Festivus with the Rest of Us Gold Developers - 2022

0:08 Okay, hello and welcome everyone. You're joining us for Festivus for the rest of us. It's an annual tradition started by none other than Doug Ramshaw. You can see him there in front of a roaring fire. You seem to have gone a bit crypto with that one. That's the real thing. Also joined, that's Othmanera Alamos of course, and joined by George Salamas of Integra Resources. And a special guest this year, we've got Dave Lothan from Orin Resources joining us. Now I better sort of define what Festivus is for those who haven't watched the last couple of years of this. So there's a secular holiday which is seen as an alternative to the pressures of commercialisation of the Christmas season. So we're gonna be a little bit grumpy, a little bit Grinch-like today. We're gonna talk about the good, the bad, and the ugly of the industry. In fact, kind of like these 3 guys here.

0:57 We are gonna be, take your pick, label them how you want. We're going to talk about some of the things we've seen this year, some of the behaviors we've seen this year, some of the outcomes we've seen with some spectacular successes. Great bear, well done Doug. Some spectacular tumbles, pure gold and the like. And we're doing this in the backdrop of an attempted coup in Germany and Peru, guys. What a way to finish the year. Doug, we're gonna start with you. What are the things that kind of caught your eye this year?

1:32 At the end, coming, hopefully, because I mean, it's, you know, by early on in this year, it's like, okay, this, I think, you know, we're talking over 2 years since the market peaked. I've said in interviews before it's been death by 1000 cuts. There was no band-aid ripping off, which I think sometimes is healthier. As we saw in March 2020, I mean everything took a shellacking and companies were making new highs 5, 6 weeks later. That actually would be a tonic. But at some point, you know, this 2 year decline, you know, 1 has to think, you know, the only way it can be a positive shift. And so hopefully, yeah, 2023 brings it.

2:20 There hasn't been a lot, I mean, we were talking before we came on that was good, the bad, and the ugly, and then you struggle, right, to think about the good. And I think there are some good things, You know, from a gold perspective,

2:32 you know, we entered the year with major headwinds from the crypto trade and everything else. And I think we're exiting the year, you know, with that behind us at least. Well, well, maybe one of you gold guys has done a crypto coup because the last few weeks have been spectacular in terms of potentially taking crypto out of the equation but I suspect there's more to come. So George what about you? What's caught your eye? Yeah I think Matthew what kind of jumped out at me this year was the lack of M&A. And what was particularly surprising is, you saw these major mining companies, most of them are doing okay. Not all the major mining companies have all-in sustaining costs in and around the current spot gold price. Some of them are doing quite well. And so some of them have amassed these amazing treasuries. And during what I would call peak M&A season, that being the conference season, September, October, November, December, that's typically when you start to see the kickoff of M&A season. Well, that didn't happen, and much to my surprise. Instead, what we saw was these major mining companies, the producers with large treasuries, instead choosing to deploy their treasuries on things like dividends and share buybacks instead of growth and M&A.

3:55 And it's a bit of a head shaker, especially with asset valuations being where they are right now. They could have gone on some tremendous shopping sprees and instead they decided to do other things with their cash. And I can't help but think that a lot of this is driven by the fact that like a lot of junior mining CEOs who are pushing off consolidation right now, they don't want to lose their jobs. They don't want to make poor decisions. They want to stay in the seat regardless. So that was a surprise to me. But you can't blame them. It's been a really tough year, very unpredictable. You guys are all in gold, right? And gold has not followed the normal rules. You know, you've got a question. Well, does gold have a future in an environment like this? You think this is tough. How do you call it? So, I mean, Dave, you've been around the block. You've put money into a lot of junior explorers in your time. It's been a tough year for juniors, hasn't it?

4:49 It has been. And I think the undercurrents are positive. And really just to go back to Doug's point, I mean, it wasn't just crypto that broke this year, it was unprofitable tech that broke this year. And I think we hit the end of a venture capital cycle. And of course, you saw all of the COVID darlings like Zoom and Peloton, Palantir. I mean, you name it, Everything that came out of Silicon Valley went public in 1920. Sorry in 2020 or 2019 was a rocket ship. And so all that stuff is off 80 or 90 percent.

5:30 But it doesn't. There's not never a seamless handoff of the baton from these tech stocks to materials stocks. There's always some sort of a disruption and people have to come to grips with the fact that you know maybe Peloton went stay on 90 percent but it's still worth billions of dollars. Is still going to go to 0. And so it does take some time for that capital either to move to a different manager or for the manager who's running that capital to look to raw materials for returns and obviously- coal stocks. Oil and gas stocks- had a an amazing run. Of the year before and into this year. And if it generally- hits the highest capital intensities lowest returns

6:20 but safest companies safest companies in the sector last. And there's probably going to be gold mining companies because the base mining companies have been spectacular. To George's point even though we didn't see much M&A in gold, the transactions that we did see, like IGNICO taking over Malartic and before that Goldfields taking a crack at Yamana, were very large and at really, really great, great prices. And then if you think about BHP going after Oz hostile a year after they went after Noront hostile, there's lots going on. It just hasn't come to the gold producer community yet. And I think part of the reason is that this Australian model of returning capital through buybacks and dividends drove returns in that market first. All those companies like Northern Star and Regis and St.

7:14 Barbara are all probably now beginning to reveal that maybe some of those dividends and buybacks should have gone into sustaining capital or growth. So just as they led North Americans into this sort of puritanical model, I think their problems will also lead North America out. Okay, well look, I want to help people watching today and I predict it's probably going to be mostly kind of retail investors, kind of learn a thing or 2. And are you guys going to share a thing or 2 with them in terms of some of the things that you see in the market, which perhaps are red flags, warning signals, some of the behaviors that you're seeing from companies and management teams alike, which are big red flags.

8:01 And if anyone's got, by the way, anyone listening into this live, there's a Q&A section there, please go to that. If you bang in your questions, they will get asked. There's someone in the background who's going to make sure I see those. So don't, feel free to ask any questions you like. These guys will try and answer them the most honest way possible, obviously remembering that they still need to perhaps raise money in the future. So nothing too rude, please. Doug, I'm going to come back to you. It has been a difficult year, and I can understand why you say, I want it to end in a way, that you and everyone else, shareholders alike, and investors alike. But there's got to be learning. So from all of this not-so-good stuff, There's got to be learning. So for you again, what would you point to as some of the perhaps slightly less than reputable behaviors that you've seen, whether that be signaling

8:56 to shareholders, narrative to shareholders, press releases, the way that they're written, et cetera. What are the things that, again, catch your eye on that front? All right, well, the funny one to start, and then we'll get into the more serious stuff. But I did notice a junior producer recently who, for their production highlights, listed off, before getting to costs and everything else, a 27 percent reduction in mine safety instance as number 1 highlight. That is a big red flag that if you actually dig down through the, I mean, to start with, how unsafe was that mine?

9:31 That they could have that kind of fall. But, you know, there are juniors leading off with revenue and ounces produced. You know, typically you look down and it's like, yeah, for all that revenue and for all those ounces produced, they lost money doing it. You know, But I think one of the problems that we've seen, coming out of COVID, and there's definitely a hangover on the M&A side from that. We really only did live conferences this year. I think a lot of, you look back through Circulus, a lot of the initial things and conversations which drive some of this M&A was very much put on hold for, I would not be surprised to see M&A deals announced 6, 9 months from now, where some of the origins come from those very Colorado conferences this year. But so I think there's been a bit of a lag there.

10:25 One of the issues with COVID was assay labs. Even beforehand, we have, when the Golden Triangle gets going and some of these big programs in Canada, the labs get completely swamped. I think it's been worse from COVID, staffing went down and everything else. And so we've seen a trend started in Australia and it's now started to become, you know, you see a few examples over here in Canada now of XRF analysis being used and being put out. An XRF is not an assay. Core pitches can be very misleading. I'm a big believer of like, to be a good investor in this space, don't worry about the bottom, don't try to catch bottoms, don't try to catch tops.

11:13 Wait until the assays come out and play the middle 50, 60%. Preservation of capital is far more important so that when the right deal comes along, you can actually benefit from it. And I think I get why companies feel the need with assay lab delays to

11:31 fill that otherwise major void. I mean, exploration companies are dealing, like developers are with the Lasson curve, that boring period of just permitting news for 3 years or whatever. It's like, well, if you're an exploration company, you have this 4 or 5 month period with no assay flow? How do we achieve that? And I think it's unfortunate because there are countless examples of when the assays come back, they don't meet the exuberance from core pitches and XRF. And so Don't feel like you have to back a deal prior to the discovery. Make sure the discovery is real.

12:09 And if you miss something, it doesn't matter. Preserve your capital. You'll grab something at the right time down the line. So I mean, that's 1 trend that I hope, especially XRF, I mean like the Aussies were doing it and we all looked at them and go really? And now it's happening in Canada and I think it's it can be very misleading to investors. But it's kind of like you pick it till you make it and there's enough stories where that's kind of worked. It's going to give some CEOs hope. And I'll take George's point that you know probably trying to hang on to the jobs in the meantime. But there's been particularly you know tough market across the board, precious metals, where you guys operate, but also in fact your metal prices have come off, equities have not followed those growth trends there.

12:57 Does it surprise you that people are clinging to power, desperately will say whatever it takes to get across the line because the good times will surely come. The cycle will cycle back out again won't it? George what do you reckon? Yeah, yeah I mean obviously I cited that as one of my pet peeves at the beginning of this discussion, which was the lack of consolidation in this business, which is, I think we all agree, it's tied largely to the social issues of consolidating companies and who stays and who goes. From my own position, personally, is as a technical person, if somebody said, look, there's a reasonable rationale for sticking our 2 or 3 companies together, and by the way, George, you have to go, Fine, so be it. I own and I've bought enough of my own stock so as to kind of hand the keys over and let somebody else make a go of it.

13:54 And I cannot easily recycle myself into some other part of the resource sector. Battery metals, would love to get into something like that. So I don't understand and I appreciate that not everybody's in the same position I'm in but I still don't understand those social issues that are such incredible impediments to consolidation. Okay well then to your point and Doug's point earlier with regards to this M&A component, you think that the mid-tiers or the majors should be making moves now. Doug, you said you perhaps think it will come later next year or for the back of some of the conversations at Colorado. Is it going to be the same as it has always been? Is there going to be a kind of twist to all of this? And if so, what do you think that looks like?

14:43 Let's see, George. I can sort of step in and tell you what I think it'll look like. It'll look like every other sector cycle that we've had in the past. And I'll give you a couple anecdotes. I used to work for major mining companies. And we would sit there in the corporate development function and yell and scream at the execs to say, look, this is a screaming buy here. You have to buy this. Have to buy it now. It's not going to get any cheaper. And this is a great asset. The answer would be no, no, no, no, no, no, until the competitor, Newmont or Barrick, said, hey, we're buying something. And then the refrain from my own management group became, tell me what your top 3 ideas are going to be. I want them on my desk by Monday, and we need to buy this by Friday. And that's how companies make big mistakes. And I think that that's going to happen over and over again.

15:34 There might be a little bit more discipline into this next cycle of M&A but I suspect things won't change much on that end. Okay and Doug I've got to, sorry Dave, I've got to go to you. You've raised money, you've invested in a lot of companies, you must have some sort of profile that you look for, but along the way you must see a lot of garbage too. Again, red flags for you, you know, must be everywhere you look. And you're not too shy with telling people sometimes. Really? Not today though, fellas. First of all, if George ever decides to hand over the keys, not only is he a future in the business, but I think he could be making old spice commercials, given that background and that handsome salt and pepper look. So I'd say his socks must be nearly dry. You should be able to put them on at the end of the show.

16:26 Sure. So, I mean, as both of these other fellows have pointed out, there are far too many companies on the venture exchange and that sadly is just never going to change because this is a business especially if you look at the constellations around Halifax or Toronto or Vancouver there are multi generations

16:49 or multiple generations were probably on the 3rd or 4th generation of Vancouver promoters or Halifax promoters or Toronto promoters now. And their fathers and their fathers' fathers were turning our capital into their income. And that that's really many, many of the CEOs in this business wouldn't have a job if they weren't the CEO of a junior. They wouldn't otherwise be employable other than parking cars or something like that. So, well, maybe not even that. Yeah. And so well, here's a here's a red flag. And this is one that that not a lot of investors think about. I talk to lots of investors all throughout the day, every day as markets are running. And that is, well, if you're invested in a company, ask yourself this question.

17:36 Could the CEO be fired? And that sounds like a really, really trivial question. But 90 percent of the juniors traded on the board have the CEO on the board of the company and the CEO generally selected the board of the company. And there's collusion around compensation and often occlusion around financings.

18:02 And so if you don't really believe that the CEO of a company you're invested in could be fired, then that is a major red flag. And I probably, of the 70 companies I own, I'd say probably only 10 of them are companies where the CEO is either not on the board or the board has enough independence that if things were beginning to go wrong, they would make a change. But that's one that not a lot of people think about and and obviously if you look at GT gold Which was just acquired by Newmont a couple of years ago Boy, oh boy Was it hard for K2 to get that one across the line with a lot of pressure a lot of stock ownership a lot of assistance from other investors because management was entrenched.

18:52 But they did get it across the line. It was a good payday for everyone. Okay. But there's a lot of, you know, there but for the grace of God, go on with you guys. One of the things that annoys me about CEOs generally is when I talk to them before or after filming is they know what the dodgy projects are. They know what the dodgy promotional groups are. They know who they are. And they know the games that have been played for the last 20, 30 years and continue to be played the same way. But you can't say anything, for the same reason you wouldn't say anything at a turn out, because you're fearful of your funding being turned off for upsetting the wrong people.

19:29 So I'll put it this way, What are your train wrecks of the year then? I can think of a few, but for different reasons, some big projects, some small projects, and obviously lots of juniors because that's the nature of the game, have lost a lot of value. What are the things again, I just want you to point to stuff and go, was that obvious to you? And could have been obvious to other people if something had been said? Doug, the hot seat. Not as hot as mine, by the way. That was a very good call putting it on the TV Pop without the heat that's very good. Very good. Look the obvious 1 Is is the pure gold Thing And I mean, it's not just a this year thing. Like, if you look at the origins of it, going back to when I think the Oxygen Group, who aren't necessarily mine builders, want to, you know, we're looking for a buyer.

20:33 They pick up Madsen very cheap. And normally when you pick up assets very cheap, it's for good reason. And I don't think Madsen

20:41 had been good since Plasser sold it to Claude way back when. So I think there was a hope that there was a buyer for it, and dress it up, get the buyer in. And when the buyer disappeared, I think that's always that warning sign, the pivot. And the pivot was get some debt and tackle this, but it wasn't gonna have a true gold type outcome for them. And so you see this evolution from a 10 cent stock right up to $3 and 1 billion dollar market cap when they announced 1st gold. And I mean, as someone who's had a 1st gold thing, I've always said to people, it's like, don't overplay 1st gold, consistent gold way more important than 1st gold. Anyway, economic gold is better than that. Well, yeah. And it's 7 August 1st of last year, there was the declaration of commercial production which I could go off on a huge tangent here and I want to say I think that terminology which has come between lender and and company has become some kind of green flag for the investor. It never made, commercial makes it sound like, you know, it's probably making money. It never made a dollar. And then there was obviously a tremendous amount of money that was further put in to try to give it life until the ultimate end. And it's unfortunate because I think when you,

22:12 from an investor perspective, If you're invested in explorers drilling, you realize you could wake up and see a 70% haircut and you'll start the next day of assays report. And, you know, there's that hope that something is going into production.

22:29 You've eliminated some of that extreme volatility that can come, but actually over a 4 year period, I mean, it's like round tripping an expiration stock. And so it's very unfortunate because the sector,

22:45 those kinds of hits, And we've seen a lot of billion plus billion dollar companies. Novo, another example. And those kinds of hits are own goals for the industry at large. Amen. Amen. For people looking in, perhaps thinking of getting into investing in metals, it's not a good look for you guys. In the same way that cannabis scored an own goal back in, I guess, 17, 18, You guys have got to be held to a higher standard. And I applaud these NGOs or these activists saying, you need to do better. Because you do, broadly, as an industry, right? But at the same time, you should be given the chance to do that and not just be switched off. So I mean, George, this question is slightly unfair on Doug because we don't agree these beforehand. So for you, what's the train wreck of the year for you? Who did it for you? Who did it for the industry? Yeah, I'm gonna throw 2 examples on there, but for completely different reasons. The first one, you just mentioned Novo.

23:58 That's a simple case of if anybody at the very beginning who was considering an investment in that company were to have made 2 or 3 key phone calls to 2 or 3 key individuals in Australia, they would have basically come to the conclusion that this whole story has been in the market 2 or 3 times in 2 or 3 different cycles with the same

24:25 mantra, right? This is Wits style disseminated gold, reef style algal reefs, and what happened in South Africa is happening in this part of Australia. And what's been tried before and didn't succeed. So I'll put that one up at the top of the list. One thing that I am going to mention, it will be controversial, I'm sure I'm going to receive a ton of hate mail for this one, is the caning that Marathon got. Now, I understand, if I was to look at the good, the bad, and the ugly, the bad is, my understanding is that they were offered significant amounts of cash back in the day that they should have grabbed.

25:07 And rule number 1 of this business, when the ducks are quacking, you feed the damn ducks. They didn't do that. But When management got to the point where they were ready to go on the asset, they had specifically the social license to go ahead and develop that. At that point, it's the point of no return. A CEO cannot say to the communities at large and the stakeholders, hey, give me 2 years to go out and find the financing. Let's put everything on hold. All of those expectations that I've built about creating jobs and wealth for the communities around these mines. Well, you know, I'll talk to you in 2 years. We don't have that luxury. Once it's go time, it's go time. So I understand why they did when they did. Unfortunately, the market circumstances were not great at that time. And I know I'm going to receive a lot of hate mail for that. So be it.

26:00 Every day of the week, right? I don't think that's- There's always some- Oh, that was very recent. I think I would rather hear you guys talk about this and said like it is, because all of you CEOs have been around the block and not just you guys here, but all the kind of good guys that I interviewed, You know what's coming down the line and it would save investors a lot of money instead of trying to play the write it up and don't write it down game. If people were allowed to say more, I don't know what the solution for that is. Sorry Dave, I interrupted you. What were you going to say? No, no, that's all right. I was just going to say to George, I don't think Matt Manson's probably watching today, but I think he came out okay in that, to be honest with you, George. So maybe he shouldn't have. But ask Pierre Lassonde and I think he might have something different to say, because I think

26:45 That caused them to leave. And I mean, I think that's a big issue. So that's not, he didn't just get a caning from the market, but Trinity's gone from that story as far as I know. And I think if you're gonna run your business, if you've got Pierre Lassonde in your corner and you lose Pierre Lassonde, that's, I don't know what to say about that. So in any event I tend to take losses far more frequently than these fellows do probably because of course I'm generally working in exploration or I think all the alphas in this business. So I'm gonna have all kinds of trouble every year. And the portfolio generates some very big idiosyncratic wins from time to time, and then it has lots of things where I just have to take my loss and move on.

27:34 Recently, I got flamed out in Ecuador when New Stratus Energy didn't get an extension on the Repsol assets. And so that's an 80% loss for me. Friends of mine put together Magna Gold,

27:48 which was the old Timmins Gold play, San Francisco and Mexico. We're all quite friendly, so we stuck around and watched this thing go straight to 4 or 5 cents now. Of course, I've been around that asset 3 times now. It's a multi-cycle asset. But occasionally you write checks for people and you agree to stick around.

28:11 And part of getting in the right deals or being an attractive investor in this business is when you're investing alongside friends, when you're sort of playing a team game, you got to stick around, unfortunately, even if things go against you. But so what would I say is the best? I mean, I want to go back to visuals because I think this is a great point that Doug made I mean go metals just just blew up on visual nickel and copper And what you often see in this industry is someone who hits it out of the park on visuals like Snowline Gold. And I mean, this is a wonderful discovery. And I don't have any thoughts about where it could go or what it's worth today.

29:00 But of course, given assay turnaround times, they had to come out with visuals for SNOLINE,

29:07 and they did. And it worked. The assays came back better than expected, and especially when you consider the kind of mineralization that attack their neighbor who was a sensation. I guess going on a decade ago when you consider the nature of that mineralization a lot of us looked at the snow line visuals and thought oh god this is going to be terrible everything's refractory up there and there's all kinds of other issues. But but unfortunately when something good like that happens you as an investor are more likely to take the next opportunity

29:41 to bet on assays matching what people suggest they see in the core. And so, unfortunately, wonderful rare events like Snowline result in potentially bad outcomes like gold medals. Or Dave, I mean, you remember Cartaway Resources back in the day. That's probably the best example of blowups that occur when visual estimates are made on Drillcore. That one was spectacular. And it's made worse by the fact that you're starting to add a technology in there which is actually giving. It's not just a definition of disseminated, you know, semi-massive or massive now to give you kind of a sense of metal content.

30:30 People are starting to believe XRF readings. It's just, yeah, and that was the company I was thinking of. But it's one of the, a lot of examples they were, and I think the danger is if you, you know, human nature is, you know, right now I think after 2 years of declines people are hurting, you know, and there's no doubt about it. The broad market is hurting and you're more likely to try to make it back with some lottery win. I bought Snowline late, but I bought it when I felt it was far more real than early on. And I watched the science evolve with it. And I don't really think of it now as an exploration play that really concerns me too much.

31:20 We'll just see where they take it.

31:23 But I think after 2 years of bad markets, we become more likely to take riskier bets. And we have these tools that are used upon us as investors like visuals and like call picks and like XRF readings, which play into that very weakness that we all have in ourselves when deep down we're trying to generate some wins to make up for the losses of the last. Not to mention million dollar social media campaigns. Well, and to that end on the topic of Snowline, Doug, correct me if I'm wrong, but wasn't there third party without mentioning any names that made an estimate based on grade times thickness, times depth, times specific gravity of a cylinder, you know, basically grade 11 algebra, which is fine. And then assigning a 90% probability of success just because of that generalization being continuous, coming up with a 50 million ounce figure.

32:25 Was that? Yeah, you know, that happens to be involved with the fund to add huge holdings in it as well. I mean, you know, deposits aren't uniform. They're not geometric shapes that I will play with my kids with and all we did study that math class. And just likewise, if you see a miss on a project, 1 project doesn't get killed by a bad drill hole. I worked years back with the former chief geo of Rio Tinto, dealt with their worldwide stuff. He said, they did a study, you could drill a barren hole in any deposit in the world, deposits which are now mines, including the gold strikes of the world or whatever. So, you know, it's, you know, I think There were lots of things, as Dave pointed out, that helped guide why Snowline had a better chance than others on those early holes. But again, projects aren't killed with a few holes and they're not made with a few holes. There's plenty of time as an investor to be able to get in on a story and not feel like you've missed it.

33:38 Well I'd also point out everyone perhaps except Matt on this phone call would know Scott and his dad. No I know them. Yeah sorry. And but perhaps you hadn't met them before the success of the company. And so Scott Stadd has been an award-winning prospector in the Yukon and I think is a really well thought individual in the community in Canada. So you're more likely to succeed taking, you know, you'd understand there's a built-in conservative conservatism there and that they probably given their own status and their desire to hold on to it in our community, they were unlikely to guide aggressively.

34:24 Sorry, Matt. No, no, I don't. But I think I think I think that's these are these great points. I know Scott and his dad, good people, would never dream of over promoting. Scott sort of stepped in from someone who was running it before. Good people want to do good things and you want to support good people. But when they make a choice of surrounding themselves or letting promoters in to try and change that narrative somewhat, I'm not specifically this instance, but broadly, you see this a lot. Good people get surrounded by bad people, like promoters, who overstate. I think for every action there's a reaction. If it goes shooting up, it's quite likely I'm shooting back down again. Nice, steady, creative growth is beautiful in this game. You make a lot of money picking the right companies and sitting with it for a while, letting good people do good things.

35:21 So I don't, but George, you make a good point that sometimes there are figures in the industry who know better, who should not try and affect people's thinking by dumbing it down to extent, which because they're going to be unchallenged because most retail will not challenge somebody's been in a space. I don't know if they'll feel stupid, but I think that example was something I think I've talked about with other people as well. I thought it was ridiculous. And people should be like that, should be pulled up on it. But let's not get dragged down there. I wanna talk about what's going on in the market. And Doug, this is gonna be thrown at you. I interview a lot of people every day of the week. We're seeing a lot of companies going through the economic study phases, you know, from PAs right the way through DFSs.

36:06 Some of them are going, and George, you've been there, you said, you know what, I'm just going to go for it. You did yours at the beginning of the year. It is what it is. This is the real world we're living in now. We've seen other companies kind of chicken out of it and I can give you a handful right now people who should be putting out their economic studies but have called me and said there's no way to frame this positively I need a reason why I can delay this and I don't know why you're phoning me because I'm not helping on that one. And they're saying, well, if we can put this out 3, 6 months, then the market may have changed. Price of the market, positivity, sentiment may save us, but these marginal projects are marginal and I'm not sure what can save us. So my question to you is, what tactic would you employ?

36:53 Would you go for it and just say, this is what it is, because I know what George is going to say? Or would you say, find a fun reason to delay it, and perhaps time is your friend? Well, you obviously didn't see the release. We did it October 4th. But we're kind of special in that we don't have big capex numbers. I feel sorry for anyone that embarks on, George, as an example, because he's here, I mean, he did his PA several years ago, you then start this work, everything that builds into this much more definitive documentation relative to the PA and the PFS, And then the world goes to hell. And you know that all your data points in there are far more concrete than they were in the PA.

37:49 But the dollars attributed to anything in there, it might as well be a PEA 2.0 in terms of those, even though the data itself has far more confidence in it. And it's unfortunate, I'm talking about Matt Manson and Marathon or guys like Argonaut, Magino or Kote Lake and Iamgold who's probably in the state going back to the Trelawney buyout days. But The reality is you can get pot committed both on a study, just like on the development of a project. And when the world goes to hell, like we have had it, and the inflationary pressures on costs, That's a horrible situation to be in, but you've got to have confidence in your team and why you've done all that work and invested all that work into that project to just drive forward with it.

38:43 We were just very lucky that our capital costs and everything else were just a different animal in that regard. So I had no problems putting ours out. It was actually needed, you know, to back in a lot of value that our shareholders have rewarded us with their faith over the last few years. It needed to be out there in the public domain. So, but it's the same for people, we see it every September, except if the gold market's off in September, we see it in October instead. Miraculously, all the assay labs release assays to all the companies at the same time and we get these huge windows of stuff and I mean I think it goes against tremendous amounts of continuous disclosure and everything else but you know there's no way you should be sitting on something as material as say you can make arguments that you need to give enough drill holes to give context to what you're drilling or haven't drilled.

39:39 I think with the study it is far more far too material to even contemplate not driving forward and just saying to hell with it we will go out to the market and explain why this improves us as a company. I think it's a really really important point because I don't think retail realize this the companies can hold back drill results by saying oh we just need to do a little bit more work or needs to be affirmed. Will confirm by a another policy and it you know this contract on for months and- it's very convenient. At the moment for a lot of companies that are says it's taking a little bit longer. And George just continuing on from my point of see you got hammered the big I think unjustly. The beginning because it was right at the one of you one of the first people to put out an economic study when the inflationary numbers were starting to really, really hurt and hit home. So you went ahead anyway. I mean, how have you dealt with that? And do you look back and go, perhaps I wish I hadn't?

40:31 Well, no, we, yeah, wish we hadn't. It was too late by the point we started to see the massive amounts of inflation creep into the study. And we tried our best to see if we could do things differently, cut capital where we could. But in the end of the day, you can only cut so much capital from an estimate, and then you've got serious question marks surrounding your assets. So we couldn't do that. The decision to proceed forward when we did at hopefully what was the peak of inflation and certainly being the first study out of the year didn't help us with that point. But that decision was just based on, hey, we've got a timeline to deliver here on a permit. Permitting is by far the longest element in terms of de-risking an asset. And that PFS really sets the stage for that permit.

41:21 Had we said, okay, you know what? We're gonna put this PFS off for another year. We're gonna defer it. Well, that's just an extra year in the permitting timeline. That's already long-ish. And so there's a time value of money associated with these assets that people I don't think fully understand. Every year counts from a PV perspective. And we have to maintain our foot on the gas when it comes to things like permitting. Can't afford to stop. There are reasons to stop, but delaying the study wasn't one of them in the end of the day for us. Thankfully, we had the optionality on the project and the ability to pivot to something that was lower cost up front, maybe a more modest build, easier to permit, etc.

42:12 Thankfully we had that ability to pivot and we are where we are today and I think generally speaking wide acceptance of that. But yeah, sometimes the train is rolling and it's hard to stop man. Yeah I get that. What I've enjoyed seeing this year is that the slight pivots and segues from companies where they're having to be a little bit more agile to survive. Because, you know, if you're not you're not at the table, you can't play the game. Right. So you kind of got it. You've got to survive. You hope they've timed the raise of raising of money correctly. But even that's hard to do. You don't take it when it's there. It is a mantra we use And hopefully you get it cheaply. But some of the strategy we're seeing, like if we look at some of the battery guys, they are doing DSO models. They're talking about doing DSO models, like direct shipping or i.e.

43:00 If we can monetize some of this at surface, at oxide, in your case gold, you know, and that's the most tolerant we'll get something from that. We less dilute, well, 1 covers the GNA and 2 is less dilutory for our shareholders. If we need money to go and, you know, advance this project or you hunker down. I don't mind what the strategy is, but at least be clear and honest about it. So, I mean, Dave, back to you, you're so down at that more exploration and it takes a lot just to stay in the game, doesn't it? It does, and I think that this is a common attribute of projects that attracts me with this this attribute of projects that attracts me to what I invest in is common with with these fellows here so both of them have chosen flexible opportunities with low capital intensity or low capital intensity options.

43:52 And if you've been in this business for as long as the 3 of us have and you're a little newer to the business, Matt, but I think you're very young. Yeah, you know, yeah, yeah. May you not have the gray hair I have but or never have the gray hair I have but when you've been in this business for a long time what you tend to notice is that the envelope of capital available to the business shrinks and expands very abruptly and usually in 2 year cycles or even less sometimes. And so I think it's really, really important for you to select companies run by management teams that understand how to adapt to a shrinking capital envelope. That's the trick.

44:39 Adapting to a capital envelope that's expanding is easy. You just take the money and you drill like hell or you develop as quickly as you can, you hire a bunch of people. And that can be the road to ruin. If the management team isn't able, doesn't have contingency plans to pause or to reduce the amount of capital usage, or to pivot as George did to a more capital light option. Both of these fellows have chosen projects that had that option in them. And When you invested in the companies to begin with, you were already getting some added safety whether you knew it or not. I like to invest in exploration even though it's dangerous because you do have the option to pause expenditures in most cases. Once you get into development, as George points out, it can be point of no return, especially when you've done all the social work. And often when you get into permitting, you just can't stop. The government assigns a whole bunch of people to your business and you start paying them. So, and I mean, I watched this happen with Nooran. It's a great example of one of these permit of no return type situations where the money just, you just couldn't, you couldn't turn the spigot off once you open the tap.

46:01 So that I think is the most important thing. Learning to or selecting management teams that understand how to change their business plan to deal with the shrinking capital envelope which inevitably comes in this business. Yeah I couldn't agree more it's a really important point you make. Just sticking with that kind of money theme at the moment and we've had some great questions sent in. So I want to shout out to Adrian at Countwell and Philip Cloutier, you know the gold guy, Cartier Resources, he's chipping in as well. I think the common question that seems to be asked is around the type of money. We've seen in the battery metal space that industry, battery manufacturers, OEM, moving into an area they never said they would, which is mining. They're moving upstream to kind of ensure their supply chains. For gold, it's been a very difficult 18 months. Money for the right companies has been a little bit easier than some to come by, but for the vast majority it's been pretty expensive money, it's been painful money, it's little bits of money just to kind of keep the lights on, 1 million, 2 million here, Doug you said at the beginning.

47:17 Do you think like the battery metals guys you're going to see new sources of money coming in for gold? And what would it take for that to happen? What's going to need to happen to the gold price? What's going to need to happen in terms of the opportunity in front of us? What do you reckon, Doug? Well, I mean, I know it's a dirty word, but royalties, hedging can be used, you know, as a very polarizing topic as well. Whereas There are times where you have a modest hedge, like when you've got debt and project finance outstanding or whatever. It's just not a long-term hedge. So hedging debt and royalties, there's a time in that cycle, as Dave was talking about, where taking a little bit of project dilution, which is what a raw is better than, than a whole ton of equity dilution.

48:08 And I think 1 has to look at all the myriad of different royalty companies that popping up, you know, that, you know, for teams that actually want to build stuff, royalty companies should be knocking down their door and just inquiring whether they need some cash. I mean, part of the problem in our space is we have everyone, And this is not a comment towards where Dave likes to invest, but I mean, a lot of investors like to play the front end of the Lasonga. Because our history as an industry is littered with references to Voisi Bay and Arrowkeeper and the like. People haven't really followed what happened with, you know, Voisy Bay as a mining operation or as Perina as a gold mining operation.

48:57 They just knew it went from 30 cents to 30 bucks in 18 months and that's why we chase them. We don't worry about the history thereafter, we live in that 18 months or 3 year period. And so we have fewer, I think, fewer and fewer teams that actually want to build stuff. And yet we've got more and more royalty companies who really should be thinking about deploying royalty funds with people who can turn that royalty into something of value rather than oh we've got a royalty on another piece of ground in Canada or wherever it might be. But if the royalty companies get multiple on those as they do for the producing ones, why not? That's the trouble. Why not? I just think that, you know, we'll see.

49:43 I mean, heck, we saw Franco do a deal with Westhaven, 6 million bucks for 2%, coming downstream on that stuff. I would not be surprised to see a the Royalty Co's being a big component you know big relative to you know in in downstream royalty but I mean they're gonna be very selective because yeah those roads so I I've had conversations I mean there's lots of P P money that's kind of sitting on the sidelines. I love it. I think everyone is kind of sitting on the sidelines waiting for this this year to kind of puff because there was no band-aid moment That is kind of okay now. It's time to deploy. It's hard to determine when that point is in time But I think there's a lot of money that's that's that's waiting on that, But I wouldn't be surprised to see more, you know, smaller cap companies, you know, taking royalty money. And from an investor perspective, just think about it over what dilution you might have suffered on your equity side, over complaining about that royalty, because not all royalty deals are bad.

50:52 But there's a time and a place for them. Philip Cloutier says, royalties and streams, if you want to play a violin, why cut off your arms? He's a very deep guy, very intelligent man. Right, I better move on to, so unless anyone wants to go in on the types, Do you think there's a new form of money that could come into this space and kind of save it? We saw this back in 2011-12 where the money vacated for juniors. It was where we were in the wandering around the desert for, well, not 40 days, 40 nights, but a lot longer than that. And it was hard to come by. Alternative financing, what does that look like in the future, Dave?

51:39 What does it look like in the future? Well, I don't buy that there is, I mean, the royalty and streaming companies have already figured out how to do this. And frankly, some of the royalties and streams that I've seen granted to these companies are T-bill returns for junk bond risk. Explain that for the layman. What I mean is they're investing at 2% and 3%, 4% or 5% IRRs in assets, which if they take an extra year to build, all of a sudden the IRR goes to 2% or 1% or something like that. So I think, to Doug's point, there's been fantastic money available, especially in the form of streams over the past few years. That's been super, super competitive.

52:27 As bond rates have gone to 0, people look for fixed income type streams. You know, obviously you start with apartment buildings and then you go all the way to gold mines. And you put something on some sort of a contractual stream of cash flows on a gold mine. And streams were the ultimate win-win over the years. But of course, when they first became popular, you streamed the secondary metal. You'd have a polymetallic deposit with the majority of the economics coming from gold or zinc or something like that, and you'd stream off the silver to Silver Wheaton and because you as a public company weren't getting any credit for this secondary metal, it was a win-win situation and then the very first deal that Silver Wheaton ever did with Fort Knox Nickel or FNX I should say was the prototypical win-win deal.

53:23 As more and more royalty entrants come on screen, you should see even better deals. And the problem is All of those junior royalty companies are choking right now. Most of them can't raise capital the last real Royalty neocodes of scale was nomad and I think they prudently sold themselves to sandstorm So I feel like that financing is going to be less competitive going forward. And I think Green Flag have just picked up Mavericks as well last week. So it's a triple flag. Yeah, triple flag. So I think that's a vehicle pickup service here in the UK. Diversification is the name of the game. Way to survive. Right. I want to talk about well, actually, there's about 6 minutes left. So I guess we've got time for a couple of topics, pick which one you want. Someone asked a question, I'd better name them, Adrian Cantwell again.

54:17 Do newsletter writers add value as a whole? George Salamis. Do they add value as a whole? I think yes, I think they do at the very beginning. When 1 starts out a company, you're looking for all the means possible to get the story out. And sometimes that can include the newsletter crowd. And there are variations in quality of newsletter writers, right? They're not all created equally. So I'll put that caveat on it. But in starting out Integra, for example, we didn't launch Integra with automatic research coverage. That took time to build. And so you have to build that following, especially amongst retail. And I think that there's a time and a place for newsletter writers. So- Right, but do the caveat. I think the caveat is really important, being that not all newsletter writers are born equal and some are incentivized very differently as well which they don't necessarily disclose. So I think that's the key point is if you understand what the incentive is you can probably work out what the outcome is going to be.

55:27 Right. Right. Correct. Okay. So they're good and they're not so good and there are individuals and there are groups who fall into both of those categories. So buyer beware on that one, folks. And the other thing, just because I'm conscious of time, is this the time for Contrera investors to be piling in? Doug, you referenced don't try and buy the bottom. So I guess you're saying yes or are you? Oh, I mean, I hope they do because I think the traditional investors, you know, I would love to see a sector, you know, the generalist money coming back into this sector. And it's funny because I think, I go back to Denver 2 years ago, a whole bunch of the gold funds all signed this open letter to the mining industry talking about how they were going to be on them.

56:27 The funny thing is, the mining industry had not done anything bad for a couple of years. Really, it cleaned up its act. It was starting to pay dividends. It was trying to do everything that these funds had wanted for so long. It was a, I think it was more to say to generous investors, invest with us because we're gonna keep, you know, it was more sales pitch for that. We saw it recently with Equinox, you know, naming and shaming executives on a website, which I thought was wrong. You couldn't call out companies. That's what ISS and Glass Lewis do every year when it comes to the voting recommendations. I thought it was wrong to name and shame. I thought their formula was wrong and aggressive. But the more I thought about it, it felt like it was more a plea to generalists. It's like, put some money with us because we're your guardian angel watching out for these people and we're gonna bite them around the ankles if they do things badly.

57:27 We just as a sector need to do things better and the sector sentiment needs to change and hopefully generous money can come back in. Because when you look at the market cap of this space, it does not need a huge shift in capital coming into it to have a real major shift in sentiment in this space. Right. OK. I'm going to have to wrap it up there. George has got more socks to wash And we're running out of time. Nice work George. Nice work Okay, 30 seconds and on what what you hope for your companies next year Doug or in resources what's happening 30 seconds? Well, I just want to see a continuation of what's going on. A handoff from the unreal stories out there, the social media stories, people living online and being in denial about the raw materials that make their lives possible. I wanna see that handover continue to happen.

58:25 Good, sorry, I called you Doug again. George, go for it. Next year, first half of the year is going to be about drilling that low-grade stockpile, the gift that might keep on giving for many, many years here. Put out our first results, by the way, this morning, which are proof of concept. Anyway, the first 10 holes. So that's looking good. Get that into a resource estimate by sometime mid-year. And while we're doing that, continue de-risking the project with the mining plan of operations. These big projects in the US are very rare. And good man, George and Doug. I mean, I think the main focus is going to be hopefully stewarding Cerro de Oro or 2nd Mind through permitting. That's a big game changer for us. And even though I talk about, I feel ironic now, I talk about how we have way too many companies.

59:17 At some point, we're going to do it, Manero, with a hidden asset. Hypocrite. We're gonna create a new- Oh, God, really? So on that day, you can all send me you hypocrite emails, but I think that we can take low capital intensity as we have in gold into the copper space. Everything doesn't have to be billions of dollars in copper. In the end of the day, it's about making money and it doesn't have to be on some grandiose scale. You can build scale out of making money in a small way first. Good man. Best of luck to the rest of us. Hope you didn't mind the whinging in places, the lots of insight, ideas and things to look out for when you're doing your own diligence, folks. Do your diligence, please. And we'll see you next year.