Navigating New Highs in Copper

[Music] welcome everybody to navigating the Minefield where we talk about everything from precious metals through to base Metals even crypto and the macrospace and as always it's a great welcome to Eric how's it going it's going well Roger how are you today very good very good um it's a hot space at the moment there's a lot going on so before we do kick off with that I'm just going to remind everybody that of what you here today is going to be investment advice this is all for entertainment and engagement purposes only do your own research work out what your goals are and invest accordingly but things are starting to move silver on the Move Copper at alltime highs and obviously we've had gold back at 2400 so the whole Space has has really caught a nice bit on the underlying commodity side uh yeah you know I mean it's one of those things where I've seen this over and over and over and over in my career uh Skeptics trolls they can point early to when you know if I've been bullish a bit early and talking about when I saw action coming and that is delayed it actually had been uh you know they focus on that or they leave they just lose interest but the fact is that uh we've been talking about now for weeks that there's evidence from the marketplace itself that are triggering some of these internal convictions that I've had for several months that you know were finally at a point where a bull market is unequivocably here in metals and Mining stocks so what does that mean for your viewer doing right now is critical you know the the seed planting if you believe that this sector is just starting to get going uh you've got to be deploying Capital that's been my main message to my people at the Gold investment letter for for months but really especially in the last few weeks I got on I had a heart tohe heart with my Elite and premium members uh two weeks ago and I just said listen if there's anything I can tell you it's you need to be putting money to work in these areas regardless of whatever uh trauma you've got from the last three and a half years or recency bias reset yourself slap yourself in the face when you're shaving and brushing your teeth tomorrow because it's a different environment we just moved into we just walked into a bull market and the reason I got in this sector in the first first place is because you can make a lot of money in a bull sector if you're involved early and you are positioned well and you don't chase things but you're there and you're ready for when this time kicks in because gold silver a lot of these medals they tend to move pretty fast I mean if you look at the price of gold or silver uh on the breakouts over the course of the last decade you know you're talking about a condens period of a few months when they end up ripping and that's why I've been saying that once we had closed through through that 2100 on a monthly we're going to 26 2700 at a minimum to 3200 and it's going to likely happen within 18 months of that occurrence and we're well on our way now and are you um licking your chops as it were the move in silver because we have that big consolidation for a few years and now what $3 $31 it's it's broken out of that and now we're now looking back at 2013 levels but obviously silvera's one of these ones where everyone's been wanting it to break because that's the high octane play is that something that you're excited as that too yeah I'm starting to Pivot to being uh a bit more focused on isolating silver miners um you know because you know we talked about this silver is like Gold's wild poor cousin you know it's like wherever gold is headed silver tends to follow that Trend and it's Juiced up meaning goes lower in percentage terms on the downside which we saw in the bare market and it goes higher in percentage terms on the upside so and that actually kicks in more and more as the the bull cycle matures or the bear or the bare Market you know silver gets whacked a lot harder and my whole Viewpoint has always been well is it an industrial metal or a monetary metal well it's just like with everybody in the markets when something is is dead cold H it's an industrial metal you know it's not going anywhere there's not even a precious metal doesn't matter anyway it's all about economic activity uh and supply and demand when it's hot when gold is hot and people are looking for places to store money uh to capture that that monetary store of value or get AE on it uh in the second half of a bull cycle I think that people start talking and putting silver in a monetary box much more often so you just have to anticipate the way that people are looking at this and now the other thing you look at is that the silver mining stocks there's way less options than on the gold side whether it's exploration or produ companies or whatever it is to get pure plays in silver is pretty tough I think we're going to get to a point and this is like not investment advice nor wise investment advice it's a comment but uh if you have silver in your the name of your company and you're a junior minor if and when we get into a phase three Mania bubble phase which we're far away from by the way your stock will explode for no reason it'll just be people are hunting feverishly to get exposure to silver stocks and there are not as many options as there are in Gold so the upside is obviously bigger the uh the options are less so the upside is bigger and the downside is bigger the volatility is bigger than gold but I'm super jazzed about silver I've been focused on accumulating you know positions in the physical medal for years the the tough part was silver when you buy physical I mean you buy 500 ounces in an American Eagle Box it's 42 lbs so you know even at $30 silver you're talking about 156 Grand worth uh of silver for 42 pounds you know that's quite a bit to Lug around so the physical part is a bit tougher you can buy obviously like s SLV uh broad exposure to the the larger and midcap Silver minders S uh is sort of like the GDX gdxj on the gold side but you know me I mean I love our individual silver stocks we're starting to see silver Corp which we highlighted not long ago that's uh challenging if not already today might even be in the new high territories yep brand new highs in silver Corp svm and also brand new highs yesterday for the year in silver storm svrs which is the uh Canadian symbol so the two that we highlighted there one very small one is a producer midcap they're of course you know there is nothing better than decent price action to get everyone interested but it's interesting isn't it that you know with copper which has been moving up for quite a while now but now that it's actually made at least on the comics anywhere and I think maybe on lme to made these new highs suddenly there's a lot of that talk about the potential s 10 20 year disparity between the needs for sustainability and all that sort of stuff and the actual availability of copper in the ground and sort of you're hearing that that long-term story again plus there's evidence that China's been stockpiling um copper which you may be holding on to to try and grab share in the electric vehicle Market but you know it's it's kind of broadening out isn't it this the point is we talked about gold it was all gold and then now got silver copper as well they're all they're all kind of there or thereabouts so it's it's not just a precious metal story this is actually an extraction Metals mining story I think so and there are a lot of people that don't ever correlate gold movement in terms of what that means for the precious metals in general but I tend to have seen over the years especially with cycle changes whether it's a powerful cyclical Rally or secular gold leading the way silver taging along and then all of a sudden we start to see the Commodities in general wake up there was a short squeeze going on in New York um in in Copper this La last week and it seems to have really shaken up uh you know the the markets I'm looking at something from the 16th end of last week on mining.com copper short squeezing New York is rocking Metals markets we're at $5 copper um I mean we're at $5 copper guys this is not something where this is uh I mean the companies that have been in production that have been gobbling up assets that have just been dead in the mud trying to survive for years and years and years if not decades I mean this is uh this is where you want to have some seeds planted and there there's also a lot of commentary about people that are just just unable to deliver um on the metal already you know with some of this stuff so uh people are scrambling for supply and I think this is just a very very very small blip in terms of signs to come over what could be many years of shortages wait till we see what happens with nickel nickel's already back almost to nine bucks or I think it is at 9 yeah I mean we're almost we're back at 961 on nickel so some of the project that you know I've got big positions in that need like 1011 nickel to be economic um that are trading at like you know 2% of npv at 5% which is incredible and these are large massive massive projects they're going to start kicking in gear and these this is where you get tons and tons of Leverage and the nickel producers and the copper copper producers boy boy are they going to have a field day if we even go higher from here and there's any sustainability for that so I'm really excited for broad you know Metals I mean you could start to dig into titanium and zinc and iron ore and all that stuff that's not really my focus nor is it uh my main interest I only have interest in things like zinc and titanium as byproducts like you know there's a lot of titanium iron or vadium connections and you know I'm big in vadium as what I think will be the king industri Ral battery metal um of the future you know there are real opportunities in some of these Niche medals critical medals and then you have your broad ones and I think you know for me uh I don't have an edge in Iron ore I don't you know even in Copper it's clear to me that we've got some shortages that are going to be popping this market and giving it Tailwinds on the upside and that's why we own things like you know I know um we've talked on this channel um even back in 2020 about like mucu and in and I had focused at that time about the uh um their their San Andreas their their their uh copper asset which is number eight or nine in the world in terms of undeveloped copper asset size they've been working feverishly on that with massive Partners Rio Tinto stantis fourth largest automaker in the world I had put money into muu and copper in a private placement about two and a half years ago at $10 a share I believe it was uh it was under 300 million was the actual post money valuation and Rob mcguan had led that round it was an80 million dollar route he put in 40 this is US Dollars and then rounded up by guys like it was a quarter of a million minimum and then you know there were very few individual High net worth investors but there were many institutions and then there have been two subsequent rounds and the last one was 800 million uh for evaluation led by Rio Tinto and and stellantis again for access to the Copper asset which mucan mining that is the public vehicle that has all of their gold assets uh we had an interview with Rob recently on the channel and at the end of I believe it was the second interview I said Rob am I out of my mind but I look at where you just valued you had valued in the private Market from some of the biggest mining companies and automative uh companies in the world uh you know your interest MCU and mining's interest as a Sher they in mucu and copper is trading at par with your market cap of mucan mining that means you can buy into and now I think it's gone up a bit from there it's just bounced off of a big pullback I think it's actually very interesting to take a look at around $1 us again because Rob mcan's put in $230 million and his cost average is over $21 a share as one bullet point but you can essentially add and I think there's going to be another big event on mucu and copper whether they spin that out or there's big rise that's a massive project it's now coming into winter in Argentina so they're going to slow down their feverish pace of drilling give a get catch their breath but then if that's an IPO on its own it's going to be a billion plus in my opinion and then so you look at mucu and Mining you can buy into muu and copper which is a massive play and then get the gold assets which are producing you know 130 to 160,000 ounces of gold per year uh profitably and all of the various you know exploration and JV and option agreements that they've got around Nevada and some of these other projects there's still some real opportunities if you're shrewd out there to get exposure to Copper to get exposure to nickel and they get exposure to gold and silver on the cheap but you've got to be looking right now that's my main message today is if anything guys just be aware be looking be awake and be looking to deploy Capital you don't have to listen to me you don't have to listen to any particular ideas out there just you know do your old homework get busy because now is when you're going to find the steals all of a sudden this stuff on the low end of the market it's just going to reset and when it resets good luck trying to get a good position we've seen these big moves in the metals but so far we've seen only small relative Moves In Those minors even when I look at the big stuff so when I look at the European um it's the basic resources sector but it's largely minors called the spp Euro stock 00 metals of mining basic resources it's still lagging the copper price by quite some way when I look at the Aussie dollar which if there's volume coming out at these sorts of prices the Aussie dollar would normally do well well the Aussie dollar is lagging the move in Copper the point being is that we still haven't seen many of the related assets move in a commensurate way so they're still lagging these prices that we're seeing in the underlying Commodities which in some ways suggests there's still potentially quite a lot of opportunity out there as you say if people do their own work and do it now those the the barn door has not been wafting open the horse hasn't bolted and been closed behind it the horse is still in the barn for many of these stocks in the barn are like you know starting to creep their head out and a couple of them have left the barn the bigger ones look at like you know ago Eagle one of the leaders new highs every week new highs new highs you know and these things are not overtly overbought numat you know baric these are the type of names where you want to watch those lead to see where they're headed to see where the rest of the sector is going to go and what's going to trickle down there but you know I think things are also changing a little bit Roger in the sense that the Aussie dollar is not just going to trade tick for tick with copper uh you know I mean like you're not going to see uh the Canadian dollar completely firm up you know just as we're seeing with the metals prices and even if oil goes up and that that country also is a very big beneficiary of natural resource um natural resources in that sector is a big chunk of the economy but you know we're also dealing in a world now where you've got debt that is out of control versus GDP and virtually every nation including in America certainly in America and you've got to be careful about what you're really pricing these things in going forward you know are you going to look at yes you have to look at your own currency that's why you're you know gold is always an has always been to me it's an inverse mirror of your Fiat value uh that's the one where you can see it if you've got an extra weak fiat currency you're going to see an extra high gold price in that currency and that's a way to protect yourself but when you stting to look at the Commodities uh you know there's a lot of pressure that's going to come into these nations with regard to the cost increases that are out there in terms of like how is their GDP growth or are they going to be going into the recession and of that nature when there's pressure on the consumers um and on the corporations with some of these price increases also what it reflects in terms of that aie dollar relationship is it also reflects part of what you're saying which is Chinese debts are so big and creaky now that China's no longer doing that growth at any cost which was just hoovering in all Commodities regardless of the price yes they stock powered some copper but China is not that growth with any cost model that was behind a lot of these correlated moves between currencies and commodities so they're no longer in that game in the same way because they're one of the key countries which has to deal with a very very bloated system just like a lot of the other places in the world which is why the underlying Commodities themselves look very very attractive and eventually yes the the stocks will catch up I think as you said a few weeks ago what we've been seeing rather out andout mmaa you've been seeing a lot of companies taking Stakes but more interestingly a lot of real world companies that need the copper like stantis taking Stakes almost kind of missing out on sort of the middleman just going well we're going to go straight into these and I think those will build over time time and eventually maybe in 12 months time the true m&a will probably come through as the big boys start to reap in the cash rewards of the Investments that they've done and then they'll go on the acquisition spree in the future those small guys will get taken out in the next sort of 12 24 months off that cycle yeah and and maybe it'll be a little longer for some but I think that you know the one thing I want to talk about really quickly that I've been saying now for probably about less than two years but I've been stressing that the the PE the the folks that own the metals in the ground are going to be the kings of the future and and resources in the ground Kings of the future what do I mean by that look at you know look what we're seeing on say even the correlation with the AI side of things with data centers and the the energy grid and and the energy that we're going to need for all of this compute power a lot of this you know look at I mean we're dealing with uh Sam Alman just has got his new nuclear Vision deal Microsoft building their own nuclear facilities uh they're all going Downstream and I think you're going to see more of that when it comes to like let's just say for example on the lithium ion battery side you have uh many of those that have tons of nickel in most most iterations of the lithium ion battery have a lot of nickel Cobalt graphite uh you know there's a lot of those different factors that are that are out there so I love some of these special metal pieces then you've got when people start to wake up to vadium uh on the industrial side and this is a metal that's a small Market that the Chinese and the Russians have a complete grip on The Price is very low right now because I don't think China has an interest in it being higher they've got all this inventory as you said on like the real estate side they're not going to be needing all this stuff for stainless steel but they are putting the US and and Canada and even the Europeans in very interesting spot because they control me CR they're not it's not a critical metal per se I don't believe but you know vadium to me it's insane that Canada produces less than 0.1% of the world's vadium and has a ton of it the United States is around 1% and we have a bunch of it you know feedom resources biggest uh asset in North America highest grade furthest along up for a $200 to30 million Grand from the US some of this stuff applies to Next Generation rocket technology and to secure our own energy supply chain uh these smaller companies that have been doing this heavy lifting in a rough Market man if they if they make it through here and then we start getting whether it's government support or just Capital that's going to say we need to develop this stuff in North America there's some huge opportunities in stuff like that because uh we're just way High the eightball it's actually dangerous anecdotally on your point and I saw it on Twitter so it must be true but it was something like one chat GTP search takes 10 times more energy than a Google search so the new technologies just require as you said so much more energy there for the networks Etc and one last thing before we we sort of sign off for the day do you think that you given some of the data in the US has been um has been softer are you encouraged by the fact that we've seen these breakouts in the metals when actually people could be arguing that the Slowdown is now coming now I'm not saying recession is coming or anything like that but do you think that the sort of price action that we've seen during some of these week data points is indicative of a sector that not so much Recession Proof but actually might ride a recession better than we'd normally expect this High beta sector to ride through a recessionary type period yeah I mean I I don't want to say it's irrelevant at all because if we go into a hard recession here projects get halted uh you know copper will be affected we also don't know exactly where copper is going to settle out after this squeeze you know does it settle but anything above $4 copper there's going to be a lot of activity in that area and and you're seeing more and more studies and companies that are coming out and saying right around just over Yonder there is a massive shortfall of supply of these Commodities like copper and nickel and many many others and that doesn't assume some sort of a booming economy that could be in a that could be in a flat economy or mild growth if we have a severe recession yes there's going to be some uh buying opportunities is what I would look at them as because I'm telling you you know the feeling I have out there in the marketplace is that people just don't understand how far behind the eightball we are on catching up with what's going to be needed to you know essentially build out our infrastructure energy problems are a big big problem we're already seeing these rolling blackouts and things California has a lot of issues there's issues in different parts of the world and um you know we need infrastructure and for that infrastructure uh we need to see production uh higher in in many of these materials and you know a recession I don't want to be blind to the fact yeah we're in like this kind of Goldilocks boom period right now A recession will happen but I don't know that it's going to impact these particular Metals as much because it's not just like this correlation to stainless steel or you know to construction anymore there are many other things that are driving demand that are growing uh exceptionally fast faster than anything we've ever seen before we'll uh maybe have a look at some of the this this sort of longer term sticky thesis in next week's show where we can have a deeper dive into this space because this space is now obviously Fanning out into a much bigger play than it was when we kicked off other the back end of last year so thanks again Eric and I'll catch up with you next week appreciate it Roger have a good day [Music]

Channel: Real Vision

Views: 11,646

Keywords: Finance, Markets, Economy, Stock Market, Investing, Trading, Financial Literacy, Recession, Short Seller, Real Vision, Equities, Raoul Pal, Inflation, Stagflation, Monetary Policy, Money, Federal Reserve, Fed, financial markets, financial markets podcast, realvision, real vision podcast, investing strategy, investing podcast, money podcast, macroeconomy podcast, macro podcast, monetary policy podcast

Id: pGzq_E5uP6U

Length: 24min 13sec (1453 seconds)

Published: Sun May 26 2024