Gold Outlook 2024

0:07 All right, well, as people are trickling in, just wanted to wish everybody a good morning, afternoon or evening, depending on where you're tuning in from today. And thanks so much for joining us. On a recent event, Diane Garrett, CEO of iCraft, who's joining us today said, if you want to talk about the gold outlook, we could take a separate hour for that. And I thought, what a good idea. So here we are today. We'll be gazing into the crystal ball and asking where gold might end up this year and why. But without further ado, I'm just going to go ahead and let the speakers introduce themselves before we get started. So I'll throw it to Rick first.

0:39 My name is Rick VanUwenhuizen, President and CEO of Contango Ore, and we're developing a gold project up in Alaska. Thanks for that. Let's get to Dan. I'm Dan Wilton, the CEO of First Mining Gold. First Mining is advancing 2 projects, our Springpole Gold Project in Ontario and our DuParquet Gold project in the Abitibi region of Quebec. Awesome. And finally, Diane.

1:05 Thank you, Romeo. I'm Diane Garrett, president and CEO of Highcroft Mining, where we have one of the world's largest gold and silver deposits in Nevada, and we're transitioning it to the next phase of operations on the sulfide ore. And we've recently had a great new silver discovery. Awesome. Appreciate it. So let's jump right in with targets. I don't want to waste anybody's time. So JP Morgan put their hat in the prognosticating ring with a gold price estimate of 2135 by the end of 2023, based largely on falling dollar and their anticipated rate cuts. So I'll give each of you an opportunity to just tell the audience if you think JP Morgan's in the right ballpark and why, Starting again with Rick.

1:49 Well, predicting the Gold price is always a tough business. I would say in hindsight, most of them get it wrong. But at some point in the future, they're always right, or at some point in the past, they're always right. So it's a reasonable target. I think for us, the way we think about things

2:10 being very near-term production in literally the next few months, we expect to start our first batch processing. We don't worry about the Gold price too much. We're hedged to a degree, so we get some up, we cover the downside, but we get exposure to the upside.

2:31 I'm of a view that we're in an election year. I think everybody looks to the Fed. I think the Fed drives markets in general, including to some degree the gold price. And I think the Fed's gonna be very careful about what they do this year, being an election year and being a very odd election, to be frank. So I think they're going to be extra careful about not trying to be seen to be influencing it one way or the other. So my expectation is a lot of the same,

3:11 but the $2,100 gold price is only a 5% overall increase. So it's not a big deal. I think it wouldn't be surprising to see gold vary 10, 20 percent. So that's just kind of general view. I'm not I think it's a reasonable prediction. I think I think investors want to see a higher gold price, and until they do, I think that's why they're kind of sitting on the sidelines. Maybe a different question, but... Dan, Diane, feel free to jump in on whether you think 2135 makes sense for end of this year. Okay. Well, Cheryl, sorry, go ahead, Diane. Go ahead. No, please. Go ahead. Okay.

4:00 My crystal ball is a little cloudy also, so difficult to forecast these things. I think

4:08 it's a conservative estimate, and I think banks tend to be conservative in forecasting because nobody really wants to be grossly wrong at the end of the day. I do believe that gold should do better than just a 5% increase over where we are right now for a couple of reasons, because we're going to see the Fed start easing on rates. I think all of us understand that inflation is still alive and well in the U.S. And it's not going anywhere anytime soon. And we still have a tremendous amount of instability geopolitically around the world. I think what throws a wrench in all of this is that it's almost too much uncertainty in 2024 because of the election year as well where gold gets very sloppy and messy and so and we don't know we don't know who's going to come into office and then what those new regulations are going to mean for the industry. So I see a lot of money being cautious

5:10 and sitting on the sidelines for a bit. So $2100 is not a bad price as long as we stay above $2000. But I think we could minimize some of the uncertainty geopolitically and

5:25 have a bit of a better sense of what's going on with the elections. And I think gold should do much, much better. Well, I'll be the one who steps off the curb here. I think it's important that people understand that JP Morgan forecast is whatever, 21 something by the end of the year, but it's $2,300 by June of 2025. So it really is forecasting an escalating price rise. And I can't recall what their longer-term views are, but I think with where we're sitting right now, if you'd have gone back 3 years and said, okay, we're going into a cycle where we are going to see interest rates rise, you know, 5% over a short period of time, I don't think anyone would have said the gold price would have hung in around $2,000.

6:25 I think the fact that it has, and it showed amazing support, By the way, not from gold ETF investors who are selling gold at record paces. It's being supported by central banks. It's being supported by people who,

6:44 it looks like, have a vested interest in changing the global monetary system of trade and having Gold play a role in that. We'll get into that subsequently here. But I think from that perspective, when you start thinking then about what happens when you start dropping rates, and particularly if you're dropping rates because we're starting to see or feel recessionary impacts and I agree with Diane, we're not there in the labour market yet at all. I think you see rates come back down into a 2% range, and I think you should see Gold up 15% or 20% from here. The way that I think about it, and all of us on this panel have seen a few cycles in our time, we need to remember the sort of peak and trough of really the last Gold cycle.

7:42 And if you say that cycle was

7:46 2002, 2003 to 2011, gold went from $250, $260 an ounce to $1,900 an ounce. So let's call that up 6X.

8:00 This cycle, I think it kind of pulled back and you can call $1050 or $1100 the bottom, but I think there's no reason why over the cycle, and depending on where you think we are in this cycle, there's no reason you can't see Gold go up $6X from that $1100 number. I don't know that it's, I don't think it's going to get there this year, but I wouldn't be at all surprised to see $2,500 gold by the end of this year. And I mean, speaking of who's actually buying gold, I'm going to lay out some research for you guys. But in the period from 2017 to 2022, it's the governments of Turkey, Russia, India, and China, and a bunch of Latin American and Central Asian countries were more than 60% of the net change in global gold reserves, increasing their central bank reserve holdings from 9.7 to 12.9 percent.

8:52 My question to you guys is, what do these governments know that investors don't? Or what are these governments up to? I'll start with start with Rick. It is more about what they're up to.

9:09 Dan alluded to this, that the central banks have been the buyers.

9:17 Coins are selling well, too. It's hard to get physical gold and that's a problem for, not the gold industry, it's problem for the people who want to buy gold. It's just physically hard to get. Central banks have their own, They operate on a different level. So It's the BRICS nations Longer term they're looking to get move away from a gold-dominated financial system I'd say they're probably tired of the United States ease of issuing debt and financing our way of life with debt, which is not to get too hairy-fairy, but It's basically what advanced societies do when they have the control. The British did it. The Dutch did it.

10:09 The Portuguese and Spanish empires did that when they were empires for a brief moment in time. So I don't know how long the US Empire lasts. I hope it lasts a while longer But you know Italy still a great place to go get a cappuccino so And I enjoy a good bottle of red wine. So don't you know, nothing's coming apart at all, but it is shifting You know in China and India and I mean that you're talking about, you know The countries you named there are more than half the world, so population-wise.

10:43 And they're advancing. And they're advancing from a faster pace than when the United States and when Europe advanced. So it's an interesting dynamic to see, but it definitely it's not going to happen over the next few years. It's a decades long process. But I think that is what's fundamentally going on.

11:07 Empires rise and fall, but they seem to be rising and falling faster these days. But I'll throw it to Diane. Do you think this behavior from governments is going to continue over the next year and a half? You know, when we go back and look at 2022, there was over $70 billion worth of gold that was purchased by the central banks. That is an unprecedented amount. And China was one of the largest buyers that we saw in 2023. And I think, you know, you look at the Central Bank Gold Reserve Survey, they do these every year, and the projections are that 24% of all central banks are gonna be buyers over the next couple of years. And I think that it will continue because, for a lot of the reasons that Rick mentioned, you know, the U.S. And all of the debt that we're piling on, and, You know, these banks want to make sure that they've got reserves that, you know, aren't pegged to government actions and other underlying securities. So it's a way to shore up their balance sheet and diversify some of their assets away.

12:13 But given the, you know, the economic and the geopolitical environment

12:18 that we see today. And I think most of us and most people would agree, we don't see that coming to an end any time soon, unfortunately, but that is all the more reason that the buying will continue to increase and be sustained by the central banks, which is a good sign for the market. I appreciate that. Finally, I'll throw it to Dan. What's your perspective on central bank buying and what investors should keep an eye on for this year? Well, I think, you know, there was certainly a lot of talk about the middle of last year coming up to the BRICS summit about, you know, the introduction of a new currency.

12:58 And I don't think that's going to happen, because I think there's lots of complications in that group of countries deciding really fundamentally what underpins that sort of common trading currency. But I think there's no question that some element of that currency is going to be pegged to gold as something that's solid, sort of independent of each of their own abilities to manipulate markets and something that most of those BRIC countries happen to have significant reserves, have significant production in a lot of those countries and have an ability to continue to grow that. So I think for all the points that Rick and Diane have mentioned, you know, around concern around the US economy, and I think, you know, there should be real concern when you look at the pace of change of the pace of the increase of the debt in the US,

14:06 it's staggering. It's staggering. Remember in the global financial crisis, in order to bail out the world financial system, they took an unprecedented amount of liquidity pumped into the system. And it was about $800 billion. Right. And just think that was in 2008. That was a staggering, unprecedented amount of money. That's like, I think they're going to add a trillion dollars to the US debt in the first 3 months of this year.

14:37 Like it's actually at a runaway pace right now. And that's where all the more reason why everyone who's looking at it from the outside is going to start getting kind of concerned. And ultimately, that's going to be really good for gold. But you've got to recognize the gold price is also at all time highs, not just in US dollar, but in every pretty much every other currency around the world as well. So, yeah, I think it's going to continue. I think the other thing, and we'll talk about this in a little bit too, but you're seeing elements of physical demand, particularly, I mean, it's always been huge in India, but it's really starting to surge in China. Individuals who had historically relied on property for a lot of their sort of store of wealth are now looking more at precious metals. So I think that's also incredibly positive for gold in the near term here.

15:35 I'm just adding on to what Dan was referring to. I think the other point, and we've weaponized the dollar with

15:46 with the sanctions and which, frankly, aren't working very well. But that, you know, if you're super wealthy. Saudi Arabia, the last thing you want to do is have all your stuff. Tied up because of sanctions because of something somebody did.

16:02 The US doesn't like, so that's a, that's that's been a big, I think it's been a big downer for the dollar in terms of holding. The other thing is, just wanted to comment that The US has the ability to issue the debt because everybody does want to own the debt, right? It's not because we're just pushing it on everybody. Everybody, it's the easiest thing to go sell, right? But that's always the case when you're wealthy. People don't lend money to poor people. And the US is one of the richest nations in the country. So everybody does want to own own debt. But it's as Dan is saying, it's it's it's kind of gotten run away. When you look at any any kind of a plot, it looks unsustainable.

16:50 So at some

16:56 point, it's of course not enough that I'll just ask you guys to be macro econ experts today. I'm also going to get into some geopolitical events. So we'll shift the crystal ball a little bit. But I'll start with Diane on this one. It's usually been the case historically that major geopolitical events that cause instability have a positive impact on gold prices. I'm curious what you think investors should look for in the coming year for a geopolitical environment that might be friendly to gold prices. Well, I think it's you know, it's been longstanding, as you say, that geopolitical uncertainty and tensions around the world play very well for gold. It's unfortunate that those of us in the gold business do extremely well when everybody else is suffering, but that is what it is. We are the anti-dollar, we're the hedge against inflation, and that's just the reality of gold. It's a safe haven in uncertain economic times.

17:50 I think that what I've observed, and there's people a lot smarter than me out there that predict these things, but when you have geopolitical uncertainty and tensions, you do see gold responding favorably to those in the sense that gold prices then move up because people wanna move

18:09 their assets into bullion because there's uncertainty around various currencies and what can happen. But it's also true that if you look back over the last couple of decades, when there's too much uncertainty around, and I touched on this a little bit before in the call, but when there's too much uncertainty, it makes people wanna move to the sidelines and wait until some of the chaos has tempered a bit and we have a better understanding of what's going on. So I can't, I think any kind of geopolitical uncertainty, and I think there's no shortage of that on the horizon is gonna be good for gold. It's just what else is going on at the same time and how much confusion is there around that.

18:56 And so I think that, you know, that To me, it feels like that's sort of another environment where we are right now. And let's also remember that, you know, if you go back and look at the 2008 financial crisis, you know, it was some time before gold really had its strong bull run.

19:14 And we are seeing that there are lags, you know, gold is not reacting immediately, whether it's, you know, a previous war, there's, there's other things that need to come into play for the market to get the sense that this is a longer term geopolitical uncertainty, and for them to step in. So I do think that we're in that space right now where people are kind of wanting to put their toe in the water, they're getting closer to the water, but they're not quite there yet. And I do think what really complicates things this year is just the whole uncertainty around the elections in the US. And I think people are expecting that this is not gonna be a normal election, that there's probably gonna be an awful lot of noise around it before, during, and certainly after. And so

20:05 a lot of factors to consider, but certainly with everything going on, it's a very strong signal for a very, very bullish gold market. Yeah, I'll throw it to Dan for what's up next in geopolitics.

20:23 Well, I think if you look at where we are right now, and sort of what's transpired over the last couple of years in terms of geopolitical, major geopolitical instabilities.

20:38 5 years ago, no 1 really would have predicted that you'd be simultaneously seeing war on the borders of Europe with Ukraine, and really all out war in the Middle East. And I think we're starting to see some of that contagion spreading into other instability that's coming, whether it's out of Lebanon and Israel, whether it's attacking from Yemen, they're attacking shipping lanes in the Red Sea. Like, This is tragic and terrifying when you look at what some of the potential outcomes are of an ongoing and escalated war, particularly in the Middle East.

21:31 It continues to shape, you know, I think it continues to shape the global dialogue around gold. I think it, you know, it continues to shape sort of policy, particularly for BRICS nations. It continues to shape where I think those nations are going to go vis-a-vis the US dollar. Because you just have to look at, like, who's in the sort of expanded BRICS area, you look at the fact that there's not many of those countries that don't have some of their own internal dissent that they're putting down or not necessarily all verging on civil wars, but there's a lot of the instigators of a lot of this conflict, or certainly supporters of the conflict that are in that group.

22:30 So, we can only hope that, listen, if the Gold price had to lose $100 for us to have peace in the world, I'd be very, very happy with that. Let's be perfectly clear. But I don't see a resolution to it anytime soon. In fact, I see, I'm very concerned about continued escalation. So we can only hope that that doesn't happen. But I think that feeding into a Gold price where it is, it's played an important role here over the last 2 or 3 years. Not always how we think it has. And I think what a lot of people need to understand is that, you know, a lot of these wars cost a lot of money.

23:18 And when you have countries that have sanctions on them, there's only so many things that they can sell externally. And sometimes some of those things are gold, right? So when you look at some of the pullbacks in gold, Sometimes you need to ask who has needed to replenish balance sheets in a hurry. And I think you could probably draw some interesting conclusions from that as well. So some of the short term blips and pullbacks certainly, you know, been seeking liquidity in gold, but only really speak to a much higher future price. I'll take a little different take on it. Actually, I'm a bit surprised with, you know, 2 hot wars going on with the Yemen Houthi group, setting back shipping lanes 150-200 years. I mean, now you got to go around the Horn of Africa, they get to Europe.

24:21 That's all Indian and all Chinese ships that are selling stuff or vice versa. So yeah, those are kind of big deals and the gold price is like, whatever. Yeah. So I'm a bit surprised the opposite way of how little gold has responded to some pretty big deals going on. Pretty disruptive war in the Ukraine that has no good outcome and not an easy resolution, obviously. And the Middle East is just blown up again. And I think the concerning thing is, and I think both Dan and Diane referred to this, is that these aren't like going away in a month.

25:12 These, you know, this has been disruptive, you know, for a generation. So, and gold hasn't reacted. So I see that as, I wonder, okay, what's different about the world? And I don't know if it's Bitcoin and other ways of investing and just the fluidity of financial markets today versus 20 years ago. I think all that probably has something to do with it, but I'm a bit surprised the opposite way of how a little gold has reacted to some pretty major events. You know, I think Rick touched on something very important there. We may be in a paradigm shift for the gold industry as to how it behaves and how it reacts. I mean, I think to some degree, it will always react to these events, inflation, recessions, geopolitical uncertainty, but perhaps it's not just that anymore.

26:15 So, you know, when we look at, you know, gold and its performance, and Rick touched on Bitcoin, you know, it's not unlike the late 90s when gold collapsed and all the money was getting sucked out of the gold precious metal sector and going into technology, right? Remember, in fact, a lot of our colleagues in the gold business started up technology companies. They went to the dark side at that time. And then, you know, when that bubble burst, everybody's like, oh yeah, okay, we better get back to gold because that's really the safe haven here. And I do think that cryptocurrencies sucked a lot of the money out of our sector. There was that big distraction there. Not also any different than the cannabis industry, right? It's sort of chasing that next hot deal. So it brings up an interesting point that we do have to change our thinking. It comes from how we approach investors and who those investors are. And, you know, everything now is so driven through, you know, digital media and all of that. It's, you know, the young investors today, if they're going to want to buy gold, then if there's not an app on their phone, then they're not going to buy it. They're not going and sitting in front of a broker and mapping out their portfolio. They want to do it from an app on their phone. So we do have to think about the other things and be able to adapt to that as we move forward, as the other things that are influencing and impacting that.

27:46 And also, we have a tremendous amount of this algo trading going on. And as many of you know, I mean, Eric Sprott's a very large shareholder of ours and he and I are on that bandwagon of all this naked short selling and all of that type of activity that goes on that has nothing to do with the fundamental reasons of the company. But yet it distorts. I know we're going to get and talk to equities about a little bit later. But, you know, when there's all of that going on also, then, you know, you can see the average investor sitting back saying, you know, well, maybe I'm not coming on and putting in enough money into the gold space. But yeah, I think there's other factors just than geopolitical that we've historically known that are influencing it today. So good point, Rick.

28:35 And Ron in the chat actually asked, he says, everybody in this call wants to own gold stocks. You guys are gonna talk about securities. Lucky for him, that is our next question. So we're Right on your tail, Ron. But let's turn the crystal ball gazing a little closer to home. Obviously, you guys are CEOs of gold mining securities. Pierre Lausanne said last week, gold stocks are still trading like gold is at 1500. So really my question to you guys, we'll start with Rick, is why do we think there is this valuation gap? And we started touching on it just to expand on it. And when is it going to start closing? Yeah, you know, Mr. Hassan is certainly no stranger to the market. So, I think that he's referring to the big companies, the Barricks, the Newmont, the Agnicos and what have you.

29:27 They are trading like gold is a lot lower than it is. Investors in gold invest in where they think gold is going. It's a store of value, but they want to invest when gold's 2,000 and they think it's going to 3,000. And clearly, investors don't quite think that yet. So I think that's a big part of it. I think also for the majors, margin has been shrinking. So Diane mentioned, we still have inflation. And I think that's still a problem for the Fed. I mean, They're not quite sure they'd like to back off and see the economy do a little bit better, but we still see inflation, we still see high employment. So they're kind of between a rock and a hard spot and it's election year.

30:17 But we do still see inflation and that means margins are reduced. So, for the reason you buy a new monitor or an Ecos is for big exposure to the upside swing in the gold price. Otherwise, just buy a brick of gold. So I think that's a big part of the issue for our industry right now. And as we've said, there's other things to invest in that are more fluid and cooler, frankly. Gold's always viewed as old school. And I saw a commercial the other day where they were talking, a group of people were talking about what to invest in and this financial thing, Bitcoin, blah, blah, blah. And they were young people. And then some old fart stands up and says, oh, we gotta invest in gold. It's like, okay, well, so that is the view.

31:10 And I think in the end, gold will shine and gold will rule. But we've gotta become cooler, I think. I don't know, I'm not sure how to do that. Dan and I are cool. Very cool. Thanks, Diane. So You guys have Idris Elba on your side now trying to make gold cool. So things are changing a little bit. But I'll throw to you next, Diane, on that valuation gap between gold securities and the gold price. Yeah, it's a complete disconnect for sure. I mean, Rick Rule has a great saying and I love it. It's, you know, you walk by a store and everything in the store is 50% off and you just have to go buy. I mean, it's such a discount, you've got to get in there and buy something. And yet gold stocks can be off 50% and people get nervous and they're afraid to touch it.

32:04 And you know, as a couple of institutions have told me over the past few months is, you know, it's like every day, regardless of what gold prices do, regardless of the fundamentals, the stocks, you know, get hammered, They're worth less today than they were yesterday. So it's a bit of a conundrum for all of us to see that. I mean, we've seen it before. We all have the scars from all the cycles we've been through. And we know that this too will pass and there will be better days. But you know, there's probably a number of other things I agree with Rick, we gotta, you know, maybe we gotta be cool and do things a little bit different and bring that to people's attention. I think also for the younger group, you know, to use the comment that Rick had, you know, if you go to the charging station and there's no power for your electric vehicle, or you go to the gas pump and it sucks there, you know, you know, there's a problem, right?

32:59 You understand that. But I think a lot of the younger generation doesn't get the connection to gold because maybe we need to do a better job of making sure that people understand how important that application is, not only as a currency, but the other strategic applications that gold has as well. And so, you know, bridging that gap, I think could be helpful, but you know, we need the generalist to get back into the sector and we need, once they come in, they really fuel that. And it can turn very quickly, as we all know and we've seen before. So it is staggering to see prices where they are right now. And really, in the industry, there haven't been a lot of, or there have been some stories that are not so good, right? I mean, inflation's up, but costs are also up. So as gold prices go up, nobody's really making any more money at the end of the day. The margins are still tight, as Rick mentioned.

33:58 And So, you know, I think all of those factors together, you know, kind of keep the weight on the equities. But these are great buying opportunities, you know, if you look for the right fundamentals in each of the company. And I think our companies here today certainly represent those strong fundamentals. Yeah, and I think just to kind of add to that, you know, the inflation that a lot of companies are seeing has peaked, right? While there is still inflation, a lot of it has rolled over. And you think about, and we know this because we were doing a study, sort of updating some economics on an internal study, call it this time last year.

34:45 And you were looking at an oil price that was $80, $85, heading to $100. You had steel prices that were very, very toffee. All of those things have come off since then. So while labor costs are unlikely to come down, I think they're not going up as much as we've seen. And particularly for projects like ours, what a lot of people forget is that we are seeing right now we're in the middle of the largest gold mine build in the history of Canada. You've got 7 major mines being built at the same time. But they're almost all complete now. Maginot, Hard Rock, Cote, Valentine, Back River, Blackwater, major, major mines, hundreds of millions or billions, in some cases, several billions of dollars going into the infrastructure, all competing for the same resources to build that. So that's certainly had a big impact, but you're also coming to a point where you look to the future and there's a very good roadmap as to what's gonna be buildable in Canada. And that's sort of who's getting through the permitting process. It's not, it's sort of addressing this point on valuation.

36:09 I think the biggest thing is we are with the gold price where it is now, I think obviously financials are backward looking and usually 4 or 5 months backward looking, right, because it'll be a quarter and then it takes 45 days for them to get financials out. I think what we're going to see in the next couple of quarters is actually expanding margins. I think you're going to see stronger cash flow. I think the industry is actually sitting today in a position of record free cash flow, largely because none of them are building anything, largely because none of them have anything to build. So I think we're actually at a point where, you know, we take it forward 6 months from here. I think you're going to see the next couple of quarters of very strong cash flow growth, you know, showing the benefit of Gold being over $2,000 and the mitigation of some of these cost issues.

37:03 And then ultimately, as we all know, the institutional investor by and large is a performance chaser. And investors at large are performance chasers. Now, they haven't had a lot of performance to chase over the last few years, although certainly all of the 3 of us can remember back to the last cycle. And I don't think anyone ever, ever talked about free cash flow margin as a metric by which you measured the value of a gold company, right? Because there was none, because they're depleting the resource and they needed to replace it, right? So it was the reinvestment, it was about growth, it was about growth opportunity, managing your costs, but there was never a free cash flow margin.

37:51 So I think a lot of these smart investors who are looking at the model of the energy world and saying, well, that oil and gas company is buying back 15% of its stock every year, or it's giving out special dividends or returning all its cash flow to shareholders. The gold industry should do that too. There's just some very significant differences between those 2 industries that say that, you know, I think The the the gold companies that are starting to follow that in order to try and please these shareholders are shooting themselves in the foot and actually only gonna make it better for companies like the 3 of ours that have projects that they're going to need to own in order to show growth in the future. So yeah, I think you're going to see that performance come. Hopefully that leads to performance chasing.

38:46 And then at some point, we'll talk about the historic, historic gap right now between the valuations of gold producers, particularly large gold producers, and the valuation of development assets, which I've been doing this for 30 years and I've never ever seen a gap as wide as it is right now. Agreed. Yeah, I totally agree with that. Yeah. Just wanted to shift really quickly to a different type of risk before I get into some individual questions for each of you guys. Given the recent events in Panama, I'm talking about the closure of Cobra to Panama. So there's a copper mine, but also produced a lot of byproduct gold and silver. I'll start again with you, Diane, actually, but curious, how do you think investors and companies should approach assessing those type of risks in the future?

39:39 You know, I think investors tend to look at, you know, again, it's backwards looking. Historically, what's been, you know, the Fraser Institute, right? And, you know, the safest jurisdictions to mine in and to be present in, you know, it's pretty much backwards looking or that moment in time. I think what we've learned over the last few years from, you know, Mexico, you know, taking back, nationalizing some of their minds, we've seen it other places, and certainly Panama was a classic example to this topic, is that, you know, there is no certainty and things can change tomorrow and things can change with the regime change. Look what happened to Sentara, they lost their best asset.

40:25 And so I think what that does, I don't know that you can assess the risk any better up front. My colleagues may have a different opinion because there's just, you know, some of these things come out of left field and you don't know when that, you know, regime change happens or elections happen, what's going to happen to the industry. But I think that, you know, it's going to make good, stable jurisdictions all the more valuable and the go-to places. So US, Canada, that's where people are gonna wanna put their money because yes, you may have delays in permitting, yes, you may have some challenges here and there, and you may have some locals or First Nations groups, whatever it may be, those things can usually be navigated through, But what you don't typically see in those jurisdictions is once you're permitted, the government then changing its mind and taking the asset back. So I think it's going to drive a premium for those companies. And I think that's really what's going to happen in the investment industry.

41:32 Is there just going to be a fundamental shift back to the best jurisdictions? But the challenge, as you mentioned, like I think Dan brought up, is nobody's replacing their reserves, nobody's replacing production, and where are they going to go? And are they going to have to go to these countries? And then investors are gonna, I think they're gonna be trading at a bit of a discount because you're gonna factor in that what if scenario if that were to happen. Yeah, keep the conversation moving, turn it to Rick with the same topic. Yeah, I mean, you know, there's those 3 words that rule of law and that just went out the window in Panama. And that, you know, Diane refers to that. So, you know, I think investors are going to look to, you know, US, Canada, Australia, Europe, at least Northern and Southern Europe, people are going to be very nervous about Eastern Europe and putting anything there with the big bear next to you.

42:31 So yeah, it was a bit of a shocker. I don't think anybody really expected what happened in Panama to happen that quickly. I mean, it was in the news a lot in terms of negotiating, renegotiating, But it just kind of went to hell in a handbasket very quickly, with sort of riots getting into the port. And it makes me wonder, what? I mean, First Quantum is a pretty sophisticated company, and they operate in challenging jurisdictions. That's their thing. That's their stick. And even for them, it went away very quickly. So it's very concerning, I think, and should be to investors that a very adept company lost control of a situation in a country that I think most people...

43:27 I often say I only work in countries that I want to go on vacation in. That wasn't a bad place to go on vacation. And I used to work there for a number of years. It's great. It was great. I don't know what the hell happened. But it went, it flipped really quickly. So I don't know if it's outside influences. But yeah, as an investor, I can say that's that's a wake up call for investing in places that where you don't have a real good trust, fundamental trust in the rule of law. And that can just change so quickly too. And I think that's one of the things that, you know, that was surprising about this. Again, it's not like you didn't hear the rumblings and I was not on the ground, but I think if you spoke to people in Panama, you'd probably have a bit of a different sense of how quickly that came about.

44:25 But all of us have been in this industry long enough to have seen several, you know, what were great jurisdictions become terrible, become great again. Right. Like that's there's a lot of great mines in Argentina. And about, you know, every 5 years it's a great jurisdiction and then you can't get your money out. And then, you know, they're nationalizing your projects and then they're devaluing the peso again. You know, there's a lot of places you'd say, oh, well, you know, you're never going to have your mines expropriated in Chile. It's a tier 1 jurisdiction. Well, lo and behold, if you're in the lithium business, it's different now. Right. And is that coming in the copper business? So as part of the great breakdown of the of the globalist world, is that you are getting much more nationalist policies, right? And that's, it's kind of, this is a very slow moving train, but it's been coming, you know, go back really to kind of the global financial crisis and what came out of that and accelerated in the Trump presidency and Brexit and everything else, the kind of breakdown of what we thought was the globalist order.

45:41 But it does lead to some pretty, it has led to some pretty nationalist, very nationalist government agendas. And I think that's something that for all that, for all that we can wring our hands, as Diane says about, you know, it might be permitting issues. It might be the length of time that it takes to get through some permitting issues. You know, it might be higher operating costs. But for all that, these big companies are going to want to own assets in the best jurisdictions. And we're all pretty sure they're never going to have a mine expropriated from them in the United States or Canada. So I think again, that just sets up those of us with the projects that we have on this call and in a very good light in coming into a period where, we've said a couple of times, the scarcity in this industry is about to become the development project.

46:47 Because those that had their permits and made their way through and got built are now all kind of built. And if you look at the pipeline for projects that can be developed, you know, and we focus on Canada just in our peer group, but it's the same thing in the US projects that can be developed between now and you know, even if you want to say 2034, let's give it 10 years. Like if you're not significantly advanced in a permitting process right now, the probability of you getting production in 10 years is almost 0. Right. Particularly in Canada, where if you have to go through a federally a process, there is no process right now. Right. It's been deemed unconstitutional. So Anyway, all that said, I think, you know, bodes well for when this cycle is turning, and we've told all the reasons why we think it's gonna turn, and the gold price is gonna go higher, and investors are gonna come back in, chasing performance, And then all of these developers are going to be the most highly sought after things by all these companies that are going to have higher valuations.

47:53 And it is fundamentally, and I think we can all agree on this, what the first thing that is going to put a big whack of capital back into this sector is the sector itself. It's going to be big mining companies that need to start deploying their cash flow back into replacing their reserves. And, you know, investors need to wake up and realize that this is an extractive industry. And when your reserve is produced, it's no longer in the ground. And it needs to be replaced. So, yes, I think obviously we get excited, massive optimism about where we're going. But that's where, when you have an opportunity to invest in a situation like we are in right now, multi-generational disconnects in value, and you find companies with, I won't speak for my company, speak for the rest of my team, but with great management teams and assets in great places and people who've done it before, this really is a time, it's a unique investment opportunity. You haven't seen this only a couple of times in the 30 years that I've been doing that.

49:04 And before we get into there's a couple of questions from the audience, but I wanted to ask each of you just an individual question before we jump into those. First, Rick, I have one for you. Contango is moving Manchurian more formally into production this year. So I can make the gold prices, they start to become a lot less speculative for your balance sheets. How does this change the conversation you're having with investors right now versus let's say a year or 2 ago? Yeah, so we're literally months away from first production. And so, and you know, We've put a financial debt facility in place with ING and Mercury, so banks will make your hedge to protect your downside. Like I said, I think we were talking before that, you know, our hedges are in place at about the same price the gold price is today. So, you know, if the gold price goes up, obviously we'll have to take a loss on the money that we wouldn't have made.

50:03 Right. So and, you know, so I make sure you're so we're starting to have those conversations with with investors. And I don't mind having those conversations because, you know, the important thing for junior gold producer is to protect the downside. If we make more money, I'm not going to be too worried about it, but I want to make sure we make the deliver on making the money that we said we're going to make. I think we're in a very strong position because of that. It's a tough market still. There's a lot of people in Pierre Lassonde's valley of death, post-discovery when all the hard work has to be done and you have to do the infill drilling and all those nice results that you said were 2 grams end up being more like 1.3 and OGs, the metallurgy and there's just a little bit of silicon encapsulation so my recoveries are 82% not 95% and That pit wall on that north side where the big fault is, I got to lay that back to 32 degrees.

51:12 All that stuff is not value accretive for an investor. Eventually you do a lot of work and you get out the other side and you regain your value on the discount if you permit it and if you've constructed your mind and you constructed it and you had all the geotech done well in advance and you didn't find out that you had a bunch of mud somewhere where you thought was rock, or you have permafrost where you thought it was rock. So that's the difficulty of the valley of death or what has now been referred to as the killing fields. Unfortunately, for and but that's the reality of our business and you know we talked about you know the development stage companies aren't getting any respect. You know, they're the Rodney Dangerfield of the industry right now.

52:10 For us, we're gonna be in a good position once we got that cash flow. And so, you know, we're gonna be looking at opportunities that are slogging through that tough part of the market. So that's where we're now. That's where we're starting to pay our attention to. We're not quite in production yet, but we will be, I think, next quarter. But that's so that's where we're that's what we're talking to investors about. You always want to talk about, you know, the future and you got to deliver on what you want to do. So we're going to be very selective and careful. We're going to stay in North America, north of the border, and grow the company and grow the company's leverage to Gold. I think that's going to be important.

52:55 As we were talking about before, I do believe the Gold price is going to go up substantially. I just don't. I'm not sure it's this year, maybe it's next year, maybe it's the year after, it doesn't matter. I'm definitely a Gold bull. And we want to, so as a company, we want to increase our leverage and exposure to Gold. Appreciate that. Thank you. Next question is for Diane. So with new silver discoveries at Highcroft, I do want to talk really briefly about precious metals more broadly. I'd love to know your opinion on the relationship between gold and silver prices, and to be honest, what that means for Highcroft shareholders. Sure. Well, Highcroft, it's a significant gold asset. It's over 10 million ounces in the M&I category.

53:40 We also have a substantial amount of silver. There's always been a relationship. In fact, there's the gold-silver ratio that is calculated by a lot of people. So, you know, that relationship has been consistently correlated over the years and decades. Silver usually in a gold deposit is a by-product and you take it as a credit against your cost. For Highcroft, what we're finding is our silver is such, it's almost a 50% contributor to the revenue generation. But what's really significant about our silver here is that, you know, Highcroft has always been one of the world's largest gold and silver deposits, but it's low grade.

54:28 And now with this high grade discovery, you know, we have an opportunity to look at things from a smaller footprint, smaller startup mind, higher grade, better economics, better return for the shareholders. One of the things that development companies get into is it's a rush to production at all costs. There's just this need. We step back and said, let's take a whole look at this. Nobody's really sufficiently looked and studied this asset to understand what is going on here. And that has led, fortunately, in less than 3 years to this big silver discovery. And then, you know, silver and gold, it's interesting because silver is also a precious metal, but it plays very well into the green energy space also because silver is required for the photovoltaic cells for solar panels.

55:18 And so that could be very meaningful for our investors and certainly opens up another investor base for us for those who are attracted to the green energy space as well. So we have a bit of a foot in both camps. Awesome, thanks. And Dan, for you, 2 major projects, 1 pretty deep into development at Springpole and 1 on the exploratory side with DuParc in Quebec, What are investors at first mining, what should they be most excited about next year with those 2 different stages of projects? Well, I thought you were gonna ask, as we get asked a lot, which is my favorite one. And I often have to say, well, you know, who do I love more, my son or my daughter? The answer is, They're both wonderful. So the biggest catalyst at Spring Pool, so we're about 85, 90% done a feasibility study, well advanced and submitting our final environmental assessment in the summer this year.

56:18 When that finally goes in, I think people should have a real confidence that we know that this is going to get to the finish line, particularly because we submitted a draft EA in 2022. It's been reviewed by every regulator that needs to say yes to this. We've received and responded to 1600 comments from all different regulators that have to look at it. There's no surprises. There's nothing that's not been discussed. And so, you know, we're kind of, it's a bit of an open book test at this point. So, you know, we're still, there's still important things that we need to continue to delineate. But, you know, That I think is a major, major catalyst targeting getting EA approval in 2025.

57:08 And that, as we said before, puts it in a pretty unique space of large gold projects of this size and scale that can produce 250,000oz a year plus permitted in Canada, should be worth more than $6 an ounce. So anyway, leave it at that. And at DuParcay, interesting exploration, Springpole can continue to grow both near mine and regionally. And at DuParcay, a couple of very interesting things there. Obviously, we're drilling right now and I think demonstrating just what's been left behind and not looked at in this amazing deposit because of a fractured land base. So we consolidated really this land package, most of it last year, and now are very clearly able to demonstrate, in areas where there's great continuity of mineralization, just not drilled over 400m because there used to be a property boundary. So infill drilling that and demonstrating that, starting right now at 3.5Moz of M&I and another 2.5Moz of inferred, with 1.5Moz depleted out of that resource already, that's a very significant endowment in the first 500m.

58:21 So lots of resource growth to come there. And as Diane was just talking about, that they're looking at with High Crop, we're doing some work around potential high-grade starter pits at Duparquet and at our Duquesne project, so that we can understand in the area where we are in the Abitibi, we've got 11mls within 170km of the project. There is no shortage of capacity and maybe that's a way that we might be able to look to get into cashflow sooner and, you know, be in the enviable position that Rick's in where, you know, he's gotten near term, not having to worry about the price of gold and protect the downside. So anyway, I just wanted to add for anybody interested in the first mining story, there's going to be a conversation with Dan and Chairman Keith Neumeier tomorrow.

59:12 So please check your emails to get the link to that. I know there are a couple of questions in the chat about that. So hopefully that conversation might clear that up. For anybody in the chat who has individual questions for companies, those absolutely will be passed on just so you know, so their teams will be able to get back to you quickly. But I don't usually do this, but I'd love to just because there's, I know there's so many gold bugs in the audience and watching the replay. I just want to give each of you an opportunity to really just pitch your security, to be honest, of why now is a good time to invest in each of these stories. Keep it to 30 seconds or minutes. We're running out of time, but I'll start with Diane. Just an elevator in a long building pitch on my job. Sounds great. So Highcroft, I've said it before, I'll say it again. One of the world's largest precious metals deposits and one of the best jurisdictions, Nevada. We are permitted for both heap leach and milling.

1:00:03 This operation's had a long history of heap leach operations. We're now transitioning it to the next phase of operations, which is the sulfide ore. So we have tremendous infrastructure on site and our team came in, applied first principles like we did at our former company and have really Demonstrated to the market that there is a lot more to high croft than just a notion of low-grade material There's certainly this high-grade Silver, which is open in so many directions. So we continue to focus on increasing value through the drill bit as we finalize our PFS work this year. And we're also very bullish on Gold and Silver prices for the year. And we've got a team with an excellent track record and 66 million US in the Treasury.

1:00:56 Awesome, thanks, Anne. I'll give it to Rick next for a quick pitch. I'd say, you know, we've talked about the fact that the development stage companies are trading at huge discounts and we're no exception. We're trading at roughly half the value we were a few 6 months ago. So, you know, you're getting in at a good value price now. I think we're trading at $15, $16 somewhere in that neighborhood. We haven't traded there since we did the deal with Ken Ross 3 years ago. And we now, we're fully permitted. We're a few months away from pouring first gold. It's a bit of a head-scratcher for me personally, but market's the market. It's a great buying opportunity for a company that's gonna be generating about $50 million of free cash flow here a year, starting in next quarter sometime.

1:01:57 We're mining, we're hauling ore, we're stockpiling, and the first batch process would be sometime later in Q2. So it's a great, it's a steal of a bargain right now. So, you know, take a look at the website. If you've got questions, give us a call. Happy to jump on a call and answer any questions. So, but definitely look to the upside of the Gold price over the next few years, for sure. And finally, Dan. All right, First mining gold advancing 2 of, what are 2 of the 10 largest undeveloped gold projects in Canada in 2 premier jurisdictions in the Abitibi Gold Belt in Quebec and near Red Lake in Northwestern Ontario.

1:02:48 Advanced stage projects, as I said, targeting environmental assessment approval at our Springpole project in 2025. Lots of exploration success, control really over 2 district scale land packages and a bunch of other assets in the portfolio that we've been very successful at monetizing over the course of the last 3 or 4 years to generate more than US$50M of non-dilutive capital to advance the company. Major milestones coming in the next 12 to 18 months, major re-rating and again, an opportunity to get in at what I would call really historic low valuations. So for more information, our website www.firstmininggold.com. Well, Diane, Dan, Rick, thank you so much for this conversation.

1:03:36 Thanks everybody who joined us today and who's watching the replay, which will be available in just a few hours after our event closes today. Wherever you're signing in the world from, Have a lovely end of your day.