Gold Miners That Actually Compound (Greg Orrell)

See, this is the problem with the gold industry. They lower the cut off grade to profitless prosperity. What are you going to do with your cut off grade? You know, are you going to keep it the same in the coming year or keep lowering it to profitless prosperity? You know, if you are an investor, what you're looking for is you want to capture that margin.

JD Gold is back, Gold's back. It's it's having, it's having it's, you know, it's coming back after a little bit of a little bit of time in there in the brief sin bin. It was a very pause, just a pause. It's back. The equities are are roaring again. It's a little bit of excitement back in the market earning season has come out and everyone's realizing that these gold companies are making an

absolute fortune at the moment. And so very topically we've got we've got the very kind Greg Aral who runs runs the OCM gold fund. And mate, you've been doing this for for 30 odd years. You're so familiar with the Golden Precious equities where we're delighted to to have you joining us all the way from from the United updates and we're keen to talk everything gold equities with you today. All right, my pleasure. Looking forward to it and enjoy your show. Great to hear Greg.

I think the the logical place to kick this one off is the the run up in gold equities and the the even more extreme run up in the gold price has seen earnings like Trav said be quite strong.

How have you sort of reflected on the profit margins and the the money being earned by minors across the globe really in in the past couple months of earnings? Yeah. I mean, I think it's been a bit slow on the uptake by generalist investors really.

If you, if you look back at, you know, how this year has gone, I mean, every quarter you've seen an increase in the gold price and you know, the though the, the price of the shares have gone up, you really haven't gotten the enthusiasm that you would normally would, that it would be typically associated with bull markets. Partly that is to do with the broader market continues to run. And so, you know, gold is looked

at as a defensive type of asset. And so, you know, with the broader market running, you know, especially tech, AI, et cetera, you haven't had a lot of folks, you know, feel like they need to chase, you know, into the gold space. And so, you know, you've seen the GDX come in with, you know, 20% less shares than, you know, they've had, you know, at the beginning of the year, which gives you the idea that, you know, money is still coming out of this space.

So, you know, I, I look at, you know, where we're going, you know, there's more room to more room to run.

Obviously sitting in my seat, I'd like to think that, but you know, I still look at it and, you know, believe that, you know, we're going to see more retail, we're going to see more institutional investors come into this space and you'll see these margins start to press out, you know, So you know what happens, you know, in a bull market, you know, the, the, the number of companies that you know, really start taking off and you know, start to, you know, see M&A at the top of a

cycle. You know, you'll see, you know, the gold XAU ratio be somewhere, you know, north of, you know, 6 probably at a peak. And you know, you're still, you know, at a much lower level than that right now. And so, you know, what we're still seeing is a lot of, you know, still a lot of room to grow just by, you know, investors coming in. And so if you look at the cycles of, you know, when gold goes to, you know, at a peak, you know, you'll you know, the gold price will peak.

You know, this is, you know, looking back at, you know, 1980 and, you know, the gold price peaks and you know, the shares

don't really, I mean, they they fall off, but then they have the real bull market run comes in that period that came afterwards. And there, you know, there was a, you know, big bull market. I mean, that's when you, you know, pulled in, you know, the barracks that were created and you know, the companies were created with, you know, settling

at a higher gold price. And I still think we're going to, what's going to happen is we're going to settle at, you know, a gold price that, you know, once the US can get its debt situation squared away is we're going to get a gold price that stabilizes at a, you know, pretty significant level that, you know, folks, you know, they're still looking back and saying, oh, well, gold price can't handle, you know, it's not going to stay above 3000. And I think right now, when you

start looking at these gold shares, you know, they're they're starting to get, you know, a feeling a base of, you know, OK, 30 three, $3400. That's a that's a good base, you know, so we're, you know, we're just kind of just getting our feet wet do. You think the consensus view is that gold can't hold above 3000? I think that has been the consensus, absolutely, yeah. And I mean, the Aussies have been weak for a while. You know, they took off over the

last month. And I think that was finally some belief, you know, coming in for, you know, the, the gold price is going to hold above 3000. It's, you know, you're starting to deliver, whether it's a West Gold or you know many of these companies, you know they're starting to deliver, you know some, you know decent cash.

The, the, it's, it's what do you, when you look back through history at the, the periods where like gold miners have very substantial like margin, it does it, do they actually have a sustained period of, of strong margins typically or does inflation often kind of erode their, their margins pretty quickly? Because that's the in the back of my mind, like if inflation comes back pretty sharply, like all of a sudden cost pressures just surely just eat into into

the margins. Yeah. I mean, and you've seen some cost pressures and I mean, right now you're starting to see, you know, where the price of inputs

has leveled off a bit. You know, it's, it's, you know, they're up and, you know, if you look at all in sustaining costs, you know, being up over the last year, you know, part of that is, you know, when, you know, the miners are making money, you know, they do put money back in under the ground that they they need to put back in, you know, which you know, then allows them to sustain themselves, you know, when the gold price goes back

down a bit. But yeah, you do see a level of inflation that comes in. Everybody wants their piece, whether it's governments or employees. But you know, what I've seen so far is that, yeah, we have a, you know, a gold price that, you know, is allowing for margin expansion. And, you know, the gold price, you know, at this port point in the cycle is going faster, is moving faster than the inflation is. And that's important if we're margin expansion.

Totally. The the, the point you made on sentiment is, is really interesting. Greg, how do you reflect on the sentiment in the states? Because I see on the one hand like Walmart selling out of gold coins and stuff, but on the other hand, to the point you made earlier, tech is the, the consensus trade and all these sorts of things. So from your perspective in in that part of the world, how do people think about gold?

Now people, you know, the, the, like I said, they're the look at gold is from a defensive standpoint and you've had, you know, this money that's moved into crypto. And I think that, you know, at some point when you, you know, there's a high correlation between crypto and NASDAQ. And once the NASDAQ does break, I still think it will at some

point. I mean, you've got NVIDIA and, you know, these stocks, Palantir that are trading, you know, it, you know, multiples of, you know, their revenues and, and earnings that, you know, typically mean that, you know, they they've reached a peak. Yeah, because you, it takes years to go in and, you know, finally earn, you know, those

multiples. And, you know, whether it was Cisco and, you know, the 2000 era or Sun Microsystems, you know, Sun Microsystems, you know, trading 10 times revenue, you know, it's, it just was, you know, it just gets to the point where it's too far. And, you know, I, I think we're getting that now and, you know, the cycle.

But you know, still, there's so much money that's been made in NASDAQ and the tech stocks, it's going to be a real tough to try to turn that and have people believe it's over. So, you know, I, I think that, you know, where sentiment is right now, you know, in the gold space is that, you know, they still need to see the, the market roll over. And then you'll then you'll get, you know, some broader

participation. You mentioned that like in the in the good times, these gold companies, they put the money back in, in into the ground. I'm noticing a lot of lowering

of the cut off grades occurring. And, and then, and then to coincide with that, there's a, a meal expansion study on the way.

So like, you know, these gold miners, they've got excess capital, but they're, they're just lowering the cut off grades, doing the meal expansion and saying that costs are going to be able to moderate from, from economies of scale with a bigger meal, but then they're depleting the resource faster once you've got a much bigger meal, like you kind of, you kind of always have to keep that thing full. It's a you can't go back after doing that.

So how do you, how do you like weigh up your, your views of just like discipline around not lowering the cut off grade and, and and and doing this sort of thing? Yeah, stay away from those companies. Really. Why? Yeah. Please. Please tell me why. Like why? Why? Why you didn't? Believe that. I mean look, see this is the problem with the gold industry is that you know they lower the cut off grade to profitless prosperity.

And so, you know, if you are an investor, what you're looking for is you want to capture that margin. I mean, the story that, you know, fund managers like to tell is that OK, the gold price is, you know, it's, it's $2000 an ounce and it's going to $3000 an ounce and our cost is 1000. And look at we're going to have 100% increase in our margin.

And, and if you sit there and lower the cut off grade to, you know, .000001, you're going to be in a position to where, you know that, you know, margin goes down to nothing. And this is historically what has been the problem with the gold miners is that they have destroyed, you know, the margins. And I think, you know, one of the things that, you know, I certainly preach in all the meetings is and ask management are OK, well, what are you going to do with your, your cut off grade?

You know, are you going to keep it the same in the coming year or, you know, or are you going to, you know, keep lowering it to profit less prosperity? And then, you know, they all say, Oh well, you know, we, you know, going to try to, you know, manage it and you know, you know, try to keep the margins. But you know, we want to make sure that we extend the mine lives because we already have the capital spent.

Well, if you have that capital spent, you know, you don't necessarily, you know, you don't necessarily make more money by lowering the cutoff grade, even though you know some of these guys think that they are going to. So Travis, Matt, I'm going to share something with you that Greg shared with me before the interviews, this little bit of insight into his checklist. Do you know what was the top of his checklist for investing in an underground gold mining

company? It's not anything to do with lowering the cut off grade. Is a is a bad thing. That's like a. Not at all. The key detail is mate the company has to use Sandvik ground support. Ah, yeah, yeah, yeah of. Course. And it makes sense, right? Yeah, great companies want to work with great people and other great companies, companies that deliver great products and why not work with the best in the industry in Sandy Ground Support? It's a signal of the type of

company you are. If you understand that using Sandy ground support is going to save you time, time is valuable. It's going to save you a lot of a lot of just like bandwidth knowing that you can depend on the product that's coming and it's of course going to be as safe as there is humanly possible because of the R&D that goes into making this ground support a truly innovative product that's essential for

safety. We were speaking about this R&D before, whether it's the Resins, the Easy 10, the latest bolts they've got, whether it's the app, they are innovating on every single front of the business. Not to mention they are working in every single corner of the world so they can get that product to the mine site as quick as possible. And of all the things you mentioned in saving there, the biggest one is money.

Mate, you know, offense, I can't wait to I can't wait to go to Kewdale and see some of this innovation with the main man Derek, Kurt, I think it's going to happen later this month. You and I, we're going to Q day with Derek. Kurt, I can't wait. Go Sandy ground support. Go Sandy. It's. Such an interesting, yeah, such an interesting reflection on the on the capital allocation decisions of management in the

sector. And I think there's also just like a, everyone thinks that they need to have growth in their portfolio. They, they, they've got to have a, they've either got to maintain production or have a growth project. And if you look at the, the, the

gold company that commands the most, the highest multiple in the space, they're X growth. They don't have any growth, but they, they do, they have, they have maintained margin like they have maintained their costs, right. Agnico, of course. Yeah. So Agnico's, you know, they're, and they're, you know, right now saying, hey, look, if we don't have any, a good project to put more money in, you know, we're going to give that money back to shareholders. And that plays well, you know,

for investors. And I, I think, you know that, you know, there are projects out there.

I mean, this is this is one of the things that it's going to be tough because I mean, when you look at a mining company, when they acquire a new project, you know, they have to look at it from the standpoint of, of, you know, getting a return on that capital and whether it's issuing shares or issuing cash, you have to get a return that is commensurate with real, you know, competitive returns in other industries.

And I think that's one of the problems that, you know, historically the industry had is that, you know, you were, yeah, in a bull market. You know, it was growth for growth's sake. And if you were going out looking for a project, you, you just issued more shares. You got bigger, everybody got bigger salaries and everything

was wonderful. I think, you know, what Agnico's is doing a good job of is, you know, they're telling, you know, investors out there, look, if we don't see anything good, we're not buying it, you know, and you know, they're and also these miners are not comfortable yet with this gold price. You know, they're still sticking. You know, you know much, you know, they're cut off grades and everything based on what I can see right now are based on, you know, you know, lower gold prices.

So, you know, they use consensus gold prices. You know, consensus gold prices by the analysts are usually, you know, pretty far behind because they're run by banks that, you know, don't want to see, you know, much higher gold prices. How do you then forecast gold? When you sort of build out your models or think about it, you just sort of do various levels of sensitivity analysis, various cases. Yeah, I mean our gold price assumption is much right now.

It is lower just because if you historically go back and look at, you know, a 10 year trailing average gold price as I believe is probably the best number to look at. And if you just take a simple average over the last 10 years, you, you get a, a number that is significantly lower than the current gold price. But you know, if you're a mining company and you maintain that you're, you're going to keep your margins throughout the, you know, many cycles.

And you know, I think we are in a, we're in an interesting period right now in that, you know, the, the gold price is really tied to total federal debt outstanding. And if you were to look at the gold price and sneaks and close the gold window, you'd see about a 93% correlation to, you know, the gold price and total federal debt outstanding.

And so if we, you know, the US could actually get its act together and start to slow the rise of total federal debt outstanding, then, you know, the gold price would slow down. But, you know, it's going to continue to this upward trajectory as long as total federal debts going up. I think that, you know, Trump, you know, he's a real estate developer and real estate developers love debt. And, you know, I really don't see him, you know, making a concerted effort to to lower the debt.

So how would? You think about positioning the fund if if you were to sort of see a slowdown in, in gold or in the the sort of federal debt level, it's a. Gold fund mate, it's always a gold. But there's. There's various, I mean. Yeah, I mean you, you certainly can. Well, one of the things you do, I mean, you know, the first thing you do is you really start chopping off your exploration

and development companies. I mean, that's, that's where you, you know, the, the axe comes first then, and then you go on to your junior producers and what you do is you just move up scale. And so you'll, you'll be, I mean, if you know, we have to be 85% invested in the, in the space being a gold fund. So you know, what you can do is you can buy bullion. It doesn't go down as as fast, as hard as you know, the miners go down. But you know, what you will do is, you know, look to have, you

know, larger cap company. So you just move up cap is what happens. So you know, what is, you know, what you haven't seen in this cycle is you haven't seen, you know, the big rush in, you know, exploration and development companies and you know, the smaller miners are are, you know, catching a bit of a bid now. But you know, the, you know, just the rush to, of excitement that happens in a bull market, you know, where you know, a drill hole comes out and it goes up a couple 100%.

You know, we're not seeing that as much, at least in the States. We're not seeing it. I mean, you have a few here and there down in Australia that, you know, had some nice moves, but you know, it's still, you know, it's a, it's a, it's not an easy, easy market to really gauge the prospects of, you know, who's going to be the next winner retail. Is is coming back here, but they're yeah that it's not it's not like fever level pitches yet.

The IPOs are on their way there and they're a good a good a good thermometer. The cap raises are just, it's just cap cap raises. And that that just shows that there's like a lot of capital like available for the sector right now. And that's just just the observation I've got. Yeah, I mean you, I mean, certainly when, you know, Canaccord sits there and hits us with, you know, you know, a deal at night, you know, type of.

Yeah, you have to kind of say all right, you know, yeah, maybe things are, you know, you know, could get a bit frothy, you know, you know, look, you know, I, I certainly believe that, you know, we are, you know, due for, you know, some type of pull back and then we go again. I mean, that's just, you know, what ends up happening is that, you know, you, you got a lot of

folks that you know, aren't, aren't involved in the space at all that will get involved. But yeah, there, there is hot money that is in the space. And so, yeah, you'll have 30% moves and then OK, you pull back a bit and you know, and then you go again. So nothing, nothing wrong with

that. One of the other reasons or sort of factors that comes to mind is the more approach, more disciplined approach to M&A this this time around versus 10 years ago and perhaps people thinking there's less odds of your junior kind of getting bored out. This ties in as well with the capital discipline, the margin discipline that you spoke about earlier. How do you consider the approach to M&A in this sort of bull market that we're in now?

Right. I think that, you know, disciplined M&A is, is really the approach. I mean, that's what, you know, folks have been preaching, you know, for quite a while they've been in the space sitting in my seat. You know, that's what we've been telling companies is, you know, just don't go buy something with it that doesn't have economic rationale.

And you know, to, you know, obviously, you know, that if you have a company that has one asset and, you know, there's a short mine life, you've got to do something in order to keep the your seat. So, yeah, it really depends individually on the situation. But I would say overall, you know, the bigger miners are are really generating significant cash right now. And so, you know, I think that they're been more apt to, you know, do buybacks than buy companies. But you know, they will buy

companies. I mean that they have to get comfortable with the gold price assumptions before they do that. And so, yeah, I'd, I'd like to see them, you know, really use cash to buy assets versus shares. I think that's more accretive. You know, the other thing to do is, you know, this is, you know, totally off topic, but is, you know, instead of, you know, selling every single Oz, paying taxes on it, why not, you know, really put that gold just in the vault. Yeah, put it in the vault.

It, you know, it certainly holds up better than currency has for quite some time. Yeah. The. One, the one gold miner that's done that for a very long time, you know, trades at negative EV

Tribune and Rand. I'm not sure if you're familiar, familiar with with that company. Well, it's two companies, but they've got, they've got like a collectively owned 50% interest in the East Kendana joint venture with, with Evolution. I think. I think the amount of gold they've got involved is enormous. Like it's eye watering. And I, I just think at some point, you know, they become ETFs. So, you know, there, there's nothing wrong with that

approach. And I, I think, you know, the, the industry has been, you know, because everybody does everything on, you know, PES and they've been not willing to accept companies to, you know, put the gold on their balance sheet. Yeah, But yeah. That's a great point. Great point. Should we talk stocks with you, Greg? We'd love to kind of peel into some of the names within your within your portfolio and also outside of your portfolio if you've got some spicy views on them.

Yeah, sure. Let's let's start. With, with Anglo Gold Ashanti, lots of making lots of news and talking big, big aspirations in relation to the yeah, the silicon project area in, in, in Nevada there. Are you pretty buoyant about that, that growth opportunity And also how do you how do you see their like their rethink of other, other assets as a result of that?

Yeah, Look, I think that Anglo, you know, they, you know what what they've done is, you know, redomiciled into into the US you know, the, you know, I think that was important. You know, I think, you know, the fact that they, you know, basically are no longer a South African company though yet trade, you know, similar to goldfields on a lot of days. Yeah, I think that they're in a, a real good spot to, you know,

finally grow this company. I mean, and you know, there have been, you know, you know, if you, if you look at the assets, you know, they have been shaving off some so they could be in a position to, you know, build the Silicon Valley, the silicon project. And, you know, and I think that's, you know, that's what they're really looking towards is, you know, trying to close the gap with their North American peers. And, you know, we've had that

stock for a long time. And you know, there's been, you know, some, some pain involved. But I, I think that the new CEO, he's, he's doing a, he's doing a good job and, you know, getting the, getting the company on the right path. So yeah, we're, I do like, I like the, I like the trajectory that Anglo's on. Yeah. Do you think they'll like even even their acquisition of sentiment like a year ago, it seemed like that'll pay itself off pretty quickly at where gold prices are right now, you'd

imagine. And they think it was a pretty undemanding price that they paid there. So yeah, that, that, that'll, I think that looks pretty like a pretty great deal right now. And, and do you think that they'll, they'll rationalize like their Australian portfolio as they kind of, you know, refocus their, their capital

towards silicon, you know? I think that they want to maintain presence in Australia. So, you know, I think that the, the, the assets in, in Australia, you know, will, will be there and I don't think they're for sale at this time. I, I really don't, you know, so, you know, I think, I still think that they believe that, you know, there's, you know, there's margin there, you know, some growth and you know, I, you know, I don't know what, you know, what the growth is outside

of their asset base. You know, that's I don't think, I don't know that they're thinking that. And I think that's, you know, when you, when you look at Australia, yeah, you're kind of looking at, OK, well, you know, you know, where are the growth opportunities? And you know, there are, you know, we have Oz Gold and a few other, you know, Saturn and a few of these development projects in the portfolio. And you know, they're, they're

coming along. But those are not Anglo Gold type of assets, you know, they're, they're really not. So should we jump? Straight into to those two you've just mentioned there. Ozgo had some good news recently on the on the sort of land front.

How are you sort of taking in the the the change in events there and how long have you kind of held the stock? We've held it for, you know, she's over a year or so since John got in there. They did the race. So yeah, that's been that's been quite a while. I think it's over a year. I think he's been in there. So yeah. So you know, we we have it at much lower levels and I and I think that, you know, it is, it is a good project. It's it just needs some, it has

needed time. It's needed John and the team to go through that jump through the hoops. You know, they clearly, you know, with doing the land deal got, you know, one of those hoops crossed off, you know, last week and you know, the stock has reacted nicely and you know, probably has more to go now. You know, I I don't believe that you know, John is in there to to to build it. I really don't. So we'll we'll see that's. That's, that's an interesting

perspective. We'll have to keep our eyes on who potential acquires could be of that one. And then like Saturn, we've got big, big scale, big tons. I mean scale in terms of amount of amount of dirt, dirt to move. But the production profile, you know, around the, you know, a bit north of 100,000 oz per annum. But it's still got a bit of time before ahead of it, like FY20, 7

or 28 at the earliest of this thing could be in production. Yeah. And. You know, so you know, there haven't been a whole lot of people each at, you know, projects down in in Australia. And so I think there's probably is a bit of lack of understanding of, you know, what they're doing. But I, I, I think I do think that he's doing a good job of, you know, systematically, you know, approaching that. I mean, he's, he really is a, he likes to do exploration.

And so he's, he's going at it. Yeah. But yeah, it's, it's probably, yeah, it's, it's a couple years away. But you know, and, and it's not, you know, at this point, I mean, he's finding more oz but you know, I, I don't see it, you know, as a, you know, it's not a 200,000 oz a year mine it's 100,000 oz a year operation looks like, and you know, so you know, who are the buyers for

that? That's that'd be in Australia if, if he doesn't build it, you know, one of the things that's happening is, you know, that, you know, these mining companies that you know, are finding juniors that are finding Oz. You know, they are kind of growing, you know, to the point where you know, somebody, it doesn't make sense for a company to buy them, you know, if the market caps go up too much.

And so, so then they get forced to build them, which, you know, that's not the worst thing in the world either. Do you think the heat leak risk is overblown? The pardon me, the the. Heat leach nature of the the project. Do you think that risk here in Australia is overblown? I do, yeah, I do. I, I think in certainly his, with his experience at Newmont, he's yeah, he's not afraid of it.

And, you know, I, I don't, I don't, I don't think that, you know, from a capital standpoint, I, I think it's a good way to go. I mean, we'll, we'll see. I mean, they're starting to find some, you know, some higher grades, which they would need if they went to the mill route with the CIO. But I, I don't think that, I think they're still looking at starting it off with a heap leach. So and that that's yeah, in Australia, like I said, there's really isn't a lot of experience

with heap leash. So I think that lack of understanding, you know, has created a bit of a, a void, you know, for, you know, for investors to, you know, embrace the story more. If I'm not mistaken, Greg, you've, you've, you've got an allocation to Ozone and they're

currently in a trading halt right now on the back of news that the WAFF has received a bit of a shakedown from the Burkina government. Ozone also a Burkina gold producer. How you feeling about about about this? I am. I'm thankful that actually ozone did trade. It opened up late today and went down about, I think about 15%. And, you know, Loft is going to trade, you know, now on Monday.

And now they're going to be down 25% probably at this point, I'm going to guess because you're down about. Yeah, see, with Orezone, they have a little different mining code that they were into the 2025, I guess. And so the government can't come back on them. And Burkina I, I was thinking that, you know, that, you know, and I was, I hadn't been in Washington for quite some time

and I went back in, you know, about a month ago. And, you know, it's, you know, it's thinking, OK, I think that the the government's going to be happy with their 15%. They just gone from 10 to 15. And so, you know, the fact that now they want to go, you know, to 50 is a little disconcerting.

But, you know, I, I think that, you know, WAFF is, you know, probably going to try to negotiate pretty hard if they can, you know, I don't know, I don't know what, you know, what they have to negotiate with, you know, But, you know, the, one of the things that is really disconcerting for investors is, you know, when you have these mines and some of these armpit countries is that, you know, they, they, they want to go in

and, and take them. And that resource nationalism is one of the big risks that, you know, is out there, whether it's South America through, you know, you do it, you don't take over the mine entirely. You do it through taxation and increase royalties. And, you know, that's why you get, you know, you know, a lot of folks that are, you know, OK, I, I can be in Australia, I can be in North America. But you know, you start going to these, you know, other countries

and it gets a bit dicey. So, you know, I think when I look at WAFF right now, you know, I'm not going to say what I'm going to do, but you know, it's not a, it's not a pleasant, it's not a pleasant scenario. If we just fly over quickly on the jurisdictional aspect, a couple of the other countries in the area that have significant minors, how are you thinking about the likes of Guinea and Ivory Coast and perhaps Senegal or other ones that you may have played in there previously?

Yeah, Guinea is been a a good country, you know, I mean Cote d'Ivoire, yeah, these Senegal, they have been good countries so far. I mean, so, you know, I think, you know, when you're sitting in my seat, you're, you're going, OK, well, we can have a, a certain percentage in, you know, each one of these countries that as long as it doesn't blow up

your portfolio. And so, so I have no problems, you know, taking a, you know, you know, being in, you know, code of law and Senegal and Guinea, as long as it's, you know, doesn't make up, you know, 25% of the portfolio type of thing, but you know, a couple percent here and there. It's OK. There's a couple of. Interesting projects in Mali as well. Are you courageous enough to go there these days?

The only, the only real asset that we have there is with Barrick and Bristow is being pretty tough with those guys believing that they can't operate the mine, which, you know, I don't think that they can. But that there. I think what you know, the Mali government wants to do is they want to try to bring in, you know, one of the other miners to to mine it. But you know, we'll see if allied. They can't ask resolute. Yeah, resolute.

I think I, I think it's I if it if it's anybody, I, I would imagine it would be allied Peter Marone. But yeah, that's, that's a that's a possibility. I I think that if you really were to, you know, take that away from them, that they would lose that in arbitration. But we'll we'll see. I mean, you know, I, I think of, you know, the the three assets that we have there are Barrick Robex, it has a small and I like Nevada. I mean that I like Nevada, but I mean, I like gold, yeah.

So I'm, I'm curious what you've made of the run of, of, of Lundin gold. It's, it's truly, truly phenomenal. You know, the like, I mean,

Freda del Norte has had tremendous exploration success and just the, the ability to deliver that project in that part of the world. It's a $20 billion company like Canadian dollars now $20 billion for a single asset in Ecuador. Surely they're going to buy something soon.

Yeah. I mean, yeah, the thought process had been that the Lundin's want to sell that to Newmont. You know, Newmont's in there with a big piece that they got when the New Crest deal happened, you know, so, you know, obviously, you know, that's a big chunk of capital that's sitting there. You know, what does Newmont do? I mean, you know, there has been speculation that Newmont, you know, would make a bid, but, you know, at these prices, you know, that's become less likely.

You know, I mean, this is, this is what the market's doing is running in front of, you know, what would be, would be acquirers. And so I, I don't see that Newmont makes a bid for at least I'd be surprised if Newmont made a bid for Lundin. So, you know, where does that leave Lundin? So Lundin had made an offer to, to buy reunion in gold. And so, you know, and I think that, you know, I wouldn't be surprised if, you know, they step up and, you know, make an offer again.

But, you know, they're going to have to get Newmont to sign off on that. I mean, that's one of the things that, you know, Newmont, our new Crest wouldn't allow the London guys do to do is to to buy anything. And so, you know, they put a kibosh on them because, yeah, originally they were thinking, you know, new Crest. They were going be before they they bought the asset up in Canada, you know, they pretium they were going to, you know, they were talking about making a bid for Lundin.

And so the pretium deal came up. So that put Lundin on the back burner, but they still had ideas that they were going to do the Lundin deal. And so, you know, what ended up happening was, you know, Newmont stepped up and took out New Crest and, you know, now new Newmont's in that same seat of having 35% and saying, OK, well, you know, we're just going to let let this play out a little while longer, but don't buy

anything. You know, so these guys have blocks on the, you know, blocking votes on the board. I guess so and. Speaking of the takeover dynamics, I, I am gold is, is another one where you thought it was like pretty, pretty undervalued for, for a while, especially given what the value of Kotak, you know, should

should be. And, and in the last couple of months it's, it's really, it's really had a, a run. Do you think that's on the back of speculative corporate action as well? I think yeah, so far Goat Day is in the still in the build up phase, Yeah. So yeah, there's no doubt in my mind that I am gold wants to be sold. So, you know, how that gets worked out is, you know, whether you you hive off what they have in Burkina and other assets and, you know, create separate

entities. But, you know, I think there'll be some type of transaction that takes place there. You know, that would not surprise me. But it's it's, it's coming, you know, as soon as Cote is just has to, you know, show itself a little bit more. Because these. Guys, these guys are nervous about, you know CE OS, you know the last cycle especially you know every time that they do it did a a takeover, you know it didn't work out. Then they, you know get hived

off quite quickly. There's a. Few of those like you know, pretty substantial assets that are still, you know, proving their straps from a ramp up perspective. Like in addition to Kotai,

you've got, you've got the likes of Artemis Blackwater and you've, you've got Equinoxes Greenstone. Do you like, do you think that once you know like if, if as

they do or if if they do kind of prove themselves that they become kind of like logical acquisitions at the right price for for the majors? Yeah, I think, I mean, there's no doubt in my mind that Artemis is for sale at some point. I think it probably needs to, you know, work on, you know, getting its debt level down just so it just needs to produce for

a while to do that. And, you know, the, the, I think the big guys, you know, you know, they look at, you know, mines that can do a half a million oz and there aren't that many of them. So, yeah, it's an attractive asset. It's not necessarily that cheap when you take the debt into consideration, but you know, I, I do believe that, you know, one of the big guys will make an

effort there at some point. Just to reflect back on the, the share price movements of some of these bigger companies like to talk about London once more. They've more than 10X in, in the last few years. It's, it's just incredible. And I can't help but notice that their market cap is almost double that of some of the companies that have been sort of

grouped as as major minors. Like how do you think about the the rationale for continuing to to hold a company like that with the the single asset risk in Ecuador? That's a, that's a good question. Now, you know, I, I've always been of the belief that you run with your winners and you know that the companies will, you know, continue to create value over time.

And, you know, right now I'm, you know, I'm still betting on the loan Deans, you know, and fortunately, you know, what they're doing is, you know, they're being, you know, very aggressive in terms of, OK, well, we're going to pay back

cash to the shareholders. And, you know, obviously Newmont's a big shareholder, but, you know, so are the Lundeens. You know, that's what that's one of the reasons why I thought that, you know, you know, the Lundeens wanted to cash out and, you know, put the, you know, that cash down into the copper assets that they have. But, you know, I, I still, I'm still thinking that.

But at this point, you know, they're, they're willing to let the, you know, the free cash flow, you know, come back to shareholders, which, you know, I know I'm, I'm a strong believer in, you know, investors participating in cash flow. And, you know, that's just one of the problems that, you know, we've seen with the gold mining industry is that, you know, investors haven't participated in the cash flows the way they

should. And, you know, I have a very simple formula in that, you know, that this business needs to be basically a third, a third, a third. And, you know, the third goes back into paying off the mine and the third goes to the shareholders and the third goes to the next mine. And if you do that, you know, everybody participates. So, yeah, so that's, you know, the fact that the Lundeens are are, are paying, paying us back. You know, I'm certainly in favor of that.

So Barracks. Sell their 50% stake to their JV

partner, Nova Gold, who've been in that asset for quite some time and Nova Gold have a run up that they haven't quite had in a number of years, but there's still an enormous CapEx bill there. How do you think about the Dolan

project? Yeah, I mean, there's a lot of gold there and certainly Tom Kaplan and that group has been playing up the OK, well, the gold in the ground is, is fine is, you know, it's, it's a asset and you know, we don't have to mine it. You know, I think now they're at the point where, you know, they get tired of all those folks out and said, OK, well, we're going to have to build this eventually. And Barrick looked at and said, OK, well, we're not going to get the return.

We'll, we'll sell to these guys, let them run with it. And we don't want to spend the management time to do do that. So it's, you know, I, I think it's going to take a lot of capital, clearly. And, you know, I, I'm, I'm not willing to go there at this point. So, you know, hats off to him really. So, but yeah, it's a, it's not an easy, it's not an easy project. You know, you got to get the power up there. You know, you're going to do it with natural gas or however you're going to do it.

I don't know. But yeah, we'll see. But there's a lot of gold up there. There's certainly a lot of gold there.

One of one of the larger positions in the portfolio Greg is Catalyst Metals who who had a tremendous run last year, retreated a bit, but yeah, but prove their straps when they when they got their their hands on Platonic. I think they've got a bit more CapEx ahead of them now and the, the, the easy runs might be be over. But do you, do you still have a pretty, pretty strong outlook for, for their ability to generate cash? You know, so James has got some work to do there.

He's got a, he's basically at this point now he's got to prove up the market cap that the market's given them. And so, yeah, he's talked about getting to 200,000 oz. He's got the Trident project, He's got platonic yeast. Yeah, they, you know, they're, they're getting some good results on the platonic, I mean on that platonic belt and, you know, with through Trident. So, but you know, the, the question is, is you know, is he going to be like his father and

go out and buy things? So, you know, my guess is that yes, he will at some point go here. Should I Daddy, I saw what you did, but I'm going to do it with better. And, you know, so far, I actually think that I actually think he might be a bit more disciplined than his father was. So maybe maybe he learned a bit at the the breakfast or the dinner table. But you know, one of the things that's interesting about catalyst, I mean, they waited a long time.

He could have done that raise, you know, for, you know, I think brokers were beaten on him for a long time and he didn't do it and didn't do it, and he finally did it. So, you know, the question is, is OK, what is he doing with that money? And is he buying something? Or is it just there to, you know, keep a larger, you know, buffer? So, yeah, I, I, I, I don't know what the answer to that is yet, but you know, I do have

confidence in his ability. And, you know, a lot of times you can sit there and you can sell assets, you know, when they've run and then, you know, look to buy it back some other time. You know, my, you know, I have historically been a pretty low turnover fund and have been, you know, if guys have been performing, I let them perform and continue to perform and I'll ride out the, the ups and downs, you know, that's, you know, the way we've operated.

And so I think that, you know, we'll, you know, at this point, I'm willing to let James run with it until he shows otherwise. And you know, once management starts doing things other than what they say, you know, then it's time to leave. I'm really curious just to hear how you think about hedging in this environment?

That's a good question. So, you know, hedging is, you know, basically been a hedge for to not make money. You know, for a lot of a lot of companies, they think they're hedging, you know, the top top line, they can't hedge any costs really. They try to, you know, you can look at, you know, energy, you know, maybe they can hedge a little bit of that. But you know, for the most part,

you can't hedge your costs. And then the costs keep going up. And then they're, you know, the, you're stuck in a situation where you know, you've, you know, sold forward and, you know, then the, your, your cost profile goes up. And you know, nobody wants to be in a company where you know, the gold price is going up and you know, they're locked in a $2000 gold.

I mean, if you look at how many companies have, you know, really, and mostly the Australians have been the worst, have really, you know, died because you know, their, you know, their hedge book portfolio is gone against them. I mean, clearly, you know, obviously Bellevue, you know, Regis, you know, they had a tough book. I mean, a lot of these companies that have had big books, you know, go against them, you know, they've, you know, it's, it's

been very detrimental. So I, I'm not big, I'm not big on hedging. And you know, one of the things that you look at now and say, OK, $5000 plus gold, you know, if you know, that's not a bad gold price in, in Aussie terms at all. And so you have to have a view on what the Aussie currency is going to do. And so if you think that the Aussie currency is going to get much stronger, you know, the gold price isn't going to do

anything. And so, you know, that's one, you know, one view that you're going to have to take as management. And I, I would, I think that, you know, companies have gotten better at looking at hedging more from, OK, well, we're going to do options and you know, we'll, we will take the, yeah, take a little bit of money here and hedge ourselves on the downside. And or, you know, they'll do some 0 callers, you know.

But you know, for the most part, if you look at, you know, the successful guys that have been in the hedging game, you know, they've, they've basically have bought puts and you know, just written them off so I could, I could have. Guessed your views there you want you want the the miners to hold gold on their balance sheet, not deliver it to to to a counter party. Yeah, right. I mean, I mean, one, one of the things that is, you know, when

you look at, you know, you know, the gold price, you know, it's that volatility that you know, is in the share price, you know, so you know, moving with the gold price. Yeah, Yeah. What's the? What's the most undervalued gold company gold producer right now and then gold. Gold developer right now, Yeah, I. I look at a lot of these companies and say, OK, well, you know, where, where are we going?

You know, and you know, I'd like to think that, you know, yeah, I have got this small one that I've had for a while, Jaguar Mining in the portfolio that had a tailings issue.

And so, you know, once they get that squared away and then you are able to expand their operation, you know, that looks cheap to me. You know that the market's going to like it. The developers really in a position to where they can really make hay in this environment if they do it correctly and, and that that's not blowing up their shareholders along the way, you know, entirely just saying, OK, well, we need we need cash. So, you know, we're going to take cash every time we can.

We're offered because, you know, in a bull market, they'll be offered cash, you know, you know, every other day. So you, you have to make sure that, you know, you have managements that are not, you know, going to dilute you out.

So, you know, that's one of the problems that you have with developers is you know that they will blow you out of the water, you know, so you have to know that the management teams are there understanding the, you know, the fact that, you know, they've got to keep a, a close eye on, you know, oz per share.

On, on that sort of theme, Greg, I've got a a bunch of rapid fire questions that on a fire towards you with the first one being who do you think is the best management team in the industry right now? Best management team has been a Nico. They've been the best thought that might. Be the answer Do you have a favorite gold mine that you've come across in your in your career? Favorite gold mine?

Oh yeah. I mean, my, my favorite gold mines through the years have have been the Nevada gold mines that Barrick and Newmont had. Those have been the, you know, the best, you know, from I go back to early 1980s. So those have been some pretty spectacular minds, yeah. Long history there. How about the best jurisdiction to operate in the world right now?

Yeah, I, I'm. I'm going to still say that you've got to be in North America and you know, Canada and Canada and Australia probably probably Australia is you know, is getting more unfortunately more and more like Canada and the US that is taking longer to permit. But you know, from its sanctity of the tenements that's, you know, those are the, the countries that you want to be in. And most likely deal in the next 12 months. Yeah, I still.

Think Lundin disappears somehow, but they're I bet. I think they buy an asset. It's probably my guess that lending buys an asset first, would you say? In the Americas. Yes, yeah. In the Americas, yeah. Interesting one. How about the best site visit you've been on? Yeah. I'd say barracks, barracks Nevada gold mines to find the best site business I've been on from a you know, large cap mining company.

I mean, I've been on a plenty of of you know, go out and you know, kick the dirt on, you know, but you know, in terms of seeing an operation, yeah, that's probably you know, yeah, you can see the most there last one from. Me is agnico more likely to buy Oregon royalties or I am gold to get their hands on Cote in some way shape or form in the. I think that they would be more apt to buy Kote is probably my

guess. You know, one of the, one of the things that you know, they're certainly looking at is, you know, maintaining, you know, their jurisdiction profile and I and I think that's, you know, one of the things that Kote offers them. And so you're going to, you're going to have to split up the split off the Burkina assets. So, yeah, so I mean, they have no problem. They have a history of doing that.

So I wouldn't be surprised if they make a joint bid with somebody or somehow they figure it out or just, you know, create a separate company. Fantastic. Greg, it's been an absolute pleasure to to speak and get your insights on, on, on the, you know, the gold equities and the gold market. And it was also enjoyable for us to talk about, you know, some of these North American gold miners that we don't spend heaps of time talking about.

No, you spend all the time talking about the Aussies all the time, but I understand that you've, you know, most of the time you guys, mostly the Aussies down there listening so. Yeah, we, it's just local market bias. I think, you know, time zones do matter obviously. And it's, it's kind of hard to force yourself to, to pay attention to the other time zone. But but we're, we're, you know, speaking to people like you. We're, we're getting there. One step more educated now.

Yeah, I know. Well, I think you know, and I, I do think that, you know, you do see the Aussies are, you know, they're, they don't do a very good job when they come to North America, then they probably should stay away. But, but you know, clearly down in Australia and you know, there's a couple of guys down playing around down in South America, you know, you know, certainly could get a bit.

And I think that there's there is a market in Canada, there's a market in Australia for resource companies that's not there in the US. And so you know, that's, you know, that's a real positive for, you know, the industry overall. So totally there's. Still that appetite here. Yeah. No, no, there is. So I mean, Canaccord is, you know, running the stuff up. It's very true. Thanks a bunch for joining us, Greg. Appreciate it. Yeah, my. Pleasure. Thanks, guys.

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