[Music] [Music] I'm Charlotte McLoud with invest.com and here today with me is Gwen Preston of resource M thank you so much for joining me great to see you oh good to see you too thanks for having me of course and we're here at the New Orleans investment conference first interview of the day very exciting we're going to talk about Commodities but before we get into talking about specific Metals I want to ask you about sentiment in the resource sector right now so tell me how you're


seeing it so this I actually just gave my my talk in there and my the the structure for my talk was comparing the majority the sentiment of the majority which is despondent the majority of Junior mining investors to the minority who are incredibly excited and I think the difference is that the majority who are that's most I'm talking about retail invest but also the companies that need to raise money those those are the two groups for whom sentiment matters right um the majority usually need to see


something happen in the near term they need to raise money near near term they want to see some gains in their portfolio in the somewhat near term and there isn't a lot of reason to believe gold perhaps accepted but for the rest of medals that anything is going to change in the near term we've been muddling along for a while metal prices have been fine but no investors are interested in mining stocks there's a whole host of reasons for that the main one is simply that being invested in


indexes which is the same as saying as the same as saying being invested in the Magnificent 7 or whatever you want to call Big Tech has worked just fine if when that changes or is changing um that will spark investors to actually have to look for value and that that is that's a setup that we haven't seen in a long time is investors having to look for Value so that's why we haven't had investors interested I don't think think that this is going to change tomorrow that's why that majority remains


despondent the minority who are super excited about buying mining stocks right now are those who have Deep Pockets and therefore can be patient and since they don't care whether this happens tomorrow or in q1 of next year or the year after they can just sit and wait they see the big picture for what it is which is that there's a shortage of medals in the future and that there's lots of reasons for gold to perform and they're happy to accumulate positions so sentiments terrible but some people are very


excited and there's sort of reasons that make sense for both right I was going to ask you exactly okay so when does that majority become interested again and you've you've answered that sounds like it's going to be the way it is for for some time but that means that people have opportunities there's time right now for people still to get positioned is what I'm hearing for sure and there's also ways that you can um find interest in the near term so if you if you're


someone who focuses on Metals investing which is what I do something like investing in Discovery stocks discoveries will perform in a market no matter the market so if you get a really so the way I look for excitement in my portfolio in the near term is Discovery stocks and then I set and uranium which we perhaps can talk about as well but uranium is doing marching to its own tune and it's a very Happy tune um and then I also have a bunch of the portfolio positioned for when the big picture changes for when investor


interest comes into this space and then I have a bunch of positions that I think will perform first and best when that happens okay and and one more note on the Juniors cuz something that I'm hearing frequently right now is even the companies that have money right now they're making progress at their projects they're releasing results when they release those results it becomes a selling event and people who are sick of it they just want to get out that's when they do it so any comments on that


situation I mean it's very real I saw a news article just this morning too about um you know Echelon Capital Partners they were having to liquidate a bunch more positions because one of their client funds ended up being broken very short description of a complicated story um there's all kinds of reasons that people get strung out from this stuff and I get it I've had to go through the mental exercise a couple times in the last six months um of what why am I in this game and what's my game plan to


stay here if I if I still believe it because if you don't it's very easy this has been a long grinding market and it's very frustrating that the gold price the copper price like a lot of the metals are doing just fine but the stocks are just not and it's very frustrating so I get it there's lots of um people out there who will also say when everybody sells like that's the bottom marker for sentiment and I do believe that there is something to that the the caveat is that we're in a bit of uncharted waters in


terms of what's been going on in the big markets what's been going on with you know monetary policy and F like it we're in a bit of a different game and I do think that that game is changing and it's changing in Gold's favor right now for sure base medals are going to take a little longer to go um I don't think Junior mining sentiment in itself matters that much but I think the big picture moves are setting up for gold to do well sometime soon and so among the Juniors that you've invested in what do


you want to see them doing right now do you want to see them release results and and possibly have that selling event and do you maybe have any examples of companies that are navigating this interesting time well you know that's a really good question there's some there's a few stocks out there that are doing very well Mayfair gold is an example of a stock that just its share price chart is a thing of beauty and it's not 100% clear to me why the investing Community has decided that


that project and that team is going like that they love that one um often you can sort of see a segmentation there's you know the the tier one projects teams opportunities and then there's the rest right now it's not so clear um what I when things are unclear I try and find a a rule that will work and for me that rule is discoveries now discoveries are the hardest stocks to pick and win because we don't know what the rocks are going to return but if you can have reason to believe that you that a stock


has a fairly good chance of generating a discovery maybe they're testing more than one target the targets are particularly good whatever your rationale might be discoveries can absolutely work in any market so I have at least half a dozen excuse me half a dozen stocks in the portfolio that where I'm like waiting on results from testing targets that I really like and those are the ones where I'm like okay this could happen sometime soon as for what Juniors should do you just got to keep keep


working because it will change especially in the gold space it will change there are investors out there it's just hard yeah very tough very tough there's not that kind of one size fits all answer there okay so going to spend just a little bit of time on gold and then we'll move on to uranium of course we got to touch on gold for at least a moment so I think just a quick take on the gold price right now does the current level make sense you know you mentioned things are going to change


in its favor but it sounds like maybe not in the immediate future gold is the one that's hardest to understand um I shouldn't say that metals are hard to understand are hard to predict in the near term in general gold seasonally November and December are not not great for gold like that's that's the general pattern um that said the reason that gold is moving right now is because of rising risk in general you can point to specific geopolitical risks like the war in Gaza but more generally we're seeing


T Bill treasury yields are rising and treasury yields are rising because there are not enough buyers for US debt and that is a huge problem like a huge problem it has been developing there's been call it arm wavy talk about the end of the US dollar for a long time that is sort of dollarization is be is happening in real time now I'm not saying the US dollar is going anywhere tomorrow but dollarization is actually happening that's why yields are rising that's why gold is rising alongside yields there's


a lot of really interesting things that are happening um that are changing the pressures on gold in a positive way Central Bank buying is through the roof undisclosed Central Bank Buy is through the roof that's all the bricks and Bricks plus Nations gradually pulling gold into their central banks so that as this dollarization de globalization system or process happens they have their fall back Reserve so there's a lot of bullish forces on gold I don't know when it's going to move if I had to


guess I think it might move in January February because that seasonally plus the forces might come together but it's equally likely that some sort of stock market crash or recession could be the Catalyst as well for gold um the the warning signs of that are also Rising so I'm not sure but gold gold is looking the best out of all of the metals other than uranium okay okay and that's a good segue into uranium so when we talked in I think mid 2022 you gave us a primer on what was going on in the uranium market


and I think a lot of the factors that you mentioned are starting to play out now so of course we want to come back and and look at that so we've had the price rise in recent months and I think what people are Wonder ing right now is what's coming next do we get a slow and steady rise do we get that price spike scenario any any thoughts there yes lots of thoughts so um the uranium price is up almost 50% since the middle of summer so it's gone from sort of 50 bucks to 74 bucks a pound um that has happened on


very small volume transactions in the spot Market a lot of those transactions have been EU buyers uh European utilities that have needed for what for their reasons to procure some additional uranium what's been really interesting in that is that us utilities have been largely absent from the market they were waiting for the answers to some questions about us policy on where they should Source uranium the realities of how those suggested policies will play out they were sort of waiting for some


clarity on that they can't wait anymore they're going to need to go in and buy some uranium so what that says is that there's some more buyers coming into a market that doesn't have pounds to sell so that's a pretty simple statement what that will do to the uranium price I'm not totally sure uh I mean how extensively it will push it higher I'm not sure it will push it higher for sure uh what I really like about this move is that this move has happened because users of uranium need to buy on the


market and it's not there the move that we saw in 2021 and the late 20121 was because Financial entities that were stockpiling uranium were taking liquid taking ex pounds out of the market that's great it worked but it isn't the same as users taking it and then using it and making it disappear um it's a more sustainable robust real transaction um and that's where we are I mean uranium is the case study for where copper and nickel and a bunch of these other metals are going uranium is at the


point where there actually isn't Supply available we are we keep talking about that for those other metals we haven't got to that point yet for those other Metals but for Uranium there isn't Supply like the biggest producers in the world Kazam prone and chemico you can't buy uranium for them from them for delivery um earlier than about 2029 at this point sure time frames are longer in the uranium world you're not usually trying to get it for tomorrow anyways but it's not there it just doesn't exist


and so this is the case study and it's happening in the uranium Market more buyers are about to come in the price will go higher what's fair value I don't know does the uranium price always overshoot in a bare Market Market oh yeah it does okay okay that's really interesting so this is possibly the blueprint that we then see repeated across these other Commodities all right so let's go into supply and demand a little bit more we have limited time so I want to ask you there's so many


different factors going on and you've talked a little bit about you know the US buyers that's an important part what are the other key Supply demand factors that you're keeping an ey on right now so the key is so there's not a lot of change happening in the supply demand set up for Uranium what really matters is that the users of uranium excluding the the stock pilers the financial ones who can sort of buy and sell as they want the ones who actually use uranium the nuclear utilities they buy if they need to buy


and they actually don't care about the price I'm sure they would prefer or their accountants would prefer if the price were a bit lower but in general they don't care they need pounds they can't let reactors run dry so they will buy regardless of the price this is a really important comment the fact that us buyers are coming into the the market now after a 50% price run only underlines this which is something that uranium investors always say oh utilities are you know don't care about


the price it's true we're seeing it happen right now they can't care about the price because they need uranium so what you're getting is the demand is what it is there's certainly uncovered future needs that are higher than usual there has been for many years lots of excess Supply in the spot Market utilities have been able to just pick up Supply in the stock market Market to cover those future demands now we're getting more into a Contracting situation but Contracting is not


available uranium producers are going to require higher prices if they are going to sign contracts for The Limited pounds they have available everything is really set up it's a sellers market right now um and yeah it's just very tight okay okay and so if we if we relate all this back to what investors can be doing right now I think it seems like a lot of people have chosen to go with producers in uranium so I want to ask you how you're approaching it is there room for for Developers for exploration companies


yeah absolutely um yeah for sure so uranium is a very small Market I mean you know there's probably 70 that may even be that that number may be a bit High there's probably 50 really like real uranium equities that you can buy out there it's a small world compare that to oil and gas tens of thousands right like it's a very small Market um so that means that when interest comes in it's like trying to send you know Victoria falls through a drinking straw right the pressure is intense um and


that pressure will lift everything for sure now the easi the most liquid the most liquid stocks out there are the producers um and so you can either buy like the chemicals or the baskets of such producers um like urm the spra basket they also have some like um nuclear fuel processors and whatnot which is fine those would all move the same way in the uranium Market um absolutely you can certainly move down the value chain there aren't a lot of uranium developers to buy there's probably only six to eight of them out


there so feel free to buy them they will do very well um quite a few of them who are developers are not that small like nextg is already a massive company right so there's how much difference is there really between buying the developer versus the producer if you want to go into the risky end you which is the explo you absolutely have the opportunity the possibility of multiples of the gains that you might get in the producer side but of course there's the risk like the Explorer will move with the market until


or unless they either win at a discovery or fail right so if they win then yes you might get huge huge returns like ridiculous returns but there's a big if in that so any of these options are on the table the main point is that the market is really small and when interest turns in the pressure gets really high all right and and maybe something for people to understand on the Explorer side companies that are exploring right now most likely are not going to go into production during this cycle absolutely


not and that's actually a good point if you really If you're sort of being very if you're formulating an investment thesis around this cycle this cycle has to do with there not being enough pounds to supply to utilities now the The Entity that can answer that are those that are preparing to go into production and so Institue recovery producers in the United States are probably the best uh category of that so the the Energy Fuels the energy um ener Energy Fuels the ue's the uranium energies those


kinds of companies have been working for the last five or six years to permit new think of it as leeching the uranium out of the Rocks while the rocks are still in the ground and pumping it up they've been working to permit those operations and so that they can put them into production in this market which is what they've been predicting for a bunch of years so absolutely there are B there are stocks that you can buy that are particularly for that and I think they probably will perform better than


average in this market because they are serving the need um but you're right that explorers are the exciting what might happen down the road for Uranium but that's a discovery thing which is different all right and and one final point on uranium so it's it's known for an opaque Market although I think that investors who look at it usually tend to go pretty deep into it but nevertheless I'm going to I'm going to ask you know what's a misconception that you see around the sector that you would want


people to be aware of as if they're going to come in I mean I think there's been for a long time the social questions about the safety of nuclear energy um and my answer to that is that it's the safest um energy Supply out there if you compare you know deaths per kilowatt produced from coal and uranium coal is hundreds of times worse um if you think of coal mining if you think of smog if you all of these things um so and then so it's a very safe energy and you the other question that's often was raised


is this radioactive waste question um it's not you know barrels of oozing green goo not in the slightest it is cooled for years it is locked down in cement it is buried underneath things it is quite modest in size um so those hindrances have long been important in the nuclear space because anytime uh nuclear energy sort of started to get momentum people these concerns would sort of get in the way I feel like that's actually easing lately because the re reality of needing nuclear energy um is just becoming more


Stark so I I feel like the misconceptions on that front are easing off I'm sure there's others that I haven't thought of yet though no no no that's great and okay as we're wrapping it up um what are some dos and don'ts that you would leave investors with as we head toward the end of 2023 and probably into 2024 as well good question so I think do uh establish exposure to Gold if you don't have exposure to Gold I want I would encourage you to consider establishing exposure to Gold if you're


new to Gold then just buy big companies right it's actually insane the companies that you can buy you know the the net asset values of their operations versus what they're trading at the valuations are very discounted because people haven't been interested in Gold I do think that will change in the next six months I do think that that will change so I would I would encourage exposure to Gold I would say don't right now get overly excited about the base metal opportunity this will happen the supply


deficits for copper for nickel these things are very real but they are not going to become investment opportunities until the investing Community is confident that we're moving towards a growth path right now instead the questions are what's what are the risks are we heading to a recession what's right so we're not going to see that as an investment opportunity until we're on a growth path so be ready you certainly figure out which stocks you like but I wouldn't get overly excited about the


Bas metal opportunity in the near term so consider your gold get exposed to gold don't get excited about base medals and know that there's a lot more room in this uranium Market yes the price has already gone up 50% since the mid summer yes there's a lot more room left in this uranium Market okay I think that gives people a lot of ideas for what to do next and what's coming so thank you so much for sitting down to talk about gold uranium and and whatever else that we just covered thank you thank you so much


of course then once again I'm Charlotte McLoud with investing news.com and this is Gwen Preston with resource May thank you for watching if you like this video make sure you subscribe to our Channel we'd also love to hear your thoughts so leave us a comment below we'll see you next [Music] time