[Music] I'm Charlotte McLoud with investing news.com and here today with me is Brian Lenny founder of junior stock review thank you so much for joining me great to have you online as usual thanks for having me Charlotte of course so we have a lot of things to catch up on today but where I want to start is with some recent news from you so you're launching a new series on YouTube it's called field notes and as I understand this is going to be a series that follows you as you make site visits


to companies as you talked to the CEOs there I know how much you enjoy site visits so this makes total sense to me I wondered if you could start off by telling me a little bit about that and what people should know about it yeah field notes follows me to the companies I'm investing in you know in the junior stock review portfolio and I'm in a sort of privileged position to be able to go to site and you know visit these companies sometimes before I invest and sometimes after and so what I


wanted to do is bring my readers viewers along with me to site and see what I see you know see the layouts of these projects the proximity to other projects the infrastructure access um you know the little towns and social kind of license that comes with these companies being in the area and uh yeah to me site visits have been such a X Factor in terms of the investment process and I really think the the visual aspect of it um should be appealing to investors and it should at least you know get them to


start asking more questions maybe about those companies um that I'm showing them and also about companies in general you know more questions to ask in that vetting process that they have at conferences or on phone calls and such yeah as I said makes a lot of sense to me because we talk about site visits maybe not every time that we meet but frequently and one of the things you always tell us is they're so valuable but of course not everyone should can do them so this seems like a great way to


bring people into the process and the videos are really well put together you've got I believe two up on the YouTube channel which we will link to in the video description two up currently I did wonder if you can share any future projects that you may be visiting anything that we can look forward to absolutely so the first episode that you'll see on on the field notes YouTube channel um is basically all about me and about what I'm going to do in the be my my thesis behind the whole field notes


uh channel the second episode is actually a site visit to fpx Nichols uh darar nickel District in central BC and you know we've talked about it before in interviews I've been an investor in fpx for quite a while and it's been a fantastic company to C C my newsletter and as a shareholder you know at its peak it was a 10 bagger for us it's come back off that high uh but it's definitely brought us some profit so for me um maybe it hasn't brought the investment full circle because fpx


hasn't been bought out or they're not in production yet but it was really a cap to me for that process to go there to site you know see the project spend time with Martin Tren the CEO and see you know the layout of a future open pit nickel mine which I think it is going to be and uh we're look forward to that episode I'm hoping to publish it uh just after Thanksgiving or Canadian Thanksgiving that is and uh so people that are interested look at the field notes YouTube channel after Thanksgiving


and you'll see it there okay really good so as I said I'll leave the link to the channel in the video description so everybody can go and hopefully check it out this sounds like a really good new project and I've I've really enjoyed watching it so far um so we'll also look today at a couple of the areas of the resource sector that you're watching right now and going to begin with precious metals so you told me before we started this interview that you remain bullish on precious metals so not a


surprise to me you've been very consistent in that as we've been speaking this year and of course previously but it's an interesting time to be talking about that because as we're speaking right now we have gold below 1900 maybe the sentiment isn't looking so strong there so I wanted to ask you about that maybe it'll be back up by the time we end up posting this video we don't know um but yeah looking at gold and maybe just some of the pressure that it's facing at the moment


yeah you know the Market's tough and I think considering all the things that are going on in the world whether it's Financial or social um I think you know all roads sort of lead to Precious Metals in particular gold um you know whether it's you know the the mounting debt um the interest rate Decisions by fomic uh you know last week they decided to keep the the playing field level you know no hike or or reduction and but they're hinting at a at a future hike and all these things sort of play into


what people think is going to happen with the gold price and and probably the US dollar being its its uh its counterpart and so that strength in the US dollar that we've seen and some of the uncertainty I think has led to um the the drop in the gold price over this last week but to me it's just kind of a blip on the map and really you know what I see is gold and precious metals are real money and they will end up being the backbone of I think a lot of investors uh portfolios moving forward


and because of you know the the move to cbdcs and and all those other things that I described when you go down to the equities and I think that's where the real opportunity is and it comes with much more risk um but if you look across the sector there's a number of really good companies selling at massive discounts to their underlying value and for me it the process has been more sorting through all that and trying to decide what I wanted invest in and what I think the market is going to


eventually give Market recognition almost irregardless of where the gold price goes because you know no matter how you look at it around $1,900 gold is still a very good level and while it's it's come off you know from that blip we had over the last month or so um I still think it looks like a very good gold price to project forward and uh for me like I like to look at companies that have existing resources or economic studies and kind of put my own spin on where I think that company headed along


with their catalysts and so I see a ton of of opportunity in those those equities and I'm looking to deploy some cash um if you go back actually into how I was moving the portfolio early this year I took profits on some of our winners and I also got rid of some of our losers to to build up a cash position to deploy sort of in this last quarter hopefully to to take advantage of potential tax loss selling and just the amount of choice that we have because again I think it's it's one of


the best opportunities I've seen um since I've been an investor in the sector okay really interesting so let's let's check back on that so you were looking to deploy cash right now and I remember you said when we spoke in January that developers at least in precious metals were the sweets fought for you so is that still your stance absolutely um I think that's where the best value is like there's rightfully a lot of attention on the critical metal side of things and energy and I like I


totally see that but I don't necessarily think the differential between underlying value and potential or what I see as the potential value um is there as much in some of the the critical metals and energy sector of the developers so I I tend to like the things that have more of a of a of a discount and just as long as I see that they've got cash and they've got some Catalyst on the horizon that's that's where I see a ton of opportunity but you do have to be picky you do have to be picking the right


company it's a stock Pickers market and uh you have to be very careful because the other side to it is with this looming recession that you know many people have been calling for many months now hasn't I don't know if it necessarily has come yet um but if it does come I think it is going to bring with it some turmoil and to some people that's going to scare them away and to others like myself I see even more as opportunity whether it's tax off selling or some sort of weakness and blowoff


selloff um uh to me it's definite opportunity yeah I think definitely we'll come back to that recession question but first I want to ask a little bit more about those precious metals developers so you mentioned there's a lot of opportunity um but you still have to be picky right and you shared with me some uh metrics that you look at when you are evaluating these precious metals development companies so I wondered if you could speak a little bit about that because of course it's


different than the Juniors and the majors that people might be more uh used to looking at absolutely um so one of the the overlying or high Lev metrics I look at is the price to Value ratio and I kind of alluded to that in the last question um and so I I'm looking for that discount on underlying value and I compare that market cap to the value I project in in a discounted cash flow model or some sort of valuation that I do on the company so that's first and foremost and obviously the bigger bigger


the differential the more interested I I potentially become secondly with these companies they have an underlying resource or they have an economic study and I want to look at that capex to after tax MPV uh specifically the ratio between the two and the higher the ratio meaning the more MPV um the the project can create over its mine life um compared to The Upfront capex that's needed to build that mine uh the more safety factor I think you have in most cases and so you have to do some due diligence and you obviously have to see


if what is projected by the company makes sense and is realistic but if you can find companies that have ratios you know well above two um you're I think you're getting a really good bang for your buck and there's a few companies out there like that the only contrast is is sometimes they're not selling at a discount sometimes the market recognizes the value and really you're either paying more than you should or you're paying Fair which depending on your outlook and your risk level maybe that's


okay um on the other side of things you know MPV to capex ratios that are around one meaning you're basically creating as much money as it cost to to build the project um I think you need some intangibles and by intangibles I mean you know these projects are located by existing operations that have maybe some future hole in their capacity their mil capacity that they're going to need another M to come in and fill that and so that potential m&a transaction um I think is very realistic you know these


mining companies are continually depleting their coffers or their resources and so they have to go out there and look and if I was an investor what I would do is if you can go find some lighting operations and basically draw a 50 kilometer circle around it a radius and say hey where are all the the most interesting deposits around there the most advanced the best looking and how would that might fit in to this existing operation when that when that my life will be over and how this potentially higher grade or equal grade


same type of mization could be used in there and I think those those sorts of opportunities are something that the market typically misses and so if you do enough due diligence this can be an opportunity for investors okay okay so some of the similar characteristics that we would look at for other stages but with a Different Twist on them and okay so I think that I think that another reason why the development stage might sometimes be overlooked is it's kind of known as a bit of a dent Zone in the


life cycle of a company right where they're working on things they're trying to move forward maybe they're trying to raise money but it's not it's not as exciting so for somebody who is looking at these companies and trying to enter what is the trajectory of that investment look like that's a fantastic question and a very astute observation yeah some of these developers can fall into that bottom of the lon curve and be forgotten and in some cases you know some of these companies are rightfully forgotten


there's reasons why they're selling at a discount and you as an investor have to find those reasons why then the other side is you find these companies that are selling at a discount you need to find the reasons why the market should take notice and recognize that value in the company um I think probably the biggest point you want to look at is expansion potential so you know a lot of these companies will have existing resources let's say it's a million ounces of gold open pable and such right


um you want to see if they can expand that deposit at depth or maybe they can find other deposits maybe there's some great geophysics and geochemical anomalies within you know the proximity of that existing deposit and you know they've got the Baseline stuff done and they're look to expand and I think you know expiration success is definitely something that I've seen uh the market recognize the others can be you know they're more complicated but you know increases in Mineral processing


Metallurgy tweaking processes using existing technology to gain extra percent on your your recoverability of gold whatever it is you know these can make huge impacts to discounted cash flows and it could really help mpvs and can surprise the market that's not looking for it um so you know items like this these catalysts that have impact um that can expand the resource or improve recoveries this is a sort of along the lines I think that people need to be looking at in terms of getting out of that dead zone and


getting some recognition for the value because you're absolutely right for the companies that you unfortunately pick wrong they will probably stick at a discounted price uh for a long period of time and I've made those mistakes myself but I'm trying to minimize those and in through experience I'm doing better as I go along so that that's definitely the opportunity in in the developers okay very very good to hear and thanks for going over that I think it makes a lot of sense so so for you


these developers are the sweet spot right now we've gone over that but to be clear I imagine that doesn't mean you're entirely discounting the Juniors at the moment so maybe we could talk a little bit about what's going on there and and what people should be looking for when it comes to juniors in the precious metal sector because although we have that historically High gold price and this this decline is probably a blip on the radar as you said they're continuing to face problems like inflation Etc the


recession that we will again come back to so tell me tell me how you're approaching that uh so exploration I I think is one of those segments it's definitely on the the far end of the risk uh spectrum and and so for that I I'll give you how I look at it and so for expiration I definitely want to have a good sense of who management is you know they're experience what successes they have had what what process they're going to apply to explore the the land packages that they've secured you know


most of the time if you get the people part right the other stuff especially on the expiration side is going to give you the best chance to be right in the end and uh so you I think you definitely want to start there after that I think the stuff that I look for is definitely location you know the you want to you want to be near I think other big deposits but you wanted land that hasn't been explored before um so large land packages next to you know large or bodies from the past and uh and have team has a sense of how


they're going to explore it and and and has that experience and Technical expertise to to do it right so if you've been looking for gold deposits undercove r all your career um that's probably where you should stick and there's some companies like let's say canland minerals Zach and his team you know they're they're experts at exploring for gold deposits undercover and if you're looking at a land package that has glacial till over it you know these are the guys or the type of guys


you want to look at to uh explore that type of thing so you know connecting the people and the type of project I think is is huge and of course the larger the land package I think the more chance you have a probability of being successful so I think those are two big points and those are the ones that I look at and then the third one I guess in this type of circumstance is that they're they have access to cash because people can have great ideas but if they can't don't have the money to actually put it to


work um then it's it's not a good scenario and so in this type of Market there are certain groups that seemingly can raise money no matter what and these guys have the reputations and they have the The Experience behind them and people will will make sure they're funded and so I think definitely in this type of Market that we're in you want to look for those guys and um those are the guys that I think are going to give you the highest probability of success okay so kind of sticking to the


basics there you know I think that makes a lot of sense and so now now let's look at that recession question and kind of your macro view on what's going on right now I feel like yeah definitely in our last several interviews we've been talking about what's going on or in a recession are we heading to one what's happening and now now we have interesting things going on with the Federal Reserve they've been able to go so much further with their rate hikes Than People expected and it's looking


like one more this year before maybe in 2024 we eventually start to come back around so tell me tell me a little bit about what you're seeing at that macro level and how it's influencing your your investment strategy you know I I definitely have to agree with a lot of the the broader Market commentators that say you know they've seen a recession coming like I think everybody has sort of had that sense that with interest rates gone or have or are where they are um that it's putting a tremendous amount


of pressure on regular people and Industry and so you would think over time that this is eventually gonna unwind but you know what I've learned in the past is like typically with those things that maybe are seemingly obvious or they a lot of people agree with it doesn't always happen that way and I'll be quite honest with you know after 2008 and the quantitative easing we had I thought to myself oh you know we're going to be much closer maybe to the position we're in today 10 years ago and


quite frankly we weren't and we kind of just plotted along sideways and so I guess my point is this I don't put a lot of stock into being able to predict where the Market's going and an experience has shown me that I'm really not that great at predicting the future and so I don't I don't I'm I'm cognizant of the risks but I still employ the same process of looking at Junior equities that I have forever and there might be some subtle differences maybe in jurisdictional risk that I'm willing to


take and where I'll put my money versus Now versus previously um but really I kind of plot along and look for good Juniors that are selling at a discount that got good management team access to cash and have the Catalyst to move their Shale price up it doesn't always work out but that's kind of the process that I've always taken but more belong to lines to your question I I think a recession is coming at some point and I think when you look at it St when you look at P recessions usually the worst


of it is the pre um and once you're actually in the recession things do have a tendency to turn around and they can turn around quite quick and stuff like gold and I think if if they do follow up with quantitative easing I think you're going to see all those base Metals shoot up and you know copper uh nickel all these other these other base metals are going to have a real push because I think the government's gonna have no choice but to flood the market with money and so this kind of Preamble up to


that that precipice um is terrible and it's but I think it's the worst of it and so once we get past wherever this this this bottom is going to be I think things look really good yeah so at some point we we RI that Band-Aid off and and hopefully we start turning around we'll we'll see when that happens I also don't have a crystal ball um but I think I think what you're saying here relates to another topic that I wanted to touch on you had sent me a piece of writing that you did about oil


and you're interest in oil and kind of the gist of it you can go into more detail I'm sure was that you're interested in oil even if we are heading toward this recession scenario so tell me what you're thinking there because I know some people look at that and they say oh maybe we don't want to be in things like energy industrial kind types of Commodities well you know one one thing is like just let's say overarching energy in particular is the basis for our lives and if we want to keep the


sort of daily life that we're used to especially oil is going to be a huge part of it if you want to drive to the store um if you want to go on an airplane or a trip anywhere you know in some cases have the lights to come on you know you're going to need that power that energy from somewhere so I think the Baseline is there I think the tendency especially with oil is to look back onto you know the co era like 2020 and we had this situation where you know oil went negative and it was a major


impact I can remember you know seeing you minus $25 a barrel it's a really it's a mind War you know but I think if you if you stay in that mentality and you have that recency bias and you look back at that point you say oh I'm I'm hyper negative we go into a recession oil's going to do this or's gonna do that well in the interm I think it would have a negative effect but it's not going to be the same as Co the world isn't going to be shut down as far as as I can tell and we're going to have to


keep on leaving our daily lives and so to me you know the even though oil is let say $90 per bail today maybe you'd come back to $70 or $65 or something along those lines but to me that's probably where pretty close to where the bottom is um if you look at the last decade all the super Majors Exon Mobile shell if you look at their research and development when it comes to new oil fields I'm telling you the the the curve falls off a cliff and they're billions of dollars behind and that's a decade uh


not only that but you saw you saw a spike in Shale oil out of the states and the sh R 2014 I think it was basically us became the world's number one oil producer and it was on the back Su Shale oil really you look at the rig counts you look at the production numbers out of the premium Basin or any of the other Shale oil uh major major areas they're all again look like they peaked and are on their way down even with this $90 bear per oil things still seem to be trending on the downward slope you mix


in you know Biden's move to uh get rid of or sell 50% of the Strategic reserves the US strategic reserves and they no longer have that kind of strangle hold or kind of threat of a strategic oil Reserve right they've got 50% of what they used to have and unless they they build that back up which would be good on the demand side or if they going to get rid of that further it just pushes out I think to me the timeline to when the oil price invariably has to go up the other thing that's happened sort of


in this last C couple years is you have the Advent of the Net Zero carbon emissions which I think there's a lot of reasons for society to move in that direction but I think people have to realize especially investors this is probably about the most bullish thing for fossil fuels that could have maybe ever happened and there's been so uh ESG has moved so much money out of fossil fuels that you've invariably impacted the supply side of the coin and the the thing is is the demand side hasn't


changed you know with all the money that's been put into the Alternatives and Renewables it it's just it's barely scratched the surface on how much we use fossil fuels in particular oil and so for me as an investor I look at those things and I like you know what that's opportunity that's opportunity for for me and I look at the oil market and you can go from the seniors all the way down to the Juniors and I think there's a lot of compelling cases um for for investment in oil or coal or not g


and uh especially we'll see this winter how how Europe is affected with you know the Germans uh policy decisions that they've made over the last let's say year and a half um and it'll be really interesting to see what happens and then I guess the last kind of figure is what's gone on with this Russian Ukraine war the financial sanctions and then kind of invariably how it flows into opic plus and you know their their their push to cut production by a million barrels per day and they've been very


stringent with that and we've seen the oil price now really respond and uh unfortunately I think that 100 bar $100 per barrel oil will become too much of the normal and might be closer to the low than the high so for me uh I I've put some money into oil it's it's probably the bigger portion of my portfolio at the moment and I've been right and uh I think un like I said unfortunately that probably goes a little bit further and that creates you know uh cost of living that to go up for


everybody and so it'll be interesting to see how that kind of flows out as we move on definitely interesting and so you mentioned in oil there's opportunities across the Spectrum you have a big chunk of your portfolio there I know you just went into all the factors you should look at when considering stocks in the mining sector but oil I think is a whole different ball game uh I don't know if we have enough time to go into everything right now but any any special considerations that you would really


want people to be aware of when they look at oil stocks yeah well you know I think one of the biggest things to the the biggest difference between the the oil or natural gas companies and then the Hard Rock uh companies is an oil exploration company goes from Discovery to production basically in the same day whereas in the Hard Rock case you're talking like a decade I don't know 15 years before Hard Rock Discovery is delineated drisk and put into production so there's still major risk when it


comes to oil expiration 100% but um if you've got a company that's got you know a good base of production they've got good positive cash flow and they've got good prospects um for expanding uh their production through expiration and they can basically pay for it themselves through their the the cash flow that they're generating I think these are extraordinary opportunities and that's that's kind of the the position I took today or in this this year was investment in a junior that had a good


small uh uh production rate and they have the chance to double it within this year and you mix in a higher oil price and wow you know you can really see how the share price recognition could could lock in by the market but there's so many examples like that especially on the high end you've got companies that are paying you know 10 12% dividends um and these are you know thousands of barrels uh per day oil producers located Canada in the states and you can capitalize on that so um yeah I think


there's a ton of opportunity there and just depending on your risk level and kind of how you see the market um can kind of direct you okay and just briefly I can see I can see from what you're saying why you would hone in on oil when you're looking at the energy sector but there's there's so many different aspects of energy and one thing I hear quite frequently is well we're going to need all of it so are you looking in any other areas of the the energy sector at the moment yeah


of course I'm always looking um I think uranium is is definitely a part of that you know the one thing that that I I tend to shy away more from uranium is because of how much hype surrounds it and usually I like because uranium is interesting because you do have an opportunity to actually buy the physical metal you know through the Sprat trust and I think if you're really bullish on uranium especially for a generalized investor that's probably the investment if you think uranium is going to go up


that's probably the investment vehicle you you should look at it's got the least amount of risk and it's actually a real investment they actually have u308 and that's what they're buying the Juniors on the other side you know a lot of them especially the the the higher quality ones their valuations I would say are probably at fair value or maybe even above that and so the uranium price almost has to go up for you to make any money and I don't like the margin of safety um that's that's that's equated


with that I'm usually looking for more just in case I'm wrong because you just never know what's going to happen to the market uh next to that you know I think coal is is super interesting um and I think that natural gas again those are sort of in the same lineage of oil um but I think these are are interesting opportunities you know another thing Charlotte I looked at a renewable company in the states earlier this year there are solar wind and sort of micr grade company and uh again you know


there's so much to learn about these individual sectors and that's sort of what scared me away um kind of getting over that learning curve uh but I think again if you pick the right company and the company's got the right sort of business model I think you can you can make money in just about any part of this energy uh sector moving forward and especially the Renewables uh on the other hand because there's going to be a lot of government funding um that's going to be pushed towards it and as you


look at you know the inflation act that the the states did last year you know 300 billion of it was focused on the renewa and so I don't see that changing okay I think that gives me a better idea of kind of how you're looking at it and and you did read my mind I wanted to hear about uranium especially during this time when it's kind of popping off a bit okay so so that gives us a good picture of of what you're looking at in Precious Metals in energy I think we can wrap up there but


I'll put it back to you in case you had any final thoughts that you wanted to leave investors with right now I think there's tremendous opportunity in the market and I think you know for and foremost investors have to look at themselves and say what what do I want to invest in what's my risk level how much do I know about that individual market and what's my timeline for profits you know is it a weekend is it two months is it three months is it a year and I think once you sort those


things out and you actually write it on a piece of paper I think that is is where you can start getting directed and being more personalized in the companies or the metals that you're investing in and uh I've made you know mistakes in the past because I didn't do that but these days that's where I start I start with myself what I what I'm looking for and then I project that on to the companies that I I I find and I think much many more people will be successful especially in a market like this where


there's tons of choice um and and profitability in the the next year okay this was really good thank you so much for coming on to talk about what's going on in the resource sector very very informative my pleasure thank you for having me Charlotte of course and once again I'm Charlotte McLoud with investing news.com and this is Brian Lenny with junior stock review 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 time