you are listening to Mining stock education where you'll learn from the top leaders in the natural resource sector and uncover quality mining investment opportunities I think by the end of the year we could see north of $2500 gold and we could see silver in the m30s by far my largest percentage Holdings are are the junior development stocks because I think you're looking at you know anywhere from a five bagger to a 20 bagger in some case potential 20 bagger in some cases you are listening to msse I'm your host Bill Powers thanks for tuning in today you get to hear from Dave crayler he's a fund manager over small mining stocks he writes The Mining stock Journal where he's the lead editor and you can find him on the web at investment research dynamics.com Dave thanks for coming back on the show it's been seven or eight months what do you expect for this summer in gold and gold stocks the saying is sell in May and go away and check back in in September uh is that what you're doing or you keeping closer watch on your portfolio first off thanks for having me back on Bill I always love doing this show um and we always have a great conversation ahead of time so I will point out that obviously gold and silver are quite a bit higher than seven or eight months ago and you know I've been I was looking for the type of move that we had it basically started in at beginning of marsh and went to miday um so yeah if you did sell in May and go away it was it was a good move um I I actually when I was looking you know after that runup and that runup got kind of frenzied but um it was well deserved but you know that the technicals like the RSI and the macd on on the charts for Gold Silver and the Mining stock just became extremely oversold I mean not not oversold overbought um and so I did teir down some positions and I I put on some Hedges um i' I've taken the is off and I'm I'm sitting on some cash that I'm just waiting um to to deploy again and I I I will start deploying it slowly um probably starting more towards the end of July because as you know because you've been in the sector long enough there's there's a seasonal Factor there seasonality in in in the way the market moves undulates let's call it um and what happens is is so India has their seasonal buying you know their seasonal buying periods and one of their buying periods that's that's lesser known than the one that happens in the fall through the holidays is uh basically February call it to miday and that's they have another um kind of a lower level festival and wedding season so so India does buy a lot of gold during that period and that's that's part of the reason why we had the the rally that we had um and then they they kind of take a break in June and July and there's there's two factors that Drive Indian buying as you head into the fall and into the holiday season and one is obviously the weddings and and their their holiday festivals but also they have a monsoon season and the quality of the monsoon season in terms of how heavy the rains are dictates how big their their agricultural crops will be and the reason why that's important is that it when the when the farmers when when they're when they get their crops sold and after they've paid all their expenses you know and and set aside Capital money for you know non- discretionary living in between you know the planting season and the grow growing season um they take all of their cash and they buy gold that's just what they do and they've done it for hundreds of years it's in their DNA it's just just like you know the entire culture is like that but I mean the farmers you know as soon as they got free cash it's it goes into gold so that helps fuel the amount of gold that gets imported into India during during their you know basically the last half of the third quarter of the year and the fourth quarter so um but at any rate what happens is there's a lull in Indian importing and they they're after China they're the world's largest importer of gold so um and and there's the thing about it is like so I started in the sector in 2001 and you know back then we knew China was buying gold we had no idea how much and they you know they they were basically the primary of China and Russia were the primary Eastern Hemisphere and believe it or not Vietnam also at one time Vietnam was the fifth largest importer of gold um and they may be heading back in that direction uh what happened there was was the the Vietnamese populists would when like Indians when they had cash freach to to use they would they would sell the the the Vietnamese Dong and buy gold and it was putting downward pressure on the dong versus the dollar which is pegged to the dollar and so the the Vietnamese government put in restrictions on gold importations well they've removed those now and now they're actually encouraging the populace to buy gold and we're seeing that in a lot of countries in the eastern hemisphere um and what we're also seeing is um and probably in response to what the US did to Russian assets being held by Western central banks there's a lot of countries that are now repatriating their gold out of Federal Reserve and and vaults in London back to their own countries in fact India just announced maybe I don't know about eight weeks ago that they were re repat rting 100 tons of gold from London and they said they're probably going to repatriate more so um we've seen that I mean even believe it or not NATO member and US Ally Poland repatriated gold so um it so what what you're seeing is is is you know the Eastern Hemisphere it's not just Russia India and China buying a lot of gold you've got many countries over there buying gold um Vietnam is revived um Singapore is becoming a major gold trading Hub and gold storage Hub um and so I I think that what's what's happened is that the ability of the western central banks and Banks to um exert price Management on the price of gold using derivatives lbma forwards and comx contracts is being diminished and the market is is being you know the price prices gold and silver are um there's much heavier influence from the actual physical Market in the Eastern hemisphere in the Middle East and and the the actual physical buying of the gold but not just buying the gold the taking possession of the gold and getting it out of um Western custodial balls and so and and there's a guy on Twitter who's who in he's Chinese and every day he posts the US dollar price of gold and silver for the from the Shanghai Gold Exchange and the Shanghai Futures exchange and there's always a a decent size spread where the the settlement price over in China is is above the the lbma am and EM fix and and the price that people observe when they look at either the comx front month or the price that Kito posts they're there you know it's it's higher over there um and for silver it's significantly higher like you know three or four bucks and um what that illustrates is you know the fact that rather than the paper Market leading the price of gold higher and lower you now have the physical markets in the Eastern hemisphere that are kind of pulling the price of gold higher and and it's so it's it's kind of taking control of the price setting away from the Western Hemisphere and so so you don't think it's Western banks that drove that move up to 2400 no I think it was the physical Market over in the Eastern hemisphere yeah I think it was Western central banks because they were less able to short derivatives to try and cap price Rises and they also are now being held more accountable for making deliveries under the derivatives contracts that they're Printing and and selling to buyers they're being held more accountable for that by the physical market so it's an accountability thing and and for that reason and that's why I think we're we're you know we needed a pullback from the runup that we had in from March to miday we just even just technically and just to kind of cleanse out some of the speculative activity that was going on um yeah for sure there was influence from the paper Market that pushed the price higher and that's the hedge fund alos you know chasing the momentum so and and and now they're they're they're kind of unwinding their long positions that's that's kind of why we're you know Gold's kind of jumping around as is silver but I do think that we'll be and I I'm not going to put a price Target on it um well I will you know I I think by the end of the year we could see north of $2500 gold and we could see silver in the m30s I I just read a report yesterday and I again it makes me leery that the source is Goldman Sachs but their Commodities guy thinks gold could be a 27 00 by the end of the year now I wouldn't go out on the limb and put that price Target on it but I think we will be considerably higher is that telegraphing they want to make money on the long side of the trade then is that what they're doing when they do that I don't know that you know the rule of thumb is you do the opposite of what releases you know whatever their position is for the public he do the opposite but um it's out there and they're not the only big Investment Bank that has a much higher price target for the price of gold I think even JP Morgan might so Dave you you taught me that one of the ways when you identify these maybe shorter term Cycles in the gold stocks you'll buy in the money call options on names you like for a shorter term profitable trade are you doing that at the moment well I've got uh large in the money like September time period call options on names like Fortuna Silver and that's that's in lie of putting up the full amount of capital to pay you know five bucks a share whereas Fortuna 491 a share you know you can buy the two and a half strike call options for almost parody with the stock maybe 10 cents above parody so and I have it also for skina resources I don't know if you're familiar with that story but um they just they just secured construction financing for their mine in Canada and that's going to be a great project that Stock's under valued um and then also silver Corp which produces this year they're going to produce 7 million ounces of silver in China they've got their mines are in China um they're in the process of acquiring a mine in forget which Central American country I think Ecuador and that's not even remotely priced into their stock and that that that acquisition is going to be it's a smaller acquisition it's copper it's going to be a copper gold is it's going to be a um that'll be a home run in terms of the amount of capital capital they're putting up to to buy the company and and build the mine and then they've got a I think it's a 20 20 or 25% stake in um new Pacific which I don't know if you're familiar with that one that that's in Bolivia and I'm actually hopefully I'll have the time to do it and do it well I'm I'm probably going to review new Pacific in my next issue with the Mining stock journal with silver Corp now I was told by somebody I trust they say Bill don't trust the Chinese financial statements so for those of you that don't like that that's just some sentiment that's out there but for you Dave you you you are comfortable with that well I mean the guys that the guys that run the you know the CEO is I think he's Canadian or Australian I I had a long conversation with him here's the thing about silver Corp and that that was probably true back in the early 2000s there were rumors about um misstatements on their their um reserves their you know their their mineral estimates um but it's it's a different management that's in there now and what I've observed is that management makes really really smart decisions and their mines over in China are low cost they're they're in every ounce that they produce is sold to Chinese customers I mean China's just hoovering silver right now that's not a a well-published fact but they've got a massive solar program as does India in place they're they're trying to you know roll out a national solar grid and it it takes a lot of silver to do that um and if they could produce more than 7 million ounces which they will you know they've got or organic growth built into those mines over there they'll sell every ounce of it over there um and they actually had a really goodlook a position teed up I can't remember which African country it was a East African country and it they there was an Australian company that they were in a bidding war with and they finally just said okay you guys take it we're not we're not going that high so it's not like this management makes really really really smart decisions and if you look at the acquisition that they're making in again I think it's Ecuador that the thing is going to be a home run so and that that's that's actually as for producing Mining stock that's one of my more favorite producers because I think it's very undervalued relative to where it's trading now do you think when uh you know money wants to flow into the silver producers there's not a lot of them do you you expect that stock not to trade out as a discount to Pier because of the China Factor oh I think that's part of the reason why it does trade at a discount I mean that you know they're they're not afraid to go into um what are perceived as risky jurisdictions you know and that's like another stock I mentioned to you you know before we we started recording um is is caliber mining I mean they're they're their primary mind right now is in Nicaragua and the reason I started looking at it when the when the stock just got demolished when when it was announced I don't know maybe 18 months ago or something that the Biden Administration was imposing sanctions on Nicaragua economic sanctions well it had to do with um sanctions on any typ of business that the president of Nicaragua was was making money on and calibur's gold mining is not one of them a very friendly jurisdiction um the reputation so and um they've got at they've got two uh Mills down there one's almost at capacity the other one still has 50% of capacity that's unused and they've got massive resource upsides so they've got organic growth there they just took over uh marathon gold in New Finland for the Valentine mine and that thing I think it's on target to do its first pour in early 2025 and that's that's going to really boost their annual production I mean I think it's going to take them to yeah it'll take them to somewhere between 460,000 and 500,000 ounces a year and the market cap is 1.16 billion US well I mean Alamos gold is going to do 500,000 this year 500,000 ounces and I think their projection I think they don't get up to something like 700 until 2028 their market cap $6 billion dollar I mean come on man talk about I I I I mean I'm not knocking Alamos gold I just think it's it's you know very high highly valued for what it produces relative to companies like caliber um you know relative to companies like silver Corp on a gold equivalent basis if you want to convert the ounces to Gold what what exchange is caliber on in the US caliber is a trades on the TSX and it trades on the OTC bulletin board I I don't know why there's there's your discount right there right cuz like you can get like a three 3x valuation like look at Dakota gold versus a comparable just The Exchange you trade on can give you a 23x sometimes in the US it could be and you know what that's actually I should ask the company why they don't why they don't list on the New York Stock Exchange it did I mean it's it's got a big enough market cap but I mean these these guys they Hemorrhage cash flow no I don't mean that like you know red ink I mean that it's basically a money printing machine especially with the price of gold where it is because their their bond sustaining cost is relatively low um they've got a small they've got a small mine in Nevada um to me that's not really that's not the driver of of what this of why this company I think is a potential double for producing Mining stock I think it's you know people recognizing what they've got in re in Nicaragua and then when the Valentine mine in New Finland um is is operating and fully ramped up again that's that's going to that in and of it self's going to be a a money printing machine you know assuming the price of gold stays at least where it is MH Dave uh listeners like when you run through some of your portfolio picks any more you want to share I mean caliber is one of my largest Holdings um I I I just wanted to mention B2 bold really quickly again you've only mentioned producer so far well I mean right now that's what the market wants and that's where the performance is in the sector and that's not to say I mean by far my largest percentage Holdings are are the junior development stocks because I think you're looking at you know anywhere from a five bagger to a 20 bagger in some case potential 20 bagger in some cases versus these I mean the the the couple that I'm mentioning that are producers I mean they're they probably are doubles from where they are now which that's a great rate of return for producing money stock I don't think in the context of and I'm talking about just in the context of where gold and silver are now I mean newmont's not going to be a double you know unless gold doubles from where it is right baric Bar's not going to be a double but these These are and and I mean yeah there's there's perception of of um excessive jurisdictional risk but the reality is that's part of the reason why these stocks are undervalued and why you can make money on them because at some point the Market's going to say wait Nicaragua looks like a great jurisdiction you know and that that brings me to another point I mean caliber told me all of the gold they produce is sold outside of Nicaragua which is part of the reason why they're not part of the the sanctions that were slapped on on the country the economic sanctions um B2 gold another I mean it's got jurisdictional call it hair on it um but it's you know while you're waiting for their their Goose project which they acquired via acquiring Suba gold and silver in Canada that thing's going to start producing in early 2025 um their market cap right now is 3.5 billion but again if I compare it to Alamos gold which has a six6 billion market cap when they're fully ramped up they're going to be producing 1.3 million ounces of gold and I think that's what their projection is for 2026 because because the goose project will be fully ramped up by then um and again like I said Alamos produces 500,000 ounces of gold that's I think that's what their uh forecast is their guidance is for 2024 and meanwhile while you wait it pays a 6% dividend so I have a large position in B2 gold and and um you know at some point I think the Market's going to see oh well they're in West Africa West Africa is one of the best jurisdictions in the world to operate and I I learned that from when Fortuna took over Rock's gold actually went over and and did a site visit to their uh seala mine as they were ramping it up and that thing is is an absolute home run that the seala mine project property is probably worth aone on a standalone basis what Fortuna's whole market cap is um but so let's in terms of the Juniors and I know I mentioned cabw gold on the last um podcast we did seven months ago and the stocks doubled to then but it's still at 20 cents us um this thing so they operate in Brazil again I think there's a perception out there that Brazil is a risky jurisdiction it's not it's incredibly mining friendly all the majors or most of the majors have have mine operations there um but but cabal has a the the current market cap is 53 million and they're in the process of of implementing they've got a trial mine permit permit Brazil issues what they call a trial mine and it that allows uh a project development company to start up just call it a starter mining operation and it's it's a good way for for more than just economic studies Dave yeah I mean this thing will produce cash flow that they can use to develop the rest of the the project but um so what they're going to be processing is they uh the Project's called QQ C cu cu IU CU IU I that's probably like a a native you know a native people's name or something um but uh they so they've got two existing deposits that are near surface op you know open pit you know oxide deposits but sitting on top of that are at surface and near surface um what they what they call oxide gold blankets and it's it's soft rock it's soft rock and mud basically saprolite for those who you know are more familiar with um geology terminology but um so what they're doing is they're in the process of finishing up a pre-feasibility study that will allow them to get the financing to put in the small mine operation that probably be starting to produce gold you know and it's is going to be small scale like call it 15,000 ounces but it'll produce enough cash flow so that they won't have to issue stock to develop the greater resource that exists on the project property so um there's a company called G mining Ventures that's literally adjacent to cabal's project and they're in the process I can't remember what the timing is on the startup of their mind um I think I think it's under construction now but G mining has a market cap of 86 7 million now they're they're merging with Revival gold so there's there's some aspect of that in their market cap um but the but the CEO of cabal was the co-founder of the deposit that g mining is converting into a mine and he told me that he thinks that the cabal project has a much larger resource and they've already demonstrated that the that the mineralization is higher grade than than G mining's um so and I'm not that's not to say that I think cabal is eventually going to have an $800 million market cap it may it may not I have no idea what I think will happen is once they get their trial mining project going and generating cash flow I think the Market's going to start to recognize what they have there and it's it's going to you know Drive the stock price a lot higher like I think based on what they've already demonstrated and the degree to which they've deris the project already and yeah you're right you pointed it out the the the trial mining project will also demonstrate the metalurgy of of the mineralization um but uh I mean you know legally I can't drag a number out of the CEO in terms of how big the resource there could be but it it just they've already got two official deposits they've got another uh resource Z Zone where that that that's going to be converted to a deposit and there's probably you know several other deposits on the property like I said it's near surface open pit style there's probably also underground um mineralization there I mean I think you could be looking at a at a project that eventually could be a 200 to 300 ounce per year operation you know by the late 2020s if we're not in World War II by then um and so you're looking at you know if if you're you know a mine of that size in the context of what will probably be a much higher price of gold and silver you know it's probably worth a billion dollars now you got to Net Present Value that back but again I think based on a $53 million current market cap I think you're looking at a 10 bagger here if you buy the stock now and have some patience then you have some other US Stocks you like too in the portfolio or any US Stocks or with projects focused primarily in the US oh yeah well um I think I mentioned Paramount Gold last time and that stock I think at the time it was probably trading around 30 cents it's it's at 40 42 cents it it did get as high as 50 cents they are um in the waiting period now just waiting to hear on um a federal permit to do their Grassy Mountain mine in in it's basically South Southern Oregon I can't remember if it's tilted on the east side or the west side but um they' they they've got a state permit they've got County permit they've got community support um that they're basically they're in the period now with the feds where uh it's let's just say they're probably drafting the permits and it takes time it's Federal bureaucracy right takes about 12 months 12 to 18 months which would I mean I think they're expecting to hear a positive decision on the permit like first or second quarter of 2025 and so um market cap of Paramount right now trying to think how many shares they've got outstanding let's call it 60 million 40 cents so I mean you're looking at a ridiculously low market cap for a company that'll probably be producing 50 to 60,000 ounces a gold by I don't know late 2026 something like that so um I I think Paramount is and I'm not saying that it's not risk-free you know because they you know you still have to actually get the permit issued and people look at Oregon and say oh no that's tree uggers well that's actually not true once you get west of Eugene and Portland Oregon is actually a pretty conservative state so and they need the jobs in this area um and I think what will happen is is once they get permitted and you know make a positive construction decision I wouldn't be surprised to see a midcap mining company just take it over so that you know to add ounces and add production to the profile of of a midcap producer and they've got another project that's in Nevada that they'll probably spin off and start the process over again Dave I got to point out here you're in Asia with your Mining stock Investments you're in Africa you're in South America you're in Central America you're in North America you're all over the place huh and are you in Europe too with some of your Investments you know what believe it or not I I don't I don't really care for the the the mine projects that are over in Scandinavia and there's one there's there's that company Name Escapes me right now that has a a very very good-look project in Ireland and I've been meaning to take a look at it but I mean the stock hasn't done anything for a long time so I'm not in a hurry to take a look at it however I will say us gold which has a gold copper mine project in Wyoming and they're full they're fully permitted now they just in um they they got their uh a 2019 show sponsor for the history Buffs of this show us go Court yeah oh okay yeah so you you know the project you know they're fully permitted they waiting for one I forget which one it is air quality or something it's going to happen they they'll get it any day now the CEO George B who's who's he's awesome and he you know he he worked at baric at one point I mean he's incredibly experienced in the in the in the industry is um so he said that I was like so you know why why don't you start you know raising the money to build the M he goes well we just we got to get the feasibility study out we just got to get that last permit which it'll happen um and he said if I had the bank roll that I had at baric I'd have this mine operating by early 2025 but unfortunately since it's a junior and no one really cares about Juniors right now he's gota he's got to wait to raise the financing and then probably start construction in 2025 but I mean as you know the stock I think there's on a fully diluted basis it's got something like 16 million shares outstanding on the NASDAQ too right it is and then there's actually options that trade on it I didn't even realize that until about a month ago like what there's call options on US Gold um so yeah so the Stock's trading at a little bit over a $60 million market cap and based on the production profile and based on if you just take the PFS that's the existing PFS and discount it back and I discount it back at and these numbers are off the top of my head but they're pretty close I discount it back at5 % over two years because I'm assuming they'll be operating a mine in two years from now um so if you take that I call it a a real hard and conservative MPV it's still over 300 million for a company that's trading at a $60 million Market Gap ridiculously cheap especially since it's almost fully drisk now they just have execution risk but there's another aspect to it because they they also um they're Excavating aggregate which they're going to be able to use when they construct their mine but they're producing enough of it that they're going to be able to sell that Aggregate and there's you know living like Martin marinetta right yep exactly so in Martin marinetta is probably about 40 minutes south of where I live the the um CK mine is probably about 2 hours north of where I live so it's it's not like it's going to cost them a lot of money to transport the aggregate to Natural buyers that are that live along the uh I25 Denver Wyoming Corridor and that's I mean is that credit built into the current PFS Dave I didn't it's not built into it they they didn't they didn't want to make it part of the permitting process because they just wanted to keep it simple but it it once you know once they've got everything set they're they'll be able to start selling that aggregate probably next year and I can't remember the numbers that he threw out at me just kind of back in the envelope but I mean it adds a couple hundred million at least to the value of the mine just from the aggregate sales any other uh Juniors before we uh conclude that you'd like to just just one more quick one and I don't know if I mentioned this on on your podcast in the past called Angus gold yep we talked about a couple years ago yeah yeah okay so and this is why that that's gonna require a this is Canada now right we're going up to Canada going up to Canada we've been all over the world people's favorite jurisdiction other than Nevada and that's why those stocks are all overvalued relative to the ones that I've been talking about I mean if you understand the jurisdictional risk in Nicaragua or West Africa you real or Brazil or Bolivia like new Pacific you realize oh they're really not as risky as as the reputation is you know so um but anyway Angus is developing a project in um it's it's called the it's got a funny name it's called like the Wawa the wawwa district or whatever um and it's I'm assuming it's probably a natives people word up there but um so their their project is adjacent to the north to West dome's Eagle River mine and West just took an 11% stake in in Angus and it it looks like they may actually have three at least three zones of intense very high-grade near surface mineralization on the project one is called abandoned iron formation which is numot has a banded iron formation M the Name Escapes me right now in Canada that is just a it gushes cash flow um and then they've got uh they've actually got there was an existing resource on on the project when the current management took it over um and and until recently the management was allergic to issuing warrants but because of the way the market and the last financing they had to they had to attach warrants to it um but it it it's looking like again this is they don't have a a an updated resource estimate out yet I think the plan is to try and put one out at the end of the year um and there the the drilling on the banded iron formation is still somewhat preliminary but it looks like it could be big um and then there's another area of mineralization that is literally just right on top of West dome's prop property um that they recently discovered that looks like it's going to be a pretty highr prolific resource and then the existing resource that's on the on the property is going to expand again this one kind of feels to me like a potential 3 to 5 million ounce deposit so I mean you're talking about a company that has $22 million US market cap it also trades on the TSX Venture um and I think with patience and the management um and the and the founders of the company have have been through this process before successfully um it it just kind of feels to me like this this could be a five to 10 bagger if you're patient it's probably going to take two to three to four years to realize that but um relative to some of the other earlier stage projects that are out there I think this one's relatively low risk and like I said what I mean West Dome is is the most obvious company to take it over and I think West Dome is going to have processing capacity at its Eagle mind which would make sense for them to just they wouldn't even have to build a processing facility or they could make the existing one larger um but Alamos also operates it's its Island mine which is an extremely profitable mine is um not that far to the east of where angus's project is so the Golden Sky project so um and this one also is one of my larger Holdings and again I you know just word of caution probably going to require patients they don't spend money on marketing they put every every dollar they raise goes into the ground which and I respect that and management owns almost 40% of the stock which is another one of my important criteria when I'm looking at Juniors do you have exposure to Australia in any companies I don't I I mean if you own barck or numont you have exposure to Australia right one of the things that I've noticed about Australian based Minds is they're prolific share issuers and so and you know a lot of the companies that operate that are that are based in Australia they don't necessarily trade on us exchanges so um I mean yeah I know it's a great mining jurisdiction uh if you want if you want undervalued exposure to Australia buy lion one lion one medals they're they're actually in Fiji but at some point Barracks could probably going to take them over and Dave The Mining stock Journal let listeners know again what they can find with that please sure investment resource Dynam investment research Dynamics is my website and there's a link on there and it it explains what comes with The Mining stock Journal um at at some point I'm probably going to raise the subscription rate on it I I mean I it's funny because I have existing subscribers who are like I don't understand why you don't have a higher you know a higher uh subscription price for this 20 bucks a month is what it was historically right Dave I remember that's what it's been yeah yeah yeah you you got to keep up with CPI man come on I know I know I mean part part track the gdxj or something part of the reason and actually the low price probably deters some people from subscribing they're probably like oh well how good can this be if it's only 20 bucks a month um so but part of the reason why I started the the newsletter back in early 2016 was because it forces me to look at ideas for myself right and I like to make money on my own ideas so that's part of it but yeah I I think I'm going to have to raise the the subscription rate here you know probably before the end of the year okay all right so go to Dave's website investment research dynamics.com to check that out Dave always appreciate talking to you thank you for sharing a lot of your Investments and the thesis behind your Investments really appreciate it thanks for having me on Bill [Music]