As Good as Gold: A Fireside Chat With Contango ORE & Brien Lundin

0:08 Hello, everyone, and welcome to Contango Ores live summit today hosted by 6. I'm pleased to introduce the president and CEO of Contango Ore, Rick Van Nuenhuysen, as well as the Gold Newsletter Editor, owner of Jefferson Financial, and President and CEO of the New Orleans Investment Conference, Brian Lundin. Rick and Brian are going to be having a conversation today about the gold industry, the outlook for precious metals, and the comparative case for investing in commodities and commodities equities. Throughout today's session I'd like to remind you that we're going to be accepting questions that you can submit using the Q&A panel found on the right hand side of your screen at any

0:39 time today and we'll be getting to those before we wrap up. If you'd like to get in contact with the Contango or team at any time today, please feel free to fill out the survey that's linked at the top of the chat. As always, this summit is being recorded and it's going to be available to watch on demand afterwards in the coming days on six.com, so look out for that. Without further ado, Brian, I'd like to hand things over to you so that we can get started. Great, Cam, thank you so much. Hi, everyone. Good morning to you. Rick, good afternoon to you. You're in Switzerland right now, working away on behalf of Contango Ore. This is a great opportunity, everyone, because I've known Rick for, god Rick, a couple of decades or more now, I guess, and we've had countless discussions over the years about the metals, the miners, the markets, etc. And Rick brings a really valuable view, valuable insights, I think, for investors, because he's been in the market at every level for so many years and has been serially successful in all of his ventures and has a view, an angle on the markets that I think we don't get every day.

1:50 And Rick, I know, as I mentioned, we've been talking over the years many times and kind of check in periodically on the markets and where they're going. And we've had some great discussions over those years. So this is what I'd like to do today is have that kind of discussion again and just have everybody kind of listen in and participate at the end in the conversation about where we're going and what you're doing specifically. And of course the title of this is Good as Gold. So I guess that's the best place to start. That's where it all begins, isn't it?

2:25 You know, Gold's made 3 attempts at getting over $2,000 over the past 3 years. Each one has failed to go beyond that much or to any level beyond that and including the last one just a few days ago as we speak. So, you know, What's your view on what's driving the gold market right now? And I'll share my view in a moment, but let's hear from you. Where do you think we're going with gold right now? We're back below $2,000 and it's a crazy world out there. What's driving the metal? What's going to drive it going forward. Well, Brian, good to see you again virtually. I'm here in Lugano, Switzerland, which is an absolutely beautiful city.

3:12 I think a lot of people don't realize that about a quarter of the world's gold is refined here. A bit of a hidden secret, but probably on purpose. But yeah, we do have a, it's a bit of a crazy world. As you say, gold has made 3 attempts, this being the third now above 2000, it seems to be doing well right now. But I would say I certainly sense a lack of euphoria with traditional gold investors and certainly the generalists are totally not paying any attention to the gold market. You don't hear it on the news, you don't hear that gold's breached $2,000.

3:59 Yeah, so I think there's good things to come because I think for a lot of reasons As you and I've talked about over the years and you've mentioned many times in your newsletter gold is the ultimate currency and I think a lot of people sort of recognize it but it's one of those things that you don't really realize what that really means until you turn around and what 5% inflation is going to do to your family, the official 5% inflation, what that's going to do to your take-home pay and what you can afford to buy and what kind of food you can put on the table. So that's going to play out in my view. And I think gold will be the benefactor and gold investors will be the benefactor of that over time.

4:49 Yeah, as you know, one of the things I've been stressing to people is that this is a critical time. And I'm not talking a critical, critical time over the past few

4:59 days or weeks or even months. But we are at in the end game of a process that extends over 4 or 5 decades in length of ever lower interest rates, ever easier money in markets and financial systems that are addicted to that. You know, we ever since Paul Volcker started lowering rates in the early 1980s after killing off inflation, successive Fed presidents have always resorted to lowering rates whenever there was a recession or any kind of a hiccup in the economy, and they were never able to raise it back to previous levels. And it's gone down to 0 a couple of times in recent years, and everything's happening more quickly.

5:45 More specifically, where we are right now is with the Fed that has been raising rates at really the most severe rate of increase since Paul Volcker and with, I think, upcoming dramatic repercussions for the economy and the markets. But more specifically, we're in a situation right now where the Fed is going to have to pause at least. And that's what the markets are looking at right now. That's what the stock market is looking at. That's what the gold market is looking at. But I think it's going to benefit gold, most especially when the Fed pauses, because it's going to have to pause without having gotten inflation near its 2% target. So I think we're about to enter into an extremely

6:37 bullish environment for really all assets when the Fed pauses, but most especially for the metals, because inflation will not have been whipped at that point. And I think that's going to happen over the next couple of months. Now, I would I would agree, Brian, I think I mean, look, the Fed's between a rock and a hard spot. The they know that they won't achieve, they won't tame inflation. And I think they're realizing that. We used to refer to a Fed pivot. That language is starting to show more of a, well, it'll just sort of be a soft landing or whatever they can accomplish. But the fact is that we still have a pretty good economy and we still have inflation. We have low unemployment.

7:27 And so until all those things change, there's a bigger demographic aspect of that as well. But I think, like you said, the fence between a rock and a hard spot. What are they going to do? They can't keep increasing rates because that'll cause more bank failures and that'll result in more money printing because even though the treasury basically said, basically lied, I mean, they said this isn't gonna cost taxpayers, but this money just doesn't, it gets created out of thin air. So that's inflationary. Everything, You know, the ultimate insult is the

8:06 IRS, the Inflation Reduction Act. I mean, seriously, people? I mean, that's, I mean, that's... You can slap a label on anything, can't you? There was nothing in that that would even affect inflation better or worse, but certainly nothing that was going to reduce it. Yeah, that was amazing. And you know, the government saying, don't worry, we'll fix the problem. When has that ever happened? When have they done anything but exacerbate the problem? In particular, one of the things I focused on is the level of debt that that multi-decadal

8:40 trend of ever lower interest rates has really spurred incredible debt accumulation and the federal debt at the levels it's at today precludes the Fed from really increasing rates above the rate of inflation, quite frankly. And right Now we're at a level of interest expense on the federal debt of $852 billion. That's not just a record. That's a record by hundreds and hundreds of billions of dollars. We're about to go over 1 trillion dollars in the days just ahead. That I think, barring anything else breaking in the financial system, it's going to stop the Fed fairly soon. But in the meantime, although we have these day to day fluctuations in the gold price and we follow it on a day by day basis and our emotions ride that roller coaster on a day-by-day basis, but the longer term picture, gold's put in a tremendous

9:39 performance up about 3 or 400 dollars since early November of last year. Now we have not seen, or at least the perception is that we haven't seen a commensurate performance or outperformance by the mining shares along that broad spectrum from juniors to seniors. Actually, my data shows that the seniors have outperformed gold by 3 or 4 times over the last 4 to 6 weeks, for example. But you just don't get that feeling in the market that it's done that, that it really is leveraging the metal as it should. What's your view on that? And you know, What's your view going forward? Will we really see the mining share market start to wake up and catch fire?

10:25 Yeah, I mean obviously the producers have moved and and you're also starting to see a lot of M&A in that space and in the mining space in general. I think it's going to take a while to trickle down to the junior, more junior companies and the explorers. And but I think it's been a slow process and I don't know if there's still lots of interest in speculative money in the crypto space.

10:53 That certainly has been an issue in the past, I think, and has been pointed to as an issue as why people are less interested in gold. It's sort of yesterday's relic metal, blah, blah, blah. But in the end, I think what we see is that central banks are buying gold. The Russian sanctions have forced Russia to buy more gold.

11:17 I think these are big picture issues that aren't really being talked about a lot. But the fact that Russia, China, India, and Saudi Arabia are actively looking at alternatives to payment for

11:33 the dollar, that's a downward pressure on the value of a dollar. It's not gonna replace the dollar as a reserve currency anytime soon, but it's part of a process to do exactly that. So now there's a lot of big picture things at play here, all of which I think are very positive for gold. And I think it will take a while before it trickles down to the junior space. And I think because of that, I think there'll be some interesting opportunities and for consolidation in the junior space. Yeah, you know, touching on that de-dollarization theme, that's really risen to the forefront lately. It's become a big thing. Everybody's talking about China, Russia growing ever more closer and talking about alternative payment systems to the US dollar.

12:24 My view on that has been one of a skeptic for a long time. I don't think China and Russia are going to create a currency out of thin air that anyone is going to respect or place confidence in unless they back it by gold in some ways. And if you look at what Russia and China have been doing, they've been selling US treasuries, in Russia's case, all of the U.S. Treasuries,

12:50 and buying gold. So something's afoot there. I mean, it seems pretty obvious. And it's also, to me, patently obvious that there can be no alternative currency that could really compete with the dollar unless it's attached to gold, unless it can gain that credibility of being objectively and independently attached and backed by gold. So I look at it as not so much an issue for the dollar as it is an issue for gold. And, you know, gold is the future in some form or fashion because all of these currencies are losing credibility with every crisis where they have to create more of it to get out of it. I'll tell you, I've had a number of meetings here in Switzerland and the Swiss are pretty plugged into money

13:41 and value. I mean, this is the place, right? I'll tell you, they're very concerned about what's going on in the US with respect to the banking industry. And obviously, the Swiss have their own issues with Credit Suisse. So there's a lot of big topics that are making a lot of people very nervous and It you know fundamentally it gets back and I know you you you've talked a lot about this is the quantum of the debt The u.s. Debt is just is astronomical after 15 years of cheap money, that there's got to be a reckoning here at some 0 dollar bill just to pay the interest on the debt is not 1 billion dollars. It's 1 trillion dollars. I mean, nobody really has a can fathom what that is.

14:39 And I think that's just it's making a lot of people very, very concerned. And I think gold is is always where people end up with the cryptos. I mean, cryptos are only as good as the people guarding the fox garden at hen house or the thing. The guys who are going to teach you on your crypto are the guys who have control over the crypto. Yeah, And that's one of the things where I think your insights will be really valuable to us because you talk to a lot of people and not just in the gold industry. You know, at the risk of making you blush when you start a new venture or decide to bring a project to market and you make calls into the executive suites of the big miners or the big hedge funds, they take your call and more often

15:26 than not they write big checks. So you have a network that I think is likely unsurpassed in this industry and you talk a lot of people who aren't necessarily, they're more generous, they're not just tied to the gold market. What's

15:44 your take on that? What kind of feedback are you getting?

15:47 Are they interested in gold? Are we going to see the generous coming back into the market in a big way? And really also in a sustainable way, not as a daily trade or something where they're in and they're out, But something where they're backing companies that make a real difference for investors in the sector. I'll have to say, you know, in general, there is a lack of interest in gold right now still. Like the fact that It's still at, you know, it's at 2000 and it seems to want to stay there. I think the sort of the hardened gold bugs, hate to use that term, but you know, people who do pay attention to gold, they're disappointed. I think by and large, they're disappointed that gold has

16:36 not defected gold to 2000, but the fact that other people aren't excited about gold being at 2000. It doesn't get in the airplay. And it hasn't responded that strongly, certainly not in the junior sector. As you point out, the producers are definitely valued better and they have outperformed the gold price itself to a large degree. So I think I take that, but I view it as a positive because I believe at some point that it's actually going to happen where the generalist wakes up and they realize after several months or a year

17:17 that what I used to think I could afford, I can't afford now because of inflation. And that if they've got extra money to put somewhere, I think everybody does in their heart know that gold is the ultimate currency and what will eventually win out. I mean, I was just I learned about gold bucks the other day or goldbacks and the other day, and I looked them up and geez, they're trading it over 4000 dollars on a per ounce basis. You know, That's that thin wafer of paper gold. So, I think there's a big disconnect still going on. Well, I was going to ask, and you answered the question, is that a positive or a negative? Because

18:04 looking at it from a positive standpoint, if they're not in yet, we have that much more room to run when they do come. Because there's our old friend Doug Casey says, when they do try to get into the gold market, it's going to be like trying to fit the contents of the Hoover Dam through a garden hose. It's going to be explosive because it's such a much smaller market relative

18:29 to the big stock and bond pools of money. Just a small shift of allocations into the sector will have an explosive effect. So let's assume, and I think it's a safe assumption, that gold's headed higher from here. I think we're headed not only over $2,000, but back toward record highs. The spot record's about 2063.

18:56 I think we're going far beyond that once the Fed pauses and inflation is still high when it does pause, and that's probably only a couple months away at the outside. So on the cusp of what we think is going to be a big run in the metals, one of the things I tell readers in Gold Newsletter is the companies that have real assets,

19:20 large resources, typically with economics already applied to them, economic studies drawn on them, where you know what the value should be, and you can see that disconnect between where the value is in the market today and where it should be, those companies are the ones that typically move first and fastest as we're about to begin a big bull run. Coincidentally, and perhaps not coincidentally,

19:47 that's precisely the kind of assets that you focused on and projects you focused on over your long career and that you focused on with Contango Orr. So let's try to dig down, pardon me, into that. What's your views on what kinds of companies move first? And then let's talk a bit about Contango and if it kind of meets those qualifications. Yeah, I think it's interesting right now. And you point out the companies with good quality resources and I think there's a big distinction going on in the market right now, quality versus quantity. There's certainly a lot of companies out there, junior companies that play the leverage game and we put a bunch of ounces together in a company that's got 3 or 4 or 5 assets.

20:39 But they're all kind of low quality assets. And then at some point, I guess the hope is that when the tide goes up, all the ships float.

20:52 I don't see that as really a viable strategy in this market, to be honest with you. With the thesis that inflation's here to stay a while, Because you're basically chasing your tail. Yes, you've got a resource, but it keeps costing you more and more to develop that resource. You never really catch up on it. We discovered the Donlan Gold Project 25 years ago. The thing's still not permitted. It's a huge project and I'm not sure they, I'm not even sure anymore that they really want it to be permitted because then they'd have to tell the world what it would cost to build it. And I don't know that they really want to know the answer to that. So I'm that's why we've kind of focused. I've you know.

21:37 We've been involved in big projects and they're fun, they love them, but they take a long time to come to fruition and they cost a lot of money. And The approach we've taken with Contango is almost kind of the opposite direction of taking things that are high quality, maybe not the biggest in the world, but they're high quality and therefore high margin and relatively low capital. I think that's going to be a big thing going forward for the, particularly the junior industry. The major companies, I mean, you see Newmont wanting to merge with Newcrest and it looks like that's gonna go forward. These big companies, they're on the treadmill of producing lots and lots of gold. And the only way they're going to do that going forward is by becoming a copper company.

22:28 Because the big copper mines have as a significant byproduct, a lot of gold. I think that's the game they're in, but that's a tough game for the juniors to play because it's an expensive game. Again, we've gone the other direction and gone with high quality. And that doesn't mean that it can be great in the case of our Montreux project. It is about great and our Lucky Shot project the same way. But it could also be about a heap leach project. That may not be the biggest in the world, but, you know, it has a good shot of being relatively low capital and. And and easy from a process standpoint, you know, as long as you've got.

23:15 You know, good logistics and power and things like that. So that's what I see playing out in our industry, is more of a selection on quality rather than just ounces in the ground. Maybe it eventually gets to the point where everybody's gone crazy and all the ounces are considered equal. But right now, I think investors are a lot more discerning than they used to be. Yeah, I guess, irregardless of what the headlines tell us, I guess you can't count on crazy in this world or at least in the junior market. But you make a good 0.1 of the things I tell people,

23:58 especially newbies to the sector, is that when you have a big rollicking bull market in the underlying metals, yeah, you have that rising tide that lifts all boats and when the wind blows, even the turkeys fly. But all that really does is mitigate your downside risk if you have that underlying support by the metals, it doesn't really lead to outperformance and you have to be aware of all these other factors that contribute to outperformance. In 2011 we saw the gold price from 2009 to 2011, the gold price essentially tripled, but for the first time really in history, the big miners did not leverage that move in gold because at the time, oil was going to $140 a barrel. So those big yellow trucks used a lot of fuel and costs rose commensurately. So the focus on low capital expense, and of course that's rising with interest rates and inflation as well.

25:04 And in a focus on grade, which makes up for a lot of mistakes, and as we know, seems to be a viable one. Contango has 2 projects that do that to a T.

25:18 The way that you saw the Manchot project, which is your primary project, our earliest 1, and I remember when you first came across it and were trying to rehabilitate the company and find out a way to develop it, you came up with what I think is a brilliant answer and has proven to be that of just digging the high grade material out and trucking it to an already existing mill. Tell us about that, the economic model and plan and idea for the Manchot deposit. Yeah, you know, I mean, Manchot is a high quality, high grade deposit. It's, we'll be trucking 8 gram per ton material up to the Fort Knox mill. That's amazing, 8 grams per ton from an open pit. From an open pit, I think it's gonna be, if not the highest, one of the highest great open pit full of mines in the world.

26:15 But taking advantage of the fact that Kinross has a mill and a tailings facility, fully permitted, they've been operating for 25 years, and they've been a great operator in Alaska. They've won awards, environmental awards, they've restored fish habitat, and just a lot of good positive things as a large company in a relatively small community in Alaska.

26:41 And so they were the ideal partner for us. And you know, bottom line, it costs about 1.3 grams of extra cutoff grade, if you will, to haul the ore up to the Fort Knox Mill. What that does is it eliminates a huge amount of capital of not having to build our own mill. It takes a lot of risk off the table from construction risk if you will.

27:08 And that's particularly important in an inflationary environment like we have. And it takes a huge amount of permitting off the table because. We all know that permitting a tailings facility in the United States. You're probably hopefully looking at. 5 years and, you know, could be longer and it could be never. So yeah, having eliminated all those risks and having a very simple execution plan, and frankly, with Ken Ross doing all the heavy lifting, it's been an ideal outcome

27:45 for us. And I think we were valued more like a royalty company, because in fact, we really are more like a royalty company. Is low capital entry point, because we're not building the mill in the tailings facility. And now We're fully financed, we're fully permitted, we're fully financed and we're under construction. And I think sometime this time

28:11 next year, we'll be in production. And with the gold price in the neighborhood of $2,000 an ounce, we should be generating in the neighborhood of $50 million cash flow. We'll have our debt to pay down and things like that, but I think we're in a really good spot. We want to effectively look at the same scenario for Lucky Shot. I'm not saying we can reproduce it. It's an exploration stage asset. We've got a lot of work to do. But you know if it's a high grade, small high grade underground mine that can that we can develop an ore body, 500,000 ounces of half an ounce, 15 grams. That's a nice target to look for.

28:59 It's not going to take 10 years to do that. I think we can get that done by the end of this year, at least get the resource defined. So that's what we're going to stay focused on for the near term. Yeah, you know, so much to go over there. I'm glad you brought up that point about a royalty company, because you're going to be able to sit back there and not worry really about the operational hassles or anything else and collect on about 65,000 ounces of gold production thereabouts a year. And I know you're focused on that and everything's pointed toward using your advantages of being able to get in production quickly, cheaply, and high margins and just getting that done. But I do have to say from looking at that project, looking at the soil sampling, You're really just scratching the surface with this mind plan and there's a lot more to come. So you will, in my view, and I know you, because you haven't done the studies, can't really say this, but from what I'm looking at, I think you're going to be generating those kinds of profits for many years in the future.

30:03 And then there's a lucky shot, which is something that is absolutely amazing. When you look at historic production on that was what, like 40 grams per ton using old school methods. And you're looking at something that's going to be in the order of 15 gram per ton production. It seems like past operators either did not have the right technology or capital applied to it, or they try to complicate the story or whatever. You're just going on, going in and drilling off truly high grade, visible gold and core resources. And at those grades, it doesn't take an awful lot of drilling to build up a decent sized resource. Yeah, I mean, you know, we spent the last year putting the underground access in refurbishing it. This mine was shut down in 1942 when President Roosevelt used the War Act to shut down all gold mining in the United States.

30:57 It's funny when I tell that to people, they're like, really that happened? And you're like, yeah, really, that happened. And it was, you know, it wasn't it was ostensibly to support the war effort, but we all know it's more to control the gold price. So these, you know, this is what governments do, and especially when they get desperate. So I won't be surprised if it won't completely surprise me if something like that doesn't happen again at some point But I'm going to get sidetracked with that But that's the last time this mine was was was mine and it's only been explored a couple of times since with any sort of serious persistent exploration. One time in the 1980s, a bunch of the oil and gas companies decided to get in the mining business and a bunch in the gold business because the gold price of course went up to $800 an ounce.

31:46 They had lots of money from the oil embargo, high oil prices. In this case, Nsearch Oil and Gas came in and explored underground. Within about 3 years, the gold price had gone down to $200 an ounce. Their board of directors said, why are we in the gold business? It's not like the oil business. So, they just walked away. But that was good infrastructure that they left for us. And another junior company had had it for a while and drilled a bunch of holes on top of the mountain. It's a very expensive program using a helicopter supporter program. You can drive a minivan up to the attic. We just looked at that opportunity and said, it's going to cost us money to get underground and develop the underground access.

32:36 But now that we've done that, now we just have to drill the heck out of this thing. We've drilled 29 holes so far. We've hit the vein every time. It doesn't run multi-ounce everywhere, but typically in these mesothermal veins, the ore occurs and shoots and you need to drill a lot of holes to find where the ore shoots are. That's how the old-timers mine it. They mine it selectively. We're going to do the same thing with just more modern equipment and might take a look at ore sorters. That might be an option to take a look at, but I think there's a lot of good work to do on this high-quality asset. Our objective is to outline A0A million ounces and develop a mine plan around that. And one of the obvious things we'll take a look at is does it make sense just to truck it up to the Fort Knox mill? I mean, we know that mill's there. We know it's a big mill. There's lots of capacity in it.

33:29 We have the advantage of having the railroad on about 20 miles away from us, which means we can probably transport ore on the rail about half the cost, less than half the cost of the Moncho trucking option, which we don't have the rail on that side of Alaska. So yeah, I'm excited. It's just a really good spot. I think the gold price is, it's a good price where it is today. We can make good money and we've got a low share count. So, we're going to be keep looking for other opportunities. Yeah, you know, I've been familiar with Lucky Shot for many years, really a couple of decades of its history. It really is one of the most extraordinary gold deposits in the world. And it's just never had a company being able to apply both the cash and the commitment to drill off that resource.

34:20 And you're gonna have both. You're gonna have the cashflow next year. You've obviously got the commitment. So it's really is a treasure chest that can be unlocked, I think, for the first time in decades. So I'm looking forward to that. You mentioned your share structure, which I think anyone looking at Contango Wars, first thing they're going to do is be amazed at your share structure. Around 7 million shares out, which corresponds to a share price that's higher on a dollar basis than we're used to seeing in the junior mining sector. Do you see that as a challenge or an advantage? How do you manage that when people ask, well, what's your share price? Yeah, it's a little bit of both, to be honest.

35:07 You say, what's your share price? And you say 30 and they think it's 30 cents. You say, no, no, no, it's $30. And yeah, so there's definitely a little bit of sticker shock. I like being different. I think there's a good attribute of being a little different and not fitting the typical mold. I think it's a huge advantage when we think about looking at acquisitions. We're company that is in production and generating the cash flow at $2,000 gold. You look at this on a leverage basis, that is a lot of cash flow per share. I think it's a huge advantage, quite frankly.

35:55 I think since most of our development stage peer group companies who are slogging through permitting and trying to figure out how to raise, you know, the 100 million dollars or 200 million dollars in capital to build something, they're creating a huge discount to their now, whereas we're not. And so I think that's a huge advantage for us to to take a look at opportunities. And that's certainly what we're doing right now. And we have good banking relationships with ING and Macquarie and a few others as a result of our recent debt financing. And we're gonna use all that to our advantage and to grow the company. Yeah. It is eye-popping when people look at that share structure. 1, I'm particularly glad that we added Contango to our portfolio and Gold newsletter because when we went through that period of view periods really over the last couple of years where some of these juniors were down by 50% and nobody was interested in them, Contango was down maybe 5% compared to them and you trade like a rock-solid company where your downside is mitigated somewhat by obviously a project that's about to generate tremendous cash flow, but it's also got the same kind of upside potential that you would want in a 30 cent stock because you have that real cash flow coming up. I'll leave it to viewers to go in and look at the

37:26 economics of Mancho and what that's going to spin out and take that kind of cash flow and divide it by 7 million and see what you're gonna get and see what that implies for a share price in the very near future. Now, that said, the market is going to apply, I think it's obvious, a very, very significant rerating to Contango by the time you get into production next year. But it's not all just going to happen in 1 day in 1 fell swoop. It's going to happen gradually as people start to wake up that this is imminent and on the way. So let's look at the near-term catalysts for Contango. What should we look at as some of those key leverage points in the near future?

38:14 Yeah, I think There'll be a whole bunch of mini-catalysts, if you will, with advancing Moncho. The truck fleet's going to start showing up. We're going to get our mine operating permit here shortly. And then the mining starts, and we'll have videos of starting to mine and stockpile ore. And I think later in the year, the ore haul trucks, the highway trucks will show up to start hauling ore up the highway probably in the last quarter of this year. So it's just a sort of a steady step to, hey, this thing is actually happening, and next year we'll be producing gold. So Meanwhile, Lucky Shot, it's all about drill, drill, drill. And we'll have results and we'll have our resource out on Lucky Shot here in another month. It's taken longer than we had hoped. And I don't know if you found this, Brian, but since post-COVID, everything seems to take twice as long as it used to. So yeah, we had planned to have our Lucky Shot resource out initial resource out here this month. I don't think it's that's not probably not going to happen until May now.

39:32 So little disappointing, but we'll get it out and in plenty of time to plan our program out for later this year. Yeah, that said, I know you're inside the process, but I didn't realize that the resources for Lucky Shot was coming up that soon even. So that will be, I think, a significant catalyst because those numbers in terms of grade, I would expect would be really something shocking for the market. Rick, where... It's going to be a small resource. We drill 29 holes, but they're really widely spaced. As you know, with high-grade gold, you need lots of drilling. There'll need to be 10, 15 meters spaced holes and we'll drill them on 25 meters center.

40:19 It's a lot of drilling, it's about 12,500 meters drilling we've got planned for underground this year. Yeah, that said, that speaks back to what we were talking about earlier that there hasn't been a company that's been able to put that kind of commitment to that project. So that's exactly what it needs and what it's going to get. So yeah, I can see the resource being relatively small. But the grades I would think would be pretty remarkable to the market and really wake it up. Rick, we've gone over time, which we typically do. Let's close on the basics, stock symbols, where people can get more information on Contango. Yeah, so our website, contangoore.com.

41:07 It does look a little odd because you've got 2 O's next to each other, but that is the correct spelling. And that's C-T-T-O, and we trade on the NYSE American. So yeah, happy to, and you can go to info at NovaGold or sorry, info at Contango and yeah, info at contangoor.com and we'll certainly answer any questions we get there. Yeah, and everyone can follow the information, follow the developments at Contango and Gold Newsletter. You can find all the information on that at goldnewsletter.com very simply. So I hope you look into Contango, look in a gold newsletter and in the bigger picture, make sure you're positioned in this area because I think the fundamentals argue for much, much higher prices for gold, silver and the mining stocks. And this is the place you're going to want to be in the months ahead.

42:05 So, Cam, are we going to do a Q&A here or what do we have going on? Yeah, absolutely, gentlemen. Thank you for the great conversation. And just as a reminder to everyone in the audience, If you do have any questions, now's the time. Please submit them in the Q&A chat on the right-hand side of your screen. But we do have questions already. So gentlemen, I'll just work my way through them. First one's from Tom Calendra. He says that short-term US rates, you know, rising three-month, et cetera, are rattling gold investors this week, it seems. Is a blue chip blowout, 3% and greater daily declines in headline equity indexes necessary to ignite a flood of generalists into precious metals? I'll start with that for Tom. No, I don't think it's necessary. I think actually what's going to ignite the precious metals will also, to a lesser extent, ignite the rest of the risk assets. And that's going to be the Fed forced to pause without getting inflation down to 2%. I don't think there's any way that it'll get near to 2% on inflation.

43:09 And that pause will be a shot of adrenaline, monetary adrenaline to the markets. You can tell by the way the markets are trading that whenever there's a Fed governor or official come out and say well we want a couple more rate hikes the market tanks and when you get somebody that's a bit dovish and says maybe we ought to pause that everything soars. So you're going to get that big shot of adrenaline at some point over the next couple of months when the Fed says, OK, we're going to hold that off. We're going to sit back and see what we've done. And Inflation is going to be somewhere in 4 to 6% range at that point. So that environment is going to be bullish for stocks, for bonds, but it's going to be especially bullish for gold because inflation will still be high.

43:59 You'll still have that hurdle that every other investment class will have to exceed before you start really making true gains. With gold and silver and metals and commodities and tangible assets having some advantage over stocks and bonds, you're going to see shifts in allocations from these much larger capital pools into these much smaller markets. And I think the returns are going to be commensurately large for that. So I think it's knock on wood. I think it's inevitable for gold and silver and metals to go much higher. And I think it's actually imminent. But we don't need to see a decline in the stock market or bonds or anything else for that to happen.

44:49 All right, great. Another question from Richard DeVriet. What's the central bank buying gold going to have an effect over the next few years regarding the dollar reserve currency status? Rick, what are you getting from Switzerland on now? Yeah, I think definitely there'll be continued central bank buying of gold. And I think that's just a good underlying support. They're not going to drive the prices up. But the fact is that, and it's been interesting in our discussions with our debt financiers, ING and Macquarie, they really want, we can tell by the discussion, they really want our physical gold. And as I know, you've talked a lot about, Brian, if you want to buy gold, it ain't that easy.

45:40 It would be easy, but it is not. You can buy paper gold all day long. But to buy gold, gold, not that easy. So, for all the reasons you just talked about, Brian, I think all of these things just pretend well for a good solid gold price here. I love it if gold, people predicting $2,500 or $2,000 gold, that's all great. But if it comes with 10% inflation a year, that's not great. So I just be happy with a nice sort of progressive increase in the gold price. I know at some point it will go crazy because that's what markets always seem to do.

46:30 But I'm happy just with a nice progressive gold price and continued central bank buying to under underline and make a good platform to build on. All right, great. Kurt Freeman wants to know, how do you see gold being affected if the US dollar loses its position as the world's currency of choice? Well, it is. You want to start on that one? I'll start on that. I think it's not a dollar issue. Again, I think it's a gold issue. I don't think there is any way the dollar loses its reserve currency status. Really because as bad as it is in as many ways as we can criticize the rule of law in the US, it's still the best in the world, and that's the overriding concern of these big capital flows. Where is their rule of law? Where your money is not subject, the value of your money is not subject, or your ability to repatriate your money is not subject to the whims of a Xi or a Putin or anyone else.

47:37 So, yeah, I don't think it'll be easy or even something that could happen in our lifetimes as far as the dollar losing its reserve currency status unless, and that's a key, but unless it is attached to gold in some way. And that's, I believe, what China and Russia are looking at as the way to do it. They don't see any other way that they can do it. And so it's not so much what's going to happen to the dollar but what's going to happen to gold when that happens because it would demand a huge revaluation in the price of gold. And importantly, you could revalue gold to, you know, you look at the numbers, if gold were to back 20% of M2, it would project to a $10,000 gold price.

48:30 You cannot raise the value of any other commodity in the world without upsetting a number of industries and manufacturing and production. But you wouldn't do that with gold. It is the one element, the one metal, the one commodity out there where you could all of a sudden buy fiat, attach a $10,000 price tag to it and not upset anything but the jewelry market. And as we know, they're just going to go down to 10 carat jewelry and sell it at the same price anyway. So you really wouldn't upset anything. Gold is the perfect mechanism for establishing credibility in a currency. And so that's what I think the end game will be. Yeah, look, I mean, we talk about central bank buying, and it's those central banks that you just mentioned, Russia, China, India, Brazil, Saudi, you know, they're going to drive this. I think it takes place over a long period of time.

49:30 It's certainly not going to happen anytime soon Then I'm talking about the reserve currency status, but the fact that the payment currency is already changing dramatically and We force the issue on Putin the sanctions haven't really done anything to Russia. And in fact, they probably hurt Europe the worst and in and in the US is it hasn't really affected us in any meaningful way, but it certainly hasn't deterred Russia from becoming more and more wealthy off of their export, particularly in oil, but other commodities as well. So yeah, I think there's The other thing I just want to mention in the context of currency is the digital currency and the fact that the US is now experimenting with this, as are other countries, China most probably most aggressively.

50:30 But that's a dynamic that I think we need to pay close attention to. I'm not sure exactly how that plays out, except I just inherently think, again, now you don't even have to have any sort of process to create gold, to create dollars. They just are there digitally. It's a bit of a scary thought and I don't know how that affects the gold price, but I suspect it's a positive one for gold since it's something real. Great, awesome. Another question, and you may have just covered it, Rick, in totality, but Robert Vance was just wondering about if you had any more thoughts to share about the planned central bank digital currency.

51:20 Yeah, no, just something that's just space that I'm watching closely and trying to understand what what all that means. It scares the hell out of me, to be frank. Yeah, I would add that that is something that, you know, write your congressman, do whatever you can in the US at least. I think there's a very vocal resistance and at some point widespread resistance. Widespread resistance. There will be such a resistance to a digital currency in the U.S. I have it on from good sources that Fed Chairman Powell is actually personally against it. So credits to him for that. But somewhere down the line, they're going to try to do this because government always seeks more power.

52:09 And there has to be something done through legislation or the courts to prevent that now before it gains some steam because it will absolutely transform everything you do and make you each of us and an absolute vassal to the state. It has to be resisted in my opinion that you know every fiber in our being. All right. Well, on that cheering note, Brian, Rick, I really want to thank you guys for coming on today. It's been a great conversation and great Q&A so far. Before we wrap up the day, though, I want to pass things back to you for any closing remarks that you might have. Rick, you want to start? I appreciate 6 putting this on. Brian, thanks.

52:58 Always good to see you. Stay in touch with the Gold Space and keep track of what Contango is doing. We've got a lot of things on the go, but as a producer, looking forward to being a producer this time next year and keep advancing our projects and looking for new opportunities. Thank you very much. Back over to you, Brian. I would close with just really urging people again to realize that we are in interesting times. This is the end game of a multi-decadal trend and things are moving more quickly now. Nobody can really predict the near term future or even how we're going to progress through the volatility ahead in any detail. But one thing we can be very confident in is that we're going to want to own gold and gold related investments going into it. And when you do that, you want to be positioned not only in the physical metals, but in the really high quality and highly leveraged companies that will benefit from these macro trends.

54:02 And, you know, Contango is on our buy list and gold newsletters performing very well. But what we've seen so far is, I think, a just scratching the surface of what's going to happen, not only over the long term, but really by this time next year, it's going to be transformational. So this is the time to get involved and to learn more about Contango and the sector generally. You