Festivus With The Rest of Us - Mining Executives

0:07 First of all, welcome everyone who's listening in or listening into this. And today we're going to, it's a tradition now, Best of Us with the Rest of Us, started by the guy with the silly hat on, Doug Ramshaw, a few years ago and it's been a big hit each summer, each Christmas. We are going to talk about the good, the bad and the ugly today. I think it's been a heck of a year for lots of different reasons. Perhaps we're gonna talk about some of those things and maybe how this panel feel about that one. So, but before we do, I'm gonna get everyone to introduce themselves.

0:41 Terri-Ann first, Rick, and then Doug in that order. Give us a little intro. Who are you? Great, I'm Terri-Ann Willey. I'm the VP of Corporate Communications for Barksdale Resources. We are a Copper Zinc company based in Arizona. We are adjacent to South32's flagship,

1:02 Taylor Hermosa, and our flagship is Sunnyside, and it's the extension of that great asset next door. So we're currently drilling. Exciting time for the company. And Good morning and happy holidays to everybody. I'm Rick Van Uren, the President and CEO of Contango Ore. We're developing

1:24 a high-grade Gold, open-pit Gold project in Alaska, fully financed, fully permitted. Our joint venture partner is Kinross and we're on the cusp of being producing here. Hopefully by the middle of the year, we'll be producing about 70,000oz of Gold a year at a cash cost of a little over $1,100. So exciting year coming up for us, but we're here to talk about 2023. So

1:52 Doug. Doug. All right, well, the reason I wanted to speak after Rick was I had the very great pleasure of speaking directly after him at the Denver Gold Show this year. Rick's very understated with his bio there. It took about 90 seconds for the moderator to talk about all his accomplishments and who he'd worked for and everything. So I'm thinking to myself as I'm ready to go up,

2:20 well, what are they gonna say about me?

2:22 And pretty much in comparison to Rick, it was his Doug Ramshaw, he's wearing a suit, off you go. It's great pleasure to be with Rick again and Terry and Matt. I'm Doug Ramshaw, I'm the President of Festivus, but also Minera Alamos. We're a gold developer, stroke producer, focused on Mexico, building low capital intensity mines with the plans to build our second mine in 2024 and try to reverse some of the issues we have with our first 1 in 2023.

2:57 Thank you very much everyone for that. And Doug, I'm going to come back to you, because I want you to set the tone for this conversation. You're out there to set the tone for sure. But I want you to set the tone verbally or audibly as well. In 2023, I referenced it. It's been a real tough year. Some CEOs are down, they've been beaten up real good, especially if you're in the precious metal sector. What this year has annoyed you the most about the market's reaction to where you feel metals should be?

3:30 Field metals should be?

3:37 I mean, the reality is these are very good healthy metal prices. And so a lot of people kind of look at stock performance and don't look underneath the hood and realize that margins have been contracting through this whole time. So although we've got this high gold price, in reality, I think to see fund flow coming back, we've got to see that expansion of margin. So, you know, maybe we're on the cusp of a moving gold price that can see margin expansion for the first

4:10 time in the last couple of years with a few short, small blips. So it's tough because people look and go, oh, you're better off investing in gold, which is true actually, over gold equities.

4:25 But gold equities were up their day and they're talky moves at some point. But annoyance, I don't know if anything overly annoys me other than people looking going, you know, this is a horrible sector to invest in. I think it's a fantastic sector to invest in, But these kinds of markets, these kinds of conditions,

4:51 you know, separate men from the boys and good operations from bad ones, some which maybe should never have been built. But, you know, I don't know if anything has annoyed me per se, other than people like just arbitrarily looking and going, why aren't companies performing better in this gold price environment

5:16 without necessarily looking and seeing that there have been major cost increases which have contracted margins. And that's a direct reason why we're seeing kind of supposed underperformance against gold. And Rick, what about you? I mean, you obviously, obviously, your credentials are long and illustrious. So you've seen a thing or 2. How do you view a market like we've just been through? Is it a case of just knuckle down, get on with it, stop complaining, or is there other factors at play? Yeah, I think you do have to put your head down sometimes and do your job and ignore the market to a degree in a sense of, you know, when you don't like your share price, try not to finance. But if you have to finance, you have to finance. So I mean, I agree with what Doug's saying, that, you know, the margins have contracted

6:14 for the major companies. That's the key metric that Gold investors look to. It starts with the majors and then the interest sort of trickles down. So when their margins stop collapsing, I think we'll see a reversal of this. And There's a lot of factors at play here. I mean, there's, you know, strong dollar is certainly a factor for the Gold price in US dollars. Now, the Aussies are having a great old time. So that's why you see them all over the place. They're up in Alaska. They're down in all over Africa, South America, everywhere. So I think the strong dollar is a big factor. I guess if I'm annoyed with something is that The US keeps printing dollars and everybody else keeps buying them because it's the strongest currency.

7:07 But that's the reality of the world today. So what about you, Terrian? You're obviously down in the US, your operation is down in the US.

7:18 I know yours is a little bit smaller, the company, than the other guys here today. Is there anything when you look back on 2023 and say, you know what, I wish I'd played it differently? You know, hindsight's a wonderful thing. Oh my gosh. Both Doug and Rick made a good point. Costs are astronomical and especially in the in the exploration sector when you are trying to move through regulation.

7:47 The costs are astronomical to these exploration companies. And what we really need to do is drilling to, you know, determine what's underground and provide some value for investors. But when you're occupied with spending money, moving through these regulations that are, you know, in place for a reason, but they've gotten to the point where they are completely out of control. And the costs are, the cost and time to get to where you need to be,

8:23 really annoying. If there's something to do differently,

8:32 try to move through those regs faster, gain, you know, cultivate an investor base that really understands your jurisdiction and the, you know, multiple hoops that you have to jump through to get to the prize and make sure that the prize is worth it. I should have gone with you first. You're definitely setting the tone. That's where I want to go. I think it's been a difficult

8:57 year for a lot of companies, whether they're good assets, good managed streams or not, primarily because of jurisdictional risk. I think a lot of investors don't actually appreciate it. So my gripe of the year is if one more person quotes the Fraser Institute at me for jurisdiction, I will switch off the screen because I don't think it matters anymore because every jurisdiction has its own problems and issues. Doug, you come in on this one, support me, what do you feel is going on out there? It's true And I think a lot of the things facing

9:35 the maybe have been amplified in certain jurisdictions are actually global issues. So water management is a key one. I mean, permit, I used to say permitting and water management, 2 biggest challenges facing the sector. I think you throw in skilled labor shortages now as well. So you take water management as an example. I think Mexico's proposed mining reforms

10:01 appropriately address mine development should be in line with water availability for said mining. That was highlighted in their proposed mining reform. It shouldn't be. There are lots of challenges to that reform right now. That's one thing that shouldn't be challenged. You know, but that's a global issue. NGOs are becoming a global issue. I think our industry needs to do a much better job not just sitting here trying to educate investors, which is very important and we need to do that better, but actually looking to educate

10:45 people in the areas of these mines, and all the NGOs who want to stop mine development in areas where the local people actually are gonna benefit greatly from it as the local stakeholders. Someone gave me an anecdote a couple of months ago. I wish I could give them credit. I've forgotten who it is, so I'm gonna pretend it was mine.

11:10 And as mining companies, we are the bottleneck. The bottleneck for so much mineral development, which is needed for technological advancement that can help society, potentially climate change is still 19th century, digging big holes in the ground. And the anecdote they made was the cattle industry never show pictures of abattoirs.

11:38 But the mining companies, we can't help ourselves but show great pictures of open pits, big scars on the earth on our deck. And the reality is those scars are actually pretty minor. The NGOs are not out in force when Phoenix are asphalting over half of Arizona's desert in its mass expansion in the late 90s and 2000s.

12:01 Asphalting, you know, desert, that's nothing, you know. And yet the expansion of Phoenix as one big city in the US, and it was the fastest growing for a long time there, Probably that scar on the earth from asphalt and new sewage lines being run was less than the global footprint of new mines that were coming on stream during that time. And yet somehow there's this stigma about what we're doing. So, you know, it all gets amped up and it all impacts jurisdictional risk.

12:36 I agree, Fraser Institute is not something, I once used to put that in a corporate deck, I don't anymore. It's skewed by the very respondents that are adding to it.

12:51 It's not a helpful guide in many ways. What about you, Ray? What are you experiencing? Probably a top 20 list to a bottom of the list today. And that's kind of overnight and I think took a lot of people by surprise. So, I built Panama, the ugliest part of the single event, that's probably one of the ugliest that the mining industry has undertaken. Our industry is not that different from biotech, from the pharma industry. We go out and we test things, we explore them, we advance them through different levels, just like you have to go through in the pharma business or the biotech business.

13:44 So We're unique in some ways, but not every way. And I hear what you're saying, Doug, on reform, but sometimes be careful what you wish for. I'd say particularly in the US, if you have permitting reform, you're going to have review of the 1872 mining law. So,

14:05 you know, there's, I think the biggest, our biggest challenge in the industry is nimbyism. Everybody wants their cell phone, everybody wants everything. AI is going to be another whole level of electronics. And that's a massive power consumer.

14:26 So I think long term, we're in a good place, the mining industry producing metals is if you're not doing it with carbon, you're doing it with metals. So I think we're going to place, I think we've just got to come to a, I think you're right, Doug, it's about education. Most people don't understand where everything comes from. So yeah, there are big holes in the ground and big holes underground. But until we figure out how to microscopically remove a molecule

14:59 of copper or molybdenum or Tungsten from from Iraq That's what you have to deal with so

15:09 But what you turn it around I was a US interests me because they talk a good game But it seems oh, here we go. Here we go Tin foil the party started, that better be real silver. I'll just put my tinfoil hat on now. This is conspiracy theory time, let's go. Oh this is going to be fun. Well, I'm just saying there's only 3 ways to get things on this earth, right? 3, 3 ways. You either have to kill it, grow it or mine it.

15:42 Period. And the lack of education. Stems from, again, the top. You have these governments that have politicians that have been in there for decades and decades and decades. It's their careers, they're in there, they're not leaving. And the longer, the more regulation that they put on us,

16:08 you know, the harder it is to become. And then other sectors have little regulation. They used to have very stringent regulation. Rick, you brought up pharma. They used to have to go through all of these hoops. But the difference between pharma and mining is that's a never-ending business of things to cure. So that will go on forever and ever and ever. Whereas mining, like we have 1 job. We have to get things out of the ground. And there's not an infinite amount of minerals to mine, yet we have the most stringent policies and they want us to literally decarbonize. Well, how are you going to do that?

16:53 How are you going to do that without

16:56 mining, without copper? And the lack of the disconnect between what the regulators want to do and decarbonize and the actual method of getting there. Finally wasn't even on the agenda at COP 28. You know, they they just announced in Canada that they want to remove

17:18 all gas vehicles by 2035. Well, where are you going to place these gas vehicles?

17:25 Right? So all of the vehicles that are on the road today, where are you going to put them number 1 and 2, how are you going to replace them if you're not going to get things out of the ground? Yeah, there's a big topic which even I'm going to avoid because I'll just sound like a raving lunatic by the end of it, because I don't think we've got enough of the stuff to get out of the ground. But I want to talk, Doug, they did talk about a bit of mining at COP28, which is uranium, because they need the energy, right? So that's getting a free pass at the moment. But it's also kind of led the way in the sense that it has driven the spot price of uranium up because the companies are saying, we're not digging anything out of the ground until you give us a fair price. They have said we want an incentive price to get into production to be able to supply you the stuff that you need. Now clearly gold's in a very, and press metal in a slightly different position, but some of the, some of the, and maybe even some of the base metal. So what's your guy, What's your angle for saying, look,

18:34 we need to be able to make a margin here because it's, yes, I get gold's gone up, but so have costs across the board. I think the average number I'm hearing from some producers is 1,400. It's come from, it's risen 250 bucks for them over the past of inflationary period I know you might be in a different position right but start with you Doug what do you guys do about it? Well just wait because you're gonna see the there's already been signs from the ESG crowd about why do we even need to be mining

19:08 gold? Right? Like, you know, the reality is, I know my carbon footprints, you know, should be celebrated going up by my shareholder because my baseline was 0 gold mines and I want to build a number of gold mines. There's no way my carbon footprint isn't gonna go up as a result of that.

19:33 Yeah, the industry cost curve has risen. I think gold has, it obviously has a storied historical sense that people have been in recent, in the last decade have been trying to denigrate, you know, whether it be the crypto boys drop gold campaigns or now the SG crowd wondering what's the purpose of it. I think gold has demonstrated its purpose over thousands and thousands of years.

20:00 But we probably got a tougher fight than uranium companies that actually, you know, if we can wrap our head around the fact that from a baseload energy perspective, uranium is the only really path you can go if you want to align things with a carbon reduction plan.

20:25 Gold is probably going to struggle with a lot of the current political side of things. And if gold really goes up, you'll see all these companies, you know, look at gold as an easy way to extract more on the royalty side. It used to be that it would be Latin American countries or African countries that if, whether it be the DRC, if cobalt prices spiked, sure enough, there'd be all this talk about, you know, raising royalty rates on cobalt. We saw it in the last gold spike in 2013. Peru changed their royalty rates on that. I think you're gonna see that in Canada, in the US. In fact, I think in the US you're already seeing, you know, the usefulness of gold and silver companies is or gold companies is perhaps that they can extract more on the royalty side of things. And I think in Nevada, there were proposed changes on the state levels there. So maybe gold has a place in terms of just being a revenue generator for some companies to, especially in a rising gold market. But

21:36 yeah, I think you'll probably continue to see more of a ESG anti-gold mining kind of lobbying group in years to come, but that's not gonna replace, you know, gold's irreplaceable, I think, as a store of value and many other aspects of why gold has stuck around. Well, certainly the central banks are demonstrating that they like gold. They've been the biggest buyers and they will probably continue to be the biggest buyers.

22:12 And I think that's going to exasperate, that situation is going to exasperate itself with the separation of East and West that's happening. And whether it's the alliances, political and or economic alliances between China, Russia, India,

22:32 Saudi Arabia, Iran, the BRICS, Brazil. They're tired of using the US dollar. They're tired of continued devaluation of their assets, which are oil and gas and things, their assets which are are oil and oil and gas and and things stuff so that that Separation between East and West, you know isn't getting better It's it's probably getting slowly worse we got to 2 significant hot wars going on Neither one of them are going to be resolved quickly.

23:13 So yeah, we're in a tough spot. And for all those reasons, Doug's right. Gold's going to shine, and I think the central banks are demonstrating that. It's one thing central banks buying this up and they've bought a lot in the last 18 months but support from the government in terms of almost, I'm not saying we've got it, we need a free pass in terms of ESG or any of the kind of responsibilities that mining companies should

23:45 deliver against, but it's not easy to be a miner these days. We talked about jurisdictional risk, we talked about regulation, we talked about NGO getting in the way, lots of big projects being held up at the moment. So, you mentioned what the sector can do as a whole. Can it come together or is it just because it's all, they're all individuals operating for themselves. I don't see the Gold Council doing too much.

24:13 So what options do you have? Well the US government, they initiated the FAST41. I don't know if you're familiar with that. But the FAST-41 is the 41 strategic minerals that they need to meet their targets for the energy transition. And so they're granting these, I want to say fast track permits to certain companies that are will be mining these different minerals. South 32 was granted

24:55 the first FAS 41 kind of permit regulation for their asset in Arizona. But I mean, it's almost like it's still like really, really slow. And they've just recognized that they need, this year actually, they've literally just recognized that this year, that they actually need these minerals and they need to get them out of the ground. And we all know in the mining business, from exploration to actually getting things into production, there is a massive

25:27 timeline to that. So if they're just recognizing that now and implementing these strategies like the Fast 41, I mean, you're still, somebody mentioned bottleneck earlier. I think it was Doug. We are the bottleneck to what they want to achieve. And they're just starting to maybe the light the light bulb may be going off at the moment with with things like the fast 41. But we need to see. Yeah, fast 41 get around since I think it came around in the Obama administration and it just kind of sat there. I think because a lot of the mining industry was afraid to use it because it was fast-tracked and it was supposed to be fast-tracked. That's terrible language for, you know, if you want to talk about ESG.

26:14 That's not what you want, right? And I know I haven't seen anybody use it that has ended up it being fast. We'll see how South 32 fares. I mean, they've been standing still for over 4 or 5 years now. Yeah, and I think- Well, I don't want to get all political, but I mean the problem is we have we have plans nice they seem great they make a lot of people feel warm and fuzzy about these goals and everything else. And they are being stewarded through by the very people who aren't actually going to be in power to actually see them. It's one thing to say 2035 or 2050. These people are going to be taking their government pensions by years before that and it's going to be someone else's problem.

27:07 Perry is absolutely spot on. The reality is mines, especially, I mean, look at Philo. Unbelievable, you know, recent discovery 10 years in the making. That district is gonna be a huge new copper development that's so many years out that it's not the source of what we need to get to 2035 or 2050. And this thing comes, and so that, you know, it's a critical time for the industry to be facing cost inflation. Cause it's not just the operating cost curve that's gone up. I mean, you look at CapEx overruns. So at a time where we actually need to see this stuff developed, you've got jurisdictional issues, permitting issues, now inflationary issues on there, which are making people nervous.

28:02 You know, the very minds that need to be developed to help are stored by a whole range of things right now. They're not gonna be the solution. So in the short term, that has to mean that there's got to be, you know, and when I say short term, over the next 5 years, I think we can be in a tremendous metals price environment, similar to the late 90s, early 2000s, where late late 90s, copper had fallen all the way back to 50 cents or just above. Everyone was just dreaming for a dollar again. And very shortly thereafter, it got to 2. And it was all on the electrification of China and this. We're gonna have another surge of that requirement, but without the companies actually being able to deliver that metal against it.

28:53 And that's got to lead to an increase in in metals prices, because we need those very that very incentive pricing to see some of this stuff develop. But don't kid yourself that it can be developed anywhere near the timelines that align with the political aspirations of 2035 and 2050. I mean, it's almost worse than that. And that, Again, I bring up Panama and first quantums. After investing $10B plus, you've got 1.5% of the world's Copper just offline. I don't think the Panamanians are going to do a great job with care and maintenance if they're in charge.

29:41 I don't know when that comes back because it's obviously a big resource and you've already got the mill and everything built, but we've taken a giant step backwards there. You've got the US wanting to invest $100Bn in infrastructure in Southern Africa. Why don't we invest a few billion dollars here in the United States to help build infrastructure and develop infrastructure for mineral development in the form of rail and things like that. So it's a very frustrating, you talk about being annoyed, that's annoying that we're not allocating resources to actually solve. If climate change is the main agenda, which it seems to be, then let's have an intelligent conversation about it. It's hard, everybody gets emotional and it gets really difficult to have any sort of a sane conversation.

30:40 Yeah, it's very frustrating and very annoying, but it's been the factor of the last couple of administrations in the US. We've seen this, I'd hate to use the word woke, but I'm going to, it just seems a very sort of woke agenda going on here because ESG, it seemed like a marketing exercise by the funds. Good companies were always doing good ESG. The fact that we need to document it in a slightly different way, I think perhaps is, what's something from the feedback I'm getting from most CEOs is like, we're already doing this stuff. But now there's, as Terri-Ann said earlier, it's a now additional cost and timeframe to doing this. And our good friend Alex Black, hopefully he's listening in to this, has been held up 18 months, well, if you count the seasonal disruption as well, 2 years off the back of his EIA because of 1 individual at federal level who wanted to make a statement and I think lots of companies have suffered from that or worse they've been held up permanently so I mean how do you feel I mean Terri you voiced your opinion earlier in terms of the layers of paperwork that put in front of you, is that going to kill a lot of juniors? Is that going to stop them being able to actually produce what they want to be able to produce? I think it does 2 things.

32:05 I think, 1, the cost overrun just on those particular things are very, very high. You know, lawyers, professionals, consultants, it really just remove the capital costs alone. And 2, I think what people don't realize is the brain damage it causes the executives. It's demoralizing. It's really demoralizing. You have to go through all of these steps just to get punched in the face over and over and over. I love it. I love it. But that's the reality of the situation. And I think what we're missing here is there's a great company I got kind of go on LinkedIn and it's called they do an excellent job. It's called better in my backyard.

33:02 Right. I don't know if you've seen it or you follow them. And they are awesome. Better in My Backyard. And they basically highlight all the wonderful things that mining companies do to protect the environment, to advance society, to create jobs, like all the wonderful things mining companies bring to the table. I mean, I don't know if you've been to Tech Resources website as of late and you go to their ESG page. I mean, I was almost in tears crying. I mean, they're saving babies in Africa with their zinc, right, like literally like saving babies' lives. These things aren't highlighted. We're not marketing ourselves appropriately to the bleeding hearts out there. I'm pardon my language, but that's really what it is.

33:49 You you mentioned woke these woke People love to be the bleeding hearts. They want to save everything. They want to create this utopia Well, how who do you think is gonna create utopia if the mining companies will deliver? You know the decarbonization the mining companies will deliver health you know, whether it be silver or copper or zinc or all the minerals that come out of the ground that big farmer uses, the things that we use for infrastructure. We are not marketing ourselves as heroes. We are completely we're always in defensive mode. We're sitting here and defending what we're doing.

34:34 We're paying for it. We're paying to tell you. I mean, it's just it's gotten to the point where it's ridiculous and we need to do a better job at marketing the wonderful and beautiful things that we and the technology has evolved. You know, we're not polluting rivers anymore. Like just like your cell phone has evolved over time, mining has evolved over time. You know, the technology behind it, the safeguards that are put into place has evolved. So I think we need to, maybe it comes down to marketing. But would we have evolved if we didn't have that pressure put on us, Doug? I mean, we need to be held accountable, right? But at the same time, I'm trying to adjust the new economic reality for mining firms. So how do you read it? I was just on a panel in London where I was asked by a funder about our ESG policy and I said listen I want to respect the fact that as funds, you want companies to have an ESG scorecard on the website and this deck that shows stuff because you as the investor, your investors need, have these, you know, have this desire for you to be investing the way they want their money.

35:51 So you have this top down pressure being put on companies, which is fine if you're a Barrick or a Newmont or a Tech, because you've got tens of millions of dollars, you can throw at something publicly that you were doing behind the scenes anyway. You know, and I said, the most important thing to me is not necessarily having a presentation on the deck that courts that crowd. Most important thing is knowing what we're doing at the local stakeholder level to improve them. They don't care about that PowerPoint. They don't care about that ESG metrics. They care about the clean water or the medical that we're providing at site. And Rick brought up NIMBYism earlier, which is true in certain areas for sure. I think Terry has just experienced that in Arizona. But the reality is a lot of these NGOs are not NGOs that are formed because something is being built in their backyard.

36:48 You know it's money from thousands of kilometers away from where this is happening and sometimes NGO NGOs rightly highlight where the industry is doing things in a poor manner. But in many ways, they are actually working directly against people that benefit directly at the local stakeholder level. And that infuriates me. Well, they're not actually highlighting where they're they're very destructive, actually, like they're not, you know, if we make a mistake in North America, we fix it. If they make a mistake overseas in country, random countries in Africa or in China, are they highlighting that? I don't think they are. They're just highlighting, you know, the people who are doing it right that may have had a little trip up, but who are actually fixing it, you know?

37:49 Yeah, I'm gonna change the tone because it's got a bit negative. I know it's Festivus, but it's got a bit negative guys. And I've got alcohol to drink tonight and I want to be in a good mood. So, Rick, question that gets thrown at us a lot, a lot is, so, grade is king in all instances. That's true, isn't it? What are your thoughts on grade is king? I certainly I think it's the most, it is, you have to put things down, the most important thing, grade is king. But it isn't just about grade. There's a whole host of things that matter. And I think Doug mentioned water earlier on.

38:36 A mine is a water management problem. So you don't have enough water and you've got to go find it and build a pipeline for thousands of kilometres or a desal plant to make it into water you can use and then build a pipeline. It's great in water. Those are the 2 biggest factors in terms of the cost, the capital cost to mine and have a safe, environmentally secure operation. Obviously, you know, striparation and all those other things are factors, but yeah, Grade is definitely king and water is queen. Okay, but for you, Terry-Ann, it's, you need to put out high-grade headlines to capture the attention of retail audiences, but in terms of all the other things that you've got to look at when you're trying to work out what the economics of this project could be, it's a long list, right? Well, that's the Lausanne curve, right? Oh, it's exciting. I've got drill holes, I've got grade, look at my grade, and then everybody gets excited, and then, oh, what's the grade continuity like? Oh, well, yeah, maybe not so good. And oh, geez, it's for crack tree. And oh, what's that strip ratio? Geez, that looks like a 20 to 1 strip ratio. Oh, maybe it's an underground line. Okay, well, it's your character is a little different.

40:04 So yeah. Metology will be your nice surprise at the end of the day. And it'll swing, you know, one way or the other. But great has always been king grade attracts. So when you have that on your headline, I mean, retail floods your way. It's, you know, everybody loves those sexy headlines, but then, you know, what comes after that, right, Rick? Like, you know, how much of it is there? Where is it? How are you gonna get it out? And can you process it effectively? And I think what we really need to harp on a lot as well is management.

40:51 You know, the guy at the helm or the team at the helm, like, do we have the right people in place to take these assets to checkmate? Because how many junior mining companies are there or, you know, and mid-tier and producers, obviously the producers have, you know, are doing well. But from, I think from an exploration standpoint, like you really need to have strong management that understand the assets they have in hand and understand how to push them forward in good markets and in difficult markets. I agree with you. I think management for me when we're investing, our family office, when we're investing, management is number 1. But so is currency exchange rates, market conditions which we're all experiencing now, gold recovery methods, which Doug will probably talk about, you know, equipment costs, energy costs, labour costs, regulatory environment, location, infrastructure, geological, you know, characteristics, etc. But, you know, Doug, for you, I mean, your project's been all about how you mine and how you recover.

42:02 Heat leach is your thing? Yeah, and it's a perfect opportunity to actually, yeah, you did it earlier, but absolute great shout out to Alex Black and the team at Rio2. Alex was an original alum of Festivus. He would have had the biggest smile on his face if he was on today's panel, but he's probably still celebrating a hard fought effort by everyone down there at Rio too. So congrats Alex and Merry Christmas to your shareholders for sure. Like when Rick said, great is King's Theory, I was like, I thought about it. My initial maybe biased opinion was no, not necessarily.

42:48 I've always, but I think he's got a point and I'll speak to it. To me, margin is king. And also simplicity is king. Open pit heat bleach is simple. And you can deal with grades where your margin can be exactly the same as something which is, 20 times the grade of an open pit heap leach. The reason grade is maybe king now is only because the vast number of easy, open pitable projects have been found over the years. You see it the same way in SXCW copper. You know, again, leachable copper using sulfuric acid rather than cyanide in Gold's case, there's been a tremendous decline in SXEW copper production, which is a great shame because it's like open pit heat bleach, it's low capital intensity at a time where capital is so precious that's something that people should be focusing on.

43:51 It's also simple, it doesn't have a lot of the geotechnical trials and tribulations of planning an underground mine and thinking about your ore deposit from the perspective of, can it consistently deliver the kinds of tons per vertical meter to feed the mill that you've got up at surface? Grade will attract investors, especially in the exploration field. But I think it's less important when you're in operation. I mean, Paraka 2 that Kinross have, it's a super low grade cash cow for them. I think it mines is around 0.3 of a gram or something. And it's a cash cow.

44:37 So it's kind of fighting that. In the long run, I think grade is less important. It's about margin. I think maybe in the short term for attracting investors, as Terry said, you know, maybe people get jazzed up much more with high-grade numbers, but those kinds of projects that maybe deliver those have a lot of complexity in determining whether it's something which is a technical discovery or something that actually can feed an economic discovery that can be built in time. And that's a long lengthy process. So kind of understand what you've got when you're chasing those high-grade plates. Yeah. And just to jump in on that and getting back to junior companies, it really, And you started the conversation about being annoyed. I get annoyed when I see companies talking about having millions of ounces of 0.3, and then they compare it to a Perica 2 and say, oh, you know, hey, they're mining 0.3 at Perica 2.

45:47 That's fine. But they also invested billions of dollars in infrastructure to be able to do that. Fort Knox has done that. But the grade isn't 0.3 at Fort Knox. That's the headline grade when you add the heap leach that comes essentially for free. But this gets back to junior company marketing and over promising way under delivering. I get annoyed when I see press releases on, we've got 20Moz of 0.3Moz and that's just like Fort Knox or that's just like Pericatoo. BS. That is not like Pericatoo. Fort Knox took 3 sets of shareholders to pay for the damn thing.

46:34 So you're not mining 0.3 mil ore in Alaska in the middle of nowhere. So that's complete BS that I think the junior industry has to sort of self-regulate or investors have to wake up and say, that's just complete crap. You know, I'm not investing in that. Infrastructure. Way too many junior companies. Doug, you said you talk about the number of companies. It's just like, well, there's way too many junior companies and we need, investors need better filters to figure out what's real and what's what's completely yes. Rick makes an excellent point. Infrastructure. Where are you? Like it's that's key. But what I mean you can start off with this one is like when I look at the market I mean 2020 was an exceptional year lots of money being thrown around for free it seemed but it created a lot of companies and a lot of white noise a lot of distraction and I think some of the good companies have not, well, they've suffered slightly, so money wasn't going to them.

47:39 What are the things that you, when you look around, this isn't about you guys, well, it sort of is today, but you know what I mean, it is about when you look around in the market you say well you know what are companies doing and what are all these sort of toxic habits that they fall back to which is you know not doing the industry good as a whole, it's not going to do their shareholders any good and it's not going to advance the project. What do you see out there, Terri-Ann? I think the obvious is, you know, what we've seen over, you know, the last decade or so is flavor of the month. That is so damaging to real companies doing real things.

48:28 That just, you know, they suck up so much of the equity available, like the money that's available for real projects kind of gets diluted with these wannabe companies that just want to jump on the bandwagon. And when most of that money should be pouring into, you know, the solid companies, the good companies that have real assets to move forward. You know, we saw, you know, mining companies turn into marijuana companies and then marijuana companies failing and then they're going back to mining. I think that is a major, major problem where the money is just evaporated into thin air and real companies with real assets and real good management and great vision, you know, suffer.

49:21 Now, I agree with that. I think we've seen that with the lithium space recently and prior to that, Cobalt, you know, where people are just jumping, I say jumping on the bandwagon. It really doesn't help the sector at all. I mean, Doug, when you look around, what are the most common mistakes that some of these startups are making? I mean, we probably spend $300 million a year sustaining Howe Street, sustaining all these companies there. And I just look and go, that's a horrible waste of money. Before 2020, and where we really had our only good 5 months May 2020 to September 2020 5 months talking market It was a very much a rising tide lifts all boats market kind of like first half of 2016, and they are the worst.

50:20 In the back half of 2019, we actually saw tough markets. Maybe I'm a masochist, but I actually kind of like the current market environment we're in. Attrition is important. It's very, very hard to kill a listed public company. So unfortunately, they stick around. We're creating way too many. It's very, very hard to kill them. You can make life harder. And I think that and that's not meant to come across as arrogant or whatever. But I think we need to make life harder for them. And I think investors need to understand that they are actually better served if we have an industry where, you know, the bulk of capital, like we saw in back half of 2019, there were a lot of companies that were prospering during that time. And it was because 85% of capital inflows were probably going into the top 20% of companies.

51:21 And so a lot of companies really weren't feeling the love and it felt bad. They were saved by in the summer of 2020. And it's unfortunate because you're given that new lease of life and you know that they're drawing attention, creating the white background noise, drawing those funds where in reality many of them should have, if they're at a conference with a lanyard on should have do not resuscitate instructions on the back of them. It's impossible to truly kill one of these companies off. And in fact, if you are a director of 1, you have a fiduciary duty to do everything you can to keep 1 alive. I did that once in my career on credit cards or whatever. That was my fiduciary duty to the shareholders at the time.

52:10 And it was a major conflict in my mind because I'm thinking it probably should die, but I can't allow it to die. We create way too many new companies all the time. You know, the name changes, flavor of the day, as Terry said, you know. Some of this lies, I think, with the exchange and the regulators as well, to be honest. I mean, the TSX, when it became a public company All these listings pay listing fees, you know There is a direct conflict or doing anything in your power to keep the very lifeblood of your profitability as an exchange. So, okay, so if the TSX, you can't really rely on the, hopefully there's no 1 from the TSX listening, to be the guardians of the galaxy.

53:06 Maybe it's the Securities Commission, but again, I feel like the Securities Commission in Canada, you know, are perceived by investors as being toothless. And it's because most Canadians you see being prosecuted for playing in penny stocks and doing things get done by the SEC, not in Canada. I think we're our own worst enemy. This industry, which I think deserves, you know, maybe we still have to earn the right to be heroes of whatever's coming in what we can deliver to help the world and everything else.

53:53 Not all heroes wear capes, but we do a lot of things to shoot ourselves in the foot. And that's at the company level, it's at the securities and exchange level, but also as investors. We give life to stuff that probably shouldn't live. And so we're all guilty to some extent in our own different aspects of this business that we grow up in. Is it not the companies you're looking for, Rick? What do you reckon? That's my Darth Vader joke for the day. What do you think? I mean, I think a lot has been said on this.

54:38 I guess I would point out I don't think it's that different for other industries. I think there's a lot of tech startups that are complete BS. I think there's a lot of, I'm going to say the world drug, that are complete BS. Some of them end up getting prosecuted, but not very many. So in some ways, I think we're, mining is obviously a unique business, but from an investor's standpoint, I think a lot of other industries have all the same problems. Overpromotion captured in a very general sense. So, I mean, I think we also like to beat up on ourselves a lot. I think we just need to talk more positively about what it is we do do.

55:27 This whole ESG thing I find is interesting in that, that certainly comes across and as more and more people talk about it, it comes across as greenwashing. Our governor in Alaska is, you know, very proud of saying we've been doing ESG before it was 3 letters put together. And if you look at the example of Red Dog as a mine development in northwestern Alaska in a place that had no infrastructure, you know, Kotzebue was not a pleasant place to go to. That region, not just Kotzebue, and the whole region is wealthy because of Red Dog. And that is ESG down to a science. And yet, as Terry is pointing out, we don't get, it doesn't get a lot of airplay. Well, good news doesn't get a lot of airplay in general, but the NGOs like to say, oh, you know, red dogs are just toxic dump in the world. Well, It's a natural occurring ore deposit.

56:34 And by definition, it's a toxic dump because that's how mother nature created it. How we find these things is there are anomalous metals in the streams. That's how we find them. That's a grassroots exploration technology that's been proven since we started looking for Gold a long time ago. Right. Well, I'd better start wrapping things up, guys. Terry, I'm going to go with you next and say, maybe a little bit of advice for investors in terms of what they should look for and maybe a little reference to your own company, just because you've made the time to be here. Go for it. What should investors look for? Well, what I think investors should do, first and foremost, I answer the phone for Barksdale and my biggest over the last 4 years what I've noticed is a lot of investors, especially retail, are afraid to call.

57:39 And if you're going to invest in a company, it doesn't matter what, if you're a small investor or a large investor, please, please, please call the company. Get to know the people. Right. Because what you read on the on social media or whatever, what somebody is trying to promote likely is they're trying to sell it. They're getting you to buy so they can sell. Call the company, get to know them. What we do at Barksdale is we put our, I put my schedule on the contact page. You can go in there and actually book a Zoom meeting with me at your leisure and I will get on that call and walk you through what we have, give you an understanding of who we are as people and what our goals are for the company and the asset. Please, absolutely, my best piece of advice for investors out there is absolutely call Doug, call Rick, call me at Barksdale and get to know the people.

58:45 Agreed. I like that. I like that. You get to know what you're investing into. Don't believe other people. Make your own mind up. It's very simple, but you really have to call the company. I love it. Rick, what about you? Investment advice, please. Yeah, I think that's a key one. No management. You can do that by looking at the track record. This is nothing new to your own due diligence, but these blog sites and everything, they annoy me. Because again, there's just- See, what's the right question, Doug? There's just a lot of BS there, and there's a lot of self-promotion. Like Jerry says, I'm promoting you to buy my stock because I'm selling my stock sort of stuff going on. So you got to see through all that and just as an investor, understand that that's how the world works.

59:43 People aren't always nice, but get to understand management, understand the plan, understand, and then look at, can they actually achieve the plan? I get annoyed with the junior companies that have a million dollars in the bank and it costs them a half a million dollars to just be a company, and they're telling a $100 million story. Well, that doesn't add up. And if things don't add up, they're not correct. Doug, you're the president. We're highlighting, Couldn't agree more. And the apathy for people calling up companies, I put my cell phone number, I thought it was a stupid idea when I would put it at the bottom of a press release. No.

1:00:30 You're not flooded with calls. To some extent, I wish I was, because those are my favorite calls of the day when I get them, because it's a perfect, you know, as companies, we're always trying to get big institutional investors and big, but you know what? The small mom and pop investors too, they all allow us to do what we do and love for a living. And there's nothing better than to remember who you're working for on a daily basis by getting those calls. Sadly, you don't get enough of them. But I think a lot of this theme is about, you know, are you a trader or are you an investor? If you're a trader, it doesn't matter. You play along with all those games on the internet and everything else. But if you're investing, which really this mining industry is not game spot or shouldn't be treated like it.

1:01:20 I get that there's a lottery ticket mentality to the front end of the Lausanne curve, absolutely. But, one's process should still be about trying to be that professional card counter at Vegas, who's got a slight beat against the house, couple of percent difference, and not the guy who comes in and plays roulette, you know, or whatever, where the house will win over time. If you as an investor can equip yourself with all the tools, which is calling the company, asking them pointed questions, which is going to CDAR Plus, lamenting it's not old CDAR and realizing it can work.

1:02:08 And researching the companies, reading the financial statements. When I was first investing in this sector, there was no internet. You only got your stock quotes in the paper the next day. Companies could tell you anything, really, because unless you were a shareholder, you weren't getting access to their financial statements. You know, All these tools are now actually available to make you better investors. Use them. We talk in mineral exploration first principles, before you spend any of your money, look at what other people have done on your ground first. Use that data first. There is tremendous amount of information that is only going to cost you a bit of time to help you determine whether something's an investment, investable or not, or whether it's worth some more time. And that little bit of time is way better than blowing money, just treating mining stocks as trades.

1:03:13 Even if you're investing in a company, you should still trade smartly within it. If you take, never be afraid to take some money off the table. Never play, you know, don't try to catch bottoms, don't try to catch tops, play the middle 60%, take money off the table. You know, stop going for home runs, just try to get on base and get some base hits. It's, you know, the cumulative power of compounding 20 and 30% wins on things by just having a smart approach to things is, and I'm not saying that from a trade perspective, good investments, good investable companies, you know, you shouldn't be thinking of them as 5 and 10 baggers in a short period of time, but you should be thinking, can I make 20 or 30% on this on an annualized basis? As a, you know, well, those add up very quickly to being your 6 and 7 and 8 baggers if you do things right. So that's it for me. Good luck out there. It's a minefield.

1:04:19 Absolutely. And so much for your advice from all of you. I'd also add, don't fall in love with the company or the CEOs or the representatives. But today it's hard not to. So, Terian, thank you, Rick, Doug. Appreciate your time today and we'll see you