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 [Music] I'm Charlotte Mloud with investingnews.com and here today with me is John Kaiser of Kaiser Research. Thank you so much for being here. Great to have you as always. >> Charlotte, thank you so much for having me on your show. >> Really good to be catching up with you. I think we've got a lot to go through where I thought we could begin with gold. So definitely we've seen the price on the rise since we last had a chance to talk about a year ago at this point. I'm wondering if you can begin by

pulling out what you see as the main drivers for gold right now. >> Okay, first off, February 2024, which I think was before when we last talked, that was the turning point where gold went on this sustained uptrend. It's now bouncing between 3,200 and $3,400. If you take 1980 gold at 400 inflation adjusted to the present uh uh that that it's up over 100% in real terms. This is a really big deal for the junior sector. Uh back in the in the in the 70s it was a 400% real gain when gold went from 35

to $400. That made a lot of uh highhanging fruit suddenly lowhanging fruit which is why we had a bare market for gold for the next uh 20 plus years. But what's really interesting about this drive is that the western markets have not participated. You look at the GLD uh uh uh gold trust uh and it's gained maybe 2.9 million ounces uh this year so far, but most days it's down or going sideways. So you have not seen the sort of North North American investor community participate in the purchasing

of ETF gold. I personally think the driver has been uh foreign countries, secret banks, central banks secretly buying gold. What has been disclosed is peanuts in terms of the grand scheme of things. And in the absence of the kind of craziness we saw in in mid 2020 when gold first charged through $2,000, uh the GLD did really well. We are not seeing that validation at all. So it is a big mystery who is buying all this gold and I think it is the rest of the world probably even sensing in 2024 that

there might be a Trump administration coming that has been quietly uh loading up on gold and what we are going through is I think a fundamental repricing of gold and it's $3,000 plus onwards but the market seems to think that it's going a crash back below 2000 because you look at all the metal rallies we've had, silver, uh lithium, uh palladium, uh cobalt, all of them go way up. Everybody gets really excited and and then it always crashes back. But gold is in a completely different category. It's

not driven by usage, the supply and demand. So I think what we're seeing is the world preparing for a post American uh world order where since you know 1945 the United States cultivated its role as the hgeimon uh controlling everything. The United States under the Trump policies is withdrawing from this role and the rest of the world is preparing for a postamerican future. >> This is really interesting and we've got a lot of directions that we can go down here. I wonder if you can talk a little

bit more about this lack of belief at least in the West that this gold price rally is going to last because I I kind of feel that too and I'm wondering why you think people feel that way and what might change that. >> Well, it's kind of been this crywolf syndrome. uh you know the gold gold did really really well in the in the early part of the last decade after the after the financial crisis in 2008 made it to 1850 but then crashed back all the way to 11 1150 and then it turned out all

the M&A that had been going on um it was misguided the costs caught up to the high gold price and when the gold price came down all these projects were underwater capex was blowing through the roof and there was a lot of misery And I think the market became quite disgruntled about the gold producers. And I think one of the things that has happened with the gold producers is that the market stopped treating them as a leveraged proxy for the price of gold. And we I I created a gold producer index

in 2020 with about 5050 of producers making producing more than 100,000 ounces. You could see, you know, I started them at the same, but they disconnected. The gold producer index has actually been lower than the uh the gold trend line starting with that same price uh on the 1st of um uh January of 20 2020 except for one brief period in the second half of 2020 when it first charged for 2,000. Only recently are they almost even and and I think we're finally starting to see the market at least with the producers coming around

to the idea that oh this gold price is not going down and we're starting to see the incredible cash flow. You know they're selling gold at the spot price of of gold uh not they're not hedging it anymore and even if they try to hedge it the hedge price shows uh that by 2030 gold's going to be $4,000. So the futures market is not telling us gold is going back below 2000 but the M&A activity is between producers. It's not really yet happening down the food chain. For example, one of my top picks

is Vista Gold Corp. Which if you run the numbers at the current gold price from their feasibility study for both the 50,000 ton per day scenario that they published in 2024 and the most recent one uh uh uh for 15,000 tons that they they published uh stocks sort of languishing at about a dollar per share when it should easily be 5 to$10 on an NPV per share basis for a permitted ready shovel ready ready project. So the the with the the when you go down the food chain there's a unwillingness to

price but we're starting to see the producers especially the mid tiers and that's where the most excitement is as that uh gold producer index is mainly driven by the uh not by the nuance and barracks but by the eagles and which is pretty much a big producer already but all the you know the Alamos gold all these other ones those are doing really well and I think we'll see those ones start doing M&A of the uh development ounce and the ground uh uh companies. The ones like Vista Gold are quite

advanced. They've been working on this for 15 20 years. They spent $100 million getting this to the point where all the problems are solved. But there's lots of others that were discovered in the past cycle where you know the they ended up their BAS ended up being not worth anything. The market is not yet really embracing them. It's peculiar. In 2020 when gold shot up, these all went up. A ton of money flowed into them. This has not happened yet. So, I think we're in a very special moment. And all you need to

do is believe that gold is not crashing back below $2,000 to load up on these stocks and be set to make five 10 times your money. Not so much from the producers anymore, but from all the ones with the ounces in the ground. Well, and just to add some context there on your outlook for the gold price, where do you see it? We can talk about where you see it going in 2025 or we can look at beyond that if you'd like. Just for the gold price, >> you know, all that gold needs to do is nothing. Just stay here and let the

market catch up. And some people might argue, well, gold is anticipating all sorts of inflation and it's just going to sit here when suddenly inflation soarses again and the capex and opex all climb up and all those economic studies that for like with Vista Gold show that they're way in the money. Well, not anymore because as happened in that 2010 to 2016 period, inflation caught up to uh, you know, where gold ended up settling at 1,200 $1,300. Um, I don't think this is going to happen. I think

if we get new inflation, it's going to add to the gold price. And back then, globalization was still the big thing. Now, we have an anti-globalization movement. And with the United States using its US dollar and its biggest economy as as kind of a a sledgehammer to bully everybody into submission, the rest of the world I think is looking at drawing away from uh depending on the US economy. And when you think about it, uh 80% of the US GDP has to do with services, only 20% with goods. So how

much goods does the does does this u uh $30 trillion economy of the United States uh really going to buy from the rest of the world? And that means moving away from the US dollar and things that we saw like firing the me messenger who gave us the bad uh uh jobs figures from the the revisions from May June and the slow figures for July and coming up with this preposterous story that somehow the person who assembles from hundreds and hundreds of data pieces and somehow falsifies it and then firing this person

because it's not what you want to see the rest of the world's looking at this and saying United States is becoming absolutely absolutely unreliable, untrustworthy in every way. Now, they can't escape the US dollar, but when it comes time to refinancing all those treasuries that are coming due, uh there's going to be a lack of appetite. And I think as these treasuries get paid back, as they as as they reach their the end of their term, that money, I think, is going to go into gold because

nobody's really ready to buy the Chinese remembi. Uh yes, the euro is benefiting, but Europe has its own problems and the United States has definitely declared war on Europe and with the Ukraine Russia situation that doesn't look like it's going to go in favor of Ukraine and and when Ukraine falls, Europe is basically the next uh target for for Russia. So, so Europe uh thankfully is finally waking up and stopped being a parasite on American protection and starting to pull themselves up by their

bootstraps up. But gold, you know, I see it drifting higher. I can see it taking a plunge down to 2500 if the big equity markets take a big plunge. But the other thing to worry about, too, is uh Bitcoin. Now, I don't think the rest of the world is buying Bitcoin. Bitcoin refers to the US dollar. um that that's all it is. It's it's like an OTC bulletin board stock where somebody owns all this zerocost paper and then there's others who own a smaller portion of it. But you have to find a buyer for your

Bitcoin to in order to get this the the money that you need to buy to buy things and and Bitcoin itself is not yet legal tender. And that's a scary thing. If Trump wants to make Bitcoin legal tender, can you imagine? You know, you're selling your house and you're going to get a million bucks and they're going to hand you a million dollars worth of Bitcoin today, which tomorrow could be no bid. So, the if if the cryptos undergo a major fall, that will have ripple effects right through the

whole market and that could take gold down with it because that's what happened in 2008. gold was the most liquid ass and the rest of the world will be sitting there buying this gold. So I'm not afraid of gold dumping to 2500. In fact, I think if it happened and then stopped there, that's still a substantial 50% real increase for the price of gold and still very meaningful. For example, Vista Gold when I run the numbers at 2500, it's way in the money. It's it's nowhere near, you know,

marginal or anything like that. So, um, it doesn't really matter what happens to gold next, so long as it doesn't do this all back below $2,000 where everything's a wash in terms of profitability. >> Great points on gold. I think that's that's important to go over there. And you mentioned with the gold juniors, we're kind of waiting. We're seeing some interest and movement in the producers. We need to wait and to see it come down to those smaller companies. I'm

wondering if we can also talk about the the health of the junior sector as a whole because I know that's where your focus is and it's good to get your thoughts there before we turn the camera on. You're talking about some of your concerns, the problems the juniors are facing and mentioning this extinction threshold. So, I think that's a a good point to take a look at here. Yeah, I I have a statistic uh where I track the uh percentage of the Canadian listings trading in the different uh

price ranges and the most important one is the the percentage trading below a dime. And going back to 2000 where my data goes back to uh when we have had bare market reversals, they have always been very violent. you'll see some like like 60% of the juniors are trading below a dime and then boom like within half a half a year to 12 months it's down to 20%. We started seeing a reversal of the bare market uh last year, but it's been the shallowest reversal yet. And the problem is there's

no money flowing into the lower echelons of the juniors. I I of 192 TSX Venture Resource listings that I track, 45% of them have negative working capital. In other words, they are worthless and nobody's ever going to pay that back. it's going to be converted to paper. There's about $3.6 billion in the treasuries of of about uh uh 40 40% of them and that's the sweet spot where you want to look as maybe like $450 companies that are worth looking at. The others are not worth looking at. Now I

also track the financing activity on the venture exchange and yes financing activity is better this year than last year but when you look where it's going it's going into $2 million or uh or higher financings which are in the higher price stocks. So the better more advanced companies are starting to attract money. So that's a big positive. But in terms of number of financings in the smaller category, that is really, really low. So it tells you that this is kind of like a split market, very

selective. But from my bottom fishing perspective, it's also really good because uh I I've got now 111 companies in my bottom fish collection. These are companies that are all missing missing one or more pieces. One of them could is is is money is is is sufficient capital to do something important. But these are teams with companies with competent management teams ones that are interested in creating new wealth by discovering something. And again, we're talking about the junior exploration

ones as opposed to the ounce and the ground. The ounce in the ground ones are starting to attract the funding from the the Eric Spratz of the world. The the the the high netw worth investors are putting money into those. But the ones that are expiration plays, those are still having a really tough time uh attracting an audience. And I call it this uh catastrophic collapse of eyeballs for the resource junior sector. And that's played out over the last decade. Uh uh the the fact we've been in a bare market

since 2012 with a few brief interruptions has has has contributed to the disappearance of eyeballs. the uh fact that with cryptocurrency like Bitcoin, you don't need to know a single fundamental thing other than that uh the trend is your friend and that there are is a greater abundance of fools, people more foolish than yourself to eventually buy. That's all you need to know. You don't need to think the resource sector is very very difficult. You need to know about deposits. You need to know about

the exploration development timeline. You need to have a method to value these these companies and it's event driven. You get a news release every one month, two months, sometimes six months and then you have these waiting period and the financial establishment uh uh ever since they got rid of the uptake rule for uh for short selling. Uh they have their bots that come in there out comes a news release in comes the uh retail buying. it goes up and they then start short selling paper into it and they

just they have to borrow it but not if they're flat by the end of the day. So they can continue as the as the incoming capital dies down, they can continue to lean onto the bid side of the order book with selling stock that doesn't exist which causes this cascade this coll this this this collapse of despair as the existing longs say another failed rally and then they sell too which enables the shorts to cover their cover their shorts before the end of the day and not run into problems borrowing paper that

simply isn't aail available for borrowing. So, the sector it's it's it's it's great if you know what you're looking for. If you're looking for good stories and management teams and looking for the ones that aren't negative, uh just it's I see it like this harbor full of several hundred boats all mored. The tide is rising but very subtly. And you're seeing individual boats put out to sea. And that's where we're having fun right now because we're I'm

promoting them from the bottom fish collection to the favorites collection as they start getting their act together, the missing pieces fall fall into place. But I think it'll be 2027 before this bull cycle has reached the kind of when pigs and turkeys are flying again. So there's like another year and a half left of evolution for this bull cycle where people who are coming back to it, who are learning about it for the first time have a chance to make money. And that's the plus side of this very

shallow decline in the number of percentage below below 10 cents. It's this is a market where you have a chance. It's not like if you weren't on board before the sudden reversal, you're out of luck. Everything's overpriced. know there will be many many opportunities over the next 18 months to find ones that haven't left the dock but where you can see the engine starting and that's that's why I'm pretty excited after almost packing it in last year when I was totally desparing about this

whole sector. >> Well, it's good to hear that you're feeling a little bit better now and I I think this is a good point to ask you to share a little bit more about your strategy. So, we've got all of these different things going on for the juniors. what what are you doing right now? Can you explain a little bit more how you are doing out your money at this point? >> Okay. Well, well, first of all, uh I've I've changed my whole business model. I still have Kaiser Research, which costs

450 uh uh until the end of this year. Then it becomes this expensive $2,000 a year, $200 a young ser a month service. But that's a a research platform. It's got all the companies in it. It's got a powerful search engine. It's really meant for family offices, do-it-yourselfers, and so on. But I've launched now a Substack version where I write and about and talk audio talk about uh the favorites collection. I've got 26 companies in there and they are a wide range of companies. So instead of

like say okay here are my top 25 and because I love gold they're all gold stocks. No, I've got all kinds of stuff. You know nickel is in the dumpster right now but I have FPX nickel in there as a longer term bet. And so I'm designing these bets as not just on individual company fortune but also on big picture outcomes. For example, right now the expectation is electric vehicles are dead at least in North America. Nobody's going to need clean anything anymore because dirty is good and so on. Uh for

example, um a Patriot Battery Metal Corp is is in there. um at the current lithium price projects uh worthless and but in their pea uh it's worth about $3 billion using a price that's about 70% higher than it is now. But they're not going to be in production until 2028 uh 2030 anyways. So you have time for things to turn around. So there are now stocks like this where you can place a bet on the higher on on the on that trend turning around and obviously China now owns the electric vehicle future and

it's going to continue expand and it's going to sell to global south nations. the Europe Europeans are going to have to embrace Chinese vehicles which will force their own domestic producers and even within the United States there's going to be the electric vehicle is the future of if Toyota succeeds with a solid state uh lithium ion battery that gives you thousand kilometers on a 5minute charge gasoline cars are toast they're they're finished so but that's not going to happen during the uh during the Trump

administration ation term. So it'll happen later. In terms of like critical metals, a Clara is one of them that's done really well. It was 35 cents at the beginning of the year. Now it's a dollar$1 dollar$ dollar20. Sunrise Energy Metals, which is Robert Freedelland Scandium deal, uh they've turned after, you know, blowing their brains out on nickel cobalt. They've gone back to the original biggest richest scanium deposit in the world. And now they they've gone from sort of

20 cents to about$120 now. Also like those two are the biggest performers in my collection. And what's changed is that everybody realizes China's domination of many of these critical metals like rare earths and scandium on which it's imposed uh export controls. Uh uh you you're going to have to pay more than the China price to have a reliable source. And we saw that with this MP materials deal that the Pentagon did saying we're going to pay twice as much as the spot price for neodymian

promian to guarantee a floor for that and they've provided government funding. So United States and I think other countries are going to have to start doing this too. They're starting to be like China. China bankrolls its industries and they make they don't even care that the their rare earth producers make no money so long as they're breaking even. They make their money downstream through the magnet production which they pretty much dominate right now. But they also use it as a strategic

geopolitical tool. So the rest of the world is waking up and starting to say we have to pay higher for reliability of these these key inputs. And and of course in in my my gold spectrum, I've got Vista Gold as my advanced uh very undervalued uh broad gold project that will likely be taken out by one of the mid-tier companies. I've got at the opposite end of the spectrum Solitario Resources Corp. which has perhaps the last major gold frontier in the United States with its golden crest project

which could end up being a mirror image of the 19 million ounce endowed homestake region in the northern part of the Black Hills. They haven't yet got that discovery hole, but they they're waiting for permit in the one area where there's gold there that it's micron size. The prospectors from a 100 years ago they walked through and and didn't find it. So something like that is there waiting to if they get that discovery oh well you know it's it's it's 65 cents.70 cents US that's the sort of stock that

could end up being a $50 to $100 stock because it controls 100% of a potentially entirely new and overlooked gold field. And then there's ones like Endurance Gold Corp which has been working for years as Reliance project uh uh you know done over 10,000 meters of drilling slowly stitching together this orogenic gold system. Uh they haven't been able to get the market's interest. They cannot get institutional interest. And this is one of the things the institutional interest that really drove

the 2000s uh both the the base metal super cycle and and the gold cycle uh they're not there yet. They're maybe getting back into the gold gold producers, but they're not here in in in in this uh area yet, but these guys are going to put out a resource estimate. It's not what the project's about because it's one of these things that will go deep for, you know, thousand meters and be an underground mine, but at least it'll be numbers there that a fund manager when he has to or she has

to explain, why do you own this stock? We say, well, they have these 500,000 ounces here and this is the starter pit and they keep going and keep growing and growing it. So they're doing that to try and coax in a different uh you know audience than than what's that because the retail that's left at the moment they're kind of all in already. The other ones are gone. They do not yet see that you know ignition of this sector that makes them rush in the way they used to in past cycles. And the biggest

groups are the Gen Z and the millennials who really know absolutely nothing about this sector. They never even had a chance to lose money in it. uh except for the odd one that accidentally strayed into it in the past past decade. So that's why I'm on this uh educational uh uh role to uh teach them about the rational speculation model, how to quantify the size of the price rise and how to assess the current pricing in the market is good, fair, or poor speculative value, which is back in the

earlier decades, you know, I didn't know how to do this. We were all just being like Bitcoin traders. Oh yeah, it's going up. the results are coming and going to keep coming until they don't. And and the pros of course would all like sell into the uh S-curve frenzy. We don't see that much S-curve frenzy anymore. And that's really the key to this sector is when a new discovery arrives, people start saying, "Oh, wow. What's the limit for this prize? How big can it get?" And that's where you get

the debate. Well, is it going to be a billion dollar prize, two billion, five billion? are going to fizzle out as a nothing or not worth anything. And that's what always used to attract the speculators into this sector. But what I think is going to be really key is like with chasing Bitcoin or Tesla or any of these other knee bender tech companies. Uh um I mean the trend is your friend until it's not. You don't there's nothing to really know about any of these companies. Everything that can be

known is in the public domain. These are highly efficient markets. The resource sector is has become extremely efficient because the eyeball the collection of eyeballs out there that knows how to think about it has shrunk. So this is now an underthought sector and and because it's event driven, you don't have to just it's not a daily trend type of thing. It's okay here's the news event, here's the drill program coming up. we're going to have to wait this, but you can get your head around what

does the the geohysical survey look like? What do these results look like? How do we stitch it all together? Becomes a thinking person's game where you're betting on the staged fundamental outcome. And what's missing right now is the anticipation cycle that used to make it fun in the 80s, 90s, and even partly into the 2000s. I think that gives a a really good idea of how you're focusing right now and totally agree on the importance of education. So nice to hear that you're doing all of this work in

that regard. We covered a lot of the topics that I wanted to go through today, but before I let you go, are there any final thoughts you would leave investors with, themes that you're noticing right now? um the the base metal trends and that are not super positive and as this uh tariff all these tariffs start to kick in we may see a global economic slowdown uh China has been unable to really get domestic consumption going. So it is a bit of a drag. Also, it needs to really liberate its own people and get them

buying stuff to take the pressure off everybody else. So in terms of like the base metals and that uh um look more at the exploration side, don't play the uh you know pounds in the ground optionality game game. Um in terms of jurisdictions, Africa's now a no-go zone for juniors. Uh Australia of course is its own world. well explored by its own thriving culture which where the government actually supports it unlike Canada's where they do not support it. Australia has not signed on to unrip the way

Canada did. When Canada did that it basically ripped the rug out from junior expiration and you know senior development by basically handing 3% of uh the population a final veto on any resource development decision. And this British Columbia is now a no stake zone since this new staking rules came in and everywhere else all these consultation cycles and that uh they are really slowing down things. United States is really the place to look for expiration. Although the changes at the BLM and the US Forest Service has been slow, there

is a noticeable difference in attitude. The hugely bad thing about the United States has been the huge NIMI blockade. this army of of lawyers and anti-mining people uh bank rolling opposition to permits even exploration permits such as Solitario hoping to get its uh Ponderosa application approved by September so it can get a drill program done before snow shuts down that part of the the Black Hills. those this idea this arrogant sense of uh exceptionalism which uh we we mine stuff elsewhere we don't want to

mine stuff in America that is now under siege and by the policies of Trump basically alienating the rest of the world uh I mean slapping a 50% tariff on Brazil I mean what's the point of that they have a they have a United States is a trade surplus with with Brazil just so that his buddy Yier Bullzaniro his insurrection panel uh he's unhappy that this guys being prosecuted the way such people should be prosecuted. This sort of bullying is alienating the rest of the world. So the pressure to look for

resources inside the United States, even if suddenly there's a turnover and the Democrats are back in charge, that's not going to go away. So juniors that are focused on in the United States where you do not have this First Nations blockade problem that you have in Canada, that's going to be something that I'm focusing a lot on. >> Okay. Okay. Well, I think that's a great place to wrap it up. Thank you so much for coming on to go through all of these topics. I think this was a great

discussion. >> You're welcome and thank you for having me. >> Of course, and we'll make sure to have you back again soon. For now, I'm Charlotte Mloud with investingnews.com and this is John Kaiser. Thank you for watching. If you like this video, make sure you hit the like button and subscribe to our channel. We'd also love to hear your thoughts, so leave us a comment below. [Music]