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 [Music] I'm Charlotte McLoud with investing news.com and here today with me is Ron McKuen chairman and chief owner at mchan mining thank you so much for being here good to have you than to be here Charlotte thank you yes yes good to be catching up with you it's been a while since we did one of these in person so that's always nice and of course we we'll begin with gold it's also been a little bit of time since we last spoke and the gold prices has really been on the move approaching the $3,000 level

and of course people will remember that you have that 5,000 long-term Target so I closer getting closer I wanted to check in that's still the long-term view well I have some friends that are suggesting it's going much higher than 5,000 but right now I'm happy with 5,000 yeah yeah I think that sounds it it sounds even more it's increasingly I think attainable as as we keep going so for for gold I'll I'll keep it broad at first what's the most important driver that you're watching for gold right now

probably well a lot of the issues that drove it to where it is now um there's except debt at you know government levels corporate levels personal uh the government keeps printing money and debasing currencies and you look at the purchasing power walk into a grocery store go to a restaurant um everything's gone up in price um and I think the world is seeing theat currency paper currency just not buying much and they're saying well what do I buy to protect my purchasing power and then so other factors you've got the

a number of central banks buying gold and getting rid of treasuries uh you the Brick Nations in particular you had recently and very interesting the Chinese government said that uh insurance companies there could buy up to 1% of their Assets in gold first time and there's been some estimates that could be an inflow if all of them did which they probably won't but $27 billion of buying um so you have those things then you have a delivery Problem in London where normally it was two day settlement you know you buy um a

bar of gold and you're going to get it in two days right now it's running at four to8 weeks so you can think of all sorts of fails or failure to deliver on contracts so defaulting on contracts and I think that's setting off a bit of panic we are hearing that maybe it's tariffs and people want to get gold from Europe into America without a tariff but I don't I don't put a lot of credence in that right now yeah yeah that is certainly an interesting situation I've been talking a lot about it with people

in quite a wide variety of of ideas about what's going on but I think I think as you've laid out for gold it's clear that there are are these really strong underlying factors and then some more recent kind of news ear items that are going on and you think maybe the people are concerned that rather than Canada becoming the 51st state that the US becomes the 11th Province and they're trying to get gold to protect that would be that would be that would be a different way of looking at

it we've I don't know I feel more comfortable with that than than becoming a a 51st state maybe May may we should talk a little bit more about that whole situation I'll I'll bring up the tariffs which you're talking about in in relation to Gold so we've got today now I can finally talk a little bit more concretely about what's going on with the tariffs the Canada and Mexico tariffs increased tariffs on on China what what is going on here in your view and we've seen retaliations are we are

we going into a trade War we might I mean you produce gold you can sell it anywhere in the world it doesn't have to go to the US so the tariffs for gold Miners and a lot of metal miners aren't going to be material it's more our manufactured goods going across the border that might experience that um I don't think Canada should have said we're going to retaliate with tariffs it's just going to make it more expensive for Canadians um I would think president Trump threw out the

gauntlet and I think it was really good because it's a wakeup call for Canada that we should be taking care of our border we should stop the flow of drugs we should be spending more on defense and it might make our government more responsible to Canadians too so um I think I it might be hard on some Industries but I think it's good for the country okay okay and and speaking of of this being maybe a wakeup call for Canada I think I worry about how it plays out a little bit because we've got our

government in transition right now so any any further thoughts on that angle to oh yeah he was irresponsible uh Trudeau and the Liberals to perogue Parliament I mean they knew this tariff issue was coming up and yet they said we're going to shut down Parliament we're not going to talk about it you go those guys should be going to jail and the governor general should be thrown in jail with them that allowed this to happen um yeah I mean doesn't there have to be National debate about this what how we're going to

behave it's you know it seems like we all kind of just accepted it and and that's what's going to happen no they should be run out of the country yeah yeah I yeah I think so that's what's going on US and Canada I wanted to ask your take on all of this in terms of you know global global relations between countries it feels like the US is trying to go more inward do you see other countries doing that as well and I'm thinking about this I guess in relation to Supply chains and things like that

which of course impacts the mining industry well China's been doing it for quite a while they developed that Silk Road concept um and they've been well ahead of the western Nations and saying look uh we're looking at our economy it's going to grow at this rate we have to secure supplies of raw materials we had here would saying well mining was bad we don't want any more mines and all of a sudden you have this ge political conflict and going well some of the sources of metals are no

longer secure Supply so where do we go and you're seeing the US uh signed anou memorandum of understanding with Argentina last year to develop critical minerals and I think some countries are saying we're going to close in um you see Saudi Arabia right now very aggressively embracing Mining and they're looking to get mineral resources there because they want to make that the third most important industry in their country and I think others are waking up to the fact that they're natural resources that

could Supply but aren't ready to supply and none of the politicians understand the timelines between a discovery to build a mine well they get it permanent and then build a mine um so yeah there nationalisms going on all over the place right now yeah okay and we're talking about you know these these this dislike of Mining and the shortages that is going to create I know that you often like to talk about bringing young people into the industry and new people and I've been hearing more and more

about that in terms of skills Gams in the industries is that is that something that you're seeing in your companies when you're you're looking for people yes um turnover is fairly high like I think in Timmons is around 28% um so that's a an expense cuz you have to bring people in train them and that um and there just doesn't seem to be the same sctu thisness to a job um but also you had a precipitous drop in enrollment in schools of geology M Engineering and all sorts of other

skills that are related to mining so I think can you create a mine that looks like a SpaceX Factory and you go in it has white acrylic floors it has stainless steel it has every sub35 um and there's all sorts of large Machinery around there that they're designing building and doing things that are exciting um I was on a yacht um three weeks ago off the coast of the Bahamas and the yach was full of Engineers from SpaceX and we were watching the rocket get launched in Florida and land on a b barge in the

ocean off the Bahamas um and I think maybe should get rid of the tie wear a t-shirt have jeans look more like a tech person and maybe and then try to make a comfortable setting um I just think too many people if I was 20 years old comeing go to school I went to a mine say an old mine it's probably a little Dusty it's not that clean most of the people there probably 45 plus uh large number to be overweight and I'm going do I want to work here no I don't want to work here so how do you make it more

comfortable attractive sexy that it it engages them to want to do something they should look at it and forget about all the surface official Impressions and say this is an industry if you want to get to the Sea SED it's probably going to be one of the fastest Industries to do it in if you're ambitious because there's just a big shortage of people right now and a lot of them are retiring yeah yeah that's really interesting it's kind of an image problem in multiple multiple ways across the Spectrum there

so yeah let's see is that is that something that you would look to try at at your own company that kind of you know switch an image like a little bit more sleek and that kind of thing well yes um it's much easier to do when you have a brand new operation so we've done that in our designs for Los aulas our large copper mine in Argentina and I mean it's it's a dramatic shift from what a mine look like in Timmons we have an old dusty Mill and an old plant and it's much harder to change something that's

been operating for 20 or 30 years than to design brand new but in yeah in in uh Argentina we're looking at a mine um it's a large copper mine the accommodation we' be using the mine would be using less than a quarter of the water of a compos size mine emitting 10 one tenth the carbon um the accommodation take inspiration from the Incas its Terrace enclosed in a large translucent structure that stretches about three football fields long it's got Hanging Gardens it's growing its own produce it's processing

its own water it doesn't look like anything in the mining industry that exists today and it's just how can you shock people into understanding that mining's change that our stewardship is much better of the environment that there are wonderful examples of reclamation and forget about those images that are 10 20 50 100 years ago of the environment being degraded to a large degree so we just have to show the world that um we're we're acting better than they think we are I think that's that's very

true and I I would love to see some some designs for that yeah I would love to see that that's something exciting our our website yeah okay so we'll we'll talk a little bit more maybe about Los aulus and mchu and copper since we're we're on that note right now I know you mentioned you've got a a feasibility study coming up for that and also the companies applied for it to be included in the large investment incentive regime so want talk about that as well about about the benefits and what will what

will happen if you or I guess when will you know if you succeeded in the application well we're now 18 days since we applied supposedly within 45 days you'll get an answer but if they have a question the clock stops and so you could be at the 21st day and all of a sudden they have a question and it might take 3 weeks to answer it and then the clock starts again and then they ask you another question so there's the regi is a very important piece of uh legislation that was accepted at all levels of government

and it's to encourage large foreign investment so for us that would based on our preliminary economic assessment we would have a 2.9 billion Net Present Value the regi will add add a third to that it'll add 900 over $900 million to that to lifting us up to 3.8 billion uh so serious and you've had right after it was introduced you had BHP come in and cut a deal with lendine mining which they valued at 4.5 billion for two properties you had Rio come along and buy a Lithium company for 6.7

billion all of its lithium deposits largely in Argentina they also have another project ringcon that's a couple of billion and there other companies they're all it's like there's a fence and they're all leaning over the fence looking into Argentina and saying is this real if it's real Argentina is a country with all sorts of mineral wealth um so yeah there's a lot of people driving towards Argentina right now and saying um this might be a very good place to be there's

30-year uh tax ility um they're going to lift the foreign exchange controls they're lifting the tax on dividends you can arbitrate outside the country if you have a issue with the government yeah I was I know that you you've become a big fan of Argentina is a mining jurisdiction and I was going to ask you what should other countries learn or take away from what they've done there to open up and I think you've listed already a number of things that that could be taken away well definitely

um reducing tax rates increasing permit speeds Canada right now is really suffering from an inordinately long period to permit a mine um I think we should put some AI in there and speed it up um another country that's doing though is Saudi Arabia and I think they're even more Progressive than Argentina Saudi before they put their legislation in you could only own 49% of a company there um the Crown Prince has said we want to make mining the third most important industry there I was um there

earlier this year they had a big mining show it only started four years ago it had 7,000 registrants this year had 26,000 it's rivaling the pdac yeah um and everybody there it was so refreshing to see a government saying we want to encourage mining it was like getting a big bear hug and you don't get that here you don't get the government coming out overtly saying mining is important we want to support it so there they'll said we'll give you back some of your dollars on exploration if you want to build a

process plant we have cheap financing we have lots of money and we're going to do this and we're going to go fast they're auctioning off lands um and at the show there are all sort people coming around and say do you want to be a partner I I don't really know about mining but the Crown Prince wants it and if he wants it we want it um so uh we need expertise to go down there um interesting so so would you would you consider yeah you would consider going there well 20 years ago when I was

running gold Corp there was a a firm here in Toronto watt scrii mchu it was a geological consulting firm and their president Jack mchu said we've just completed a Geological Survey of Saudi Arabia I think you should go down there and look at some of the prospects so I sent some geologists down you couldn't ran a helicopter you couldn't use explosives and we're not going to use them in the city but you know in the field um you could only own 49% of a company and the ministry of Minds You'

be sitting outside their office for a couple hours waiting for a meeting that was supposed to start a couple of hours earlier so they didn't show really any sign they were used to putting a hole in the ground and the oil comes out and they got cash flow immediately but now it it was it was really something and they've also reduced tax so what should other countries do Canada should wake up I'm when I went to the middle I've been to the Middle East twice so far this year in the last six months rather

and when I I look at things that bother me about Canada right now there's litter on the streets that wasn't there when I was a kid and it was actually supposed to be a crime if you litter You' be fine there wasn't a lot of graffiti um there wasn't homelessness wasn't an issue car theft wasn't an issue you go over there there's no litter there's no graffiti there's no homelessness there's no crime and they beautiful buildings popping out of the ground all over the place huge

construction boom and I'm going what's the space Stone this is all based on natural resources and I turn around I think about Canada I think we've got this massive country and we have all sorts of Natural Resources why are we denying Canadians the lifestyle they could have and the strength of our dollar I mean the actions of the government have dropped our dollar through the floor and made inflation just unbearable for most so I'm thinking we got to get our act together because there's we're wasting so much

opportunity yeah yeah I think it's very painful for a lot of people and it's quite telling to make that comparison between the two countries so good to go into that and just one one more uh question on Los aulas I know you're considering an IPO from a qm copper is that still to come I know people are wondering yes we want to get the feasibility done so that's going to be done in Q2 the regi we want to include in it because it's such a significant boost in the value um and that's

probably sometimes in the third quarter so in the second half of this year we should have an IPO okay and and when we compare it to the deal that BHP did with line u based on our last financing we're valued at less than a quarter of that but we are at a lower altitude top end of felo which is one of those properties vhp is almost base camp Everest now when you go up that high in the mountains you need oxygen so do your machines so lower altitude we're a larger resource than the published

resources of those two combined we're a higher copper grade we're not going to we have gold they have more gold but uh we're building a heap Lea so we won't be getting gold out um we're closer to infrastructure major roads and power lines and we're in the lowest cost curve according to Goldman Sachs and they're in Jose Maria is in the highest so being less than a quarter of the value I think when we do the IPO we we've got probably got a 50% bump assuming we're in this

type of marketplace okay okay so we we'll keep an eye out for that for sure have a big impact on M and Min yeah I would imagine so yeah is a valued lifting yeah okay and on that note we should take a look at what's going on in the rest of the company although the copper side is is of course important so recently the company came out with 2025 guidance looks like 120,000 to 140,000 gold equivalent ounces so pretty similar I think to 2024 but I know you've got you've got plans beyond that to to get

bigger so what would you want us to know about about the rest of the business I know that's huge but production in Tim is going through a transition we're going from one mine to another so next year this year is going to be relatively flat the terms as you said compared to the previous um but as we move next year we won't have there's a 8% metal stream on what we're currently mining that isn't going to be where we're moving to so right now 8% of our production is being sold at $600 an hour

so we're going to make more money we're not going to have to pay that stream that was put on by previous owners um we are going to be mining at our Mill rather than having to transport material so that's $10 a ton of savings the or is softer so we'll be able to put more through the Mills so larger production lower cost uh and so in the next two years that's a double in the next 5 years we're working on a plan where we can see a five-fold increase in production for where we are

today up to 150,000 ounces um and we've been exploring quite aggressively there um our resources in Timmons went up to over 2 million ounces and uh right around our mine and then there's another million and plus in the near the town of Timmons we're exploring in we bought a company called Timberline in Nevada which is close to our our existing operations so that exploration we just put out a release today or yesterday another one on Tim this week on Friday so those are all going as expected that the expiration in prolific

areas is generating more ounces okay okay I think hopefully that gives us an idea of what's going on and I don't want to keep you too too long cuz there's there's lots to do out on we did one other thing oh yes we raised 110 milon do yet so we have time on an instrument called a Capp call convertible denture it's available to us companies we're a Colorado Incorporated company so it's available to us it's not it's not available in Canada but most people look at a

convertible denture and they go why' you do a convertible denture you know there's only a 30% premium with the cap call you're buying options that synthetically increases the conversion price or the premium paid to from 30% to 100% so um we're basic with did our stock was around 860 us when we did this and we effectively were the conversion price was 1730 so 100% premium over where we were um it's a lower interest rate five and a quarter it's five just over fiveyear term we can call it in um three and a

half years we can use stock or cash um and if our stock tripled we'd be only issuing 6% of our shares let's let's hope let hope that that would happen yeah solution because we think there's much more value there and I didn't want to issue a lot of stock okay good that that was on my list I wasn't sure if we had tub so I'm glad that you went into it I I'll let you go any any final thoughts you would leave investors with I think especially on the gold side people are still thinking a

lot right now about gold price doing so well and their gold stocks maybe not doing so well any any thoughts on that angle well the majors their treasuries are filling up they're going to be looking for more resources they're going to be looking down and the intermediate and the Juniors I think there's some really interesting drill results coming out of the Juniors and the market hasn't paid it's starting to pay attention to some of them um and I think you'll see more people entering when they they look

and say well Gold's been one of the best performing investment classes over the last 10 years so maybe I should have some and I I recommend they should okay okay I I think that's that's a very nice note to end on so thank you so much for for coming on to go over what's happening in gold and many other facets of of the world right now thank you sh of course and and once again I'm Charlotte McLoud with investing news.com and this is Ron mchan of mchan mining [Music]