[Music] [Music] I'm Charlotte McLoud with investing news.com and here today with me is Dam earthley editor and founder of Junior minor junkie thank you so much for being here good to have you thanks for having me again charl I was great to talk to you it is really good to talk and today it's going to be a rap and fire interview because we we have things to do here at F so just just briefly here we are at the convention how is sentiment feeling to you how what is it looking like down on the floor it's


really interesting because um yesterday was was like the retail day right Sunday's usually the retail day and um you could pretty much roll bowling balls down the aisle and not hit very many people um I was walking around to booths and asking how many uh inquiries from retail investors are you been you've been getting most of them said one or two or even zero I mean you look around and and and um as I know on Friday the gold price hit at all-time daily and weekly High closing at 2095 an ounce of the Futures market


and you would hardly know it walking around the floor yesterday it's actually a little more busier today it seems like yeah you know I was down on the floor in the morning yesterday and I thought it looked a little emptier but I was like oh maybe it's the morning and people will come in the afternoon so that's that's very interesting but let's let's talk a little bit more about the gold price so very high gold price right now gold stocks interest low um share prices not doing so hot so have you seen this


type of Disconnect before I've never seen this much of a disconnect before while the golds price is breaking out I've seen this disconnect twice before this much of a this much of a severe disconnect twice before when the gold price was threatening to break down to a to a a much lower level so in two in uh 2016 it's more uh common to to what's happening right now so it's it kind of mirrors what's happening right now but in 2000 in late 2015 early 2016 the gold price was threatening to break down


below $1,000 an ounce now it's threatening to break out above $2,100 an ounce there's something i' follow called the Hui to gold ratio and that's basically the uh the gold stocks in relation to to the price of gold so a mean reversion happened in early 2016 and at the um March 2020 low as well right around Pac in March 2020 so basically what it was was you had the H to gold ratio hit 0.09 in 2016 the first couple weeks 2016 and then 0.093 in March of 2020 and then it hit 0.094 last Wednesday so meaning a Gold


stock mean reversion is about to happen because the last two times that happened the mean reversion started and you had huge moves in many Juniors and and many miners in within 6 months okay so you have you have answered what my next question was going to be is when when is that Gap going to close so we've gone over that maybe maybe another question then is how are you positioned for that and what can people there's still maybe a little bit of time so how maybe a little bit so how can we prepare what


are you doing yeah well I think that mean reversion started uh last Friday and what i' what I've done before this in in uh anticipating this mean reversion was i' I've been accumulating late stage projects with uh multi-million ounces in the ground that have solid management teams that know how to manage these Capital markets because this is a totally different Market than we had the last time when we had low prices like this and it was it was what I think what I believe to be the the end of a bare Market I think


we're in that we're the process of ending right now but it was a totally different Market I mean Capital was very cheap capital's expensive now and um a lot of these companies are mismanaging them like meaning they raise at the wrong times and they don't they don't have the right feel for the market as to which what kind of deal what's the right deal to take and what's the right deal to leave on the table and the timing of that deal because when you have when the retail Market is out of the sector like


it has been basically for the past 12 years there's been no retail in the sector so the street is very Savvy on what is happening with these stocks if so when you see a junior come out with very good news of drill results the first thing they they're going to the Street's going to look at is how much money how much C cash do they have in the bank now right to follow this up on if they have less than 6 months the Stock's going to get sold and the Street's going to keep pushing that


stock down because they want to get a cheap Finance with a full warrant they know they know this company's going to be backed into a quarter they don't have enough money and they're going to have to take a finance they don't want and they're going to have to give out a full warrant to d o it probably at three years so what they'll do is they'll they'll wait for that to happen they'll they'll participate in the place and then they'll strip the warrant meaning they'll they'll they'll sell the


shares after the four-month holding period and they'll just keep the warrant so it keeps it keeps pressure on the stock because there's no retail money that doesn't understand what's happening to bring the stock back up and the street knows this so they're keeping pressure on these stocks so they have to cover short positions right to make their money but they're waiting for that signal and it usually happen happens with the miners first right they start going up first you usually see the


short covering signal and like I said it's when it happens when that h2i to go ratio gets certain level I think it started last Friday I don't know I could be wrong we'll see we'll see we'll see and we'll hope to post this quickly so that gets up and out there I want to follow up on a point you made at the beginning of that answer so you're looking at companies toward the later stages and I have to ask cuz you know you have Junior minor JN Junior in the name so are you looking at the Juniors


or what would make you look at them yes they are Juniors I mean these are Juniors there there a lot of them are are are sub 100 million market cap but they have to raise a lot more money than what their market cap is four or five times their market cap in some cases so you have to make sure that uh they have the right shareholders in their stock they have that access to Capital they have some strategic partners and some Majors right so I mean because you see a lot of these a lot of these companies


that are in that position where in a position where they put out a economic study and then all of a sudden the economic study was outdated because of inflation and there was and the capex on their on their project was blown out right and they all of a sudden they have to raise a lot a lot of money at a lower share price and blow out their share structure so you know these companies are are being vultured by a lot of these other you know mid teers or or or Majors they see this happening and they can swoop in and


pick up these projects for a song so it's kind of the opposite of what they were doing at the at at the last time the gold price was around $2,000 12 12 years ago where companies were basically going after ounces at what at at whatever cost it didn't matter to them they were they were they were buying low grade bulk tonnage projects that large projects that weren't economic they just wanted the ounces so now we have Majors concentrating on balance sheet Health share BuyBacks and they're not concentrating on on adding


ounces in the ground just yet but some of them were starting to take strategic placements in these companies so they could do so later but this is what is this is what is happening now is kind of like the the the you you you see size of the bottom of what I was talking about so but we have to have that short covering move start because all bull markets begin with short covering and then you see the value investors waiting on the sidelines to to see levels hit to where okay now it's time for us to come in and this sector is so


tiny it happens so quickly because if you take the entire market cap of the mining sector it wouldn't even equal the market cap of Home Depot that's how small it is okay and I know we have to wrap up soon but ever ever so briefly silver do we have a little bit more time if we want to look at Silver cuz silver tends to move a little bit later than gold absolutely the level to watch on Silver is the $26 level was very stiff resistance up there the initial resistance is is 24 I don't know it


could be close to there this morning uh but um the level to watch is 26 it's $26 but if you take a look at the silver stocks I mean they're hated right now I mean that's silver is a fantastic opportunity right now as far as the stocks are concerned but you have to get into the right runes you really have to do your due diligence and make sure you get into the right ones because all it takes is one or two of those if you get into the right ones you can make 10 12 15 times your money off


awfully fast in in in a couple of years I mean this is my two biggest wins when I first got into this sector were from silver stocks so all right well we're we're going to wrap it up there for now thank you so much for coming and taking the time to go through a little bit of gold and silver I feel like we packed in a lot of good information would love to have you back and do a longer discussion at some point but thank you thank you very much for having me always great to talk to to your thanks of course and


once again I'm Charlotte McLoud with investing news.com and this is David earthley with Junior minor [Music] Junkie