U.S. Gold Corp. (USAU) Earnings Call Transcript & Summary

Welcome to Navigating Capital Markets on investorTV, I'm Michael Switow. Gold has had a record-breaking run this year. The yellow metal is up 33% since January. It is outperforming most other commodities as well as stock market indices. Against this bullish backdrop, join us as we explore the ins and outs of gold mining in the United States. Please allow me to introduce our panelists. Jason Kosec is the CEO of Integra Resources, Luke Norman is the Chairman of U.S. Gold, Rob Bergmann is the CEO of Relevant Gold, and John Feneck is an analyst and investor and the President of Feneck Consulting. Gentlemen, welcome to the show.

Thanks for having us.

Gold hit a record high this week, topping USD 2,800 an ounce. The bullish case behind the yellow metal is fairly well established. There's been central bank buying, safe haven demand amid conflicts in the Middle East and Ukraine and uncertainty ahead of the U.S. elections. The gold rally though is taking place alongside rising bond yields, record stock market prices and a strong U.S. dollar, all of which frankly do not usually take place in tandem.

So John, investors may be wondering if the gold rally will continue or if gold prices are even sustainable at these levels. What do you think? Can miners and investors expect goal to rise further?

Absolutely. Gold has shown resilience for weeks now where every single drop has been bought. If you look at the 1-week to 1-month or 3-month chart, you're not seeing any dips like so many people were thinking, like a test back to $2,300, right? So this is extremely bullish price action. Any time you're at an all-time high, you could look at NVIDIA stock as an example, right? You don't know where it will go. And the gold price right now is showing you that it will probably get to a $3,000 target next year. And if you don't believe me, look at what big banks are saying, right? The top 5 banks, 3 of them have a $3,000-plus price target for next year. So that's really new. If you look back at 2016, which I know the panelists will remember, Wells Fargo had a $900 target in 2016 when gold was around $1,050, right? So we're seeing the opposite now where big banks are flip-flopping and getting on board with the narrative. So I think the gold price, at least from our view, Michael, is going to have a little problem here with $2,800. We bounced right off of that here this week. But that's not a major resistance point. The next resistance point for us is $2,900 to $2,925, then $3,000 is the big round number in the sand. And then you could see a target well above $3,200 at some point later in the year, we think.

So you have momentum traders and value traders, and it seems the momentum trade is definitely strong right now as investors look for safe assets. And I understand that value investors like yourself still see plenty of reasons to buy gold. On top of that, though, there is a quieter but growing concern about America's fiscal health, namely the risk of a new deficit and debt crisis. John, I'm curious, how does this factor into your calculations?

So the debt narrative is getting some steam, I think. It's not just about central bank buying anymore. It's -- people are looking at the U.S. debt and saying, "Wow, this is getting completely out of hand," when you do the math in terms of interest payments and such. That is just another positive for why gold is continuing to maintain this price point, right? We're not -- we look at the nonfarm payrolls numbers very closely every month. If you look at what happened just 2 hours ago, nonfarm payrolls came in at a huge miss to the number, so 1/10 of what the estimate was. That is showing you something. When you see job growth waning, that's the first kind of thing you look for, at least one of the things we look for in terms of the party's over. We think next year, you could see it, the narrative in the U.S., to be much more difficult, right? ISM manufacturing just came out about 90 minutes ago and said the same thing. It was the worst read in 13 months. So I think some of this euphoric behavior in the broad market is ridiculous. I mean, you have to be really thankful as an investor. I think right now, look at your portfolio, look at your 401(k) or your 403(b) and say, wow, it made much money since March of '09. I need to start thinking differently about portfolio allocation. I can't just throw darts at the S&P anymore.

Really interesting. We're going to talk more about portfolio allocation in just a bit, and we do have a lot of ground to cover today. But before we dive further into the issues, I think it's important to understand our panelists' projects on the ground so we can have a better sense of what's informing their perspectives. Now as regular viewers know, I'm not a fan of long introductions. So I'm going to ask each of you, each of our mining panelists, to tell us about your work. And I'm going to give you 90 seconds to do this. I hope you're ready. We're going to start with Luke. You founded U.S. Gold, which is developing a major project in Wyoming. You have prospects in Nevada and Idaho as well. Luke, tell us about U.S. Gold. Go.

Yes, certainly. Again, Luke Norman, I'm the Chairman of the company and the Co-Founder of the company. We have one of the very few shovel-ready projects in North America. As you stated Michael, projects located just outside of Cheyenne, Wyoming. Unique location, 20 miles from our deployment hub, major transportation. So our deposit, which is preproduction as I said to you already. It's got mineral inventory currently of about a million ounces of gold, 248 million pounds of copper. We see a lot of upside to that resource, both laterally and depth. But it's a P1, P2 preserve. And in 2021, we put out a PFS, a pre-feasibility study, which showed really robust economics using $1,625 gold, $3.25 copper, that forecast producing 110,000 ounces per annum and about an $800 all-in sustaining cost. So look, with the location that we have so close to Cheyenne, Wyoming, that's probably why we're able to manage such good value metrics. We've been through a bit of a, obviously, inflationary spike. So we imagine our CapEx will increase from $222 million we reported in 2021 to somewhere in the realm of $300 (sic) [ $ 300 million ]. But right now, we're in a pretty robust position. So USAU, it's listed on NASDAQ. We have only 10.7 million shares out, so a $60 million market cap. And again, pointing to that 2021 pre-feasibility study. That had about a $325 million net present value. So relative to that, I think we're trading a little bit below where we would be in a normalized market.

All right. Let's stay in Wyoming for the moment. Rob, you're up next. Tell us about Relevant Gold.

Great. Yes. Thanks, Michael. So relevant gold, we are on the earlier side of the mining life cycle in the exploration phase, capitalizing on the upside of discovery. And our company has really been built on science over the years, where we've identified this connection of these Archean belts throughout the state of Wyoming with a direct connection to the Abitibi belts of Canada during the time of gold mineralization. And the Abitibi belts of Canada being one of the most prolific orogenic gold belts in the world producing about 0.25 billion ounces. So that really put us into Wyoming in the first place. From there, we built an exceptional team of value creators that have created billions of dollars of value in the market. We've assembled a very large portfolio of 5 district-scale assets now across the state. And we have really started to understand some very high-grade gold, copper, silver systems throughout these Archean belts across our portfolio. We've got now about 17 of these truly district-scale targets worked up. We've got some initial drill holes into a couple of these with some very strong results confirming these large-scale orogenic systems. And we've got very high grade. So we've got multi-ounce gold both at surface and at depth that we've intersected with the drill bit. And we're in this unique position, as we look to a rising gold environment, where the earliest stage of the sector really hasn't seen much of that re-rating at all. So we see ourselves in a really good position as far as kind of the upside potential looking into the future. In addition to...

Fantastic.

A wide range of shareholder base that we're pretty proud of, including Kinross, who recently came in as a strategic investor.

All right. Thank you. We're going to travel a bit west now to Idaho, Nevada, where Integra Resources is focusing their efforts. And thanks to a recent acquisition, they are already producing 70,000 ounces of gold a year. Jason, give us a quick overview of Integra.

Yes. Thank you, Michael. I'll just -- cautionary note that the transaction hasn't closed. It should close in the coming weeks, but we got unanimous shareholders support and court approval in the last couple of weeks. Well, really, what Integra is, is a leading growth-focused precious metals company in the Great Basin. And for all your listeners who do not know what the Great Basin is, if it was a country, you would be in the top 10 gold producers globally, okay? Within the Great Basin, we have our producing asset which is almost acquired. The Florida Canyon asset does about 70,000 ounces per year. It's a pretty steady state over the next kind of 7 years. We have our DeLamar project, our flagship project, which is moving to a feasibility study, another kind of development exploration asset which is Nevada North. And what we've done with this acquisition is we've created a regional mining platform that could persist for multiple decades. And that's what great companies have done in the past, okay? Within that platform, we deliver over $1.2 billion of net asset value across the 3 projects of mining NAV, okay? We have just over 10 million ounces, gold equivalent ounces within that regional mining platform. And a clear pipeline to grow our production profile over the next 5 years to well over 250,000 ounces, making us a true intermediate producer focused on the Great Basin, which is one of the best and prolific mining jurisdictions in the world, with costs very competitive with our peer set.

All right. Well, thank you. We're going to turn now to a topic which is on everyone's minds across the globe, and that is the U.S. elections. They are in less than a week. At this point, the polls are showing to toss-up, either Harris or Trump could win. And I suspect that when the viewers tune in for the on-demand version of this broadcast, they may still be waiting or wondering who's going to take office in January. So I'd like to get your perspectives on what a Trump or Harris victory could mean for the mining space in the U.S. John, how do you think the markets are going to react if Harris wins? And what would that mean for gold?

I think there's a knee-jerk reaction down if Harris wins on November 6. She's about 2 points behind. I just checked an hour before this recorded right now in the poles, and I didn't check Fox or CNN on both sides of the spectrum. But I think that she's done a tremendous job of stepping up in a very short period of time. I don't think anyone can disagree with that. I just think that her capital gains notion both for the stock market related, as well as real estate, is out of that field. I don't think Wall Street gets behind that narrative. And I think there's going to be a knee-jerk reaction down if she were to win in November 5.

Okay. And Rob, what do you think a Trump victory would mean for the markets and for gold miners?

Well, I think generally positive overall. And I think from the gold mining perspective, the fundamentals are seemingly driving gold price at this point. So similar to John's perspective on, there will be some immediate effect from the results of the election, but I think the long-term trajectory on gold and gold miners is in the upward direction. I do think, from a Trump victory, we see a strong shift in perception in U.S. gold development opportunities from just a regulatory perception viewpoint in the investor community. And so I do think that will be positive overall for the mining stocks in our space.

Ryan Zinke, he served as the Secretary of the Interior under U.S. President Donald Trump during that first administration. He's also a former Director of U.S. Gold. Luke, he was on your board for 3.5 years before taking a seat in U.S. Congress, so you know him pretty well. I'm curious, based on your conversations with Zinke, as well as what you saw during Trump's earlier term, what do you think a Trump presidency would mean for mine permitting?

It's -- they were in there trying to fix it all, sort it all out. Ryan's a huge proponent. He's all about U.S. generating its own resources. And I know that, that's going to be the return once -- if they get back in, if their administration gets back in. But when I look at the election itself, I think gold loves chaos. I was just having this conversation with the Co-Director of the company. Gold loves chaos. So either way this way -- this election swings, we're going to see chaos, I believe. And I think gold is just -- boys, that's kind of smelling that right now.

Well, the markets generally hate uncertainty. But in times of uncertainty, like you say, people go for gold. I'm also curious, you and I were talking about this earlier, and you shared that, while you think a Trump presidency may be better for miners, you told me that Harris might actually be better for gold. Why is that?

Revert back to my previous statement: Chaos. I think there will be a hell of an uprising in terms of pushback if Harris wins. I just -- I sense that. It's not my politics, obviously. I'm a Canadian-New Zealander. But from my time in the U.S., from spending a lot of time with gold-centric investors, I think there will be a lot of pushback if it's a Harris win. I just believe that.

Thank you. Today's discussion is also an opportunity for our viewers to ask questions to the panelists, and I see a couple already coming in. [Operator Instructions] All right. At the moment, political risk in the U.S. might seem quite high. But if we take a broader perspective and look beyond these elections, is it possible there's less risk in the U.S. mining than elsewhere? Jason, you've worked on projects in other parts of the world. Why are you focusing your efforts now in the U.S.?

Yes. I've worked around the world in West Africa, South Africa and all throughout the Americas. And frankly, I'm not -- I wasn't really fond of getting kidnapped and all that sort of stuff in Latin America. And one of the things you're seeing is more pushed to nationalizing a lot of these metals, or higher taxation. And the beauty about being in the U.S. or in North America in general is it's a pretty predictable environment. And the key to our business is predictability and consistency and to kind of maintain your integrity as a mining company. And when you push something that's out of your control like a government that keeps on getting overturned, makes it very hard to do our job and allocate capital in a responsible manner. So I prefer working in very predictable countries and that being in the U.S. and Canada.

Returning to the elections again for a moment. Donald Trump has consistently said that he thinks he should have a voice in how the U.S. Federal Reserve sets monetary policy. He is not a strong advocate for Fed independence. John, if Trump wins, what do you think happens to the Fed? And what would that mean for gold?

To Luke's point, more chaos. There's no way that Jerome Powell survives next year, in my opinion, as the Chair of the Fed if Trump wins. Trump has been very vocal about removing him. That's going to cause another entire wave of buying, I think, for gold and silver. If the average investor doesn't really realize this already, we all realize this on the panel. But it's going to be very difficult, even though Powell is a former attorney, to walk around the obvious, which is when Trumps gets into office if he wins, he's going to be out. And again, gold loves uncertainty. What does that look like? What does the Fed look like? You can see what Trump already did with the Supreme Court, right? So like -- I mean, he's all about power, and I think that -- he's all about lower rates, right? He's been very transparent that he is all about lower rates to support his own real estate portfolio. So I think we see lower rates next year in a Trump presidency.

From what I've been reading, many analysts believe that Trump win, coupled with his likely stance on raising tariffs could dramatically alter the trajectory for raising -- for rate cuts, I should say. Possibly even bringing those rate cuts to a halt. And then, John, like you say, that could lead Trump to exert greater pressure on the Fed, perhaps firing Powell or taking other measures to bring him to heel. Let's switch tracks now. One of the biggest issues that you hear people in the mining industry talk about, particularly in the U.S., is permitting. I want to zoom in on Wyoming first. It has a reputation for being a mining-friendly state. At the same time, though, U.S. Gold's CK project is the first gold mining project. In fact, it is the first hard rock mineral project of any kind to be approved in the state of Wyoming in more than 100 years. Luke, tell us about that permitting process. How long did it take?

Well, the beauty of dealing with a state-level regulator versus dealing with the federal regulation is that they have clear guidance in terms of the timeframes. So we entered into what was going to be a 12-month process. We as a company extended it. We chose to include an industrial sitings permit. But we dealt directly with the Department of Environmental Qualities who oversees several branches within the permitting process. We dealt with 5 of those branches, from air quality, water management, all the way through to land use, the works. It is easily as stringent, if not more stringent than the federal process. However, you are dealing with timelines, you were dealing with real people, accountability. So it was a remarkable kind of scenario. Everyone thought we were crazy when we started talking publicly about our time lines to receive those permits to mine. But in a well-run government, which Wyoming is, it is a process. And look, again, just as stringent. The environmental standards, environmental qualities, but just as stringent, if not more, than what the federal agencies would have been. Thankfully, we didn't have any interference by it, even the Army Corps of Engineers, because of the Waterway's of America's involvement. Look, Wyoming receives over 60% of its revenue through natural resources, and a lot of those are pushback resources now. No one likes coal, there's pushback on oil and gas, especially fracking. So between what we have done and managed to do with our hard rock permit all the way through what Robert is doing with his team in terms of looking for more, I think this is a pathway into Wyoming that people should be really paying attention to. If you want to get permitted, if you want to get work done in the U.S., take a look at Wyoming.

Right. So just a real quick follow-up on that. If your mine had been located on federal property instead of state land, how long do you think the permitting have taken?

It'll be a lot greater. Look, we have no water table issues anyway at this project, so that would have been a savior. Again, Army Corp of Engineers. But you're still looking at anywhere from 7 to 10 years. It's heinous with what's going on. But just in Nevada, we have one of our core assets, our company flagship originally, is Keystone in Nevada. And we want to get after that project, but it took us 3 years to get through a plan of operation. That's inexcusable. That's just to explore the project, not to develop it. So I think with the Trump administration, you're going to see a revert back to trying to speed up these processes. And really, it's the same thing as what we'd go through in Wyoming. It just has to be accountability and some sort of time management on behalf of Bureau of Land Management, Forestry and the other federal agencies because, look, the U.S. needs to get back to work in resources.

All right. So Wyoming, clearly much quicker than U.S. federal government. Some people on the other side of the spectrum, they might ask whether or not Wyoming is being as stringent when it comes to the environmental impact. Luke, you've said it is, Rob, you also have experience in Wyoming. I'm curious if you agree with that.

Yes, completely. I would fully echo those sentiments. What we've experienced in Wyoming is very similar to what Luke has experienced in over there at -- in Cheyenne. And that is really extremely stringent policy. But a clear, navigable path to follow, right, and accountability along the way. And so when you combine those things, you actually get a process that works, that is protecting the environment, that is putting environmental stewardship first and foremost as part of that process. But showing the applicant a very clear path of how you actually get there, how you need to go through the process and then following through according to those timelines that are laid out. And so we've experienced the same thing. A lot of our stuff has actually went faster than the time lines. And then we see widespread support from the state of Wyoming. They've been investing a significant amount of capital into not only developing resources domestically, especially the hard rock mining resources, flying geophysical surveys, collecting these new data sets, but also looking at their regulations regularly and saying how do we continue to improve? How do we continue to streamline our process while managing environmental stewardship at the highest level? So I would agree with that sentiment completely. And I think I just feel fortunate. My background in consulting has given me the opportunity to operate in almost every major mineral jurisdiction in North America. And Wyoming, I'd say, is equivalent or sometimes even better than Nevada in certain scenarios. So -- and again, echoing that their GDP is so heavily dependent on natural resources. They do take it very seriously as far as the environmental impact, and the community impact, and that's all part of the process.

All right. Good to hear. I'm going to take a question from one of our viewers now. Someone says that considering Trump's history of imposing tariffs and Harris' potential trade strategies, how might their trade policies affect the global demand for gold? John, do you want to take that? How might the trade policies affect global demand for gold?

I really don't know the answer to that. I'm not going to skate around it. But I would just say that gold is in an uptrend. That's not going to change with either of these candidates winning. Let's just be clear about that. As I said earlier, I think Harris would generate a knee-jerk reaction down. Don't forget that she's talking some really crazy things regarding capital gains. And I think when you look at the broad rally starting in the broad market, meaning S&P, NASDAQ, et cetera, starting March of '09, that people are looking at this very, very closely next week, right? The -- we're doing this November 5, right in the middle of tax law season. Which, again, I'm always saying to people, you have to watch tax law season. You cannot just look the other way and think that your stock isn't going to be under pressure because it will be under pressure, right? And so I think that would generate a lot of selling on Wall Street. My fear is that since -- when you look at previous corrections, Michael, right? We had the 2000 to 2003 recession that lasted years, not months. You look at the '08, '09 correction, that lasted less than one year. You look at 2020 -- in 2020, excuse me, for COVID, that lasted 2 months. These corrections are lasting less and less time is my point. That's because there's more algorithmic buying and selling in the market now. Things happen very, very fast. And I remember trading February, March of 2020. And I do this for a living, and I couldn't even keep with the velocity. So I think people need to really take a hard look at their portfolio today and tomorrow and Tuesday and just try to get some cash built. I mean, that's what we're doing right now just to be sure that we don't get some surprise on election day that's going to be detrimental to our portfolio.

Okay. Really interesting advice and perspective there. I want to turn now to tax incentives. U.S. states compete against each other. Indeed, they compete against projects across the globe by offering a variety of incentives, from tax breaks on machinery, to property tax reductions and rebates for creating new jobs. Jason, I'm curious, from your experience, what state do you think offers the best incentives?

I think there is part of the Inflation Reduction Act that was put into -- in 2022, gives us basically about 10% on production on critical minerals. And that's really the only thing that we see from a tax incentive from the government. And nothing really proposed for other mineral exploration or production, frankly. All of us being precious metals companies here. And I think it's really important to know that all minerals are frankly critical. Nothing more critical than monetary policy, frankly, in preserving the wealth of everyone's portfolio. So we don't see the incentives that you would see up in Canada via flow-through or charity flow-through in the United States.

Rob, how important are tax rates when you're evaluating a new opportunity? Is it enough to sway you to choose a project in one jurisdiction instead of another?

We're a very technical group. We follow the data, right? We're looking for big, high-grade gold systems that are ideally going to be insulated from the minutia of taxes on a statewide basis. That said, I have experience in building businesses and way more experience with the U.S. tax code than I probably would like. And Wyoming being a no-income-tax state, from the idea of building mines and building out new jobs and employees, it's a really beneficial place to operate for the individuals that are working with the groups. But on top of that, similarly with -- as Jason had mentioned, from a federal basis, we are -- there's potentially the benefit from the IRA, but again, the eligibility component based on criticality of minerals. But I think there's other incentives that you should be considering when you're looking at states in the U.S. to operate and develop. And one of the many reasons we're in Wyoming, they're investing capital into developing the hard rock mineral industry actively as we speak and really have put out grant opportunities where they're matching potentially up to 50% of some of these exploration expenditures to develop the data sets for the state. So those are the types of incentives that we look for because they far outweigh the actual tax incentive that you're eligible for.

Interesting. There's another question here from the audience I want to bring in. Robert asked, are you afraid of potential labor policy changes after the elections and the cost of skilled labor in mining? Any of our miners like to take that one? Are you concerned about how the elections might affect the labor market?

I think that's always something that we have to really look at. And frankly, our industry really lacks skilled labor, that's a fact. In not only skilled labor, but technical experts as well. It's one of the biggest problems facing our industry which will ultimately drive metal prices higher. And as we talk about the elections and all that sort of stuff, I think all roads to lead to inflation and de-dollarization. And the gold price movement is really coming from the U.S., and we really need to start focusing on the people in the U.S. that can do these jobs.

Luke, could you want to add on to that?

Yes. I just think more of the election kind of focus is around minimum wage. And we are talking skilled labor. You attract people globally. Half the geologists in the industry here are from Australia or abroad, in the U.S. side anyway. Canada obviously has a very rich pool of qualified people in that industry -- that side of the industry, excuse me. But I don't see that spilling over as being an issue for us. Locations in North America can obviously have an impact. If you're in Alaska versus being in Nevada, you have a little bit more -- it's going to be a lot more costly to entice people to come up and work for you. So I don't think that's really an election issue. I think there's just more a shortage of qualified personnel in the mining sector. Not many kids are getting out of bed in the morning and saying, "I want to do a geology degree."

Well, I had some friends who did, but there should be more of them. I want to bring the conversation back to investing now and take a look at how the shares of our panelists are doing -- excuse me, vis-a-vis the price of gold as well as in comparison to the big 3 mining companies. Sam, if you could bring up a slide, please. We're going to see how the big 3 miners are doing. You can see that Agnico Eagle is outperforming gold both this year and over the past 12 months, but Newmont and Barrick are not. John, what are your thoughts when you see this?

Well, we just saw Newmont come out with earnings, October 23. That ticker is NEM. Their costs went up again. The market wasn't ready for that, and they had their worst day in many, many years. We've put out a note the following day just saying that, that was really an overreaction if you believe in the path of gold. We didn't buy any. We have a 0 weight on Newmont. We have a 0 weight on Barrick. But we do have Agnico in our top 15 holdings because the chart looks absolutely beautiful. They came out with earnings October 30 and killed it. Their costs all-in sustaining are, I think, about $1,280 an ounce, which is very, very doable when you look at someone like Newmont at $1,600-plus. So Agnico is just clipping a much larger margin, and that's one of the reasons for their ascent.

There's been a disconnect this year between the share prices of many junior mining companies and commodity prices, with the miners lagging behind. If we pull up the next slide. Jason, we look at your stock. It has done better than gold over the past 12 months, though it is lagging a bit behind this year. Why do you think that is?

I think we've done 2 financing this year and did a pretty big M&A deal which puts pressure on the stock. Frankly, there's a lot of room to catch up over the coming months as we rerate from a developer into a producer and potentially being included into the GDXJ in '25, and people will be positioning into that inclusion.

If we look at the numbers for U.S. Gold, it's doing quite a bit better than the price of gold, both over the past 12 months and in the year-to-date. Luke, when you and I were chatting about this earlier, though, you emphasized that it's all a matter of time horizon.

Bounce off the bottom. We had a major fundamental event: We came out with permits to mine. Again, we've got a $325 million net present value project from 2021 numbers, $1,625 gold. Traditionally, we'd trade at 0.6 or 0.8 of that in our current bounce with a P1, P2 reserve, great jurisdiction, that's a $180 million to $240 million market cap. We're a $60 million market cap. So a bounce off bottom with a big fundamental inclusion like that to our company, I don't think we've moved at all, shifted at all. But I think, no way, no. I mean, the inflows of capital from the generalist investors has not shown up yet. That's in part because of poor management, I think even amongst the majors over the last 20 years. People are aware of that. But a lot of cleanup's going on in those major books now. They did clean up the -- culled some assets that they didn't need to hold on to. When this capital inflow comes into this sector, it is going to be -- it's just going to head to the moon. But anyway, yes, look, yesterday, we look really like we've had our run. Again, our average cost base as management is still probably close to double where we trade today, so there's a lot of upside.

Rob, if we look at your share price, I see on the chart there, up 21%, 23%. So good returns. Not quite as good as gold though. Do you think you're going to catch up to it any time soon?

Yes, certainly. I think being at the earlier side of the exploration sector in the junior mining stage, there's no -- it's no secret that the challenges have been there for the micro caps and small caps in our sector. And we've really outperformed that as a whole and largely because we've been able to secure capital and continue to develop our projects as planned systematically. And what that's done now is it's really put our portfolio on a pedestal as we look to this secular bull market. And we really haven't seen any of that generalist investment come back in. And once we do, we'll start to see that tide rise. And the last place that it goes up is in the small cap component of the sector. So I think by all means, we're really just getting started to see this re-rating in the earlier phase of this expiration cycle. And you combine that with how well we've teed up our portfolio, our team and our allocation of capital structure to folks like Mr. Rob McEwen and Kinross and New Gold, amongst others, and myself and Co-founder still being the largest shareholders. So we really see ourselves in a unique position as we look to this rising gold environment and I think there's a lot of upside potential there for us.

Thank you. A note to our viewers, please be sure to visit the investorTV website, that's at investor-television.com, to sign up and receive exclusive invitations to future panel discussions. Our next discussion is in 2 weeks on Friday, November 15. We're going to take a look at investing in the EV ecosystem, from lithium to solar-powered electric vehicles. We have some really interesting companies participating in that discussion, so please be sure to join us. All right. As we mentioned at the top of the show, it's been pretty unusual for both gold and equities to be trading in the same direction. And yet, the S&P 500, the NASDAQ, the Dow Jones Industrial Average and gold all trading at or near record levels. So I'm wondering, could the gold markets actually be predicting a stock market reversal? Luke, what do you think?

No. Matter of fact, we don't. Okay? Because as goes the market, goes gold and equities. I can look back as far as 1928 or we can look at 2008. When there's a flight to liquidity when the markets crash, equities and gold itself follow that. It's just a flight to liquidity. So that would be the really wrong bet if people were buying up gold, buying up gold equities, believing that there was a future market crash. Now in that, when crashes do occur, again, look back to '08 or as far back as '28, the equities follow. Especially in '28, it was -- I'm sorry, I'm talking 1928, of course, there was no -- well, sorry, the equities for the proxy was gold because gold was a fixed price. So they followed the Dow Jones down, but then they rallied 600 points up. So home state mining is a good, again, proxy for that trade. So no, I don't think that gold is -- or gold equities are leading a future catastrophic event, because otherwise, you just be playing into liquidity right now.

All right. Well, thank you for the historical perspective. I want to turn to something a bit more recent. Since the end of April -- excuse global investors have poured more than $11 billion into gold ETFs. That's according to State Street Global Advisors. John, you specialize in commodities and you prepare a monthly Feneck commodity report and you have your own investment portfolio. And I want to take a look at that because, not long ago, you posted the latest results for the Feneck mining -- excuse me, Feneck metals and mining portfolio that's on your website. If we take a look at the numbers, if we can get those on screen, your portfolio is doing better than big exchange rate funds like the VanEck Gold Miners and the VanEck Junior Gold Miners ETFs. It's outperforming the Russell 2000 Index small-cap index as well. What explains that strong performance, John? How are you doing this?

I describe myself as, frankly, who likes horseracing as a horse with blinders on. I don't really talk to other newsletter writers or analysts. I look at facts, right? I have a great relationship with U.S. Gold. I talk to Luke on a monthly basis about what's happening in Wyoming, what's happening with the project. I attribute our success to those kind of relationships dating back to 2008. We went public with this portfolio in January of 2016, but I have been cold calling people like Keith Neumeyer at AG and Mitch Krebz at CDE for literally 16 years. And that really helps. When you have concerns about valuation or concerns about public news, to be able to pick up the phone and dial people like that is very useful. So we are also overweight certain things, Michael. I should say that coming from the portfolio management world, one of the things I hated about that working at large institutions like Merrill Lynch or JP, was that you have to be 80% invested at all times, right? That's standard in the U.S. portfolio management world. You have to have 5% or less in a particular name. That's really not allowing you to overweight certain things when you have conviction. For example, right now, we have a 6% weight on U.S. Gold, right? We would never be able to do that if we were working in those type of constraints. So we basically just try to grind every single day and try to put up good numbers. And I think if you look at our entire body of work, which dates back almost 9 years now, we're well ahead of just about everyone we compete with.

So you mentioned that U.S. Gold is in your portfolio. Can you give us an addition of what else is in it? To what extent does it include gold and gold miners as opposed to other commodities and companies in the mining space?

Yes. So right now, we have about a 45% weight in gold miners like USAU. We have probably about 25% in silver miners. And the rest is spread amongst copper, tungsten, tellurium, palladium, different special situation kind of commodities. And the reason for that is, as Jason pointed out, the world right now in terms of critical minerals is like on a precipice for us. We talk to people in the U.S. government quite frequently. I used to work out of D.C. The U.S. is far, far behind in its commodity war, I would call it, with China. China is just killing it in terms of producing things that are relevant to the world, right? Give you an example. Tungsten, which is something I didn't follow until about 2 or 3 years ago, is 91% produced in China. The U.S. literally produced 0% last year and the year before. So we're buying tungsten companies because we think that, that will be the next antimony. If you look at Perpetua, PPTA, that chart was doing nothing for months and months. And then all of a sudden, antimony became the new buzz. And the stock, I think, doubled pretty quickly. So we're looking at special situations like tungsten and trying to buy U.S. assets or North American assets, to the point of this entire panel, because we look at jurisdictional risk very seriously. And we'd rather have money in the U.S. or Canada as opposed to places like The Congo.

Really interesting. Sam, could you bring up a slide on copper, gold and silver, please? Because we have a question from the audience about different commodities, asking how attractive is U.S. gold mining for investors compared to other resources sectors and what innovations may be helping U.S. gold mining companies reduce costs and increase efficiency. Okay. So we don't have that slide in a moment, but gold is doing better -- there we go. Gold is doing better than copper, not quite as good as silver at the moment. The question from [ Yirlan ] is how attractive is U.S. gold mining compared to other resource sectors? John, do you want to give us a quick answer on that?

Can you repeat the question?

The question is how attractive is U.S. gold mining for investors compared to other resource sectors? And are there innovations that might be helping U.S. gold mining companies reduce their costs and increase efficiency?

Well, as Luke pointed out, and we haven't heard from the other 2 panelists about costs. I mean, costs are going up, right since COVID. That's just a fact. But our thesis is that the price of gold is going to make up for that and then some. So we don't really get worried about costs going up at this point. I was really worried in 2021, 2022 when I started to see feasibility studies or PFS, pre-feasibility studies, coming out and seeing these CapExes just go up enormously. But we're not as concerned anymore. We think that the price of gold is making new floors. Meaning last year, it traded at $1,900 an ounce for over 5 months. It never closed below $1,900 on a single day, right? This year, I see that floor is $2,200 to $2,300. We -- every time we test that, it bounces. And now it's just taken off, right? So like you're seeing -- take a look at the 15- or 20-year chart of gold, it looks absolutely beautiful from a technical perspective. So we're not worried about -- gold is just doing what it's doing here. We're putting a lot of our time and effort into evaluating companies, like 3 panelists here, and trying to find how do we build positions into equities because there's a lot of leverage in any gold equity as opposed to just buying the price of gold, whether it's physical or through an ETF.

I was speaking of our 3 companies here, our 3 panelists. Let's turn back to them. I'm going to give each of you an opportunity to tell us why your company is a good investment. You're going to have 60 seconds to make your pitch. Luke, you're up first this time. Go.

Well, for one, we're fully permitted. As an investor also, I'd be keen to know that we are U.S. listed, senior U.S. listed with over $5 share price, up in the mid-$6 range, I think, today. We [indiscernible] for retail investors. As they show up into the marketplace, we are one of the few companies out there that they can buy into. We have an extremely strong management team which I didn't really get into. But we managed to harvest the ex-developer from Barrick, George Bee, who built some of the largest gold mines on the planet at our helm. He's been the one who's been in state to deal with all the regulators and different people in state. We have a very tight share structure, as I touched on. And we're one of the very few bucket-ready, shovel-ready projects. So aside from the fact that, obviously, we need to now move towards development, I think there's a lot of focus coming out of the way from other interested parties who want to bolt-on in other 100-plus thousand ounces of production. So enticing M&A activity, whilst we also start to, I think, recognize the untapped value in the company. I think we're a great investment opportunity right now.

All right. Thank you, Jason. Tell us about your company. Go.

Yes. The beauty about us is that you have immediate exposure to the precious metals price. We will be doing around 70,000 ounces, moving up towards 75,000 ounces next year. We're meeting guidance this year. So you have immediate exposure to the gold price. More importantly, once we close the transaction, we'll be coming out of the gate around 0.25 on a price to net asset value. As Luke mentioned, producers trade in the 0.6 to 0.8 range. So there's a significant rerating opportunity once we close the transaction in the next coming weeks. More importantly, investors have exposure to $1.2 billion of mining NAV, U.S. So you put a 0.5 on that or a 0.6, your investors can do the math on that, it's pretty easy. Also, we have a really robust building pipeline that will allow us to triple production over the next 5 years. Lastly, we have a strong institutional shareholder base. Myself, the largest individual shareholder. We have Alamos as the -- one of our biggest shareholders. Wheaton Precious Metals is our second-largest shareholder. And Beedie Capital. So if you don't believe us, you can follow one of the best miners globally, and that will be Alamos; and the largest precious metals and royalty company in the world, which would be Wheaton as our major shareholders.

All right. Thank you, Rob. What about Relevant?

Well, we're capitalizing on that upside of discovery, which as we know in the mining equity space, can provide some of the largest returns if successfully driven through that process. And we're doing that through creating a pipeline of these discovery opportunities. As I mentioned before, we now have 17 high-grade truly district-scale assets with a direct connection to the Abitibi during the time of gold mineralization. This is one of the most prolific metal regions on Earth. You combine that by being backed by some of the top capital providers out there with strategic partners like Kinross, investors like Rob McEwen and New Gold, and being led by an incredible management team that has created billions of dollars of value through concept, discovery and taking things into production. All of that leading us to the fact that the management group and insiders are the ones that hold and control the biggest share of the company, really showing how vested we are and how we are fully believing in the opportunity at hand. And in Wyoming. I'll touch on it for us and Luke. We're in one of the most credible places to operate. As I said, I've worked in almost every major North American jurisdiction, and it's just refreshing to have a place that is so supportive with a clear path for development. So I really think as far as when you think of investing in earlier-stage exploration opportunities based on discovery, we have that opportunity to rapidly develop beyond discovery into kind of the feasibility and mining spectrum. And so that's kind of with what I call the upside multiplier effect by having a true belt-scale concept and a very large land position across the state.

Fantastic. Luke, we have a question for you from [ Bill Heng ]. He wants to know when there's going to be gold mining and production starting at your site out there in Wyoming.

Didn't realize I was muted, excuse me. We're coming towards our final production decision. We have one outlier, I mentioned at the front end of conversation, which is our air quality permit. That went through public disclosures. There were no objections posted towards it. So we're expecting to see that in the next sort of 14 to 30 days. We're updating our pre-feasibility study right now as well after spot [ realizations ] change. I apologize, but we're talking to a 3-year-old study when I talk to these numbers. So we've got a few things to line up when we enter into production. But kind of time horizon is, if we have the CapEx in hand today, we're probably up in production somewhere between 18 and 24 months. Which is, I know incredibly quick, but again, it's the location.

Okay. 18 to 24 months. You guys heard it here first here. John, if you were to offer advice to investors who are considering opportunities in the U.S. mining space, what would you tell them?

A couple of things. We never get the entry point perfect, right? So you have to buy multiple times on any of the names like Relevant, Integra or U.S. Gold. Luke knows this for a fact because we've talked about this. When you have conviction in something, you buy more at lower prices, it's called dollar cost averaging. It doesn't -- it's not just relevant to our sector. It's just in general, right? And it's one of those best ideas for investors to get behind, is check your thesis, if you still like the thesis, you got to buy more. And so we've bought 6 to 10 times on many of our holdings. And that way, we get a blended cost basis that's going to be something that we can live with and make money on. I mean, the name of game is investing for money, not investing for being flat or losing money, right? I mean, if we recorded this 2 years ago, 3 years ago, we'd be looking at 0 interest rates. Now you can put your money in the bank and make 4.5%, right? So like you have to get -- investors need to see why that this is going to be making them some money. And I think that it's helpful for companies to understand that they have to update their presentation decks and their fact sheets so they can educate investors about the path that Luke just kind of mentioned, right? And Jason had mentioned. And Rob's in a different part of the curve right now because he's basically at explore, right? So he is early stage. But we would argue that we've overweighted explorers in 2024. I mean, they're just so cheap right now relative to producers. We own Agnico as a producer, but we also own things like Relevant Gold as an explorer because the prices are just -- they don't make sense. I mean, that's just the best way to put it. So investors need to look at diversifying across, not just the producing names, but also the ones that are earlier stage because you can make really good returns by doing that, I think.

There's a question from the audience about foreign relations and the elections, which has me thinking about geopolitics. Competition between China and the U.S. for critical minerals has been intense. We talked about this a bit in our last investorTV panel. That was about mining in Africa. You can check that out online. We're wondering, to what extent are U.S.-Chinese tensions impacting the gold sector, particularly in the U.S. John, do you have some thoughts about that?

I mean, if you look at Russia's move into Ukraine, February of 2022. China's buying went up exponentially. If you look at what happened with the BRICS just last week, the BRICS, which is Brazil, Russia, India, China, South Africa, that coalition is positioning for an alternative currency to the U.S. dollar that is backed partially by gold. That's why China and so many of these other countries are hoarding gold, for lack of a better word, is that if this currency does launch in 2025 or 2026, you're going to see gold really take off, in my opinion. Because now you have a currency that is partially backed by gold. And you have to have the gold in your possession. You can't just back a currency without owning it, right? So I think there's going to be just again, a large floor on gold. And to speak to the China thing, I touched on it earlier. It's a real problem for the U.S. I co-hosted -- well, I didn't co-host. I was an adviser to a conference in April in Washington, D.C. talking only about critical minerals. And a lot of the CEOs that attended that met with their constituents in Washington. And the vibe coming out of that, Michael, was we know we're far behind China. We know we have to do something about this, and we're trying. But we're not there yet. I think we're going to see that change in 2025, meaning Department of Defense, DoD, is going to start funding a lot of companies. And it's going to surprise a lot of the investors, and we're positioning accordingly in some of these names where we think they have really good ties to the U.S. government and are actively seeking funding.

Interesting. Really interesting about how those geopolitics could come into play here and how you're positioning for that. Before we wrap up, gentlemen, I'm curious when it comes to managing your projects, what keeps you up at night? Rob, do you want to go first?

I mean, quite frankly, the geology and the excitement always keeps me up because I am of a geologist background. And on the exploration side, we're always doing really exciting things. But I think, ultimately, one of the things that continues to be a challenge we touched on is that human capital infrastructure. I see this, what I call the generational fart in our industry where there's this massive gap in skilled labor and technical skill sets that it takes to really drive these things forward at the pace we want to. And if you take the example of the junior mining space that hasn't seen the large inflows of capital yet, and we're all expecting to see that in the near future. You got to ask yourself, when you're looking at these investment opportunities, what groups are actually going to be able to evocate results and execute? And the human capital infrastructure, the skilled labor component, I think that's what we're going to continue to see as a challenge as this market really goes into a true secular bull cycle.

Jason, what keeps you up at night?

Well, frankly, we've created a regional mining platform that any intermediate producer would really like to have. And trading at 0.2, 0.25 on a price to net asset value, we're basically a sitting duck here. So one of the things that really keeps me up at night is intermediate producers that need NAV exposure to quality. The best mining jurisdiction globally by the Fraser Institute, which is Nevada, a platform that will persist for over 20 years and a production profile that will push over 300,000 ounces in the next 5 years. That's really what every intermediate is looking for. And we really need to see this rerate in the next 12 to 24 months before someone takes a run at us, frankly.

If I can just jump in...

Sorry, go ahead, John.

I just wanted to -- sorry, Luke, I just wanted to ask Jason something real quick. So you had mentioned Alamos and Wheaton as big shareholders. Do you think you could get another strategic of that size potentially to kind of prevent a take-under? Or what are your thoughts?

Yes, I think that's something that we always are looking for. And Wheaton isn't -- Wheaton's there to be a strategic shareholder when it comes to project funding, and same for our DeLamar project. Alamos came in because they really are excited about what we're building in the U.S. They're not in a blocking position at around 9%, but they just want to keep tabs on everything that we're doing. And bringing someone in, yes, totally for sure. But we're in the position, John, right now, where we have -- once we close, we'll be around USD 37 million. And at these metal prices, our AISC floor next year going to be around $1,925, so we're going to be printing money at these levels. The life of mine AISC, obviously, next year is a critical year. But the life of mine AISC is $1,525. That's the thing with Newmont happened. There's good years and bad years. And depending on how you allocate your capital, you have to be very disciplined about it.

Luke, our topic today, gold, profits and politics. Looks like you have the last word.

Great. What keeps me up at night? The proverbial kick between the legs that always seems to show up in all sectors, but this sector in particular. I'm acutely kind of following, obviously, the price of gold. We've had very good fortune in terms of, of course, our timing and getting our permits, to securing a reserve and having all that. So similar to Jason, a take-under. As John, you referred to that, I don't know, I've never heard that before, but I mean that's a concern to me for sure. But ultimately, I'm not -- I'm very, very optimistic about this entire sector. I do believe there's a lot of capital inflow yet to come into the space. I know that there's not as many mining-centric -- or sorry, precious metal-centric funds out there anymore. So that flow of capital is going to have to be carefully managed, and let's hope they find the right companies, quality companies like ourselves, like the group on this panel. But I just think it's all excitement moving forward, that the stretch difference between the equities and the mining equities and the minerals prices themselves, that's a gap that is going to backfilled. And it's not going to be backfilled by price of gold going lower, it's going to be backfilled by the price of the equities joining the game, joining the party. So I don't have a lot of -- I sleep well right now. Let's put it that way, Michael. I think the excitement is right ahead of us.

All right. Fantastic. I know investors want to sleep well too. So gentlemen, thank you very much for your insights and thoughts today.

Thanks.

Thank you very much for having us.

No problem.

The on-demand version of this discussion will be available online next week on the investorTV YouTube channel. Please remember to sign up at investor-television.com to receive updates and register for that next panel about investing in the EV ecosystem, which takes place in 2 weeks' time. Until then, you've been watching Navigating Capital Markets on investorTV. I'm Michael Switow.