Gold Price - Where Do We Go From Here

0:03 Good morning, good afternoon or good evening, depending on where in the world you are signing in from today. I am thrilled to have on with me today, Brian London, host of the Luminary New Orleans Investment Conference. Rick Van Doornhuyzen, CEO of Contango Ore, Dan Wilton, CEO of First Mining Gold, and Michael Kosselman, a director at TDG Gold for discussion on everyone's favorite topic this month, the price of gold. How's everyone doing today? Doing well, Romeo. Fantastic. Doing wonderfully. Thank you for having me. Awesome. Now, a couple of quick housekeeping items before we get into today's event. Diane Garrett has taken a bit ill this morning, nothing serious, but wasn't able to participate in today's conversation. I know there's a lot of apes in the room. I really appreciate you guys being here and I hope you stay for the conversation. It's going to be a very good one. If you have any questions for Diane, still stick them into the chat. I'll pass them along to the Highcroft team once the event closes. I'm going to avoid asking live any questions about individual stocks today, but as with Highcroft questions, I'm going to pass them through to the appropriate people after the event ends. Last piece of housekeeping is that today's event is also being recorded and the replay will be available very shortly following the close of today's event. But enough out of me, I wanted to get into the protein of today's events. And that's it. I met with almost this exact same group in January of 2024.

1:10 And obviously a lot has changed in the gold universe since then. I know in that January, JP Morgan predicted gold at a paltry 2135 by the end of 2024, with a climb, an ambitious climb they said, to 2300 by June 2025.

1:24 So here we are, gold's nearly doubled that forecast, hovering just below 4000 or just above 4000 in the last couple of days, after touching even higher earlier this month. So, Brian, I'm going to start with you. What did the market get wrong about gold's trajectory? And more importantly, maybe what did it get right that allowed prices to get past even those optimistic predictions? Yeah, you know, it's not these experts always get it wrong. As somebody who puts experts on their stage of this conference every year, I probably shouldn't be saying that. But nobody knows the future. And if somebody tells you they are, they can, then they're lying about something else to you as well.

2:05 So nobody predicted what has happened in gold. Nobody with any common sense, even the most ardent gold bug, of which I count myself among, did not predict this kind of a furious, even violent rally to the levels we've had in gold. And it's scary, you know, even for us. We admit that gold is telling us something, and it's likely not good. So right now, we're just kind of looking ahead, or feeling ahead, and trying to figure out what is gold predicting, what's it saying right now. And I think it's really, as the mainstream media have come to call it, I think it is the debasement trade. That term,

2:51 it's like marketing. Now that we have a marketing type term for what we've been talking about for many years, it's kind of catching the attention and the interest of mainstream investors. And I think that's it. I think the numbers, I think the levels of debt, the cost of servicing that debt, etc., are what gold is protecting against. Obviously, central banks are also protecting against dollar weaponization. So it's all kind of blended into this mix, this gumbo that is predicting or driving prices higher. But I don't think it ends here. I think it goes considerably higher from here. The question is when and how long. The timing's even tougher than the degree.

3:39 And so nobody really knows, but the trend is pretty obvious right now. And I think everybody needs to be investing accordingly. Yeah, just to jump in there, Brian, on something, to pull apart the gumbo, so to speak, I mean, I would structure things in a sense that you're looking at debasement, as you mentioned, the debasement trade. And if you look at the debt to GDP numbers, we're now past that 120% debt to GDP type mark. So we're starting to rival economies like Venezuela, Sudan, Lebanon, you know, these types of jurisdictions which are not necessarily high on the, let's say, economic strength list. The other issue has to do with the debt. We've just passed through that $38 trillion mark, and we're on pretty shaky ground, and it's kind of new ground in a bad way.

4:31 The other has to do with the dollar hegemony

4:35 and the fact that I think since the Obama administration making SWIFT more difficult to transfer capital, US capital around readily, people outside of the Western world were starting to question the validity of that liquidity. And you know, was it really an asset after all? Was it theirs? Could they pay the right kind of debts with it? And certainly the BRIC countries, and now you're seeing the central bank buying, that's been occurring for quite some time. They've been the underlying big buyer. And now you're getting accentuation, I think, from outside buyers. This is typically how you get flare-ups in not only stock prices, but also commodity prices where you've got major buyers who just say, we will buy at all costs, period. It's not a matter of what the price is. That's kind of irrelevant, quite frankly. It's a matter of actually getting your hands on the metal.

5:28 Rick, I'll let you get in there. Yeah, I'll just add that

5:33 we're all US-focused in terms of the market, and we tend to think about that, but it's not just the US currency that's being debased. It's Europe, it's Japan, it's Korea, it's China.

5:47 It's a collective. So it's a global debt crisis. And when you've got, we've also been competing with the cryptocurrencies in terms of our own, who invests in our space and who invests in gold.

6:04 I think it's very relevant that Heather, you know, one of the platforms for stable coin platforms, what are they doing? They're buying lots and lots of gold, $200 million worth of gold a month. And they have a hard time finding $200 million worth of physical gold, if that's what they want. And they're having a hard time figuring out where to store it. But I think that's telling everybody something more than, to address Brian's comment, that we're nowhere near the end of this. We're kind of at the beginning here. And it's been crazy and it probably will continue to be crazy. It'll probably be very volatile as well. I mean, we just had a 10, less than a 10% correction

6:48 and yet the equities corrected 25%. And not just the small equities, we're talking new one. So it's, you know, hang onto your hat. It's still more action there. Dan, I'll let you get the last word in on that first question. Oh, well, listen, I think everyone's hit on the key points in terms of the macro drivers.

7:10 What I think is interesting is nowhere in the mainstream media is anyone kind of starting to talk about debasement trade. Almost no one is talking about the debt issue, right? And that's something that Michael's pointed out. That's, that to me, you know, the writing's been on the wall for a long time. I always remind people, you remember the global financial crisis in 2008.

7:35 The unprecedented, unprecedented global fiscal stimulus that went in to save the global economy was $1.2 trillion. That was an unprecedented amount of money at the time. You now have deficits in the United States of America funding, you know, like program costs that are 3 to 4 times that. And it's not getting smaller. I don't care what anyone says. Like there is no government in the world right now putting forward, well, I probably shouldn't say no. I'm sure there are some. No major

8:12 economy in the world that's putting forward a fiscal plan to tackle its debt and its deficits. And at the same time, those of us who have the good fortune to travel to a lot of other parts of the world, and I was in the UK a couple of weeks ago, and I can tell you, like a pint of beer is really reflecting inflation. It's phenomenal. Like, you know, I lived in the UK, granted, it was 20 years ago. But if you'd someone if you told someone in the UK that you'd be paying 7 pounds for a pint, you would think there would be civil unrest in the streets.

8:54 The pubs would be burned. It's crazy. The economy is, I think, globally out of control. And no one has even really caught on to that fact. So that's, I think, when we talk about the early stages of a Gold rally, this has been, you know, a little bit of, call it the wake-up trade, right? This is the first 1% of global assets saying, oh, well, geez, maybe I should be owning some Gold. We know that in times of real crisis, that number is going to be 10 to 15 times higher than 1% in terms of global asset allocation to gold. And, you know, again, like very, very little in capital inflow into the sector yet, even just at the beginning. So beyond anything, beyond physical. So it's it's very interesting times coming forward. But I agree with everyone's view here that this is still just the beginning.

9:55 Yeah, and Romeo, if I could add a couple of things to what my fellow panelists said after I talked. Michael talked about the debt to GDP ratio. What really makes that soar is when the denominator stalls. If we get into a recession, the debt's going to keep going up and we won't have that, you know, 3% annual increase in the GDP. That's when that number really soars, and that's going to go up to 135,140% in a flash.

10:23 That will make the Fed come in and lower rates much more aggressively, back to 0, which would then engender inflation, and then they can't raise rates again because the debt's so large they can't service that debt at higher rates. So that's essentially the trap. And there's no way out of that trap. And the only thing that we can do is protect ourselves through gold. And Rick mentioned this 10% correction we had in gold and how everybody is just

10:54 running around hair on fire. What are we going to do? This is ridiculous. Gold went down $250. Well, we've had a lot of 5% flash sales in gold over the years. We've never had $250 sell off in gold, and that's what you get at these kinds of prices. But I'm looking at the KITCO 30-day

11:18 KITCO chart on gold prices, and the 30-day gain in the gold price is $159 right now. So we've gone right through that crash, and we're still up $159 in the gold price. Yeah, Brian, I'm amazed at the amount of panic that some investors are talking about. Panic about gold having pulled back to $4,000 an ounce. Let's keep it in perspective. Those of us who are in the business of putting out economic studies, if you're looking at an economic study today, you're putting that out at $2,800, maybe $3,000. I think there's maybe 1 study that's come out at $3,000, which is kind of a long-term consensus in the industry. But the consensus view and the gold price reflected in analyst forecasts for gold producers is still

12:15 25 or 30% lower than spot. Yeah, and I've seen a couple of companies actually put the economic sensitivities out at spot and left it up until the regulators have slapped them down. But the numbers are absolutely mind boggling, mind boggling. No, it's true.

12:34 Well, the panic, the panic to me still has to do with the unrest, the potential unrest that you'll see with respects to the price of beer in the various jurisdictions. But I think, you know, to underline your point, Dan, before, it really shows the willingness of the sort of the masters of these fiat currencies to look at a soft default and not advertise it, not talk about it, and in fact, try to keep it covered as much as possible, keep everybody sort of liquid enough. But realistically, I mean, we're all going down the same route with regards to, you know, first of all turning, lowering interest rates, yes, and then quitting with the quantitative tightening, and then I would dare say even start with the opposite, which is quantitative easing, which is probably the next series of steps.

13:19 So when people are asking for projections on what is the gold price gonna look like in those kind of scenarios, it's sort of, you know, how long is a piece of string type of question. Well, you know, the fence is between a rock and a hard spot and you've got increasing. We just had Amazon, what they announced, they're going to lay off 30,000 up to 30,000 people.

13:40 That's white collar workers. The people who distribute the Amazon packages, they're not included in that number. So, you know, the economy's not doing well. Our president, President Trump, is not afraid of debt. Never has been.

14:03 He's shouting down the Fed to lower rates. Ugly hasn't started yet. I think we haven't heard quite the sound of the money printer going as much as we're about to. It's my personal view. But Rick, I'll stick with you on this one. I know last year when we talked, we talked at length about central bank buying. At the time it was China, Russia, India and Turkey since obviously it's been a lot of China aggressively accumulating gold resources. Curious just we can catch people up on the facts of it. Has that buying continued through 2025?

14:32 And with gold at these levels, do you think we're gonna see any change in central bank acquisition? Or as Michael said, do you think price is irrelevant?

14:39 I think Michael's right. Price, you know, at this point in the game with these levels of debt and a global economy that's trending down, not up. Yeah, I think the central banks are still buying, China's still buying. Interesting article in The Wall Street Journal, opinion piece by Judy Shelton, who was at one point a nominee for the Fed and she was voted down because she definitely has alternative views

15:10 from from the norm but her article basically was you know hey and Trump's alluded to this you know he who makes the rules is the golden rule, who has the gold makes the rule. We still have the most gold. The United States still has the most gold, twice as much as the next nation, which is Germany, about the same as the Euro nations of all the countries that are backed by the Euro. And that is, I think, it's in the neighborhood of 8000 tons of gold. China's got a little over 2.2 or 2.3, something like that. So and her article basically said, let's just go back to the gold standard and And reprice it. So I mean if you want to fix inflation Boom, you know goes $10,000

16:03 And you can do that by just, her recommendation, and I'm sure this stuff's being discussed, I mean, it wouldn't be an opinion piece in the Wall Street Journal if it wasn't. Her recommendation is just for the US to sell a gold-backed security long long dated 20 20 30 year security it interesting concept and if you think about how do you fix this mess it's a reset and you know as Dan said you know when in the 2008 financial crisis was was which was just about selling houses to people who couldn't afford them, you know, nearly brought down the whole banking system and we just printed money to the tune of a couple of trillion dollars.

16:55 So selling gold-backed securities for a 20-year gold-backed bond, The US can do that in a heartbeat. And then everybody else has to do it. So I thought that was a really interesting article and really pertinent to the discussion we're having about where does the gold price go? Sure. Somebody in the chat actually- It goes where it needs to go. Yeah, somebody in the chat did the math of what the gold prices have to be to neutralize all US debt. Interesting. Take a look at it in the chat if you'd like. Michael, I already know your thoughts on central bank buying, but curious if you have any instinct of whether China is just going to keep buying at these rates or as rates keep increasing.

17:30 Oh, I think it's a definite yes. I think the BRIC countries together Understand that there's a consortium out there that they're going they are the future developing economies. They want to work together They don't necessarily trust each other's fiat currencies, but they trust gold They all have in different ways a real culture with gold to back their currencies and it gives them stability

17:52 to things that aren't necessarily very well trusted. And you know, there's a blueprint. The U.S. Had that blueprint with regards to backing its currency. And as long as you maintain that stability towards it, I think that that's going to endear enough trust. I think, I know this is a gold panel, this might not be the most popular opinion, but we're talking about gold relative to debt amounts And I've heard numbers all over the place from up to $40,000 an ounce in order to stabilize the price relative to the gold holdings of the different debt entities that are held on the US side.

18:29 And those are nice numbers, but maybe something, maybe the stability of a basket of currencies, commodities, you know, this type of idea has been dragged out before by the IMF and other bigger banking structures to sort of bring in sort of a less volatile feature and have less pressure on just 1 asset. So I think that that is probably also, you know, oil, other types of commodities as far as a basket and things that are needed in the real world.

19:00 So But to answer your question, Romeo, I think it really is a, you know, gold is a great place to start. As Rick mentioned, the US is way ahead of the game with regards to their actual gold holdings, given the historical economy size. But these other developing nations, they're coming a long way very quickly. And that's going to be commensurate to their appetite for gold. Brian, I'll let you get in there if you've got any thoughts on central bank. Yeah, a couple of things. You just mentioned that China holds around 2,000 tons. Well, the best expert on global gold flows is a guy named Jan Muenhuis, probably a long lost cousin of Rick's. You ought to get to know him, Rick. He's the smartest guy out there. And he has analyzed the import-export figures over a number of years, and he thinks China's really got a bit over 5,000 tons

19:53 of gold reserves, and they've been building it for a while. And for the U.S. Number, I'd say, are we sure?

20:00 And I've never been a big conspiracy theorist that there's no gold in Fort Knox. I would bet that there's less than is claimed just from the 90% melt issue. It's never really been addressed. But I recently plotted on, put a chart out on X, and I had Grok go in and the X AI agent and figure out the mentions by the administration, the frequency of the mentions by the administration of an audit of Fort Knox. And they peaked around February of this year and then fell off a cliff completely, just radio silence. And If you look at the gold price, it was going right along, and then after they stopped mentioning the audit and bought Knox, the gold price took off like a banshee.

20:54 Coincidence? Maybe so, probably so. But I think a good part of what we've seen in this 19-month-old gold bull market, especially during these furious rallies, has been gold trying to get where it's supposed to have been all along. You know, when Germany asked for their repatriation of half of their gold holdings in the US, the US replied, OK, we'll get it to you in 7 years. I mean, if that wasn't a blatant admission that the gold ain't there, I don't know what is. So yeah, there are games being played on a sovereign level. There's big buying being done on a sovereign level. But as far as U.S. Holdings, who knows?

21:39 I know that I would not trust the U.S.

21:42 In any kind of a gold-backed security because they would just renege at the end and settle in cash or settle in not cash and in newly printed dollars. So yeah, it's a lot of things going on, but I think you just look at the gold price and it tells you that there's an undercurrent of some intrigue and some really big moves. All right, Dan, I'll leave it to you once again for the last word. And then I got one from something you said in January. No, there you go. In terms of central bank buying, I don't see any situation in which it stops. Like there is nothing in this environment that I would say is going to

22:30 discourage that buying or give sovereign nations more comfort that they're gonna collaborate, right? Like we've gone from what was 40 years of a very integrated and collaborative world to in the last 5 years,

22:47 outbreaks of real war in the Middle East and on the Eastern Front in Europe, amongst other places. You have, you know, the U.S. Is sending military into sovereign waters of other nations. And, you know, I don't think the announcement of ceasing of trade hostilities to me qualifies as we now think that sovereign nations can trust each other, because I don't think that's the case. So all the reasons that these countries have been buying gold, I think are just going to continue

23:24 to grow. And you know, a bit much to my dismay, because I'm a believer in, you know, the world is better off in a freer trading world.

23:40 You know, I don't see, you need a very significant shift from where we are right now to get back to neutral, let alone to get to something that's going to be pro-collaboration again. Appreciate it. Now I do want to talk about the valuation gap because that is something we talked about nearly 2 years ago. And Dan, you said in January that gold stocks were trading like gold is at 1500. Now, at the time, gold was flirting with 2000. Now, it's, of course, approaching and around and over 4000. Have gold equities, in your opinion, caught up to the metal price? Or are we still seeing a crazy historical valuation disconnect? You know, it has caught up to the gold price 2 years ago.

24:28 And in the meantime, the gold price has doubled. I think the reality is you see a bunch of statistics, the producers, which have had, you know, many of which are up

24:38 5 to 7 times in the last 2 or 3 years. You have been seeing basically that valuation inflection coming with that turn of the industry into free cash flow. And that was maybe only a year ago, maybe not even a year ago, I think, as the gold price reading rounded through 3000.

25:04 It felt like all of a sudden you got to watch the free cash flow, right? Because that free cash flow, you started seeing when they were reporting, you started seeing all of a sudden, every quarter, free cash flow is doubling. And that's because the last quarter they were at an average Gold price of $3,000. And then in that, let's say, Q4 last year, Q1 this year, average Gold price in Q2 was $3,400, $3,500. The spot price had gone through $3,600, $3,700. And it's just kind of been chasing it all the way up. They're still historically cheap. And one of the things that everyone on this panel who has memories long enough to have remembered a few cycles ago.

25:54 I mean, you've never been able to buy gold producers at a free cash flow yield like you can buy them now. There's some of these producers that are generating 20 and 30% of their market cap in free cash flow over the next, like per year, over the next 2 or 3 years. And that's based on a free cash flow number that's basically using like a $3,200 gold price and the gold price was $4,400 a couple weeks ago, right?

26:21 Like, it's insanely cheap. And then, you know, you look and as we always do, just given kind of the portfolio of assets we have and where we are, you then look at gold developers, and we're not alone in this, you know, we're very happy our share prices are 2 and 3 x off the bottom. But there are 2 and 3 x off, you know, where they've gone from $7 an ounce in the ground to $20 an ounce in the ground. Yeah, there's still at unprecedented like bargain levels. And And what's especially interesting is these development assets have probably the best gold leverage in the industry, right? Just because where you can buy it today and where, you know, it should trade with a permit or it should trade when you have construction financing or where it would trade as you and we've seen a couple of well executed project builds and where those companies have traded, you know, in the 6 to 12 months after commercial production.

27:23 So it is still the equities, I think, broadly, having pulled back 25% this week, they are still very, very cheap across the spectrum. And speaking of free cash flow, we're a producer and we're generating $100M of free cash flow a year from a high-quality mine that's now operated over a year. We get 0 value. We get a discounted value to the free cash flow that we can point to. We're not the operator. Our big brother, partner, Ken Ross is the operator. So, you know, maybe we'll screw it up, but they won't.

28:10 And so we're not getting any value for our development stage assets that we can self finance now. We're trading in an enterprise value of under $200 million.

28:23 And we're producing $100 million of free cash flow. So, you quoted those statistics, that's an accurate statistic. And we're getting 0 value for our advanced exploration plays that are 2 and 4 years from production, if we can execute our plan, which we have the money to do. It is still a very tentative market. I used to be BPX for Placer Dome. The rule of thumb, you weren't paying too much if you could pay $100 an ounce for ounces in the ground. Quality ounces that you could convince your boss we should buy to advance and put into production. That's what I did as VPX for Placer and Oatman, was look for those kinds of opportunities.

29:10 And if I came to them paying 200 bucks an ounce, they'd get shut out of the room. But if I could get something between 50 and 100, it's like, that's a good deal. And what was the gold price at that time? That was a 400 dollar gold price, right? Yeah. So if you were paying a third of the gold price to buy, you know, good resources, reserves in the ground, that was pretty good. Well, today that says developers should be trading at a thousand to 1500 dollars an ounce. Right. And I think we'll get there because no one's really had the impetus to show the growth. But I'll tell you, when I was at, I mean, a lot of us were in Beaver Creek in Colorado Springs, and you looked at the producers' presentations from those conferences, every single one of them spent 90 percent talking about their growth profile.

30:02 2 years ago, they would not have mentioned growth. It was efficiency. It was cost reduction and capital return. Every single one of them, the focus was on growth. So they're starting to get rewarded for it. So to your point, I think we've got to keep exactly your point in the context of this, of this gold price environment as well. Thanks Dan. Michael, I'll throw it to you for what you see as the current valuation gap. Are we, are we close to closing it? Are we still way off? Well, I mean, I'm going to distill the, you know, what I pride myself at is being able to distill information I'm receiving on the fly. And I think the short answer is no, meaning there is the big gap as far as the valuation. But instead of getting upset about it, you know, I sit back and think, well why?

30:47 Why is that the case? And I think it has, if I was to put my stockbroker hat on, I would have to say it has to do with muddy flows and liquidity, which is still a big dominant effect in this market. And the types of capital that's involved. And you can even remove it from our space. There are plenty of smaller cap sectors that are free cash flow positive that are doing quite well, but they're just not rewarded for it. So I think, you know, if you really take the 50,000 foot view of the market in general, it has a lot more to do with those issues, the money flow, the liquidity, you know, the amount of capital that's out there that just isn't able to squeeze into certain spots or certain sectors of the market.

31:36 But someone brought up Newmont here and it was really interesting effect to look at Newmont. They announced their earnings just last week and Great earnings, free cash flows as we're all saying, you know, off the charts. Earnings per share, they beat the street by 35%. What happened to their stock? It went down 12%. And the reason is, is that the market is now going through this transformation. And the reason I believe that the stock price went down is because they weren't able to provide any forward guidance or growth show on production. And they were getting penalized for it immediately. So sort of what are you going to do for me next year? And the consensus view is the answer that came back is not much. And I think that that's going to be a big underlying issue now and a paradigm change in the context of the way that the people are starting to look at and value these larger cap companies, which of course is going to trickle all the way down through the industry.

32:36 So I would say that there is the valuation gap, but we have to figure out how do we strategically attack it as opposed to just complaining about it or whatever. We really have to develop a sector and a product within the sector that is amenable to that type of money flow. And that's why size is king and being looked at quite closely here as far as even the senior companies looking for how do we grow, how do we look at increasing our profile significantly. Because I think the dearth of exploration that's occurred over the last 15 years doesn't offer any remedy to that situation. And I think anything that happens in that sense for mid tier to intermediate size companies is going to be just merely a mouthful as opposed to a feast that these companies need to, in fact, grow to these bigger sizes that are being required by this market that's so liquid and so big.

33:38 I appreciate that. Brian, I'll throw it, sorry go for it Rick. I just want to say just a quick comment on picking up on one of the things that Michael said was that yeah we you know the glass is half full sort of a thing but that does also mean that there's so many great opportunities out there for M&A in the mid-tier, you know, junior to mid-tier space. We're not going to go compete with Agnico and Newmont, but there are lots of opportunities to grow a new mid-tier company. And that's where our focus is gonna be. Awesome. Brian, I'll throw it to you for last thoughts on this before I get into ASIC. Yeah, and just touching On what Rick said, I talk to companies all day long and every day, and really for the past years, they bemoaned their market valuation and their share price. And I'll tell them, you may not like your share price and your market valuation right now, but investors do and should because that's the opportunity.

34:40 And things will not be that this undervalued forever. Eventually, you're going to get to fair value, and if this market is like the previous ones, you're going to get overvalued. But right now, even after the moves that we've had, every junior across the spectrum from, well, even the major producers, The producers, the developers, the junior explorers, all across the spectrum, you can look at their valuations and still see, compared against a normal market, much less a really heated market like we should be in for mining stocks, they remain very undervalued against long-term metrics and long-term norms.

35:26 So the opportunity is still there. You don't have that easy money of the quick 2x or 3x, but still the rising tides, the tide is rising and the boats are lifting across the spectrum, across the market, and there's still plenty of opportunity here. Right. One thing I want to touch on, Brian, I'll start with you on this one. Last January, we talked a lot about Covid-era inflation eating into producer margins. Gold kind of wasn't rising as fast as inflation was. Now, with gold significantly higher, I'm curious for your perspective, just generally looking at industry, have operating costs stabilized Or have they kept climbing alongside the gold price at the same rate they did in the early 2020s? Yeah, they've been pretty stable, fairly dampened, not like we've seen in the past.

36:11 The largest cost input of gold production is energy, is diesel, moving those big yellow trucks. And you know, in the 2008 to 2011 bull run in gold, the gold price from trough to peak nearly tripled, But that was the only time in history that the mining stocks, the major mining stocks, didn't leverage the move in gold. And the reason was that while the gold price was soaring, so was the price of oil, $240 a barrel. So margins did not expand. Now we have margins expanding by virtue of the product price, gold. But at the same time, we do not have energy prices and other cost components rising.

37:00 So miners didn't really need a stagnant energy cost, but they got it anyway, and that's just, you know, turbocharging the whole process. We used a $100 barrel of oil in our feasibility study to develop Mon Chaux, and we haven't seen oil price above, you know, much above 60. So, that's a huge, it's a huge savings for us, obviously, with the, not only just for the big yellow trucks that Brian was talking about, but our transport to between the mine and the mill. So, yeah, we're pretty happy campers and all sustaining costs have actually gone down from our guidance. Yeah, nice. Yeah, I was going to say, Rick, for you, ASIC isn't a theory and a study. It's something you actually have to report every quarter, real numbers. So just might as well throw what you've seen for ASIC recently, not your upcoming numbers, but most recent ones.

38:00 So is that to me? Yeah. Yeah. Across the board. They've been surprising to the downside, you know, so I think I think came out with their a sake and nuance was good there and it is mostly about the oil price and Trump is all about oil prices and more you'll go baby Joel and he wants cheaper gas and cheaper oil and And I'm sure the oil companies aren't horrifically happy with them, but the mining industry certainly is. We're a big benefactor of that single event. I don't really see a lot of things happening in the world to see an oil shock. Obviously, eventually, if we're shutting down and not developing oil fields, we'll eventually see that. But I don't think it's an only this year or next year sort of event.

39:01 On miners being happy, I often say this year's Beaver Creek. I saw the most cumulative smiles I've seen over the last 3 years. Dan, I'll throw it to you for what you're thinking about ASIC and inflation, what it means for first mining. Yeah, it's interesting because, you know, we've got a couple of big studies that'll be coming out over the course of the next couple of years and updating against a pre-feasibility study that was done in late 2020, early 2021. So our PFS really didn't have any of the COVID era inflation that had come into it. We sort of updated those numbers internally to middle of 2023. And in that time, you'd have seen 30 to 50% increases in many costs, particularly things like labor, equipment, energy, not so much because we had priced it. Well, actually had because coming out of COVID, the old price was like $50, I think, when we ran the study in 2020 or 2021.

40:00 And it had come up and has since pulled back. So as we're kind of looking at updating some of these numbers, getting closer to kicking off a Feasibility Study and understanding, and just want to understand what's happened to the costs, I think we've seen inflation, cost inflation from the same vendors who we went out to a couple of years ago of, call it 4% to 5% a year from 2023, mid-2023 to mid-2025. Nothing like what you'd seen in the prior couple of years. So you average it out over the 4, it still feels like there's been some significant inflation. But I think particularly in Canada, what a lot of people forget is we've been through this period where from 2019, 2020 until it's really still just kind of rolling off now, you had an unprecedented build of projects in Canada.

40:57 You had 7 major Gold mines built in Canada over 4 or 5 years. And it's all the same, basically all the same resources that we're moving from project to project to do these builds. So as you get kind of towards the end of this, what has been this big capacity addition, There's lots of kind of battle tested build teams that have been through and built these projects and learned a lot of lessons sometimes the hard way. But now you don't have, you know, projects competing to get the resources, you now have some of these resources competing with each other to find a project that they can go build. So it is quite a different environment. But that's entirely because of the, you know, the lack of capital to move projects forward that we've had over the last, you know, call it 10 years.

41:49 That there's just, there's a big gap between those that are kind of getting ready in the next couple of years and the next generation of projects that are the ones that are just getting funded now to start the really hard work of development. And we all know how long that's gonna take. Appreciate it, Michael, I'll give it to you for last word on this one. Well, we're in a particularly sweet spot for the mining sector and the other panelists have mentioned it, Oil prices being the prominent issue, relatively benign inflation, benign dollar movement, those types of issues. But to rain on the parade a little bit, I think that this is a snapshot in time. And my concern has to do with, well, once we're out of this stage and these real benefits to the mining market, what happens next? Because what I'm seeing is not necessarily fantastic. I just don't know how long we can prolong this in many senses, whether you want to be specific about the oil prices or what I'd prefer to do is look at how much continuance do we have to offer with the assets that we have. And I want to focus in on there are these real iconic assets within the mining industry that are tremendously important for either gold production, silver, copper, you name it. And we've seen a lot of them falter, especially on the copper side of things.

43:13 And I think that there's this belief from outside of the sector anyway that these things are like, you know, they're like video games and you can just hit a button and increase supply or whatever it is. And we've seen that this is just not the case. And as a mining engineer, when you evaluate these projects, You just know how difficult it is and what happens to these assets as you push them too hard from Bingham Canyon to Kid Creek to Grasberg now, you know, to, you know, and then even some of the more recent copper projects that we have in Central Africa, they're showing real duress when you try to push them too hard. And it's just not possible to continue to get those types of production levels out of it. So that's my overlying concern from a sector perspective.

44:03 And then when you add to that, another issue is really the social licensing. So you can pick off different, you know, between Panama to, you know, to Mali to parts in between, you can pick off issues with regards to there are countries that have issues, but even within those countries, you have jurisdictional concerns that you have, you know, First Nations types of issues and permitting issues that are in place that can really slow things down. So I think we're in this great spot right now. But I think, you know, looking forward, things things might not always be this sweet. And, you know, the the underlying premise of this panel discussion is, well, what happens to the commodity price?

44:50 And the answer is going to be, this is also supportive of those higher commodity prices because they have to. And you've got a lot of other encumbrances, whether they be social or technical along the way that have to be overcome with capital. I want to add another Debbie Downer comment for the panel, and that is, and they're all kind of related, but a fundamental part of the mining business is the people. We don't have the people to produce the Copper and the Silver and the Zinc and whatever. We don't have the schools that teach the people the skills they need to execute the plan to have a greener, integrated transportation, non-ice world.

45:46 And I think that's a big factor in in all of the things that Michael was referring to you know Why are these why is empty into having problems or you know, why did grass-roots fail? Yeah, those are huge. Those are all people issues. It's a huge It's a huge point Rick. I and I dragged this out all the time. I Personal level. I mean I always tell I graduated in the biggest mining engineering class in Canada. It was 21 people. It's nothing and that was a long and I'm not exactly a spring chicken. And to me, those numbers have gone down, nothing but down. What's the interest, you know, comparative to getting involved in the tech sector or biotechnology or medicine or whatever? You need AI, oh my god.

46:32 Yeah, well, exactly. Get an idea on AI, you need some money. Now, my hope remains in parts of, like, let's say, Eastern Europe or, you know, Russia or other sort of these other types of countries where their economies are more or closer to being real as opposed to online, like you're suggesting. But people is a big component and you're absolutely right. I couldn't agree with you more. China graduates close to a million engineers a year. I think the statistic, I can't remember the number anymore, but it was a couple of hundred. Geez, I want to get to because I know the title of this webinar is where do we go from here? So I'm going to ask you all a very dangerous question, which is where do you think gold is actually going from here? And if you are unwilling to give a number, which I hope you are not unwilling to give a number, I'd be curious to hear your take on what you think economically or geopolitically it's going to take for gold to get materially higher from here, or what could trigger a real serious correction. Michael, go ahead and start with you, actually.

47:32 Well, I think that I'm uncomfortable giving numbers. I mean, aside from thinking that this is much higher, if the idea is that is this the correction that's occurred, I look at other ratios. The gold to silver ratio is simply too high. The gold to the S&P 500 ratio is conversely too low. So I think there's plenty of room to run. So to me, it always has to do with that relationship and that relativity to other types of assets. And I just think that when you look at, you even look at the S&P 500 and so much value is really just concentrated in 5 names as opposed to the other 495 in that kind of index. And they make a valid argument as to how they could be undervalued. And then you extrapolate that into our sector, which really hasn't seen any kind of capital flows on a global level at all. So to throw numbers around, Romeo, which is food for the audience here, you know, global asset investment in gold, gold related products is only about 1 half of 1%, which is not only very little, but it's historically very, very small. And the number should be to the order of 10 times that.

48:50 So if there's your multiplier on where the gold price ought to go, then I'll leave that to the imagination of the audience. I appreciate it. Somebody in the chat gave a great Yogi Bear quote, never make predictions, especially about the future, which I like very much. But I will be asking you guys to do just that. Still, Rick, I'll be curious for your thoughts on what comes next. So I'll give you a couple of different answers. 1, what do we use when we're thinking about developing our projects and looking at opportunities, new opportunities and things like that. We're gonna be a little bit boring and we're gonna kind of stick with consensus. And there's a CIBC report that comes out monthly and then they updated, I think, they have a quarterly and a monthly thing. And I think that long-term consensus, the last time I looked at it was about 2,600.

49:40 And so that seems like a, I'll call it a safe number to use to do your own valuation work and think about, if you're looking at a new opportunity and what does this mean for the company. It's safe in that a bunch of bankers, from JP Morgan, Morgan Stanley, Goldman Sachs to CIBC and RBC, the Canadian bankers and some Australians thrown in there. Here's what they think. They tend to be conservative as bankers, which is not a bad thing because If we as a company want to develop a new project, those are the folks we got to talk to. So that's 1 number. It's a safe number, I'll call it.

50:26 And that's the number we use when we do our evaluation work. So the number I think where we're headed for the, and this is for the next year, right, you're asking. I think 5,000 is an easy number to achieve next year. Right now, we're obviously goals in a bit of a corrective period, which is welcome. You don't want things to go straight up because they tend to become straight back down. So I would have expected a 20 to 30% correction at some point. We only had, I think, less than 10. I don't know if it's over. Maybe this is when they refer to a dead cat bounce or whatever the heck these terms are. Could we go down to 3,500? If you look at the chart, we had a nice stable platform at 3,500.

51:17 We could go back to that level. That wouldn't bother me at all. We're using $2,600 for our planning purposes. As a producing company, you definitely want to be conservative. We want to be prepared to take advantage of opportunities. We've talked about that before. You've had a project like Dan's that's gone from a $7 an ounce in the ground valuation to $20. He's got a smile on his face, that's great, but it should be 100. So if I can buy stuff for 20 bucks an ounce in the ground and if it's quality, I'm a happy guy. You know, throw it to Dan and then Brian, I'll let you wrap up my prognosticator question before I get into some individual cues.

52:02 Yeah, I mean, I think even you go back to, I tend to look at things on kind of a trough to peak through a cycle. The question is, where are we in this cycle? We're not at the end of the cycle. I think for everything that we've talked about here, I think we're still very much on an uptrend of this cycle. You look back in the last cycle, let's say from 2002, 2003 to 2011, you had the gold price go up 7 to 8x from 250,260 an ounce to 1900. I think there's no reason why we wouldn't see a similar kind of peak to trough or trough to peak in this cycle with the trough being, you know, $11, call it $10.50, $1100 an ounce in 2015.

52:58 So, you know, I think, and this is absent like a crisis scenario. This is where do we think the Gold price is going to go in its regular sort of movements. But I would say, you know, it's maybe peaking out absent a real a real crisis. I could see it at $7,000 or $8,000, and I could see it pulling back to $33,000, $3,200. I don't see it pulling back to $2,500. I think we are going to blink. And in the environment where Gold price is really running fast and there is real inflation in the economy, you're going to see all in sustaining costs creep up. And that, to me, is always going to be sort of where that floor is at the 90th percent of the cost curve. Right. That's, I think, historically where you'd see that. The 90th percent of the Gold cost curve today is probably $2,000, $2,200, $2,300 and getting higher every day.

54:04 And you're going to see it get higher because Gold companies haven't found more Gold. They're dropping cut-off grades and extending resources by virtue of just dropping cut-off grades and gathering more low-grade material, which is what's going to push up your All-in Sustaining Costs faster than any factor cost inflation. So yeah, I will say by the end of next year, I would be pretty confident in a US$5,000 number anyway. And if we are actually at a point where the world realizes where we are with debt and everything else, I think you could see it on an express train to 10 plus. Appreciate that, Brian, I'll throw it to you to wrap this one up.

54:49 Yeah, you know, to paraphrase Yogi Berra, the real rule of market punditry is you can give a price or a time, but not both. So I will give a price. And I agree with Dan for the same reasons. You know, I track the way I divvy it up. I think this is the fourth bull market we've ever had. We've had the early 70s, the late 70s, the 2000s before this. And the track record of gold trough to peak in each of those was 5.6x, 8.2x, and 7.9x. And if you do, and I also agree, Dan, the bottom of this cycle is $1050. So that gives you $6,000 to $8,000 whenever we get there, or why ever we get there. I hope it lasts a good long time, like the 2000s, so we can make a ton of money in all these junior mining stocks.

55:45 But in regards to that number, some people look at the 70s as one big bull market of its own. And if you do that, if you take out that 1975-76 bear market, Then gold went up 24x during that period, and that will get you to a price obviously in the mid-20,000s for the end of this cycle. And that in turn would imply some kind of a financial reset with the revaluation of gold and the dollar and other fiat currencies, etc. So regardless, I think it's important to look at that trend. And we are firmly on that trend toward significantly higher prices. Timing, you know, nothing exact, but I would say that one of the things that was pointed out in this last correction, even if we're in it still or not, is that gold at that furious peak of just a couple of weeks ago was overbought but still significantly under-owned.

56:51 You know, nobody, hardly anybody owned the thing. It was just speculators, these Western speculators coming into the market that kind of drove it higher. And that's what you're going to get when they're involved in the market, a lot of money coming in. And then, you know, when the tide goes out, they go out. So we're going to get more wiggles in the line going forward. But I think we're going higher because it is still not a widely owned asset. It's still not in a bubble yet. And so we've got a good ways to go. Awesome. Just checking. I hope everybody has a couple of extra minutes because I do have a couple of questions more. You guys have a hard stop, but 4, you guys got 5 more minutes for me. No fire away. Okay, perfect. Brian, I would love actually, because you've just answered my question, which is so helpful, but I'd love if you pitch the New Orleans investment conference to the folks in the room.

57:43 Twist my arm. Okay. Yeah. Would love to coming up in a few days this Sunday, but don't despair. You can still sign up at neworlandsconference.com for the virtual show or hop a plane on down. It's not easy, but it's not too difficult to get to New Orleans. We've got, I think, our best lineup ever, even surpassing what we had last year for our 50th anniversary. We have Matt Taibbi, Danielle DiMartino, Boo Print Johnson, George Cannon, Peter St. Onge, Rick Roll, Viva Free, Robert Kiyosaki, Peter Bookward, Jim Bianco, Jim Vigorio, Adam Taggart, Peter Schiff, Lawrence Lepard, Jordan Obern. List goes on and on and on. Like I tell people, there are Some conferences have 3 or 4 of our speakers.

58:33 None of them have 40. The value is overwhelming. So please, you know, take a look at our lineup and I think you'll see the clear value there. And especially at this time in the market. There's no time that this conference is more valuable and more rewarding than in this kind of a market. So, you know, do yourself a favor and take a look at it. And I hope you can join us. Appreciate it, Brian. Rick, I'll throw it to you, because last year when we had this similar event, you were months away from first production at Moncho. Very exciting. Now, of course, you've had over a year of actual operating experience in a very high gold price environment. So how's the reality of producing at 3504000 gold compared to expectations? Are you Scrooge McDuck in the vault full of coins?

59:20 No, we're having fun. There was an interesting discussion with my CFO, Mike Clark, and saying, you know, geez, we've got a lot of money in the bank. We probably shouldn't have it just in 1 account at JPMorgan Chase. We probably should spread it around and go talk to Morgan Stanley. So those are fun problems to have. We're definitely making money. We're now directing that to advancing our other projects. Ken Ross is doing a great job managing Moncho and producing Gold and making money for us. We're focused on getting our Lucky Shot project. We're drilling. We're getting the drills turning on lucky shot here in another week or 2, and advancing the Johnson Track project through the next round of permitting and hopefully get to expect to be under starting the underground tunnel at Johnson Track next summer. So we've got the money to execute our plan. Our plan is to, it's a five-year plan to basically triple our production profile. And we think our own sustaining costs are gonna be in the $1,500 range.

1:00:31 So that's a $2,500 margin. And With our DSO approach or direct shipping or approach and not building mills and tailings facilities We can get things permitted quickly and we can get things into production for a modest amount of capital And that's important and and we don't as we've been talking about people I don't need 400 people to work for me. I can do that with 20 or 30. So our business plan's coming together. I'm very excited. I'm on my way down to one of my favorite conferences which is to join Brian down at New Orleans. It's a fun conference. It's a great conference. Lots of great people and the food in New Orleans is just awesome. It's a great area. So we love going down there. So looking forward to it. It's fun to see how many oysters you can eat in a year, to be honest.

1:01:23 Dan, I'll throw it to you. I know, again, a year and a half ago, we talked about working towards the EA approval for SpringPoll. Where do you stand now on that timeline? And honestly, with where gold is now, are you seeing increased interest from potential acquirers? Where do you see the scene going from here? Yeah, so on the timeframes, we're still driving toward that environmental assessment decision Q1, Q2 next year. Like all of these things usually do, it's taken a little bit longer than we had expected. And in large part, it's just been important to make sure that a lot of the communities that we're working with have had the time to complete the processes that they wanted to, to make sure they understand the project. A lot of that great work has been done.

1:02:10 And yeah, in 2026, I think is going to be a pivotal year for this project. We are one of maybe 2 projects in Ontario that you could get a shovel in the ground before 2030. We're one of maybe 3 large gold projects that could see a construction decision before the end of the decade in Canada. And we all know, it's funny, the potentially interested partners or parties, No one wants to go through a permitting process in Canada. That's been made very clear to us, but yet everyone wants to own a permitted mine in Canada. So again, you come through that environmental assessment approval and you really, we're very confident we hit an inflection point here very quickly once we get through the EA process.

1:03:06 Still lots of work that has to go on from there. The hard work really in large part starts at that point where you're getting more permits and the real detailed engineering and getting ready to build a project is a different scope. But yeah, we're starting to see a lot more interest, and in large part, just because. We always said we wanted to have these projects ready for the time when the industry needs them the most. And just because we've been resourceful and able to move these projects forward and do all this hard work that the industry didn't want to do in terms of permitting and building social license. Now, I think we're left in a really good position to be one of very few projects that can move forward at a time when you're at record gold prices and companies are starting to get rewarded for growth and you have assets that can produce 300,000 ounces a year plus of Gold.

1:04:03 And you can buy them today for $20. So I think it's a pretty compelling investment opportunity right now. I appreciate it. And Michael, I'll throw it to you to wrap us up. I know you're somebody who evaluates mineral finance opportunities. And you operate in BC's Tutugan district, a region that I know seen renewed interest, ripe for consolidation in my opinion. What are you seeing in terms of M&A dynamics in the junior gold space and what makes an exploration company hot as a consolidation target in this environment? Yeah, a lot of what today's discussion is focused on the idea that, you know, the price of gold relative to what puts these assets into production, valuations, those types of things. But if you really want to be a bit critical about things, the initiation of additional resources just hasn't been there. And I think you've seen that. That's why the senior companies have taken a hit, etc. So to my mind, the thing that's missing is the kind of thing that TDG gold has, which is the best porphyry discovery in Canada in the last decade.

1:05:06 Now to qualify best, that's the second highest grade porphyry in all of British Columbia. So it certainly garnered a lot of attraction, a lot of interest. Our immediate neighbor is one of the biggest copper mining companies in the world who are spending $110 million right on our boundary. And then 30 kilometers away we have a very hungry 45,000 ton per day mill, which is looking to initiate and quite frankly, I think is going to decide the future of that intermediate mining company. So I think that we are surrounded by some very big names as well as a lot of activity in a district that it's been known for a long time. It's known as the Eastern Limb of the Golden Horseshoe of British Columbia. But to take a step back, the historical amount of exploration dollars that has ever been spent on that region is 300 million dollars.

1:06:00 That's it. And on the Western limb, there's a lot of well-known bigger names that are certainly out there. And on our side, only this year, we've spent about $100 million collectively amongst all the different companies of which we are 1. And I would say we're the hub right located in the middle of all of this type of future development that I see taking hold. The other thing that's important is the ground itself, the logistical capabilities of the ground is second to none. We have Mines Act permits, we have tailings, we have mills, we have infrastructure, we have power lines, airstrip, road, etc. So the infrastructure, the historical production is going to serve us well to fast track any production that's going to occur. And that's critical. I mean, we talk, you know, Dan mentioned everybody wants to have a mine in Canada and I agree.

1:06:56 The problem that often is dragged out is the fact that the timelines as far as permitting and getting things in line is really the killer. But if we can even provide a solution where we knock 2 to 3 years off of that timeline, that's critical to your NPV calculation and that's very important. And I believe that that's why we're being looked at from not only our neighbors, but our corporate partner who owns 11% of us, who by the way, just built the most recent mine in British Columbia. So on the personnel side, they have the people who are most akin to being able to execute on what happens next as far as making and building that next mine, premier mine in British Columbia.

1:07:41 So I think all of those elements are critical. I think initially we looked at this ground with regards to its logistical significance. But now it looks like we're blessed with the geology aspect as well. And we are now a company that has 5 drill rigs turning, as opposed to having come from a very modest beginning, where we had the backbone of about a million ounces of gold, but now we're looking at something that's much larger, a porphyry-style mineralization that's going to keep the likes of the major mining companies mining in this area for decades. Michael, thank you so much. And I'll say, Brian, Michael, Dan, Rick, this is so fun to redo this a year and 3 quarters later. I know this is actually one of the most attended events I've ever been part of, so I appreciate the audience too for sticking with us. I know I took an extra 8 minutes of your time. I apologize.

1:08:29 I hope you felt it was well spent. But all of you, thank you so much. This was a really great event. Appreciate all of your insights. Thanks everyone. Thanks, Romeo. Have a great afternoon, guys.