Q1 Wrap Party - Gold Stocks, Silver Stocks, Copper Stock & Uranium Stocks, Bitcoin Investing

good morning everybody my name is jay martin i am an investor and the ceo of cambridge house now i'm very excited to share this next piece of content with you i've gathered a handful of personalities that i'm very excited to dive into their perspectives and forecasts for the year because we're a quarter of the way through 2021 already somehow now dialing it back to december and january i probably interviewed close to 100 investment gurus with the intention of dissecting their perspectives their opinions and their forecasts for the year so that i could allocate capital accordingly now three months in a lot has changed and so i felt that it would be timely to bring back some of my favorite personalities to revisit these forecasts determine where we were right where we were wrong and how we need to adjust and so today i'll be joined by a handful of personalities some have had on before some are brand new but i'm excited to share every single one so today we have stephen van meter the president of steven van meter financial now stephen is one of these analysts who's been very bearish on gold he's calling for 1300 gold and i tend to have way too many gold bugs on the show and so it's always refreshing to hear a contrarian's viewpoints and i dive into this with stephen today willa middletown founder of the commodity discovery fund one of the true pioneers when it comes to discovery investing in the resource sector warren gilman chairman and ceo of queen's road capital a legend in the business used to manage the money of one of the most well one of the wealthiest individuals on the planet mr lee kashing in china warren's now running his own company with queen's road capital and i was very keen to determine where he's putting his money lynn alden crowd favorite founder of lin alden investment strategies daniella cambone editor at large and anchor at stansberry research peter schiff ceo of euro pacific capital rick rule president and ceo of sprott u.s holdings david morgan founder of the morgan report and jeff clark senior precious metals analyst at goldsilver.com i'm also going to be joined by a small handful of investment opportunities that i believe are timed perfectly for this softening in the precious metals prices that we are experiencing so i always enjoy putting this together thank you so much for stopping by i'll be in the live chat drop me a line and enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined right now by lynn alden of lynn alden investment strategies lynn welcome back it's good to see you glad to be back thanks for having me yeah well i wanted to spend this time uh sort of revisiting your forecast for 2021 right all analysts put out their forecasts in december and january for the upcoming year you did a phenomenal one on a real vision tv that was just published at the end of february but i know it was recorded in december and so lots has changed right it's been a pretty crazy year very very busy and i'm curious about what may have changed in that you covered you know your thoughts on the us dollar interest rates inflation commodities the emerging markets trade real estate gold bitcoin a whole variety of things we only have about 20 minutes we won't get into all of it with as much depth but first of all everybody should watch that on real vision tv it's excellent uh but i want some updates from you today and so maybe let's start with the us dollar you know you had a very bearish outlook in 2020 obviously that paid off and now if i understand correctly you're pulling back on that a little bit because you're seeing that trade become a bit crowded is that correct yeah pretty much uh starting in late 2020 i started become less decisive about that at least in the intermediate term uh so i still have a longer term view that we're probably in a more structural dollar bearish cycle but during that process you're going to probably have counter rallies along the way and so whenever it gets too crowded to consensus it's easy to have a surprise that pushes it up and so far that's what we've seen here in early 2020 i mean early 2021 still getting used to that um is that we're having somewhat of a rally in the dollar now with the fomc uh you know uh press release today we did get a little bit of a pullback uh in the dollar due to uh powell kind of pushing back being a little bit dovish it's possible that can start a reversal but until we see some kind of major or hurdles crossed i don't really have a ton of conviction in the near term about the direction of the dollar and so you know i'm kind of focusing on other topics of the moment and kind of just wait wait until the market gives me more signals on that got it yeah i mean i know you mentioned three to six months uncertainty any hurdles come to mind land what would you be looking out for to go one way or the other that'll increase or decrease your conviction well a couple of things one is just price levels you know we'll see if it starts breaking firmly above you know say 92 on the on the dollar index uh and you know we're mainly it's also we're seeing some some weakness in europe related to the vaccines related to their various policies and because the dollar basket is very euro heavy that that weighs on it and so uh that's that's a pair that i'm a little bit uh you know less less convicted on uh the main thing i'm watching though is is yields and so as uh you know we get higher inflation expectations here in the united states uh we have other central banks that are kind of taking the turn and being more dovish and so they are uh some of them are doing uh yield curve control some of them are doing kind of indirect yield curve control where they're more explicitly saying that they're not going to let long end rates rise too much whereas the fed has purposely been a little bit you know you know more kind of balanced on that and not really showing at least any concern about the long end of the curve until the market probably forces them to and that's kind of a something we've seen out of this fed is that they've been very reactive rather than proactive and so rather than trying to get ahead of things uh they let and they wait until the market kind of has a pain point and it tells them what to do and so they're kind of moving forward with that and saying that they're they're remaining the very dovish on the short end of the curve they're keeping their qe in place uh but they're not really overly concerned about the long end of the curve right now and that can keep somewhat of a you know a little bit of a floor on the dollar does that concern you land that reactive nature versus the proactive planning from the fed not exactly because i mean it's all about essentially market manipulation and so instead of kind of getting ahead and manipulating ahead of time they're at least kind of letting the market poke around a little bit before they come in and quash it so i guess it depends on what your view is on that i mean if you have a certain outlook you'd rather them just kind of rip the bandit off and do what you want them to do but if you're if you're kind of just watching market forces play out in that sense you want a fed with a lighter touch and it's all relative right because they're still holding rates at zero they're still doing you know billions and billions of qe per month and so it's you know what exactly is is tight versus getting ahead of it is is it's a relative game you're basically comparing it to other central banks and you're comparing it to the massive amount of fiscal spending that's happening and how much of it they're going to have to monetize and how much they're going to have to control rates okay okay last question on the dollar you know just a month ago i had i had peter ship and brent johnson back on the show and they were debating uh you know the dollar for 2021 renewing a bet they made in 2020 so they've got a one ounce gold coin writing right now on whether the dollar will be higher or lower i guess it would be like january uh it was the final week of january they hosted this i have to recheck the exact date but anyways it was around 92 and it was the fourth week of january any prediction obviously brent's betting the dollar is going to rise who's going to take home that gold coin in 2021 i'd have to lean bearish on that but again until we have more signal that's not one of my higher conviction areas i was more conviction last year and i still think longer term we're going to see a dollar weakening cycle uh but it's you know it's always possible that 2021 ends up being a kind of a neutral year or you know mildly up mildly down if i had to pick one i would say probably neutral to to down got it got it okay now you mentioned higher uh inflation expectations um you're you're expecting the fed to hold rates of zero is that correct or or not yeah okay yes yeah they they've indicated them as well but the market's beginning to test that theory and they're they're basically kind of pricing in some rates some rate hikes happening in a year or two uh and you know pal today pushed back against that and basically they don't plan to raise rates until they have persistent inflation over two percent as the way they measure it so people can debate about you know what what is the correct way to measure inflation uh but we know that basically what the fed is using is is their model and so um overall uh they seem pretty intent on staying uh dovish for as long as possible and it's going to be a couple tests along the way and so one of the big ones to look out for is that in quarter two uh you know specifically um april and may uh the the inflation number is there and they'll be reported in may and june uh but the reason those are significant is if you look at what cpi did it took a really big dip back in april and may because that was kind of the heart of the the shutdowns and the and the big disinflationary period and so when you do year-over-year comparisons those are really low base effects and so there's a decent chance we're going to get a cpi print that's over uh three percent uh in april or may uh probably both and so the but powell already referred to that he also already said they're gonna call that transient and so you might have a mismatch between what the bond market is doing and what the fed's looking at and so you know we'll see if things get a little bit disorderly around that time uh but the fed's already aware of that talking about that so it's something that's kind of the next time period that i'm monitoring okay okay thanks for that now just to touch on that so you know we're expecting inflation to run hot we're expecting the fed to continue to suppress rates creating this uh you know negative real rate scenario which is typically a great setup for gold if that's the consensus are you surprised that gold hasn't performed better since august it's been a very soft market uh not really it's been i guess a slightly weaker than i would have expected but overall it's it's pretty much doing what i'd expect from the 10 year doing what it's doing and so a lot of people focus on the shorter end of the curve but because gold is generally a longer duration asset it is best to compare it to other long duration assets such as the 10-year treasury or or longer and so if you look at the real rate in the 10-year you know the ever since august of 2020 we've had nominal rates rising faster than inflation expectations and so you've had a rising of real yields that are still negative uh but less negative than they were at their bottom in august 2020. and so even even though if you look at say earlier in the curve like the five year uh you're getting kind of a a wider you know kind of more negative rates if you look further out at the 10 year that's where you're kind of getting some solidity there now i do think that as we go forward a little bit we'll get you know inflation expectations probably catching up to that and you might have seen kind of a rollover where gold kind of finds some a bottom drill rates find a top uh we have to see a little bit you know more conviction on that right now it's kind of a potential turning point then i'm kind of monitoring that we might we might see a little bit of a decoupling here and gold kind of find its legs a little bit uh but kind of the the ultimate long-term thing is the potential for yield curve control or things like that but the fed's unlikely to move on that until things get disorderly enough to that the market's essentially demanding it until then uh they're basically keeping the the short end tight they're letting the long end rise and so gold's kind of in a mixed condition because you know the gold really kind of focuses more on that long end got it okay now i have to ask because it's a common conversation these days specifically maybe from gold bugs more so that the bitcoin is eating gold's lunch right now right as the asset you know the role that gold used to play a lot of that dough is now moving towards bitcoin what do you have any thoughts on that lin is that does that resonate with you or do you think that's missing the point i i think around the margins uh you know it's still a little bit of the narrative uh but if you look at you know if i just looked at what gold if i if bitcoin didn't exist i'm just looking at what gold is doing compared to 10-year yields nothing stands out as unusual now it might be on the weaker side slightly of what i'd expect you know maybe it's 100 bucks lower than i think it should be but overall you know it's roughly following what i would expect from money supply growth uh and from those 10-year real yields uh and so you know it's possible that bitcoin is responsible for the fact that it's on the weaker side of what i'd expect rather than you know say on the stronger side or kind of average but overall it's not really doing anything enough that i would call it deviant from how i'd expect gold behaving in this 10-year environment now overall real yields rose a little bit quicker than i would have guessed say six months ago and so gold's been slightly weaker than i would have guessed six months ago but comparing those two measures together it's making sense as gold relative to real yields um now so but because we're getting such strong action in bitcoin and because younger investors are generally using uh you know bitcoin more like that gold proxy uh you know we are probably getting some money flows that would have otherwise gone into gold and silver instead directed towards bitcoin but i i view it as a big mix so some people are you know only one camp only the other camp whereas i like bitcoin i like gold i like silver i like copper i like uranium and i kind of just tilt them based on you know what's what's getting out of hand and so for example last summer i was still bullish on gold but i started rotating more and more into you know some copper uh some bitcoin things like that that a little bit more of that that kind of uh you know kind of inflationary bent to them and those have done well uh but for example copper i think is you know it's gone up pretty far pretty fast and so it's it's starting to look a little bit more interesting towards gold again okay okay thanks for that now i want to jump into a lot of the commodities that you just mentioned uh one final question on bitcoin though just because i know your thesis remains fairly bullish right for 2021 and from from my standpoint like what i do is gauge sentiment right i have conversations like this for a living i talked to a lot of retail investors and you know i've seen the sentiment shift in bitcoin and i was waiting for this shift i knew it was coming and now i feel like it's here where you know i don't want to call it retail euphoria but we're getting close i mean i mean people like lindsay lohan for example are calling out now saying if you're not you don't know bitcoin you're an idiot and those are the flags you gotta look for right so are you seeing those flags are you concerned that we're sort of reaching a frothy top and and or or not it does not bother you uh so i think we're i think we're firmly bull market i mean it's certainly it's certainly a popular trade at this point my base case is that that that trade's not over yet that that bitcoin probably still has more to go in this cycle you know potentially for example when we see some of those three three percent cpi prints like i mentioned uh in quarter two i still think there are a variety of kind of catalysts ahead that you know the tga drawdown the stimulus checks going out the potential for three three percent cpi prints uh and so i you know and looking at just a variety of on-chain indicators you know basically looking at what long-term holders are doing you can generally see these patterns play out with bitcoin and so far the underlying fundamentals uh still look strong and as another example bitcoins are still leaving exchanges meaning that there's still kind of a net uh outflow where people are buying bitcoins put them in cold storage uh and so overall this this huge price increase hasn't yet been enough to get long-term totals to to basically dig their coins out of cold storage and sell uh but it you know started to happen to some extent we saw some profit taking uh in a little bit in recent months but nothing that yet would suggest a major tops in place uh but of course it you know it always remains to be a possibility we can't purely go on what fundamentals are doing what past performance because ultimately sentiment can dictate a lot another thing i point out is that a lot of the kind of the altcoin space has taken some of the really kind of frothy elements and so for example we've seen you know intense uh you know uh uh euphoria around nfts yeah uh and and some of these uh you know kind of utility protocols you could say like some of the the ethereum competitors uh and uh you know d5 was was big for the past couple months now it's kind of been replaced by nfts and sort of the narrative uh but overall i think that's where a ton of the really retail speculation is uh whereas bitcoin ironically you know a lot of the retail people are saying that bitcoin is not fast enough for them that they want to go into that that kind of wild west of the different types of tokens whereas uh you know institutions are the ones that are still loading up on bitcoin as well as uh some of the more kind of you know dedicated bitcoin investors okay okay um two more questions on this one purely from a speculation standpoint 2021 are you choosing bitcoin or ethereum uh so that's tricky because during a a bitcoin bull run a lot of times uh those other protocols actually outperformed on a percentage basis during a bull market so i don't really have a high conviction between the two during 2021 i would lean towards bitcoin if you talk about multiple years to include say the bullish run and then whatever pullback we're going to get right so that's that's my preference as a protocol but during that up phase you know who knows okay okay and that i guess that answers my second question i was wondering about time horizon um if you're looking for an exit point this year or in the next sort of 12 18 months um in regards to your bitcoin position but it sounds like not right you're holding for the long term well so i think you know there's basically different strategic holding and a tactical holding and the same thing is true for gold so for example some like someone might have physical gold uh as a strategic holding that they don't really plan to sell for the foreseeable future and then they might have gold miners or gold etfs that they're using as a tactical play because they're bullish on a certain time period and so i'm viewing i'm viewing bitcoin similarly where uh i think probably later this year is a good exit point uh from from a tactical standpoint or at least to basically rebalance the position uh and up not become super overweight that position and i treat different different types of of bitcoin holding differently so for example in one of my model portfolios i already sold you know a small tranche of the the gbtc that i hold in that portfolio just to stop that from becoming such a big chunk of the portfolio and so we've already actually uh you know taken more profits to be put in so the whole wrestle position is just a free riding position and it's still a pretty big chunk of that portfolio but it's not i'm not letting it get too big of a percentage because a lot of people kind of follow that portfolio for some of my other holdings like my cold storage holdings i don't plan to sell those uh you know just yet uh and so i kind of separate that strategic holding from kind of a another portion that i'm willing to rebalance or kind of trim in certain transits to not be overweight too much okay okay we're gonna switch gears to commodities now and i want to start with uranium land so um are you positioned and if so how right now uh so i'm bullish on uranium i wrote a report in october uh 2020. uh that's right uh you know i then established my positions and became bullish on it uh and so i i played it somewhat conservatively with uh you know i have a a pretty decent chunk in the um you know the holding companies uh the ones that just hold uranium they were at the time they were trading at a discount in nav now even though spot uranium has gone nowhere the the discount closed and turned into a mild premium uh and another i'm also bullish uh you know say kamaco i also think the etfs are a decent way to play it and so overall i'm bullish on the space but i leave you know kind of specialists to pick through the different types of junior minors and and find out how to get the most explosive gains that's kind of a you need a lot of specialty to really kind of dig into those and follow those well then i'm sure you've had them on your show yeah yeah for sure now when it comes to uranium do you factor in public perception of nuclear power into your thesis because the reason i ask is because for my entire life it's been pretty negative right nuclear power has been stigmatized uh as a dangerous power source and it's you know it's i mean it's it's a it's a it's an amazing technology right the energy produced per square foot the zero carbon emissions there's lots of reasons to love it there's been some horrible mistakes made and that's where the connotation comes from but do you factor that sentiment into your uranium thesis len uh to some extent and the reason uh that i don't focus on it too heavily is because a lot of the demands coming out of asia so going forward a lot of the reactors are gonna be built in china india south korea middle east um you know uh eastern europe places like that uh now so the major tale of this guy look out for is if you have like a fourth major nuclear disaster that basically pulls some of the existing uh you know reactors off the market in a big way right so a handful of reactors here doesn't matter but if if a major country like we had japan pull all the reactors offline if that were to happen to united states or france or something like that you know that that would really kind of derail the bull market thesis uh but overall just from the numbers being built compared to the supply you know basically regardless of what americans the europeans think about nuclear just the numbers kind of suggest very long-term bullish here uh now in terms of sentiment it is seems like it's changing in the better uh and you know one thing i point out if you look at india they still have like two-thirds of their great electricity being generated by coal right so you know people can debate about you know what what's cleaner than what else but i mean there's no there's no debate that coal is pretty much the dirtiest major fuel source out there and you know their usage of that is still growing and and they have some of the you know if you look at say air pollution in major cities it's been a pretty big problem throughout asia including india and so they have a pretty big incentive to at least want to take a segment of that and put that into nuclear energy and one thing i point out in terms of the overall environmental and safety profile is that all these different types of energy sources have risks and you know nuclear is kind of like it's comparable to an airline and so for example we often a lot of people are afraid to fly on planes if a plane goes down it makes world headline news for for weeks whereas statistically it's a far safer mode of travel than cars we don't really think about cars too much uh but that's because there's no disaster that that makes like world news with cars it's always these these small things kind of building up over time and so with coal there if you look at the studies i mean there's there's like hundreds of thousands of deaths attributed to uh you know basically the burning of coal and other sources and causing particulates to be in the air and exacerbating health conditions and causing death and illness uh whereas if you add up all the deaths associated with nuclear energy including the the long reach one so very few people died from the actual you know meltdowns but then if you include the even the high range estimates for the long-term health effects from radiation and stuff it still comes nowhere near coal over those decades and so overall if you just run the numbers it's it is a pretty safe and clean energy source yeah i think you brought up the most important point there and that's that if you're not choosing nuclear you're not choosing solar or wind you're choosing coal that's the reality of our energy production today okay let's stick with energy then so talking about the renewable energy transition in the u.s outside of copper land are you looking at and outside of nickel are you looking at any rare earth's lithium cobalt anything like this uh so i don't go too heavily into that um and i i am generally strategically bullish on a variety of those uh but again kind of like say junior uh uranium miners it's not an area that i pick out uh but it is well known that cobalt is is important for electric vehicles and at least as they're currently uh kind of designed uh but i've really focused pretty heavily on having a broad distribution so i like copper i like nickel uh and i i you know i like i like it when a company has a cobalt mine or cobalt stream as part of its uh you know production and so that's kind of how i'm playing this is kind of a scatter shot broad approach yeah okay that makes sense and so then staying high level precious and base metals maybe call it you know silver copper nickel um any that you're most bullish on for 2021 uh so for 2021 um not not specifically i think you know copper came really far really fast so i turned increasingly bullish on copper and in kind of the summer and we've had a you know stronger rise than i would have expected those positions have done really well so i've been somewhat pairing them back even though i'm still long-term bullish it's just a matter of kind of risk management right i wouldn't be surprised to see consolidations or corrections there so i guess i'm not super bullish on copper in the near term uh but if you're if you're kind of really kind of focusing on say a 6 to 12 month outlook technicians can probably give you a better answer than me i'm kind of looking at more of like the multi-year outlook but i remain very bullish on on uranium very bullish on silver and gold you know pretty much most of those metals and maybe a little bit more concerned about copper just in the intermediate term okay and final vertical i want to touch on is emerging market equities so talk to me about timing and your outlook when it comes to emerging markets so one thing i do is i separate them into different markets and so you know people often look at that you know the basket the msci emerging market index and that's you know market weighted composition uh we have very different countries in there you know russia and india have very different demographics very you know just very different markets than you know you have china compared to chile it couldn't be more different in terms of what their what their what kind of companies they have what what's happening there and so i really look at things on a country by country basis the one thing that they mostly share in common is that they're they're an inverse dollar trade because a lot of emerging markets they rely on external funding they have dollar dominated debts and so when the dollar is is you know inflating when there's basically the dollars weakening compared to basket foreign currencies and and weakening compared to hard assets in general emerging markets tend to go along with that that dollar bearish pro-commodity trade and there's some more than others and so for example uh you know russia for example has less dollar dominant debt i mean they've really kind of de-dollarized to a pretty good amount but of course they're very dependent on energy prices that's their that's their big connection whereas china on the other hand they're more technology focused and with them it's kind of about monitoring uh you know what the basically the authoritarian leadership is doing in terms of you know they go through these cycles where they want to grow but then you start to get overheated over leverage and it's basically well known they have a pretty big corporate debt bubble and they always kind of try to prevent that from getting out of hand and so they go through these periods it's like if someone's like bodybuilding they'll bulk up and then they'll cut back a little bit and bulk up and china goes through these cycles where they grow and then they they put on the brakes a little bit and so you kind of watch those cycles for china but overall i am bullish on some of the chinese equities uh pretty much i'm i'm you know bullish across the board except places that have a ton of dollar diamond debts i'm more concerned about and i you know i generally like to avoid that risk i'm also actually you know pretty bullish on japan even though it's not an emerging market partly because you know japan's companies are pretty global in scope a lot of them do work around the world including in emerging markets and so for example one of the ways that i'm i'm kind of trading emerging markets is actually to have some of the japanese trading companies that are involved in commodities that are involved in infrastructure projects and all sorts of industrial projects for a variety of countries okay excellent look lin it's been great catching up with you thanks so much for making the time i know you're crazy busy you must be the hardest working macro analyst in the business this year so it's been great having you back on i appreciate it yep thanks so much for having me if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined right now by jonathan weisblatt the ceo of rockridge resources jonathan how are you doing great thank you very much for for having me i'm excited to have you on and dive into this story canadian expiration story so you know where i want to start is with you i've noticed a trend this year like maybe last 12 months jonathan of a few institutional money managers making the transition from institution to running a uh precious metals public company and this is the transition that you recently made i know a little bit about your background you were an advisor to one of the largest family offices in canada my audience knows sprott very well you ran their flagship canadian equity fund for over four years i'm curious why you've recently because you're the newly appointed ceo of rockridge resources like mid-march so what inspired you to make this transition now yeah so let me give you a little bit of background on myself um so i i have been involved in institutional institutional portfolio management for the last almost two decades uh the first few years as a diversified sell-side analyst uh 10 years managing multi-strategy hedge funds here in toronto uh four plus years as you mentioned running the sprout canadian equity fund and the last few years um you know working as an advisor or as a an internal portfolio manager for uh for a very large canadian well-known uh real estate family office so the important thing to know about my style is that i've always been a source of capital but the investment style was always taking a concentrated position in a few high conviction companies so really getting to know management teams uh having an intimate understanding of the businesses and the strategy uh always being very supportive capital as opposed to just being a passive investor um and with that being said a little bit more than a year ago i started to allocate capital um in both my own um in my own accounts and in the accounts of my clients into precious metals for the first time in the prior four years just given the market uncertainty and the current environment as the the environment wore on as the year wore on and the increased stimulus being created by central banks causing fears of rising inflation depreciation of the u.s dollar i started to add various positions and base metals as well um so i started to take a very macro view of the world um and while i was doing that while i was repositioning my portfolio um i met rockridge and became very interested in their two flagship assets uh one was uh knife lake which i'm sure we're going to spend some time talking about today and the other was the rainy uh the high high grade gold project in ontario right started to to find interest in becoming more of an internal advisor and operator as it's just opposed to being a source of capital so this is the the transition that i i was making um in my career so as opposed to just having a collection of quality assets you know under my portfolio or my umbrella it was really my goal to really focus in and harness um the the quality of one of one asset so i worked early on as a strategic advisor to rockridge getting to know the team the assets and the strategy in greater detail as you know and as i mentioned i come from an institutional background in the company its assets um and its size makes it an ideal addition to more institutional grade portfolios this was a very appealing situation for me given my background and experience and as an investor in the past you're always trying to identify a sector that has an attractive investment thesis and growth angle it's also good to identify sectors that are under the radar and undervalued so when i started following the metal sector in late 2000 and early 2001 this was certainly the case and once you've identified the sector the fun part is digging into the investment opportunities and for me it was finding a business with very good assets in an operating team and rock met both of those right away um furthermore i would say the potential at knife lake was the real exciting opportunity once it started to get under the hood uh with rock ridge we have a relatively new company with two great assets um but perhaps the most exciting thing about rock uh was its market valuation relative to its assets and its peer group the upside looked tremendous and even more so uh even more so today the company has 11 million dollar market cap it trades for about two cents on an enterprise value it's a total resource um resource basis its closest peers um in north america copper oriented peers trade between 10 and 12 cents making the upside for rockered shares just incredibly appealing uh the company was looking to to add bench strength to its capital markets leadership team i agreed to take the ceo rule and here i am i hope that gives you a bit of a flavor for my background and why i decided to join rock ridge yeah it does it does and as you said before we hit record i need to check apart was your network in toronto and i know a lot of that the team at rock ridge and i've invested with a lot of the team uh at rockridge uh you know jordan trimble being one who's been on my show before and i've known for years and have a high level of confidence in so i like the expansion to diversify the network and and build the brand further out east which i know you bring to the table so let's jump into the assets a little bit um you know we like the jurisdiction we're in canada we've got the knight flake knife lake right yeah in saskatchewan this is the copper project you've been drilling this there's a longer history to this project i think it was last explored correctly if i'm wrong jonathan like 20 years ago is that right yeah so let me run you through the the history there so mineralization of night lake was first discovered in 1968 so quite a long time ago um and you know the interesting part of that time frame was one of our strategic advisors uh ron nedelitsky was actually one of the geologists working on the the property at the time so he brings a lot of a lot of experience and a lot of legend yeah okay yeah and he's a legend so that that's uh that's a positive point to make uh the property was extensively drilled in the 60s and 70s um the asset back then was owned by uh actually not even so far back but in 1996 the company was owned by a group called leader mining leader completed the 300 plus goals on the property so they really zeroed in on the knife lake deposit uh in the late 90s and early 2000s metal prices collapsed well well below where they are today and leader mining was issued to cease trade order uh in 2009 a group called ursa major international acquired knife lake and its surrounding properties uh the company changed its name to minova gold and they had very little focus um in the region and very little capital was spent on knife lake at the time so back in 2017 um not too far back knife lake mining lease lapsed and the area became open for staking this is a very very rare occurrence in the industry specifically in canada and this was the first time actually in the history of saskatchewan that a mining lease had expired and in 2018 eagle plains which is a partner of rockridge they're a prospect generator they staked the area that had expired uh we negotiated an option to acquire 100 of the project in 2018-2019 and then went on to complete the inaugural drill program in 19 and we published the first 43-101 resource estimate on the project shortly thereafter so they were going to build a mine in the 1990s the project was orphaned before ending up in minova gold minova failed like i mentioned to make a small lease and tax payment and deposit and surrounding area it was became open for staking eagle plane staked it uh we ended up doing a great deal with them and here we are with with knife lake that's the the history i believe 20 million dollars in aggregate has been spent on the asset today okay okay and the secondary project is the rainy gold project in ontario i know it's the secondary asset jonathan but anything you want to highlight on this project today yeah so we completed a drilling program in the fall of last year we followed up on some very exciting results from the previous program it's high grade it's um you know it's it's much earlier stage than the knife lake project is so that project is currently on the back burner for now when i say the back burner i don't mean because we're not super excited about the opportunities there it's just we are so focused on knife lake at at the moment and really working to expand the resource base really understand the geology um in the region and really try to figure out what else is uh what else is at knife we think there's just tremendous upside and the resources of the company and the focus of the company really needs to be in saskatchewan for the time being okay and that makes sense and you know once again just a column i don't know jordan's got a ton of experience in saskatchewan via sky harbor uh but okay so talk to me about your cash position are you going to be going back to the market for capital for more drilling i know you've got a lot of work ahead of you yeah so we just closed the two and a half million dollar financing we did a unit deal at 12 and a half cents the program that we're running right now at knife lake will cost about 1.3 million so we're fully funded cash and ready to go um we don't need any capital right now i just want to emphasize that point uh when we finance again it'll be dependent on the success of the current program at knife lake there's early indications um coming from uh from the program that things are very exciting um the company is getting very excited about you know getting some results out to uh to the market and capturing the attention of the street for sure um so we're nearing completion of the the knife lake erning um we own 100 of the gold asset so we don't need any capital uh to keep going there um i guess the only other thing to mention is that the mineral claims are in good standing at knife lake uh for several years so there's no holding cost for the company right now so in terms of the treasury we are in great shape okay so if i can recap appropriately you know we're focusing on knife lake in saskatchewan we're drilling right now have enough cash to fulfill this program we've got a bit of optionality in ontario in terms of news flow this year what investors would look forward to there for is the drilling programs in saskatchewan correct and when can we expect some results uh correct so um the focus like i said is knife lake uh the program should finish uh over the next couple of weeks and once results are ready to be released uh which we believe should be you know sometime in mid to late may maybe through early june we're gonna get them out to the market as soon as we can um so investors can look forward to reviewing the results um also from the airborne geophysical surveys that were flown earlier in march uh with those geophysics in hand the target's refined investors can can get our drill results from from knife in the coming weeks and yeah those are the the big catalysts coming up for uh for the company okay so we're looking at late spring early summer all right okay jonathan thanks so much for coming on uh introducing this story to my audience i've been curious about it um i keep a keen eye on anything coming out of that office uh in vancouver and so um appreciate your time and i'd love to revisit uh maybe in the summer once you've got some results to talk about i'd love to do so thank you very much my pleasure if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm very excited to introduce my next guest daniela campone the editor at large and anchor at stansberry research longtime friend speaker at my conferences for ages i toted daniella as the best broadcast journalist in the junior mining sector danielle it's great to have you on and connect uh jay it's uh it's my honor and i just want to congratulate you on you know you're not my competitor um but you have uh launched a really successful show here um i've been following it you have great guests and you're awesome at what you do so congrats on the success of the show thank you no i feel super fortunate it's a ton of fun um and i'm sure we have a lot of war stories that we could share absolutely yeah where i want to start is you know like me you sit down with well you probably sit down with the largest variety of personalities in and now macro finances not just the mining sector anymore it's broad spectrum finance and when you do that you must pick up on trends you must pick up on hype and you've seen a number of cycles occur come and go what how do you determine daniella when you're talking to a guest these days whether whether what's catching the attention is just hype or if there's some long-term trend underneath the narrative yeah that's a really good question jay um you know and i always try and bring on guests that i feel my audience um you know wants to hear from and are not pushing an agenda but of course like you know sifting through the noise and figuring out like who's you know speaking the truth or speaking from an agenda you know that's that's one of the main uh roles of of journalism um you know and how do i like i guess your question is how do i know if someone's being being straight up or or pushing something or selling something yeah or selling i mean you know what like i tell my audience or what you know i need to also be doing is if you look back on on the interviews and if they've been repeating the same thing you know year after year and if something doesn't pan out right and it was just a sweeping statement because maybe it got them views in that moment um well then maybe that's where you need to question their track record sure um and again doesn't mean that they're not popular people but just take that with a grain of salt that you know if they've been saying like this event is going to happen and it hasn't happened and 10 years have passed well maybe you just need to maybe take a step back and re-evaluate that and it's not to say that we can't be wrong and calls can't be wrong and and i always say it's not easy okay it's really hard to go out there and make a call especially when it comes you know we do it where's gold going where's bitcoin going to stick your neck out and make that call is a lot harder than people think um so you know also take that with a grain of salt like no one knows you know and here we are you know asking these experts well tell me where do you think it's going you know and then they give us a number and you know most of the times it's not going to pan out um so i think you know if someone's really off on a call i don't think well they're not they don't know what they're talking about then you know i think there's a lot of factors at play and that's why i'm not a huge fan of asking for forecasts you know i do it because i know the audience yes that's what they want to know you know but you know i don't think it's fair that we have to you know hold people to those forecasts forever but yeah and and just on that note about you know it's happened to me a few times and it happened to me recently where during an interview i'll actually have some sort of eureka moment or enlightening and i love when that happens i wish it were to happen more often um and you know offline i don't know if you want me to share this story we were talking about how i had michael taylor on before definitely who's you know the ceo of microstrategy famously made um a huge call in bitcoin and move into bitcoin a very bold move into bitcoin and um you know it's no secret i obviously come from the gold world and i am invested in bitcoin um but getting me there in terms of seeing bitcoin from a speculative asset to a vehicle of wealth preservation is something i'm having a hard time doing and during the interview he was almost he didn't know he was doing it but he was walking me through that path and trying to get me over that threshold of it is wealth preservation it is a long-term play bitcoin is life bitcoin is alive now kind of loses me when they you know bitcoin proponents say bitcoin solves all world problems bitcoin is love that's kind of where the narrative gets lost on me but i love that interview because it caused me to think to you know step away from that interview and look look at bitcoin differently so whenever that happens i know wow that that was a really good interview you know well yeah he's he's such a i don't want to come a gift he's kind of a gift to the bitcoin community because he's so articulate if there was ever going to be a poster child yeah or the corporate world moving towards bitcoin i mean he's the guy right he's very eloquent very passionate very intelligent very successful he takes all the boxes and he's somewhat evangelical about about bitcoin and so in terms of driving that bullish narrative there's i mean he's an excellent candidate for that now you know from your seat you've seen trends like this come and go you've seen the bitcoin trend come and go before 2016 17 18. right here it is again different but it's back right you've seen gold markets come and go um what do you look for when you know so i asked this because i'm also invested in a bitcoin i'm a precious metal investor quite diverse in my portfolio but i hold bitcoin and i dollar cost averaged in it's it's like i don't know if i look at it as a safe haven asset class yet we talked about this a bit but more of a speculation but now i'm seeing a lot of the science that uh that that resonate with me as a top and i mean you know the retail froth i mean people who have never purchased a stock now calling me for bitcoin investment advice i mean lindsay lohan on twitter telling everyone if you don't own bitcoin you're an idiot these are the things that we should watch out for the red flags um now are you seeing that are you seeing that shift in sentiment in the bitcoin market now yeah i think that's a really good point and had you asked me a month ago i was sure bitcoin was going over a hundred thousand even yeah two months ago when like the euphoria was really high now we're obviously in some sort of consolidation period here and i i know when energy's down because you know like you i i live on based on traffic and numbers and what content's being digested so i kind of see it as it's happening right and the bitcoin energy for whatever reason right now has kind of gone right we're not really moving anymore so that said i don't think this is a top i don't think this is a top and again this is purely just based on my gut instinct um i still wouldn't be surprised to see bitcoin go north of a hundred thousand uh but i also wouldn't be surprised to see it have an 80 correction the next day okay and that's how i view bitcoin um yes well no i don't think we're at a top yet okay i'm with you now you interview individuals like michael saylor right you also interview individuals like jim rickards right and so they're the the icons and the gold in the bitcoin space and everybody in between now the gold versus bitcoin debate often becomes very binary right it's like you got to choose one or the other yeah and if you choose this this campaign so if you choose that this camp hates you right and you know you reference before we hit record here you know your portfolio is spread out actually you've got positions in each why is that a mistake what are investors missing when they they believe it's one or the other and and how does that impact your portfolio yeah another good question jay um yeah and i think people will be surprised because of course i i've emerged and i'm very present in the gold world and of course you know i don't think it's any secret i'm a big believer and proponent of holding gold uh but i do believe that there is space for bitcoin and the way again this is what works for me and the way i view it is bitcoin is a speculative asset for me so the way i play bitcoin is money that i am not afraid to lose that if i were to lose that money it does not affect my quality of life the money that i need long term is in cash gold and silver primarily gold and i'm not losing sleep at night with that so um i've used this example in the past for my new mom to twin boys and whatever they're 100 in gold whatever whatever money has come in for them is all in gold because they don't need to touch that for 20 30 40 years some people are like oh but look at the you know gold hasn't done anything from since august i don't need it to i'm fine with where gold is here right i actually like to buy gold below 1200 and it kind of you know hurts me to buy gold here but i still do um so so that's that's so i they're all in my portfolio but they serve different functions if that if that makes sense yeah of course of course so so for me long-term wealth preservation it's gold period got it and yeah i mean obviously in cash too but you know bitcoin is just you know if i can get in and um you know have my money grow via bitcoin why not but i'm also prepared to lose all of it got it okay yeah i see it somewhere in my portfolio to be honest now danielle reflecting back on like the years you've been hosting interviews what's the the most significant piece of advice that you've ever received from a guest wow that is a loaded question that's what's me sifting through thousands and thousands and thousands of hours of interviews who do you quote most often wow that's like asking me you know choose between my children but um in my head i mean i you know i i look to actually i look back a lot of my interviews as research for myself and the people i always go back to are like the frank just the gym records rick rule uh doug casey has taught me so much you know um things that he told me like 10 years ago and i thought at the time like i don't know that's really out there you know and now i'm like wow he was right you know i think he's such a visionary um and he's such a gift for our industry so he's taught me a lot um like i said frank giustra has taught me a lot about the role of gold you know when you're talking about how michael sayler is really that the poster child for bitcoin for me on the gold side it's really like the records the justra yeah um so you know i've had so much wealth accumulation i can't say there's like one specific but you know advice but but jim rogers had you know had a good one about when i was talking to him about bitcoins and about bitcoin he said you know the problem with with bubbles is that no one really no one really ever wins because you just don't know when to to get in and out at the right time so um he really kind of framed that up you know brilliantly for me so um yeah i always just like i said i go back and i listen to a lot of these experts i speak to because i've learned so much um you know and i really think that all these interviews have uh added to my knowledge base and have made me the journalist i i am today so i i can't just pick one for you jay i know you want that no i don't but you know i'll counter that bull market quote first of all i love it and i was chatting with uh ronnie stoffle yes yes his comment about bubbles is a bubble is just a bull market that you don't have a position in and he was he's a gold investor who's positioned one of his funds in bitcoin got a lot of hate for it and his response was you're calling it a bubble because you're not positioned in it that's all which i just thought that's a smart rebuttal i love that right okay now you listed a lot of names that we know but if i could add one i'll add one which has caused me to reflect a lot is um when rick rule was on and i asked him the best advice he ever got and he said it was from his wife who who when he was so focused on i got to make money i got to make money and we've all been there right like we're hungry we want to we want to be successful we want that financial freedom um but for him his eureka moment and this resonated with me is he stopped focusing on wanting to make money and help others and he said that's when he saw the greatest wealth come in interesting um so that's lingered with me um and i love helping people and and and and i just thought that was really interesting so um yeah a lot of these things just stay in my mind and i keep thinking about it and thinking about it so yeah marvel service tonight i'm sure you know rick loves that right i've been a benefactor of that he's very gracious with his time spends a lot of time and energy reaching down to the next generation um you know one of the few who gave me a big kick in the ass like 12 months ago you've got to start sticking your neck out right this isn't enough you're not doing enough which i loved um okay now you mentioned a lot of big names that we know doug casey jim rickards jim rogers frank giustra rick rule who's off the radar though who should our audience be paying attention to that is less known you know okay yeah okay i love this so i've discovered some new gems i i feel like it's like mining in a way and when i find that person i'm like yay you know and that's something i just want to say i'm proud of that i built at kikko my prior life um where i i i have a good sense of if someone's gonna be a talent like i'll meet them and be like you know what i think there's something there and if i could help propel that person and give them a platform that that brings me so much joy so for example when i first had met eb tucker who's a speaker i was like this guy this guy's going to be phenomenal for camera he should have a newsletter and i'm not saying that i am the reason to success at all but i knew he'd be good for interviews and in fact he's you know done extremely well um so guy who has zero social media presence evie's made himself quite the name yeah so off the radar so and and this might be not off the radar for you but they were for me was i just met lawrence leopard who's a newsletter writer um i've had him on twice now the audience loved him i highly recommend people follow him i think he resonates really well with the audience i'm a big fan of vince lancy he's really like this classic new yorker you know kind of disgruntled traitor old school but tells it like it is and he's the founder of echo bay partners and also is a writer for zero hedge but i like him because he always offers i don't know just a different perspective you know so um in terms of two two new people on my horizon yeah and oh actually this week i just had lynette zang lynette zang on interesting yeah she's uh chief market strategist i believe at itm um i had never interviewed her now she has a huge following uh but i just liked her matter-of-fact way of of speaking and if the times like even if i don't agree with them but the way they present that information and it makes me think and reflect i'm like hey i'm all for that so those are just a few names that i've been following more closely okay i appreciate that now one thing you must do and i i find that myself doing this with my guests frequently is you hear you know 10 11 12 perspectives and without question you end up identifying where there's consensus right and that's where i end up spending the most attention right if i think back to last winter and early spring every guest i had on the show 90 of them were telling me something along the lines of i've got a non-zero position in bitcoin right they're pushing some percent of capital that direction now that's all i have to see you know enough times over a variety of individuals to know there's a wave of money moving that direction so i want to put myself in front of it obviously that ended up being a great trade so this year daniella does anything stand out as consensus all the guests you've spoken to so far in 2021 where is the most bullish sentiment consolidated right now i'm feeling the heat on copper and this is i'm not saying it i'm just saying where i'm feeling the energy from the gas copper uranium and i think there's a lot of hope riding on silver interesting i really hope for the silver investors yeah um this will pan out so this whole like movement towards greener energy electrification you know how how necessary silver will be um i hope this will be the breakout if not this year next year um for for silver but right now it's a copper and uranium look or feeling hot to me interesting okay very cool i think that's a great place to wrap it up look thanks so much for coming on it's about time we did this hey continued success jay you're killing it and i can't wait to be back um at the next vric yes it's one of the greatest greatest conferences i attend so look forward to that yeah fingers crossed this january we'll see you back in vancouver absolutely a lot of fun okay thanks daniella thanks if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined again by serafino iacono the executive chairman of grand columbia gold court serafino it's great to see you again thanks for coming back on thank you for inviting us again yeah it's a pleasure and i i'm excited to get an update there's a handful of topics i want to run through with you today in the time that we have i want to get an update on segovia and production i want to talk about how you position grand colombia as i was saying prior to hitting record almost like an investment bank where you've taken large positions and some of the most exciting emerging companies from eris which we've talked about on the show before daenerys silver a newer company my audience might not be familiar with and of course gold x which is a really exciting development so um why don't we start with segovia the bread and butter of gran colombia and uh we're on pace to do 200 220 ounces of production correct anything you want to update my audience on specifically sure look it's it's exciting times um the the covet affected us uh just for three weeks so we are literally short three weeks but we're catching up i believe that we're going to achieve our upper part of the guidance that we have gold is being produced perfectly the company is running now smooth so maybe we can start a little bit with what we see coming this year this year it's going to be a very critical year for us it's a it's the year that we are first of all the carla mine is coming into operation so material is going to be coming out of the carla mine um we are concentrating our efforts this year to 60 000 meters of drilling and this drilling it's exactly to do what we've been saying that once we felt comfortable we had the money we had ourselves positioned well concentrate on the 24 additional mine that uh that is still shut down and ready to be to be uh to be developed we have a program that it's a very aggressive program and the program is to bring in number one reserves up number two resources up and to continue to increase those reserves and resources the good news also is that as we start starting to drill drilling in areas like vera we announced a a few weeks ago you know the market sometimes just doesn't pay attention in vera we announced some incredible drill holes you know we're talking about areas with uh 50 grams 60 grams of gold and and 400 grams to a half a kilo of silver so very very profitable area these are these are all mines that were mined in the 50s and 60s we are now drilling opening them up trying to understand what they are and this is the continuation of of the rest of the area in segovia so very exciting year this year it's going to be a decisive year 2 21 22 it's gonna it's gonna take the company into uh deeper where we have uh we're still finding some incredible grades and the other exciting part is that we're going to be expanding the mind to 2000 tons so we're going to have a bigger capability of us processing more material and possibly taking advantage of of processing some more material that normally we wouldn't process into this thing okay and take advantage the other exciting thing is that within the next three months we're going to be putting into operation the the concentration plant from the tailings uh we're going to make a concentrate that's going to recover all the silver that gets left out of the recovery the gold that gets left out of the recovery and the zinc and zinc and and lead that uh normally we wouldn't recover so this thing is going to recover it's going to be a great it's a great investment that we did it's going to come into operation i think within the next two months we're going to start producing this concentrate not only does it bring additional income into the company and it's a substantial amount of income we're looking somewhere between 8 and 16 million dollars a year additional money um but we're also doing something that is incredible we don't have to dispose of these materials that you know with heavy metals like lead and and zinc we're going to be recovering them so the tailings that we're putting back are now much cleaner than they used to be before so got it okay so there's there's a ton to unpack there um first of all it's remarkable you were only put on pause for three weeks that's right and that's uh quite an outlier scenario for this year for companies like yourself um so a couple questions then if you know we're looking at a pretty aggressive 60 000 meter drill program at segovia but we can expect more results probably ongoing from vera and your other properties you know with your current production are you going to have to go back to the market for capital to continue to expand these resources and reserves or are you are you satisfied with what you're sitting on yourself we're sitting look the company is also in a great situation even with the gold prices being a little bit down we're still making great money do you have a company there right now we're sitting 100 million dollars using cash okay we are paying 10 million dollars worth of our debt our debt by the end of this year is going to be less than 20 million dollars um insignificant to what we have uh the company uh the company doesn't need any money right now to do any expansion or to do any any drilling everything is uh basically under control and our dividend policy is still going to be in place what we talked about last time that's the most important thing i wanted to have a sustainability capacity for us to pay that dividend not to pay it once in a while or you know if gold is up or gold is down or whatever i want to make sure that once we said that we're going to pay that three percent dividend the three percent dividend is sustainable yeah and we believe we are excellent okay okay now i want to dive into some of your holdings because when i opened up i said it's interesting how you position grand columbia let's start with eris gold i believe you're holding 44 of that company what developments should shareholders be paying the most attention to right now well that you know look we're very happy with the management team neil and uh and his group are top top of the market type of guys yeah um so they're going to take this project instead of first of all it frees us from concentrating on on grand colombia now we are very happy with our investment because i know neil's going to take this mine into production very quick so for us we like where we stand we like that what what's happening in sego in marmato marmato is moving along well with uh we're getting the construction going but most important what i like that neil also realized the value of uh of uh the jubi project in in northern canada and is now going to be spending money to start getting a scoping study i would imagine or pre-feasibility going on that so that he has a second mind pretty soon to be going up also got it so we're very happy about that yeah and neil woody are people who aren't familiar as a legend in the business and the whole team at heiress this is the team that you get the opportunity to bet on once every 10 to 15 years absolutely and we're very we're very on their side and we're very confident that they're going to take this company to great levels i believe it yeah no it's a it's a big piece and a growing part of my portfolio eris okay so let's let's look at denarius right now it's a newer uh silver project that people might be less familiar with again you're holding 36 percent i believe correct what we wanted to do is look at one of our strategy has been that we had inside our company grand columbia um a couple of assets that were undervalued aris what is one of them right okay and actually we got no credit and crazy enough even though we own almost 200 million dollars of harris gold we still don't get any credit for that which is the craziest thing of all you know it's like it didn't exist but uh but to us for our shareholder that's a great value to have now uh we wanted to do the same thing with the san clemente san culo is a joint venture that we had with i am gold i am gold is drilling they're doing their work diligently we find him some incredible uh results we published uh some of them we're going to be publishing more drilling that is coming into place it's a fantastic deposit but it's a deposit that's got more silver than gold the same thing with the antigua that that was put in by gold x because it was a silver more silver than gold so to give you an idea the uh with the san cuda project it's got seven grams of gold per ton very very reasonable amount of gold but it's got half a kilo of silver per ton right so it's more silver than gold uh same thing with gui antigua gui antigua you have seven eight grams of gold but you have 300 grams average of silver with up to three kilos of silver per ton so we wanted to create a company that would concentrate more on the poly metallic aspect of the company and so we said let's put these projects and get them in there the interesting part now is we added to this to this company a project in spain that once we finish the due diligence and once we uh we you know we can go through the closing of of the acquisition with an australian group that uh that had the rights of the property once once we know him we feel comfortable that we can close it's an interesting project it's a project in in the near sevilla spain in andalusia um it sits right next to the mazda mine that belongs to mobadola and trafigura it's a big copper producer uh what's interesting about this project it needs work to be done probably 12 to 24 months worth of drilling and and putting some scoping study but what's interesting it's got 20 million tons of resources with uh four grams of gold one ounce of silver one percent copper and two percent zinc and lead it's a fantastic poly metallic with some great gold grades open pitiable so very easy to to manage and with a major plan six kilometers away already built that we can probably bring material to them okay use it in the process okay so we like that and we like the the exposure on silver so you made a comment you know that we look at some time of our company as a sort of like an investment vehicle it's turned out that way by accident more than anything else uh i wanted to get value on some assets like arrest gold like what we did in denarius yeah and then we wanted to do some smart investments that then would consolidate this company would give this company a portfolio of projects that down the road either we developed it ourself or we did a smart investment yeah for our shareholders right one of those is goldbex yes and i want to talk about that next and right before we do though i guess i'm curious you know your comments about grand columbia is not getting credit for the value of marmato for example that's why it's now in eris but even still holding 44 of that company you don't feel like grand columbia is getting their deserved credit for that do you think i mean what are we waiting for then once neil gets this gets marmato to production do you expect that to change what are investors missing on this one sir if you know i i i think they're starting to come in and realize what this company is it took us a while look we i i took this company from being a company that was in the verge of almost bankruptcy that's right and you know very difficult times 150 million dollars in debt gold at a thousand dollars an ounce cost of production where 1300 well we managed to turn the company around i still believe that there is a lot of people that they remember this company like it was five years ago okay but they're starting to realize that that it's not yeah um why is it under value because i put it to you this way 220 000 ounces of gold production a year standalone segovia we own a mine now through eris gold that uh we own 40 43 or 42 whatever it is um that's worth close to 200 million dollars so i produce 220 000 ounces of gold i'm the largest single shareholder into a company that's gonna that it's fully financed and it's gonna go and produce 200 000 ounces of gold by 2024 at the latest okay so i have but i have 200 million dollars in value there i have a hundred million dollars in cash u.s i own 18 of gold decks which today it's worth about 70 million dollars 80 million dollars okay so 280 million dollars plus 120 million dollars in in canadian now i'm talking about it's you're talking about 400 million dollars right over there alone plus now we own 36 percent of daenerys which is worth another 35 million dollars 30 million dollars so put all together 400 million dollars canadian in value between cash and securities sure and i have a 375 million dollar market cap does that make any sense right it doesn't make any sense that's why i'm a buyer in my stock and by the way and i pay a dividend on a monthly basis yeah my debt is reduced and we are a very disciplined company yeah well that's how you're able to execute the turnaround i mean that's the story that i think people that are just tuning in now need to catch up on is the the history of grand columbia the turnaround story i mean it's it's the comeback kid story um okay so and what i see there i guess is security when you talk about you issue the dividend but a lot of companies issue dividends in a good market then can't keep it up when times get tough you know i see these assets you positioned in grant columbia i see security that'll protect my dividend as a shareholder so let's talk about gold x a little bit 18 interest um what should investors be paying the most most attention to sarah if you know well look goldex is we looked at gold decks always in the beginning for developing it and we took a position in the company because of the reason um we made a first attempt when the decision came when guyana goldfields was up for sale we bid for the company because we had and still stands to be one of the best ideas to get those two projects going our project with uh decision project which is guiana goldfields they have a plant that processed ten thousand tons a day they are sitting around that's that was the idea for me to buy into the company and to do the merger with grant colombia right uh they have ten thousand ton a day planned they have a pit that it's almost finished with a 16 to one stripping ratio they have to go underground almost finished reserves on the other side 60 kilometers away sits a project with six million ounces of gold open-pittable with high grade uh with a pit with i grade that is about four to five grams per ton uh with a mine life of about 10 years that you can bring into that material plus a huge deposit with 6 million ounces of gold and 280 000 tons of copper in place so this project is a perfect marriage with that other plan it didn't work out we stepped back and we said let's wait and let's develop our project in in in colombia get it that we gave it to neil's group now we want to concentrate ourselves in developing the project we are the largest shareholder of that company single largest shareholder with 18 and if you put the warrants in there we're more like 22 into the company so we decided that we want to buy it because if there is one area that i know is the guyana shield i built three mines in venezuela it's the same environment i believe that this project is ready to be built it's been sitting around for 10 years with trying to get developed i think that big ambitious projects to be done you know project 2 billion dollar project we don't want to do a two billion dollar project we want to start with a small pit hopefully we'll be able to do a deal with the xi jin with the chinese to use their plant and execute what i would just told you that i wanted to do originally otherwise we have to we're going to build a smaller plant to process five six thousand tons a day um it will cost 375 million dollars to build it we already did a scoping study on the project to build a whole mine we have a beautiful thing over here we have wheaton ready to write a check between 150 and 200 million dollars into this project so i got two thirds of the project already financed almost well at least sixty percent of the project grant colombia sits in cash and in the worst case i will do the same thing that we did with aries gold go out raise the rest of the money and develop this project and this project within 24 months if we do the deal with the chinese we can have production within less than 12 months and we could produce 100 to 150 000 ounces out of that mine they're using their plant if not 24 to 36 months we'll let the mind into operation with our own facilities and that's what i want to do and i believe that that's the next step to the risk colombia because one of the biggest problems that i've had okay has been everybody comes to us and says well you're one country one mind risk and i'm trying to say to people we're not uh first of all yes we are one country it's the country that i know best and know how and know who is just as important as anything else as i always say yeah so to me colombia and it's not a war risk company i own arrest gold which is a second mine that owns also a third mine in canada which was my idea now we are diversified with daenerys to go into spain and we're going to be looking at other opportunity and at the same time with gold decks grand colombia has a foot in another country that we feel very comfortable that we work and we can take our production to 400 000 ounces a year very easily right okay that's the system wide okay thanks for that explanation look sir you know it's been great having you back on and getting sort of a i don't know a bigger picture of the ecosystem at grand columbia and all the various moving parts because it is a bit of a complex story right you need to dive into it and when you say you're undervalued i find this often a relationship between undervalue and just a retail investor not quite understanding where the value lies yet right and there are many moving parts to the grand columbia story by design but for good reason and so i appreciate coming back on and updating your audience and letting us behind the curtain again thank you thank you for giving me the time jay [Music] if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined right now by willem middleco who's the chairman of commodity discovery fund really one of the pioneers when it comes to discovery investing willem's also the author of i think seven books well i'm focused on the financial markets and economics and a very respected name in the natural resource business so it's a real privilege to have you on the show right now thanks so much for your time well thanks for the invitation great to finally meet you and of course i met your your dad already 13 years ago i was a visitor in 2006 at the vancouver conferences so i go way back okay well hopefully we're going to be back in the physical forum january 2022 uh wait and see but well um for since i haven't had you on the show before for anybody who's not familiar with the uh commodity discovery fund with what you're up to can you give us the highlight reel what do you spend your time doing right now yeah yeah as you said i think we're one of the very few full-time dedicated discovery investors worldwide uh we know a few other discovery investors eric scrotts of course is became famous by investing in early stage companies uh warren irvin somebody like us as well but they're very few around actually many resource funds exited the exploration business after the collapse of the market in 2011. uh i've been a private investor in this space since uh 2003 2004 i've been a professional journalist for 20 years i was a dutch market commentator for dutch national tv between 2001 2008 and i was a private investor in the resource space and when i started to invest in gold and silver mining companies i noticed around 2004 that small companies making large discoveries do much better and i was a very early investor in aurelian resources in 2006 which jumped from 30 cents to 40 within 18 months and that that really got me hooked on non-discovery investing and we we built a system in which we um concentrate on the smallest companies uh responsible for the largest discoveries and to give you an example our fund was up 85 percent last year because of uh the gray mining up 1900 because of a large gold discovery in the australian pilbara and greatly gold that was a second largest position also gold discovery in australia so we're metal agnostic and we're um we don't focus only on north america we we cover the whole world so and i think um that's a large difference from most of our peers they tend to concentrate on the north american market and they tend to forget what australian business is like and australian investors they don't focus on the north american market so they only focus on their national resource place okay yeah now thanks for that so seeing as your metal agnostic what can you tell me about the fund right now in your exposure and to which commodities yeah as a discovery investor we're metal agnostic so we do we don't care whether uranian company or a copper or gold company makes a discovery we we always follow um the the best discoveries so we always have this top 50 of uh developing discoveries worldwide but we we try to focus our portfolio towards precious metals for 60 70 percent and that's because most of the books i've been writing were um about uh a pending credit crisis a pending monetary reset i'm the author of the big reset and our macro uh point of view our macro analysis points towards a growing role again for gold that silva will follow so we we try to uh to have a large waiting for independent precious metals and then we have a 20 waiting for um the base metals copper nickel zinc we focus on the battery metals in that respect and we also like uranium so uranium is like six seven percent of our fund as well and we invest most of our money through private placements uh because that's well that's the best way i think uh to get the most value for your money especially in the canadian markets agreed agreed so you know following that thesis you're seeing a growing role for gold and silver where fault will follow are you therefore surprised willem at the performance of gold over the last seven months if you look at the macro trends they're real favorable right and for reasons we all know but the metal price hasn't performed to a lot of investors expectations so tell me about yours i was especially uh surprised by the way gold behaved in the last seven years then it took uh seven years to bottom out because golden euros were here in euro country in the netherlands gold bottomed the euros in 2013 but the gold equities only bottomed well actually march march last year uh one could say and um we had this uh wonderful first recovery phase starting late march last year we saw a top in the gold equities around start of august last year we follow elliot wave counts a lot so we tend to trade quite a bit around our positions based on the elliot wave counts so we scaled down our gold investments seriously in august and september and we diversified our portfolio into some other place and that has really worked out well because if you look at the gdx the gdx is almost flat for the year over the last 12 months yeah we're up over 100 percent and since the early august the gdx is down 35 and we're up 10 so it really helps when you understand that you shouldn't try to predict the price of gold from fundamental reasons you can say there's so much money printing gold price needs to go up but there are always these strong corrections and we became humble because 10 years ago when i started 12 years ago i thought i could predict all these price movements by just doing some good fundamental research but then during the long downturn in which many of our peers even you know stopped or really lost most of their money um i i learned to pay a lot of attention to the technical indicators and to the um elliot wave elliott wave really helps us i'd love you to dive into that because i'm actually not super familiar with the elliott wave so can you describe how this impacts your decision making and what you're looking at yeah um well elliott wave is just an a form of technical analysis and actually it um it tells you that every strong move up has five phases the first phase is when nobody believes in it and you know it's very surprising rally that's what happened last year april may june and i always get a big correction can bring you down 62 and that's when everybody starts hating the space again and that's the phase where now you know and nobody's bullish only 20 is bullish on gold and that's when the real recovery starts all of a sudden i think we're on the verge of that point and then you break out from out of the downtrend the timeframes we've seen since august and then you get the strongest rally which is the phase three and that's the longest and that's the strongest rally so you can expect a stronger rally even stronger than we had last year and it will take longer as well and that might bring gold up towards 2500 there's a very interesting situation around silver you must be aware of the silver short squeeze movement um i've been following silver for 20 years i've been investing in physical silver for 20 years so that's something we follow and i think we're on the on the verge of a break of 30 dollars again in silver as you might know silver is the only commodity only metal which is trading at the 50 discount compared to 1980 levels so silver has as a big uh has some room to run and i'm i'm a big fan of eric sprott's um well writings and line of thinking and eric sprott always told us that once silver breaks when once the paper silver market breaks you could have a run towards 100 silver within a few weeks or even a few days and that's why 15 of our portfolio is silver related now and there was only three four percent last year okay interesting yeah that's hyper bullish then when you put that in context uh so two follow-up questions off of that willem um first and it's kind of a gimme it's easy to to claim foresight in hindsight but you know based on your elliott wave theses i was curious as well last spring coming out of the collapse in march how frothy the metals market became very quickly and i had a lot of conversations on this show with individuals and i was asking that question i was like you know all of a sudden recreational investors who have never had exposure to precious metals are asking me for gold investing tips and you know i've seen enough cycles to identify the red flags and things start to get frothy and so i wondered if things heated up too fast too quickly uh but most of my guests said no you know you know this is exactly as i expected in fact they expect it to get hotter um obviously we've sensing the correction so can you tell me truthfully back in the spring spring you know june july were you anticipating a correction to be as as stark and long-lasting as it's been um we expected the correction as i said because we scaled back our investments in the personnel space around august okay we thought it would take a little shorter yes say three four months but as you might have experienced yourself trends always take longer on the upside and the downside yeah and especially in the metals and the precious metals once they run they keep running because the run from march last year till august was an amazing run we were up 200 from the lows um from the march lows and and then you have a correction always takes longer than you think always another leg down we're on the verge of a breakout now but we might have one more move lower um and then out of a sudden there will be a very strong rise and it will be a vicious rally it might be a vicious rally it might be that vicious that if you're not in the market you you don't dare to to enter because you will we'll we will go up um you know four or five percent a day and this can go on and on for for some time just like we had last year and if we look at our charts and if we listen to our advisors av gilbert is a great technical analyst in this respect i expect a a jump for a rally for gdx 50 to 80 later this year and it just can't start any minutes okay now second question on this topic and then we'll move on you covered phase one which is the initial rally phase two the correction phase three the longer the prolonged uh what's phase four and five look like yeah um it it's very important to scale back your positions after um in the end of the phase three and phase three will will be a one two three four five in itself as well um and so most of the time it it it's not that difficult to um to see especially when the market goes up and in the next uh in a parabolic way you know that that's the time to scale back you see that with bitcoin as well once you go parabolic uh then you need to take some profit uh so we expect a uh a rally uh for gdx and and personnel is related to equities of around 50 to 80 and then you really need to take profit because you'll have this correction the phase four and that can bring you down um 20 to 40 percent and then you will have another strong rally and which will bring you to to the top of the of the cycle this won't be the end of the commodity boo mark or the gold bull market because if you look at the very long term chart the monthly chart i think you could you could say that we have seen a generational low in commodities around 2016 2020 right 2020 was a double bottom compared to early 2016. and a generational low means that you could have a decades long boo marked in commodities and if you see all money printing worldwide it's quite logical to expect inflation will turn up we see the first signs about of that you might see more investors start to flee out of paper assets towards hard assets and bitcoin is also a great example of this uh well fly to safe havens right and and but but it's important to to to time the cycles and to trade around your positions but if you are buying a whole type of guy and you're 40 now and you want to save money for your retirement you don't have to trade you just it is start of a bull market and just sit down and sit back and relax and then we'll do well you know what what i like about this is i can find direct correlations to the sentiment indicators that i look for i mean i i run a conference business so i talk to people for a living i i do this for a living right i talk to people and and not just professionals like yourself but you know we have thousands of retail investors that attend our events that have a monday to friday day job and also play the market yeah and and those those conversations are the best indicator that i have yeah when i sort of just watching sentiment become a bit unrealistic right um and i like hearing the technical version of that which is what you pay attention to because it's it's off my radar right it's not what i focus on so i appreciate that so thanks for for that explanation i didn't expect to go deep into the lab when we see markets um when we have this exhaustion gaps down you know after a long correction i always know when we're very near the bottom because then we have over 1 000 high net worth investors but then you have this day that i arrived that i i see my mailbox and i have five mails in my mailbox uh about people you know people panicking and one wanting to exit the the the their investments and that's always the best indicator that the bottom is near you know when people start to send me those kinds of emails yeah well it's good right and it happens to the best of us i mean i'm not i'm no veteran but i'm not new to this market and you know i cut my teeth in the resource business really from 2011 forward so it was a it was a very tough bear market right which is a great time to cut your teeth in anything right at the bottom because the individuals who stick around typically are there to work hard and they're not there for a free ride or easy money um but as a consequence of that i think i'm used to kind of riding the bottom of things however i look at my portfolio now i'm very weighted in precious metals and even you know i'll still question my conviction and say was i correct was i right that i missed something here right what am i missing you know um it's a conversation i think every investor goes through so anyways uh i want to move on a little bit because you you talked about you mentioned bitcoin a couple of times and you know i i mean i'm glad that we focused this conversation on precious metals but i do want to touch on this just because it's so timely right now it's another asset class where i watch sentiment right and i watched the bitcoin rally of 2017 and we all saw this parabolic rise and then the crash that followed immediately after and and i attributed that to sort of a retail dollar rush into the space right and and typically i think a lot of that buying activity in 2017 was inspired by the fact that the price was going up and that encourages more buyers creates fomo creates more buyers who pile in because the price is going up which isn't a great reason to buy anything right and that's why things crash as hard as they do this rally in bitcoin was led by much more conservative long-term money tip you know for the most part and still is right corporate treasuries all this stuff but now i'm seeing these red flags you know i'm seeing the frothy red flags you know the evangelical twitter personalities the celebrities like lindsay lohan tweeting if you don't own bitcoin you're an idiot and i every ounce of me says it's time to hit the bid but i haven't yet i stopped yet so tell me yes what's your what's your stance what are you doing i know you hold some bitcoin yeah and i've been following bitcoin for a long time um in the big reset at the end of 2013 as that bitcoin is digital gold but i wasn't investing in it myself because i always thought you know i have the real thing i've got gold and silver so why should i buy the um digital gold and i was also of the opinion that the um g20 and the powerful leaders of the western countries they would um start to fight bitcoin at a certain point because it's it it's it's an enemy for the fiat money system um but around 2018 i became convinced that the g20 was choosing to regulate the crypto market instead of to fight the crypto market and fight bitcoin and once you regulate it you accept it and once you regulate it it becomes an asset class and once it's regulated the institutional investors can enter it and add it to their portfolio so from 2018 i started to invest personally into bitcoin around 5 000 because again i was making the technical analysis so we had a hype in 2017 and the very strong correction um which brings markets down 80 or 90 percent and then i dare to enter the market and we've been thinking about um how to handle crypto within our portfolio because no we're hard we are hard asset investors yeah i don't want to have to build another fund i don't want to build a crypto fund although there's huge demand for that so from a business point of view i really should start a a crypto fund but we decided to um to start adding crypto assets to our portfolio i think um we'll start later this year we're having some legal experts um well researching this topic now and advising us we're usage fund we're highly regulated some so it has to fit within all uh all are our rule book and so we have to change our prospectus but by only investing in listed equities which are connected to the crypto space like etfs and and and the listed miners i think we can add digital hard assets to our well standard hard asset portfolio and if we could add around 10 of our if we could change 10 of our portfolio from heart heart assets to physical heart assets that would be a great diversification and um of um you might know that that bitcoin once you have a rally is such a strong strong move so you only have to be for five percent of your portfolio should be connected to that rally and then then that would that would work out very well for the whole portfolio so that that's that's the way we treat bitcoin and crypto assets now okay okay yeah i'm with you that makes sense and speaks to to my strategy and you know a dollar cost averaged in most of last spring didn't ever expect to trade it never planned and it still don't uh but it's there i just wanted a horse in the race you know okay well um it's been great having yon thanks so much for making the time it's it's about time we had you on the show so i really do appreciate it thank you [Music] if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined right now by doug hurst the chairman of northern vertex mining corp among many other things that we're just talking about off camera the founder of international royalty corp founder of newmarket gold i want to get into a lot of these stories doug it's an honor to have you on the show thanks so much for coming on well it's a real pleasure jay this will be a good conversation yeah yeah well there's there's a variety of places i could start but you know where i thought would make the most sense is in the last 18 months royalty companies have been the bus right and there's been a ton of new listings and industries have piled in with your background with international royalty corp i just thought it made a lot of sense to start there because you're one of the pioneers in that business and uh we were just going over the found the founding of irc and and all of this and i'd love you to walk us through how you founded uh your royalty corp sure sure uh well so uh so it was really doug silver and i um and uh doug silver's a great guy good mind and uh he and i found that um we were throwing a whole bunch of business ideas against the wall kind of like in college when you threw spaghetti against the wall you know it's not done yet it's not quite ready so um so we threw a whole bunch of business ideas against the wall and one day he called and said you know what i think we need to start a royalty company and uh and he had described that he had sold a royal a royalty on behalf of a client to royal gold and so he looked at the the overall royalty market and realized that there were no canadian royalty companies listed at that point now franco and euro nevada had really broken the mold through the 90s and they'd grown to become a big company with a billion dollars of cash in the bank and the fascinating thing is that pierre and seymour figured out that a royalty company was trading at two times nav so twice the value of a normal gold company so for every dollar of assets that they were perceived to have the market gave them two dollars of value so for five or six or seven years in a row they between euro and franco and then the the merged company franco they raised 50 to 100 million dollars a year of unallocated working capital and they just threw it in the bank i mean there weren't enough royalties for them to buy right what that did was that a billion dollars in the bank gave them two billion dollars of market value and where was this done uh so that was through the 90s i don't remember the year that uh franco disappeared into newmont yeah it was in the late 90s so barrack made the the discovery a gold strike so that was in the uh late 80s in the early 90s and just as barrick had made that discovery [Music] pierre and seymour bought the royalty i mean it was it was uh wonderful wonderful fortuitous luck but you know when they when they got something good they knew what to do with it so fast forward doug silver calls me up and says hey we gotta start a royalty company and you know do you want to join the board and i said well of course let's let's see if this works and i put the phone down and i thought no no this is the idea this is the idea this is the spaghetti that sticks to the wall okay i called him back and i said doug i'll drop everything let's go uh you know i know a couple of places we could probably find a couple of producing royalties let's see if we can't make this work uh so we approached an old friend of mine uh in toronto a guy named claude and we bought his quarter percent royalty on hemlock wonderful guy claude and uh we dashed around trying to find the financing and uh uh the price to buy it was i think it was 3.8 million okay and and it was cash flowing between a half a million and seven hundred thousand dollars a year and so it was you know five or six times cash flow which is an extraordinary number if you know what the current royalty uh value is right you know five times nav so that's 10 or 15 times earnings right yeah that was an extremely cheap price and uh we also had the advantage that gold is 300 an ounce copper was under a buck nickel was three dollars zinc was was 40 cents lead was 25 cents and so we knew we knew that we could negotiate prices that uh that the the 30-year lows in all of those commodities was going to skate us on site so uh it was you know so at first it was kind of shooting fish in a barrel and we were the only company around now shortly thereafter as soon as as soon as we listed on came gold wheat and silver wheaton uh franco came back out of newmont and relisted royal gold was completely re-energized and uh so we were early to the party but the party got hot and heavy very quickly [Laughter] got it got it and royal ended up purchasing international royalty corps for 700 million correct they did they did yeah so so both franco and uh and royal got into a bidding war which was wonderful yeah and uh um and uh royal won the bidding war and that was a wonderful transaction yeah right okay so what what do you do after this right this is a colossal win potentially a life-changing transaction for you you've you've built and sold irc what's next what were you thinking at the time because they know what you did went on to found newmarket gold which was another yeah successful exit to kirkland for a billion dollars but at the time like were you thinking of stepping back or were you ready to charge into another opportunity right away well i did i mean i you know things got very quiet for me i played played with my kids for a couple of years it was wonderful yeah and as a side business uh some friends here in nelson and i started a small runner river hydro company so we played around with that for a couple of years and uh it really went nowhere and we sort of paid most of our investors money back and uh and then um uh and then just having been in the business for you know 20 years uh i got a call from doug forrester who said you know we have a shell called race star and uh we're thinking uh we've been approached to um to start a royalty company and you know you should join as a director come jump on let's see if we can make this go and that that royalty idea didn't work and and i knew most of the directors at that point so there was uh blaine johnson and doug forrester i'd known for a very long time great guys the other directors the other directors were it was randall alifont and lucas lundin so uh and then you know so i had the privilege of joining this this cast of characters and uh and so after the royalty idea didn't work we started looking around and actually we brought on a really wonderful guy a guy named ray threlkeld so ray threlkeld joined um as our chairman and uh so so the four of us said doug and blaine and i and ray uh started looking around for other ideas and along came crocodile gold and and crocodile gold was one of those companies that the market had really forgotten about they all of their minds were in australia but it was a canadian listed company so we jumped on a plane and flew out and looked at the assets and the key asset in that company was fosterville unbelievable so we got there just as they had pulled a few early drill holes from from what is now not the swan zone so we saw drill core you know five six eight ten meters of just gobs of gold hundreds of grams of gold just as we were doing our due diligence so we couldn't get home fast enough to complete the deal uh and it was wonderful and working you know doug doug forrester was the ceo did an incredible job absolutely wonderful um and he and blaine worked so well together and i was just so privileged to be part of that team um and it worked out incredibly well i mean you know from the day we bought crocodile gold to when we sold was what about 18 months yeah that's outstanding remarkably fast turnaround were you expecting to catch kirkland lakes attention was that was that in the vision well no so what uh we talked to uh many producers in australia and we talked to a few in canada you know when you uh you know when you're doing business in another country especially australia talking to a fund manager about raising money or buying your shares and they call the guy that they know in australia and you know so we had several of those kinds of interactions and they would call the guy the guys that they know in australia what do you think about foster girl and they go ah it's kind of a dog with fleas you don't really want to deal with that and no one really understood uh what uh what had happened or what had transpired in the exploration at fosterville so it took a while to to overcome that scar tissue that the industry had built up around uh crocodile's assets but once we overcame it i mean it was just lights out uh you know the the merger with kirkland lake we talked to several groups about it and uh eric sprott had bought a nice chunk of uh new market i think 17 of it and he had you know 15 to 17 percent of kirkland and so the obvious place to go was to go to kirkland and say you know what eric sprott owns a chunky you and look at our assets and uh um and so that's how that merger came together and it was a wonderful win for shareholders for sure and uh many of us kept a good chunk of our stock uh in kirkland afterwards and uh and you know the rest is history i mean it was extraordinary okay so thank you for detailing that you know i wanted to start there with you know international royalty corp you know founding this company selling it to royal gold for 700 million finding the new market opportunity building that up selling it to kirkland lake for a billion dollars you know notwithstanding then you know northern empire which you built with mike allen turned around and sold to core mining again remarkably fast that was remarkably fast the reason i wanted to start there is because everything i do on this channel i harp it's it's people over everything investing that's my approach and you know we talked about this before i hit record you got to know what kind of investor you are in this business and some are more technical you may have a different skill set than i do but i talk to people for a living i run a conference company and that's the hand i have so i play that hand i like no who i always invest in the who um and with that you know success begets success and that's what brings me to northern vertex but prior to that that's what brought me to eclipse which was the company that i covered on this channel in my newsletter in september you know what brought me there was yourself what brought me there was marcel degroot to pathway capital um you know a handful of individuals that i follow in this in this industry because success begets success now let's talk about northern vertex let's talk about eclipse first of all because when investors were looking at eclipse they were probably looking at you know a single asset explorer so you're looking at a relatively binary outcome and you touched on this right when you you put holes in the ground you get one or two outcomes you find something or you don't right the merger with northern vertex could have been perceived as a bit of a pivot for investors who are expecting a traditional expiration story yep look can you talk to us a little bit about that and the methodology and thought process that directed that decision well your description of uh of eclipses was exactly right it was binary right so it's either going to work or it won't and you're either going to get good drill results or you won't and and and as managers of a company we have a broad range of risks and there are some risks that you can control and then there's a whole bunch that you can't you can't control the gold price you can't control the social environment you can't control the political environment and so so as a way of mitigating the value of the company you try to control the risks that you can control so uh so northern empire was a really good example of that a northern empire had a couple of exploration projects and they were drilling holes uh in them and and it was the the binary outcome and so the stock price went with the uh uh with drilling campaigns right and when mike allen got involved so i was a director of northern empire when mike allen got involved um the board came to me and said you know what you should step up as uh direct as the chairman or maybe even the executive chairman mike was a green horn ceo at that point and so mike and i created this relationship where i was really his mentor so he went out and he figured out uh he figured out that he could probably buy sterling which was an asset that the street had completely forgotten about right and so when he brought the idea of sterling to me you know i went what that underground weird thing in nevada you know and he said no no you gotta jump in a plane so i had to push past my scar tissue above that jumped in a plane and uh you know the the the at the main assets of sterling were the was sort of the resource that was permitted and the and the and the leech mines so that was already there but then we went to the north and jay there there were open pits there and and uh we stood on the lip of an open pit where the previous operators had uh um had mined this this operation was called daisy was the operation and this was all included in the in the in the claims that was sterling and there i am standing on the edge of an open pit there's a wall of 50 meters of a gram that's pre-stripped and all ready to go and none of this was in the 43 101 report about sterling so we got back and uh completed the deal raised the capital and then what that did is that functioned as a an anchor value in the company and the anchor value in the company meant that we could now if we did some drilling and the drilling didn't work out then we had a permitted project that we could put into production without having to wait for uh you know the permitting authorities to give us so it was a way of mitigating the risk on behalf of our shareholders so fast forward we sold we sold empire decor core has done very well with it we're very pleased with uh with coors success in this project and we started eclipse with all the best elements of northern empire and then we added a couple of other people you know marcel degroot wonderful wonderful guy um we brought on the exploration manager's got him warwick board a giant brain he's a he's a he's a geological savant very very smart guy and so with eclipse the structure of it was such that it was a binary outcome you know it was an exploration play and there were there were a lot of investors that looked at that and said okay if this hercules thing really turns out as good as we hope it will then you know there's a lot of money to be made but a lot of investors will look at the upside and they don't necessarily qualify the downside so for us we had we had been looking at vertex and the moss mine for many years we looked at it with northern empire okay and uh the operation uh it when it started it had some teething problems but then they began to sort of clear some of the some of those bottlenecks and the teething problems and but we always love the exploration potential so when when vertex started to uh permit drill sites outside of the patented claims it became clear that they were going to really start to flesh out the exploration potential and that's when we went back to them and just said you know what we just love this thing and we would love to uh pull together a merger and there were some stops and starts and lots of lots of discussions and uh and that's when the merger happened so we really really love the exploration potential of moss and so now uh northern vertex has a very similar structure to what northern empire was it had a backstop value it had excellent blue sky potential at moss and it had excellent blue sky potential at the original project which was hercules yeah and then at that point we had sort of bumped over the development curve into the operations side so right mitigated the risk for investors now uh you know the stock has fallen more than we really wanted it to and i know that some investors are disappointed as a consequence of that sure but moving forward there's a wonderful base value and oh my the blue sky potential is good so we really like the structure of this asset we really like the structure of this business and this investment yeah yeah and it's exciting to me and i wondered when the merger occurred if you would have shareholders you know eclipse shareholders that were like this isn't what i thought i bought and maybe there was some selling activity maybe we saw that right absolutely um and you know whenever i would connect with somebody who would ask because we covered the eclipse story in depth in september so i got a lot of incoming mail when the merger was announced and they were like you didn't see this coming or what's going on and i restated you know i i hercules is a great asset but i didn't buy eclipse for hercules i bought eclipse for the people behind eclipse right and you touched on a few of them retouched on a few of them but you know you bring you know irc you bring new market uh you know mike allen you guys bring northern empire we have marcel de groot who brings in companies like equinox gold sandstorm gold i mean you know some of the the sort of diamonds in the sector and and that's the team that you're betting on you know you made an interesting point before we hit record you said when a company pitches you on becoming a director one of the first things you ask them is if your bank account was full how would you spend it yeah and you know often they'll go oh we put it right in the ground we get to work we prove our results and your response is okay but but then what and they kind of shrug and like well it depends on what happens right and and you know and i agree uh but it is a binary outcome like you said you'll find something you won't you get the results you and your shareholders want or you won't and so i'm betting on the people what i'm betting on is that they're going to have a plan c just in case right plan a doesn't work out plan b fails you have the wherewithal the energy to have a plan c and hunt that down right yeah absolutely well that's the whole process of risk mitigation right yeah when i described you know there's risks that you can control and there are risks that you can't you try to control the risks that you can control and so if you can generate a base value in the company yeah and so many so many corporate managers completely miss the the whole process and the and the thought process around the cost of capital so the cost of capital essentially says that you can grow a company but if you issue more shares than the value grows then investors make no money yeah so you can you can do an ipo at a dollar and you can have 10 million dollars in the bank and if you if you don't do proper control of the capital market side then every financing that you do is a down round yeah or it's you know you you finance it a dollar you found it's at a dollar you find it's at a dollar five years has gone by and your investors have made no money that's not you want exactly and so that so the cost of capital is enormous for investors under that circumstance so um so if you can you try to mitigate that by just telling people the story making sure that uh that the value i'm sorry i've made you do all the talking no worries no that's okay so really what you're trying to do is you're trying to generate value for your investors and a lot of people lose sight of who you're working for and it's the investors and so yeah if you can control the structure of the company and you can do financings that are increasing as you're moving along trying to move value then your investors win right it doesn't always work that way and markets are a fickle thing and sometimes you have to do a uh uh a financing at a higher price and sometimes you have to do that a loader for lower price yeah but if you're managing the whole process and you're and you're conscious of it then at least it's something that you're aware of whereas many companies aren't yeah 100 a lot of chairman a lot of ceos don't talk like that right um we don't hear that that narrative that vision from too many ceos and that's the difference right and that's right that speaks to your experience and your success but so i'm glad i could bring you back on because like i said we covered the eclipse story in september i thought it was a smart buy i built my position on the open market i think it's a better buy now right you actually entered a cheaper price point you're buying now you know cash flowing with expiration upside and cash to fulfill drill programs at hercules which is an exciting asset in nevada it is arguably the the best gold jurisdiction on the planet um look doug it's been great thank you so much for making the time i'm really glad we could put this together um you know you as the chairman of northern vertex now i think it's a very exciting story that i'm keen to continue to cover on behalf of my audience so i appreciate you coming on and i'd love to do this again sometime very good well i'm so i'm very pleased that we had this discussion it's always an interesting one and you know what i've just had a lot of luck working with people that are so competent and northern vertex is just another example of that okay i love that i love that okay well thanks again doug [Music] if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome hey guys jay martin here ceo of cambridge house and i am very excited to introduce warren gilman the chairman ceo and director of queens road capital uh warren i've been looking forward to having you on the show thanks so much for joining me my pleasure jay uh looking forward to our uh chat and good morning from hong kong i guess it's afternoon and squamish but a lovely morning here in hong kong yes it is so there are a handful of directions i want to go with this conversation a bit of background warren is a bit of a legend in the business and we're going to get into this but quick intro i mean a director to some of the world's biggest mining companies including bhp sorry advisor 2 bhp rio tinto anglo-american zijan a bunch more but warren for anybody who's not familiar with queen's road maybe let's start with a bit of a high level explanation what is queens road capital and what do you spend your time doing thanks jay uh i've never been described as a legend before so i really appreciate that introduction my mother would be very proud i hope she's listening so queens road uh is a toronto listed company so all your viewers out there can go out and buy the stock i'd be remiss if i didn't say that as a director of the company we focus on income generating securities in the resource sector uh in uh in spectacular ore bodies we're driven by the quality of the ore body and we generally focus on convertible debentures so converts pay us a coupon every quarter and we have a very efficient tax structure so our plan is to take that coupon and pass it through in the form of dividends to our shareholders so if you invest in queens road you'll be receiving dividends but queens road retains all the equity upside in those uh convertible debentures so you have all the upside you're protected on the downside and you have income so it's a great structure uh can relatively conservative structure in which to invest in the mining business underpinned by fabulous ore bodies now this is a company that i launched a year ago so it's relatively young relatively new but it follows the investment philosophy that i employed for the previous 10 12 years running a private company that was called cef holdings cef holdings was owned fifty percent by mr lee kashing one of asia's richest men uh and fifty percent by cibc the canadian bank that your viewers would be familiar with uh investing cef effectively invested mr lee's money i invested over the course of 12 years more than half a billion us dollars of his money was incredibly successful and this is literally the public version of that so now all of your viewers and all of queen's road shareholders can gain access to that experience and hopefully we recreate that track record or even surpass it in the coming years now that's i wanted to touch on that cef holdings yes investing the the wealth of one of the world's richest individuals did he have specific parameters warren like were there specific marching orders about how you would allocate that capital how did that how did that relationship function [Music] he certainly had specific parameters uh they weren't specific with respect to where to invest in the mining business that was my job okay mr lee's job was to tell me whether to put my foot on the gas pedal or put my foot on the brake and that was because as you well know the mining business has evolved over the course of the last 20 years to be very much dominated by china and i would argue there is no human being on planet earth who knows more intimately about china than mr lee at what one point in the past 20 years he was the largest single individual investor in mainland china so he would tell me whether i should be investing or selling okay beyond that he had specific guidelines to anyone who invested his money so if you worked for mr lee you did it under the guidelines of two main points point number one carved in stone do not lose mr lee's money so we had to devise a way to invest in the mining business and not lose money which as you know this is a volatile cyclical business it's pretty tough to do that and we were investing through a pretty tough period you'll recall that period 2010 to 2018 those were pretty eight pretty tough years in the mining sector unlike the environment where we find ourselves today so we had to devise a philosophy a strategy a method of investing that didn't lose his money and yet provided him all the equity upside that we all want so that was rule number one and rule number two was you didn't get access to his capital for free as i said i invested over half a billion us dollars of his money but he just didn't hand that money over i had to pay him rent on that money every year uh he would come to me at the end of every year and say warren how big a check are you sending me and he didn't want to hear about a down year in the mining business he didn't want to hear that commodity prices were flat he didn't want to hear that you had a problem with permitting a delay uh problem at the operation that that you had invested in he simply said how much money are you sending me you know i i somewhat liken it to working for the mob and the mob doesn't care about your problems they just need their money at the end of every week well i had to also devise a way of investing that provided mr lee his rent on his money at the end of every year so that i could continue to use his capital so with those two cast in stone guidelines and they weren't guidelines they were they were rules steadfast rules we had to devise a way to invest in the mining sector uh that didn't lose money and gave people a return every year that's what we did at cef and that's what we're doing at queen's road so the idea at queen's road is just i'm treating shareholders money just like mr lee's money and frankly just like my own money because i'm a significant investor in this company we will not lose your money and we'll pay you a dividend every year okay wine i just have to say you share stories like that and then you sound surprised when i call you a legend that's amazing okay look i want to dial it back to to rule number one a little bit and i'm just curious what you can share with me because yes i look i cut my teeth i wasn't managing mr kashing's money but i cut my teeth in the resource business from 2010 until today you know and so i know that market very intimately is that the bear market that i learned about this business and um all i can say about it is that when i entered the space in 2010 up until about 2015 i would estimate that 80 of the relationships i had vacated the sector because of how hard it was to make money and those that were left are the core relationships i have today which is why it was such an advantageous opportunity for me but in the time didn't feel like it so how what can you share about how you executed on rule number one not losing money in one of the most ruthless bear markets in the resource industry well that's a great question and uh jay you've cut right to the nut of the issue and right to the core of queens road which is what is your investment philosophy how do you deploy your capital uh and the driving factor behind that is as i said earlier quality of war body as long as you invest in quality assets you're going to be fine you're going to be fine in good times and in bad times they always say cream rises to the top well quality always rises to the top so number one my job is to find great ore bodies and i can find them no matter what stage of development they're in i can find them when they're just a bunch of drill holes and we don't even have a resource statement we don't have a pea i can find them when they're already existing mines with a 40-year operating history uh the point is whether they're a bunch of drill holes or whether it's an operating mine it's got to be a great ore body that makes money or will make money when it gets built in good times and bad times that's point number one point number two once you find that quality or body then you invest in a proper structure because we all know that if you buy common shares even in a great company in a great ore body those common shares in a bad market are probably going to go down along with the rest of the sector not by as much but they're going to go down that's why we focus on structures that protect our downside but give us unlimited upside and there again we come back to the convertible debenture structure downside protected pre pay us a coupon every quarter but unlimited upside when things get better and things take off uh and mines get developed or companies get taken over so those are the two core ingredients of our investment philosophy couple that with a couple of other points uh with respect to commodity we're commodity agnostic we'll invest in any commodity we don't just focus on gold we don't just focus on copper we're nimble we have the ability to invest in things that are out of favor so when things are screaming that's time for us to sell not to buy so we use those cycles to our advantage we're constantly looking for those great ore bodies but in particular great our bodies where the underlying commodity is either off the radar screen or out of favor because that's the time to put your capital to work so commodity agnostic every commodity has its day in the sun and have a diversified portfolio that exposes you to all of those and hopefully at the lower the down part in that in that cycle point number two geopolitical risk mr lee was very very conservative uh with respect to geopolitical risk uh and he is uh conservative uh historically with all his investments he has a global empire that spans the world where he has 200 billion u.s dollars invested around the globe but all of those investments are in relatively safe jurisdictions he focuses on canada he focuses on australia he focuses on the uk uh and oecd countries generally and that translated likewise into cefs and qrc's investment philosophy no sense owning or being exposed to a great ore body if that ore body is located in quote unquote a funny country where you might own it today you may not own it 20 years from now or if you do you'll probably own less of it because the governments start taking more and more and more of it away from you so again in order to reduce the risk of the portfolio we try to go to safe jurisdictions now recognize this is the mining business mining business you have to take a little bit of geopolitical risk uh at some extent you have to go where the ore bodies are but there are certain places we simply won't go to and our portfolio will always be weighted to very great countries like canada yeah okay okay yeah because i noted that you know in the portfolio right now you're holding next-gen uh you're holding iso energy and then which would speak to that and but then adriatic medals right which i believe is bosnia and like i'm gonna i'm gonna botch this herzegovina did i say that close good enough so which historically is not the most predictable jurisdiction so talk to me a little bit about that yeah and and that goes to well you have to go to where the ore bodies are but still a relatively safe mining jurisdiction you know it's part of europe uh yeah it certainly had some uh strife 30 years ago but it's been stable now for 28 years part of europe and because of that history very underexplored and as a result of that adriatic was a first mover back into the country and has discovered an incredible ore body which i think is underappreciated in the north american context a lot of your viewers won't be familiar with adriatic because it's listed in london and sydney australia it's not listed on the tsx right so not as many viewers will have heard it you know nextgen everyone knows i'm in love with nextgen and i'm sure most of your viewers are uh you know it's a fabulous incredible uh ore body that's going to change the world in in in the uranium sector and i made my first investment there with cef in 2016. as much as i am in love with next gen uh it has an irr a stupendous irr of 52 based on the bankable feasibility study that was just released well to put it in context adriatic has a hundred and thirteen percent irr so different ore body mainly silver majority silver revenue but can you imagine it has an irr double what next gen is and next gen is stupendous so uh uh it's quite an ore body and uh again falls perfectly into queens road's focus okay okay yes and you know what i had warren irwin on the show about a month ago rosso asset management and we were mainly talking about uranium and and not to put words in his mouth but he was essentially calling out next-gen as taking the seat from kamiko that's what he's predicting and yeah well that's it i agree with warren uh my name's sake my brother with a different last name yeah and uh and uh you know warren's a very astute guy and uh can't agree with them more with respect to next gen so one of the reasons i was looking forward to having you one is because as you just detailed your investment philosophy you know or body structure looking at commodities that are out of favor geopolitical risk you didn't mention the number one thing on my list which is why i feel like i have so much to learn from you uh you know i'm people over everything when i approach this as a consequence i don't look at a ton of deals to be honest warren and i often get notes from subscribers they people sometimes assume i look at hundreds of different deals but i don't i have a list of names that i track in the sector and i pay attention to what they're doing and because i don't manage anybody else's money that's enough for me you know what i mean so you must look at a quite this you have to look at a crazy spectrum of of opportunities if you're focusing on ore body first is that the case you just yeah yeah you know uh jay uh two points first of all i totally agree with your investment philosophy as well people management that is almost everything uh so very very important uh and my investment in an ore body in a company is always an endorsement of the management team that's there uh i shouldn't be investing in the company if i don't believe in management so i agree with you critically important and something that's very important to queens road i i have the benefit of having been in this business for 40 years and you know i grew up in timmins my father was an exploration geo so i've known a lot of the players since i was six years old uh and so the benefit of that knowledge and experience and knowledge of the people really helps in following management teams and and i love the canadian analogy of uh hockey analogy of playing the man not the puck and i often refer to investing in great management teams as just following the man and that is a great way to run a business but for me at the end of the day the best combination obviously if one can find it is the great degree sorry about that no problem and that's what we strive you know great management team great it's probably good for a ride but unless that great management team ultimately finds that great ore body it's a trade it's not an investment uh and and and i've done that in the past just might you know personally uh you know a great one is fortescue i was an early investor in fortescue and andrew forest tends to be one of those people that you follow and wherever he goes you invest and see how it turns out and fortescue has turned out to be a 50 billion dollar company from a company that when he started it was obviously 10 million dollars uh so i was an early investor in that and lo and behold 20 years later andrew forrest is one of the largest shareholders in greensboro it's a small world indeed and life says life can be funny yeah okay now okay so let's get back to commodities that are out of favor so we touched on next gen and iso now my question for you warren is i've seen sentiment really heat up in the uranium sector so are you looking to deploy are you keen to deploy more capital and uranium or do you feel like you're well positioned and it's time to look for something else talk to me about your uranium sentiment right uh and the driving force behind our original investment and when i say our i'm going back to the cef days with mr lee the driving force behind that original investment when next gen and the aero deposit was a bunch of drill holes was the ore body it wasn't a play on uranium it was a play on a spectacular ore body a lot of people interpreted that investment as a play on uranium they thought ah warren's investing mr lee's money mr lee knows all about china mr lee must have a really great insight into the build out of nuclear reactors in china therefore he has a view on the uranium price and that's why he's getting involved in the sector okay in actual fact even though all of those things were true that wasn't the driving force that wasn't the catalyst behind the investment the catalyst was it being a great ore body so that continues to be our focus we are very well positioned with respect to uranium as you mentioned with our investments in next gen and iso so and with the success of those investments over the course of the last eight months our portfolio currently is very heavily weighted towards uranium simply because those stocks have done so tremendously well so yeah i would suggest that you know adriatic was our first diversification away from uranium i expect the next investments will be something other than uranium simply because we want to diversify the portfolio but i am keen nevertheless to invest more in the uranium sector so perhaps our fifth or sixth or seventh investment might be a uranium investment simply because i do believe that if we get exposure to really good ore bodies and perhaps that's simply more of next-gen and iso the uranium price does have the wind at its back right now i think it's a still a great time to invest in that sector because i believe that we're going to have a pretty good decade uh for uranium stocks as uh all of this unsatisfied demand eventually comes under contract and the market really tightens up right right now so my perspective on the uranium sector warren is that it's well i guess nuclear power has largely been misunderstood for the majority of my life and stigmatized right there's been some disasters that have created this but still i feel like it's a bit unfair or undeserved is a better word right um and there's a number of reasons so that actually warren irwin is one who will uh who loves to talk about this and he was sort of speaking to me about the the narrative created by greenpeace that was this anti-nuclear narrative because a lot of funding from greenpeace comes from the coal sector which people may not realize and that's why greenpeace was so negative towards nuclear but not coal anyways all that to say you know if you're not choosing nuclear you're choosing coal that's what you know so from a green standpoint it's a bit of a ridiculous misunderstanding anyways uh if you're looking further like earlier in the food chain earlier stage uranium what can you tell me about where you're looking right now either jurisdiction you can talk about companies if you want to but are you looking at the athabasca basin or what catches your attention right now well obviously one of the things that underpin great ore bodies is great great and there's one place in planet earth where you go for grade in the uranium sector and that's the basin okay so i think you can be pretty well assured that we'll stick close to home saskatchewan is a great province for developing minds and greatest king in the uranium business and uh that's that's where you'll find it okay got it all right look warren it's been awesome having you on i'm really glad we could put this together and make this happen get you in front of my audience introduce queens road capital i hear some of your stories i'd love to do it again sometime down the road but thank you so much for your time thanks jay and uh appreciate your time we'll leave your uh uh audience uh with the summary which is you know queens road just very very early days we've got a market cap now of 200 million uh we didn't touch on my shareholder base which is six six australian self-made billionaires who dominated the capital uh raise from a year ago those guys are very supportive looking to grow this company we started off with a market cap 100 million dollars a year ago we're over 200 million now and i expect will be a billion dollar company in the next few years as i said regular dividend payer high quality deposits uh very very early days uh so a great time for your listeners to start following the story yeah i love that i love that and um yeah if you were able to execute on rule number one during the previous decade then i'm excited what you can do with the next decade warren so um thanks so much for sharing that and it's definitely on my audience's radar appreciate it great jay talk again if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined once again by alex whittier sharon ceo of empress royalty alex welcome back it's good to see you great to see you thanks so much for having me jay no it's my pleasure i'm excited to get caught up on the story the last time we spoke was end of january at the vric the virtual vric that we hosted here on the channel since then i know you've been to mexico four times uh doing diligence putting capital to work as a shareholder i appreciate this what i wanted to start today was alex there's been a surge of royalty companies that have hit the market in the last 12 months and definitely a surge of investor interest like i'm seeing it whenever we have a royalty company on we have outsized response in the audience and i get it you know i get why but what i would love your help with today or love your love you to help my audience with is what are the easy steps or what are some steps in your opinion that investors can apply to value a royalty company say they're looking at six and they want some just quick hacks to determine what which are worth more time than others what should investors focus on um i think one of the the interesting parts of the royalty space is how companies develop their royalty portfolio there's sort of three different ways of doing it you've got the expiration project generators those type of royalty companies you're getting early stage opportunities high risk doesn't cost a lot of money and there's a long lead one lead to the revenue generation um but you really need a lot of projects in your portfolio to get a win um and then there's the third party royalty acquisition companies so like a royalty trading company meaning that they've already got the royalties already in place so it's a simple acquisition um but it's quite a crowded marketplace so you end up and you end up paying sort of a premium for those types of royalties um and those in that situation third-party royalty acquisition they don't have a direct relationship with the company and they don't have the ability to renegotiate the contract um and then the third type is the creation which is a little work focused where we're working with mining company partners to provide them financing solutions to either get into production or expand in the production um it's definitely more labor-intensive to structure them and put them together um but we're able to structure that contract to meet not only our goals but the goals of the company so we work very closely with the company we get a lot more information about what's happening what they want to do with the company where they see it growing what the opportunities are a lot more in-depth due diligence goes into this um and you know we're able to do this and get access to this type of deals through our network through our strategic partners um you know we're able to source the due diligence negotiate through those relationships right okay actually i'd love to segue then into your strategic partners it's what turned my head about the empress story in the first place most people watching this know endeavor financial their you know hallmark name in mining finance and advisory um in addition to terra capital and uh ascendo banco in mexico so if you could walk me and my audience through these three strategic partnerships that you've developed for empress and what each brings to the table i would appreciate that yeah so um endeavor financial uh as you mentioned homework in the money industry uh it's a global mining finance investment banking firm so they um have access they've got a lot of different clients in the debt finance side corporate finance side uh we get access to all of their cash flow modelers financial analysts mining engineers so this brings a whole team of investment bankers to empress so it's not only sourcing opportunities because they're so well connected within the industry but it's also helping structure those deals do the due diligence and be able to execute on the transaction so very much deal flow for us and so that that support in the execution our second partner is tara capital run by jeremy bond in sydney australia um terra capital is a petite fund uh that focuses on the natural resource space it gives us access to australian deals australian listed companies with projects internationally but as jeremy's been an active investor in the cap and natural resource market in canada in the last 10 years gives us a fantastic capitalist markets network so it also provides a very unique opportunity for empress and then our third partnership which was signed in august is the cendobanko um room by head via race and this gives us access to mexican streaming and royalty opportunities ascendo banco has over 30 clients mining companies as their clients so we're able to work with essendo banco and provide that full financing solution to companies and their look at investment size similar to our range so it's very complementary in the smaller five investments being that one to ten million dollars um you know a great example of that has been the deal we completed um in november candelaria that was a joint deal we did with ascendo banco um and then we're doing now one we're working on one with uh telephone mining and the telewetter project uh where ascendant is providing um the depth facility and we're providing the stream along science and equity got it okay and i want to talk about the telehuedo agreement soon you know yeah that's interesting the deal flow component because when i saw these partnerships my immediate thought was well they're never gonna have a problem raising capital uh but the the deal flow advantage is notable so on the capital front i know you guys just completed a financing put 16.4 million in the treasury um anything to mention on this alex yeah we did the most of the bot deal through red cloud county court and mackie and this uh financing definitely gives us the ability now to execute and close on the transactions that we're really advanced on so it's going to allow us to bring revenue into amplifiers pretty quick okay okay now let's get into some of these agreements let's start with talahueto um and just walk me out and see this is the tulsa mining project so walk my audience through what you structured here yes this for us is a five million u.s silver stream um on the telewinner project um this project is fully permitted um it's about half it's half built right now and i've actually just been to site uh looking at the project um and we came alongside a central bank who's providing 12 million dollars in debt we're providing the 5 million silver stream and then there was an equity raise which is being completed now to support this which gives them a full 25 million dollars to get tallahato into production which should be the end of this year beginning of next year okay so yeah that's we're i know so i'm down here right now um just been to the mine site met with different government officials uh met with rock takers um to make sure all the counterparties are working well together um it's a very exciting one um so this one we we're in the final stages of negotiation on the documentation um and then we'll provide the funding for it uh when we get that part completed okay and another agreement that's recently been on the radar is manica in mozambique yeah so this one is a two million dollar investment u.s for emphasis it gives us a two and a quarter percent royalty on the entire project um and this one this is mentioned in mozambique um this one will be in production in q3 this year so hopefully providing revenue to empress by the end of the year uh we've signed the documentation we're just bringing the final cps before we fund um and then this will be part of the portfolio of the near-term cash producer for us okay now is who has the expertise in africa with out of your three partners because i look at this and it's like it's it's exciting coverage you got north america australia latin america covered with these three partnerships is it endeavor does endeavor bring expertise in africa yeah endeavors you know been advising to mining companies and been in africa for uh as a company for over 20 years david's uh who's the managing director of endeavor financial also our executive chairman and chair of our investment committee david yeah david rhodes david's been in africa for 25 years yes and you know we're not going into any country where the team hasn't been there before so we know how to operate within those countries um so obviously risks that for us um by knowing the countries we're going into yeah 100 it's the know who angle right okay okay so let's walk through the pipeline a little bit what can we expect in the future alex so we're very much focused on as i mentioned before near-term producers or producers i've got exclusivity now and two new deals um and this means we've got the terms of go negotiate the term sheep fined we've got exclusivity and we're advancing due diligence both technically legal and this is on ones in peru where we would double their production and other ones in kenya where we would increase the production by a third so if these ones do vet out through a due diligence process and come online these will be immediate revenue coming into empress okay okay okay so what i like is the diversity of revenue you know i love the team i think that's why um we connected in the first place um i like what you're building and yeah it's it's do you expect to remain focused in latin america and africa where geographically alex do you have preference to where you're going to be shopping in the future um we're going to countries instead that we've been in before so that's that's part of it part of the criteria uh we see a lot of opportunity in latin america higher grade projects less capital to get them into production and also with endeavors relationships and sunday's relationships we're seeing a lot there at the moment um but definitely africa as well we're looking at some stuff in australia um indonesia so we are looking globally um probably roughly about 75 would be in latin america that might change when the opportunities come up um but that's kind of where our focus is right now at the stage that we're at yeah okay but not restricted to that obviously okay yeah we look for good products and skid returns right yeah do you have a list of like where do you start where do you start when you because i imagine you're looking at hundreds of deals you know what's what's the first thing that you need to see for you to take a deeper look a good project it has to be a project that makes them um absolutely key uh obviously the other most important thing is the people and the management teams running these projects you know we're working with people we know can get into production they know how to operate the country that they're in um and it's come these deals are coming to us um through the management groups that we know and there's other situations where we know a group that's running the project and they're in production but we know they can do more production with more capital so we've approached a few of those um like the one in peru where we're going out to the groups that we know but it's it's very much about the people um and their their confidence and ability to do it and and that comes through our relationships and and uh history with them okay okay look alex i appreciate you coming back on and updating myself and my audience i do appreciate your time i know you travel like crazy so um yeah it doesn't go unnoticed but i'd love to get back in touch six months down the road check in on the story again that would be great thanks so much for having me and thanks for listening always a pleasure talking with you yeah my pleasure [Music] if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined right now by the bond king stephen van meter uh president of steven van meter financial financial planner portfolio manager runs a youtube channel among many other things stephen how are you great jay thanks for having me on your show today i'm really happy to have you on i'm excited to dive into some topics with you is the first time we've had you on our show so for anybody who's not familiar can we begin with a bit of a highlight reel steven where do you focus your time and what do you do yeah good question jay you can find a lot about me on my weekly macro show on youtube i'm active on twitter facebook linkedin and i'm a portfolio manager i've invented a formula based strategy called portfolio shield which you can read more about on my website and i'm also managing macro fund okay now a handful of buckets i want to jump into with you today the majority of my audience comes from a precious metals investing background and as a consequence of that we get a lot of consistently audacious gold forecasts you have a contrarian standpoint which is why i wanted to have you one so i wouldn't call it a prediction but you made a case for 1300 gold correct and i'd love you to walk us through that a little bit yeah and and you're right there when it comes to gold you do get a lot of these big numbers i think it's kind of like tesla's talk too you just get big numbers when i look at gold it has it's not always inverse the dollar but it's frequently trading versus the dollar now a lot of people think the dollar is going to the toilet it may be even farther down and i have a completely different view that the dollar is going to rally and when i look at gold and i look at how it's traded up from 1300 that it hasn't traded on a lot of volume and as you look at the price structures moving up to current term price and you go back down you find out there's not a lot of what we what we call support from a tactical perspective and so all support really is is where buyers are at and where are those buyers that don't want to sell that if prices came back down to that level they'd buy more well that number is 1300 there's a massive amount of buyers of 1300 but between 1300 and where we're at now there's not a huge amount of buyers to support this so if we get a dollar rally which i believe we will then there aren't a lot of people there to hold gold up so i'm looking at 1300 now could it hold this hold up around 15 15 50 sure i i can i could be completely wrong i'm just looking from a volume perspective is 1300 is where the buyers are at and my my gut feeling is if it gets down to 1300 we're not going to see those buyers sell got it okay now that makes sense especially relative to a rising dollar so my next question therefore is what's your case for a rising dollar yeah and that's it a lot has to do with quantitative easing and how quantitative easing works and a lot of people believe that qe is designed to weaken the dollar and raise interest rates but in actuality it's designed to do the exact opposite it's to find the lower interest rates for lending growth and it's designed to kind of not remove dollars from the system but put them in what i call a dollar prison lock them up into the fight into the banking system so that way even though we can account for them we can see them they just can't move around like i'm kind of like an actual prisoner they are a citizen they are part of society but they're locked in somewhere and their productivity as part of the society is well rather limited so when you understand the qe is really a dollar prison and that it causes a velocity of money to slow down and continue to fall because even though there's a lot of dollars they're just stuck in the commercial banking system that over time as the fed continues to do qe and continues to trap these dollars well the dollar is going to rise and on the back of that you know we already are a dollar shortage partially due to quantitative easing but the main reason we've seen the dollar fall is just due to massive amounts of short positions either on the dollar or long positions on foreign currency so you have this perfect recipe where qe you will eventually work its way through all these short positions cause the dollar to rise and that's really what the fed wants anyways because you know what what is the ultimate goal of qe well it's to get america consumers to borrow money why because it creates money in the system well how do you get it and get that money abroad and how do we do that you know right jay if you and i are going to think through this and said how are we going to get dollars out of the u.s into foreign countries well it's real simple i want a strong currency so foreign produced goods and services are cheaper and then i'm going to borrow money and go buy them and so when you start under really examining what qe does lower rates stronger dollar and if you get that stronger dollar then you know like i said before you could see gold move with it but there's too many times that there's an initial shock that drives gold lower okay okay now now bear with me because this is not my area of expertise but so if i'm tracking you correctly yes the assumption would be you increase the money supply you increase the velocity of money that would be a logical correlation but in fact the opposite occurs so therefore even though you're increasing the supply of the money since the velocity of money is dampened the money itself is still relatively scarce even though there's an increased supply of it there's less of it sloshing around is that am i kind of on the trajectory here yeah so let's let's kind of dig deeper in that if you don't mind about this money supply issue because that's really kind of the crux of this inflation view is everyone just they look at the year-over-year rate of change in the money supply that we're kind of at that annual anniversary and for the last 12 months has been this is going to be massive inflationary because qe causes an increase in the money supply that's actually completely backwards qe is a money supply pacman i mean it chews up the money supply it needs a rising money supply it doesn't create it it's an effect of qe so so let's kind of dig even deeper that how does that how does that even happen how do we get this money supply growth from qe well the whole point of qe is to again lower rates and depending on the size and the scope of the qe program done by a central bank you know if it's broad base across you know short-term the long-term interest rates you should see the whole curve come down if it's focused on the the front and you'll see shortened rates come down but the whole point of why money you see money supply growth in tangent with qe is because you know savers go down to the bank and and they start building up their savings and normally they'll say well my emergency savings is at you know at the limit and now i have a buffer so i'm going to take that extra amount and i'm going to put it away in a little bit longer term where i can earn a little bit higher rate well the problem with qe is it slams those rates down where a saber says why would i go put my money in let's say a five year cd and tie it up where there's a penalty get it out when there's a negligible literally negligible increase in return so what you start to see is this money supply growth because savers have nowhere else to put their money there there are higher yields you see corporations just parking their money in cash and so that starts to grow the money supply and then everyone gets excited that okay that's inflationary because this money is going to come out of the money supply but it's not how it works so as the money supply grows the bank has to pay interest on this money now grant is not much but they still have to yeah so how does the bank get the interest to pay depositors on their money well they take those deposits and they convert them into reserves and all that means is they go and buy treasury securities right so now the sudden you have depositors who don't even know they're funding the u.s government debt which is really interesting i think a lot of people listening right now are like i'm funding this deficit yes you are you absolutely are so you've got the bank you know now has these reserves these treasury securities the fed comes along and through qe and says hey i bank i'm going to swap that reserve with you so you might be holding a five-year treasury note right now i'm going to give you an overnight reserve i'm going to swap with you that's what qe does so in order for the fed to keep doing qe they need more reserves in order to get more reserves they need more banking deposits why do you get more banking deposits you need to keep rates so low the depositors have no other choice right right so so it's kind of so now now here's where it gets really interesting are you are you with me so far yeah yeah okay so that reserve swap that the fed does let's let's unwind it just briefly when when a bank creates a reserve out of treasury security they have the power to to undo it too so there's a big demand from depositors for cash they can just sell the treasury security get the cash and meet depositors needs now when that swap occurs that reserve asset that the banks are given well they're not actually given it it's actually held at a federal reserve member bank and the the commercial banks can list it as an asset on his balance sheet so from a balance sheet perspective there's no change we have a a an ass a reserve to begin with swap to a reserve asset but the fed now is in control of this reserve asset the only way to undo that is through quantitative tightening so what kind of happens here is this reserve asset can only move inside the commercial banking system with banks that are eligible to handle reserve assets who are part of the qe program and by doing that it limits the velocity of it limits the movement of it now if we had a large number of commercial banks let's say we had like a thousand a couple thousand of them that were part of the system well then that reserve asset could move all around but when you have like a small number and i don't know what the exact number of you know 10 to 20 of these the velocity the ability of that money to move around is very very low and so that's why if any of your viewers were to to chart the velocity of money against the monetary base is where we see this pickup and the fed data and you take the monetary base and you invert it yeah you'll see very clearly like wow qe is a velocity crusher yeah that's exactly what it's supposed to do it's supposed to put these these dollars in through this swap mechanism it puts them in a prison now is this is this possibly behind jerome powell's recent statement where he said there's no longer a relationship between the quantity of the dollar and the value of the dollar which is again it's counter-intuitive right right you wrap your mind around that you're like either he doesn't understand basic economics or he's just trying to pacify the population but maybe there's more to it and that's what you just explained is that is that related yeah i think i think that is i didn't catch um when he said that but respectively right he's got a lot of dollars out there and what he wants to do is make it worth more well how do you he can't destroy them he doesn't have a mechanism destroy it the only way to destroy a dollar is to apply it toward the principal value of the loan or as part of a regular payment any principal payment loan destroys a dollar so what what could he do well he can do one thing lock them into the commercial banking system where they can't move around very much right very interesting okay well that way the other dollars right that are that are outside it become hopefully worth more and as they get stronger then that incentivizes people to come back to where we started originally is borrow money and maybe go buy that foreign car take that foreign trip or invest outside the us and get those dollars out there where the the euro dollar market really can start multiplying them because a lot of our dollar denominated debts are held outside the u.s and there's a demand for dollars to meet those well the fed has to get dollars outside the system but they have again no mechanism to do that they can't just write a check and say here you go so the only way they can do it is get american consumers and businesses to borrow money spend that abroad the only way you can do that is lower interest rates and increase the value of your currency which is completely the opposite of what everyone really believes right now yeah no kidding it is it is a very uncrowded bet going long dollars so you know what actually recently i had uh i had brent johnson he must know uh peter schiff and raul powell on a panel and we were they were debating i was just moderating you know it's called the top asset class for 2021 and enroll was long bitcoin peter schiff gold and brent the dollar obviously so uh you know brent and peter have had a similar bet at my event every january for the last two years and this being the third they're now betting whether or not the the dollar will rise or fall in the 12-month period obviously your money's on brent for this one yeah absolutely bro brett will be right in the end there's no there's no question about that and again it is all because of what qe does and you start and then you start to connect the dots is well if qe causes a dollar to go up and interest rates go down that means the bonds are going to go up too well then you start looking at the relationship between bonds and dollars and you start figuring out that a dollar is just an overnight duration bond so and they're not perfectly correlated there's there's times they separate but generally they'll follow the same direction so yeah brent will be right in the end the only question is how long will he have to wait to cash in on his back yeah he may re-up another couple years okay interesting no no steven question i have to ask is what could make this wrong what could make you wrong with this with this prediction yeah that's a good question so if if you don't mind i want i won't list can we dig into what a liquidity trap is because that's really where you see the where steve is wrong view come out please please okay so we we kind of talked about how the the money supply is not going to lead to inflation so what happens when a central bank does quantitative easing we get into what's called the liquidity trap now if you actually went out and talked to a central banker they're going to tell you this doesn't exist and jay the way i like to to frame this is it's kind of like a black hole so if you and i point a telescope in a black hole and we've did yeah i can't see it right because it's it's black it looks like space but if we zoom out and look at the event horizon and look at the circumstances going on around it we go ah okay we can see that and that's problem with central bankers you mentioned the word liquidity trap and they start shaking their head and they're like now that doesn't exist well what happens in a liquidity trap is the demand for money so we kind of talked about the demand for money being qe qe has a demand for deposit money to be converted into reserve to be converted into a reserve asset through qe when the demand for money is rising more proportionally then the money supply you get disinflation or deflation in fact that gap that gets created has to be filled by lower consumer prices so not only are we likely to see the dollar rally and bonds rally and interest rates fall where i see consumer prices fall again another view that very few people have so why did i want to go through this because how how does a planet or an object escape a black hole well there's some very very small ways it can happen but it is possible and the same is true with with a liquidity trap because a liquidity trap is created by qe the most obvious way out of it would be for the fed to do quantitative tightening and raise federal funds rate what that would do is take all these dollars in the depository system and give them somewhere else to go but jay you you listen to the fed meetings press conferences i know as much as i do and the fed's not going to undo qe anytime soon because the perception is that it's a good thing so there's one check mark that we can say is not going to happen the second way on a liquidity trap is lending growth so this is where you get consumers and businesses out borrowing lots of money and why does that work because that's how money is created into our system is when people borrow so we need money to get out of this problem and that's how it's created well let's go to step three before we come back and dig into step two there's a third way out which is fiscal stimulus now a lot of people are probably thinking aha okay we're doing that the problem is not only do you need a massive amount of fiscal stimulus you need continuously increasing amounts of it and why do you need it is because you need to create lending growth see lending growth is really the only way out of this whole trap and we kind of know that because today as we're recording this the chicago fed national activity index came out for february and showed we went from positive growth in january although a slow a much slower rate than months before to negative which means we had below average growth in february after a stimulus check in december so what you find out is the stimulus checks just don't work because of again the negative impacts of qe so how do we get out of this trap well one the fed unwinds and does qt not going to happen raise federal funds rate not going to happen congress does infinite amounts of fiscal stimulus they can't do that not enough money so the way i get to be wrong at this moment in time is if we get a massive amount of lending growth okay okay okay now okay so let's let's walk in another path here uh we do see the dollar rise this year significantly i think you said and correct me if i've misquoted you here foreign governments hold more u.s dollar debt than than the u.s is that did i get that right well they hold a lot of it i mean there's don't get me wrong there's a ton of dollar debt here the problem is it really is the dollars outside because how do they get dollars yeah if i'm if i'm in the us and jay you're in a foreign country you you don't create you don't live in a dollar world you need dollars well how do you get them you get them from people in the u.s to spend them over there so they have effectively a dollar shortage and that kind of feeds into again the strengthening dollar is the their dollar shortage creates a demand for dollars which also leads to a rising though i think that's more long a brent's dollar milkshake view is this shortage of dollars in the foreign market leads to a greater demand for them and what's the impact on these foreign nations that are holding us dollar denominated debt in a rising dollar environment i mean well for them that means their currency is going down or what in their case what you look at is the fed does not have the authority to print money but there are a number of foreign central banks that can so what would happen is they to get dollars well that they don't have to pay on their debts to keep from defaulting is you know they could print money and sell you know dump their currency on the market to get dollars which would devalue their currency and increase the value of the dollar so for for them uh you know a weaker dollars have been been beneficial easier to get a stronger dollar means well it costs them more to get right it sounds like a death spiral it is right okay it is absolutely that i like to use the phrase the a rising dollar is the pen that pulls a grenade on this whole thing right now it's being held into place but when the dollar gets when the dollar rips higher it will be unstoppable i mean it will be worse than a bull in a china shop because there will be so much demand for it and there is a massive shortage of it created by qe so longer we do qe and the less lending growth we get the worse this is in the end which would then therefore lead to a string of sovereign debt crises in other nations who are holding us dollar denominated debt when they go belly up then i mean i guess the u.s is left holding the bag correct well or even worse they just print more money it drives the dollar up higher and then you see what happens the u.s stocks they start crashing right all of a sudden oil you know all this inflation stuff crashes you get a deflationary shock you get a financial crisis and then you have a problem because it's still you don't have enough dollars being created to start servicing debt you get more defaults you know the pandemic has really pushed that off because banks have been told not to not to you know foreclose or not to you know default on these loans well all of a sudden now you've got this really high dollar you got everybody needing it and then you know like music game and musical chairs the music stops and well we've seen this happen in a great financial crisis there just isn't enough money to pay the debts and people default that that is what a liquidity trap is is a shortage of dollars and the problem is you you can patch it right by fiscal seminars like you know i i can the government can send you a check jay and you can pay your bills but the problem is what happens next month right and you're like why i'm short again oh here's another check well at some point they're gonna say hey you're on your own pal you know we've been giving you a bunch of money you need to you need to figure it out well the problem is there's not enough jobs there's not enough dollars and eventually there is a point where if you don't get that lending growth which we're not seeing because now interest rates have been pushed up by speculators and a lot of people think that's reflationary now it's exact opposite and liquidity trap higher rates leads to less demand because people aren't borrowing out there and we've seen that in the lending day we're starting to see that in the housing data and you know people are rejecting higher rates and ultimately that is another factor of how you get to even lower rates why liquidity traps lead to new all-time lows and yields is because you need this you know them to be so low to get people to go out and borrow money to to create more money it's just you know the fiscal stimulus has just really pushed this can down the road and in my view is only going to make it worse when it does eventually happen okay interesting so that's that's walking down that road a bit further then that is what you are forecasting through to the sovereign debt nation crises leading back to i guess massive crises in the united states and when you say kick that can down the road i mean i hate to ask people for time predictions because i i don't do it but but you know do you have a horizon stephen that you're you're thinking about right now um i i don't because the banks i know are being told not to default on loans i know a lot of consumers haven't been paying on rents and paid up mortgages haven't paid on their bills the question is when they're going to be required to start doing that and that's what we're going to find out that wow this situation is really a lot worse than we actually believe it to because if they've been paying on their bills this whole time we would know i mean we we'd probably be in a whole different situation having a little bit different conversation right now of wow the economy is just cratering because all these people are being forced to pound their bills instead they're out spending money on goods and services and then saving money which we're seeing in the deposit numbers but once all those once they have to start making good on their debts then we'll truly know the scale of the dollar shortage and at that point the dollar rips and what it does everyone they're gonna wish it didn't i i promise you they wish they did it didn't right right okay because the ryzen dollar is ultimately worst for the fed right yeah because they can't stop it yeah they're gonna have to do so much qe and see that that that's where you get down the spiral right the the you i think you kind of mentioned it a few minutes ago is it it you can't stop it so you know when people come back to like how can i be so bullish on bonds is because that's gonna you know if you thought what they did last march of a trillion dollars was a big deal wait till you see what they're going to do when the dollar skyrockets and they have no ability to stop it they're going to do more qe but now you and i just discuss the fact that that actually makes it worse and ultimately what they're going to do is slam rates down so close to zero or zero i think we'll see parts of the curve go negative they're going to have to do it again too because well first they've convinced everyone that that actually does something but to get rates so low to create inflation expectations and lending growth to get out of this mess but yeah the rising dollar is is a problem because the fed doesn't have the ability to stop it got it got it got it got it okay so so that's the trade from your perspective your your long long bonds us dollars for now until some sort of event like this starts to materialize and then where do you think you go is it emerging markets is it back to hard assets like gold yeah bitcoin where do you look yeah a good question is because i think the cpi is going to go negative on a year-over-year basis a lot of people right now i know we're shaking it has to go there's no way it's possible you see it if the dollar rips higher i mean gold uh you're gonna see uh crude and food prices just completely tank you look at the look at the core cbi it's not even reacting as if there's inflation so this so cpi goes negative year over year basis what is it i really want to buy what would be my number one choice gold mine stocks gold money stocks number two emerging market stocks because why those are your big two sectors or you can do precious metals whatever you like but those are where you go when you see a negative cpi print because when it goes up you you can't not get inflation you know how high it goes that's i don't know that's a different story but that's where you want to initially start out is go from bonds into inflation-sensitive assets why hasn't cbi been recognizing inflation is that just like a formula issue is what do you think it's a it's qe qe is deflationary so you kind of if we summarize everything we've talked about you could say qe is deflationary until we get lending growth and then it becomes inflationary okay so if that's really the basis of and what qe is designed to do it's designed to you know again remember we talked about a liquidity trap so where that demand for money is growing more proportionally than the money supply well what happens is that gap has to be filled with lower consumer prices and so when you hear people reporting on cpi every month they go okay well next month you know this part is going to go up and then the next month comes along and that part does go up and then another part goes down and then the month after that it keeps like they keep saying everything's going to go up but because of the liquidity trap if something goes up over here something's got to go down so if crude oil prices and gas prices go up then you'll see other parts go down because there's a shortage of money and so when everyone gets excited about and i think you'll appreciate this jay everyone is like okay when the economy reopens right massive amounts of inflation and i go like no no you don't understand it's going to be worse because the limited supply of money is now going to get stretched across more businesses and so what have we already seen in the unemployment data we've seen people get on lose their jobs into pandemic go back to work and now they're losing their jobs again because there's a shortage of money so the more businesses are more people working nope i mean we saw it in the hours worked they dipped a little bit it's like wow that people like that shouldn't happen it doesn't liquidity trap happens every time interesting so coming out of this you know vaccine-led recovery you're if you're choosing between you know the economic boom of a lifetime as everybody gets back to work versus coast-to-coast insolvency event for small to medium businesses i think i know which camp you're landing in right now yeah as long as the fed's doing qe and there's no lending growth which you know if we looked at all loans and leases across commercial banks you're looking at two to three percent you're over your lending goal which it really needs to be a lot higher it needs to be six to eight percent so we're not seeing that and then you look at what our consumer is doing with their stimulus checks right saving a third is savings and a third is debt pound well we already talked about that paid off debt destroys money so stimulus is not even inflationary it's actually disinflation it can be deflecting so yeah i'm definitely on the fact that please reopen the economy you're going to find out that the liquidity trap is real and is not what what investors are expecting at all interesting interesting stephen look this has been fascinating and very educational for myself so thank you thanks for making the time thanks for coming on the show and i'd love to do it again sometime jay anytime you like let me know i'd be more than happy to come back and speak with you and share more of my views with your audience i have to get you on with uh with a few people maybe we'll call up like a brent johnson and a raul and then somebody somebody else provide a counter argument to this that'll be fine but let me let me set it up and i'll get in touch okay i'll look forward thanks again stephen thanks jay [Music] if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined right now by fred bell ceo and director of elemental royalties fred how are you very good thanks jay yeah thanks for making the time i'm excited to dive into this story we always get a ton of interest around royalty plays and this is not necessarily a newer story i know you found it in 2016 but maybe it was newer on my radar to be honest so i'm excited to bring you on and i think timing's really good to have a look at this before we jump into it i want to get to know you a little bit introduce you to my audience you're a young man but you know what's interesting is three years ago uh i know that you won the young and rising star award at the mines and money conference 2018 uh probably in london is that right that's right i didn't realize it was three years ago it feels um yeah it feels a lot more recent than that time flies man okay so give us a bit of background fred uh who are you and where'd you come from so so i'm based in london um we listed we started the royalty company privately a couple of years ago but we listed actually in the summer of 2020 on tsxv so in terms of most investors having any awareness of us um it's probably only the last seven or eight months that we would have even been um sort of visible and prior to that um we said uh we set elemental up in 2017 and i think it came through experience of working with junior explorers developers and i think if anyone who knows the mining space you know will know that the years from maybe 2013 to 20 sort of 16 17 were pretty lean years and they were difficult from a financing perspective and one of the things that i learned um going through that experience early on and i worked in in london for aim-listed companies and i was based in melbourne um with one of the other partners here and i've worked across probably half a dozen um african countries um and australia and i think one of the things i learned is that often with a junior exploration company and developer it's you know half the battle is having a good asset but the other half of the battle is is financing it correctly um timing the market which is very hard to do and not diluting yourselves and i think you know my my experience from that was that actually a royalty company when you sort of take a step back and critically think about the industry it's a really good way to play the mining sector and if it's a gold rule to company like another it's a great way to play the gold space because what you do is you can actually have exposure to multiple assets across jurisdictions and with different operators and you can really diversify your risk and if you can get revenue from different assets early on um you can be as diversified as a mid to minor but you're a 50 million dollar royalty company right and that's the that's a sort of light bulb moment when i sort of thought well if i'm doing this and i want to set up a company again i think the way to do it um especially my age is to take a starter royalty company and staff are ruled to company with a difference which is producing royalties from day one yeah and that that sort of that is the elemental story um we've had producing royalties from the day we've started i think we're um the third you know in the sort of revenues in the royalty space really high on the on the revenue side and that is i think unusual in the junior royalty space um and uh that's i suppose um a quick background yeah thanks fred thanks for that so yeah gold royalty if you guys locked up four agreements in 2020 is that right i want to i want to dive into those prior to though there's definitely been a surge of new royalty companies listed and like i said definitely a lot of interest for my audience from your perspective fred in your opinion what's the the quick metrics investors should look at when they're valuing a royalty company say we're looking at six what are some of the quick and dirty rules investors could apply to eliminate half of them okay so so put aside elemental just talk royalties generally please i'm an investor i know the space really well now um if i was looking at a royalty company i think the first thing i'd i'd want to see is the whole reason i'm investing in a rules company in the first place is because it should be lower risk it should have diversified revenue as a number one point because you have diversified revenue then you you make yourself immune to a lot of the you know disaster stories of mining that destroy investor returns over the years um and there's a great example in in terms of covid over the last year and if you are an operator in a jurisdiction through no fault of your own that's been really badly impacted by covert you could have your single mind shut down and lose your revenue for x months um but if you're a royalty company and you have two three five ten royalties with revenue you might lose one of them but you've actually got the others and so you're able to keep going and so that's my one sort of critical assessment is check the downside risk do they have revenue and do they have revenue for multiple assets and then number two i think is always quality and quality can be a number of different things it's the operator um it's the asset itself um and and i think the the resource um but if you if you have good quality operators and good quality assets you're more likely to have a royalty that will deliver better over the longer term so first of all protect your downside um make sure it's got revenue for multiple assets number two are these good assets um are they good quality operators are they good are they are they mines that will go not just for five years but 10 years and longer um so i think those are the two two key things and then um the third thing after that and maybe this delivers some of the the alpha is um if you've got those two building blocks in place what is the management team and what's her track record and their background and i remember i used to um i remember i used to i always used to invest when i was younger and um i invested in explorers um in my early 20s when i when i knew not nearly as much as i do about the industry now and and actually one of the questions i hardly ever asked was you know who are the management teams and who are the people but since since um since i've now been and mining for the past sort of um 12 years i think one of the first things i'd always ask is who are the management team and you know what have they been involved with and um sort of what track record and reputation do they have and and that is i think in the royalty space um that if you get a really good management team with good assets and diversified revenue i think you're on to a winner um and that would be how i would look at it um on a personal level okay thanks for that i appreciate that so let's let's apply these rules to elemental talk to me about your revenue and how it's diversified so i think for us it was um i my my background i studied history university so one of the first things i did before we set off elemental was i looked at the history of the royalty space and and the royalty companies i think that have um often run into issues are the ones that haven't had um diversified revenue from the outset so for us it's the hardest thing to do but if you can get some producing royalties on day one if you can be cashflow positive from day one your your future your destiny is in your own hands to a much larger extent and so um i think we were really really selective in what we did and we bought some royalties from some pretty large operators so acacia who's now part of barrack yamana gold we bought one royalty privately we bought one royalty from if you know carlton breweries who are foster spear in australia um these are these were big big companies that had in some cases held these royalties for 20 years and um they were very much non-core assets and so what we were able to do was we were able to identify the royalty evaluate them extract the value and um and i think get a put it into elemental to give ourselves a really good foundation of diversified producing royalties from day one and i think that's one of the things that that probably set us apart straight away when we came to market to list last year okay and you're right it's not easy buying producing assets like this it's competitive landscape so how do you compete and how talking about the quality of your assets then fred and how have you been able to be competitive in what's a very crowded space now i think if you look at our our track record of acquisitions um i think to date the the royalty acquisitions we've done in the last three years i think are are second to none in terms of returns um and and that's that's you can see that in our presentations and um and and just sort of you know two two and a half year paybacks on some of them and i think the way we've been able to do that is that we have um for the large part we have focused on third-party royalties which have not been in competitive processes and so that's enabled us to i think probably turn down 98 in every 100 deals but focus on the two that were really outstanding value and then when we came to last year um and we did two transactions and they were both our biggest so a 12 and a half million dollar acquisition of a royalty on endeavors and a 55 million portfolio acquisition from 32 those two deals double the size of the company with each acquisition and what that really did is it gave us this this great blend of of value and scale and both are really important in the royalty space because you you obviously always want the best value you can get to give returns but you also need scale because with scale you get a lower risk b you can have a bigger more diversified portfolio but crucially as well once you start as a listed company um what you really want is let's just take an example you're running costs of two million dollars a year plucked out of you know just for example sake if you have two million dollars of royalty revenue obviously you're covering your costs but you're still having to raise money to invest on a day by day basis if you then get a million dollars of royalty revenue you then have you've increased your revenue by 50 but you have a million to play with if you have two million dollars additional royalty revenue you have increased your royalty revenue um by 50 but you've increased your available money to spend each year on investments by 100 so the thing is because you're a royalty company with fairly fixed costs each additional dollar that you add in revenue is a is a really sort of um uh it can be two times or three times the free cash flow and that is i think where elemental now now is at that inflection point where we have been we've got more than enough money to pay our costs and so every million dollars now we add in of revenue is going to be um essentially 90 going into the bottom line and that's really where the model starts to get powerful and i think that's why we've worked so hard over the past couple of years before we listed to to get that portfolio of producing good quality royalties in so that when we come in now we can we can comfortably look ahead and say we're going to have you know more money last year than uh this year than we did last year more money next year than we did this year to invest and that's a really positive cycle and position to be in what are your 2021 revenue projections so um so we we announced last year 5.1 million us as are pre-audited but um revenue numbers and then for 2021 um depending on the gold price i think we've said seven to seven point nine million dollars us and that's um that's about four or four thousand four hundred gold equivalent ounces and i think if you look at the history of the company we have since we started in 2017 we have doubled the revenue nearly every year since we started and so i'd say that those revenue numbers for 2021 are on the basis that we do nothing else so um if if hovid locks us down and they cut off the phone lines and break up on our house then that will still be what elemental can deliver and i think that one of the unique things about us is with the south 32 acquisition in particular um this year is the first year we have 12 months of royalty revenue from wang yong which was our biggest royalty and we have a our new biggest royalty that starts production in q2 australia's newest gold mine and so next year will be the first year we have a full 12 months of revenue from that and then in 2023 that will be the first year we have a full 12 months of revenue from equinox's new acquisition um on mercedes and so what you get is you get this and again it's one of the benefits with a really scalable royalty model is that 2021 2022 and 2023 without doing anything else we will have more revenue and more royalties paying us each year in the current position we are now okay now so we're looking at seven to seven point nine 20 21 what about 2022 so 2022 is um it includes one of the sort of development assets but i think what we say is if we don't include that we're looking at a plus 10 million um so annualized run rate from the second half of this year onwards um once we have carla windering and um and then and then you go into um i think our our big development um sort of pre-feasibility stage gold project in western australia and one of the things that again if if you look at the royalty space and it's a parallel for the mining industry but we all know that projects often take longer than intended and um and uh mines can take longer to build projects take longer to come on stream and one of the things that we did at the beginning to do risk is we really focused on buying royalties on existing mines so there was a track record of production we knew what we were getting we could see what the royalty had been paying and if you look at our portfolio most of them are producing royalties and most of them are up and running so they're very de-risked in that sense and i think that again is a is a big differentiator so that pre-feasibility stage project that we've got um that's probably the the big one that's a that's um sort of development stage okay and where the timelines can move and i think if you look at a lot of if you look at a lot of um sort of other developers or royalty companies you'll see that 2021 more since 2022 and it takes another six months takes another nine months and so if we can have a really good 10 million plus space that whatever happens we're pretty confident we're getting that from existing minds existing operations then it puts us in a really good place down the line even if some of these subsequent royalties are delayed by three months or six months it doesn't actually cost us any any any more and it doesn't really impact you know the amount of revenue that we already have and i think that's the key key position that we wanted to get it um to be in that to be in that 10 million plus um space okay now i want to wrap it up talking about your team uh it was the third point that you mentioned when you're looking at criteria it's usually the first thing i look at when i'm looking at a company so talk to me about who you've surrounded yourself with fred and do they bring expertise to royalty business talk about your executive team so it's uh it's funny and it's a funny funny world because it's actually two of our directors um personally owned royalties themselves and um and both of those were on stage over operating minds and so i think we've got a lot of experience um not just in the in the management team but actually as well on the board um people who have been um personally involved in in bringing projects on stream and holding a royalty on it across that period and i think that if you look at our track record um over the last couple of years and in what the team has been able to do um always say it's it's an awful lot harder to buy a royalty on a producing mine um than it is to buy an expiration royalty an expiration royalty could probably be you know a few pieces of paper but if you want to buy a royalty in an operating mine in a certain country you'll need to do tax due diligence and structuring there will be an awful lot more due diligence in terms of legals tenure environmental all of those kinds of things and so i think for us now we have acquired royalties over operating minds since we started in mexico in chile um in australia in the clinifasso and in kenya um and those are operating minds and so i think um our success rate on deals that we have actually agreed terms on and gone through to execute is we have executed successfully on every single one and that's something that can often be overlooked um you know we'll buy a royalty we agree the price that's it done it's not and um i think we have built up a lot of ip over the years in doing this and also in the deals we've looked at where we haven't um where we haven't actually bought the royalty but we've done a lot of work looking at different countries jurisdictions different royalties or streaming structures so i think we've learned a lot both from that and from um the people involved and on our on our team we um we joined discovery group when we listed in canada yeah and the principles are john robbins and uh jim peterson i think have a really good track record and network in canada and really helpful for us particularly in the odd year that we've had over the last 12 months not being able to travel and not being able to come to canada and america ourselves and market i think it's really helpful having the benefit of their experience and and network with us and um and then i think um one or two of the the other people on the board um you know bring a really good mix of technical experience which is so important and if you look at if you look at our sort of management team at the moment the average age is probably in the mid 30s our sort of day-to-day management team but then if you look at the people around us they don't always like me to call them the sort of experienced gray hair but it's um it's that kind of technical experience that you can't you can't succeed without um we can go out and we can bring in lots of royalty opportunities and we can do a really good commercial due diligence on it and we know the marketplace and we know what what opportunities work but i think what you really need is you need people who have been geologists engineers geophysicists who have worked on different minds and seen everything that's gone wrong and they know the history of the project and they know the history of the people working on it and you can get a really good feel for that and so i think we're lucky in that we have some really good quality institutional shareholders um and and a number of people in the mining space who have been really helpful for us as we've been building the company and we've been able to lean on some of their knowledge and contact base and i think that's been that's been really helpful okay okay thanks for sharing that i you know there's distinct advantages to being part of groups like discovery group uh because of the resources the the overhead company brings to the table um we've had jim peterson on the show very recently digging into the velour story a big fan of that guy okay thanks so much for coming on fred i appreciate your time um i wanted to introduce this story to my audience and get to know better myself so thank you and i'd love to do this again maybe six months down the road check in and see how things are going that's how sick thanks jay if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined right now by david morgan the chief editor of the morgan report david welcome back jay it's always fun to be with you thanks yeah i appreciate making the time so i wanted to bring you back on because we spoke in january uh you were among a ton of interviews we did in december and january we did about 100 interviews with the intention of gathering as many forecasts and perspectives as possible so we could then sort of pick and choose what we could apply into our portfolios now a quarter's gone by already we're at the end of q1 of 2021 already i wanted to pull back a select few personalities onto the platform to get an update right because it's been a crazy quarter lots has changed and some things went to plan and some things didn't so i'd love to get your perspective on what's changed how your conviction may have shifted and how that impacts your outlook for the rest of the year um you know maybe a good place to start would be you know we're sitting here i guess at the end of talking about the gold market now a seven month depression in the gold price since august ish my question for you is what are you doing now is it time to buy is it time to wait and how are you actioning right now yeah that's a great question jay right now building cash but taking nibbling uh you know it's tough to be all things to all people you know there's people that just caught on the gold store a year ago and maybe they got in too high and then there's you know first of all i'm long-term you know now i do make intermediate term calls and i'm pretty good at it my long-term calls for tops has been very good my bottom calls haven't been that great but the main idea is to have a goal and don't overdo anyone's sector now i know i'm over invested in this sector i know it well i can take the risk some people can't so if you're that personality you know 10 15 waiting or whatever is probably adequate so one thing i'm going to put in the next report and i do it on my videos for our paid members is covered call writing so you can have a stock like one of our top tiers and uh what i call rent your stock so you can go a month out and pay get and believe it or not jay you're gonna get most of the time you're gonna get like three to five percent in a month and the reason it's so high is that gold stocks have the highest beta or the highest volatility is what that greek letter means of any group in the stock market because of that volatility you pay more for the option which means as the option seller you receive a big fat premium i had a options expert i met at one of i think one of your conferences and uh had him do a mastermind with me and he did the portfolio this was about three years ago and all i did was my top tier which is only like five companies but he and he works at he writes an option out one month every time it yielded 40 in a sideways market so you know there's that aspect i'm going to be publishing that as an outline in the next morgan report something you can do your own you don't need to buy the report to get it in fact it's going to just be an overview but that's some way to generate some income and also kind of soften your loss because every time you write that call your cost basis comes down so if you're on a hundred dollar stock and you write an option for five bucks then that time it's 95 and you write it again it's 90 and the right again you could do four or five times in a year and your cost basis goes from 100 down to let's say 80 and that's maybe your average price right now because we've been the seven month roll and you don't feel so bad and you can't do that with um you know some of these junior companies don't have options but the big companies you can do it so i've structured a portfolio conservatively jay you know i remember in the early days at your shows way back in 2002 and 2003 and some of the guys in my business were just kicking it and i was doing good but being conservative um maybe not as good on a percentage basis but i'm still here and in the long long run i was doing pretty good where a lot of these guys left left the business so you know it depends on your perspective depends on how you like to invest got it okay now switching to the silver market david what what has surprised you most about the silver market so far in 2021 well i have to i have to give you two answers one is this reddit group wall street silver that came out of nowhere basically from this gamestop situation that was unexpected and of course it's been sort of one of my dreams about what's wrong with the metals and particularly silver is the lack of awareness you know no one really hears the silver story unless they're at you know one of the vancouver resource investment conferences or maybe one of the other investment shows around yeah i know they find it on the internet or they're kind of a metals head or a resource investor but i mean the general public just doesn't hear the silver story just somewhat the gold story but it's usually diluted and so that was number one because awareness is key education and awareness the second thing is and i hate to sound like a whiner but it's the price situation we're presently experiencing okay i mean look you know common sense would tell almost anybody not even a futures trader like me and i don't do that much futures trading anymore but i used to actively to stay a buy like we had in four days in silver taking the price or or taking the amount to 100 million ounces in a four-day time frame if you did that much volume respective to the percentage of what's available in the corn market or the cotton market or the wheat market you would have probably been up limit three days in a row silver made this big up move on the after market over the weekend and up to touch around 30 and then came right back down it's been like 28 maybe 28.50 is kind of it's high so it's been this traded range between 25 and let's say 27 and a half since that time frame which is only like five six weeks ago memory is correct yeah and this is rather frustrating to new silver investors but i gotta back up and go to the conviction trade of 2020 and when uh at davos which you now know most people know as a world economic forum when guggenheim's chief investment officer scott miner was asked what's his conviction trade for 2020 he said silver he said that in january of 2020 and it went from roughly 18 to i forget what it closed at 28 we had about a 40 something percent move over that year year to year january to january been flat now it's frustrating it doesn't make sense but there's been a lot written about that you got a question or two on that idea so hand it back to you yeah cool well you're right about the uh sort of mass audience awareness tuning in and you drew some parallels recently between the silver market and the 2008 crisis specifically with analogies pulled from the movie the big short about the housing crisis in the us i was wondering if you could recap that for our audience today sure uh it i've watched the movie two or three times i actually own it one of the few movies i've bought but there's a part of the movie after dr brewery gets goldman sachs to write them the option to be able to short the mortgage securities that are basically garbage and he knows it has known it for a long time and then of course further on he says he wants to guarantee that they're still going to be around to pay them i digress so what happened is as the movie progresses the market goes against them against them and it's not only dr berry and his invest investors other people on wall street are catching the whole idea as well so there's more on board on the short side so market continues to go against him lots of frustration and then all of a sudden i think it's countrywide financials headline news biggest news on the ticker it's going bankrupt major brokerage it does a lot of subprime mortgages in fact i think their whole business i may be misquoting but countrywide was pretty much the choice for subprime type so you know very difficult paper you know the credit scores aren't that high chance paybacks aren't as good and all that stuff and this is an absolute in your face it's happening it's right there and the market actually goes against them and these three league players in the movie are like baffled this can't be true and i forget the exact line but something like this is the most corrupt thing ever or something else is going on and from the movie there's something else is going on that one of the banks wanted to be on the short side now that they saw that these these coupes were correct yeah and once they got on the short side then the whole thing started to tumble down and the way it went everybody that was short this the mortgage securities were making a lot of money so the analogy is similar that you know we see all this physical demand we see off takes from the comex itself we see premiums 1 000 ounce bars commercial bars we see the pslv rewriting the prospectus we see the sivr uh aberdeen trusts rewrite the prospectus and basically whine about the speculators taking silver for crying out loud when those funds are supposed to be long silver this must be long only funds if you can't buy a commodity you can buy stock because an etf is a stock representation of fill in the blank and in this case it's silver so all those things adding up jay just give me the idea that we might might be at that point in the movie the big short where even though it looks like we're wrong or something's wrong we may not be that far away from something breaking free i would say you know i do technical work don't hang my hat on it i'm pretty good at it but and the market knows more than me but i'd say if we got 28.50 uh print three days in a row on the continuous contract in other words a spot month and it's decent volume i think that's it i think from that point we'll see it could be wrong we're probably into the 30s pretty quick and there is some congestion at 30. i mean there are people that bought silver at 30 and now you know with 26 or 25 or somewhere you're paying 30 or 31 anywhere if you're a retail investor even at some of the banks you're paying a huge premium to get you know silver maple silver eagles even a rcm rcm world canadian mint i think that's bar has got a huge premium on it so something's just not spelling right in the silver market i'll leave it there okay we'll have to wait and see now talking about your portfolio for 2021 and how you've allocated cash between call it early stage explorers 32 miners what are you holding now what are you shopping for okay well my big positions i've been writing some calls not as aggressively as i outlined the mid-tiers are still doing well and getting great news so we're keeping our paid members informed about that haven't done much in the speculative sector there was one that basically wasn't living up to their mission statement so i dropped it off the list i hate to do that because once i make it but i'm not married to any of these things if there's something that changes i have to have to adapt correct and continue so i corrected and continued uh i just got on our mastermind which is primarily fund managers and ai's accredited investors just had a presentation yesterday on a new silver situation over by me in the silver valley that looks quite interesting it's not got the paperwork out yet for a private placement opportunity that will be coming so i'm definitely going to take part which you know those people on that call know that and it looks like you know very high potential i mean i know that area pretty well i'm not a geologist but i've been over there many times so that's sort of one i'm kind of very intrigued by uh for current you know i mean it happened like tuesday and this is okay wednesday so it was yesterday so that's it i am holding cash building cash because i think we're nearing the bottom in gold but i also think that it's not going to be a rocket ship up i think it's going to it's going to hit the bottom of the trading range and i think that's where we are or close to it and then it's going to come up to the top of the trading range over time of course between that goes up and back and forth back and forth with higher lows and then it's got to break through the trading range so i do expect better gold prices by the end of the year but nothing significant so i'm willing to focus a little bit more on silver i think it's got more upside at this point in time but not so much that i don't have enough cash to take advantage if we get a large stock market sell-off and it takes everything down including the miners or i see something i really want to uh invest in that's an opportunity that presents itself okay okay i love it look david i appreciate your time you know who i was just talking to before this was uh daniela camboni and i told her i'm talking to david morgan next and she goes oh you have to share this story with him uh she said you were her first interview ever in the business when she you know going back would have been like 15 years at kitco and they were positioned at the bottom of the escalator at the pdac and she said she pulled you aside was super excited to uh convince you to do an interview with her and then she couldn't get the audio to work and uh you guys had to try it a couple times do you remember that i do indeed yeah i mean in the career i've had which i'm very blessed uh almost everything has happened at one point or another you know the powerpoint quits working because the bulb goes out in the you know the unit then you know the lectern might quits working i mean not everything so i just got you know you just admit that hey something went wrong and try to pretend or instead of pretending you know everything's okay people know you're human i mean most of them will be very empathetic with you and of course knowing that she was probably nervous uh you know i just handled it to the best of my ability that hey you know it happens so what i've got time so relax you know and it all comes out we all have our stories but uh yeah i hadn't thought about that in a while but i do remember it yeah well she you're uh one of her favorite analysts that she's interviewed she shared that with me so i just wanted to pass that on um look i appreciate your time david thanks for coming back on updating my audience and i look forward to doing it again thank you jack appreciate it [Music] if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys j martin here ceo of cambridge house and i'm joined right now by louis zapata the ceo of oro x soon to be executive chairman of silver x we're going to get into this transaction uh on this during this conversation louis i haven't had you on the show before so i'm excited to dive into this story with you thanks so much for for joining me no thank you great being on and uh great to speak to you so let's let's start with you a little bit my audience might not be familiar with you i like to know the ceo behind the deal so let's start here give us the highlight reel who are you and where did you come from i was born in lima peru but i grew up in richmond bc did all my education there went into fight mining finance my first job out of college was a canada court annuity in vancouver i grew to be the head of south american equities for for canada court and in 2013 i moved to peru full-time i'm basically just being in mining finance my whole career it's all i know i love it and uh been financing mining companies since my early 20s basically and what inspired you because i've seen this this i don't want to call it a trend but in the last 12 months i've seen more and more professionals move from banking to running a public company specifically in the precious metal space tommy makes sense i get it but what inspired that decision for you um you know i've been in the business almost 15 years so i kind of saw what makes good companies and it's really all about people so when i i felt that when my network became good enough you know through meeting people like paul matisse meeting goodness other you know executives etc i just thought it was time to make the jump and a couple years ago i saw the market was weak i thought it was going to flip around so i said you know i'd like to take over a company and print acid in and that's really what was became silver x uh now okay so talk to me about the team a little bit because that's what turned my head as we said before i hit record here you know i've been a shareholder of oro x for maybe seven eight months i know you guys have had a busy 15 months but it was the people that turned my head right i've invested with paul matissek in the past and made money and he's one of the personalities that i tend to follow around the space and just make sure i know what he's doing uh so talk to me about the team at orox and what you guys have built yeah for sure we took over the shell that became rox in january 2020. uh we've done three deals in 14 months each one bigger than the last paul came in in the peruvian transaction which took us from the shell to rox in june of last year a lot of people don't know but paul lives part-time in lima peru he's my neighbor a few blocks down from me so we've known each other sort of socially for a few years and in business circles so we were always looking to do a peru deal so when we partnered up with paul and also daryl carty was a great vancouver financier you know great a great guy uh we thought it was the time to make the jump and that's sort of how rox was born and then previous to that i had always known about the asset that we're rolling into silver x la recuperata i helped them finance privately so to be able to roll them into rx has been a you know an amazing thing for us yeah daryl carty is another individual who uh is someone you should pay attention to he's more behind the scenes a lot of people don't know daryl but um and a lot of the a lot of the deals i've had on the show in the last 12 months he's in the background um okay now let's talk about la la la raccoopera forgive my my botching of the pronunciation but what struck you about the asset let's talk about it for sure we we wanted to roll in latitude silver which is the company that also recuperated for three reasons number one it has production 1.7 million ounces over equivalent over the next 12 months going to 2.3 million ounces to 12 months after that we see organic growth potential in that asset to family analysis which we think is great number two as a resource you know uh seven million tons and change equivalent to about 70 million ounces of equivalent and number three what the guys did which really attracted me was the consolidated district right i mean they took over a district when they bought this asset from one of ventura in 2017 they've expanded it from you know 6 000 hectares to 15 000 hectares and today there's 90 nine zero non-productive veins on site so veins have actually been touched by mining methods in the past so we think we have our hands on with basically what's peru's next great solar mining district okay and i would imagine the game plan here is drill drill expand the resource what have you guys got planned yeah i mean look we're a company that we're going to be out to market uh out back trading at about an 80 million market cap but we're in production right so we have 1.7 million ounces of production going into 0.3 so that's number one expand the resource by drilling we believe in creating value by the drill bit so we're raising 14 million dollars in this go public transaction if you will and with that the most of it's going to the ground to increase the resource and turn it from an inferred to a mission indicated resource but also there's high-grade silver zones which have never been touched really by modern mining methods so increase the resource increase the category of the resource and obviously expand uh the resources across all categories that's the plan okay okay and i know we have some optionality at koryorko can you want to talk about this a little bit yeah i know coryorko's a project paul and i originally bended into the shell that became oro x it's a high grade gold target it's pro ready i mean there's 17 known outcropping veins and in a dome that we really like the previous operator had basically done a sampling program across the entire dome and you know you had three and a half grams of surface across 17 veins there was previous mining we got our hands and mining records it was around 10 000 tons of color 10 grams and then below that it was 13 grams so we think it's the upper reaches of of the thermal system we think it's real ready we're shooting 3d ap in the next few months and then now as part of silver x we'll drill it and it'll give our investors sort of a high grade gold target within a silver company that's in production okay okay and so correct me if my number's wrong but we're looking at about 30 000 meters of drilling at la cupareta right 5 000 exploration at coryoko and then what can investors expect will you be looking for more acquisitions lewis like what's what's next on the radar for you because i know your mission has become you know the next low-cost silver producer in latin america so are you looking for more properties 100 i mean look peru's the world's second biggest silver producer right so the question is why has nobody built the first majestic mining in peru there's a lot of these mid-tier mining opportunities silver mines that have been you know mined by local peruvian families or local peruvian groups that have never had the room to expand or the capital to expand we think we have a good sweet spot there i mean recuperator again we think we took it at one point at zero because it was on care maintenance when we bought it now it's 1.7 million announcements going to 2.3 we see two or three other opportunities like that so to build a 5-10 million silver producer we think it's quite feasible in peru um and i think that's the value that we bring you know the whole team is based here from paul to myself to our you know our ceo incoming ceo et cetera only our cfos in vancouver so you know we're a local group with access to canadian capital and canadian know-how and i think that's really what's going to drive a lot of value i want to ask your own question why has nobody built the first majestic of peru yet i think peru was obviously the land of elephants in all sense like there's huge copper mines huge gold mines huge silver mines right i mean peru's biggest primary solar producer is a company called vulcan they produce 20 million ounces uh and then the next biggest one would be fortuna right so there's not a lot of people looking at the small like two to five million ounce producers that could become five million plus because you know silver was such a weak spot for so many years that nobody really thought about doing it i think we're the first to look at that strategy and you know we're executing right now okay okay let's get into your cap table a little bit um starting with management and insider ownership what can you share louis look uh pro forma we'll have about 30 plus 35 management insider ownership i think that's quite large for the for any company we have institutional ownership from sprott we have us global we have uh baker steel so we have great institutional backings in this 14 million round we've been lucky to collect more institutional orders so you know we'll be a relatively tight company we're going we're doing a 40 million dollar race and a 66 million pre-money valuation 81 million post money that's canadian uh if you look at some of our peer group they have around the same or higher valuation with no production so i would argue we're very attractively priced and yeah that's that's what we're doing right now okay okay and so near term catalyst if we're looking for trigger points we've got cash in the treasury we've got to focus drill programs are running we're look we're waiting for results at this point for la cuparera for koryoko and that's what investors should look out for the next six eight months correct so one of the big things about our company is look we have two rigs on site now the third one's going up next week so we have three three drill rigs turning even before we go public call the middle of april so we'll have drill results we have production results but we are in production i want to make that clear we'll have resource expansion resource uh sort of upgrading the resource categories and definitely m a i'm a banker by trade uh i think everybody knows that paul's a deal guy we're not here to run a two to three million ounce producer we're here to grow the next american or first majestic i love it can you run my audience through your production numbers yes so 1.7 million uh this year over the next 12 months 2.3 million a year after that that's on the current installed plan capacity of 600 600 times per day we will be doing a slight capacity increase to 720 tons per day that's where we go from 1.6 or 1.7 to 2.3 million ounces okay this year we are putting an eia study for an upgrade of the plant to 2500 tons per day so we think organically this asset can grow to 5 000 sorry 5 million ounces but again i think a big driver for us would really be m a you know we uh i just came back from meetings we're chasing mma deals all day long okay yeah that's the other catalyst we'll keep our eye out for which is exciting okay okay louis thanks for coming on the show i i appreciate your time and uh i can hear that you're downtown lima we can hear the traffic outside your window right now uh yeah i want to i want to bring you back on four to six months down the road get an update on the story uh but thank you for coming on i appreciate your time no thank you jay nice to talk to you if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined right now by rick rule who prior to this interview every single time i've had you on rick i've introduced you as the ceo of sprott us holdings and as of seven days ago that's no longer the case now you're an investor and a speculator among many other things but welcome back thank you it's nice to be back in this role i will be as you might imagine less constrained by regulation and corporate etiquette these days so the interviews might become more interesting every time you've said that and like i've talked to you a few times in the last couple of months and you've mentioned something along those lines less regulated less constrained for some reason always get excited about what's he gonna say where could this go this time so let's start with that though because i know this has been a long time coming i know your your plan was to see your clients through the bear market and then step back i don't know how many times i've heard you say on our podium bear markets are the author of bull markets and you could also think about that in the sense that bull markets are the reward for bear markets so after seeing your clients through the bear market rick why not stick around for it for the party and the bull market well i would suggest uh two reasons one uh i'm now 68 years of age i've done the same thing effectively for 45 years i'm not trying to say i was always ceo but i've i've been involved uh in uh client service investor service for 45 years uh and that's a very long time uh as i said in my retirement letter among other things i'd like to travel with my wife without an investment conference or a mine tour tagged on to it but rather for sport also however the regulatory climate has made operating within the regulated financial services realm increasingly less amusing it has seen from time to time that anything i said to investors publicly that was useful was prohibited and that became somewhat disconcerting i understand that i could not and should not give investment advice to people that i don't know but the idea that i might be able to talk as an example about a company at some point in time and disclaimer at the beginning say this isn't investment advice uh this is the way that i view this company in terms of my own money uh could have been misconstrued when i was in the regulatory environment as being investment advice nonetheless as a licensed person right i'm not a licensed person anymore uh i'm an investor and a speculator maybe a particularly well informed one but an investor and a speculator the second thing is jay that increasingly i think that social commentary and political commentary is an important part of an investment discussion uh and frankly if you're sprott with 200 000 investors worldwide some part of my political commentary or social commentary irrespective of the fact that it is investment related uh might be offensive to more than one of them so some of what i said uh was well not deliberately uh offensive to some constituents within sprott uh and served to embarrass uh certainly some of the employees of sprott and i didn't want to do that uh but at the same time i felt that this social and political commentary was a necessary part of describing some of the investment theses that i was involved in so i won't be constrained any longer from doing that interesting okay so so if i hear correctly obviously we're stepping back from from sprott as an employee standpoint you're not stepping back from the market you're not stepping back from media and so from on a personal level rick are you going to be as involved in the market as you've been uh in the sense that uh uh i will keep one private client uh his name is that name is the rule family trust myself i will sub advise some sprott products uh but the you know merely as a subadvisor and i will continue to mentor other portfolio managers and private wealth managers within sprott but their decisions will be theirs uh not mine i i would expect that in some senses i'll be more active as an investor because i'm relieved from all um managerial responsibilities which despite my best efforts to shirk them took as much as 35 of my time uh in 2020 right uh i i am taking the business that you knew as brought u.s media uh the vancouver conference which is of course a um pardon me a companion of your own conference uh the old sprott's thoughts blog uh the the sprott investment media us media business will now be called rule investment media and i suspect i'll be much more active in that business hopefully uh occasionally cooperating with cambridge excellent thing i look forward to yeah me too absolutely okay now you referenced 45 years that's a long time that's a lot of cycles that's a lot of entrepreneurs that came and went um a lot of speculations now you know it made me think about rick when i i flew to carlsbad to meet with you in 2015 and i was i was in a bit of a stuck place because i've been running cambridge house for close to five years we were in the pit of a bear markets and i was i was struggling to get some vision on how we should proceed forward and you were very gracious you sat with me in one of your boardrooms for probably an hour and a half and one of the questions i asked point blank was rick is if you are in my shoes right now in this market what would you be doing right what were some of the decisions that you'd be making and you know you seemed to think about it and you sat back in your chair and then you said look i can tell you what i did do when i was about you know that stage of my career and what you said is you identified the top entrepreneurs in the business you know fortuitous that you were able to but you did right individuals like ross beatty lucas lundin bob quartermaine and you said you made yourself indispensable to them right and then ever since then i approached my business very similar right i looked for those those personalities whether they're the entrepreneurs the money managers the newsletter writers whoever and and focused ninety percent of my energy on those relationships but my question for you is we're all trying to find the next lucas lundin the next ross bee the next bob quartermaine now you spent a lot of time and hosted a lot of panels at my show and others talking about the next gen of these legends you know can can you say with confidence now rick and we're not looking at their current deal or their next deal but who in 15 20 years do you think you could point to with absolute confidence to say that's that's the horse to bet on does anybody stand out any entrepreneurs in the space that are way above the others sure i i think in uh in your town as an example um all of a sudden the names are going away uh nikki adshedbell if she decides to continue on her current trajectory uh will be one of those she certainly has the tenacity and the intelligence it's up to her whether or not she wants to do it of course the whole team [Music] around sandstorm okay of course by nolan watson yeah uh i think amir adnani has proven himself competent as a multi-issuer stable uh you know that's probably a start yeah i think there's probably there's probably four or five in town uh that have uh a been able to build a team which they need to do nobody can do it by themselves uh have an established track record so you can see how they do what they do uh have a reputation which is a bit different than a track record so that they have lower cost of capital relative to their peers and i've also shown them discipline what you want to avoid is somebody who is a serial issuer who just gets in the business of marking up 15 cent paper to 50 cents and moving on you want to be involved with people who understand that building a company either to being a successful company or for an exit involves a six you know five or six year time frame and you want a young entrepreneur who will do whatever is necessary to make each individual effort a success i think that's important there are other groups in town that have you know five or six prints on the table uh all of which might go up in a bull market but that's not the same as a serially successful group that is more likely than not to be successful in the future it's a very different circumstance you need to segregate between people who build companies and people who buy paper by the truckload like a supermarket does bread and retail in the same fashion those are very different disciplines yeah okay okay thanks and three names is a lot actually more than i expected so thank you for sharing that i have two more and just to waiting for a month to see what they do okay i'd speculate on one of those at least um i'll have to call you in a month and see how we did okay okay rick now speaking to anybody who entered the gold space last spring and there was a frothy rally you know like you said a rising tide lifted a lot of ships the macro trends supporting a rising gold price haven't debated if anything they've gotten stronger right we're talking about our expectation that inflation will keep running hot our expectation that the fed will keep rates suppressed which in theory is the formula for a rising gold price but in practice the last seven months haven't played out that way and so what do you have to say to investors right now who seven months later are starting to question their conviction and say what did i miss where was i wrong and why is the market not performing as per the theory well your second point is the explanation uh the increase in gold price from eleven hundred dollars to nineteen hundred dollars coincided with a decline in the interest rate on the u.s ten-year treasury from 235 or 240 basis points down to 60. the plateauing and then the decline in the gold price coincided very very very closely with the increase in the interest rate on the us 10-year treasury from 60 basis points 275 basis points your listeners will need to decide what they think the likelihood is that this interest rate increase can stick or be increased you'll recall in an earlier interview that you and i did jay that i identified several factors and it's worthwhile i believe going over them the first is quantitative easing which i think you and i both correctly identified as counterfeiting were it not done by parliament or congress but it debases the currency the second is debt and deficits and debt and deficits continue on unabated in my country the deficit this year will likely be three trillion dollars adding to an existing on-balance sheet and off-balance sheet uh debt at the federal level exceeds 140 trillion dollars the third of course is uh nominal and real interest rates uh if the interest rate on the us tenure which is the world's benchmark security continues to rise the gold price will continue to weaken my own belief personally jay is that as the increase in the interest rate in the us 10 year if it continues at this level that the signal will go through the rest of the economy which is to say in the united states the 30-year fixed mortgage rate will go up by 100 basis points which will be hard on home buyers and home builders the prime interest rate will go up which will make it more costly for american companies to invest and employ the capitalized value of dividend distributions will go down because of the increase in alternatives from savings products meaning that share prices which are now based on dividends will fall because alternative yields are higher auto loans will become more expensive and most particularly the gargantuan amount of short-term liabilities at federal state local governments which are which need to be rolled over in 2021 2022 will be rolled over at higher interest rates which is so that the deficit will be increased because the interest rate will be increased that's a very long way of saying that i don't expect that either the voters uh or their political masters uh are much inclined to higher interest rates i believe that they think that the economy is in good enough rate shape that they could let it rise so they can cut it again if they need to if your listeners feel different than me if your listeners feel that the economy is in fact vibrant enough that these interest rates can stick or that interest rates could actually rise from here then they need to be leery about gold and gold stocks i feel differently it's worthwhile revisiting 0.2 as well specifically for u.s investors but i suspect investors around the world to the extent that those investors believe that the budget deficit falls substantially below gdp growth which is to say if gdp growth were to go to three percent uh as an example uh and the budget deficit were to fall substantially uh in other words if it became apparent that we might be able to actually grow to the point where we could begin to at least service if not amortize the budget i think that gold would be weak when i look at the popularity of deficit spending in the united states and i look at the unconcerned that both democrats and republicans have with the deficit i don't think that's likely but your listeners and your viewers will need to make up their own minds the final point and i'm sorry for this long-winded answer but it's the 64 trillion dollar question is that if you observe prior bull markets the two that i've lived through in 45 years what you will see is that while they are decade-long affairs they are punctuated by numerous cyclical declines inside a secular bull market the decline that we've seen on the gold equities index is 30 plus is extraordinarily common uh if you look back at the bull markets that we enjoyed in the 1970 to 81 period or the 2000 to 2011 period smaller cyclical declines of 10 were 15 uh happened historically uh with the frequency with which you and i breathe inhale and exhale and while that's unpleasant for people who haven't experienced them uh it's fact and you either get used to them or you get out of the way yeah right and i'm glad you touched on that because i've heard you reference that so many times during the bear market when you're talking about your experience in bull markets and i think even to say 50 corrections although challenging right to maintain your your conviction you know occur with consistency rick how how much emphasis do you put on i don't call them rules but things like the elliott wave right you must be familiar i wasn't to be honest because i really focus more on sentiment than anything just because of where i sit in this world but but do you put a lot of emphasis on theories like this i don't uh i have uh i have a use for people in turn internal to our own business like paul wong who use technical analysis as a timing tool okay um i i i i don't believe that markets are so much a source of information as they are a facility for buying and selling fractional ownership in businesses so the most important tool that i use is simply whether or not i think something is cheap yeah when you and i visited in july of last year i think i commented to you that there were very few things in the junior market that i could buy which told me that the universe was overbought and it was time to sell yeah a plethora of bargains particularly a plethora of bargains when everyone is afraid is the most bullish sign i know a dearth of bargains particularly when everybody is aggressive is the most bearish sign i know that may be confirmed by technicians in elliott wave but i prefer to think of it in sort of gram and dodd terms when are things cheap and when are they not cheap yeah i like that perspective you know i'm i'm re-reading anti-fragile right now and uh wonderful book just a wonderful book it is it's dense i feel like it's not the kind of book i can pick up and read 30 minutes of every couple of days i have to spend two hours with it consistently to really absorb um and i'm maybe a third of the way through at this time where we're talking about the noise versus signal and and you know i think telev's analogy is if you're paying attention to anything on an annual basis best case scenario you're getting you're getting 50 noise 50 signal most of us pay attention on a daily basis where you end up with 95 noise five percent signal and if you're into it on an hourly basis like a lot of market participants are you're looking at something like 99.5 percent noise to the 0.5 percent signal and i i just i know this book is not that old you know it's only a decade or so i believe but the amount of noise that we've become exposed to has only amplified dramatically so and so what how do investors avoid this trap brick i mean you may have just said it right i don't you don't you're not worried about technical analysis sentiment trends you're strictly looking at the value of companies but any additional advice for investors sure there's this wonderful phrase now fomo fear of missing out during periods of time when there is a fear of missing out and you feel it in yourself things are too bullish in bear markers there's a fear of participating in other words things look cheap but you're afraid to write the check anyway uh so i think almost doing the opposite of consensus you know one of the times that you and i taught jay i believe it was probably when you were down in carlsbad uh what i said was that my life would have benefited in every regard from doing less that's right had i picked the 10 best people that i dealt vis to this with in my 20s and early 30s and stuck with them and never did transactions with anybody else ever i would have worked a quarter is hard and i would have made twice as much money [Music] when i look at the most successful investment product i ever offered to the public which was exploration capital partners 2000 and that was a truly spectacular performance you'll notice i'm picking the best not the worst what i noticed back testing that was that i made something like a 165 or 170 buy decisions in a 60 year in a six year time frame and seven of them made a difference huh right which tells me a lot uh if i had it to do over again i would do a lot less uh i would do much bigger transactions you know marin katusa talks about his strategy as the alligator strategy or the crocodile strategy or something yeah you know where you just sort of hang out and wait jimmy rogers says the same thing he says to be a real investor you sit in the corner of a room and you do nothing right and once every three or four years somebody walks in the room and puts down a bunch of money in the center walks away you get up from your corner you go take it and walk back in your corner and maybe you don't do anything for a while it's difficult for people to do nothing even people that have been in the business like me for 45 years it's very difficult to do nothing yeah fear of missing out uh is a a great sin i used to give a lecture in your conference actually a workshop in your conference uh where i talked about the difference between the fear of omission and the fear of commission in the fear of omission you miss out on money that you could have made in the fear of commission you make a mistake and lose money and well fears of omission are aggravating fears of commission are painful and i i would prefer aggravation to outright pain yeah i love that it's uh it's a new a new bus every 15 minutes i think is the quote or the uh wonderful quote wonderful quote buffett has a good one too he says baseball is a game of baseball with no called strikes your money is your bad and so you just wait there and if a guy throws one past you it doesn't matter right you just wait till the pitcher gets tired and you swing at the fat ones right yeah you make me think that's the the most important characteristic of an investor is patients over and above everything else um okay now you opened up this interview talking about your ability now to talk about companies you are invested in and that you think very highly of and so obviously rick i'm going to try to peel some stock picks out of you now um what have you got for us what what are you very bullish on right now at present this will be extremely unpopular with your listeners at present the only companies i have in my global global rankings database that are too ranked remember that one is perfect uh two rankings and i just only very recently had some two rankings because of a general decline in natural resource equities they're all russian which is something that american and canadian investors don't like so and by the way these are not stock recommendations many speculators are too uncomfortable owning russian stocks to make it worth their while no matter how much money they make just because of their prejudice against russia or their lack of fondness for opaque markets sure but there are names like this isn't really russian but uh um pardon me kazaki kazadapram uh which is from my point of view the finest uranium company on the planet uh poly metal which is a very rapidly growing russian gold and silver producer i recently demoted both gazprom and luke oil from two to three because the oil and gas price went up so much that those stocks had returned to favor but my highest ranking stocks are uh russian which makes them extremely unpopular uh with my old client base and your listeners i suppose so you know what i've got the uh ceo of uh kazadaprom booked into the comment of the show next month so i'm excited to talk to him i believe personally this will make me a lot of enemies in the uranium space uh i believe that if you include the middle management the younger people at kuzadam prom that it's the best managed uranium company in the world interesting okay okay but i gotta ask you for some canadian american listed companies do any come to mind that you're comfortable endorsing right now uh i'm not going to endorse any of them uh i can tell you some that i'm attracted to and they'll probably bore your listeners my highest ranked canadian stock at present is altius minerals not because i think that'll be the best performer on the market in the next three three months but because they're the best capital allocators in the junior resource space in canada and the enterprise value which is to say the market capitalization less current assets plus debt uh substantially less than uh gross market capitalization and their uh new emphasis on streaming and royalties in renewable energy uh where their partner is apollo uh one of the largest u.s private equity businesses i think will grow much faster than the market believes it will i'm encouraged too that in their most recent quarterly report their management team expressed concern about the difficulty that they have deploying capital the saying that if they are unable to deploy capital they'll return it to shareholders by way of shareholder purchases uh or uh dividends yeah now most speculators don't want rational common sense capital capital deployment uh they want hot sex uh which is to say they want to be lied to on a consistent basis they want a narrative that turns them on uh what i've learned is that money isn't made in a quarter it's made in three years or four years and it isn't made with a narrative uh yes you can trade ten thousand dollars uh against a quick narrative and make enough money to take your girlfriend out for a nice dinner buy snow tires for your car or something like that but that's not how money's made and so i would say that my yeah easily my highest ranking canadian would be altius simply because it suits my needs it may not suit sure no i mean regular people everything you just said is consistent with what we were talking about 10 minutes earlier right whether it's altius's capital deployment strategy right they're not in a rush to deploy cash if they don't see the opportunities um your outlook on these these narratives versus companies it's all very consistent what we just discussed right there's there's a new bus and and right is the characteristic to wait for or to hold so when we spoke in july um you know i asked you about deploying capital and your answer as you just stated was everything's a bit too expensive for my liking right now um seven months later gold prices come off a lot of the miners have come down a little bit at least has your sentiment changed or are you oh i'm i'm much more bullish in the precious metal space there we go and just much more bullish in special versus metal space i wouldn't describe myself as wildly bullish yet in the junior space okay which is to say the sub billion market capitalization yeah although there are some exceptions to that uh i'm quite bullish about the current affairs as an example of uh sandstorm where i don't think that the market has adequately priced in a transaction on odd mod which hasn't occurred but i think will occur and hasn't uh appreciated the legacy value of their assets so that would be an example where i'm really bullish myself is on the mid-tier producers usually single asset producers that are enjoying very high free cash there are valuation discrepancies in the market between multi-asset producers which are regarded as being less risky because they have multiple sources of income and single asset producers where you have some risk associated with the shutdown of your single asset okay but from my point of view the discrepancy the delta has become too broad and if the price of these single asset producers doesn't increase my suspicion is that they'll be taken over by multiple asset producers and the discount will go away uh de facto uh so that interests me i i should tell you jay that i can't tell you really which way the gold price is going to go i have a suspicion of course but i can't tell you which way the gold price is going to go what i can tell you is that if you look at the gold producers by the metric that i like most which is net present value of future cash flows as a percentage of enterprise value enterprise value being market capitalization minus debt add back cash by that ratio using the forward strip as the gold price assumption not either current prices or aggressive prices but rather the prices established in the futures market the universe of gold producers particularly intermediate gold producers is the cheapest that i've ever seen them this goes back 45 years yeah uh if the gold price doesn't hold in other words if it falls then i'm gonna look pretty stupid uh if the gold price goes up which is what i think it will i might look stupid for not having uh invested more capital in in the sector uh at the present point in time i have a buy list of seven which i'm not going to share with you okay because i don't want a hundred thousand competitors from your listeners driving up the prices of stocks i'm trying to buy but suffice it to say they are market capitalizations between a billion dollars and five billion dollars uh generating free cash margins net of sustaining capital in excess of 15 percent um okay and you know trading at reasonable multiple sometimes a discount to uh net asset value uh [Music] at uh current uh strip prices uh this is as i say the cheapest that this class of stocks has ever been to my knowledge in my career and can you tell me i'm gonna prod a little bit can you tell me anything about the jurisdiction jurisdictions the jurisdictions where i'm finding the best ratios of free cash flow to enterprise value was australia interesting okay okay rick it's been a pleasure having you back on thanks so much for making the time i i love getting in front of our audience jay i'm hoping that you'll allow me to make my normal offer to your audience yeah of course uh i am still affiliated with sprott in this fashion uh if any of you care uh about the way i think about the companies that you own you can ask me directly go to a website sprottusa.com forward slash rankings enter the stocks the resource stocks no cannabis stocks no tech stocks uh and i will rank them one to ten one being best ten being worst i i will comment on those stocks where i think my comments might have value please be patient i'm about 900 rankings behind there was a bit of a snafu uh an i.t snafu in my leaving spot which wasn't resolved until today so when you submit your rankings please be patient remember that i'm a daughtering old 68 year old and i'm 900 rankings be behind but i look forward to fulfilling that service for your readers i've been checking my records done for over a thousand cambridge house listeners in 2020 and it's been an unalloyed joy for me to do so amazing yeah i don't know why you wouldn't do that i actually submitted a portfolio close to a year ago be about 10 months ago and i think i'll do it again this spring because why not it's i look forward to it exceptionally valuable okay rick thanks again it's been a pleasure having you on if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined right now by nico cackos the president and ceo of blue sky uranium nico how are you i'm doing well jay thanks for having me on your uh program now i'm excited to have you on to introduce this story to my audience i've been covering more and more nuclear and uranium content over the last month and a half in response to demand from our audience which is great because it's definitely a sector that i'm sort of most bullish on for 2021 and part of my bullish sentiment is not just driven from the supply and demand economics or i think the you know nuclear as an energy source is very much misunderstood and underrated but for most of my life the biggest barrier and you tell me if i'm on base or off base on this one the biggest barrier to nuclear hasn't been technological hasn't been financial it's been public sentiment right and i feel like i'm starting to see that change now the stigma might be a thing of the past but i don't know what are you seeing from your side nico no i absolutely agree with that statement i think what we're seeing is a big fundamental shift happening on a global basis in terms of the the public accepting uh electricity generated by uh into nuclear reactors as being safe as being a secure way to generate electricity a very efficient and very dependable way of generating electricity and that's i think what is the major driving force right now behind a global expansion for building more and more nuclear reactors and and that of course underpins the demand for uh the nuclear fuel which is uranium and this is the this brings us into what what uh what we're trying to accomplish with our company right on yeah it's super important because like anybody like i want a greener planet right i want less emissions i want cleaner air all the stuff for my kids and et cetera et cetera and uh you know we talked about this a lot i hosted a nuclear summit a couple months ago here on the channel and a lot of the conversation ended up being if you're not choosing nuclear it's not like you're choosing solar or wind power you're choosing coal if you want that scalable electric power um and it was warren irwin from rosso asset management who was on the show saying a lot of this narrative has been controlled by greenpeace what people don't understand is that the anti-nuclear sentiment that originated from greenpeace was funded by coal lobby groups who needed a strong voice to downplay nuclear anyways we won't do all that too much i want to talk about blue sky for anybody who's not familiar nico with the blue sky story why don't we start with just the highlight uh reel the elevator pitch what is blue sky uranium well blue sky uranium is an exploration company that's focused on advancing a brand new uranium vanadium district in southern argentina it right now this uh district is uh is the largest uh has the largest deposit of uranium in argentina and is the most advanced uranium deposit in argentina and the real upside here that is that it has the potential to rank among the largest uranium districts in the world with some of the lowest operating costs and that's what we're working on okay okay now i believe this is an in-house discovery is that right that is correct can you give us the timeline of what led up to this well there's we've been working on this since 2006 so that puts it almost 15 years of uh of work and it really has to do because of the size of uh of this district um it wasn't uh this district it runs about 145 kilometers the strike length by 50 kilometers wide so uh it's just an enormous it's like going it's a district that covers safe from vancouver almost to seattle so it really is an enormous piece of land and we've examined and explored throughout most of this and have been and have identified uranium mineralization throughout and it wasn't really until the last few years that we started to really focus on the southern portion and we established a resource and we completed a pea a preliminary economic analysis on it so now we have a solid understanding of the of the geological model and we're stepping away from that and beginning to add to put numbers uh and pounds to the resources okay and can you speculate a little bit for me i think you have a drill program underway what's the work program look like and what are you hoping to show investors well we do have a 40 500 meter drill program underway we're drill testing about 10 kilometers north of our current uh uranium deposit and another 15 kilometers north of that um this program is going to last over the next uh couple of months and what's our objective here well we have a deposit of just under 23 million pounds of uranium and 11 and a half million pounds of vanadium our objective here is can we now with the knowledge that we've got find another one expand this okay and continue to grow this this district you know is not too dissimilar than some of these districts we see in kazakhstan which have uh multiple deposits adding up to 100 200 million pounds of uranium with you know these are the districts that currently produce 60 of the world's uranium so this is a very unique discovery in argentina okay okay and talk to me about cash right now i think you recently completed some funding are you cashed up and ready to help talk to me about your runway right now yeah um because of the restrictions from last year uh were lifted in december it was in late december that we announced the finance they said okay let's resume our exploration program and get going again so we announced the three and a half million dollar financing and we received an absolutely unprecedented uh demand for from from sophisticated funds and private equity investors to participate in our in our private placement we increased it to five and a half million dollars and we kept it at that and now we're completely funded to complete our expiration program which will last another couple months and also to begin our pre-feasibility engineering studies because that's the program that's going to lead us towards making a production decision in the in the near future okay so talking about that a little bit when you because i knew you were oversubscribed looking for 3.5 ended up with five and a half and lots of institutional interest private equity and funds what was attracting their attention not just to blue sky but to the uranium sector in general right now i think there's a a general understanding like we said at the outset because of this increase in acceptance of uranium and and nuclear power we're seeing now more nuclear reactors being built around the world and the demand for uranium uh as of a couple of years ago is already exceeding what the supply is so there is a crunch coming there's a number because uranium again is purchased in long-term contracts five or ten year contracts these contracts now seem to are beginning to expire so a lot of the utilities are coming back into the market trying to renegotiate new contracts and we're seeing a huge uh uranium deficit and the price of course is working towards us is moving upwards and this is a fabulous example a fabulous backdrop in which for blue sky to be uncovering new uranium discoveries okay now talking about argentina a little bit we've had a handful of companies exploring in argentina mainly copper gold like filo mining jose maria resources obviously not a uranium company because i think this is quite unique so what's the landscape like operating in argentina unique opportunities unique challenges argentina is unique and and our group being managed by gracia group has got almost 30 years of active experience in in working in argentina in fact uh we're an award-winning pioneer considered pioneers in argentina um but argentina for nuclear is a different ball game argentina most investors don't realize has been in the nuclear business since the 50s it's a nuclear country in fact they're involved in every facet of the nuclear cycle except for production of uranium right so they've got nuclear reactors research reactors they build and export small nuclear modular reactors around the world and they're quite well regarded there's even a pilot enrichment plan but all the uranium that they need they have to currently import and they're paying an average price of almost 85 dollars a pound which is nearly triple uh the spot market right now so this creates a very unique opportunity for blue sky in that we can step up and become the very first domestic supplier uranium to the uh government in argentina okay okay now let's dive into the people a little bit talk to me about the management team nico any highlights and the team that you've assembled at blue sky yes absolutely uh our chairman joe grosso is founder uh and uh and president of the grosso group he brings a humongous uh competitive advantage for uh for blue sky to operate in argentina he's been mining man of the year there he's been inducted into argentina's mining hall of fame and the name grosso group in our gt net carries a lot of respect opens up a lot of doors and it allows us to get permits quickly to uh gain access to uh promote projects work with local communities so it's really important another couple of people like to highlight are our exploration geologists our chief geologist there is a guillermo pensado guillermo is a unique individual in that he is a geologist and an expert in uranium it's not a very uh uh common thing to find in argentina so he's been very key in helping us to understand the geological model and advance this and and again guillermo received the exploration geologist of the year in argentina just about a year ago and the last person who joined our team here is chuck edwards chuck edwards is a as a metallurgist and processing engineer and he was the chief meddler just for chemical for over 20 years and uh he loves this project he's joined us as an advisor and he heads all the metallurgical and process engineering work so we have a really top-notch team and you know i feel a great sense of pride to lead a company you know with such empowered individuals behind me no kidding you know what i used to live in the terminal city building in downtown vancouver and i used to always bump into joe crosso in the elevator so haven't seen him in over a year but you gotta tell him i say hi i certainly will okay now um uh speaking to your perspective shareholders right now i want to ask you about trigger points thank you for opening up the kimono niko and letting us inside the blue sky story a little bit what should investors be looking out for in the next six to 12 months trigger points for blue sky uranium i think blue sky right now is at an inflection point i i think you know the pea that we did it is it established blue skies current deposit uh to rank amongst the lowest uh potential operating costs in the world i think our pa had the cash cost of 16 a pound which is a lot less than what you see with most hard rock uranium uh producers which is upwards of forty and fifty dollars now the second uh leg that we need to demonstrate is you know this entire district uh how quickly and how cheaply can we find additional resources and that's what this current drill program is i think in the next by the end of april beginning may we're going to start getting some of the results back if we're getting uh good grades here of uranium i think we're going to be off to the races in terms of uh growing uh in terms of growing their current resources and demonstrating the scalability of the project and then the next step is in may we plan to commence our pre-feasibility studies so that will take about 10 to 12 months and at the end of that point we'll be making production decisions okay excellent all right look um thank you for coming on you know there's definitely sentiment building around the uranium sector on my channel and and uh for myself you know we all look towards nextgen and camaco is a safe home for capital in the uranium sector but for investors like me uh who like to move earlier stage and really get that torque we're looking for companies like blue sky so nico appreciate you making the time to come on today connected with my audience and i'd like to do it again sometime in the future i would love to thank you jay if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome all right guys jay martin here ceo of cambridge house and i'm joined right now by jeff clark the gold and silver analyst at goldsilver.com and the gold advisor on twitter jeff it's good to have you back it's great to be back with you jay thanks well i wanted to bring you back on because we chatted in january at the summit we produced on the youtube channel then the vric and you know through december and january we ended up collecting about a hundred forecasts from newsletter writers analysts money managers because everybody puts out their forecasts for the year in december and january we collected a ton of them but the first quarter's been uh not what a lot of us expected right so i wanted to pull on a few of the personalities that i trust and opinions i respect to get an update and say you know here's where we're at here's where a conviction lies because i am getting some messages these days from our precious metals investors who you know at the end of uh seven months softening in the gold price are now starting to question their conviction and wonder if they made the right decisions in their portfolio last spring and summer so why don't we start there jeff what do you have to say to investors who are questioning their conviction right now in regards to gold and silver i think it's always wise to you know reconsider or question your assumptions about a bull market but there's really nothing honestly that has forced me to change my mind the fact that the prices are stagnant weak range bound however you want to describe it doesn't really change my idea of where we are going in the big picture ultimately look at 2006 pull up a price chart of gold in 2006. it was flat for a long time over a year i believe i wish i had the data in front of me but it was flat for a long time and a lot of people thought ah this is this is not uh the bull market's over it's not going anywhere yeah and a lot of people use that opportunity to buy and of course they were very well rewarded after that there are other examples like this in history as well where the price is really flat in the middle of a bull market or the price even goes down a lot in the middle of a bull market so i think if you focus on the big picture and not the uh road right in front of you but the horizon and you look at all the factors out there that could impact and propel gold and silver prices higher you have to view that as uh the current environment as something that would be more of a buying opportunity as opposed to anything else at least that's how i view it i don't think the bull market is over i don't think we're in a bear market look at 2008 look what happened then uh gold and silver prices sold off big time in october gold fell by a third from a thousand down to 700 by any technical indication we started a bear market and yes of course that was the time to buy if you happened to buy on halloween day in october of 2008 you were very well rewarded i i think you know based on incidences like that we're in a similar environment now the prices range bound um but ultimately i think we're headed much much higher okay thanks for that perspective i like how you encouraged investors to step back from the day-to-day fluctuations because it's so easy to get trapped in that right you start obsessing over the price of things and the the day by day or even week by week movements which in the big picture aren't so relevant so there therefore jeff what are the macro trends that that keep your conviction high right now that investors should focus on i think you know in the big picture it's what mike maloney has talked about it's monetary abuse basically what we're doing to the currency especially in the us but this is a global thing as well you know not only are all currencies today fiat for the first time in recorded history but you have most of the advanced economies grossly abusing that currency right and i just don't believe in a free lunch i i think there will be consequences to that it doesn't feel like there will be consequences right now right but there is no free lunch look at almost any period in history and you'll see that when you there are abuses like this going all the way back to the romans that this has impacts uh on the currency it causes a monetary shift it causes a crisis it causes turbulence and when that shift begins to take place uh you know that's when gold and silver are really going to shine uh irrespective of what any other asset might do so i you know in the big picture i really view this as uh if look at it this way i'm gonna hold gold and silver and continue to buy in weakness until the monetary system is redone right you know until the dollar is it you know the the abuse the dollar's going through it i'm not saying this is this is imminent i'm just saying in the big picture i'm gonna hold gold and silver and mining stocks uh until there's some kind of revamping of the system because there's always an accounting of the monetary abuse versus the price of gold and silver and that process has not taken place yet therefore i'm holding and buying until it does okay okay so then you know if you built your portfolio last spring call it early spring picked off a lot of the what you interpreted to be top performers in the gold and silver space saw a phenomenal rally through the spring until july august and even a little bit after that um right now what are you doing jeff so are you we've seen a depression in the price valuations have come down i stopped buying gold and mining equities in july august because things got a bit expensive it actually got kind of frothy for a short period there so is this it's almost like a reset a second chance to participate but you have to have the wherewithal to believe that your your thesis is correct that this is just that 30 correction that occurs in almost every bull market my question jeff is what are you doing right now are you sitting on cash waiting for things to come down even further are you actively buying in the market or are you sitting in your portfolio happy with it and this is just a blip on the radar well first the key to to determining what gold and silver equities are going to do is what are gold and silver going to do so irrespective of what the stock market does what real estate does what bitcoin does what do gold and silver do if you believe they're ultimately headed higher then that tells us that based on history the equities are headed higher as well so what i did and you know i say this in full humility but i bought very aggressively last march uh both miners and the um uh physical metal and uh obviously did very well and then in july and august i started taking profits and now what i've been doing is basically uh buying i'm holding i'm doing three things i'm holding what i have because even if there's a stock market crash um you know i'm looking at what gold and silver are going to do not what the stock market is going to do at least more looking more to that so i'm holding i'm building cash because if there is a big sell-off you want to be able to take advantage of it and having a nice cash buffer that kind of empowers you that empowers your portfolio right uh it gives you a nice buffer and it allows you to take advantage of opportunities and then the third thing i'm doing is i am selectively buying right now um you have some producers that are off 50 from their august high last year so um you know this is a strategy i use and again i say it in full humility the timing has been great for me but i learned the hard way uh you know i'll admit to you and this is embarrassing but jay i chased the uranium stocks up in 2000 was it six the big run-up right and then ratio seven i believe you know i chased them up because i thought wow this is a this is a raging bull market i want to participate and oh man i i got hurt you know financially in my portfolio because i chased them so i learned by experience through the school of hard knocks not to chase and so i don't chase and i also learned that you buy when things are weak if you believe in the big picture if someone is doubting the big picture of where golden silver headed then you probably don't want to buy my conviction is i i think by any reasonable standard they're headed higher so i'm buying now so that's what i've been doing okay okay now last we spoke in january it was a little bit less clear on how the vaccine rollouts and recovery was going to look right on the back of this pandemic you've since made some pretty bold predictions on the cpi for this year so my question for you is you know i generally get too far to really generalize two uh predictions on this show about what's gonna happen after we we reopen the economy either we're going to have a widespread insolvency crisis that has yet to be realized because of all the stimulus and once that is shut down small to medium businesses will be left on their own and the truth will come out that they're insolvent right that you can't you can't shut down an economy for 12 months without severe consequences coast to coast but the second is no it's actually going to be the economic boom of our lifetime because the whole economy simultaneously is going to wake up and begin charging do either one of those plot lines resonate more with you jeff or is it somewhere in the middle the bold prediction i make and i'm staying with it in january was that the cpi doubles yeah we've had asset price inflation that comes from the monetary side of things but what's coming now is fiscal uh stimulus and that's a direct injection into the economy yeah and also you have so many other inflation indicators commodity prices that look like bitcoin charts you know uh input costs are rising shipping costs shipping costs have tripled in a year you know so that's that's going to cause in you know uh consumer price inflation so i made that prediction that when the cpi was 1.4 so i thought within a year by january gets a 2.8 who knows that may end up being conservative now the caveat to all this is that if we do get a stock market crash that is obviously deflationary and that would temporarily at least you know hurt the inflation argument but there's also the uh you know the uh the the combination you know inflation and deflation the stagflation like we had in the 70s and 80s right that's also a possibility but yes i think i do lean a little more toward the inflationary side of things there's a lot of pent-up demand supply is crimped savings i don't know if a lot of people know this savings rate in the u.s are at their highest level ever in recorded history since the feds started keeping records on that there's more in household savings right now than ever before so a lot of that cash is going to come out as well when things start to open back up people are anxious to to get out again just like you and i were talking we got on air here we want to travel again i think all this is going to contribute to a real push on demand and a real push on supply you know a real crimp on supply all of that is inflationary so i tend to lean toward that argument you know the great thing about gold and silver though is they don't have to have inflation to do well they're a crisis hedge their store of value uh there's a lot of other catalysts that could push them higher right i just happen to think that inflation is probably one of the bigger stories probably later this year probably this summer okay okay now another prediction you made earlier this year was your expectation that silver will double do you stand by that today yeah i made that in january as well so i think silver hits 50 dollars by excuse me by the end of the year january somewhere in there uh and and that's based partly on the inflation argument right and uh silver clearly responds historically directly to inflation so if consumer prices do move up and again i'm referring to consumer prices here not not you know monetary inflation but the actual cpi readings you know if that begins to move up and makes headlines this summer i think silver responds and silver's biggest bull market in history was during the runaway inflation of the 70s its second biggest bull market was during the fear of inflation from 09 to 11 with all the qe efforts we didn't actually get cpi inflation right but uh we had the fear of inflation and that fear drove people into gold and silver and silver always responds more than gold in every single bull market silver has outperformed gold and i think that's exactly what will happen again and is that reflected now you're back in hunting mode which i love i love to hear this and uh so congrats took prop it's july august smart now you're ready to go back into the market at depressed valuations from when you exited are you approaching uh with an emphasis on silver therefore for that torque or are you split how are you looking right now oh i'm looking at both gold and silver definitely but obviously we're including silver in this mix you want to have silver in your portfolio i wouldn't you know go so far say i i would have only silver because there are some differences between gold and silver we can go into that if you want but but i'm looking at both i'm looking at the opportunity it's just that with silver you are going to get more torque as you say that's well put it's it's going to rise more the equities are probably going to rise a lot more than the gold equity so i'm definitely focused on both okay um last question before i want to try to peel some stock picks out of you jeff so the world is opening up now we're getting back in airplanes you're heading to miami in june uh we're looking at booking events in florida in september and this is all good stuff so now we can get on airplanes and travel again is there pent up m a demand that will be realized oh i love this topic because yes that's exactly right think about it analysts have not been able to get on planes just like we haven't been able to get on planes right so that all the bank analysts and all that they've not been able to visit projects now they're going to be able to and so m a is likely going to pick up it's already starting to pick up a little bit right um so you know i i think for that reason alone you're going to have analysts on site looking at projects we also have simultaneously you know supply is dropping new supply is dropping and both go but especially silver so there needs to be m a they haven't done as much exploration and development and expansion since 2013 when prices crashed so there has to be m a for that reason as well so you put those two factors together and you could see a nice little surge in m a this year next year and going forward so i i think uh you know you want to look at things that are big and rich can i can i press you for any takeout targets that you're looking at well i like i wanted to talk to you about first majestic silver too because they just did m a right um they bought the jarrett canyon gold mine there in nevada which is kind of in my backyard i've actually been there but i didn't get to tour the operations but this is a very big mine and it it produces a lot of gold every year uh first majestic just bought that um and interestingly uh so so that's gold right and first majestic silver has had primary silver projects only but they got a they bought a gold deposit and it'll increase production by roughly 30 percent um the dilution was about 12 percent so it's a very accretive deal but they're diversifying you know into gold but they assured me i've talked to management about they assured me that their next asset purchase is going to be sober definitely you can count on it is what he actually said so now they were first majestic to my knowledge was the only pure silver producer up until this acquisition anybody else on your radar uh uh for silver or yeah i mean i i like that i just was going to mention real quick you know a lot of people like to follow eric sprott right and he invested again in the company to make this acquisition and now he has 550 million over half a billion dollars invested in first majestic silver it's now his largest personal investment in the mining space so that that gives you that tells you what he thinks about it anyway so uh but to be honest what i've been buying recently is some of the pre-producers and i like this stage because a pre-producer implies they're going to become a producer but not they're not there yet they're building a mine gearing up for uh production i like that because they almost always get a re-rating you can count on and it's think about it you know you go from a cash eating junior to a revenue producing company and you should be re-rated so they usually get that re-rating so the two that are on my radar right now that i'm actively buying right now is ascot resources ascot resources you can look that up they basically have two gold projects that are going to feed into a mill the irr the combined ir there is over 50 percent now um we did really well in pure gold and i think this could be the next pure gold um and just to give you an idea those stocks when they get the re-rating you know uh leading up to production the stock tends to rise uh but it's the last three months where that sweet spot is where they tend to rise the most so ascot's probably not going to be in production until the end of 2022 right so it may not be till next september when you see the big rise in this stock but of course between now and then the stock could be up 50 you know easily especially if gold and silver right the other one i've been buying a lot jay is um artemis gold okay yeah i like that it's the blackwater project in bc it's huge it's got over eight million ounces just in reserves you know an amazing year in 2020 yeah amazing year 2020. um that's going to be in mine it's low grade but the ir again is like 51 i believe so that's gonna be a mind so i've been buying it on weakness they're probably further out than artemis even or excuse me than ascot in getting into production but i've been buying on weakness out building a position while the stock is weak in anticipation of that re-rating two or three years from now so those are two also that i really like right now now a couple companies you mentioned to me in january one is maple gold an earlier stage speculation any updates on your preference there uh i you know everything i said then is actually still true um they're gearing up now the the the jv with uh agnico eagle has closed um they've built up cash they're they're looking to drill now they'll be starting their income back so they're going to be drilling here real soon to uh this year is going to be a major drilling year for them so it could be potentially very exciting uh there's a lot of things happening there with that company so i definitely like maple gold the stock has been weak because there hasn't been a lot of news recently so this has been a good opportunity to buy for those that maybe want to take a stab at that but i do like maple gold there's a lot of potential there it is a speculation but wow lots of potential there could be exciting okay okay any others that you want to call out before we wrap it up jeff uh there's a lot i you know frankly uh do as i say not as i do i own probably too many juniors you know it's it actually got to a point where it's getting hard to track them all so that's why i kind of started putting some more money into the pre-producers that i mentioned but another one i really like i've been buying is metallic silver that's up in the kino hill district which is one of the highest grade silver districts in the world they're onto some things there lots of drilling going on they're surrounded by eight i believe it is other mines or projects in that area so it's a very fertile perspective area for looking for silver so i like that one too okay look jeff i appreciate your time and thank you for coming back on and updating our audience thank you thanks for having me jay look forward to seeing you in person at the next conference 100 if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined by alex sukernik president and ceo of nova royalty corp alex welcome back how are you doing great how are you jay i'm always good man it's good to see you again you know every time i have you on it's because you've just completed a transaction i've had you on like once per month in november right yeah and uh you came out the gates so hot with this story the market responded really really well i mean anybody who built a position in the winter has been uh very favorably rewarded you know so i want to talk about what's next in the pipeline you know what goals you're setting for 2021 i know you're you're a long-term thinker i love when i first met you when i was asking about you know the near-term 12-month plan you're like i don't think about anything in terms of 12-month plan like this is a legacy business we're building here and i appreciated that and the proof is in the the transactions you're putting together that are very forward-thinking um what i wanted to do today was revisit the macro a little bit and the copper narrative a little bit because in december and january alex i sat down with probably a hundred different analysts newsletter writers money managers and because every everybody puts out their forecasts in december january right and copper was one of the most common uh conversations that we had and you shared an article with me a couple of weeks ago put out by traffic yora one of the world's largest commodity traders forecasting by 2030. it's a 10 million ton copper deficit annually and 20 30 is not that far away so first of all just what are your thoughts on that is this realistic is he on the money there and how that what happens next with the deficit like this it's crazy i mean 2030 in conference rooms is like tomorrow i mean if you listen if you listen to what the freeport ceo was saying i think recently he said that if you basically if you want to develop a mind and it's assuming you have a real reserve when you've done your technical work it's a seven eight year process from today so i mean so 20 30 in this industry which has which which has such big lag times is literally tomorrow and so 10 million tons is the number is much bigger than people think it is so this is a market that's about say 25 30 million tons a year depending on how you count um it's very tough to bring one month into production i mean it occupies the resources of a major company to build one line completely and so for instance take takataka you know where we all let's see the first quantum is next major period multiple times now now that's going to be a mine that's going to take probably a good three to five years to build it's going to be multiple billions a lot of challenges that's going to produce you know an average of just over 200 000 tons a year of copper so that's going to fill two percent of your deficit that's coming basically tomorrow so the question is where is the other 98 going to come from yeah and so and it's it's i mean i don't think anybody knows i don't think anybody knows an incentive price that actually takes to speed up um i don't think anybody knows exactly what the production schedules look like i mean one thing we have learned over time is that these big projects you know kind of where we focused our royalties on is that's going to be where people look to because then you can get the scale you know both initial production you can expand them because these are massive water bodies they always get expanded over time anyway you just you might be able to speed up the expansions sure um so so yeah i mean you look at that number you're not even sure if you can believe it to be honest because it's just so big um yeah but um but it looks like listen that's what the world is looking for in terms of decarbonization goals i mean the industry's gonna happen yeah and that's that's what i when you when you look at numbers like this that's what i try to wrap my mind around it's like how what what do you do about this i mean that's it's a substantial deficit and okay let's talk about that demand for a second alex so 10 million tons a year is colossal where is the majority of that demand gonna come from it's gonna be worldwide i mean that's that's the thing i mean what we've never seen which is what's happening now i like in it imagine that the whole world was undergoing an industrial revolution at the same time and they're all using the same inputs to get there i mean this this is this is i think one why we started the company i think in the first place we saw this trend coming it's not even the trend it's just a complete complete change in terms of how we operate and i mean i'm a history buff i've read enough in my life and i have the industrial revolutions that we've seen in the prior age they all happen separately you know the americans did it in their own time they bristed in their own time europe did it their own time russia so it was spread out right now everyone is doing it right now and they're trying to shorten the time frames as quickly as they can and they're all using the same technologies so i i have never seen anything like this actually do you ever wonder about the geopolitical implications because like you said it's a worldwide demand everyone's trying to um trying to build at the same time and everyone's charging towards an energy revolution or variety of things that are creating this copper demand so the competitive landscape that's going to be created you think is going to be significant do you think about that yeah of course i mean listen i mean this is these are you know kind of i mean i think i think i mentioned before i mean i think that a lot of people and governments they consider sort of this energy transition effort to be existential you know this is something that they view as vital to the survival of the world and their countries and populations and the like so the resources you need become a strategic asset no question so so no no listen i mean there's there's a lot happening i think the world is changing kind of faster than most of us can keep up with at the moment but um but i mean all we see right now is that you're going to have this need and it's not like you can just bring a random deposit into production you know this is a complex business it requires a lot of money a lot of expertise and so i think that you know the deposits that are that are large and capable are just kind of see that much more love and attention earlier from people in anticipation of it what is the average time horizon to put an economic deposit into production alex well listen if you're talking from exploration to production you're talking 30 to 40 years i mean this is this is not a short development timeframe once you have a full reserve and and things like that nature i mean like freeport said you're talking the better part of a decade uh to get that done yeah because permitting i mean look at permitting right now look at the united states it's not easy out there right now so i think you're i mean the the world right now is really figuring out where where the stuff can be produced um sustainably you know so it's uh it's not like i'm pointing a finger at the regulators at all it's just the the fact is that there's environmental considerations which are very important right now yeah this wasn't the case say 50 70 years ago when it was happening so you've got you've got you've got two competing needs you have the need of the world to create sort of this energy transition at the same time you know the mining industry is the mining industry you know it's not it's not all easy you know obviously there's environmental concerns that come with that um and people are trying to address that but i think there's just there isn't a consensus yet and how it's going to happen and i think people have talked about this in the multiple times it's like you're you're unleashing so much new metal demand but the question is how you're actually going to get there um you know so that's i think we'll all find out right right and those are the options we're going to see a rising price inevitably when there's such an asymmetric uh supply and demand landscape we can look at speeding up the expansion of current mines and then expediting the the build out of proposed what countries come to mind alex as the most favorable locations investors could be looking at if they're looking at uh near term producing copper deposits i think um we really love um canada and chile i i think those are excellent places i'm really super supportive um australia is excellent i think the salted province and argentina takataka situation is excellent um so i think that you know there's definitely um there's definitely some places which are making a clear effort to really beat i think the um the key regions where these materials are produced um and so i think the world will somehow distribute i think kind of who does what and i think i think what we see right now these places definitely look very strong um and then we'll just see how it goes right now okay so let's let's talk nova for a minute because you were incredibly busy over the last six months like i said every time we had you on it was to talk about your most recent transaction um and i know there was a sense of urgency right you were the first mover at the gate you've locked up agreements with all the significant copper projects to be honest what's next for you what can investors expect in terms of news flow for 2021. oh look we're we're hardly done here i mean we've only begun you know so i think that you know we've just we've picked up religious and some exceptional deposits no question and i think you know we we've gone out of our way to make sure that we got the royalties on things that had a clear future in the hands of strong people [Music] but there's a lot there's more left and so you know when we started the company we literally dug up every piece of copper nickel on the planet you know every camp you know everything that's in that pipeline's of majors and and mid-tiers and juniors and the southern and so we have a global team that's it's in every place and we're constantly talking to realty owners um about potentially doing deals with us um so i mean we kind of our job was to shark the world because we really want to create the best possible proxy for this sector um kind of as as we grow so look i think it's reasonable to expect that you know we'll continue adding to the portfolio and so i think it's been a great start and sometimes we'll do more sometimes we'll do less but i think we have a lot happening here so it's going to be exciting um kind of to really grow the company to something that any investor hopefully can see is a great proxy for these commodities and that's what nova really is right it's the proxy against the copper price so anything you can talk about or go ahead um well i think it's both i mean i mean the copper price is good uh but i think more importantly we don't want to be just slaves to the cobble price i think we've gotten we've gotten the royalties on really exceptional deposits that will operate once they're going in any couple price and so then and i think that's a critical thing you know because the advantage of royalty is if you do your asset selection correctly you're getting you're getting generational data essentially yeah and so look up when the commodity prices go up obviously you do exceptionally well but even when they fall if you have the right asset that's strategically positioned i think you can do very very well and i mean i do think that's a critical differentiation from the royalties i mean an example imagine that you know for instance right now i think we're looking at a very high compressed environment for the next 10 to 20 years just because what's happening but these are mines that will outlive that as well these are 50 70 100 year projects eventually so you're going to go through periods of all kinds of couple prices but these are also deposits that naturally expand over time so you can help the couple price drop but your your your uh your realtor you may go up because your deposit you know actually naturally kind of expands you know that's the nature of if you look at the history of what mining companies do with their prime projects um that's exactly what occurs i mean i i saw presentation from bhp some time ago it's a shame that i lost it somewhere but they basically showed to you um kind of the deterrent capital uh on all the couple product on on all the major projects um kind of in in the mining sector and most of them lose money except that one percent which actually compounds at double digit rates for decades so all we've done here is um you try to buy royalties and what you think will be that one percent you know kind of there will really kind of be the focus of people and really generate those returns so um i think that kind of as a company that's what we wanted to create and to build and look we're obviously always adding to look into that more i mean i think the reason you buy a royalty company versus something else is obviously the current assets give you they give you everything they give you they give you the asset upside they give you the commodity price upside um and they also give you access to the company in the team that built it so we can add more things of that nature uh to the portfolio and you can do that obviously kind of in the in the structure where your gna costs are running the company um you know we spend everything we need to spend in the business to make it successful but in the context of the size of the assets it's very small so it's um it's really something where you can run a top-notch business um with in in a very good way without ever really interfering with the asset value which you got so um so yeah look i think it's pretty exciting now i have to imagine you're on the radar of some traditional precious metal royalty companies even though you're focused on copper nickel which may be outside their historic business model you've got to be on the radar now as a potential horizontal integration had conversations with any alex uh no not nothing nothing serious um certainly no not really um you know kind of i mean we we think that you know precious metals guys i mean some great companies in that sector um but for us listen all we're concerned about is really where the world's heading and and capturing royalties on what we think will be the most strategic deposits and giving giving investors a way to invest in that um and so that's really i think the full scope of our activity and that's pretty much all the time you spent on that any corporate stuff and things of that nature um i'm not sure how that's that's what we're doing you know so i appreciate that yeah i'm just curious because i i have to imagine your names come up in a variety of boardrooms in the resource business when looking at the growth the business and where this is going um yeah look i mean you know it's uh we never saw the company as something that we needed to sell you know i mean the reason i think you started business is because you think you can build a great business that's all we think about sure okay do you expect going back to the market for capital in 2021 well listen given how much we're doing we'll we'll i mean if we don't come back it means that something has gone wrong um so i think we definitely will be back at some point look we've got access to some pretty good financing tools we've got a healthy balance sheet we've got 20 million dollars available from from bd capital on the convertible loan facility uh we have an atm facility that we set up um about a month ago or so so i think you know we have more than enough for certain things but obviously given what we'd like to do and stealing the business at some point we'll definitely have to come back as well um so we'll just see what we'll just see what formula takes i think the way we think about it is um we we set out to build a business that would be the best proxy for investing in these commodities in the whole energy transition um whenever we go back to the market it's because we saw a great opportunity to enhance that business um and we and we need additional capital so i think that whenever we do come back investors i think we're pretty excited to hear from us because it means it's something that really adds value so you know when that happens it happens the 20 million facility with bts relatively new if like three four weeks ago correct so talk to me a little bit about this well the facility is not new but the amount is new um so they funded us um really before it went public they gave us that financing facility for 15 million and so that was a 13 million dollar convertible loan facility and a 2 million commitment to invest in the first equity offering which they did already so we we had used uh it was uh eight and a half million um of the com of the after of the thirteen of the convertible loan facility on the besketes deal uh we used up five and so we have four and a half left and i think they're quite happy with what we're doing so far now and obviously look we we have a need for more capital just in case we need it and so they were very gracious and they gave us another 15 and a half to expand that because we were down to four and a half availabilities so that's that's back and that's a great tool to have you know whenever something is whenever something serious comes out okay 100 um look alex it's been great having you back on i um you know we started covering the story in november i know a lot of our subscribers bought in they've been handsomely rewarded and i'd like to stay on top of it because it's it's been a moving target and i i know a few investors have been chasing the stock they've messaged me about it so well the thing is it's funny when you get calls from investors and you know people want to know where the stock has gone up so much and i guess we can solve it a little bit now they want to know why it dropped a little bit and you know to be honest i'm probably the wrong guy to ask about all this stuff because it's uh you're just building the business you see so much opportunity and upside i mean whether it's two dollars four dollars six dollars ten dollars twenty dollars like you're not really paying attention to any of this i mean because you you have so much you can do here you know i mean we got lucky that we you know kind of we were the first mover and we got a chance to get some great assets and we have a window to more great assets so all you're thinking about is really building a great business market's the market i don't know what else to say yeah good for you it's a good outlook honestly getting yourself out of the uh out of the noise right and just focusing on the signal yeah like i don't have time for noise to be honest it's just you don't have a lot of choice to be perfectly frank uh but no look we've we've been blessed with the investors i've been supporting the story it's great to have people who call us up and they say no we love what you guys are doing um you know this is some people it's the only stock they own you know which which is great i mean i think you know my favorite deal i think still is very much the second takataka deal you know when we did the when we did the first one you know they took 80 cash 20 percent now um and that's understandable we were like a super new company we had just gone public like a week before i mean it was we were just happy that we got it to be honest um and then um you know i think we started building the business and we got through the strategy and i think they they saw kind of what we're trying to do so when it was time to to buy the other 0.18 percent that they they looked to do something with you know they took 80 percent of shares the second time you know and so i i think when when that when that occurs and people showed up out of confidence and it was actually done at a materially high per share price um that would be the first deal so so look you know you're flattered and really honored by the shareholder support and hopefully it stays that way yeah well you're you're humble and you how many times you mentioned luck and you've been blessed and you get lucky and all this stuff but i know it's hard work behind the scenes so um i guess we'll keep our our eyes open because i know the pipeline is full and you didn't touch on specific transactions but i know there's some coming so we'll stay on top of it and i'll look out for news yeah look on the deals you know it's tough to touch on that all i can say is like our job is to track the world you know so anything in our sector um you know we we're intimately involved in anything whenever there's a window open so you know kind of i don't even know how to guide in this stuff i mean our job is to cover everything and go through the window when it's there so you know that's all i can tell you i love it i love it okay well we're almost allowed to fly again i'm coming to new york probably late spring so nominal have to hook up i look forward to it yeah absolutely thank you very much thank you alex if you are just tuning in my name is jay martin i'm an investor and the ceo of cambridge house and today what we are doing on the youtube channel is revisiting the forecast that we collected at the beginning of the year in december and january i probably interviewed a hundred investment gurus here on the channel so that i could create an ideal portfolio for myself for the year but a lot's changed in the first three months and so today we're having the q1 wrap party revisiting our forecast from january determining where we were right where we were wrong and how we need to adjust our portfolios accordingly enjoy [Music] what i love to do is introduce the right people to the right people assemble the smartest people i can think of or reach out to to carry that conversation and that's exactly what i've done today please give my panel a round of applause welcome okay guys jay martin here ceo of cambridge house and i'm joined again by peter schiff the chairman of shift gold the founder of euro pacific peter how are you i'm doing well today how are you good i'm really good yeah good to see you again you know where i wanted to start is i've got a question for you something i'm trying to write my mind around right now i think that anybody who's most people who pay attention to the markets right now would agree that inflation's going to run hot and i think that most people who pay attention to the market right now would agree that the fed's going to continue to suppress rates and historically that formula that creates negative real rates has been the setup for a rising gold price but that being the case for the last seven months the opposite has been proven true and so my question for you peter to start is what am i missing what are we missing here well i think the key to the reason that gold hasn't done better is first of all we did have a pretty big run leading up to this period i mean gold hit 2100 and change last year and so nothing moves up in a straight line and at that point when gold was at its peak a lot of people were bullish and we know that markets don't like to go up when everybody is bullish so generally something has to happen to shake confidence so that enough bulls turn bearish right before you can have a base to build a another rally so i think what you're missing on the inflation threat is yes most people see that inflation is going to run hot in that it's going to be north of two percent and maybe even north of two and a half or maybe three i mean people you know will vary on how much they think we're going to overshoot the fed has already said that they're okay with an overshoot because the fed is confident that it's only transitory and that even if we have higher inflation as measured by you know cpi for 2021 you know maybe even 2022 that it's going to be short-lived and we're going to be back into our sub 2 zone right so i think to the extent that the markets agree with the fed that the increase in inflation is temporary it's hard to argue that then what we should factor a temporary increase in inflation into the price of gold right because you know you're talking about a long-term forecast for you know for inflation when you're moving into gold but i think the other factor is that people still expect the fed to fight inflation especially if it ends up getting out of the comfort zone i mean maybe headlight inflation does come in at three three and a half four percent i think what everybody thinks is that well the fed is going to have to tighten in the face of you know that big a a uh you know overshoot right so i think the markets are also bracing for the fact that you know maybe we're going to get more inflation than the fed is bargaining for and therefore the fed is actually going to tighten rates a lot sooner than they're now indicating because their current posture is based on inflation not getting too far above two percent even though they haven't specifically said like you know how high above it they're you know they're comfortable i think the markets are trying to get ahead of that by thinking you know it could be a lot more than they think and therefore the fed's gonna have to raise rates sooner than they're saying they may have to start you know tapering off their bond buying sooner and and so i think that's also scaring the gold market somewhat that the fed is not going to be as easy as the market thinks now i think the market is wrong on on on both counts right i mean i think that inflation is actually going to overshoot by a much bigger margin than pretty much anybody thinks i don't believe that it's temporary i believe it's the beginning of a protracted period of much greater increases in consumer prices i mean the fed tries to hang its hat on the fact that the last 10 years or so or 20 years we haven't had a lot of inflation and the fed says well that means that you know that's the new normal and we're never going to have it again right i think that was the aberration i think we're going to go back to normal and i think there were some you know some other factors that helped to mitigate the impact of inflation which is the expansion to the money supply on u.s consumer prices i mean one certainly was a cpi that was dramatically changed in 1998 and all of a sudden magically uh inflation disappeared after we rejiggered the cpi because we claimed that it was overstating inflation so we had to fix it and i think now it understates inflation so that's part of it but a lot of it had to do with china and their willingness to accept our dollars and exchange for their products and just buy our treasuries and supply our market with all sorts of consumer goods so there are these you know extenuating factors that i think made the lag between printing money and increasing prices longer than normal it didn't stop it i mean we're going to see the impact we're just seeing it later than we might have in the past but so the other thing though that i think the markets have got wrong is not only is inflation going to be bigger than they think and not be transitory but the fed's willingness or even ability to do anything about it really doesn't exist i mean the fed could talk all at once about how it's going to fight inflation if it if it was wrong and inflation became a bigger problem i just don't buy it i don't think the fed is going to do that they can talk a tough game right they can bark but they will not bite because think about it from a practical point of view they've already said two and a half percent inflation that's not going to worry right a little bit above maybe three and they've also said they want to wait at least a year they're not just going to look at a blip up in inflation they want to make sure that the inflation isn't transitory before they take action that's what powell's already said right they they want proof they're just not going to look at it they're just going to assume it's transitory unless they're proven wrong so let's say we they wait and as they wait the inflation just gets bigger and bigger and bigger because they didn't act preemptively and now a year goes by and maybe inflation is six percent seven percent and it's headed higher and now the fed is like okay we were wrong uh it wasn't transitory we got an inflation problem well now they got a bigger problem in trying to solve it because now they have interest rates still at zero what are you gonna do if inflation is five six percent move interest rates up to 25 basis points 50 basis points that's not going to do anything they gotta move interest rates up to maybe eight percent nine percent i mean it's not even a possibility that they can go anywhere near that amount they're going to have to start unloading u.s treasuries and shrinking the balance sheet they would create a far worse financial crisis than anything we took place in 08 if they actually had to fight inflation because they waited too long and let it get out of hand so my thinking is they will not fight inflation they're going to surrender inflation is going to win without a fight and so when people understand this that inflation is going to be much greater than the fed things or anybody thinks and it's permanent and the fed is never going to do anything about it there is no way to put out the fire uh i mean gold will just go ballistic when people you know finally connect those dots okay there's a ton in there i want to unpack i want to jump back to one uh point you made sort of midway through about cpi because you were tweeting like last week uh cpi is another government lie and just now you reference the changes they made in 1998 so my question for you is what changed and why now should we not trust this number well the government always makes changes to their uh methods of measuring things whether it's gdp or inflation or unemployment and they always tweak the numbers to produce a better result for as a report card it's like you know if the the students were allowed to kind of change the way they were graded like the methodology for coming up with their grades would it surprise anybody that all of a sudden they started getting more a's and b's and fewer you know c's and d's right because they were in charge of it so the government always wants to make the good stuff better like economic growth and the bad stuff worse like unemployment or inflation right so they want to find ways to make those numbers little and uh the good numbers big so they made a lot of changes in 98 i mean very substantial ones because they were taken into consideration the recommendations of the boston commission which according to the boston commission the cpi was overstating inflation so they introduced other you know formulas into the computation of the number to try to correct that right so they deliberately wanted the cpi to be a higher number because they were being told it was overstated i mean they wanted it to be a lower number right so i'm not really sure there's a lot of geometric weighting and substitution and hedonics and and all sorts of stuff right that i don't really understand all the the exact changes but i know they were profound and i think this period of oh wow we have little low inflation it's not a coincidence that it followed this major revision into how we you know calculated and i i reference i did this in 2013 on my and you can see the whole video i did a big video on inflation it's on my youtube channel but this was in 2013 right and i said i think the cpi is understating inflation and i had a bunch of ways that i a bunch of baskets but there was one thing that's easy to look at and and my video is a lot more comprehensive i did a lot more analysis at different prices but just to point out one of them because i remember it it was newspapers and magazines so according to the cpi from 2003 to 2013 newspaper and magazine prices were up by 30 percent that's what the cpi said now i figured well this is easy to check because all the newspapers and magazines have their prices on the cover right so all i had to do is use the internet and get pictures of those magazines from 2003 and get pictures of the same magazines in 2013 and compare the cover prices sure right so i i did like 20 magazines and they were the big ones times newsweek usa today i mean u.s news the world i did new york times uh wall street journal washington post i just took really big magazines right i don't know the exact ones they used but they must have had a lot of the ones i used right because i used the biggest ones sure and i just compared the prices in 2013 to the prices in 23 added them up took an average and said okay how much more expensive are these magazines today than they were 10 years ago right very simple and i got about a hundred and thirty percent increase in price okay so the actual increase in price was 130 percent but the cpi scored it as if the prices had only gone up 30 so that is a huge amount of increase that totally was not captured by the cpi now the question is why right how did the government take these numbers and get them so that they were so much less than the actual increase you know they maybe they said the newspapers are better they're printed on better paper uh maybe they're delivered faster i don't know maybe they assumed that people weren't paying the cover price that more people were using subscriptions and getting discounts i mean i don't know what they did but the result was that 130 increase turned into a 30 increase and so this stuff is going on with a lot of products not just newspapers or magazines so you know the the the the measure is not honest and of course you know it's interesting because the government keeps complaining there's not enough inflation yet they're the ones that are cooking the books to pretend that inflation is lower than it really is because what they're really trying to do is get the go-ahead to produce more inflation which is printing money this is the problem is that people are focusing on an effect of inflation and ignoring what inflation actually is inflation is an expansion of the money supply it's the money supply that's being inflated prices can't be inflated prices can go up they can go down but they can't be inflated it's money supply that's inflated and when you have more money and then chasing a certain amount of goods well the price of those goods goes up so inflation causes prices to go up it isn't prices going up and obviously we have massive inflation we've never been printing this much money so the question is you know when is all this inflation going to manifest in a way that's you know more obvious when it comes to consumer goods and i think that's already happening but you know the cpi will never uh reveal the true extent of these price increases but it's going to be more and more obvious as the true rate of inflation is is so much higher than what they're officially reporting you know there's only so much they can shrink the packaging there's only you know i mean because a lot of the inflation comes because they just you know give you less or they substitute lower quality ingredients or you know stuff that used to come assembled now you got to assemble it yourself i mean they find different ways to lower the quality uh and not increase the price and i'm sure that you know the government's not picking up on any of that it's probably you know if the quality improves yeah yeah they calculate that but they probably ignore all the circumstances where the quality is diminished interesting okay now i want to want to jump to a quote that powell came out with recently i could probably guess your take on it but i want to dive into a little bit where he came out and said there's there's no longer a relationship between increasing the money supply and the value of that money right no longer relationship between increasing the number of dollars and the value of those dollars so just to to jump into it what's he talking about and what's your take on that well he's trying to say that in the past right printing a lot of money uh would have been negative for the value of that money would have been negative for the dollar which is obvious yeah right if he's saying that that's no longer the case i mean that is a ridiculous statement i mean maybe you could say that for the last several years that hasn't been the case but to say that it'll never be the case makes no sense whatsoever because you're basically saying that the law of supply and demand has been suspended that somehow it no longer matters i mean obviously if the u.s government mailed everybody a check for a million dollars you know we wouldn't all be millionaires we couldn't all go out and buy you know expensive sports cars i mean there's just not enough of them to go around the prices would have to go up i mean they can't make everybody a millionaire by giving them a million dollars i mean they could make them a millionaire but you'll have to be a billionaire to buy things at that point because being a millionaire won't matter because everybody will be one so to make a statement like it's it's unlimited i mean like we could just print as many as much money as we want and we're never going to destroy the value of the money that we're printing the money that you're printing when you're printing paper money you're not mining gold see when you bring gold out of the ground you are introducing a new resource into the economy you're bringing gold which has all sorts of uses right and so the world is wealthier because a resource has been harvested and now is available for use right but when you print money we don't have anything that we didn't have before the money was printed so all money does is enable you to buy the goods and services that have already been produced and if those goods and services aren't there the money means nothing doesn't matter how much you produce if there's nothing to buy and you just can't keep printing money you know prices just have to go up what we need is more goods not more paper to buy the goods and and so his statement is just so asinine and it reveals you know either a complete misunderstanding or lack of understanding of basic economics or he's just lying and just figures that well you know nobody's going to pick up on it right he doesn't really believe it he just doesn't want to admit uh the problem they're creating by printing all this money or get holders of us dollars to start to worry more about the value of all the dollars they're holding on to and not just foreigners but americans who may have dollars and that they're holding on to or saving that they're hoping to use to buy stuff in the future if they understood the truth that those dollars may have no value in the future or very little value they wouldn't hold them they'd be getting rid of them right now which is not what the fed wants because that would accelerate the crisis so that's that's i guess where i struggle with this because i have to assume that powell does understand basic economics right like i don't know right i mean you know man that's a he may not i mean you know it's it's possible for sure anything's possible you know and you know but i i i assume he's an intelligent individual probably has his biases and his blind spots and his internal pressures that i'm not privy to but he's got to be a smart guy right that's my assumption i could be wrong there right well he could be smart in intelligence and iq but there are a lot of smart people that believe a lot of dumb things so for sure intelligence is not necessarily something that's going to keep you making these mistakes you're right and i guess what i therefore wonder is how much of this is just to pacify sentiment it's just to pacify the public passive by the holders of dollars like is that the core do you think that's the core motivation it's to keep everybody calm to avoid the crisis mindset everything's going to be okay it's just that just that narrative yeah well i think a large part of the fed's job is public relations and spin and to try to create a false sense of confidence in the u.s economy in the u.s dollar i mean i remember i watched an interview or listened to an interview with ben bernanke and he was being interviewed i think by maybe it was motley fool or some podcast or yahoo finance it was something but he was no longer fed chairman and so the guy that interviewed bernanke played for bernanke clips of ben bernanke talking in 2005 2006 saying everything is great there's nothing to worry about we don't have a housing bubble oh the subprime market is contained we're not going to have a recession right all these assurances that he was making that we shouldn't worry everything was fine right and he plays bernanke these clips and then he says well how does it make you feel right to have been so wrong because clearly you know i mean it wasn't contained there was a bubble we had not only did we not avoid recession like you assured but we had the worst recession since the great depression right so he's basically like look you couldn't have been more wrong and here you were chairman of the federal reserve you had all this information more than anybody else right now he didn't say hey peter schiff was out there saying it's a housing bubble we're gonna have a financial crisis right he didn't bring me up but he's basically saying look you had more information than everybody yet you were so completely wrong like how do you feel like knowing you were so wrong right and instead of saying yeah i really feel kind of dumb now that i look back god what was i thinking i was so clueless what ben bernanke said to basically save face his answer was well you know i couldn't exactly speak forthrightly or honestly i can't remember said honestly but i couldn't actually say you know what i actually thought because i was part of the administration right and so as i had to kind of toe the the official party line and i'm thinking what this is what he just said because the fed is supposed to be independent but what pal basically said is look you shouldn't believe anything i was saying as fed chairman i mean i mean bernanke because i'm not going to tell you what i honestly think i have to tell you what the administration wants you to hear that everything is great and so that's basically what he was saying look the reason i got it wrong was because i wasn't trying to get it right i was just trying to reassure everybody that everything was fine and there was nothing to worry about because i was part of the administration so this is what this independent uh central bank and i'm surprised that these admissions didn't get you know any more reaction in the media i mean i'm the only one i've ever heard comment about you know such a statement right but i mean he really you know let that out of the bag and i think yes i think that these fed guys the fed chairman uh they're just like you know people from uh you know propaganda from the government and and also i think the fed they think that confidence is very important right they don't want to do anything to shake confidence in fact they want to try to instill confidence if they think confidence maybe is waning and so they look at it as like oh we got to talk how great everything is how great everything is and even if they think that there's going to be a recession or a crisis or the dollar is going to crash they're not going to say gee we think the dollar is going to crash because if they say that well then it's going to crash even sooner even if it wasn't going to crash there's their statement warning of a crash could cause one so i think they're very very concerned they don't want to accelerate the onset of the crisis they see by acknowledging that they see it they want to postpone that as long as possible and they think one way to postpone it is just to pretend it's not even a threat and get everybody to not be concerned and then hope that maybe it works out better or that maybe they're wrong or we never we never have a crisis so i just never believe anything that they say at the fed i mean i i don't believe what politicians say either and so i don't believe they're any any different and i don't believe that they're truly independent i think yes they want to pretend they're independent but that's part of the bluff to instill confidence in the dollar right that oh these independent central bankers well they would never allow inflation to get out of hand they're going to raise rates they're going to force the government to cut spending they're going to force companies into bankruptcy they're going to force real estate prices to crash they're going to force stock prices to crash because they don't care about politics if you want to you know they want to preserve the dollar no i think they're they're they care as much about politics as the elected representatives who appoint them sure yeah okay and i'm with you on all that and i think that the the confidence bullet point is so critical not just like internally with you know americans uh worried about a dollar crash but foreign dollar holders you know maintaining their confidence is obviously super important but i mean what other tools does the u.s have i mean towing the party line making sure you know we appear like everything's fine hold the dollars no worries it doesn't matter how much we print it's not actually going to affect the value but there's there's obviously other like foreign policy leverage tools they have right either through threatening of sanctions or other actions do they not to ensure foreign dollar holders aren't dumping dollars are there other tools in the tool belt i don't think there are i mean i think that we risk biting the hand that feeds us i think if we start being overly aggressive to people who have dollars that just creates another incentive not to have them and that also instills a greater sense of urgency to divest from the dollar and to no longer rely on the dollar as a reserve currency or for a lot of international cross border exchanges because you know the us runs that risk i think they've already crossed that line where we've uh abused that privilege and we've put on sanctions to the extent that i think there's already a desire for for that reason alone to get away from the dollar to diminish the influence and power that the u.s has over the rest of the world by virtue of its ability to deny access to dollars that's right and and so what it really boils down to is what we have is our military but is that something that we actually are going to use um you know the soviet union had a big military and they collapsed i mean they didn't use their military to try to avoid that collapse the whole empire disintegrated um you know so i don't know like are we going to tell people hey hold these dollars or we're going to invade you or we're going to bomb you i mean i don't know that we would even do that right so and if the dollar crashes i mean we got bigger problems we can't even afford to pay the military i mean there's gonna be chaos at home that they're gonna have to deal with so i don't really think i think the only thing we've got going is the fact that the rest of the world you know hasn't you know come to this conclusion yet i mean they they're still have confidence in this system and in the dollar and um but the question is how much longer will that happen you know because we've already asked them to you know increase substantially the the amount of dollars that they'd be willing to absorb or allow us to print i mean we're going off the charts now with deficit spending and money printing i mean the government is spending about eight trillion dollars a year a little over and it's not even collecting three and a half trillion in revenues taxes and that's before this two trillion dollar spending bill got passed so i mean we're spending money like crazy without any regard to our tax revenue and so all of that is basically a tax on dollar holders because it's financed by inflation and so we're asking the world to bear a heavier and heavier burden of maintaining this system of the dollar reserve status and you know how much longer will they do that and as they foster the idea in america that hey everything is free like hey it doesn't matter we can have whatever we want green new deal you know uh reparations for slavery if we want uh government guaranteed employment uh we can forgive all the student loans we could have medicare for all and we're going to pay for it by printing money i mean the world is just not going to you know go along with that right and so there's going to be a crisis soon because we have upped the level of dollar printing to such a degree that they've got to back off i mean you know we've got to be in the you know the final innings of this game okay look peter it's been great having you back on um i appreciate your perspectives so thanks very much for anybody who's curious and wants to catch up on more of your content check out peter's youtube channel check out shift radio and for all the products uh you can now offer to canadians as well a majority of my audience is in the us but i'm i'm canadian yeah yeah we we're all licensed and ready to go at your pacific asset management in canada so yes 100 we can work with canadians finally it took a long time for iraq to approve us uh but it finally happened so persistence pays off yeah right on okay well thanks again peter okay [Music] okay guys that's a wrap the q1 wrap party is over thank you so much for stopping by i hope you enjoyed this i always enjoy hosting it if you did please hit subscribe we produce content four times per week always a fresh interview with the intention of making ourselves better smarter and wealthier investors thanks again

Channel: Jay Martin, Cambridge House

Views: 34,131

Rating: 4.9137769 out of 5

Keywords: gold price today in usa, stock market today, stock market news, stock market crash 2021, gold price 2021, gold price prediction 2021, stock market live, stock market investing, gold price analysis, junior mining stock investing, mining stocks 2021, mining stocks to watch, mining stocks to buy, mining stocks vs gold, gold stocks, silver stocks, copper stocks, uranium stocks, junior gold mining stocks, junior silver mining stocks, Lyn Alden, Steven Van Metre

Id: 5nhBKSi2DeE

Length: 368min 40sec (22120 seconds)

Published: Sun Mar 28 2021