gold news

 [Music] I'm charlot cloud with investing.com and here today with me is Jon Zar editor of exploration Insight GL to have you thank you for being here youo yeah yeah okay I'm excited to get into it we've got a lot of topics I think we can cover but definitely I'm going to start with gold because everybody really has gold I think top of mind at the moment and I know you take a commodity agnostic approach to IND dusting but is gold's price run tempting you to increase your exposure to Gold stop uh like in

expiration insar we have most of the portfolio geared true precious metals such that when this happens that's why we're there we're not going to chase it but uh yeah we're we're here for this event so I'm not increasing my exposure because of the price but obviously the part of my cor for you that's exposed to it is dealing quite rough yeah yeah so you kind of saw it coming you're already there and yeah but I mean the thing is that most of what we what I did was I

vought royalty Junior royalty compan that were cashfy uh worried about margin compression that concern is less but because it's expiration insights we don't do a lot of you know we don't buy baric we don't buy igno we don't do that sort of stuff and so we don't get that kind of Leverage and exploration as I said in my talk you know that's probably got the worst leverage to any commodity because it's more about the leverage to a drill intersection or when anything

and so yeah I I like the way the portfolio has worked year to date the out performance has been on expiration Discovery drilling uh mostly in cops okay okay okay and on just before we move on from gold you mentioned you've been focusing on those small royalty companies and we talked about that in a previous interview as well in terms of your gold exposure so that's still what you're like there yeah but I mean the thing is that I'll probably cut back because uh that had a specific idea and that idea might might

be gone now so of the ones that I've got this probably one I'll keep and the other ones might have to uh because you know they're low risk but when the risk is off and their Gold's going up that might not be the best iness okay okay so possibly possibly done with that possibly Poss okay hard to say hard to say all right and you mentioned you started to talk about your presentation here at pdac unfortunately I didn't get a chance to see it I'm sorry I was up here but it was about evaluating Real

Results using Ai and hi which I had to look up human intelligence that that's correct okay thank you so I I'm curious if there's a key takeaway that that you would share from that well I guess the key takeaway is if it was in the investment Hub and so the idea is to take that machine learning and translate it into decisions cuz we get a lot of data and what we have to do is convert that data into information that translates into an investment decision and so what the machine learning is

trying to take that data which is usually Drilling and try to make a a uh a an investment decision on an expiration play pre resource so that's the whole idea is and and with gold the idea is that you know gold can be highly variable and it's understanding the variability and the pability of that resource and what it could be uh in in the terms of the valuation so when do you sell or do you buy more and a perfect example would be fosterville a unicorn deposit got bought and unicorn deposits or any of these deposits get

bought not once but several times so in an investment decision I would have probably kept Kirkland as opposed to just selling or New Market got taken out because later you know uh Kirkland got taken out for about 10 times out my fique and so uh yeah understanding the deposit and the value of it is very important versus the perer yeah and I like I like the hi Angle now that I know what it stands for because I think a lot of people still feel quite wary about the whole AI thing and are we going to

use it is it effective yeah I mean you do need that control in understanding that okay if the machine tells you that it's variable and then you've been to the deposit and you say well it's really not that bad then you can accept more and maybe there's a little bit more upside than the machine's getting because what the machine's doing is it's learned from whatever 3,000 plus resource estimates and you know millions of drill intersections to say okay these intersections generated this resource

and now you're giving me more data and based on what I know this is the probability distribution of what it could be and that's what we're trying to figure out the problem with a a a rubicon's deposit is the resource they came out was not even in the distribution that the machine came up so I'm already know that my upside is limited have I only got downside so if I had to make a decision at that point with the made resource I would have sold yeah yeah that gives you an idea I

think of some of the concrete decisions that you can make okay really interesting and I'm going to go back to gold for just a moment I got too excited about your presentation and I blew past this question but I was going to ask you we're seeing quite a bit of m&a in the gold sector right now any thoughts on the deals that we're seeing or do you think that this is a trend that's going to continue with the the m&a so uh I did another talk which was at the medal syester Forum on Thursday uh oh no on

Friday sorry which your bubly Miss sorry I I wasn't in town yet I'm so sorry I'm doing so badly okay so that one was about uh a rant I done in the letter several weeks ago about new mods divestitures and so some of the m&a in 2024 was was held back because the overhang of producing assets that were coming out of numont and so there was like eight or nine that they sold for about $3.8 billion when they thought that they would get two so they were selling into a rising gold market with a lot more

people interested and that overhang is now gone and so now I believe there'll be more m&a as there's not this big overhang of assets that are sitting out there like a producing because people are willing to pay a premium on production because it's already permitted we know the plant the capital is already been spent versus single asset developer which is cheap but we got the capital risk we got the permanent risk potentially but that might be where people are forced to go down okay

interesting interesting and I heard somebody saying earlier this morning I was watching one of the talks numont has it finished this process and we know where those assets have gone but there were companies in the bidding process that were looking for those assets that didn't get them so they'll be out there exactly and and that's what you want to see is just all those guys that were waiting now and didn't get it are the ones that are going to be doing quite so where are we overall for you in the the

cycle for gold right now well I mean there's a big disconnect and people talk about it is that you know because of what was pushing gold price up that did not translate to the equities so if we have Central Bank buying uh of Golds which is making it go up then central banks are not going to look for leverage to Gold they want the physical goals and so that doesn't spill over into equities and until we see gold buying by ETFs mostly in the west Europe and uh and in uh the states we won't see

that translate into people buying gold equid ETFs that translate that that trickle down into buying companies like the big seniors down to the Juniors and gring S if it's just Central Bank buying that's not going to translate and that's been one of the big disconnects yeah I think it's it's definitely a central Topic in terms of what will we talk about here when I guess the follow-up question when do you see that was alling well okay so so I did a I looked at one company angle gold

de Shanti so angle gold de Shanti came out with their Q4 results and and if you want to talk about leverage to Golds they uh they I think free cash flow wise on 2023 they produce I think they generated about 100 something million uh in in free cash flow and in 2024 they generated a billion dollars of free cash flow with no change in sales volume so all that billion dollars was just the gold price going up 25% and that's leverage and that's where companies are going to be able to show but now the question is people go well

they had these great numbers why are they going down because that was already embedded in their 40 or 50% rise up to the release of that docer because people already expected that now they're worried about okay what's going on can they do that again probably not you know and then now are the costs going to go up you know what else is happening are they building you know are we giving into a capital SE so that's why people will go oh they had such good numbers why they trade down the problem

is that most of that's embedded and now people are just looking for expectations and that's how you get it arted okay okay okay thank you for for going into that one I want to shift over to your travels you're always going around to very many different places you had mentioned before we turned the camera on over in Africa recently and and other areas so what highlights would you pull out from from those travles yeah so Africa is Big so please help me hold in help me hold in sorry when you go from Germany

like your Vancouver you go to Germany and then you go down to Cape Town that's an 11-hour flight only one hour of that is your 10 hours of that's half year so when we talk about Africa we're talking a big place with 54 countries I'm just talking about true countries Namibia and Zambia and jurisdictionally they're very different than where we're seeing a lot of problems in West Africa with uh with baric and Molly with with other jurisdiction risk I mean but the problems in the southern part of Africa

is more East structure power issues you know they do have most of that was for copper and so infrastructure there is the issue the Chinese have built a lot of infrastructure of Zambia the roads are great and stuff like that but when they have a drought they suddenly don't have PS so it's not being connected to the grid there's just no PS uh but in West Africa they're doing diesel it's 28 cents per kilowatt hour but you know you've raised the rent so you know you're 10 to 15% carried interest Molly

wants to do 35% you know your your royalties have gone for Thunder 6 to potentially more than 10 so all of that is weighing in on Direct expiration into these jurisdictions right yeah yeah I certainly didn't mean to paint Africa with a bro brush I wasn't talking about you yeah so so we've got we've got those countries that you have been to Let's maybe we talk a little bit more about the whole Barrack situation in now it seems to be resolved at this point point we'll see any any thoughts on that does

that kind of put Mali out of consideration no no it won't because the thing is anybody who's looking at expiration we doing anything going forward the number they got to look at how many more people will enter Mali or bikina Faso you know nir matters less because it has less gold production but uranium is an issue for them uh but will anybody else come in and so if the company's already in don't want to invest in Mali nobody's going to come in and explore in Mali because they're going to get a

severe discount and their cost of capital is going to go through the reef so where they're going is kis they're going to guinea maybe Sagal uh they're going to other places in the uh in the greenstone belts that are not those countries but the problem is that some of that creeping nationalism on rents that might transfer to these other countries without the security risk they might say wow hey these guys have a much higher royalty why don't we why don't we do a split the difference and raise our

royalty but not as high as theirs so we're still attractive but we get more money and and then the other thing is that countries that you know people probably have talked before about you know uh back in the days we had pan you know the northern part of South America was connected to West Africa and so those greenstone belts have been separated by the opening of the North Atlantic and so these are very similar locks U so some of that jurisdictional movement has been to Northern South America right right okay and any other

jurisdictional ideas you would pull out from from your travels recently well Rec I mean like one thing that's worked for me has been uh Kazakhstan because some of these copper projects the capital intensity is very high and so uh when you deal with lower grade and we're going to lower and lower grades uh because the better deposits have been found that requires bigger plants those bigger plants require not only power but water so you need all that infrastructure and so when you have places with cheaper power and

infrastructure that's getting more and more important and so Kazakhstan is a place where some of the operating mines there they are paying maybe 2 and A2 cents per kilowatt hour now jurisdictions you might be paying 15 to 20 so uh that's a huge expense uh so yeah so jurisdictionally I'm looking at those kind of because that's what's attracting Majors as where as well as as as much as gr it's infrastructure okay okay and on a on a jurisdiction note I did want to bring up the us because

since the last time we talked we have Trump as second second term as presidents and there's a lot of optimism I think in the mining industry about speeding up permitting making things easier so what are your thoughts does that make the us more attractive for you yeah so companies that if I had a company like let's say a Trilogy medals which I had and then I sold and should have vought again but they had a royalty I'm sorry a a permitting issue where they had a permit under the Trump

Administration and the Biden Administration an NGO got it revoked and now they're the Trump's back and then the idea is that they'll get it back again for that 311 Mile Road that a the Alaskan agency is actually putting together so so that's done very well for people that bought Trilogy as a pure Trump play the one that I'd invest in which was Arizona Sonora copper which is building the cactus Park saller uh uh open pit deposit in in uh southern part of Arizona that didn't have those issues

because they went out of their way to make sure they were mostly on private land so the boost for them in terms of trump is less but if there was any issues they're probably gone and but mostly they are permitting a state and not federal uh so there might be a boost for some other companies but the ones that I'm exposed in Stakes uh you know not a lot of change because uh you know in terms of Permitting I specifically picked those because I thought the permitting will be easy right right and you the way you're

talking about it brought up something that makes it hard for me to feel too optimistic you know the the company mentioned who got the permit had it taken away now is it going to come yeah and then 40 years later what's going to happen when it's a 30-year mind l oh yeah and and and and if if you talk about electric vehicles and the subsidies and that you could go through that where Ford bills plants they employed people for decades and then once they build a plant because you know they get this EV or electrial incentive

and then you take it away suddenly the plant doesn't make any Mone so it's hard to plan these long terms where it's a mine or a manufacturing plant with foure differen in uh in in Plants you know it's very diff yeah yeah it feels like you would just be racing to get as much done as you could which I guess you yeah well you can because once you build it and if you don't have that subsidy your the penetration of EVS in the US which was already you know was way lower than China and the EUR European Union it's

going to go lower sanoa and so now you're building a plant into a market that doesn't want it because they don't get any incentives to buy so and then you take that to mining you know oh you know you're like like resolution you get the landwalk you don't get the landwalk then you're back and you got the landwalk then you get to your point let's do this as quickly as possible so the land SW is you go away you know yeah yeah well and on the note of things that are changing quickly anything you would

say about the Tariff situation that we have going on which has already changed multiple times back has not happened yet not yet we we'll see but yeah from a mining perspective yeah from a mining perspective you know those Supply chains will be an issue like if you like let's take an example of a rare earth company that I I'm looking at I I I own shares of I'm not going to mention them but but the thing is that when they talk about Downstream there's an incentive for them to do it in this us

but then if they like decide oh hey we could do this in Canada and then send it to the US to do a metal allog and I said well what about the 25% potential ter uh we had me it and go well or if you're going to go to Canada maybe the supply chain should be to Europe now and not to the states and if you stay in the states you're going to stay in the states and so that I don't know how that's trickling down into people's feasibility studies yet that's going to be an issue but if

you're in the states and you're producing cath of let's say like Arizona Samora that's going to be purchased by local manufacturing you're good but if you're producing you're concentrate and then you're exporting it you know what does that look because it you know there won't be an export tariff on you but then where you're sending it might impose a tariff on you as a reciprocal to whatever uh the US Administration is did right so so there are new considerations that companies just

didn't even think to No it's it's it it gets Beyond ridiculous because you can't plan on something that hasn't outen and would you why why would you and then also something that's highly negative why would anybody put that in and then then you say well is it going to change and then they'll tell you well you know this guy's going to be gone and so by that time yeah but in the inter inter are you doing yeah so so yeah I I don't know how people work under these conditions when

they're trying to put out as certain numbers as they can you know constantly evolving uh uh uh you know policies well yeah and it seems like companies then okay say you do have to account for these these new issues then you end up spending more money I guess to to do that to study up yeah yeah but but I mean look at anally so so what we've done is like you go from critical minerals which now this Administration doesn't like so you're not going to get like the dod or the doe I think funding

lithium projects or nickel projects or stuff like that but they'll continually potentially do the anol because that's become a security and so they're more interested in security mow that give them you know that go into the military and anything that China bans that'll become a security so antimonies come up and stuff like that and and you know you could see people talking about that yeah yeah I've already heard about antimon once today and we've only been here for half a day and before never

heard about it at all so yeah really interesting times I'll I'll before I let you go I'll ask you any other key topics right now that you are like Trends mining industry things you're keeping a close eye on yeah I mean with all the uncertainty I'm thinking the best thing for me to do is go back to Grassroots exploration uh just because I mean we're just talking about a long timeline and all these uncertainties that are short term I don't have to dealer cuz it takes 20 years to putting in

production that's kind of funny yeah yeah so just choose something that's not going to happen I'll prefer the uncertainty or drill vit rather than the uncertainty balls okay okay very very interesting takeaway any final thoughts you would add for investors um uh be careful yeah okay yeah what a okay we'll end on a be careful note I feel like that's appropriate for this time thank you so much for coming by to go through all these different aspects of the market great thank you very much okay

and once again I'm Charlotte McLoud with investing.com and this is Jo zindar with exploration insights [Music]