Is This Genuinely a Metals Bull Market?

0:07 Good morning, good afternoon, good evening, depending on where in the world you're signing in from. Appreciate everybody joining us today very much. I'm very eager actually for today's conversation. Is this genuinely a metals bull market? I'm joined today by Tom Calandra, the Calandra Report, Brian London of the Gold Newsletter and the New Orleans Investment Conference, Dan Wilton, the CEO of First Mining and Rick Van Nuenizer, the CEO of Contango Ore. Good morning, gentlemen, good to see you. Good morning. Good morning. Awesome, but Before we get into the protein of today's discussion, I do have to do a bit of housekeeping, so bear with me for just about 1 minute. Today's event is being recorded, and the replay is likely to be available by the end of the day. It should arrive directly in your inbox as soon as it's been posted. I'll also say today's event is interactive. We're actually very eager to hear your questions. We're very likely to get to some of them before the end of the hour. The chat box is in the bottom right-hand corner of your screen.

0:58 Feel free to pose a question at any point during the hour. I might sneak them in if they're really on topic, but otherwise we'll try to tackle them towards the end. Now, unless it's really on topic, questions about individual securities are gonna be passed to the relevant team and they'll connect with you via email following the show. Let's get right into the main event. I'd like to honestly cut straight to the chase. So investors in Six's audience, I'm sure all of your audience as well, have seen false starts for metals markets, especially in the last half decade. What I'm curious about, and I think the question A lot of investors are joining for is what makes this run difference? And Tom, I'll shoot it to you to lead that question off. Well, you know,

1:40 I wonder, Romeo, whether we are suffering when it comes to the metals equities. Look, when it comes to the physical metals, I think most of us here will agree that gold especially and silver are having a great

2:01 2, 2 and a half decade run. That's pretty fabulous. What makes this different, I think, is that large miners are probably, not probably, they're definitely starting to look over their shoulders at reserves, depleted reserves. And I think we even see companies eliminating their hedges forwards, right? So by eliminating their forward sales on derivative contracts, that's very bullish. Finally, I think you're seeing more and more royalty stream deals with companies. And the royalties are in business for cash flow. So I would put it at that right now.

2:47 Appreciate it. Brian, I know I saw your presentation at the Rule Symposium. I know a lot of people in the audience likely didn't, so I'm curious to hear your perspective on what makes this one slightly different. Yeah, and you know really to answer The question posed by the webinar itself, I do believe this is a real bull market, it's a secular bull market in precious metals and also other metals as well for entirely different reasons. But what makes this different is, well, a few things. There are a lot of similarities, actually, to the 1970s,

3:21 when we saw some explosive moves in gold and silver. What's different from the 1970s right now is that the Fed is essentially in a trap. You know, when Volcker hiked interest rates to kill off inflation, the federal debt to GDP was about 35%. Now it's about 125%. So Powell simply can't do what Volcker was able to do because he doesn't have the same toolbox. So that's a trap that the Fed is in. And what that essentially means is that we're going to have to have negative real rates as the predominance in investing environment going forward as long as this monetary regime is in place because the debt load is so great. The other thing that's different right now is that Asian investors, the East, is buying gold on the price uptrend, following the price up.

4:21 Historically, they have always come in on price declines to support the price, and that served a great function. It stymied big sell-offs. But now they've been following the price up from the East and also from central banks. They're largely price insensitive. The West this time has not been following the price up because they haven't really understood these drivers, and the primary driver that they were waiting on being a Fed pivot hasn't occurred yet. Now though we're about to have that Fed pivot and the markets are starting to price that in. And what's really different now and I think it's potentially explosively different, is that this may be the first time in the history of gold as an investable asset that we have both the East and the West buying at the same time.

5:17 That could be dramatic and that could be happening, I mean, literally right as we speak. Appreciate that. Rick, I'll throw it to you next. Yeah, I think I agree with what Brian was talking about. I mean, we've weaponized adult, Not only are we $34 trillion in debt and adding a trillion dollars of additional debt every 3 months, which 5 years forward, that's $50 trillion. At some point in there, that's a lot of money, a lot of debt. The thing besides the buying is from the Eastern banks for the most part, and from Eastern,

5:55 the people who don't align with US on Russia. That's who's buying And it's because we weaponized the dollar.

6:03 So you've got central banks buying, in the last 3 years, a third of the world's global annual production. That's a lot of gold. So that's off the market. So that's the demand side. And on the supply side, we haven't been investing in gold exploration for 15 years. And gold's also a significant by-product of copper mining, and we haven't been investing in copper mining either. So on the supply side, you've got a positive of new supply coming in because of that. It starts with exploration. We don't have that. And now we have high interest rates. That's a downer for developing new mines.

6:52 Anyways, I think you combine those things. It's really bullish for gold. The other thing I'd point out is, and I find this odd, We have Costco shoppers buying $200 million worth of gold a month in bars, which are Costco shoppers. They're not fancy,

7:11 pinstripe suit Wall Street dudes buying, deciding to buy in gold. You go over to the ETFs, they're at a low and the gold funds aren't getting new money in. Most of our shareholders, our investors and shareholders we talk to are high net worth and family offices. It's not the gold funds. They don't have any money. You go talk to them, they say, I love your story, but I gotta sell somebody to buy somebody. Well, that doesn't happen. They gotta take a loss on that. So it's a really interesting

7:41 dynamic when, as Brian points out, you got this huge demand from the East, but not from the West. And yet the West is the one with, at least the US with the 34 trillion Dollars it doesn't sound like a healthy economy to me May not be at its best but then I'll try to you before a question from the audience That's actually really on point. So I'll throw it to you guys after, but Dan, go for it. Yeah. I think one of the most bullish signals that we're seeing right now for the gold price, and it's a little bit to what Brian was talking about, you're continuing to see this central bank buying. But what a lot of people don't understand is that the Western gold ETFs until about 2 weeks ago were massive sellers of gold as the price went up and continuous sellers of gold like they've sold I can't remember what the statistic is but like million 3 million ounces or something this year already So significant liquidation of physical Gold from ETFs.

8:39 But that's turned around in the last couple of weeks to where they're now adding day on day on day on day. And you see that at the bottom of markets. We're seeing it, you know, we saw it in the equity markets, gold equity markets, both, you know, producers and particularly developers, over the course of the last

9:01 few months where, you know, we had when the gold price started pushing up, you actually had outflows from the GDX and GDXJ as the gold price went higher. Like that's never happened in my career before. And that's That's the sign of a market bottom. That's the sign of a lot of really tired, frustrated, long-holding investors who finally see a bit of liquidity after 12 years of bear market, more or less, and they hit that liquidity. They look for the exits. It's super constructive

9:33 because that takes the weak hands out of the market and puts, whether it's that Gold or whether it's those equities, in the hands of people who are resetting for a longer term run. So we've seen that in a bit of the pullback from where price has bumped up to on the run in March, April, May. But you've now seen the Gold equities and particularly the producers busting through those levels and hitting 52-week highs and continuing to run. And that's before we really had the capital inflows into the sector. So I think from a Gold perspective, the biggest thing is the FOMO is starting to kick in and that's why you're starting to see the Western investors come in and start to contribute positively to the increasing price.

10:22 That makes sense. Now, I know, Dan, we were on a panel in February right before things started to look a bit rosy. And I asked people for price targets for gold and you said what at the time was the most bullish for the year, which was 2,400. And you actually, yeah, there you go. And you actually, you got some raised eyebrows even, I remember at the time. But here we sit at the end of July and we've already jumped just past it as of this morning and multiple times the last couple of months. I'd love to set all of your feet to the fire a little bit and ask where you think we're going this year, just

10:53 so that one of you can have an I told you so moment in 6 more months. But Brian, I'll start with you for where gold goes from here this year. So you want me to violate the cardinal rule of punditry, right? That's the one. You want me to advance any time frame? Yeah. You think I'm a rookie at this or what? Whatever you're least happy to do, that's what I'm looking for. No, I think, okay, we're at $2,400 and change. We are in uncharted territory. By the end of this year, Tom flies when you're having fun. I think we may be at $25.50 or more. I think more important of a message for people right now is that if you look at where these kinds of bull markets have gone before and specifically I divided up into 3 bull markets in the history of gold as an investable asset and not necessarily money.

11:49 So that's post-1971.

11:52 We had a bull run in the early 70s where gold went up about 5 and a half times. We had one in the late 70s where it went up about 7 and a half times and 1 in the early 2000s where it went up over 8 times. So if you look at say 6 to 7 times from its lows, you know, the low in this cycle was about $1,050 or thereabouts.

12:18 So we're looking at 6, 7, $8,000 goal by the time this cycle ends. Of course, we don't know when the cycle is ending, but we know what the trend is, and it's not something you wanna bet against. So I'm with Dan, I'm about as bullish as you could be, hopefully, I'll end this webinar as the most bullish among the panelists, and we can point back to me and say that I was right. And I'll have the same kind of smile on my face as Dan has right now. It's a fun moment. It's a fun moment. Tom, I'll throw it to you for a number of predictions. Well,

12:53 you know, I started investing in gold in 1999 when I was in, when we were living in London, working at MarketWatch and Bloomberg. And as you know, that was a historic low, $250, $260. I buy gold. And my subscribers buy gold, I hope, for the purchasing power. I buy metals equities for my investment portfolio. Where are we going to go? Well, I won't get into this reciprocating theme about reciprocating all these Fortune 1000 gains over the past 20 or 25 years. But based on what we're seeing with the BRICs, the BRIC nations replacing

13:41 some of their oil trades with some very clever gold swaps, And also what we're seeing with generalists, professional generalists who have yet to join the physical metal party. And also, once again, when we see how strong the ETFs can be in attracting investors before individual equities. I think easily we could see $3,000

14:13 in the next 5 months, 5 and a half months. And as someone, we were all there, I'm sure when he said this, as someone said from the podium at PDAC, I buy gold because I'm afraid it'll go to $5,000. I buy gold because I'm afraid it will go to $7,000.

14:34 Let's prepare for a line. Rick, I'll throw it to you before I give it to the reigning chair. I just you know, hats off, Dan, you but you obviously were too conservative. It only took you half a year to get You know, and so gold's up 20% on the on the first half of the year. So maybe it's up 20% on the second half of the year. That makes 2800-ish. I don't think that's unrealistic.

14:57 I'd say the things, What's strange about this year, it's an election year. It's been a weird election year so far. President Trump was, you know, attempted assassination. You have a very disjointed Democratic Party, Sleepy Joe dropping out. We have not the brightest Veep, who's now anointed queen or whatever. So just when things

15:23 got weird, now they get weirder. And the Fed has to figure out how to maneuver through this. Are they going to cut rates? Is the September rate cut sort of in the works, in the mix already?

15:42 Do they do that just before an election? How political do they want to be accused of being. All this is really unsettling for investors, which I think is going to be very, ultimately very, very good for gold. Trump's not afraid of debt. He's built his empire on debt. So I don't see us cutting the deficit or cutting the debt anytime soon

16:08 with Trump elected. You certainly won't do with a Democrat in office. So yeah, I think it's very, very bullish for gold. So I'm saying $2,800, Dan, just fill in the second half of the year for you. There you go. I appreciate that. Well, I said, I, you know, I don't want to be the conservative guy on the panel here. I think you're going to see, I think because you're in an election year and because of all this uncertainty that Rick's talking about, I think you see a bit more muted trade over the course of the next few months up until the election. So I think by the end of the year, it's still gonna be a positive trend. I'm gonna say, let's 2,600, and you'll be at or through 2,600 by the end of the year.

17:03 But I think if you want to talk about where it's going at the end of 2025, that's where the analysis I've done is exactly the one that Brian laid out. And honestly, I've lived through a few cycles. I've been financing mining companies since the early 90s.

17:23 I think that peak to trough is it has to be your guide. And with that trough at 1050, you know, I think you're going to see ultimately the Gold price up sometime in the next, call it 5 to 7 years, by the end of the decade, let's say. But I think it's $6,000 to $7,000. And I think you're going to get the last $2,000 of that very quickly, as you do in each of these run-ups. They don't tend to be run-ups stay high. They tend to be a build, build, build, build, and then a big push and a retreat. But I do think you need to continue to focus, as Rick had kind of pointed out, on the supply.

18:10 We'll get to some of these questions about are we past the peak production of Gold? I think what investors need to be looking at is

18:22 the Gold price to a degree, Gold is a commodity and a currency, but the commodity angle of Gold, it's always going to trend to over the longer term, the 90th percentile of the supply curve in terms of costs. That's just every commodity does that. So you're going to see the, as an increasing gold price, you're going to see that average cost of supply continue to creep up. And it's going to creep up because producers are going to pretend that they've found more Gold by dropping their cut-off grades. And we're starting to see it now. And we'll get into that part of the discussion because that's, you know, I think super bullish for the sector that that's happening. But that fundamentally underpins as it as you know, just look at the global cutoff, like global cutoff grades from 2000 to today.

19:17 You know, they've jumped up meaningfully just because it's hard to find. So leave it at that. I appreciate it. Appreciate you guys. I'll give me a number. I always like that. There's a question from the audience. I'm going to jump in here because It's a good one. We get it all the time from investors. And that's from Joe Max here in the audience. But like I said, I got it by email. Lots of people ask it, which is in a bull market, why buy mining securities rather than simply the metals?

19:44 Now, I know Rick and Dan, it's kind of to some degree asking a toaster how it likes its bread, but I will start with you guys for why buy mining securities. Rick, I'll give you the first run here. Yeah, it's leverage. I mean, and this goes back to the point Dan was just making, you know, explorers find nuances and investors want leverage to gold. You can go buy a brick of gold, that's great, and sit there and stare at it, it looks pretty pretty and it's heavy and it feels good. And it does feel good to hold a brick of gold. I know that now. But

20:20 it is that leverage. So we acquired an asset. We tripled our resource base, our reserve base, very, very quickly. So that's I think that's the main reason why you want to own the equity rather than the metal. Dale, I'll give it to you quick before I throw it to Tom and Brian. I think that's the reason. It really is that it's multiple points of leverage. And that's what I think a lot of people forget here, particularly when you have established resources. If you're buying an Explorer, it's a different kind of leverage. That's like, you know, kind of lottery ticket explosive growth, which is great. There's a lot of investors who love that and some who've done very well at it. But on a percentage risk-adjusted basis, it's hard to be continually successful just with exploration.

21:12 The producers have obviously leverage in theory to ongoing resource growth, resource expansion, and they have margin leverage to a higher gold price. If you want the real leverage, I think you have to look at those ounces in the ground that are transitioning from ounces into the ground into potentially productive capital. Because today you get the leverage on the purchase,

21:39 the purchase level that you're buying in at. So if you're buying those ounces for 10 bucks an ounce today or 5 bucks an ounce or 6 bucks an ounce and there are a lot of developers out there with kind of those valuations. You know if they have established projects you get the leverage from getting in cheap because they're out of favor, you get the leverage to just you know the gold price leverage to the fundamental value of the projects that they have. And you get the leverage to ongoing resource expansion through exploration. So it's kind of the ultimate layered leverage play there. But that's the whole reason.

22:19 There's a couple of different ways to play that, but it's you're buying the sort of very cheap ounces that may never produce for $1 and they trade at $10. And that's a good business model. There's the buy the ounces at 5 to 10. When they get to be producing, they should trade for 100 to 200. So that's kind of the benchmarks we think of when you think about that leverage. Tom and Brian, I know you guys own both mining securities and physical gold, but curious your perspectives on why to own both, especially in a bull market. Either of you can start. Go ahead, Tom. Oh, thank you, Brian. You know, at least 50 or 55 percent of our portfolio here at home, and it's a large portfolio, are in the smaller, as you know, the smaller metals equities. And that includes copper.

23:13 However, I would say

23:16 Today is July 24th. 1 week from today, this is why you buy individual gold stocks. 1 week from today, we're going to see, I believe, as companies, I'll mention a couple real quick because this is on point, Romeo. I think we're going to see some blockbuster profits from gold producers and copper producers and you name it, producers, because we've had a quarter now of elevated prices. I think, for example, Alamos Gold, which is also building huge ounces and I'm not promoting Alamos Gold. I'm just saying it's a good example to keep an eye on when they put out their numbers in 1 week. Ivanhoe Mines, another great example, largely copper right now. When we see the huge jump in profits, that's why you buy these companies, because it's growth. These are the established companies, right? The Agnico Eagles and so on. The smaller ones,

24:20 as I know Brian can tell you, and also, you know, Rick and Dan are specialists in this too. The micro caps and the small caps have yet to have their day. And as we see this reciprocal gold movement, people looking for something else to get away from that daily decline in the Fortune 1000, which could be happening even today, right? S&P, Fortune 1000 down, gold and the gold equities and the metals equities up, we'll see them turn to everything. Everything whether it's a $10 million market cap or a $14 billion market cap. It's pretty simple. Appreciate that. And Brian, I'll end with you on both.

25:06 Yeah. With the caveat that I've said this many times before, so apologies to anyone who's seen any of my recent interviews, but it is important, I believe, that everyone realizes there are 2 reasons to buy gold. One is as insurance and 1 is as investment. So for insurance, you're buying those physical metals as the viewer posted and asked about. And you can do quite well on that, but what you're doing is you're insuring against the future depreciation of your home currency.

25:39 So if you're in the US and you figure that 3, 05:10 years from now, the dollar is going to buy a whole lot less than it is today, then you need to own gold because what you're doing thereby is locking in today's exchange rate. And you're protecting yourself to whatever degree that's a position or a portion of your overall assets against that further depreciation in the dollar. And I think that's a safe bet. I think it's insurance. When you think the macro picture has turned to favor a rapid catch up in metals prices, You know, a lot of gold has a history of spending years just trading sideways and not reacting to kind of a slow depreciation of the currency.

26:25 But then it plays a rapid catch up as people get justifiably concerned. If you think one of those rapid catch-up periods is in play, like I think it's apparent it is right now, then you want to invest in the metals and find ways to leverage that move and build wealth, not just protect wealth. The classic way to do that is through mining equities, ranging from producers to the junior exploration and development companies all along that spectrum, learn about it. It's an inefficient market. You can make lots of money in this kind of an environment. And I think an important thing to realize is these are not necessarily, you know, buy and forget about it for a decade investments. If you look back 20 years and see that the share price of Barrick and Newmont haven't budged, then you realize these are not growth stocks.

27:20 They are leveraged plays on a macro environment that argues for higher metals prices. So now is what you need to do. And as money flows into that sector, as generalists come into the sector, it explodes almost exponentially because it's such a tiny sector relative to these huge, massive pools of capital that are now sloshing around the globe. So When that turns and they come into this tiny sector, everything's just, you know, the rising tide is gonna lift all boats and a number of these companies are going to dramatically outperform the rest. Great, thank you. Next thing I wanna talk about is inflation. I know as soon as I posted this event, one of our regular investors that joined 6 webinars emailed right away and said the price of gold, the price of copper, the price of silver doesn't matter nearly as much to pre-production junior mining securities as inflation does because the cost of getting to production has gotten so much higher. So I wanted to, and Tom and Brian, I'll shoot it to you guys first, and then I know Dan and Rick, you guys have probably a different perspective to add to it, but it's really, is there a kernel of truth there that inflation rates and the interest rate are the more significant factor than the precious metals prices for security value? And as a side note, when are these rate cuts that we've been talking about since every event that have been on for the last 7 months, when are they meant to actually happen?

28:45 Tom, I can start with you there. Romeo, I tend to believe that the interest rates are far more important, as you know. Inflation, absolutely. I mean, anybody who lived in the, lived and was just coming of age in the late 70s and early 80s as I was, knew how important and devastating inflation could be, not just on everyday life and gasoline prices, but also on interest rates and gold's operating expenses for any company. Still, 4 years ago, we saw a very, about 4 years ago, we saw a very dramatic rise in interest rates. The central banks flood the world with free paper for many reasons.

29:35 I'm not going to use the pandemic word there and low interest rates. But now, and that had a very strong effect, But now it's a drama that's going the other way. At some point soon, when we consider both inflation and stagflation, which I think can be far worse, we'll see metal prices reflect an interest in diversification. And by the way, as you know, owning the equities and the metal is a great way to have exposure to a currency. It's great to own Canadian securities, for example, and hopefully 1 day watch the Canadian dollar gain against the US dollar.

30:27 So I mean, interest rates, let's look at interest rates, hope we don't have stagflation. But if we do have stagflation, I think people will turn to gold equities and actual physical metals. Thanks. Brian, what's your take on this? Yeah, Inflation is really just another word for the depreciation and the purchasing power of your currency. And we know that's advancing at a much more rapid rate than is being reported officially. That's what engenders this fear of people wanting to hedge. And we're seeing, interestingly, a lot of millennials. Millennials are now the biggest buyers of gold, which is another different thing about this market. Interest rates, I think, are headed down because the Fed is going to go on to the cutting side of the interest rate cycle.

31:21 The thing that can change that is if the bond vigilantes come in and force rates higher, force yields higher because of higher inflation. But I think one of the things the poster was asking about is why invest in mining stocks if, and I believe this is what they were implying, if inflation is rising and their costs for production are rising, then where's the leverage? And that was true, I think, over the last year or so, but not so much now. The interesting thing about this moment in time in the equities markets is that over the past quarter, the prices of gold and silver and other commodities have risen at a far greater rate than their cost of production.

32:07 Back just reported that their largest cost increases over the last quarter were in royalty payments, a direct result of higher gold prices. So the kind of problem you want to have, in other words. So what's going to happen over the days just ahead is that the mining companies are going to report earnings that I think are going to force the generalists to recognize that and start repricing these assets. We're going to see that filtering down through the food chain that we have been hoping for and expecting for some time. Appreciate that. Now, Rick and Dan, you guys have faced inflation and growing costs really face first. So I'll throw it to you guys for if you really do think there's a kernel of truth that inflation and production costs are as much or more significant factor to the value of stocks than the price of gold. Rick, I'll throw it to you first.

33:08 Yeah, I mean, absolutely. And I think that's why you want to be careful of investing in marginal producers. So, which that kind of goes to our one of our main aspects of our business model is to look at high grade, high quality, high grade projects. So that you get away from that, you know, being on the on the margin. As Dan alluded to before, you know, you're going to see higher gold prices, you're going to see the majors drop their cutoff grade and instantly have another 10 million ounces of gold on the books. It's a good news thing, but it's a bad news thing because the cost of producing those ounces is going to go up. And it's so, you know, there's a balance point there. I do believe, you know, when we saw gold, it, you know, bump up against 2000, you know, 3, 4 times and then finally got the 2100. And we all thought, OK, it's above it's 2100. Now's the time. And then it bumped up against 2200.

34:05 And now's the time. And generalists are going to come in. And then it pumped up against 23. And it still didn't move the needle for investors. And it goes to what Brian, I mean, what everybody is saying that, you know, when Agico and Barrick and Newmont put out results that have their kick-ass results, that's when I think the change happened. And, you know, I'm hopeful for our stock. When we start our first batch and once we report the next 2 batches and by the end of the year, we'll have made a bunch of money, we have it sitting in the bank account, I think people will stand up and pay attention. There you go. Dan, go for it. Yeah, I think just so that the viewers and people joining us understand, we have seen major cost escalation in the industry.

34:57 We focus on it because by definition as a developer, you're kind of long CapEx risk, right? Because you have CapEx in front of you. But I was actually looking, I was looking this morning at what some of the assumptions were around steel prices that we would have used in some of our studies. What the assumptions were around oil prices that we would have used in some of our studies, what the assumptions were around oil prices that we would have used in some of these studies. A lot of those commodities are actually starting to come well down below where the peaks were driven by the whole supply chain challenges around the pandemic. So, yes, labour rates moved up and labour is sticky downward. I think we all kind of have to accept that. That's certainly an element of it. But a lot of the inputs, particularly if you see going into a period of stagflation or some kind of lack of economic growth, there's a lot of capacity sitting around the world that is starting to get a little bit nervous, right? Like that's gonna have an impact on a lot of the fundamental commodities that I think can be good for those who need to look to build stuff in this industry.

36:12 I think the most important thing is what's that link between inflation and the gold price. And, you know, the one thing we can say, having looked at a couple of our studies that were done, 1 in the middle of the pandemic released January 2021, and another release kind of last about a little less than a year ago, is that even today, we're in very different environments there. But the gold price, you know, the assumptions we were using on the gold price in 2021 was $1,600 an ounce. Well, for all the reasons that we talked about the cost curve moving up, I just don't think we're going to see $1,600 an ounce again. So you got to kind of factor in some of that trade-off that the expectation of inflation has actually already baked into the gold price, and is a big part of the reason why the gold price should be going higher, and why, as we said before, $2400, $2500 might just be the, oh my gosh, gold's at $600 moment that we experienced in 2008, right? Like, everyone and always tends to happen in September. I remember it in the Denver Gold Show, like it's always, something always bad happens when you're at these conferences in terms of gold price. But I remember, you know, we've said it so many times before, as Rick was saying, at 2,000, 2,100, 2,400, you know, oh, well, we can't make money at these prices,

37:43 you know, we should just get out of the industry. But the reality is we said the same thing at $600, said the same thing at $800 and $1,000 on the way to $1,900. So yeah, it's that expectation that's coming in as well. That's funny you say about conferences. This is the first year at PDAC I saw a smile. It's the first time anything good happened to a gold price during a conference that I've seen. But I have one question. I'm going to throw it just to Brian for this next one, just because I know you've got a take on it. But historically we've seen – sorry, I think there's feedback on somebody's mic. If you guys wouldn't mind just muting just to see where that's coming from. But Brian, I know historically, usually the gold price and the value of the US dollar are to some degree at odds.

38:30 They're usually inversely correlated. Right now we're seeing both at new heights at the same time. So just curious what you think this means. What's going on here? Yeah, you know, it's not just the US dollar. And again, we're getting to back to that question. I should have mentioned it earlier. What's different about this market? We saw in the early stages from March through April, thereabouts, the dollar strengthened, treasury yields rising, and gold rising. And we saw the same phenomenon briefly in October, November of last year. In October, November of last year, that was because these bond vigilantes poked their heads out of the foxholes briefly and saw the spending by the Biden administration and the deficit expanding very rapidly.

39:26 And that was a reaction. We saw, I think this time, a kind of a similar reaction. And you know, Treasury yields usually fall in a safe haven trade, but occasionally they rise in a safe haven trade when the worries of the market are for incipient inflation. You know, inflation rising to a degree where the market needs to accept higher returns on their treasury securities. I think that's kind of what we're seeing. Generally speaking, I think there's a growing unease in the world about the situation in the developed economies with these debt loads, with the need for lower interest rates to service these debt loads.

40:11 With some geopolitical issues mixed in there, but I don't really think geopolitics drives the metals prices. I think it's all economics and monetary issues, and there's plenty of those to go around. And I think when that happens, big money starts shifting their allocations a little bit. The dollar is a safe haven because the US has the best law in the world. As lousy as it is, it's the cleanest shirt in the dirty laundry kind of a thing. Treasury yields, well, you're going to have to accept or want a higher return even for treasuries. And I think some of the money that was going into treasuries as a safe haven is instead going to gold. Again, it doesn't take much of a shift of these huge pools of capital.

40:59 You know, 1% shifted in their allocations toward metals and mining and the reaction is absolutely explosive. So I think that's kind of what's going on here. It's a bit of a safe haven trade. And that's why the dollar and gold are rising. And I think worries about not just the return on your investment, but the return of your investment, as Jim Grant says, is one of the reasons why we're actually seeing treasury yields rising a bit or have seen that very recently that they've been followed. That makes sense. Here's something that we've all alluded to at a certain point during today, but I want to kind of zoom in on that. When does the generalist investor get excited? I mean, it's interesting. I mean, you know, we work in the industry. I see almost no generalist press articles about the gold price, even as it goes higher. Meanwhile, I'll see 4 or 5 articles a day on a rapper's meme coin in the crypto space that breaks through to the front section of newspapers. So I'm curious at what point do commodities and metals prices start to get through to the generalists? And this alludes to a question in the comments, the chat here. Somebody asked how to crypto ETFs detract new investors from precious metals. So it's really these high flying, really precise tech stocks, Nvidia, et cetera, and crypto detracting from metals prices?

42:19 Dan, I'll throw it to you first. I don't think they're detracting from metals prices, but I think they are taking some of the speculative capital that historically, when you've seen metal price moves, has been incentivized to come into the metal space. What gets them excited? I think we need to sort of understand where we are in a cycle that's moving, right? This is gonna be the first quarter that we will have seen gold companies reporting earnings and free cash flow at a $2,300 plus average gold price. That in the previous quarter was like $2,100. So think about a company that's probably gonna have, you measure it on free cash flow, you got a 10% increase in your revenue, is probably, I don't know, probably a 40 to 50% increase in your free cash flow, maybe more, right? Might be a doubling of your free cash flow, depending on what your cost bases are and your capex profile is. So I think it's going to be driven by fundamentals, because I'm a fundamental value believer at heart.

43:31 I think you're going to start seeing some of that. The other thing you need to recognize is that you've now got gold producers that from, you know, call it late February to today, most of them are up, you know, somewhere between 50 and 100%. And these are large multi-billion market cap companies, but they're seeing massive increases in their share price already. Well, at some point, having been a professional investor for a few years, You know that the investing public is going to performance chase and they always do. They always want to see the number of times you hear, oh, I don't mind missing the first 100% of this rally, but you don't want to know that it's solid before I see the time to start changing your allocation. I'm going to start seeing changes in allocation.

44:18 Less in the US. I think Canada is where you might see it first, just because you have defined sub indices of metals and precious metals that are going to be outperforming everything other than Nvidia. And that performance is what engenders the capital to start flowing in. It then comes in in the GDX and the GDXJ because people are chasing what has been a 6 month 100% return. Those are pretty good metrics by any estimation. So again, muted as it has been, as this gold price has gone up in, call it the bottom of the bear market rally, because you've seen people seeking liquidity off the bottom. But that seeking of liquidity, I think, is done. And when you get the positive correlation between gold price movements and inflows into the sector, which you've seen every other time and cycle in this sector, but, you know, that's when I think you're really, really going to see the momentum start and ultimately that trickle down effect start that Tom was talking about earlier.

45:26 I appreciate it. Tom, I put you on mute, so to answer you'll just have to unmute here at the bottom. I'm curious for your take on when generalists get involved. Oh, you got to unmute yourself. It's a button at the bottom of the screen, Tom. We can't hear you until you unmute. It's just a little microphone at the bottom. While he's sorting that out, Rick, you can give your answer on when Generals get involved. I think Dan covered it really well. To me, it's just really when they start seeing companies make a lot of money. As I mentioned earlier, we are producing Gold now and when we report that our all-in sustaining costs are in line with where we said they were and that they haven't gone up 50% And we've got the money in the bank and we're able to now execute our plan.

46:23 I think people will recognize that. And I think it starts with the majors, always does. And I think the other thing to point out, I think we've got a question on M&A as well, but when the majors have a lot of money in their jeans, they have a tendency to want to spend it for a couple of reasons. 1, again, Dan mentioned, they're going to drop their cutoff grades, which, you know, going to make a lot more ounces, but they're going to be more marginal ounces. And they'll be on the hunt for the better quality projects and they will buy them. So I think that's the dynamic that's going to play out here in the next year or so. And we're getting M&A right after this actually, but Tom, I'll throw it to you for your perspective on generalists. Yes, right. By the way, we saw some great metrics from the East about professional investors, ETF investors, money managers, and India, Japan, China, Korea, they have been buying even with the higher dollar gold price.

47:25 And at some point soon, I think The professional investors here in North America, that includes Mexico, Canada, the US, the UK, in the West, they'll want to see more stream deals, you know, like wheat and precious metals, you know, more Mount Todd for Vista Gold or more takeoff partnerships for metals, more purchases of development projects in copper and gold and silver and nickel. And especially, I think professionals will start to look and say, what kind of acceptance are we seeing now of Africa or Peru or as economically safe places to mine. Serbia, my very favorite, Colombia.

48:13 When they start to see that, it means that we're gonna see a broad shift in metals equities, which by the way, haven't done so bad. They're doing OK. Or physical metals. Appreciate it. Let's jump into M&A. So I know you can tell walking to PDAC, there's a million juniors. It's, there's so many, aisle after aisle after aisle of juniors and there's due for some consolidation at some point in the industry. I think everybody to some degree agrees with that. Brian, I'll shoot it to you first. Typically during bulls, when does the MNA really heat up? Is it early in the bull or is it really at its height when you start seeing most of the M&A? Yeah, it's really at the height. You need to see that enthusiasm.

49:00 The major miners have been, rat crossed their collective knuckles over and over again by how poor of stewards they've been of shareholder capital. And there've been a number of leaders in the industry who have called for these big miners to get their houses in order and be better managers of their business. And to those industry leaders, I say, shut up. I mean, we don't want them to be. We don't want them to get any better. We want them to spend money like drunken sailors. We want them to spend money exorbitantly on all the juniors that populate our portfolios. And they will. I mean, this is just human nature. It's going to happen again. So you have to have that euphoria.

49:51 And more specifically, what's happening right now, as we've all kind of alluded to, is that miners' margins are expanding very rapidly. We're going to see a lot of that become public knowledge in the financials, but nobody understands how rapidly their margins are expanding better than the big miners. So I think they are kind of have their toes on the starting line right now and are looking around and all it takes is that gun going off and they're all going to start and Hopefully we'll get those kinds of bidding wars for these juniors rather than what we've seen over the past few years where there's a takeout of a company at a 20% premium to its VWAP and half of its all-time high share price kind of a thing where the managers at Igenia just give up and say we're going to cash out.

50:47 What we need to see are these multiples. And there are a lot of projects out there that are still trading for a quarter or less of what they would be trading for in just a normal market. Companies have big resources trading for about a quarter of where they would be on typical valuations in a normal market, much less a euphoric market. So you look at companies like Rick's and Dan's, and I know that they're just really getting excited about this market that's coming up ahead. Because if they can hold out, and in both of those cases, it looks like they can, until that euphoria really hits, they have that option of selling out at a vast multiple to these big mining companies that are spending, hopefully, recklessly.

51:37 Now, just very briefly, one of the interesting things that's happened over the past couple of months is that The gold price has gotten to the point where these marginal miners, these optionality plays that were launched as out of the money options on gold are now economic. They're not only economic, they're achievable. Very soon I think they will be achievable in the market and potentially imminent. So these things are lying around in front of us, these companies, and it's a target-rich opportunity right now. But if you focus on the best ones, I think in a few years, you're going to be very happy that you did. Appreciate that. Rick, I'll throw it to you for M&A. Well, you've got a front row seat. When do you think it heats up?

52:26 I think it is heating up. I think you're seeing it now. I mean, you know, we just acquired high gold, we acquired an asset, a good high quality asset. It's 9 over 9 grams a ton. Well drilled, good solid ore body. We were able to acquire it for $30 an ounce. And we can, with our cash flow, we can turn that into hundreds of dollars an ounce of value. So I think you're seeing it now. I think the majors will, for the reasons that Brian mentioned, the majors are going to be a little tentative before they start buying things willy-nilly, but they will eventually buy things willy-nilly because they'll just have a lot of money. And, you know, that again, with that dropping their cutoff grades, which they're gonna have to do to maintain, they can't reduce their level of production. That's just not in a major's DNA.

53:17 So they're going to do that, and the only way to compensate for that is to buy something better, which the juniors have. So I think that's what plays out here. Great. Dan, I'll throw it to you on M&A and then I will go to individual questions for each of you. Yeah, listen, I think there's a couple of things that a lot of people have not been focusing on in this M&A market or the M&A market to come. Number 1, I can point you to at least 4 bona fide mid-tier producers that might have 2 or 3 mines, in which one, at least one of the mines in their portfolio is going to be out of ore by 2030. And maybe you can drop the cutoff grade and expand it by a year or 2.

54:04 But the reality is you're not probably not finding a 5 year mine life extension when you're down to year 5 of your mine life. For those companies, it's getting to be existential, right? Like, you're going to be down to a single asset producer that dramatically changes the risk profile of your company as an investment. And you haven't been able to, so a lot of those companies, the mid-tiers who need the new projects the most have all been kind of trying to merge over the last 4 years. It hasn't been achieved in large part because boards and management weren't going to make a lot of money when they came together because share prices were at all-time lows. Well, we're now at 52-week highs. I think you're going to see the first push of consolidation.

54:52 There's going to be a couple other 10 billion market cap companies created by merger of those mid tiers. And then they're going to look at their portfolios and say, you know what, we actually need to build stuff. But here's the biggest thing that people don't realize. And we focus on it because we're kind of toward the end of a permitting process. But if you haven't spent 7 years in a permitting process already, Like there's almost nothing that can be built and think about big mines in Canada, but there's almost nothing that can be built between 2025 and 2030. And for those who want to have things ready to be built in 2030, they got a lot of work in front of them because most of them haven't even entered a permitting process yet. So those timelines are drawn out. That's where when you talk about exploration, the one thing I'm very confident of in this industry is that the timeframe from exploration to production is only going to get longer with permitting in most parts of the world. So, you know, I think that's, we're really at a turning point here, but I think the next 6 to 12 months is where you see that real competition come for assets that are becoming more and more scarce.

56:08 Appreciate it. Now, I got one question for each of you in the interest of time, please also use this opportunity to pitch whatever you'd like to pitch. So we can try and finish at least close to the hour, make a minute or 2 over. But Rick, I'll start with you here in this last round of questions. Contango has been hungrier and feistier than most during the metals, metals winter, we can call it, recently acquiring high gold and pouring gold at Mancho very recently. So curious what the, you know, what a bull market could mean for Contango's business model. Does it change or is this right on course? I think it puts us on steroids. We've got cash flow, we'll have a nice bank account by the end of the year when we get our third batch done of processing and I think we'll do more of the same. Again, if we can buy ounces for 30, 40, $50 an ounce and turn them into $200, $300 an ounce value by just executing on our business model, which focuses on high grade, focuses on things that can be developed using a direct ship model, which gets around the permitting that Dan was just mentioning. You know, that's the Achilles heel of the junior sector in terms of trying to get from exploration to production.

57:31 It's the permitting. The rest of it, if you've got a good gold mine, you can raise the capital, but you can't make regulators move any faster. So that's, we're going to just keep doing what we're doing. And we've got a good portfolio now, and we're going to keep building it out. Awesome. Thanks. Dan, You alluded to it today, but I've heard you say before, John, year 7 of an 8 year process or year 7, 7 and a half year process at Springpole. For those who don't know, one of your flagship projects. Curious if you think this market's going to continue through to Springpole's construction decision And what could that mean for investors at First Mining? Well, yeah, I think this market is just getting going. And I think the value and scarcity of large projects in tier 1 jurisdictions with low pro forma operating and capital costs, They're just gonna become more scarce and therefore more valuable.

58:23 So I think a better market opens up a lot of different opportunities in terms of a path forward. We've talked pretty openly about the fact that SpringPool is probably a good project for us to bring a partner in on as well. But I think you get to a point where you have really one of only a couple, maybe, projects that could be built in Canada, maybe you might say in North America, over the course of the next 5 years, that puts a bit of urgency on that value and on that scarcity, and give it just gives you an ability to attract capital at much better cost. Ultimately, if it is bringing in a partner, our shareholders end up retaining more of that, or you have kind of your choice of partner who's really gonna help you realize the value of this major scale asset. So yeah, Lots of good opportunity. It's not the only project we have, of course.

59:22 DuParcay, a major asset sitting in the middle of the Abitibi Gold Belt, which has a lot of things that Rick would like in terms of proximity to infrastructure. 17m within 200km of the project. We're starting to understand the high-grade plumbing at depth as demonstrated by our last few draw results here. So we're making good progress on that too. Perfect. Reference to the RIC test. I like it. I'll give you one question for Tom and then close it with Brian for, we'll call it a vibe check at the end. Tom, one thing just for the investors in the room, what are signs in the next few months that the bull has slowed? What are signs investors should look for that it's really, really ripping? Well, I'd like to think on our way to $3,000 gold, hopefully by the end of this year, that there are good signs. As I said, streaming deals, more purchases in the M&A area of developers like the China deal for Osino in Namibia.

1:00:28 I would not like to see, to be honest, higher interest rates once again because the effective interest rates have been so dramatic. I would keep an eye on central bank purchases. You know, if we stop seeing India and Poland and China and Japan continuing to increase their reserves, if we stop seeing that or if we see some kind of shift by the other BRIC nations, including South Africa and so on. You know, I'd be a little skeptical. But in the end, I do see gold going to, you know, far higher this year and definitely next year.

1:01:18 And thank you for the chance to say that most folks can find me at tomcolander.com, the Colander Report. And I look forward to being at Brian's conference as a speaker and also the Denver Gold Show in Colorado Springs later this year. Thank you, Romeo. Thanks, Tom. And speaking of Brian's conference, it's quite a year for it to be the, I believe it's the 50th anniversary, right? Of the New Orleans Investor Conference. It's interesting timing. You know, you've got a really unique community of investors. I'm curious, since I'd like to end on a vibe check from you, is what are you hearing from people that's different than last year and the year before and the year before? What energy is coming into the conferences here? Yeah, well, it is our 50th. It's the oldest investment event in the world, longest running because, you know, I think there's something special about it. I didn't start it, but I'm trying to continue it over the last 25 years that I've been running it. And it's really a special event and it's filled with really smart investors who value information, value information from thought leaders who are saying things that they're not going to get through more traditional media.

1:02:26 And because of that, I think that they're a great barometer. We saw them enthusiastically buying this junior mining share market last year. And I think they're obviously reaping the rewards of that. So, you know, this event is one place where you can take advantage of that inefficient nature of the junior mining market. You can not only get the macro picture from really smart, insightful people like this year we have Jim Grant, we've got Danielle DiMartino Booth, Brent Johnson, I'm obviously reading from a list here, Dominic Trisby, Dave Colum, George Gammon, James Lavish, Lynn Alden, Lawrence Lippard, Michael Maloney, Rick Rule every year, Peter Buckvar, Tavi Costa, Tom Calandra here on my list in front of me.

1:03:19 Just really a who's who of the most insightful analysts out there in the market today. And the attendees themselves are, by their very nature, that they're coming to this event in New Orleans and traveling to it, that they are self identifying as some of the smartest and most successful investors out there. And they like to share their views. So, so yeah, it's it's going to be an incredible event this year. It was last year. It's going to be bigger and better this year for our 50th anniversary. Still working on bringing in some great surprise speakers and it is November 20th to 23rd this year. And you can find all the information at neworleansconference.com. Very simply, just neworleansconference.com.

1:04:07 Thanks, Romeo, for this opportunity, by the way. No, thank you all. This was a great conversation, a lot of chit-chat. For those in the audience, thank you all so much for coming. I know there are several hundred of you in the room. Really appreciate it. I didn't get to all your questions. I'm sorry. I tried hard. But we will give you an email response and where relevant, send it through to speakers as well. But gentlemen, thank you so much. Really appreciated your time today. It's a good event. We'll look forward to the replay. Thanks very much, all. Thanks very much. Thanks very much. Thanks very much. You bet. Have a great day.