Do you think we have the right environment right now, fundamentally speaking, for the gold mining complex to truly lever gold?

I do, and I've bet 90% of my net worth on that thesis that when I started this eight, nine years ago, starting investing a lot of my capital in junior mining resource stage companies, I asked myself the question, If gold goes up a lot, and I've been right about that, where do you have the most leverage? It's in the junior resource companies.

That is traditionally where you see it.

So why is that the case? Well, if you look at the last bull market, gold went from 800 to about $2,000 an ounce, right? When you say the last peak, Most gold mining companies in 2011, 2012 were getting $2,000 gold for a cup of coffee.

It's these round numbers because they didn't stay there for long.

And they're all-in costs, all-in, all-in, kitchen sink included, might have been about $1,500 an ounce, $1,500.

So they had $500 margins.

So the yardstick is kind of flawed in that sense, not necessarily saying that you can't use it, but how do you actually pick the companies that could generate those outside returns i understand great is going to be a component but what are else what are the factors you are really thinking about to get the maximum torque on that ounce in the ground figure

But yeah, just tell me your thoughts since we've last spoke since Atlanta, and then tell me your thoughts really going into the second half of the year.

Yeah, I've been very vocal, Andy.

I felt like a bit of a back in the desert again, yelling, the lone wolf in the desert yelling at the market when the gold price pulled back just under $4,000 an ounce.

So, you know, in Q2, obviously, we had a lot of concern about Chairman Warsh.

He's going to hike rates.

I think the Fed fund futures almost went to 100% likelihood of a Fed fund increase.

People were talking about multiple increases.

if you can talk about that again because i think it's it's very different it's it's similar but you added to it but it's very you use it as a uh yeah well i'll let you you say it um but yeah just talk to me about your methodology when you allocate capital what you look for and and how and all of that

What is one thing that you'd want to debunk right now about just money in general, like in terms of how could people disassociate from thinking that the value they are is their net worth when really the value that they are is really their self?

Yeah, and I thought about this, and it may come across a bit disingenuous.

I don't want your viewers to view this this way because I have money, right? But I would say money will not make you happy.

Okay, so I grew up in an amazing family.

Both my parents were teachers.

You know, four kids, very modest upbringing.

Never went on a plane until I was 21 years old.

So for

And I

said, the maximum leverage you have to gold is in the micro-cap junior explorers, which I had never owned before.

I had always owned the producing companies, small mid-cap producers, senior producers, because my institutional customers wanted cash flow, they wanted balance sheets, they wanted a bit more blue-chip exposure.

I said, I've got to go down to the wild west of junior mining.

That's where the action is going to be.

And typically, we haven't seen it yet, but typically the maximum torque to a rising gold price is in the smallest companies.

So I was at home in late 2018, 2019.

Are we at, you know... 20% interest, 10% interest, or are you starting to see money pouring into the space? Are you seeing a little bit of momentum, I guess is the question.

How, when you talk about your five to 10 year horizon, do you make allowances for the different phases of growth? Or again, what are the metrics that matter when the story goes on?

Yeah, Rasmus is a great example.

I made my first investment in the company even before I became an exclusive junior mining investor in 2017.

I think I had 4,000 ounces.

I was a fund manager at the time, busy.

I liked the project, really high grade, over 10 grams, 4,000 ounces in Quebec.

So that's a really high grade project.

So Silver Crown Royalties, you're not really a royalty guy traditionally, are you?

All right

...

I discovered the stock market as a 10-year-old kid.

I was in grade four in elementary school, and there was an after-school project where one of our teachers took the time to do special activities with kids that want to learn more and, uh, she did a profile on the stock market, and I thought it was the coolest thing in the world.

I loved sports back then as a kid, and then I started reading the sports section and the business section every single day.

Bought shares in McDonald's 'cause my dad used to bring me into McDonald's once in a while.

He used to drink Labatt beer, which is a old Canadian beer.

You could have disagreements or ideas, but like is it really getting up to management or to board members to actually make any sort of a difference? Does that make sense?

Why is that?

So if you look at why gold was down, I mean, gold was down on the back of a major liquidity draw.

I guess some of the countries in that BRICS nations or the areas surrounding it start to see their currency go under pressure.

Obviously, when, when war breaks out, uncertainty goes into global markets.

Investors tend to run towards the more liquid and stable currency.

So the US dollars had a good run on the back of the war, and some of the third, uh, you know, BRIC countries have seen their currencies draw down.

You had Turkey selling gold to defend their currency.

How is that translating to the producers? Are there some interesting value arbitrages one can find?

I don't know if you want to share them from like having to start your business over or what you're able to do differently or whatever perspective of just like the importance of having those things in place for your business.

So I can give you a basically a back and forth of like a business one, right? Which business one experienced rapid, tremendous growth.

And even now business two is experiencing rapid, tremendous growth.

The difference between business one and business two is one, I didn't know what I was doing.

I just knew how to sell construction.

I understood construction.

I understood waterproofing.

But the ones that can't seem to go forward, what do you think is blocking them?

Okay.

Yeah.

So I just did a deal with McFarlane Lake Mining where, you know, Pierre Boulle is a good friend of mine.

He's a prolific mine builder.

He built Detour Lake, which is the biggest gold mine in Canada back in the day, about a million ounces a year.

This guy is extremely intelligent, and you know, we, we're good friends.

He's chairman of the board of Radisson, and uh, you know, he told me a couple years ago, he's like, "Mike, I can, I can build another mine.

What are the biggest mistakes you see retail making?

I hope to see you there.

Yeah, I have a very contrary view to that.

And I think I saw a headline today before we started to review.

I think the chance of a Fed hike by the end of the year, I just saw I hit my email like it's 100% now.

So the market's pricing and 100% chance of a Fed increase by the year end.

I think that's totally wrong.

They may hike rates.

You know,

Is there a chance that, uh, we're gonna get a miners re-rating at some point? Is it, is it going to be a factor of margins expansions from the producers or the, uh, juniors just have to hit home runs with explorers, uh, exploration and, and development and, uh, finding new deposits? Um, what, what's the play here?

Yeah, I wrote in my, uh, my weekly newsletter I send out on Saturday mornings.

I had a dinner with a major mining CEO in Montreal a couple weeks ago, and, you know, he's a very large cap mining company, and he was, he was shocked at how the market was selling off his stock because he shared with me, you know, in Q4, the average gold price was between four thousand and four thousand one hundred dollars per ounce for the average producer.

That was the average gold price in Q4.

And if you look at the gold price today, David, you said it's forty-eight hundred.

It's been above five thousand for much of Q4, so just use five thousand for round numbers.

The, the gold price is up a thousand dollars per ounce quarter over quarter from Q4 to Q1.

Now that that rotation has seemingly happened, what's the next big rotation, Michael?