Latest / SILVER / GOLD / $UFD Meme Coin Investing & Global Economics / **SILVER & Gold Price** You Best PAY ATTENTION to This 🚨 (Precious Metals Mining Stocks Also)

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**SILVER & Gold Price** You Best PAY ATTENTION to This 🚨 (Precious Metals Mining Stocks Also) · SILVER / GOLD / $UFD Meme Coin Investing & Global Economics

0:03
What's driving the big rally in precious metals prices and is it
0:07
set to continue? Today, we're joined by two
0:10
experts in the field, Jamie Carrasco from Harbourfront
0:14
Wealth Management and Dan Wilton.
0:16
He's the CEO of First Mining Gold.
0:20
Both of them have decades of experience in the precious metal
0:23
sector and analyzing precious metal mining stocks.
0:27
Dan and Jamie, welcome to Ron's Basement.
0:31
Thank you for having me again. Thanks, Ron.
0:32
It's a pleasure to be back in the basement.
0:34
Yeah. Well, this is going to be a
0:35
great conversation. I thought we would start talking
0:38
about kind of the macro factors that are affecting the gold and
0:42
silver prices and then narrow it down and talk about what's going
0:46
on, you know, is the smart money right now taking a look at the
0:50
precious metal mining stock. So whoever wants to kick us off,
0:53
what's behind this big move that we're seeing in gold and silver
0:57
over the last six months to a year?
0:59
Well, let me, let me start on this more on the macro because I
1:02
don't know how smart the money is right now considering that
1:05
99% of Western wealth is still sitting on outside of the
1:11
sector. That is the best hedge
1:14
throughout history for the times and periods that we're going
1:17
through. I think it's not being very
1:19
smart right now. You know, the 1% that are in
1:22
like us were at first we were seen as crazy, but now we're
1:27
actually looking at the benefit of being down the yellow brick
1:30
road, as the old allegory goes, especially wearing silver
1:34
slippers. As we move down this the, the
1:38
again, you know, when I look at, at precious metals, I am not a,
1:43
a gold bug. I am a bond bear.
1:45
My, I started my, my, my years in the, in the practice being
1:48
taught the bond market by the last generation of bond traders
1:51
who have worked under a gold standard where gold was traded
1:54
ahead of U.S. dollars, ahead of every currency on the bond test.
1:59
And that's something that was, you know, smacked into the back
2:02
of my head by my old mentors at the bond desk.
2:06
And I think that's the big issue.
2:07
People have to be looking at what's going on with interest
2:09
rate because the 80s are replaying, but nobody has
2:12
noticed yet. And what's important there is to
2:14
look at the fact that on the same day that the long 30 year
2:18
treasury hit .74 talking about below 1% point 74 gold hit that
2:25
temporary low in 2020 or whenever it was at 1450 since
2:31
then. And now we're looking back at
2:33
.740 my how low that was even though we just crossed 5%.
2:38
But think about this .74, the first double gets us to
2:42
1.1.41.5. Next double, 3% we're heading
2:50
for the third double. And people haven't yet figured
2:52
out that this is about interest rates rising, about credit
2:56
destroying itself. And gold is money.
3:00
All else is credit for 4000 years.
3:02
We're here you go. Now we're sitting at $3300 gold
3:06
and yields have just crossed 5%. I think they're going to
3:09
continue rising. Maybe by the time we get to the
3:12
next double at 10%, they'll notice that gold is rising, but
3:17
it's going to cost a lot more in Canadian dollars. 4700.
3:20
Now, why is that important? Because I think 10% is just on
3:24
the way to wherever we're going. I say that simply because in the
3:28
1980s, to undo the debt bubble that we had then rates had to go
3:32
up to 18%. We're only at 5, and this time
3:36
we have exponentially more debts than we did that.
3:39
So how high do we go? I don't know.
3:41
But I'm very happy watching this whole show from the vantage
3:44
point of the Yellow Brick Road because all of our holdings are
3:47
doing well. Those companies that we were
3:50
adding like crazy people over the last three years, well,
3:53
they're just starting to build. When do I take profits?
3:56
You know, I think, I think we have a long way to go.
4:00
I'm more invested in silver. I'm one of the not only am I in
4:03
the 1% that is in in the sector, but I'm also over weighing
4:09
silver. Why?
4:11
Because of the gold silver ratio.
4:12
The gold silver ratio is set by nature, not by some bankers whim
4:18
of where the price should be. And that that bankers whim of
4:21
where the price should be is based on credit.
4:23
And that credit is getting more and more expensive to maintain
4:27
the price mechanism. And so I've always said that
4:29
when silver finally and pegs, it'll be the signal that they're
4:32
losing control of the, of the, of the credit cycle.
4:35
And that's what's happening. That's why silver's finally
4:38
unpeggy. So let's talk about silver for a
4:40
second. The gold silver ratio, which is
4:43
set by nature is the amount of silver that we pull out of the
4:46
ground for every ton of war that we pull out 1 to 1 to 1516.
4:52
Keep new Meyer first Majestic that we all know says about 7:00
4:56
to 1:00. Let's keep it about 20 to one.
4:59
Well, that means that the price of silver got down to 100 to
5:02
one. That was the opportunity and
5:04
that's why I was adding not only physical silver, but also the
5:07
producers that are coming behind because I think that's, that's
5:11
the, the, the, the, the biggest wealth transfer that we have
5:15
seen for a generation. And those that have been able to
5:18
take advantage and are getting prepared properly are going to
5:21
do very well. Now, let's talk about this for a
5:23
second, because one of the things that I'm, I'm looking at
5:27
is you got all of these technical guys saying, you know,
5:30
worrying about price. I keep saying, forget about
5:33
price, worry about your allocation.
5:35
How much of A percentage in relation to your net worth are
5:39
you allocated in the sector to protect from the destruction of
5:43
purchasing power loss? One of the problems I see is
5:46
that finally people are starting to notice, wait a minute, gold's
5:49
going up. But you know what?
5:50
The market's still at 42,000, right?
5:52
So why am I going to worry? Well, the problem with interest
5:56
rates is like boiling frogs. By the time the water gets too
5:59
hot, it's too late. Well, I would say that 5% and
6:03
then what it's doing to the housing sector, what it's doing
6:05
to everything, It's already a bit too late for people to start
6:08
preparing. But by the same token, the cost
6:11
of the hedges is getting more expensive.
6:13
It's funny, I just posted this morning because I this morning
6:16
the the my last silver squeeze came.
6:18
I've been buying the same amount of dollar wise every month to
6:22
put away into silver for a number of years since my years
6:26
at Scotiabank. And I just, and it's funny
6:28
because I realized how literal it's buying because I happen to
6:32
have received some Scotiabank rounds.
6:34
Scotiabank hasn't hasn't been a bullion bank for a couple of
6:37
years. They stopped making those rounds
6:38
a number of years ago. So what it meant was that
6:41
somebody had sold that round to somebody at the Mint and then it
6:45
came to me. But then all of a sudden I
6:47
realized, wait a minute, this is nothing in relation what I was
6:50
buying a couple of years ago. Why?
6:52
Because silver in Canadian dollars is at 4:40, almost 46
6:56
bucks, $47. When I was buying it, it was at
6:59
about 10 to $15.00. So, so the price is going
7:03
higher. It's not that the price is going
7:05
higher, guys, it's that the Canadian dollars losing value.
7:08
When I was doing that, we were at par.
7:10
So an ounce of of of gold, if we were still at par would be 3300,
7:14
while an ounce of gold now is 4700.
7:17
That's a big ticket item for one ounce.
7:20
On the same token, a couple of weeks ago we could buy 100
7:23
ounces of silver for that amount.
7:25
Now it's starting to come back because the gold, silver ratio
7:28
is going down. So bottom line is the hedges are
7:31
getting more expensive. The frogs haven't noticed yet
7:34
that the water's boiling, but when they finally do, are they
7:38
going to be able to be able to afford anything?
7:40
I keep saying look at silver, look at the producers.
7:42
They're still cheap, but they're going to move fast and gold is
7:46
going to get more expensive. Now the real question is when do
7:49
I take profits? When things return to some level
7:52
of equilibrium. When the gold silver ratio
7:54
returns to some level of equilibrium, I will move out of
7:56
my silver companies. But I think we're far from it.
7:59
I'm not going to worry about what the technical guys are
8:02
saying in terms of in and out because what has that achieved?
8:05
99% of the money? Still worried about price
8:08
instead of allocation. I'm going to keep watching this
8:10
show from the silver, from from from the vantage point of the
8:13
yellow brick road, holding onto my silver.
8:17
I'm open for questions, boys. Go ahead, Dan.
8:21
Dan, do you have any thoughts on what you're saying?
8:24
I mean. I'd like to thank the sponsor of
8:27
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8:30
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8:36
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8:40
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8:49
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8:53
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8:58
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9:00
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9:03
sponsoring Ron's basement and sponsoring this video.
9:07
Yeah. And the from a macro
9:08
perspective, I think Jamie articulates it incredibly well.
9:13
You know, I've, I, I tend to look at it over cycles and we've
9:19
always talked about this and Jamie and I've talked about this
9:22
in the past. Like I kind of think of where
9:26
are we in a cycle and what can we expect in terms of kind of a,
9:30
a through to peak rally and just go back and look in history.
9:34
You know, the through to peak really in the last cycle, which
9:38
was in the 2000s ending in, in 2011 would have been $260.00 an
9:45
ounce to $1900 an ounce, right? Like you were you're.
9:48
Talking silver. No, this is gold.
9:52
OK. This is gold.
9:53
Yeah. So you know, you're more than 6X
9:57
from the through to the peak. This gold rally, let's, let's
10:02
say generously that will track this, you know, market back to
10:06
2015 when you had the gold price down to around a, you know,
10:12
1050, something like that for a brief period of time.
10:17
You know, we've had a couple of rallies up, but nothing like
10:20
this breakout that we've seen this year.
10:22
So we're now, let's say we're three and a bit X up on the
10:26
real, you know, through to peak. Is there any reason why we can't
10:31
see another, you know, 3 or 4X in the gold price in, in the not
10:36
too distant future, right? Like I think when you look at
10:39
the at at that last gold rally, you also see how fast it
10:44
accelerates in that last stage. So but the only way that you
10:49
really benefit from that is being into it early, right?
10:53
Like that's you have to have been in the game.
10:56
And that's where I think Jamie makes some really interesting
10:58
points about, you know, it's it's an allocation game here
11:02
pretty soon, like if you don't have it, it's going to become
11:05
very difficult to get unobtainable, unobtain,
11:08
unobtainium. Yeah, exactly.
11:11
But but you know, I think that's where particularly with silver,
11:16
you know, gold always has. There is, there is a supply of
11:21
gold, there's an annual supply of gold.
11:23
But every ounce of gold that's ever been made is by and large,
11:26
you know, it's not consumed in the same way that silver is as
11:30
an industrial mineral to the same degree.
11:33
And that's where, you know, I think and spent a lot of time
11:37
with our friend Mr. Newmeyer and talking about supply demand of
11:40
silver, just the fundamentals where you've got this real
11:45
supply deficit that's coming in silver, I think is it's, it's
11:50
where, you know, the difference is I think in gold, you, you're
11:54
competing against different people for the same thing, which
11:58
is they're holding it as, as you know, an investment allocation
12:02
largely. And they'll sell it to you if,
12:05
if people's views on that change, if you're buying silver
12:09
to put in electric vehicles or iPhones, like you don't have an
12:14
alternative to that right now and you're not going to have an
12:17
alternative to it at any time soon.
12:18
So that's where I think that supply crunch, when it really
12:22
hits and it feels like it might be starting, That's where you
12:25
see this gold silver ratio move from 100, which in my career is,
12:31
you know, I've been doing this for 30 years.
12:33
I can't really remember 100 gold silver ratio before.
12:37
Like that's got to be several standard deviations away from
12:41
the mean, but you can see it pushed to to 20, right?
12:46
And that's where, you know, if you think the gold price is
12:49
going up and I do and you think that the gold, silver ratio is
12:53
going to adjust and potentially overcorrect due to the relative
12:57
scarcity of the metal and that industrial nature of silver
13:02
really contributes to that. I think silver could be very,
13:05
very well poised for, you know, the kind of edifying explosive
13:09
returns. Let let me add some points
13:11
because you made some, some really good points on, on, on,
13:14
on the historical aspect of this.
13:15
And, and one of the things that I keep saying is personally, I
13:19
don't think I'm going to take any, any profits off the table
13:21
on my silver until we see at least a 40 to 1 silver ratio,
13:24
which is which is still very conservative as to where we're
13:28
going. That's the first point.
13:30
Second point that we have to understand is that, you know,
13:33
I've been calling this move in gold and silver for a long time
13:37
only based on the fact that if you look at history, we are at
13:41
the end of a monetary system, which I think is becoming pretty
13:46
clear that we are going back to an asset, back to away from the
13:51
Fiat system and back to some money because it's the only way
13:53
that they can repay debts is to devalue them.
13:56
You know, Scott Percent already said that they want to they want
13:59
to adjust the asset side of the Ledger.
14:01
Well, there's only one thing on the asset side of any
14:03
government's Ledger and they've been buying it like crazy.
14:07
Most people haven't noticed that central banks have been buying
14:10
crate gold like crazy for the last couple of years and they're
14:12
taking it away. So why is that important?
14:15
Because by the time gold gets to that silver gets to the 40 to 1
14:19
gold silver ratio, where's gold going to be if we are heading
14:22
for a, for a, for an adjustment on the asset side of the Ledger?
14:26
So, so that's why I'm not touching anything.
14:28
I think the win is clearly our backs to those that have already
14:31
built those allocations. I'm going to have a massive
14:34
fight with compliance because the value of those allocations
14:38
is going to get bigger and bigger and bigger as a
14:40
percentage of the portfolio. And I'm going to want to adjust
14:46
the the the size as it grows because that's a wealth
14:49
transfer. But where are we going is the
14:51
question right? Like if you do the math and you
14:54
look at Judy Shelton, which most people don't know who she is,
14:57
but she's an important player in this because she was the person
15:00
that Trump nominated to replace Janet Yellen when she stepped
15:05
down and Powell steps in. Well, her proposal is to do a
15:08
5-5 trillion 30 year bond backed by the US gold reserves, which
15:14
is in a way exactly what Roosevelt does in 1933 to reset
15:18
a brand new pool of money. If you do the math, though,
15:21
we're looking at about $20,000 silver, sorry, gold right to to
15:26
to achieve that evaluation of the Fiat system.
15:30
So between just crossing 3300 and 20,000, there's plenty of
15:36
room to to benefit from what I've been saying all along that
15:40
when I look at my holdings in the sector, you know, I have
15:44
some that have already gotten been taken away, like Max Silver
15:47
just got, just got just got bought out.
15:50
There's been a number of buyouts, but I look at, for
15:54
example, something like an Ethnico Eagle, like a longboard
15:57
of a wave that we can ride for a long time.
15:59
Some of the smaller ones are going to get taken out along the
16:02
way, but I'm going to manage my position to be able to benefit
16:06
from that wealth transfer. Because all we're witnessing is
16:10
these trillions and trillions of dollars that are sitting in the
16:13
Fiat system, where in order to rebuild the monetary system, we
16:17
have to take all the value of that and transfer it back to a
16:22
sound money system. And the value shift that always
16:27
occur as it did in 33, as it has occurred throughout history,
16:30
It's always the same replay, but that creates massive
16:33
opportunities. And the biggest 1 is in the
16:35
miners. Now, one last point that I want
16:38
to make here that both Eagle Mcgriers of gold money have made
16:45
and the same point that Rick Rule had made.
16:49
One was looking at it from the asset side of the equation, the
16:53
other one from the dividend side of the equation.
16:55
And this is interesting because this is a repeatable pattern
16:58
that also happened in 1933. In 1933, before the beginning of
17:03
the shift, if you had had $10,000 invested in Homestead
17:07
Mining by the end of Bretton Woods, by the time that Bretton
17:12
Woods get placed, which was almost 18 years, that $10,000
17:16
turned into $100,000 paying you $10,000 in dividend, right?
17:23
So Rick Rule made the same point about how he had seen some
17:26
stocks that he had invested $10,000 turning into $100,000 by
17:31
the height of the 1980s. Egon made the same point by
17:35
looking at dividend that the same dollar amount invested had
17:38
turned into dividend cash flow. Now why is that occurring?
17:41
It's important to understand because what is happening is
17:44
that it's the dividend payment of the producers that are also
17:48
rebuilding the monetary system because gold is money, silver's
17:52
money. Now when it comes to silver, we
17:54
have that substitution effect that we're starting to see
17:57
because people are figuring out those that go to Costco and can
18:00
only buy at Costco, their physical gold and silver are
18:03
realizing, wait a minute, for for 3300, for actually 3700
18:08
bucks, USI can buy one ounce of gold or almost 100 ounces of
18:13
silver. So they're buying more silver,
18:15
silver selling out quicker. So the substitutions already
18:18
taken place. So everything is playing out.
18:21
The question is where are we going down with this?
18:23
I think we're just getting going.
18:25
And you know, it's about finding good quality assets that we can
18:28
ride along the way going forward.
18:31
And as investors, that's how we're going to save ourselves.
18:34
And, and, and to some extent that's my, my life replaying
18:37
because it's the same monetary adjustment that occurs in Latin
18:40
America and Chile and Argentina, Venezuela last, but this time
18:44
it's global. The whole system is rebuilding.
18:47
So all I'm doing is taking all of my experience both
18:50
professionally and through history and allowing the, the
18:54
system to rebuild around me. And one of the things as well as
18:58
Canadians that we clearly have to understand our government
19:01
doesn't have any gold in, in backing our currency.
19:05
So we're in a big, even bigger, bigger trouble.
19:08
One of the things I do advise my Canadian clients especially is
19:12
an understanding that the they have to build their own gold
19:16
standard to protect their savings.
19:19
And that's so important because at first everybody was kind of a
19:23
little bit scared. In the last three years, we're
19:25
not moving anywhere that we're seeing gold and silver run up in
19:28
price, but the companies weren't yet producing the yield.
19:32
But now all of a sudden, all the winds are our backs and
19:35
everything's moving proper. So it's a beautiful feeling now
19:38
that we've done the hard work. And by the way, one last point,
19:41
and then I'm going to just drop it.
19:44
Think about how hard it's going to be for somebody with
19:48
$5,000,000 and 0 allocation because our advisor has just
19:52
been parking assets in the sector.
19:55
I'm advising 30% because 20% is the very minimum you need to
19:59
protect your savings. Another 10% to benefit and be
20:03
able to speculate, but if you have a $5,000,000 account, 30%
20:09
of 5 billion is 1 1/2 million bucks.
20:12
Most advisors are not going to have the components to actually
20:16
put that money to work or the knowledge on how to put it to
20:19
work because they're going to go buy some ETF or something that's
20:22
paper based. The challenges going forward is
20:25
going to be the future contracts that are creating all of these
20:28
products that are all over the place.
20:30
Those are IOU's by financial institutions that might be in
20:33
trouble. How do you properly position a
20:37
portfolio in the assets in the stocks?
20:40
Stock picking, which again is another part of the cycle
20:43
rebuilding because don't forget that the 70s and 90s, we had to
20:47
learn how to stock pick again. That's what Merrill Lynch
20:50
surges. That's where Fidelity, who was
20:52
the white hair guy at Fidelity, Peter Lynch, Peter Lynch,
20:57
Remember, it's all about stock picking because through that
21:00
inflationary period, not everything works.
21:02
You have to become a stock picker again.
21:04
And that's what missing in my in my field, that one of the
21:09
problems that we have right now with the advisory is that
21:12
they've been easily just parking assets in pools that have moved
21:16
very well. But that wind is trying and now
21:18
you have to learn how to stock pick again.
21:21
Yeah, Yeah. Jamie, I have one question for
21:23
you and then Dan, I want to hear from you about first mining
21:26
gold. But Jamie, you mentioned
21:27
something earlier you the word unobtainium as you referred to
21:32
gold and silver. And I want to get your, your
21:34
opinion on this. When I look at the fact that
21:37
what 1% of the world's financial assets are invested into
21:42
precious metals right now. And I think that that like we
21:46
haven't even begun to really see a material move of people coming
21:52
into the sector that when there is a move like going from 1% to
21:57
let's say 5% is that is that even possible?
22:01
Like is there enough gold and silver out there that's
22:04
available like that? That would be like a 5X move in
22:08
terms of assets. I mean, I guess price fixes
22:10
everything, but it just feels like we're in a very but and you
22:14
guys both mentioned this like we're early.
22:17
I think all three of us were early into this sector, but that
22:20
we could very well find ourselves in a very advantageous
22:24
situation in the future. I think it's important to
22:26
understand that, that it's the exponential effect of how prices
22:31
will rise that is important because, yeah, right now we have
22:36
silver at 36 bucks. It cut through butter 35.
22:39
We only saw it for one day and if you got lucky you could have
22:43
picked it up at 35. But how quickly do the prices
22:46
accelerate going up is going to be the question, right?
22:49
I know that these things always accelerate as people finally
22:54
wake up. And I think it's up to each of
22:57
us to, to, to, to make that decision on how do we cut
23:01
quickly and how to, how to shape up.
23:03
That's one of the expertises of my practice that I'm one of the
23:05
few that has been working in the sector for such a long time that
23:09
I know how to cut very quickly and how to get people properly
23:13
positioned. But you're going to have to take
23:15
a bit, a bit of a blind, blind faith, step into the abyss and
23:19
just jump into it, right? Because but, but, but that abyss
23:22
is getting further and further away from investors, right?
23:25
So an obtainium in the fact that the price will always be there
23:28
is whether your money will be able to buy you the, the level
23:32
of insurance that you actually need is the question, right?
23:35
Be it through the producers, be it through physical, physical
23:38
silver or being through physical gold.
23:40
Now, I do advise that you've got to have a little bit of each
23:43
within your, within your savings, right?
23:46
How to position yourself is important because there's a lot
23:49
of, there's a lot of minefield. It's a massive minefield when
23:52
you look at at how a lot of the products are being structured.
23:55
And I think that's another hot potato that we haven't even got
23:59
to yet because investors things haven't started growing up, but
24:03
you. Do see it?
24:04
You know, when you look at at some of the derivative books of
24:07
some of these banks, they have way more derivatives than the
24:10
asset base that's backing it. Two quadrillion is a lot of
24:13
money. A trillion is a lot of money.
24:15
You know, it's funny, when Elon Musk stepped down, I kind of
24:18
made a point of saying, well, maybe you figured out that
24:21
what's the point of saving a billion here, a billion there
24:24
when interest rate expenses growing at a trillion a clip?
24:27
Well, a billion and a trillion are a big difference.
24:29
And don't forget that in O 8, we weren't even talking trillions.
24:33
In O 8, the issues were billion based.
24:36
Now we're talking trillions. Right.
24:38
That's a lot of money, Jamie. The rescue in O 8, the
24:42
unprecedented pumping of, of liquidity into the system at the
24:49
end of what was, was almost a systemic collapse of the US
24:53
market was $1.2 trillion and that's and that was unheard of.
24:59
That was unprecedented. And now 1.2 trillion is like the
25:04
run rate deficit for the year if we're if we're cutting back.
25:08
Daily. What are you talking about?
25:10
It's daily. Hold on a second.
25:12
Hold on a second. Yeah.
25:13
You're being too kind and. Another important point of that
25:17
is that that 1.2 went through banks around the world.
25:20
Yeah, This time around, is Trump even going to allow any bailout
25:24
of international banks? I, I think this time around,
25:28
everybody has to run for it. For, for is running for the
25:30
hills and worrying about themselves because this is too
25:33
big, right? And I, and I think that's what
25:35
clients have to wake up and realize that, hey, it's time to
25:38
start thinking for yourself and how do you protect yourself?
25:42
Interesting. You mentioned being a stock
25:45
picker earlier Jamie, that we're moving into this in this
25:49
environment where that's going to become more important.
25:52
And you know, kind of given everything we've talked about
25:54
what what what seems like a very bright future for the value, the
25:59
prices of precious metals. I'm wondering, Dan, I'm a
26:03
stockholder in your company first mining gold.
26:06
Your, your company has two big multi million ounce projects and
26:11
a third million ounce project in Canada.
26:14
Where do you see us right now in terms of, let's say, if we look
26:19
at development stage companies? Is it, is it, are we very early?
26:24
It feels to me that we're still very early.
26:26
And when I hear Jamie talking about what, you know, this, the
26:29
yellow brick road, you know, I think there's a lot of people
26:32
who are starting to focus on the metals themselves, but it feels
26:37
like there's even potentially more to gain from some of the,
26:40
the, the junior and development stage companies.
26:43
Any any commentary on that that you can share with us?
26:45
Yeah, absolutely. I mean, from our perspective,
26:49
look at it in a couple of different ways.
26:51
Number one, in the industry, you just need to understand that the
26:56
producers, as Jamie has said, you know, on these high prices
27:00
are generating record levels of free cash flow, they're paying
27:04
out record levels of dividends that if you believe the gold
27:06
price is going higher, that is going to continue.
27:09
And so you know a lot of those, you've seen 234X return in some
27:15
of the producers already. There's a lot of developers
27:18
though, So to take a step back, well, most of those producers
27:23
have not added to their productive capacity in recent
27:27
memory. And a lot of that is, you know,
27:30
they sort of shut down exploration budgets in 2011,
27:35
2012 really lost the capability to do meaningful greenfields
27:40
exploration because they always had this, you know, these set of
27:45
companies, junior exploration companies that they didn't have
27:48
to fund the real risk capital. And the, and, and the industry
27:52
wisdom was that, you know, the exploration sector will spend
27:56
$100 and 98% of that will be wasted.
28:01
And so if we have to pay 10X on the $2.00 that find something,
28:05
then you know, we're, we're better off.
28:09
The reality is it's just that's not working.
28:13
You're starting to see, and I think you're going to start see
28:16
more of panic amongst producers on reserve declines.
28:22
So they've been able to offset that recognizing that producers
28:26
can drop their cut off grades at higher gold prices and magically
28:31
just show more gold that's there.
28:33
And the reality is more gold becomes economic as the price
28:36
gets higher inside an existing deposit for a while.
28:39
But if you don't find more in the, the deposit's not growing
28:43
and like mine shut down, right because you run out of ore
28:47
geologically, that's where I think we're starting to see some
28:53
of that. It's not quite panic yet, but a
28:56
real recognition that there's a bunch of three and four asset
29:00
mining, gold mining companies that in five to seven years are
29:04
maybe going to have one asset that's still producing because
29:08
they're just not able to. You can't just flip a switch and
29:11
and immediately, you know, grow through exploration.
29:14
So what that means is there's been this long-suffering cohort
29:19
and I'd put first mining in that camp of companies that have
29:23
advanced these development projects in really difficult
29:26
times when they haven't had a lot of access to capital.
29:29
And if you've been able to move these projects forward in that
29:32
time, well, we're coming to a point where let's say there's,
29:36
you know, 20 companies that need to show reserve and resource
29:40
growth. They all, you know, they all
29:43
want to be putting that money into Tier 1 jurisdictions.
29:48
The number of Tier 1 jurisdictions is shrinking every
29:51
day. You know, not to kind of pile on
29:54
on our friends in Ecuador, but I know it's, it'll be a fun one
29:58
for Jamie who follows a lot of things in South America
30:01
reasonably closely. But this time it's, it was
30:03
totally different with Ecuador, right?
30:05
Like it's, you know, they built fruit of Del Norte, total world
30:08
class mine. You know, there's lots of good
30:12
exploration development going on in Ecuador.
30:13
Well, lo and behold, there's now a new tax that's come in that's
30:18
going to be, I think, pretty punitive, particularly to the
30:21
exploration development sector there.
30:23
So they all want to find great assets in Tier 1 jurisdictions.
30:29
And you know, that's something where we're seeing a lot more
30:32
traction these days, in large part because we, and it's a very
30:36
small group of us and others who've been able to move these
30:40
projects forward in tough times. But we're, you know, we're now
30:43
sitting at a time, I think if we're not at the point where the
30:46
industry needs them the most today.
30:49
I think that point is absolutely insight.
30:52
And So what does that translate into it, translate into
30:56
valuation of companies like ours where, you know, you could have
31:00
bought first mine and gold, it's 7 bucks an ounce two months ago.
31:04
Today, you know, it's 10 or 11 bucks an ounce.
31:09
It's still a long way to go to 100 bucks an ounce, which is
31:12
where these development projects should trade.
31:14
So you know, the, the flip side of that is though, you've
31:17
probably, you know, missed out on, on the first, you know,
31:22
maybe the first doubling of it almost doesn't mean that
31:26
there's, you know, there's not another 9X coming off that
31:31
initial 1. So if it goes up 5X from here,
31:33
it still looks like it's a pretty, you know, a a pretty
31:37
good bet. Can I add to this actually,
31:41
because you made some really good points.
31:44
First of all, $11.00 an ounce when I look at developers when
31:51
building a portfolio and I've been formally started building
31:54
my portfolios in 2015 when I was at Scotiabank.
31:56
That's when I structured my first my, the portfolios that I
31:59
managed now. But I've been investing in
32:01
precious metals. Man, I can remember Bri X back
32:04
at Burns Fry and that ran up by the keeper and the companies
32:08
that took us to that top of the market.
32:10
Now when I look at a developer, I look at buying reserves on the
32:16
ground knowing that eventually they will get taken out.
32:20
Actually, in 2015 when I set up My Portfolio, I actually added
32:25
Detour Lake because I had bought Detour Lake a couple of years
32:28
prior before they drained the lake, which I find very similar
32:31
to what you guys are doing when you're at that stage where prior
32:34
to, to, to, to, to, to, to draining the lake, which
32:40
eventually will have to be done or diverted.
32:42
Now, why is that important? Because it's the $11.00 an
32:46
ounce. Don't forget that at the height
32:48
of the cycle in 2011, while I was there, I get take, I got
32:53
taken out of a company called Prolani at about $150.00 an
32:57
ounce gold on the ground. That's how high we went.
33:00
And that was a $1900 gold. I don't think we have even seen
33:04
what we're going this time. So when I look at it, something
33:07
like first mining or any development company, when you
33:11
got to think of building a portfolio, first of all you got
33:14
to look at your senior minors with a dividend.
33:17
You mentioned Frutal and Norte. Here's a great example of
33:21
something that I've invested all along because I actually bought
33:24
it as a Radian around 2008 got out of it when Ken Ross paid a
33:30
billion dollars for the asset. That's when I said, OK, I'm out
33:34
of, I'm out of this thing because I knew that, you know,
33:37
Ken Ross, Pan American, we just batch.
33:40
But Mag, I don't want to own those companies.
33:42
To me, they're fat management companies kind of like Barrick
33:45
Goldcorp and I managed money for Barrick actually along the way,
33:48
I managed the stock option plan. But they're they're, they're, I
33:52
don't like the management they're, they're, but they're
33:54
going to fly at 3004 thousand $5000 gold anyways.
33:58
It'd be like putting lipstick. However, with Iranian, I got out
34:02
when Ken Ross spotted out. Now when the Mundines came back
34:05
in, I jumped back in. So I've been in it ever since.
34:08
And thanks to that, they also bought into food into into Filo,
34:11
which I also own. A couple of exploration plays
34:13
around that that have done very well.
34:16
But first mining. It kind of blends between the
34:19
two because they're in the process of building a mine and
34:22
there's a lot of very good quality assets out there of
34:27
reserves on the ground are ridiculous prices.
34:29
And within the portfolio, I would want the producers first,
34:33
the big boys, then the little boys between silver and gold,
34:39
right? Because that's where value is.
34:41
But then you also want that section of developers within the
34:43
portfolio, something about a company like First Mining for
34:47
Canadian investors and another, a lot of other ones is that when
34:51
companies like that issue flow through shares, which if you're
34:55
lucky enough to be able to get some, it's a perfect investment
34:58
because you're buying them and then just holding it within the
35:01
portfolio. I love being able to acquire
35:03
those and get the tax benefit as I wait for prices to come back.
35:08
But $11.00, I got to tell you from following this sect, this
35:12
sector since about 1997 on, it's ridiculous.
35:17
We're still buying assets. You're buying gold on the ground
35:20
at a crazy number. Same thing with silver on the
35:23
ground. And that's why the developers
35:25
make sense within a portfolio. How do you position them?
35:28
What percentage there? You should talk to an advisor in
35:31
terms of the percentage. But I think we have a long way
35:34
to go because silver reserves on the ground really shows how
35:37
myopic and, and, and how the money hasn't even started coming
35:43
in at all. You know, let's get over $100.00
35:46
an ounce gold on the ground, which is the number in in 2011.
35:50
Haven't right now. Yeah, plenty of upside.
35:54
At half the share price, right And and.
35:57
And what were the reserves, what were the, what were the reserves
36:00
you guys had? When did you guys start down the
36:03
down that path? How have the reserves
36:06
exponentially increased through this period?
36:08
Right. Yeah, yeah, yeah, yeah, No,
36:10
we've been, I mean, lucky to acquire those at very low prices
36:14
when a lot of that work's already been done.
36:16
So a bit of a different risk reward profile, but no, it's,
36:20
you know, we're, I think we're, we're pretty happy with kind of
36:24
where we are and very happy with the support that we've had from
36:28
our shareholders in some really tough times to be able to
36:33
continue to do the work. So that when you get to better
36:37
times, you have a project that's now, you know, one of the most
36:41
advanced with our final environmental assessment
36:44
submitted in November and, you know, targeting that EA decision
36:49
at the end of 2025, S $10.00 an ounce.
36:54
I can understand it if if those major milestones are still 15
36:59
years away and that's the reality of an early stage
37:02
discovery is you got a long runway ahead of you.
37:05
But I think if you've been able to kind of claw your way through
37:09
this, this very protracted downturn in the cycle, you know,
37:15
your time to wait is just not that long anymore.
37:18
And so, you know, I think it just means you're going to have
37:20
a much quicker opportunity to see that RE rating come in.
37:24
One other thing that I wanted to make that I just remember I made
37:27
the note because you mentioned Ecuador on the tax.
37:31
Listen, the Canadian government is going to put a tax on on
37:34
profits along the way. Everybody's going to tax the,
37:37
the big risk here is expropriation.
37:41
You know, will they expropriate it?
37:42
Well, first of all, people have to own it to be expropriated.
37:45
So I don't think expropriation is in the cards because nobody
37:48
owns it. Everybody thinks it's still a
37:50
pet rock or a barbarous relic. You know, it's just like no time
37:53
yet. However, taxes are part of the
37:56
game. My thing is, is that when I
37:59
advise clients, I say, OK, make sure you shelter as much in
38:02
there in the TFSA, right? The tax free savings account
38:06
that we have in Canada, not necessarily the RSPS, because
38:10
the RSPS you're going to get tax on the way out.
38:12
So I'd rather have it invested outside.
38:15
So part of taxes is part of the game, just like being Latin
38:20
America. That's LATAM experience at its
38:22
best. But be aware that I'd rather get
38:25
taxed when I buy an asset at $100.00 an ounce and hold it and
38:31
be taxed at $3000 an ounce on that profit from that point
38:35
forward, but be able to benefit. That's why I've been building my
38:38
positions. But I'm fully aware that yes,
38:40
eventually the government's going to come when it's share.
38:43
Because you know what even people don't understand yet that
38:46
what to me is the biggest tax is the tax they put on our wages,
38:51
right? Your labor is being taxed and
38:54
being devalued daily through inflation.
38:57
That's the, that's a stealth tax.
39:00
So, so, so to to figure out that part and be able to hedge your
39:04
portfolio to fully protect yourself from everything.
39:08
I think it's important, but that's all part of the
39:10
geopolitical all of the factors of risk that I go through when
39:14
assessing and had a had a position money.
39:18
Excellent guys. This has been great.
39:20
I want to thank both of you for joining me.
39:24
Is there anything I forgot to ask either of you that you want
39:26
to point out before we before we fare a bid farewell?
39:30
Just don't ask for gold targets. Match.
39:33
Fire match. Fire.
39:36
Wow. What I what I am going to do is
39:38
share your your respective websites.
39:41
Hold on, I'm going to pull up first mining gold here.
39:44
If people want to learn more about the company,
39:46
firstmininggold.com, you can learn all about the spring pole
39:50
and do parquet projects. And there's another project
39:53
named Cameron that also has Dan, correct me if I'm wrong, but
39:57
about 1,000,000 ounces of gold in the ground, correct.
40:00
And Jamie, see if I can pull up your profile here as well.
40:06
You should be on the screen. Yep, there's a a good picture of
40:09
Jamie. With Harbourfront Wealth
40:13
Management you can learn all about him there.
40:16
Didn't have time to ask him about his sailing and analogy,
40:19
but maybe next time, Jamie, you can tell us.
40:21
And there's an easier e-mail now.
40:23
We've set up jamieasinjaimejaime@jcwealth.ca
40:29
much easier than that long and guys, we almost.
40:33
Forgot one of the most important things?
40:35
If you want to learn more about first mining gold, you can reach
40:38
out to their Director of Investor Relations, Mr.
40:41
paul.morrispaul@firstmininggold.com. Call Paul.
40:47
Yeah, call Paul. I think Paul, all three of us
40:49
can agree, is a great guy. He is and loves to hear from his
40:53
musician. That's right.
40:57
Oh. Man, well, this has been.
40:59
Great, I feel like I'm walking down the yellow brick road now,
41:03
wearing silver slippers. Wearing silver.
41:05
I know, silver. Slippers.
41:06
Yeah, a lot. A lot of.
41:07
People don't know that. That whole movie was is kind of
41:09
based off precious metals in the it's it's, it's an allegory.
41:13
For the for the banking crisis of the late 1800s, yeah.
41:17
So the, the wizard were the bankers, the yellow brick road,
41:20
the the gold standard. Yeah, Dorothy Slipper were
41:23
silver not not read in the in the allegory in the book, the
41:28
the the scarecrow is agriculture, the Tin Man is
41:32
industry and the lion is banking.
41:36
But having been usurped by the, by the, by the wizard, Yeah.
41:42
Well, we're going to we're going to travel down this yellow brick
41:44
road together. Hopefully all three of us will
41:47
get together again sometime here in the next 2-3 months.
41:50
It's been great. And thank you guys and we'll see
41:53
you next time. That's great.
41:55
Thanks, Ron. Thanks for having me.