gold news

 [Music] [Music] I'm Charlotte McLoud with investing news.com and here today with me is Ross spey chair of Equinox gold thank you so much for being here pleasure Charlotte nice to see you again oh of course really good to be catching up with you it's been I think about a year since made touch Bas so lots of things for us to go over I think we definitely with gold I always enjoy talking to you about gold because you make me feel so confident in where gold is going so yeah you know Charlotte it's not hard to be

bullish on gold in fact that's that's probably for me as a contrarian as a lifetime contrarian I I'm most worried because everybody's bullish on gold right now you know you go through every single mining analyst the real smart guys in the in the sector spart people in the sector in the investment world and they're all forecasting uh the gold the gold market is is is an odd one in the last few years really ever since the uh Russian invas of Ukraine because uh for various reasons but

especially because certain countries wanted to get off the US dollar as their functional Reserve currency uh central banks have been buying gold and this is really unprecedented in my lifetime in fact in the 90s most central banks were selling gold Bank of England sold out of its gold Canada sold out of all of it it's gold but of late uh a lot of countries have wanted to reposition their Holdings of Reserve assets and so uh led by China but by no means only China China bought 700 tons of gold last

year that's that's you know that's you have to multip by 70 times three and that's that's an awful lot of gold uh and then um and then uh it wasn't just China it was it was it was it was India usbekistan Poland turkey you know you could just name a whole bunch of countries that bought gold as an alternative uh currency asset which demonstrates Gold's long-term abiding store of value value um and a lot of retail investors in China and India and Vietnam bought more gold than they've ever bought before as

an offset to concerns that their own currencies were potentially going to decline and that's exactly what they did so you had all of these new buyers of very large amounts by gold in an environment when the dollar was strong and it got stronger yields were went up not down of course quantitative easing was ending and quantitative tightening was going to begin again inflation was reasonably high it was coming down but it was still pretty high a whole bunch of factors that are typically very negative for

gold and that's why a lot of the smart money in New York and Toronto did not buy gold you saw last year new money into ETF f s went down actually more money was pulled out of the US ETFs than was put in uh so very bearish from the sort of classical investor side and yet the gold price went bananas it was the best year in gold in I don't know maybe my whole lifetime maybe I mean as a proportion of what it started out it went up 27% so it was a really great year and I was I'm not surprised at that

I was very broadly forecasting higher gold prices last year but I didn't expect to do do so well so today I mean who cares what happened last year what's going to happen this year right of and I mean Yogi bar said it right he said you know you know you know the trouble with prediction is you you know you have to deal with the future so uh it's it's never simple but I really have to say to sum up my own views I don't see why gold would go down this year every factor that is influencing gold in the last 12

months is still at play so I really do expect gold to have another pretty good year but then you have to ask and I'm sure you will the next question is what about gold equities yes of course and I know you're you're going to be on a panel I think I don't think it's happened I think it's coming up and the title is very apt it's gold prices out why aren't the stocks moving so of course we should talk about that yeah yeah so again traditionally I I've been in this

business a long time I I'm not I haven't been for 70 years but actually for 70 years there's been this direct correlation between the gold price and gold equities gold price goes up gold equities go up revice first classic cycal world and uh that broke down a couple of years ago it broke down to the extent that gold price had a really good set of runs and the gold Equity prices haven't it's not exactly that simple I'm really talking more about the small companies the Juniors here because if

you look at the Gold index funds you know this this this place you could sort of see where passive money goes in and comes out the GDX uh between February and October gold went up 20 % the GDX went up 52% and the gdxj which were the junior producers and larger or more liid explorers went up 58% so it actually did work out in that period and then a lot of that was given back in the last couple of months so uh there has been some move but by no means uh the move I would expect in companies like apono

gold which is grown from a from from nothing really we started this company you know seven years ago with an idea we were going to try to build a big you know gold company that would be really leveraged to higher gold prices and certainly the golds moved gold was 1350 when I started Equinox and it's 2,700 now pretty good uh we went from having no assets of any significant gu a couple of exploration projects we've bought two companies built four mines acquired how many mines acquired five or six maybe

and and sold to and it's been a very busy company the last time we V greenstone is is now our Flagship minus it's up and running so in that environment our stock price has gone up a little but not not a huge amount of nothing like you'd expect in a normal gold market where there's lots and lots of money uh coming into the space in conjunction with higher gold prices just it's a it's a very odd Market um and I really think maybe I'm just you know swimming in my own bath water as

they say and maybe I'm maybe I'm really crazy biased but I really do I thought last year there was going to be move in the Juniors never happened gold Juniors were pretty much flat all year and struggling to raise money equinom did okay I'll go back to that um the large companies you know baric and numont they're flatter down you know so it's been a an odd year uh and I just you know that's rare you know normally big markets there's a mean reversion that happens and if if that happens

either goal is going to come down this year or the value of the equities will go up and I'm betting on the ladder I'm betting on the ladder so I I I really expect it's going to have we're going to have a pretty good year this year especially if generalist funds come into the gold space that's exactly yeah kind of what I was going to ask you is okay if we think that we're going to get that change this year perhaps what is the the spark for that change in the equities yeah I mean as I said a year ago I

thought it would be higher goal per set you could say that worked for a while but certainly not on a long-term basis um gold going to 3,000 maybe um maybe the tech stocks the big big seven maybe losing a bit of traction and people want in other places to put their money that could could happen gold is under owned in institutional accounts across the US it's under owned by retail investors there's been some move out of gold into crypto that might come back I mean it's not a lot of money actually it's it's uh

it's um don't forget crypto is valued only at the last trade doesn't mean to say there's huge amount of money that actually got into that uh but um it could be a big Discovery it could be more mergers that have that create more wealth in the space uh it could be any of those but probably it's going to be a sectoral shift of money from one asset category bonds uh uh large cap tech stocks for example into this area and they'll go they'll go probably across the board there'll be some balance the

big stocks will move first but eventually get down to the Juniors and you'll wake up and every company downstairs at this conference will be uh 50% or 80% higher than they are right now yeah well I think certainly certainly investors would love to see that and I want to go back this is connected but to something that you mentioned at the beginning of the conversation which is you know we've got Central Bank buying we we know about that Eastern investors buying Western investors just not really interested in

all right now anything else you would add on on why that lack of interest is what is different than in the past you know it's it's I mean back in uh so there was a giant move in in the gold equities and I mean I can go back many many cycles but let's just say in recent years it was in 2009 was a huge move up that lasted for like three years there was another one in 2016 there was another one more recently uh postco or during Co actually uh 20 202 2001 not postco during Co so we've seen we've

seen some pretty dramatic moves where I'm talking 20 % to 100% R in most of the gold stocks uh that's probably going to happen again in the near future I'd say um and and really it's it it's like I said it's hard to really figure out what will be the Catalyst for that uh but it usually happens um it usually happens okay well we we'll keep looking forward to that and you know when we talked last year you mentioned in in that envirment you were buying gold equities for the first time like five

years so are you still buying you know the the backdrop there is that I've generally not been an investor per se I'm more of a developer you know I'm a company Builder right that's been most of my experience in my background uh but last year I I just couldn't help you know this this this disconnect was too significant so I actually went into the market and put a pile of money to work and I have to say it hasn't been a win it hasn't been a loss it's been actually been flat there's been other kind of you

asked about why the generals haven't come in there have been some rather anomalous and and ugly things that have happened happen in the space in the last couple of years you know we've had a couple of mine calamities Victoria gold for example single mine calamities that have destroyed a lot of value and worried journalists investors we've had some comp countries that have gone upside down Panama Panama of all places Bann you know open pit Mone and they shut down a gigantic new copper Vine

crazy um uh and I can go on down the list Molly's Gone Bananas in in in Africa you know they're they're they're blackmailing the biggest and best company in the whole sector which is bar and they've had to shut their mind up so that doesn't help because it it identifies risk in this business that journalist ADV bestor don't want I mean nobody wants my approach to that is to recognize it's it's it's true but also recognize there are many places and many projects that

can go from being uh distressed or unpleasant to being very very good and I've had lots of that happening in my career so good to bad or bad to good the way to overcome that problem is to diversify your assets and so equin gold for example now has eight months we don't need eight we could have four in three countries but but more than one and so you don't have a single Asset Risk and you don't have a single country risk uh but less of that is good for for generalist investors uh and then of

course the other the other imponderable is uh that nobody has control over is something like the gold price yeah well adding $700 on to uh every ounce you produce and if you produce let's say a million ounces that's an extremely happy event for your sholders and your income statement and that can come out of the blue so that's where the gold companies do have higher leverage than people just buying the gold price less more risk but much much higher return higher beta more volatility and you got to accept that

yeah well and on the country risk angle I wanted to ask you because we're in such a time of transition literally on this day we have Donald Trump's Inauguration in the US we we have Trudeau is resigned we're looking for a new prime minister probably we're going to have an election here in your mind do these changes in the US and Canada does that V well for mining how are you feeling you know flipper coin I mean really I I have no idea what Trump's at the end of this year I mean he's just

such a bomb thrower he just likes to disrupt uh and and I don't think anybody it doesn't matter like predicting the future is a tough game very tough game uh so nobody really knows what's going to happen but I just think if you look at what has happened to gold in the last 12 months there's no reason why it's going to change you know gold done so well for all the wrong reasons it's supposed to go down it went up with a higher with a stronger dollar well today the dollar weakened go went up so it almost doesn't

matter um yields go higher typically goals inversely correlated to to yields that's the treasury bills have got got have got uh I've got higher yod in the last couple of months and Gold's gone out it's it's it's upside down so it's a blurry forecast in specifics but as long as central banks keep buying which they will do as long as they don't trust the US dollar which is what a lot of foreign banks are concerned about um you're going to have a happy happy story

in the gold sector and silver by the way silver is also going to be very strong yeah I I thought to ask I know that you're more focused on gold right now with Equinox I thought to ask you for your outlook for silver as well connected well silver of course is connected to gold they're both precious metals but silver has an extra component it's much more used in industrial demand and there's a broad range it's the most widely used of All Metals it's used because it's the best conductor of

electricity and heat and has has all manner of incredible physical characteristics uh the biggest demand sector right now is in photovoltaics s for renewable energy and us is another thing American investors don't quite understand is how actually less important the US is today than it's ever been before in the commodity business the driver of commodity demand of every single commodity across the board is China I mean it's it's two to three to 10 times the demand of certain Metals

even copper and silver the big demand is in China so it doesn't really matter what the Outlook in the US is for the industrial production of this or that or what the US is doing with renewable energy it's what China is doing and right now they're going gangbusters on developing so solar solar production and and and renewable energy generally which uses more copper electric vehicles which use more silver um so it's a pretty good outlook for silver both on Industrial demand and as a precious metal it'll

follow gold but if gold does well and the economy does well silver actually will outperform gold and that's what could happen in 2025 but you know I I say every all bets are cautious because um I just think capacity for unintended consequences with what happens under a trump Administration is significant and those unintended consequences can be good and they can be bad and and F the coin yeah yeah it's a tricky day for me to be doing all of these interviews so we'll we'll we'll see how that all pans

out I wanted to talk a little bit more about Equinox gold so I believe the 2024 production numbers just came out just over or close to 622,000 ounces which is in line with guidance but I know I know you're really into scale so getting bigger so can we talk about plans for 2020 I know the guidance isn't out yet but what can you say yeah I mean guidance isn't out but it's obviously going to be quite a bit higher than that because we have all the minus plus we have greenstone greenstone is just

getting going greenstone produced uh I can't of forget how much in Q4 our second quarter production the last month in December was 25,000 OES and the you know steady state is you know our Target there is just under under 400,000 o for a full year so we're going to I think we're budgeting ramping greenstone up to hit full scale production some having Q3 takes long it's a big mind there's a lot of things that you know valves that leak and gaskets that blow and pumps that fail all that stuff that happens in a in

a big mind startup like that so that's kind of happened and uh it's typical stuff and it was all budgeted but uh it at the end of the day for us it's it's doing some really transformative things you know Equinox preg green s had uh four mines in Brazil a mine in Mexico that was uh having some challenges with local communities and a mine in Califoria growth everywhere but uh the the the last three and a half years have been focused on building greenstone and it's now built and running so a year ago

there was a lot of you know quite frankly concern by people where we going to hit budget where we going to hit schedule because if we didn't do both it was a serious risk factor and it's it could have blown us up well we hit budget we hit schedule but a week before we opened the mine up in May our partner uh 40% partner Ryan told us they wanted to sell their stake they're Finance Company they're not a mining company so we had to raise a billion dollars to buy them out we did that in in miday well

that added debt and it added more equity and nobody likes that but the result was we got 100% of a mine that we previously own 60% of so in the process of building the mine a lot of time a lot of you could say technical risk that's done now financing risk that's done uh we have a lot of debt we have about 1.3 billion dollars in debt that we've accumulated to buy all these and build all these mines and this year since the mine is built it's it's it's given us 50% of our asset based in Canada best terisation in

the world for mining a real tier eight tier one uh deposit to your one country and by far the lowest cost of all of our mind so it's going to bring all of our costs down corporately deliver a huge amount of free cash flow which we're going to use down to pay down the debt that's a really transformative time for us much lower R this year I'm predicting a pretty darn good year this year for equinox uh we've got growth in other assets we're we're hoping to finalize our community issues down in Mexico this

this next couple of quarters right in the middle of that right now and uh great team of people and you know just really uh I really feel we're we're hitting our our targets we're We've Ended at producing a million this the year and we're very close we'll be very close to that after green I got something ready fully yeah I'm going to come back to that that million ounces I have kind of an emotional question about that process of getting greenstone up and running you mentioned there's people

who are doubting you know is it going to go right how did you feel you you've done this before were you feeling good you know people there's a lot of armchair quarterbacks in this world and uh and you know sometimes they're right and sometimes they're wrong but when you own something and you can't just be like a stock owner investor where if you don't like something or if you're worried about something or if you see something shiny over there you just sell and move on and that's the end of your

investment you can't do that when you're a developer you've got to you own you own your your decisions long term so uh right now I'm feeling pretty good about things because we've we've we've done a really good job at greenstone and uh you know we're not over the woods completely we have to get it up and running fully and and that's still uh lots of technical things but you know we're making money there already and we're paying down our debt we paid $180

million in the last quarter so I just feel pretty good about things right now uh the the more relevant question is you know like what next and uh and I will say to uh answer your question you might have otherwise asked that we are going to be pretty careful with what we do with our cash it'll be directed mainly at paying down debt once we did that to a level we'll be able to look at do we buy back shares do we pay dividends do we reinvest it in the other growth things we've got going

you know we've got a lot of opportunities as most companies do to allocate Capal yeah the best news of all is you know we're actually making money now we're not just spending it that is that is very good news and thank you for anticipating the question that's always helpful any any m&a in the cards there yeah it never know uh you know we we certainly were out of the m&a game for three years or actually almost four years we we did nothing since we bought Premier gold uh which was in December

2020 so that was four years ago uh December 2020 yeah it was yeah legal was 20 2019 Premier Is 2020 so uh you know never say never it's not a it's not the the focus of ours we have we have a mine in California called calan we could build when we get permits that's going to add 220,000 ounces we have most fos if we get the community issues settled we will be able to expand that to about a 300,000 a year mind that'll add incremental growth Arizona We're Going Under underground in one of our mines in

Brazil we just extended another mine from a three-year mine life to 10year plus mine life so there's a lot of other stuff we've got going that we can we can work on now first we have to get this you we had to get green up already as our Flagship operation yeah yeah that makes sense so L stuff yeah of course Very it is a very nice position to be a to have those choices yes yes okay and and a little bit bigger picture there's been there's been quite a lot of m&a in the gold space this past year what do

you think of those deals do they make sense to you do you like what you're seeing yeah I think most of them have most of them have um there hasn't being uh a real Blockbuster deal in 2024 the way there were you know new M bought new crust and then feed up a bunch of assets the the deals in 2024 were more you know incremental deals for example numont selling some of its non-core assets and the companies that bought them the market has really rewarded it they've done really well or mining for example's

done really well it's been well well rewarded G mining darus dog right now it's done done a nice job with some Acquisitions that it made um uh we did a billion doll acquisition we bought 40% of of greenstone so that was pretty significant but it was incremental it wasn't you know a blockbuster uh there's a few out there that that might happen uh you know the really giant ones glenor and Rio tendo maybe a Rio glenor Rio maybe glenor Tech that's been talked about yeah you know uh BHB Anglo

American they tried they didn't succeed but those sort of things so those are the big ones but in the gold space there have been some small mediumsized ones I see that continuing okay all right I think as we're wrapping up here I got a couple more questions for you is there anything more that you can say about what you're doing with your money right now we talked about the Gold stock angle anything else well I do a lot of philanthropy I'm investing in a ton of uh of environmental projects mostly in

BC but you know that's a big deal through a fun found I have called the Sitka Foundation that's uh that's very important to me and I'm put a lot of time probably as much time as I am with um the mining game I'm the excuse me I'm the chair of the BC Parks foundation and so we're trying to add huge new protected areas in BC where they don't conflict with other resource tenure uses like fogging and and Mining and so on and I'm working very hard with indigenous Nations and BC to make that

happen so that's extremely busy I've got a little Junior called lumic gold that we've been working on for a number of years that I'd really like to divest because it's part of the business plan we went to the alter three times in the last four years with other companies each time for crazy reasons we we didn't get the deal done so in the meantime we've been doing a feasibility study on this massive lowgrade gold deposit in Ecuador and it's really nearing completion will be done in April April

May this year and that'll demonstrate the value uh so that's a junior that is sort of a textbook example of how beaten up the market is today it's got a market cap of you know 200 I don't know 250 million Canadian that asset value is probably 6 or 7 billion doll Canadian and so that is just that's a rather broad discan right and it's really Advanced no risk I mean no uh no fatal flaws social license political license it's got It's got everything so I expect that'll do well that should do well here

for now I hope I don't tell you that we're still working on it uh but it's representative of the companies that I invested in a year ago that are still kind of flat there's been a handful and you know uh good companies good value investors in the space today should hold if stocks go up 10% do not sell hang on because when the move happens it'll be a really beautiful move yeah and and once again I think you anticipate my question which was going to be your your best advice for investors in 2025 yeah uh get

a get a basket of of companies don't don't bet all your money on one company because you could have a horrible experience uh in one company that doesn't have anything to do with the people or the geology just things happen in this business it's a risky business so have a portfolio some large some small and overall to the extent that gold does well if they're gold stocks gold they're all going to do well I predict in 2025 uh if gold goes down unfortunately I have to say they'll all go down that's

the flip side of the Quin yeah yep important to look at both sides okay well we'll leave it there turn yeah you know the rest of it was a little bit more cheerful that's realistic that's okay thank you so much for coming by to talk about gold silver Equinox gold always great to have you thank you okay and once again I'm Charlotte McLoud with investing news.com and this is Ross spey thank you for watching if you like this video make sure you hit the like button and subscribe to our Channel we'd also

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