you mentioned when it's an MPV5 or an MPV8 for for a large project like a copper project, typically you'd see an MPV5 for like a gold project. Is that what you just take and kind of run with or would you like to see it, you know, go above 10 12, especially given the the interest rate environment that we're in right now? >> Yeah. I mean, if you're using their cost of capital as as the discounted figure, well, then you're probably going to be using something more like an NPV 15. Uh, and which is which is way off from what an NPV5 would look like. And um also the MPV starts from the start of construction. So if it's if it's four years or something until construction starts, then you that would need to be discounted a lot further. But yeah, I think it's it's typically fantasy. Uh, usually the the NPV is fantasy, the capex is fantasy, and it there's there's very few cases where I I trust the numbers from a a study like that. And I I think something else that's important to look at is who who's who did the study? What's their reputation like? do and do they have experience um working in that area and have they have they done studies for other major companies in that same area? So are they familiar with the cost of everything? the uh what it what it's like to get electricity to site. How much does electricity cost? What are what are all the input costs? what are the how much you know all the costs that that go into it and costs that are also specific to that that country or that particular region within a country and then um I also want to see who signed off on that study as well and and what's what's their history and what's their experience. >> Do you have like a nice naughty list of mining consultants who do PAS and PFS's? Um, no. I I don't I don't know enough I I don't know enough people in the industry and I have to do research for every single one of them that I look at. >> And then you look at the QP as well. So you look at who signed off on it. Um, sometimes it would be, you know, someone who's the CEO for example. Is that is that a red flag for you? I've seen some discussion on that online as well. Like um, yeah, would it be a red flag if the CEO is also the QP? on on a major piece of dues like uh P or like a PA or a PFS or something like that. >> Yeah. >> Yeah. >> Yeah, that makes sense. >> Is that even allowed? Is that even legal? >> I Well, I I don't know about a PFS, but I've seen it on PAS. Um I I so I would I would assume so. Um or Well, definitely is on on um exploration companies, which is again where I spend most of my time. Uh you also mentioned you look at the price assumption. So that's an interesting one for me because gold was stuck in a range for a couple of years where everybody kind of knew what's acceptable and what's not acceptable for a PA, but then it's broken out massively now. So what is do do you discount the price to to spot or what would be a good price to run an economic study at right now? I I would like to see a a series of of amounts on that. And something when when people talk about an NPV, they often talk about as if the NPV is just one number. But an NPV isn't one number. An NPV is a whole series of probabilities or like at at different commodity prices different things go wrong. Uh there's there's lots of things that could change a potential NPV. You could even possibly increase it with with expanded reserves and and such like things like that. So what what prices would I like to see on that or what metals prices if we're talking about gold? I would I would like to see that at a very conservative case, maybe around 50% of the current gold price, let's call it $2,500 gold, and then um perhaps all the way up to spot and then various various numbers in between there. >> Mhm. >> Yeah. And would that be based on on other stuff in terms of like the the the type of asset you're looking into or or management's experience? Like what would you be would you be willing to make an assumption of spot for a specific situation or do you kind of use all the same inputs for all the same companies uh for for for different companies? when it when it comes to that um I I don't think I would separate that by company because the the reason the reason why I want to see a very conservative scenario and then also in a in a bull market like we're in right now maybe one at spot and then various places in between is that I have no idea where the commodity price is going to be in the future and and if we trust um let's say a pea or a feasibility study that runs it at $4,000 gold. $4,000 may look very reasonable today in an environment where the gold price is north of $5,000. But we got to remember that the gold price hasn't been here for very long. And uh let's say I mean it's it's a real possibility that after they get that mine built uh assuming it gets built that the gold price falls to 3200. I mean and then and then what if certainly the economics aren't going to be anywhere near what it was at $4,000 gold. So I I would like to know what kind of downside I have in a in case the commodity price falls in the future which and commodity prices go up and down. So, of course, it's going to fall at some point in the future. We just don't know when or how low. >> Well, and in that case, you're well, so so your input on on the NPV can fall without your capex and your opex falling. Like if oil went up while gold's going down. Um what what do you do in that situation? Right. And that's something you've actually you've talked about the the gap between what a PA says mine's going to cost to build and what it actually costs to build that mine in the current environment. How wide is that gap typically? And and like what if someone maybe can talk to me about some of the line items that are most commonly understated or or misused in these documents? >> Uh well, in terms of like what what kind of margin of error, you'll you'll see them saying, well, there's a 30% margin of error in this PA or something like that. And I think I think 30% is is way too low. Uh I mean a lot of times there's even a much bigger margin of error for a feasibility study that than that. And uh it can even be a quality company that that's building it and they just totally um dropped the ball on understanding how costly it was truly going to be to build the mine. Like I mean I I mentioned B2 Gold as an example earlier, but we'll just go back to them because that was a case where I said I I trust them to to build it on a on a pea because they think they can. Um, so I I trust that they've done the work there. But I mean, you go back to the same company and you have an example where they bought Sabina Gold and Silver uh to build that goose mine up uh close to the Arctic Circle in Canada. And even though they were experienced mine builders and they had um built near the Arctic before in Russia, they ended up going way over budget and have had to revise their costs higher multiple times on that. And I mean the I forget what the exact numbers were, but I mean Sabina's feas feasibility study said something like man it was it ended up Sabina's feasibility study just from a few years ago ended up being something like the capex was 50% of what it actually turned out to be. So I mean that was a that was a 100% margin of error and that was a feasibility study which has much more extensive technical work than a pea. So uh then like another recent mine build in in Canada was I am gold's cot mine uh that ended up being 200% over budget. It was they they spent three times more than what the feasibility study said to build that mine. So, I mean, it's not even close. There's so many examples like that. >> Most of the times it takes longer and it costs more to build. That's kind of my my assumption that I work on. Um, which ultimately is going to affect your IRRa, right? So, so that's really what we're after here is that so do you have like a quick and dirty rule where you're like, oh, if I see a 40% IRRa, I'm discounting that by whatever 10 percentage points or something like that. I don't have a quick and dirty rule, but I don't take it at face value either. >> And I I consider the the most the single most important metric to be the payback period. >> Would you discount that because that that also depends on again the size of the capex and OPEX in that situation? >> Yeah, I absolutely do not take it at face value for sure unless it's coming from a very high quality company. Like if it's G mining for example and they put out a feasibility study and they say it's a payback period of 2.2 years. I trust it to be 2.2 years but that's a very rare scenario. >> Yeah. >> Yeah. U is there a number you look for as well? Like would you I know a lot of people like seeing a payback under two years which is rare but would you would you be interested in a mine that takes you know seven or eight years to be paid back? uh even at the company's own assumption >> certainly not in precious metals um if if we're talking pod ash perhaps because I mean these are these are typically reserve lives or resource lives of hundreds of years or a thousand years or something. So, I mean, uh, a 7-year payback period in with a mine where you're going to have cash flow for a thousand years is a lot more attractive than like a seven-year payback period with gold where you might have guaranteed cash flow for 10 years. >> Yeah. Uh um also copper you can have uh those are typically huge mines. So I'm more okay with a longer payback period there. Seven years is tough. Even even there, even even with copper, I I would love to see it under five years, but I mean, >> even then, there's times when it takes four years to build the copper mine, and you're not going to have a payback period of under five years when it when it takes four years of construction to get it built. >> Yeah. So, so again going back to that the same point like it costs more and takes longer than it typically um would or than it typically gets pointed out in these documents which reminds me that a PA and someone else told me that in in a previous interview but a PA is mostly marketing document than it is anything else it's most of the times so it's trying to market to either trying to market to attract a buyer so essentially a takeover or just marketing to retail uh for for people who want to raise capital and and you know do infill drilling and whatnot. Um, how do you how do you recognize that? Again, I know that's something you've talked about recently, but how do you recognize a good PA where the company actually intends to build it versus one that that it is just really meant to attract investors or or a potential takeover? >> Yeah, I it goes back to management team to start and also who who did it. Like for example, I I looked at a PA in in West Africa recently and they they had it done by a quality company and it was it was signed off by on it was signed off on by someone who was highly qualified in the industry and had a a big reputation to risk. So, um, that that's a case where I think they they did that PA not because they intend to build it, but because they want to sell it and they want to have potential buyers to be able to trust the work that went into that PA. >> Mhm. Is is it just track record that you typically look for when you go, you know, scroll all the way down, see who the QP is, and then you go and look them up and see what other stuff they've signed up signed off on before, or how do you how do you determine, you know, a credible QP? Well, I I mean this this recent one, he I I look him up and he was the head geologist for uh Glen Core at I forget what the mine was called, but it was a huge uh copper cobalt company or a copper cobalt mine in the DRC. And I mean, if you're a chief geologist at a major mine for Glenor, clearly clearly you're qualified. And then he was the chief geologist at um a it was a similar type deposit uh in the same country in West Africa >> um for for another major company. Uh and then looking at his qualifications, he was uh a fellow at the Australasian Institute of Mining or I forget the exact name of that but and then I I looked up okay what is what does it take to become a fellow and typically you need like 15 years of experience and you have to be highly vetted by the other fellows at that uh to be uh included or to be uh given that title of fellow and um then I'm looking at Okay. Well, how important is this institute, this mining institute? And okay, it's one of the most important ones in the world. So, I mean th those data points tell me, okay, this guy really knows his stuff. >> So, you keep pulling on the thread. That's interesting. I thought just kind of from my experience in junior mining. Um, who's a good CEO is whoever buys you the fanciest dinner. Um, but jokes aside, I think you might have been talking about Komodo in the DRC. U maybe when you talk about Glinkor or um or Mutanda because they own two. >> Yeah, it was that it was that one. >> Mutanda. Yeah. >> Yeah. >> Um yeah, huge huge point. Yeah. So that's a that that is um um Yeah, that's a good point. That's a good point on how you do research on QPS. Um do you now talking about jurisdiction, do you discount for jurisdictions either in terms of operational risk or just permitting risk like in Canada might take 25 years in the DRC the asset might be taken away. Uh so yeah, do do you discount for for jurisdictional risk? >> For sure. Um but jurisdictional risk is a lot more than what are the chances something goes wrong or uh what are the chances that this gets um taken away by the government or they effectively confiscate the mine by raising taxes over and over and things like that. Now, for example, Canada can Canada's great in terms of fiscal stability, in terms of having a straightforward permitting regime. It's straightforward, but it takes a long time. So like there in Canada is a lot of time good for there's a generally a lot of qualified minor but there can be extremely remote projects uh that maybe they don't have qualified miners in that area but in in certain in certain areas of Canada you have qualified miners and then uh when there's when there's a lot of mining around uh you typically have qualified suppliers as well qualified contract miners and um So there's there's that part of jurisdictional risk, but then you also have to look at jurisdictional risk of, hey, if if I discover a good deposit here, how long is it going to take me to put into production and will I be able to? Um, and if you discover uh a quality deposit in, let's say, Kavois in West Africa, it's highly probable that you'll be able to put that into production. Um, and then whereas if you discover a high quality deposit in Canada or Alaska, it's there's a big question mark of whether it will ever you'll ever be able to put it into production. And then so if the answer is yes or probably then how long will it take? And if you if you find a high quality deposit in Canada from first drill hole to the time they pour first gold if it's a if it's a gold mine that we're talking about you're probably in most cases looking at at least 20 years. Mhm. >> Uh in West Africa, if you have the same discovery in Kavvoir from first drill hole to pouring first gold, you can probably do it in eight years. >> So I mean in in terms of your like the net present value of those early drill holes, they're way higher in a place where you can where you can actually put that mine into production faster. Now, how you determine a net present value on a couple of drill holes, I mean, practically impossible, but I mean, when you're when you're comparing one drill hole to another drill hole, that that's something to consider. And and that's one thing I although West Africa certainly has its risks for many reasons like um the some the governments can be very unstable. There can be lots of coups and changes of governments and uh a new military dictatorship taking over and and things like that. And and then there's the problem you often come across where you when the company goes to build a mine, they had a fiscal stability agreement. they were promised a certain level of taxes and royalties for a certain number of years and then um the government needs money or the new government comes in and wants to raise more money and then uh they basically tell them, "Okay, we're we're shutting you down until you meet our demands and uh we're we're going to take a higher royalty off the top end. You're going to give us a bigger percentage of this project. Uh you're going to pay us for uh tax disputes." In other words, you're going to um pay us an extortion fee to allow you to keep operating things like that. So, so there's you have those risks in West Africa, but then West Africa is is way better in the sense that when you go from finding the deposit to taking it into production, it's a heck of a lot easier to permit. Uh it's way more certain that it will get permitted. The permitting times are way lower. Uh, and then also when it comes to getting the mine built, there's there's lots of qualified suppliers there. And um, when when building mines in West Africa, those are much more likely in my experience to come in on time and on budget than many other places in the world. >> Mhm. >> So there's there's a lot of advantages to that. And when you can put a go from first discovery to production in 7 to n years, you can earn money by building a mine and earning money from that mine and then reinvesting it into more exploration and then finding a new deposit, putting that one into production and you can recycle that capital a lot faster which can help the companies grow much faster. So that's something to consider too. >> By the way, I do want to talk about financing these things as well. Um, but would do you think that therefore based on what you just told me, African assets uh at the PA or PFS stage are maybe undervalued relative to their Canadian peers just because of kind of the investor base that buys stuff on the TSX and TSXV or even well definitely in in um in the US most of it is is Western focus, right? it it's Canada and the US themselves and Africa is just so far away and so foreign scary, right? And so maybe therefore people would would discount those assets more. Is that a thing that you're experiencing kind of running your own numbers? I I don't know if I can generalize to say that yes, that that's a thing for sure. But I I can say that a lot of times I I trust uh a feasibility study or a PA more in West Africa than I do in in let's say Canada because permitting is much more certain. permitting is typically fast and also it's much more likely to come in being built on time and on budget. >> Yeah. And or or being built period. Um sometimes again >> and that that's what that's why I mentioned the certainty of permitting because when when you don't know if it's going to get permitted in Canada or in Alaska or wherever else in in what's typically referred to as a tier one country or something like that. Well, then I mean that that's that's a huge risk and a huge question mark. >> Yeah. Long as you didn't call it Pebble, you should call it something else like um good for the environment, gold corp or something like that and then they'll get permitted immediately. >> What do you think is financable though? Or how do you even determine what is financable? Because that's another important um piece of the puzzle like whether something is going to build is directly related to is the company going to have enough money to build it. So whether it's debt and equity or or just debt or or royalty or a stream or whatever when you look at a preliminary economic assessment or or anything else like that or PFS what do you want to see that you say like okay that is actually financable. >> Um well low low payback period is is really important. the lowest the lower the number the better because when the when the payback period is low the lender is much more likely to get paid back uh or and there and there's less time that something could go wrong or something could happen. So uh we were talking about Kotvoir earlier. We we'll just keep using that as an example. And now if you're trying to build a mine there that has a payback period of 1 and a2 years that that's probably much more financable than a project that has a payback period of four years because while things are pretty stable in Kotivvoir today will they be stable in 3 years and um that that the lender of course their their number one priority is getting paid back and then like in terms what's financable. Typically, anything with less than a feasibility study is not going to get financed to at least not to any meaningful degree. like you can get some if you have a PA, yeah, you can you can raise some equity or you can raise some money via equity to advance towards a prefeasibility study or maybe you can get uh5 to$20 million from one of the royalty or streaming companies to help you advance to those those next levels. And then in exchange that royalty or streaming company is is getting a small royalty on the project plus the rights to fund it or like first first right of refusal. Uh so they get f first stab at it if that that gets to a point where it's it's going to be funded and be turned into a development mine. But uh I also want to see high grade uh lower strip ratios uh when you're looking at the strip adjusted grade. That's important too. So um when you like for example um a project can have really high grades. So let's just say it's it's a gold project with 10 g per ton gold, but it has a strip ratio of 10 to one, meaning they have to strip away 10 tons of waste just to get one ton of ore. So to get the strip, so that strip adjusted grade, instead of it being 10 g per ton, you divide it by the strip ratio and then now it's only one gram per ton. >> Mhm. But I I like to see the strip adjusted grade be high. High grade is always good. >> High grade is always good. Um that's a that that's a quote for for the thumbnail. Uh but you're right and and especially the strip adjusted uh grade is an important thing that I think a lot of people would not really get to in the first place. Um but but maybe I should have picked this up from the point of should a project really be financable in the first place yet you know at a PA stage as a speculator you're looking at it and thinking about it is it financable? Nobody's going to finance it at that stage but you maybe you want to know whether it's it's potentially going to be financable if they do upgrade the resource and put it in a PFS. But but maybe a better question was to begin with was was should it be financable? Should it be viable? So is there a difference between a project that is that is viable by a major so a junior's you know discovered it and brought it developed it to a PA stage um is isn't that the outlook that you or the outcome that you should be looking out for um someone buying in >> yeah I I mean I think that's it's it's not it's not a deal breakaker um if I if I don't think it's a an immediate acquisition candidate um by a much larger company. But it certainly helps. It certainly helps when making a decision of whether to invest in a company if uh a bigger company has already taken an equity stake in the project. That's something you you see quite a bit. Um and and that's a that's a very good sign if that's the case. Um maybe maybe it's a case where it's a deposit that's very close to another mine that's already built and and maybe that other mine is depleting the reserves. Maybe they're they've already mined uh much of the high grade and that that company needs needs new ore to fill that plant. And I mean, if there's if there's a nearby mine like that, that's a huge acquisition target because I mean, the the economics change completely if you don't have to build a mill and build uh the processing facilities and and all that stuff and and you you already have uh the mill and everything nearby. >> Mhm. Yeah. Strategic is one of um one of promoter's favorite words out there, but what you're looking for is an asset that is actually strategic. Um that that that is a good point. Is it um is there a bigger discount to assets that you think are not viable? like an asset that is too big um to be built by or or an asset that is that big that it really limits the number of potential buyers where you're like, "Oh, this is only something that BHP or Rio could no longer but that that either of them could build. Uh therefore, there's, you know, less demand for this specific asset, so I'm going to apply a bigger discount." Is that something you go through as well? >> Yeah. And but absolutely everything applies to this. Like there there's all these pros and cons of every single company and ev every pro and con ch changes that that discount rate changes changes the math behind it. And there's there's no project that's ever going to be perfect and is going to check every single box or at least probably not. But when when you have 18 great things about it and then two challenges, I mean, that that's a lot better than something with 15 challenges and five great things. >> That's that that's a great way of putting that as well. um when you when you go through that, how how many of the PAS that you see on the market uh or or PFS's cuz you said you don't look at PAS that often, but how many of them do you think are just pure fantasy and you would discount by by at least 50%. How many of the MPVs out there are are overstated? >> Um >> just a rough number. Yeah. Kind of a like a maybe a you know a guess like in terms of percentages >> put out. So if we can separate it by the the peas that are put out by companies that are actually already operating minors versus the PAS put out by juniors. Uh I would say the the ones put out by operating minors those have a those have a much higher success rate. Those are going to be much more likely to be accurate uh or or more accurate. But th those put out by juniors I think the the number that are fantasy is close to 100%. >> Junior mining it can be like that. Um it is it is mostly like that actually. >> Do you apply um what what's what what's the what's the smallest discount that you you would want to see? Like would you ever look at a PFS or PA stage acid and go like oh that's something worth paying one times or one and a half times NPV for or do you always require a discount and if it is how big of a discount do you require? I for for a development company that has an asset that has like a PA or some other type of further advanced study like a PFS or a feasibility study. I'm never going to pay a premium for that. M >> I I don't feel like I have I I mean I know I don't I don't have I don't have the geologic knowledge to to know just how much exploration upside there is there. So yeah, maybe they maybe they put out a feasibility study. Let's let's say a junior puts out advances a project to a feasibility study and it's trading at one times NAV. I'm I'm not going to buy that even even if people say it has a lot of exploration upside because I that's not what I'm an expert in. So I I got to have a big discount to it because that that's not my expertise. >> Is it what is kind of the is there like a cut off point for you where you think like okay this is discounted you know it's8 NPV that's too much I'm not paying it or or do you go kind of case by case? Um, I mean 0.8 NPV uh would I I'd probably never going to buy that either. Um, now if if you have a a super highgrade highquality deposit, let's let's say you're talking about Dennis's Phoenix mine. This was rated by the the mining journal as the world's best development project of any commodity because it has it has the location close to other uranium mines. It's in Canada. It has extremely high grade. >> So something like that I might be willing to pay.5 uh like half of half of the net present value of that. Mhm. >> But that that would be probably probably my limit for for a developer. >> And that's again if everything else that we talked about today already checks out. Um that's that's kind of exactly where I was going with this where I'm like I I think a lot of people, me included, um look at these things and and kind of look at it. Oh, you know that NPV is so high and I'm only, you know, I'm only buying it for that much. But most of the times that's that's even overpaying when you go and discount for everything that we talked about today. And don't even get me started on people doing INC2 value where they're like, you know, there's 10 million ounces at 5,000 bucks that deposits worth all the money in the world. Therefore, that's not too much. Um, yeah, get Jordan, I think we we we've touched upon a lot of the topics that I wanted to go through here on the PA. Um, interesting to see how you look at it specifically because you come kind of from the mining side of things and not junior mining side of things, not the exploration side of things. Um, what am I forgetting to ask you here? What else is important when it comes down to looking at at PA stage or developer stage uh companies? you you've covered a lot of the important points but I I think there there should be a lot of focus on on management team there you should have a a lot of focus on who who else is investing has has a strategic taken a position has is there another mining company that has a 5 10 20% position in that if if there is that's a very good sign. Um some with the really good projects sometimes you even have a couple of those a couple of those strategics in there. Look at look at the other shareholders if if you're not an expert in this. Look at how many of the shareholders are institutional. Um look at look at who's been buying. Um now if you have all the bigname shareholders buying uh I mean that's a that's a very good sign if you have if you have huge uh shareholders like all several billionaires for example who have bought into this project and it has a strategic invested I mean that that's a pretty good sign that you're that you're on to something good and I would also urge listeners to look into the management game. How much stock do they own? How much they're getting paid? Is a stock that they own a lot more valuable? Like the the value of the stock that they own, is that a lot more valuable to them than their annual salary? >> Um do does the management team uh own royalties on it? uh ju just because they do that not that's not a deal breakaker but uh it can give you an idea of of where the incentives are there. So u I I would love to see a a management team that has a lot of the skin in game has um isn't isn't overly promotional. They need they need a certain amount of promotion, but I I want to see most of the money um most of the money that they raise going into the ground. And what else? You know, read read the read the quarterly reports, read the annual reports because you'll you'll find a lot of stuff in there. You'll you'll learn that the management team is the owner of the drill contractor that's drilling their project. So, the amount of shares they don't own doesn't matter. Their their salary doesn't matter. What what matters is that they're getting paid $5 million a year because they own the driller. >> Mhm. >> Something like that. And you'll you'll see there's lots of things that are required to be disclosed if you read those documents. And um you'll you'll find you'll find a lot of stuff like that. >> Yeah, very good point on incentives. Um specifically, does management personally own a royalty on the project? That's one of the very very very first things I ask when I when I speak to management. Um super underrated point, very important. Royalties are typically worth a lot a lot more than what their salaries, a lot more than what the person can afford to invest in their own companies. So they can skew incentives in the wrong direction. So, very very good point on that. Um, yeah, good. I'll be looking forward to having another conversation. Maybe next time we can talk about the actually the producing companies and how you value those because I know there's a lot of disagreement in that. Not as easy as just applying, you know, an EV to FCF ratio, not a PE ratio type of sector. So, that would be a good point for next interview. Um, what talk to me a little bit about um mining stockmonkey.com. If I if I go there now, what what can I do there? And what am I going to get if I uh end up subscribing? >> You basically can't do anything there. You can you can sign up for my research service. Uh but the the website the website is is very simple. But what what you get is you get someone who who follows a handful of companies extremely closely. I I I know the companies that I follow inside and out. I know. I try to know everything that I can about them. And this is what I do. This is what I do full-time. If you're looking for a service that follows 50 different companies, uh this isn't for you. Uh I I typically have a portfolio of 15 companies or less, usually less. Uh even even when I get above 10 companies, it's to follow them as closely as I want to and know everything about them that I can't that I possibly can as an outsider. um that that takes up a lot of my time. So, if if that sounds good to you and uh you want to know what I'm investing in with my own money, uh and and what I'm what I'm trying to find out before the market is like when I know these companies as well as I do, sometimes I'm able to find out stuff before the market figures it out. And if it's bad news, I try to get subscribers out of the stock before then or at least let them know about it. And if it's good news, I I try to get uh subscribers into the stock. And this is this is what I'm investing my own money in as well. But if that interests you, I'll uh have Antonio I'll leave a link in the description or maybe maybe the comments below as well, but the description for sure. And uh for anyone watching this, I'm offering 25% off for your first year, but this is limited to the first seven people who sign up. So se first seven subscribers get 25% off for the first year. So, you don't like um payback of seven years, but you do find meaning in it for seven subscribers. Um I like that. Uh is there is there a name or do you publicly talk about your the the companies that you that you invest in that you like sometimes? I know you used to on YouTube, but it's been a while since you since you've done that. So, do you publicly talk about that? >> Yeah. Yeah, I I do. I mean, when when there's an important alert or something, my my subscribers are going to get that first. And I don't share my whole portfolio and I I don't share my uh latest valu I h at least I haven't shared my latest valuation models publicly and I have these dynamic valuation models that change with spot prices that change quarterly with updates in the financials and any changes in the company. >> Um but >> well so then what what are some of the companies that you that you kind of have in that portfolio right now? I I understand it's very selective just about 15 names um mostly bigger names you said. So, what are some of the companies you liked right now? >> Uh, one, my my top pick right now of any any company, any commodity where I'm deploying most of my personal capital is Royal Gold. Now, this is this is one of the big three uh precious metals, royalty, and streaming companies. So, they're they're not they're not a small market cap by any means, but it's rare. Why why is it my favorite? because it's rare that I find a company that's this big, that's this low risk, and this undervalued. So, while it it might not have it it definitely doesn't have the most upside, it's by far the best riskreward play that I know of today. Um, and at at spot prices, even though even though it's run up quite a bit, I think it still has close to a double left in it before before getting into overvalued territory. And they're they're highly diversified. They have a great business model. The the biggest risk there is the gold price because they're they're heavily allocated to gold. But e even my my model says they're even undervalued at $3,500 gold. >> So that gives a certain margin of safety. >> What how's that for a question? What's the what's the smallest position that you have right now? And why is it the smallest? Is it by design or is it because you're adding to it or is there something where you're like not quite sure with? Well, so I have I have two I have two services that I offer. One I never advertise. That's the one I never advertise is my speculator service and that's with like explor some explorers uh developers prospect generators. It's a very small portfolio. I never talk about them publicly. Um there there's just not that much liquidity in these stocks >> and um so so yeah, I have I have some bets that are like 2% of my portfolio. And and why why is a bet 2% of my portfolio? If I if I like it, shouldn't I be willing to place a bigger bet? Well, for example, there there's a prospect generator that I like and they have they have a few different uh projects that they're advancing and they have a few different partnerships where they have major mining companies advancing projects and some of these projects look very very good. Um, and if one of them works out, it could be a 10x. The stock could 10x easily. But if they don't work out, the stock price is probably slowly going to grind lower over time as the company has to issue more shares to stay alive over the years. So if in a company like that, I don't want that being 10% of my portfolio because if it grinds slower over time, 10% or well, I mean, if it's 10% of my portfolio and it falls by 50%, that's a significant loss. But if it's 2% of my portfolio and it falls by 50% over the next 5 years that if I won't even notice it in my portfolio because it was a it was a small investment to begin with, but if things work out, it could easily 10x. So it could go from 2% to 20%. So and and that's that's a big enough winner that um I'm I'm comfortable taking that risk. But in in my core portfolio, in like my product that I call Mining Stock Monkey VIP, uh these are generally the more more liquid companies because to add a new position to the portfolio, I I typically want to see $5 million or more in daily trading liquidity. Uh but absolute minimum 1 million absolute minimum. But typically the smallest position I will take in that is 5% to start. But my smallest position today is B2 Gold because I just I recently sold half of that position. Um because I I thought they were going to have horrible 2026 guidance. I thought they were going to have problems with their mobile crusher at their new goose mine. I thought that they were going to have a production cliff at their Fakola mine in 2026. And I thought they were going to have a production cliff at their OIOT mine in 2026. And all of those came true. Um so I I reduced my position before that happened. H good and and and again next time we should do that we should talk about the producing companies and how you treat that when you know it's time to get out is an important topic as well. Uh but yeah Jordan thank you so much for sitting down with me today. It was a pleasure and hopefully speak to you again soon. >> Thanks for having me on Antonio. It was nice.
You're (probably) Buying the Wrong Junior Mining Stocks
Summary
Transcript
Today on resource talks, we're talking about advanced stage junior mining companies and specifically the ones who have an economic study of sorts such as for example a PA which I think a lot of us look at and think of as an absolute valuation tool. But in reality, at least in my brief experience, most of the times it's a a bit more of a fantasy than anything else. So yeah, hopefully we'll get to see a couple of examples. Um talk about a couple of uh expensive and a couple of potentially cheap examples as well. But luckily for you though, I'm not going to be doing much of the talking. Instead, I've invited someone else to do it. And it's um it's a monkey, I guess. Not really. It doesn't look like a monkey. It's special kind of monkey. Maybe it's a mining stock monkey. So it's uh time for me to shut up already. And Jordan, I'll let you do the talking. But first of all, thank you for being here. >> Hey, thanks. I'm happy to be here, Antonio. The pleasure is mine. Uh or hopefully will be mine because it's the first time you and I are are are chatting and uh at a certain point maybe in the future we're going to have to talk about the name that you've chosen there. Uh but this actually might be a good opportunity to start off uh with one of my favorite more annoying questions than usual. But you you so you write a a paid um a paid research platform where you talk about individual companies and and provide analysis and so on. Um, why though? If you like if your picss work, why not just make money off of them? >> Yeah. Um, that's a that's a perfectly fair question. So, if I can uh step back um since since graduating high school, I graduated in 2006, so it's been uh what is that 20 20 years ago now. Um I've been studying mining stocks, but that was always as a part-time thing. Like I I always had my own businesses. I I was never an employee. I had a online retail business. Ended up of all things uh doing like travel videos uh and grew grew a channel to be the the very biggest uh Mexico travel vlogger channel ever. Um, but yeah, so I I had a successful business, but I was getting married and we were going to have kids and I I thought it'd be difficult to travel with kids and also I never wanted to have my kids on on the video. I I sometimes felt like um parents would exploit their children like that and I I didn't want to do that. Uh so I was I was thinking, you know, what what can I do? I said, "Okay, well, I know how to make videos and I know a lot about mining stocks because I've been doing it for a long time." So, uh, I I made lots of mistakes, uh, when I started investing and basically spent my first 10 years losing money, uh, making all the mistakes that that I see, uh, beginner investors in the space making today. So, I thought, you know what, I I think I have a lot of stuff that I could teach people. And I was thinking, okay, well well, I'm giving up if I if I start doing that, I'm giving up a six-figure income from this other uh travel channel. And I that that income is going to collapse and it's going to turn into nothing. So So what can I do? And I I thought, well, perhaps maybe a little bit of YouTube ad revenue, maybe I'll take on some sponsorships. Did a couple of those. Uh ended up deciding, hey, I don't want anything to do with sponsorships. I just want to do 100% independent research. uh for my uh research service and uh then yeah the the third leg of that was going to be my research service and initially that was that was targeted towards retail investors like those that I I wanted to help avoid all the mistakes that I made. Uh over over the time uh since I started though that has more so uh moved from from retail to having uh quite a few professional money managers and and such um following my work. So now it's leaning more into institutional stuff. But yeah, I I mean I I was given up a a six-figure income and I I wanted something else to to replace that. And uh right now the research service is my main source of income and I I hope to eventually transition that into my investments being my main source of income. >> Yeah, that's a fair answer. Uh and and I think it's also important when it comes down to these things to talk about kind of incentive. Uh is what is the case for you? Like do you do you eat your own cooking? Is is is your money or most of your money invested in the mining space or is it what what portion of your portfolio would mining stocks be? >> It's practically all of it. >> Yeah. Yeah. It's it's rare you see that. I mean, same. Um and and I mean, yeah, again, it's rare that you see all that, especially when it comes down to mining, although I think you do like in general bigger companies than what I typically what I typically um invest or speculate in myself. What what is the portfolio breakdown for you right now in terms of u by metal maybe like what's gold, what's silver, what's copper. >> Uh well, mo a majority of it is precious metals. So, gold and silver. I don't want it to be though. Um like I wanted it to be back when gold was $2,000 an ounce and silver was 25 bucks. But now that silver is whatever it is, 80, 90, 100, I can't even keep track anymore. And gold is 5,000. I'm I'm slowly working my way out of that and trying to reduce the amount of precious metals in the portfolio. Uh I I have some copper exposure. I have some diversified metals exposure like um for example nickel, pot ash, uh lithium and um I I have a a copper explorer, some copper royalties, and yeah, what what else is in there? Um and then some some critical minerals as well. H you typically approach it top down or or bottom up because you said you don't want as much gold exposure, but is that just because you think this the stocks that you do own are kind of getting overvalued at this point or is it more like more of a macro call? >> Uh it's that I like to buy commodities that are cheap because when commodities are cheap there's lower risk. Uh, and so in regards to whether it's top up or bottom down, it's almost all looking at the price to value. But I try to go to specific commodities that I think are cheap at that point in time. So when when a commodity is cheap, uh, users of that commodity, they start to use more of it uh, in their production. For example, like let's say nickel. Right now nickel's cheap. So um people who use nickel in production well then they typically start using more of that uh when it's cheap and when it gets expensive they start using less of it. And um then the when it comes to the supply side the producers tend to produce less. They don't build new mines. They don't expand mines uh when the prices are low. Um but when the prices are high they do. So when the prices are low, eventually it results in in less supply helping to drive the price up. So you have both the demand and the supply side working for you when the commodity price is cheap. And they're typically both working against you when the commodity price goes up. And uh me wanting to reduce my exposure to precious metals is not necessarily because I think they're overvalued. My valuation models if using spot say they they're still a bit undervalued. However, when the prices are higher, you have more risk of the pro commodity price decreasing substantially. Um, and I I think there's just too much risk in my portfolio there. Uh, so I want to lower the risk and uh increase it in other commodities where I think it's a better value right now. For example, pot ash or nickel. >> Yeah, I do want to know more about that. But people listening should also want to know more about Terara Hutton, who doesn't only make the invisible investable, but they've made this video free of YouTube ads by sponsoring it. Terra Hutton is built for the people who are tired of going through boring PowerPoint decks and geological jargon when they're analyzing mining companies. It's a digital platform where the data, the story, and the context sit together so mining investors can use visuals to understand the why without needing a geology degree or a week off work. And if you're on the company side, it's a great way to present your project like a serious operator with everything investors keep asking for in one place. Contact them at terrauden.io. Yeah. Um that's a it's a fair point especially on nickel. That's something that we might end up touching upon as well because I think and again I kind of want to make this conversation about um junior mining companies that do have a at least some sort of a a resource or an economic study and a lot of the times you see those um you know being undervalued at least in my opinion or not. Again that's what we'll get to later on. What what is the portfolio breakdown by by segment? Is it because again I said I I think you mostly like kind of the bigger companies. I know you like royalty companies but so if you break it down producers, developers, explorers, and royalties, what's that breakdown? >> It's not necessarily that I like the bigger companies, but bigger companies are a majority of my portfolio largely because my clientele demands that liquidity. M >> uh like there there's there's a lot of money that follows my work and I I need stocks to be extremely liquid uh to to put them in my um main portfolio. >> But yeah, in terms of the breakdown though, uh my my preferred uh investment is typically royalties, prospect generators, um royalty generators, th those kinds of companies. some quality producers. Uh a lot of times I'm looking at uh junior or mid-tier producers who have growth coming and um to to a lesser extent exploration u and I have to be highly confident in an exploration project um because it's it's just not my expertise. So it I need to be extremely confident to invest in an exploration company. Uh and I I have to like the management and like everything about it, like the other investors in it and uh see that it has lots of potential and uh hopefully um things that protect my downside. >> But but yeah, that exploration would kind of be at the bottom of what I'm looking at. Well, you said you used to be a travel vlogger and um most of the exploration companies don't do much else besides travel. Like that's the only thing they do. That's the that's their business model as well. Uh it's a bit tongue and cheek, but but it um but but but there's also a little bit of truth to that. And and you're probably better served. I think you're um you're almost a decade older than me, but you look the same age. So I think people in junior mining or like on the exploration side, we age in dog years or we definitely age quicker than you have. Um but I actually want to focus again specifically on the the developer segment because of um you wrote something about that recently and that kind of piqu my interest. Uh with how much gold has run up, it seems like there might be valuation gaps between the real value of the of the underlying asset and the value shown on on the PA both on the upside and the downside. So maybe you can talk to me specifically about that when when a PA or or even another um economic study might be a PFS even or FS. When when that first crosses your desk, what's kind of the first first pass look? What does that look like for you? What are you are you looking at the MPV? And when you look at those numbers, what are you hoping to see there? >> I Well, first I'm I'm probably not even going to look at it unless I already like other things about the company. like I I already like the management team for example >> because if if you have a bad management team uh it doesn't really matter the results of the pea or or how good it is. So, um, yeah, like for example, B2 Gold put out a a PA on their Antelopee project in Namibia, which is, uh, next to their OICO mine, and they made a construction decision based on a PA, but it's that that's a high-quality mindbuilding team who has a lot of experience building mines, and and like that's the basically the only time I would ever trust that. And um when it comes to looking at a I would I would much prefer a prefeasibility study or a feasibility study because there's a lot more information that goes into that and there's a lot more uh a lot more engineering work and uh studies and basically a lot more money that's put into that. Um so those are those are much better studies typically than a pea. But I mean, I'm I'm the the some of the first things are are the numbers after tax because a lot of times they like to put it pre-tax and uh that that'd be great if we didn't have to pay the tax, but but that's not the reality. And what kind of discount rate are they using? What kind of what kind of assumptions are they using? Um commodity price assumptions. uh what kind of what's their cut off braid, things like that. Um but yeah, th those are some of the places that I start. But typically typically I'm looking at ones from a quality management team. And if a quality management team is putting it out, then it's it's much more trustworthy than than one that's from an unknown team. for example, >> finding quality management teams um at that stage of the market or at least once with proven track records that have done it before is hard. Um you don't see that too often. Um with the discount rate that you mentioned when it's an MPV5 or an MPV8 for for a large project like a copper project, typically you'd see an MPV5 for like a gold project. Is that what you just take and kind of run with or would you like to see it, you know, go above 10 12, especially given the the interest rate environment that we're in right now? >> Yeah. I mean, if you're using their cost of capital as as the discounted figure, well, then you're probably going to be using something more like an NPV 15. Uh, and which is which is way off from what an NPV5 would look like. And um also the MPV starts from the start of construction. So if it's if it's four years or something until construction starts, then you that would need to be discounted a lot further. But yeah, I think it's it's typically fantasy. Uh, usually the the NPV is fantasy, the capex is fantasy, and it there's there's very few cases where I I trust the numbers from a a study like that. And I I think something else that's important to look at is who who's who did the study? What's their reputation like? do and do they have experience um working in that area and have they have they done studies for other major companies in that same area? So are they familiar with the cost of everything? the uh what it what it's like to get electricity to site. How much does electricity cost? What are what are all the input costs? what are the how much you know all the costs that that go into it and costs that are also specific to that that country or that particular region within a country and then um I also want to see who signed off on that study as well and and what's what's their history and what's their experience. >> Do you have like a nice naughty list of mining consultants who do PAS and PFS's? Um, no. I I don't I don't know enough I I don't know enough people in the industry and I have to do research for every single one of them that I look at. >> And then you look at the QP as well. So you look at who signed off on it. Um, sometimes it would be, you know, someone who's the CEO for example. Is that is that a red flag for you? I've seen some discussion on that online as well. Like um, yeah, would it be a red flag if the CEO is also the QP? on on a major piece of dues like uh P or like a PA or a PFS or something like that. >> Yeah. >> Yeah. >> Yeah, that makes sense. >> Is that even allowed? Is that even legal? >> I Well, I I don't know about a PFS, but I've seen it on PAS. Um I I so I would I would assume so. Um or Well, definitely is on on um exploration companies, which is again where I spend most of my time. Uh you also mentioned you look at the price assumption. So that's an interesting one for me because gold was stuck in a range for a couple of years where everybody kind of knew what's acceptable and what's not acceptable for a PA, but then it's broken out massively now. So what is do do you discount the price to to spot or what would be a good price to run an economic study at right now? I I would like to see a a series of of amounts on that. And something when when people talk about an NPV, they often talk about as if the NPV is just one number. But an NPV isn't one number. An NPV is a whole series of probabilities or like at at different commodity prices different things go wrong. Uh there's there's lots of things that could change a potential NPV. You could even possibly increase it with with expanded reserves and and such like things like that. So what what prices would I like to see on that or what metals prices if we're talking about gold? I would I would like to see that at a very conservative case, maybe around 50% of the current gold price, let's call it $2,500 gold, and then um perhaps all the way up to spot and then various various numbers in between there. >> Mhm. >> Yeah. And would that be based on on other stuff in terms of like the the the type of asset you're looking into or or management's experience? Like what would you be would you be willing to make an assumption of spot for a specific situation or do you kind of use all the same inputs for all the same companies uh for for for different companies? when it when it comes to that um I I don't think I would separate that by company because the the reason the reason why I want to see a very conservative scenario and then also in a in a bull market like we're in right now maybe one at spot and then various places in between is that I have no idea where the commodity price is going to be in the future and and if we trust um let's say a pea or a feasibility study that runs it at $4,000 gold. $4,000 may look very reasonable today in an environment where the gold price is north of $5,000. But we got to remember that the gold price hasn't been here for very long. And uh let's say I mean it's it's a real possibility that after they get that mine built uh assuming it gets built that the gold price falls to 3200. I mean and then and then what if certainly the economics aren't going to be anywhere near what it was at $4,000 gold. So I I would like to know what kind of downside I have in a in case the commodity price falls in the future which and commodity prices go up and down. So, of course, it's going to fall at some point in the future. We just don't know when or how low. >> Well, and in that case, you're well, so so your input on on the NPV can fall without your capex and your opex falling. Like if oil went up while gold's going down. Um what what do you do in that situation? Right. And that's something you've actually you've talked about the the gap between what a PA says mine's going to cost to build and what it actually costs to build that mine in the current environment. How wide is that gap typically? And and like what if someone maybe can talk to me about some of the line items that are most commonly understated or or misused in these documents? >> Uh well, in terms of like what what kind of margin of error, you'll you'll see them saying, well, there's a 30% margin of error in this PA or something like that. And I think I think 30% is is way too low. Uh I mean a lot of times there's even a much bigger margin of error for a feasibility study that than that. And uh it can even be a quality company that that's building it and they just totally um dropped the ball on understanding how costly it was truly going to be to build the mine. Like I mean I I mentioned B2 Gold as an example earlier, but we'll just go back to them because that was a case where I said I I trust them to to build it on a on a pea because they think they can. Um, so I I trust that they've done the work there. But I mean, you go back to the same company and you have an example where they bought Sabina Gold and Silver uh to build that goose mine up uh close to the Arctic Circle in Canada. And even though they were experienced mine builders and they had um built near the Arctic before in Russia, they ended up going way over budget and have had to revise their costs higher multiple times on that. And I mean the I forget what the exact numbers were, but I mean Sabina's feas feasibility study said something like man it was it ended up Sabina's feasibility study just from a few years ago ended up being something like the capex was 50% of what it actually turned out to be. So I mean that was a that was a 100% margin of error and that was a feasibility study which has much more extensive technical work than a pea. So uh then like another recent mine build in in Canada was I am gold's cot mine uh that ended up being 200% over budget. It was they they spent three times more than what the feasibility study said to build that mine. So, I mean, it's not even close. There's so many examples like that. >> Most of the times it takes longer and it costs more to build. That's kind of my my assumption that I work on. Um, which ultimately is going to affect your IRRa, right? So, so that's really what we're after here is that so do you have like a quick and dirty rule where you're like, oh, if I see a 40% IRRa, I'm discounting that by whatever 10 percentage points or something like that. I don't have a quick and dirty rule, but I don't take it at face value either. >> And I I consider the the most the single most important metric to be the payback period. >> Would you discount that because that that also depends on again the size of the capex and OPEX in that situation? >> Yeah, I absolutely do not take it at face value for sure unless it's coming from a very high quality company. Like if it's G mining for example and they put out a feasibility study and they say it's a payback period of 2.2 years. I trust it to be 2.2 years but that's a very rare scenario. >> Yeah. >> Yeah. U is there a number you look for as well? Like would you I know a lot of people like seeing a payback under two years which is rare but would you would you be interested in a mine that takes you know seven or eight years to be paid back? uh even at the company's own assumption >> certainly not in precious metals um if if we're talking pod ash perhaps because I mean these are these are typically reserve lives or resource lives of hundreds of years or a thousand years or something. So, I mean, uh, a 7-year payback period in with a mine where you're going to have cash flow for a thousand years is a lot more attractive than like a seven-year payback period with gold where you might have guaranteed cash flow for 10 years. >> Yeah. Uh um also copper you can have uh those are typically huge mines. So I'm more okay with a longer payback period there. Seven years is tough. Even even there, even even with copper, I I would love to see it under five years, but I mean, >> even then, there's times when it takes four years to build the copper mine, and you're not going to have a payback period of under five years when it when it takes four years of construction to get it built. >> Yeah. So, so again going back to that the same point like it costs more and takes longer than it typically um would or than it typically gets pointed out in these documents which reminds me that a PA and someone else told me that in in a previous interview but a PA is mostly marketing document than it is anything else it's most of the times so it's trying to market to either trying to market to attract a buyer so essentially a takeover or just marketing to retail uh for for people who want to raise capital and and you know do infill drilling and whatnot. Um, how do you how do you recognize that? Again, I know that's something you've talked about recently, but how do you recognize a good PA where the company actually intends to build it versus one that that it is just really meant to attract investors or or a potential takeover? >> Yeah, I it goes back to management team to start and also who who did it. Like for example, I I looked at a PA in in West Africa recently and they they had it done by a quality company and it was it was signed off by on it was signed off on by someone who was highly qualified in the industry and had a a big reputation to risk. So, um, that that's a case where I think they they did that PA not because they intend to build it, but because they want to sell it and they want to have potential buyers to be able to trust the work that went into that PA. >> Mhm. Is is it just track record that you typically look for when you go, you know, scroll all the way down, see who the QP is, and then you go and look them up and see what other stuff they've signed up signed off on before, or how do you how do you determine, you know, a credible QP? Well, I I mean this this recent one, he I I look him up and he was the head geologist for uh Glen Core at I forget what the mine was called, but it was a huge uh copper cobalt company or a copper cobalt mine in the DRC. And I mean, if you're a chief geologist at a major mine for Glenor, clearly clearly you're qualified. And then he was the chief geologist at um a it was a similar type deposit uh in the same country in West Africa >> um for for another major company. Uh and then looking at his qualifications, he was uh a fellow at the Australasian Institute of Mining or I forget the exact name of that but and then I I looked up okay what is what does it take to become a fellow and typically you need like 15 years of experience and you have to be highly vetted by the other fellows at that uh to be uh included or to be uh given that title of fellow and um then I'm looking at Okay. Well, how important is this institute, this mining institute? And okay, it's one of the most important ones in the world. So, I mean th those data points tell me, okay, this guy really knows his stuff. >> So, you keep pulling on the thread. That's interesting. I thought just kind of from my experience in junior mining. Um, who's a good CEO is whoever buys you the fanciest dinner. Um, but jokes aside, I think you might have been talking about Komodo in the DRC. U maybe when you talk about Glinkor or um or Mutanda because they own two. >> Yeah, it was that it was that one. >> Mutanda. Yeah. >> Yeah. >> Um yeah, huge huge point. Yeah. So that's a that that is um um Yeah, that's a good point. That's a good point on how you do research on QPS. Um do you now talking about jurisdiction, do you discount for jurisdictions either in terms of operational risk or just permitting risk like in Canada might take 25 years in the DRC the asset might be taken away. Uh so yeah, do do you discount for for jurisdictional risk? >> For sure. Um but jurisdictional risk is a lot more than what are the chances something goes wrong or uh what are the chances that this gets um taken away by the government or they effectively confiscate the mine by raising taxes over and over and things like that. Now, for example, Canada can Canada's great in terms of fiscal stability, in terms of having a straightforward permitting regime. It's straightforward, but it takes a long time. So like there in Canada is a lot of time good for there's a generally a lot of qualified minor but there can be extremely remote projects uh that maybe they don't have qualified miners in that area but in in certain in certain areas of Canada you have qualified miners and then uh when there's when there's a lot of mining around uh you typically have qualified suppliers as well qualified contract miners and um So there's there's that part of jurisdictional risk, but then you also have to look at jurisdictional risk of, hey, if if I discover a good deposit here, how long is it going to take me to put into production and will I be able to? Um, and if you discover uh a quality deposit in, let's say, Kavois in West Africa, it's highly probable that you'll be able to put that into production. Um, and then whereas if you discover a high quality deposit in Canada or Alaska, it's there's a big question mark of whether it will ever you'll ever be able to put it into production. And then so if the answer is yes or probably then how long will it take? And if you if you find a high quality deposit in Canada from first drill hole to the time they pour first gold if it's a if it's a gold mine that we're talking about you're probably in most cases looking at at least 20 years. Mhm. >> Uh in West Africa, if you have the same discovery in Kavvoir from first drill hole to pouring first gold, you can probably do it in eight years. >> So I mean in in terms of your like the net present value of those early drill holes, they're way higher in a place where you can where you can actually put that mine into production faster. Now, how you determine a net present value on a couple of drill holes, I mean, practically impossible, but I mean, when you're when you're comparing one drill hole to another drill hole, that that's something to consider. And and that's one thing I although West Africa certainly has its risks for many reasons like um the some the governments can be very unstable. There can be lots of coups and changes of governments and uh a new military dictatorship taking over and and things like that. And and then there's the problem you often come across where you when the company goes to build a mine, they had a fiscal stability agreement. they were promised a certain level of taxes and royalties for a certain number of years and then um the government needs money or the new government comes in and wants to raise more money and then uh they basically tell them, "Okay, we're we're shutting you down until you meet our demands and uh we're we're going to take a higher royalty off the top end. You're going to give us a bigger percentage of this project. Uh you're going to pay us for uh tax disputes." In other words, you're going to um pay us an extortion fee to allow you to keep operating things like that. So, so there's you have those risks in West Africa, but then West Africa is is way better in the sense that when you go from finding the deposit to taking it into production, it's a heck of a lot easier to permit. Uh it's way more certain that it will get permitted. The permitting times are way lower. Uh, and then also when it comes to getting the mine built, there's there's lots of qualified suppliers there. And um, when when building mines in West Africa, those are much more likely in my experience to come in on time and on budget than many other places in the world. >> Mhm. >> So there's there's a lot of advantages to that. And when you can put a go from first discovery to production in 7 to n years, you can earn money by building a mine and earning money from that mine and then reinvesting it into more exploration and then finding a new deposit, putting that one into production and you can recycle that capital a lot faster which can help the companies grow much faster. So that's something to consider too. >> By the way, I do want to talk about financing these things as well. Um, but would do you think that therefore based on what you just told me, African assets uh at the PA or PFS stage are maybe undervalued relative to their Canadian peers just because of kind of the investor base that buys stuff on the TSX and TSXV or even well definitely in in um in the US most of it is is Western focus, right? it it's Canada and the US themselves and Africa is just so far away and so foreign scary, right? And so maybe therefore people would would discount those assets more. Is that a thing that you're experiencing kind of running your own numbers? I I don't know if I can generalize to say that yes, that that's a thing for sure. But I I can say that a lot of times I I trust uh a feasibility study or a PA more in West Africa than I do in in let's say Canada because permitting is much more certain. permitting is typically fast and also it's much more likely to come in being built on time and on budget. >> Yeah. And or or being built period. Um sometimes again >> and that that's what that's why I mentioned the certainty of permitting because when when you don't know if it's going to get permitted in Canada or in Alaska or wherever else in in what's typically referred to as a tier one country or something like that. Well, then I mean that that's that's a huge risk and a huge question mark. >> Yeah. Long as you didn't call it Pebble, you should call it something else like um good for the environment, gold corp or something like that and then they'll get permitted immediately. >> What do you think is financable though? Or how do you even determine what is financable? Because that's another important um piece of the puzzle like whether something is going to build is directly related to is the company going to have enough money to build it. So whether it's debt and equity or or just debt or or royalty or a stream or whatever when you look at a preliminary economic assessment or or anything else like that or PFS what do you want to see that you say like okay that is actually financable. >> Um well low low payback period is is really important. the lowest the lower the number the better because when the when the payback period is low the lender is much more likely to get paid back uh or and there and there's less time that something could go wrong or something could happen. So uh we were talking about Kotvoir earlier. We we'll just keep using that as an example. And now if you're trying to build a mine there that has a payback period of 1 and a2 years that that's probably much more financable than a project that has a payback period of four years because while things are pretty stable in Kotivvoir today will they be stable in 3 years and um that that the lender of course their their number one priority is getting paid back and then like in terms what's financable. Typically, anything with less than a feasibility study is not going to get financed to at least not to any meaningful degree. like you can get some if you have a PA, yeah, you can you can raise some equity or you can raise some money via equity to advance towards a prefeasibility study or maybe you can get uh5 to$20 million from one of the royalty or streaming companies to help you advance to those those next levels. And then in exchange that royalty or streaming company is is getting a small royalty on the project plus the rights to fund it or like first first right of refusal. Uh so they get f first stab at it if that that gets to a point where it's it's going to be funded and be turned into a development mine. But uh I also want to see high grade uh lower strip ratios uh when you're looking at the strip adjusted grade. That's important too. So um when you like for example um a project can have really high grades. So let's just say it's it's a gold project with 10 g per ton gold, but it has a strip ratio of 10 to one, meaning they have to strip away 10 tons of waste just to get one ton of ore. So to get the strip, so that strip adjusted grade, instead of it being 10 g per ton, you divide it by the strip ratio and then now it's only one gram per ton. >> Mhm. But I I like to see the strip adjusted grade be high. High grade is always good. >> High grade is always good. Um that's a that that's a quote for for the thumbnail. Uh but you're right and and especially the strip adjusted uh grade is an important thing that I think a lot of people would not really get to in the first place. Um but but maybe I should have picked this up from the point of should a project really be financable in the first place yet you know at a PA stage as a speculator you're looking at it and thinking about it is it financable? Nobody's going to finance it at that stage but you maybe you want to know whether it's it's potentially going to be financable if they do upgrade the resource and put it in a PFS. But but maybe a better question was to begin with was was should it be financable? Should it be viable? So is there a difference between a project that is that is viable by a major so a junior's you know discovered it and brought it developed it to a PA stage um is isn't that the outlook that you or the outcome that you should be looking out for um someone buying in >> yeah I I mean I think that's it's it's not it's not a deal breakaker um if I if I don't think it's a an immediate acquisition candidate um by a much larger company. But it certainly helps. It certainly helps when making a decision of whether to invest in a company if uh a bigger company has already taken an equity stake in the project. That's something you you see quite a bit. Um and and that's a that's a very good sign if that's the case. Um maybe maybe it's a case where it's a deposit that's very close to another mine that's already built and and maybe that other mine is depleting the reserves. Maybe they're they've already mined uh much of the high grade and that that company needs needs new ore to fill that plant. And I mean, if there's if there's a nearby mine like that, that's a huge acquisition target because I mean, the the economics change completely if you don't have to build a mill and build uh the processing facilities and and all that stuff and and you you already have uh the mill and everything nearby. >> Mhm. Yeah. Strategic is one of um one of promoter's favorite words out there, but what you're looking for is an asset that is actually strategic. Um that that that is a good point. Is it um is there a bigger discount to assets that you think are not viable? like an asset that is too big um to be built by or or an asset that is that big that it really limits the number of potential buyers where you're like, "Oh, this is only something that BHP or Rio could no longer but that that either of them could build. Uh therefore, there's, you know, less demand for this specific asset, so I'm going to apply a bigger discount." Is that something you go through as well? >> Yeah. And but absolutely everything applies to this. Like there there's all these pros and cons of every single company and ev every pro and con ch changes that that discount rate changes changes the math behind it. And there's there's no project that's ever going to be perfect and is going to check every single box or at least probably not. But when when you have 18 great things about it and then two challenges, I mean, that that's a lot better than something with 15 challenges and five great things. >> That's that that's a great way of putting that as well. um when you when you go through that, how how many of the PAS that you see on the market uh or or PFS's cuz you said you don't look at PAS that often, but how many of them do you think are just pure fantasy and you would discount by by at least 50%. How many of the MPVs out there are are overstated? >> Um >> just a rough number. Yeah. Kind of a like a maybe a you know a guess like in terms of percentages >> put out. So if we can separate it by the the peas that are put out by companies that are actually already operating minors versus the PAS put out by juniors. Uh I would say the the ones put out by operating minors those have a those have a much higher success rate. Those are going to be much more likely to be accurate uh or or more accurate. But th those put out by juniors I think the the number that are fantasy is close to 100%. >> Junior mining it can be like that. Um it is it is mostly like that actually. >> Do you apply um what what's what what's the what's the smallest discount that you you would want to see? Like would you ever look at a PFS or PA stage acid and go like oh that's something worth paying one times or one and a half times NPV for or do you always require a discount and if it is how big of a discount do you require? I for for a development company that has an asset that has like a PA or some other type of further advanced study like a PFS or a feasibility study. I'm never going to pay a premium for that. M >> I I don't feel like I have I I mean I know I don't I don't have I don't have the geologic knowledge to to know just how much exploration upside there is there. So yeah, maybe they maybe they put out a feasibility study. Let's let's say a junior puts out advances a project to a feasibility study and it's trading at one times NAV. I'm I'm not going to buy that even even if people say it has a lot of exploration upside because I that's not what I'm an expert in. So I I got to have a big discount to it because that that's not my expertise. >> Is it what is kind of the is there like a cut off point for you where you think like okay this is discounted you know it's8 NPV that's too much I'm not paying it or or do you go kind of case by case? Um, I mean 0.8 NPV uh would I I'd probably never going to buy that either. Um, now if if you have a a super highgrade highquality deposit, let's let's say you're talking about Dennis's Phoenix mine. This was rated by the the mining journal as the world's best development project of any commodity because it has it has the location close to other uranium mines. It's in Canada. It has extremely high grade. >> So something like that I might be willing to pay.5 uh like half of half of the net present value of that. Mhm. >> But that that would be probably probably my limit for for a developer. >> And that's again if everything else that we talked about today already checks out. Um that's that's kind of exactly where I was going with this where I'm like I I think a lot of people, me included, um look at these things and and kind of look at it. Oh, you know that NPV is so high and I'm only, you know, I'm only buying it for that much. But most of the times that's that's even overpaying when you go and discount for everything that we talked about today. And don't even get me started on people doing INC2 value where they're like, you know, there's 10 million ounces at 5,000 bucks that deposits worth all the money in the world. Therefore, that's not too much. Um, yeah, get Jordan, I think we we we've touched upon a lot of the topics that I wanted to go through here on the PA. Um, interesting to see how you look at it specifically because you come kind of from the mining side of things and not junior mining side of things, not the exploration side of things. Um, what am I forgetting to ask you here? What else is important when it comes down to looking at at PA stage or developer stage uh companies? you you've covered a lot of the important points but I I think there there should be a lot of focus on on management team there you should have a a lot of focus on who who else is investing has has a strategic taken a position has is there another mining company that has a 5 10 20% position in that if if there is that's a very good sign. Um some with the really good projects sometimes you even have a couple of those a couple of those strategics in there. Look at look at the other shareholders if if you're not an expert in this. Look at how many of the shareholders are institutional. Um look at look at who's been buying. Um now if you have all the bigname shareholders buying uh I mean that's a that's a very good sign if you have if you have huge uh shareholders like all several billionaires for example who have bought into this project and it has a strategic invested I mean that that's a pretty good sign that you're that you're on to something good and I would also urge listeners to look into the management game. How much stock do they own? How much they're getting paid? Is a stock that they own a lot more valuable? Like the the value of the stock that they own, is that a lot more valuable to them than their annual salary? >> Um do does the management team uh own royalties on it? uh ju just because they do that not that's not a deal breakaker but uh it can give you an idea of of where the incentives are there. So u I I would love to see a a management team that has a lot of the skin in game has um isn't isn't overly promotional. They need they need a certain amount of promotion, but I I want to see most of the money um most of the money that they raise going into the ground. And what else? You know, read read the read the quarterly reports, read the annual reports because you'll you'll find a lot of stuff in there. You'll you'll learn that the management team is the owner of the drill contractor that's drilling their project. So, the amount of shares they don't own doesn't matter. Their their salary doesn't matter. What what matters is that they're getting paid $5 million a year because they own the driller. >> Mhm. >> Something like that. And you'll you'll see there's lots of things that are required to be disclosed if you read those documents. And um you'll you'll find you'll find a lot of stuff like that. >> Yeah, very good point on incentives. Um specifically, does management personally own a royalty on the project? That's one of the very very very first things I ask when I when I speak to management. Um super underrated point, very important. Royalties are typically worth a lot a lot more than what their salaries, a lot more than what the person can afford to invest in their own companies. So they can skew incentives in the wrong direction. So, very very good point on that. Um, yeah, good. I'll be looking forward to having another conversation. Maybe next time we can talk about the actually the producing companies and how you value those because I know there's a lot of disagreement in that. Not as easy as just applying, you know, an EV to FCF ratio, not a PE ratio type of sector. So, that would be a good point for next interview. Um, what talk to me a little bit about um mining stockmonkey.com. If I if I go there now, what what can I do there? And what am I going to get if I uh end up subscribing? >> You basically can't do anything there. You can you can sign up for my research service. Uh but the the website the website is is very simple. But what what you get is you get someone who who follows a handful of companies extremely closely. I I I know the companies that I follow inside and out. I know. I try to know everything that I can about them. And this is what I do. This is what I do full-time. If you're looking for a service that follows 50 different companies, uh this isn't for you. Uh I I typically have a portfolio of 15 companies or less, usually less. Uh even even when I get above 10 companies, it's to follow them as closely as I want to and know everything about them that I can't that I possibly can as an outsider. um that that takes up a lot of my time. So, if if that sounds good to you and uh you want to know what I'm investing in with my own money, uh and and what I'm what I'm trying to find out before the market is like when I know these companies as well as I do, sometimes I'm able to find out stuff before the market figures it out. And if it's bad news, I try to get subscribers out of the stock before then or at least let them know about it. And if it's good news, I I try to get uh subscribers into the stock. And this is this is what I'm investing my own money in as well. But if that interests you, I'll uh have Antonio I'll leave a link in the description or maybe maybe the comments below as well, but the description for sure. And uh for anyone watching this, I'm offering 25% off for your first year, but this is limited to the first seven people who sign up. So se first seven subscribers get 25% off for the first year. So, you don't like um payback of seven years, but you do find meaning in it for seven subscribers. Um I like that. Uh is there is there a name or do you publicly talk about your the the companies that you that you invest in that you like sometimes? I know you used to on YouTube, but it's been a while since you since you've done that. So, do you publicly talk about that? >> Yeah. Yeah, I I do. I mean, when when there's an important alert or something, my my subscribers are going to get that first. And I don't share my whole portfolio and I I don't share my uh latest valu I h at least I haven't shared my latest valuation models publicly and I have these dynamic valuation models that change with spot prices that change quarterly with updates in the financials and any changes in the company. >> Um but >> well so then what what are some of the companies that you that you kind of have in that portfolio right now? I I understand it's very selective just about 15 names um mostly bigger names you said. So, what are some of the companies you liked right now? >> Uh, one, my my top pick right now of any any company, any commodity where I'm deploying most of my personal capital is Royal Gold. Now, this is this is one of the big three uh precious metals, royalty, and streaming companies. So, they're they're not they're not a small market cap by any means, but it's rare. Why why is it my favorite? because it's rare that I find a company that's this big, that's this low risk, and this undervalued. So, while it it might not have it it definitely doesn't have the most upside, it's by far the best riskreward play that I know of today. Um, and at at spot prices, even though even though it's run up quite a bit, I think it still has close to a double left in it before before getting into overvalued territory. And they're they're highly diversified. They have a great business model. The the biggest risk there is the gold price because they're they're heavily allocated to gold. But e even my my model says they're even undervalued at $3,500 gold. >> So that gives a certain margin of safety. >> What how's that for a question? What's the what's the smallest position that you have right now? And why is it the smallest? Is it by design or is it because you're adding to it or is there something where you're like not quite sure with? Well, so I have I have two I have two services that I offer. One I never advertise. That's the one I never advertise is my speculator service and that's with like explor some explorers uh developers prospect generators. It's a very small portfolio. I never talk about them publicly. Um there there's just not that much liquidity in these stocks >> and um so so yeah, I have I have some bets that are like 2% of my portfolio. And and why why is a bet 2% of my portfolio? If I if I like it, shouldn't I be willing to place a bigger bet? Well, for example, there there's a prospect generator that I like and they have they have a few different uh projects that they're advancing and they have a few different partnerships where they have major mining companies advancing projects and some of these projects look very very good. Um, and if one of them works out, it could be a 10x. The stock could 10x easily. But if they don't work out, the stock price is probably slowly going to grind lower over time as the company has to issue more shares to stay alive over the years. So if in a company like that, I don't want that being 10% of my portfolio because if it grinds slower over time, 10% or well, I mean, if it's 10% of my portfolio and it falls by 50%, that's a significant loss. But if it's 2% of my portfolio and it falls by 50% over the next 5 years that if I won't even notice it in my portfolio because it was a it was a small investment to begin with, but if things work out, it could easily 10x. So it could go from 2% to 20%. So and and that's that's a big enough winner that um I'm I'm comfortable taking that risk. But in in my core portfolio, in like my product that I call Mining Stock Monkey VIP, uh these are generally the more more liquid companies because to add a new position to the portfolio, I I typically want to see $5 million or more in daily trading liquidity. Uh but absolute minimum 1 million absolute minimum. But typically the smallest position I will take in that is 5% to start. But my smallest position today is B2 Gold because I just I recently sold half of that position. Um because I I thought they were going to have horrible 2026 guidance. I thought they were going to have problems with their mobile crusher at their new goose mine. I thought that they were going to have a production cliff at their Fakola mine in 2026. And I thought they were going to have a production cliff at their OIOT mine in 2026. And all of those came true. Um so I I reduced my position before that happened. H good and and and again next time we should do that we should talk about the producing companies and how you treat that when you know it's time to get out is an important topic as well. Uh but yeah Jordan thank you so much for sitting down with me today. It was a pleasure and hopefully speak to you again soon. >> Thanks for having me on Antonio. It was nice.