Green Transition Panel

0:08 Hello, everyone. Thank you so much for joining us for our green transition panel discussion. We're very happy to have you here with us today. My name is Gwen Preston. I am the editor of Resource Maven. I'm joined today by 2 friends. One is Frank Holmes of US Global Investors, who has been a leader in the green transition investing space. So we're really lucky to have him kick off the panel with his thoughts, his latest sort of outlook on what it is to do green investing and why it makes sense, I'm assuming, to do green investing despite sort of the market being what it is at this moment. And then Frank and I'll have a bit of a chat and after that we'll have Peter Kraut chime in. Peter and I are launching an Evergreen Investing newsletter. We're gonna write it together. So Peter's gonna run through the different arenas that we plan to cover in that newsletter. So those who are looking for some monthly guidance, some monthly knowledge about Evergreen Investing might consider subscribing to that. And that's the sort of the impetus for doing this event today. So without further ado, Frank, I'd love to hear the latest from you.

1:18 Well, thank you, Gwen, and thank you for bringing me back to share our story. But before we jump into the slide deck, I was just mentioning to you all that every year I go to Harvard, except for COVID, And we are kids again. Most of the guys are over 60 and women are over 65. And it is a 150 of us from 80 countries live in a dorm and we do nothing but case studies for a whole week. And it's intense. And after 10 years and 600 hours of being involved with this, you get your MBA from Harvard as part of the program. So this year, it relates to your topic. And so the theme this year is about digital transformation.

2:05 And those are the winners and those are not. And what happened during COVID, those that were in that digital transformation in that move, they were able to compress 365 days to 11. That's a 40 bagger buying a stock for a dollar going to 40 bucks is a huge win in a year. So, they're the ones that survived and companies like Moderna, they were not into messenger RNA creating a vaccine but they were the most advanced in a digital transformation and they could pivot and they could pivot in 11 days and all of a sudden take all that intellectual capital and apply AI to it and come up with a solution to a crisis. And I think that we're going to see that happen more and more. And the big bank I was talking about today was DBS, which was the worst ranked bank in all of Asia. And it becomes number 1 in the world. And they went through this unique digital transformation.

3:02 We're now going through a green transformation. That's the big part of trying to tie that in for people. And the green transformation, which I see is going to need a lot of copper, is going to need a lot of special metals and a lot of silver for solar panels. I'm going to walk through a couple of parts for this for you. But I thought it was a really interesting few years back. We were at the at the Harvard, and it was all about Obamacare and how much everyone was attacking Obamacare and etc, etc. And it's interesting because most people did not buy health care stocks. And during Obama's 8 years, many of them went up 8 times. So rather than listen to a negative narrative, you got to follow the money. The money was going into reforming and repositioning healthcare. So right now we have this a lot of money in the US going to go into the green transition.

4:01 And so President Biden is even tweeting that, telling people that quickly go and check out that if you can get this 30% credit, 7500 for the average system, that the US government's raised the taxes on corporations, raise the taxes on individuals, and they're going to recycle that money back into this big green transition. And so I think that solar photo vitalics, like you've got to think about what goes into making solar panels. What are the magic ingredients? Well, the biggest one that I know from my gold fund experience is silver and there's been lots of advancement to have less silver but the use for silver and the need for copper to wire the whole system. If all of a sudden, you notice Texas never had a energy problem.

4:50 Anytime there was this bad weather but now we do. Why? Because there's more and more Teslas on the road. They're tapping into the energy grid, recharging their cars so they have to now have a huge cap expense to upgrade everything. This is follow the money, a classic example of it. So if you look at US solar photovitalics, you can see here installations are forecast to grow to double here in the next few years. So this to me is a very, very, very bullish sign and for investors to focus on where the opportunities will be. When we think of the car industry, of charging infrastructure, the sector will need a 250% more copper.

5:35 What's the problem with copper is that the grades for the mines all over the world have been declining. They have to move 5 tons more of dirt to get that pound of copper. And you're seeing that issues like in Chile, union problems, government policies, they have a communist leader comes in, so it's just all of a sudden mining difficulties, that restricts supply. Whenever you restrict supply but there's money going into the demand side, the prices of those commodities are going to rise. And it fits into another famous mathematical law called Metcalfe's law. So could copper shortage derail the energy transition?

6:21 Is it embedded here? So there's, I think the copper gold stocks that produce both metals like Freeport, they're in a very sweet position for several reasons for gold, which are different dynamics than what are for copper. But for your copper stocks, it's interesting to watch that short term copper follows purchasing manufacturers index. Why do they do it? Why does it do that? It's because PMI is a leading indicator. And it means that if I'm gonna have to make a lot of solar panels, I'm gonna use a lot of silver, I'm gonna use a lot of copper, and therefore I deliver those products in 6 months, you see all of a sudden as PMI numbers go above 50, that's an expansion in the economy. When it go below 50, it's contracting. Well, last year, China was contracting.

7:11 So now it's expected this quarter that China is going to open up. Well, China's the 800-pound gorilla, consumes 55% of all commodities. So if they're not going to open up their economy and America is all of a sudden throwing all these billions of dollars into This new world of this new green energy movement Then you're going to expect a lot of these commodities are gonna trade higher. So electrification has a silver lining, literally. And so I come back that the superior conductivity of electricity, that Silver shows up more and more in all these electric cars. And I think it's usually less Silver needed for the solar panels, but it's needed for other parts.

7:57 And so I think that this concept of understanding the link between a new technology and the basic material is key. Last year, a lot of mining stocks took it on the chin, but not lithium stocks. There's a shortage of lithium. And some of the lithium stocks we own went from 5 to 50 dollars, 10 baggers in this sort of lack of supply, but huge demand growing. It'll take another decade for that supply to balance with the demand. And now with all this government money going into it, it means that Many of these stocks will trade on the upside. So the electrical veal giant Tesla needs lithium for its car batteries. Everyone knows that. But Tesla signs agreements to secure a lithium supply. And China is another big nation pushing for more green energy.

8:47 So Asia dominates electrical fuel battery manufacturing, you can see here. And so now what happens if some of these metals become strategic? What happens as we're seeing a battle for rare earth metals and minerals, that China's trying to secure everywhere in the world they can access to these minerals. And I think that we could see a huge imbalance here that countries are all of a sudden, what they learned from COVID was not only these minerals and supply lines, but food. So food is going to become a key element that you don't want to be exporting, never mind the carbon footprint of food going from Spain and Italy up to Sweden, you can't get the food up there.

9:32 And so now they have to think of ways to reinvent that they can grow the food 100 miles south of the Arctic Circle. So here's another visual showing the share of new US electricity generating capacity. And what you can see here is coal has only expanded only recently because of the war between Russia. It will go away. But we're going to see a continuous increase in solar and we're going to see an increase of we believe that will turn here. You're going to see natural gas. So what is Hive doing? Hive was the first crypto mining company that took public, couldn't launch an ETF with Bitcoin. So when you launch the first crypto mining company, you create the Genesis coin, therefore you don't have an AML concern.

10:18 It's been an incredible business ride for me, extremely volatile. But what I'm so excited about, it was the first to go public and first to have a strong ESG strategy. And we're doing some really, truly beautiful, unique things like in Lachute, just north of Montreal. We have a building that was repurposed from graphite and basically 30 megawatts in the 40,000 square foot building is throwing up so much heat, it produces about 2.5 Bitcoin a day today, and it turns around and sends across 25 feet heat the heats of 200,000 square foot building. So what does that mean? It means that we're recycling hydroelectricity molecule and energy and it just keeps recycling. It doesn't just evaporate and so therefore actually you can say you create a carbon credit from that end. And then some of the other exciting parts of what we're doing in robotics, and we're seeing in the Netherlands recently, and we're gonna be doing this in Sweden. Now I see that it's not been uploaded yet, but there is a video here. Oh, it is. Great.

11:23 This is in Amsterdam. 2 megawatts of Bitcoin mining heats massive water tanks. The water tanks allow for this greenhouse, which is 8 football fields, 8 football fields. And it's a high cash product. It's red peppers. And so that's a visual. And most of the next visual is to show you that relates to what can be done. Can we upload this one? This is all used with robotics. And these are the robots. And you can see the train of them. And look how far down. As I said, it's 8 football fields of a greenhouse that's providing all the peppers for France and Germany and the Netherlands coming out of this facility.

12:13 So with that idea, we are taking that up to Sweden and we've got a joint venture and we're going to build a 90,000 square foot greenhouse and we'll recycle from our data center which is mining Bitcoin, was mining Ethereum before,

12:32 and this will basically create enough vegetables of cabbage and cucumbers and particular cucumbers and tomatoes and peppers that will cover all the northern part of Sweden, Iceland, sorry, Sweden and Norway and Finland. So there'll be no carbon footprint of bringing food up from Spain or Italy. And if there's a lockdown ever again, don't have to worry about it because it's all grown 100 miles south of the Arctic Circle. So where is this going? Where is the use of the technology? How can you recycle where we're recycling from our hydroelectricity here? Hive only uses geothermal hydroelectricity. How we can recycle and create other business opportunities, create other jobs, and we're gonna also have fish here.

13:22 And that's the other next exciting part about having fish and food, even when there's 8 feet of snow. That's my presentation. Thanks so much, Frank. I was gonna ask a few questions before we move into Peter, and then there are questions coming in from the audience. Audience, if you have other questions, please put them in the Q&A, and I will direct them, or we will answer them collectively after Peter does his presentation. Going back to the beginning of what you were saying, Frank, I mean, that Moderna example that you gave is so powerful, right? That they were not in messenger RNA, but because they had built their operations in an appropriate digital manner, they were able to pivot in such a short period of time and obviously benefit themselves and the world and whatnot.

14:07 And that's a paradigm shift, right? That's what like getting into digital transformation, that's embracing a paradigm shift. And paradigm shifts are obviously very profitable for investors who can get in front of them. What other paradigm shifts have you seen in your career positioned for? I just want to give people a little bit more context because these things are not common but

14:27 when they happen they really happen. Well 1 of the things is is that data centers have become very centralized. It's like an oligopoly. If you look at it, Microsoft, Google and Amazon, how much money they've made from selling those services and those services are quite expensive, especially if you want to use their Nvidia chips. And we have discovered that we have decentralized data centers. The campus we built in New Brunswick is spectacular, right along the border of Maine. It can go up to 80 megawatts. But what we see is that there's going to be this transition that you're going to need software coders that you have to. We're going to also be using solar in that area besides hydro. And we're going to build greenhouses.

15:13 So you just have to sit back and say, how do I take this molecule and keep recycling it so that it's not just it's renewable and and it just takes that creative idea so I believe that what Hive is the first to do also was to build decentralized data centers that are not owned by the big oligopolies, like in San Antonio is a big military bases. So Microsoft is or Google is building. Sorry, Microsoft is building a $3 billion data center, because they need all of this. These Nvidia chips and all this AI is going to be part of the revolution. So when you use AI and that technology, you can actually become much better at using minerals, of extracting and recycling that same mineral.

16:03 So I guess when it comes to paradigm shifts, one of the things is that they're hard for people to accept, right? It's hard for people to accept the digital transformation, the green transition, all of these things, because paradigm shifts by definition are turning something that's been very accepted and longstanding on its head. So what do you say, I mean, people, investors are often very focused on the moment and certainly in this moment, the talk is all about recession and rate hikes and what's happening in the near term. What do you say to what I'm sure is a common question that comes your way, which is the classic, well, right now isn't the moment to invest in any of this because there's more downside coming in the market because of the recession. How do you how do you approach that that worry? The adoption process goes in incredible volatile waves.

16:54 And probably the best ever to see in 13 years, Bitcoin, how that adoption doesn't have a CEO, doesn't have a marketing department, has a unique algorithm that everyone starts to participate and it really validates blockchain. Blockchain was invented in 91. 91. Yeah. And so you say, well, who was it was a bunch of telecom guys that said, you know, we have to move money. And they created it telecom guys create the blockchain to be able to move money. And it's now called triple entry accounting. And it was to me as fascinating that it comes along and it's Bitcoin that demonstrates the validity of this technology for mass adoption.

17:46 And I thought I was at the doctor today and he was telling me about if you have bleeding ulcers. So one of the things about ulcers was it used to be because you're too stressed buying stocks, you're in the capital markets, and you're too anxious and you go home and you're worried about your kids, and you're worried about the market, you're worried about this, you got compliance issues, you got all that stuff. That's what gives you bleeding ulcers. No, this doctor in Australia recognizes that there's a bacteria that seems to show up with people that die from it, or everyone is done in this one bacteria. And he comes out with, he thinks that you need to give human beings antibiotics to go after this bleeding ulcers. You're a quack, get rid of you, are you crazy? 20 years later, he gets a Nobel Prize. It was true.

18:31 You have to recognize the adoption takes a lot longer and people want to subscribe to a newsletter that you guys are creating. Well, that's all part of helping people come into that adoption, that education that's necessary. But the digital transformation is on this great wave. I believe that decentralized data centers are gonna become very valuable. I believe that the Texas government does not want their data center in Louisiana, that New Brunswick doesn't want it in Quebec or Nova Scotia, that I believe that you're going to see this sort of proliferation grow and I think you're going to see where they're going to say, well, I built a data center, can I recycle the energy? What can I do with it? And it creates all these unique jobs like in Montreal.

19:18 The university system was the first to really put a lot of effort into AI. So, it's become the AI capital of Canada and Google realizes and and and Amazon and Microsoft Microsoft couldn't get people to leave Montreal with PhD. So they would go to Seattle and pay them much more money and get their H1 visa. No, no, they love their lifestyle, their family, et cetera. So what happens is Microsoft goes and builds a campus downtown Montreal. Well, that's a big construction that creates lots of jobs and tapping into the university system and that is going to be used for smart cities. We're going to see smart cities populate everywhere. And so I think that this whole transition of green, recycling of molecules to extract every, it'd be more efficient with a molecule is a huge growth business.

20:14 This is, I mean, there's a long game here. There's also short term and medium term games here in everything that you're saying for the investor. The big short term things are usually, the tidal wave of transformation is not gonna stop. It's going, that demand is growing. And all of a sudden you get a government saying they're going to put 50 billion dollars into that industry, right? You got to automatically say, where's the supply of the minerals and that's why lithium stocks went up tenfold last year. So the short term moves are gonna be able for someone to figure out there's a lack of supply, it's gonna take 10 years or 8 years to get it there. The demand is not stopping. The coders are there banging away like Mozart on the piano keys.

21:02 They're writing their own symphonies and there's money going into to fund these

21:08 kids and there's money going into build these solar panels. They want new things with them. So I think that the short term opportunities is when you understand demand and supply. Yeah, fair enough. I mean, we could talk about this forever, about portfolio construction with these short, medium and long games and whatnot. The one thing that we won't get into that because that would take up the rest of the webinar. But You mentioned lithium just then, and I did want to ask you, since lithium has done, did so well in 2020, 2021 and 2022, what is your outlook for lithium in 2023? Do you think it can sustain where it is because the supply is just not there? Do you think there's downside ahead? What's What's the opportunity there? I think we have. What's nice about interest rates is that the 2 year government bond is the bond that moves around with currencies.

21:59 The 5 year is dividends. So if you're a pension fund and you make an allocation of insurance company money's coming in, you got to invest it. I could buy a 5 year government bond with no risk or do I buy a dividend paying stock that's going to grow faster? So the surge in 5 year yields all of a sudden had to create a big sell-off in stocks in particular, even the dividend paying stocks, unless that yield was higher. So I think that the 10-year is predominantly these big infrastructure projects. When you're building a data center, you're building in power lines, et cetera, And all gold mines and lithium operations are all funded off a 10-year government bond yield. They all went above the 50-day moving average and only last week they fell below. So that means that there's a skittishness that when BlackRock all of a sudden gates peo exchanges gating people I gating real estate funds sudden rates are coming u a systemic risk that's gr like 2000 and 8, 2000 and this. So I think the rates have peaked or they're going to peak this quarter. I think we're going to have to get the rates, the inverted yield curve, where the short is higher than the long term, that can stay there, which will make the economy just sloppy and move along.

23:24 It's not going to have this grand crisis unless you have a greater widening of it. So I think the lithium stocks, you know, they've had a great move. They're going to produce, but used cars and new car sales are coming off with the rising rates. There's an uncertainty with it. And so I think that that's going to be the skittish part. But what's not is the build out for houses that all these people want to get their energy bill down. They're going to get a grant from the government, a credit, and they're going to put solar in. In my business, I'm looking at solar here. So I think that that will be the next big move and I think the supply of silver is actually lacking. I think that when this what we've had very fortunate in Europe it's warmer so the gas issue in Europe is not as bad as last year. So rather than minus 10 degrees this time of year in Sweden and 8 feet of snow, it's minus 1 and only a foot of snow.

24:24 So I think that that will create a bit of a transition, but rates falling will be a big boom for the Tesla cars, and that will be the next wave for lithium. But copper is needed. Copper is so desperately needed to upgrade all the infrastructure in America. Fair enough, Okay. Again, there's lots of things there that we could pick up on, but I'm going to let Peter take the floor for a moment here. Frank, we'll bring you back once Peter's done his talk and then we can answer some questions from the audience altogether. But before that, Peter, do you want to take us through our introduction to our Evergreen Investing Newsletter. I sure will. Thanks, Gwen, for that. So, Frank, thank you so much. And you set the bar really high, tough act to follow, but I'm going to do my best.

25:14 So Gwen and I are launching this newsletter called Evergreen Investing. And as the byline says, it's really all about the inputs and innovations for the green future. And we're going to cover 6 broad arenas, which I've listed here, clean energy, energy metals, carbon neutral, agri-foods, recycling and waste management, as well as transportation and infrastructure. So I'm going to go into these in a bit more detail, but before I go there, I just want to describe, I guess, from the, especially from the mining side, in terms of commodities, metals and so on, not just metals, but but certainly they're important. What 3 of the big drivers have been over the last sort of 8 to 10 years or so that have created this shift and this potential going forward in terms of undervaluation for this entire sector. So the first is that company managers have certainly not focused on production.

26:16 They've been gun shy after mistakes that they made in the last bull market being much too aggressive, overpaying when they've made acquisitions and mergers with other companies. And now what they've been focusing on is surviving the bear market that, as I say, lasted the last sort of 8 or 10 years or so. And so their focus has been on dividends, trying to be profitable, using borrowed money for share buybacks, that sort of thing, but not in terms of increasing production and looking forward and being forward thinking in terms of what the demand is going to look like going out several years. So the second big driver has been, of course, that tech, we just talked about this, tech and other general sectors of the market have been fantastic ever since the financial crisis, the great financial crisis of 2008, 2009. And so these sectors have made for really easy gains when it comes to tech and general stocks. So there's been a lack of interest in metals and commodities.

27:19 They may be considered old school types of industries. And so there's been a lack of funding that certainly has worked against managers of these big producers. They've had difficulty accessing capital at reasonable rates. And so, you know, production has, has stayed low. And as I said earlier, they've been really gun shy. They focused on just staying profitable, keeping the lights on and, and basically lowering debt, but that's really turned around. And if you look at where, where the sector is, the mining sector, across the, across the entire space, it's really now become the single most, cash, highest cash flowing sector of all, the market in the, in the broader market. And so the yields are have become fantastic.

28:09 The ratios are extremely low. And I think that we're going to start to see general investors really start to focus and pour into this area. And the third point really has been that, again, if you're mining in particular, what has been a headwind for them is that permitting mines has become tougher and it's become slower than it ever has. If you look at the developed economies, it can take these days upwards of 10 years to permanent mine. So of course, these kinds of things, these kinds of headwinds exacerbate supply deficits. So let's start digging into some of the specific sectors. Energy metals, for example. The big energy metals tend to be things like copper, nickel, zinc, silver, for example.

28:57 And it's interesting to note that if you look at how we started out the year, The London Metals Exchange has warehouses around the world and in major cities and they recently pointed out that they started 2023 with the lowest inventories they've had in 25 years. So the chart on the right shows you inventories across many markets, many different kinds of commodities, and they are significantly below their 5 year averages, and they're at risk of depletion. The last 4 bars here in this chart show you zinc, aluminum, copper and nickel levels. And so, you know, zinc, for example, is down is about 40% below its five-year average. Aluminum, 50% below copper, 60% below and nickel, 70% below its five-year average.

29:49 So, you know, these are serious shortages. The reopening of China from its COVID lockdowns is certainly going to factor in here in a big way. So now if we turn over to the chart on the left, Frank talked a fair bit about copper. This chart deals with copper specifically. And so the blue line, as I'm pointing out here, this narrow line is the forecast demand out to 2030. This and This is the huge and expanding gap that's basically going to start right around this year and worse going forward over the next 8 years or so. And so by 2030, we're forecasting a 12.5 billion pound deficit in copper.

30:36 And as Frank was saying, geopolitics, politics, all sorts of influences over copper supply are really very likely to make this become reality. So how does that how does a metal respond? Well, price is is the obvious way price for copper has to go much higher, not only in terms of the risks of production, but in terms of really a growing demand when you think of things like electrification and so on. So the next sector to look at is clean energy. And one of the big, big factors in reaching our clean energy goals and low or 0 carbon future is uranium.

31:23 So let's just look back over the last decade or so. And after the obvious events in Fukushima, where there was the nuclear disaster. Japan and Europe in particular turned their backs on nuclear. They started to reject the sector in a very obvious and big way, pretty much reacting to sentiment. And so unfortunately, last year with the war in Ukraine, Europe really has learned the hard way that uranium is absolutely a necessity for clean baseload power with no carbon emissions. And so they're really starting to embrace it now in a very big way. So uranium has been in a depressed sort of state until about the last year and a half or so. The price is still relatively low, but it's rising. It's below the cost of production.

32:18 But if you look at this chart, the red line shows you the forecast demand for uranium out to 2030. And then the blue bar here, the dark blue bar is primary production. The gray section here is secondary supply of uranium. But as you can see, from currently going out to 2030, the light blue bar is rapidly increasing in terms of shortfall for uranium for nuclear power. Uranium for nuclear power. And so what's needed, of course, is, again, for the price to rise, to incentivize new production. New production is not necessarily going

32:56 to be a difficulty. There's plenty of there's plenty of productions that that's out on care and maintenance. It takes time to get it back up and running, but a higher price and a sustained higher price is what these producers need to see to have confidence to start producing more of this of this commodity. So next, let's move to agri food. An interesting point that I don't think has made really too many headlines is that just a couple of months ago, the world has really hit a huge milestone. The fact that we've now crossed over into 8 billion people on this planet. And so because of that, food inflation, partly because of that, but of course because of the huge money printing that we've seen since COVID, especially since COVID, we've seen massive food inflation take hold in the last couple of years. This is the FAO food index that's generated by a branch of the United Nations, and It shows that in real terms, the kind of high and sustained prices we've seen in food in the last couple of years last happened in the 1970s.

34:09 And we know that the 70s were a very strong period for commodities. You know, food prices were up, food commodities were up in that decade. I think we're heading for something very, very similar over the next few years. So what are the opportunities in green investing? Well, when it comes to food, we need to improve, of course, because there's so much demand and growing demand for food, we need to improve the quantity and the quality of our output. So the opportunities lie in investing in things like better fertilizers to boost crop yields. There's all sorts of new technologies. Frank showed us some great examples with video clips of greenhouses, massive greenhouses where you've got new technologies, you've got new farming equipment things like robotics, irrigation, harvesting technologies, And you've got also things like indoor and vertical farming. So indoor farming, of course, you've got greenhouses, but vertical farming is where you, rather than having to have such a large footprint, which is traditional farming on land and outdoors, you can do vertical farming in buildings, multi-level skyscrapers, in fact, that could be right downtown in the middle of metropolises.

35:31 And so, that of course has multiple benefits.

35:36 You control things much better. You are not limited by temperatures and the weather, in terms of the number of harvests that you can have every year, you can multiply the number of harvests every year for certain products, you need less fertilizers, for example, you can provide light through LED, which is obviously much cheaper, doesn't produce heat the same way. And so again, multiple opportunities exist in this sector. And so if we move on to recycling and waste management, recycling, the recycling industry, obviously also offers all kinds of great opportunities. Recycling is all about things like reusing and repurposing.

36:21 And that, of course, you know, when you do that, that means instant savings to the articles that you're doing this with. And recycling has really expanded over the last several decades into all sorts of materials like plastic, paper, fiber, metal, glass, oil, rubber, lumber, water, you name it. And again, here there are all kinds of new technologies that are being developed that help with extraction, separation, cleaning, reprocessing materials, and that's opening up all kinds of opportunities as well. When you look at waste management in particular, there are ways that we're learning to convert and process discarded materials and waste. Waste management also includes things like waste collection and sorting, treating hazardous waste, especially biomedical waste. And there are companies that specialize in that and growing. It's becoming a big concern and they are doing very well. These are, again, additional opportunities and energy from waste, things like burning waste.

37:19 There are multiple municipalities around the world that generate heat and electricity by burning waste. There are biomass, again, all kinds of technologies that have been developed and are continuing to develop and improve in these sectors. And the last sector I want to talk about is the transportation and infrastructure. So transportation in particular, it's just interesting to note that transportation alone represents about 20% of the global annual CO2 emissions. And transportation is all about moving goods or people in and or delivering services. So the opportunities exist in things like greener fuels, electricity, natural gas, hydrogen, even ammonia these days is being considered as a great way to generate

38:07 power. Things like cargo ships for example could be converted to to use ammonia as a fuel and so We have opportunities in terms of more efficiency, public transportation, ride sharing, the technologies around that. One example that I've heard of is that Tesla is actually looking at the idea of setting up a program where Tesla owners could actually, where Tesla owners could actually, this would be of course under the circumstance of having things like self-driving cars where you would have owners of Tesla's could actually when they're not using or don't need their car, let's say they go into work and then for that day they don't need the car, they could actually allow the car to be accessed as an Uber or a taxi. So the car would go back onto the streets, someone would you know put in a request for a ride, that person's Tesla would go out onto the streets, pick up the passenger, bring them where they need to go, look for a new passenger, be available for a new passenger after that. And then at the end of it, go back to its owner and bring that person back home, perhaps overnight in the evening. It could also go back out into the network.

39:25 And so, you know, a car, for example, goes from being a cost asset to 1 that is revenue generating. So the tremendous opportunities exist there as well. And if we look at infrastructure, that includes things like utilities, power grid, telecommunications. You know, so again, opportunities to invest in clean power providers, solar, wind, hydro, biomass, geothermal. Frank talked about these as well. There are technologies like smart grids where you can have people, first of all, technologies will help to better manage the grids, make them more efficient. And then you've got people who are, let's say, producing power, their own power from solar at home. They're able to sell back power when they don't need it, back into the grid. And so again, a number of opportunities coming from that.

40:15 So here are a few real world examples. Frank alluded to some of them as well. The US Infrastructure Act is expected to represent over the next decade or so about 1.2 trillion dollars in spending. This is going to go into roads, bridges, rails. It's going to improve drinking water and internet access for people. It's going to help develop a national EV charger network and it's going to go again as well towards things like environmental remediation. And Then you've got the U.S. Inflation Reduction Act. It's all about investing in energy production. It's aiming to reduce carbon emissions by about 40% over the next 8 years. As much as $370 billion in spending is going to go into renewable energy and climate measures. And Frank talked about solar and the implications for silver in particular. And the US Inflation Reduction Act has massive implications for solar. I'll just sort of look at that in a little bit more detail now. And so back in 2020, there was about 10 gigawatts of solar capacity installed every year. And thanks to the Inflation Reduction Act, by next year, we could be up fivefold over 2020 to 49 gigawatts per year. By 2030, that's expected to run up to 100 gigawatts per year. And the forecast is that solar investment by 2030 could be as much as $321 billion in the US alone. And we're gonna see as much as double of the current

41:45 growth rate in solar. This chart shows the different types of power generation, solar, wind, onshore and offshore, nuclear, gas, coal, et cetera. Well, it's obvious that over the next decade and well beyond that solar is going to grow tremendously. And so part of the Inflation Reduction Act has included extending the long-term solar investment tax credits to be able to help encourage solar installations. So that's really my overview of the of the different opportunities you've gotten all these different sectors. As I say, evergreen investing is about the inputs and innovations for the green future. And so really, we talk about paradigm shift. There really will be across all these sectors, massive paradigm shifts for you to invest in the inputs and innovations. And we're going to do the research to bring these opportunities and ideas to you. And for the most part, they will be in low risk investment opportunities that you can help build a portfolio in this green transition.

42:50 That's it for me. Back to you, Gwen. Thanks so much, Peter. All right, we have some questions from the audience. I have a few, 1 or 2 follow-up questions that I'll ask Peter just to start with. Peter, you showed a dramatic chart at the end there about solar and the growth in solar installations. Do you want to talk a bit more about silver usage in solar? I know there's some details there that I'm sure You would have loved to include in your talk, but you knew that there wasn't quite time in the 10 minute time limit that I gave you. So do you want to dive into that a little bit about how much silver is used in panels and how that how that's changing? Absolutely. So thanks for that. Yes, Solar represents the single largest industrial use for silver. Most people are really quite surprised to hear that. So right now we're talking about of the entire annual silver supply, about 12% goes into solar panels.

43:46 And that is a reflection of what Frank was saying a little bit earlier. The critical use of silver in solar is just unreal. And so there was some research that was actually just released yesterday that showed that over the next 5 years or so, we could be looking at nearly a double in the amount of silver from 12% today as to as much as 20% of all of the annual silver supply going into solar. And, you know, from the research I've done and what I've seen, I certainly don't doubt that. The International Energy Agency tells us that in 2010, sorry, in 2020, about 3% of global energy comes from solar. And yet they're forecasting an 8.5 times growth in solar over the next just 8 years to 2030.

44:38 So for me, the simple math, unless I have something wrong, is that if solar currently takes about 12% of all of the silver, And if you're going to multiply solar output by about 8.5, say 9 times over the next 8 years, technically you should be consuming all of the silver supply just from the solar industry. So, I mean, there's only one plate one way for the silver price to go and that is massively higher. We haven't even talked about EVs that use twice as much silver as the internal combustion engine technologies for cars. Silver is in electronics, it's in electrical applications, It's the most reflective, the most conductive metal. Everything is actually benchmarked on silver in terms of other metals. So really it's critical. I think it's the real sleeper in the commodity space in terms of the green transition. And you know, the fact that it's a monetary metal certainly doesn't hurt either.

45:33 Just a compliment that Peter, we remember going back to when the catalytic converter first came out, I think it was zinc was for the first in Japan was the first catalytic converter. And and then as it went into platinum, everyone dismissed the platinum and all of a sudden platinum faro perform gold. So you could have silver both a precious metal and because the industrial demand faro perform gold. I Usually the beta is 1.5 to 1. It could be 3 on this sort of supply-demand imbalance. Yeah, I agree. I certainly agree. I think that it's the potential for silver is really highly underestimated given, as we've just said, its monetary applications and its history as money for 4,000, 5,000 years.

46:28 And it's developing technology applications. It's really something to pay a lot of attention to. And silver, like another space that I'm about to talk to ask both of you about, is a small sector in terms of the number of stocks that are available to play. And that's one of the things that can increase returns, because when attention turns to silver, there's not that many direct silver plays that you can buy. And so that enhances often the upside in those equities. Another arena where that concept applies is nuclear. There's not that many uranium stocks out there because uranium goes through these crazy, short bull markets and then these long bear markets where most of the uranium stocks disappear. And so then the few that survive get all the attention when attention returns. Frank, you did not mention nuclear in your talk. Obviously, there's lots of evergreen topics that you didn't cover in a mere 10 minutes. What are your thoughts on nuclear in the context of this conversation?

47:25 Well, I know that Bill Gates spent a lot of money coming up with modular units. And I have another friend that I'll be meeting at Harvard that has been building these modular units. The technology is much more greatly advanced but what has happened is that Putin and his KGB and his Gazprom have been so brilliant at polluting the minds of media in Europe and then it comes over here about how bad fracking is so that made everyone in Europe have to rely on Russia for gas And then it was to be anti-American was all anti-nuclear. So in that panic, Germany shuts down and Spain shuts down their nuclear reactors.

48:13 So you're seeing that I think that we're going to go through a period where nuclear is better. I think there's going to be a bigger push for these modular units. And I think that nuclear energy is going to go up dramatically. And what's interesting, yesterday I was talking to an executive of one of the large utility companies, and They had not gotten around the idea that you put a Bitcoin mining facility beside this cheap electricity and you use it when there's a surplus. 30% of all electricity produced is wasted. It doesn't go anywhere. So there's not enough battery storage to capture and to reuse it and sitting along long transmission lines is you lose it again? So the concept of having modular nuclear reactors coming up across the nation.

48:59 I think that that's going to grow We do know like the movie with Matt Damon talking as a documentary how bad fracking was, was funded by Gazprom. If you read the end of the movie, you'll see that the Russians have been so clever in funding NGOs that turn around and then scream, oh, it's all bad, it's all bad. And then policymakers make really bad decisions. So one of the concerns of how to climate change policies is that a lot of them are emotional. They're not about engineers. They're not really strong core. So I think there's gonna be great opportunity because money is going to go in this direction and first mover advantage is studying it. And Peter, I enjoyed your presentation so much that I'm going to have my whole investment team watch it tomorrow because I thought it was a very insightful way and timely for them to look at it.

49:51 Fantastic. Thank you, Frank. I love that you mentioned the small modular reactors. I think that ties into a lot of what we talked about at the beginning, Frank, which is the overall, like sort of the pervasive nature of this or how you have to be very You have to think about all the different applications that stem from this green transition. So sure people Sentimentally are often opposed to nuclear but they're also opposed to driving power lines across nature to get to far flung communities. And they even like even less the fact that those small communities are instead running diesel generators and that's the only way that they can get power. And so, you have to decide what you're gonna choose and you have to make a decision that balances the odds, right? And that kind of relates to what I was going to ask about copper.

50:41 Both of you mentioned copper, so feel free to, either of you can jump in on this, But we're facing this massive copper shortfall. There needs to be more copper. But one of the biggest impediments to copper production has been permitting. Permitting timelines are now especially in the developed world. In 15 years does it take to permit sort of a large scale copper mine. What do you 2 think about that? When we talk about sort of society needing to accept small and modular reactors because the alternative is worse, do you think that there will be some sort of government shift in approach to permitting? Do you think that's necessary for part of this copper derailing the green transition problem? Frank, maybe I'll let you go first. You know, there's very few great mining promoters that have the intellectual capacity and capability that a Ross Beattie has, a Robert Friedland.

51:37 What Robert Friedland was able to do in China and bring in the Congo and bring in the Chinese to develop a high-grade copper deposit. But immediately once they got control of that, he's just a shareholder. He's no longer building that. And so where is he shifting to? He's going to Saudi Arabia. Ross Beattie, that was very early in the thought leader of tying up big copper deposits in North America and creating a phenomenal billion dollar asset. So I think that you're going to see, because I was very fortunate, I went to the opening, I saw Canada play in Qatar and there was so much fud out there about how bad it was, etc. I thought it was interesting. One of the gentlemen I was with was a sultan that developed all the real estate. And he went to school in Oregon. They all went to American schools and they went to Canadian schools and British schools. So they're all going back with big wallets from all this natural gas they have and they're recycling those petrodollars into development.

52:40 And so it's interesting to see that that the Ross Beaties and the Robert Freelands are in this part of the world, tapping into the capital markets over there because they wanna build for the new generation. So I think there's some really interesting developments where in previous cycles, we didn't get that reinvestment in the Middle East that you have today. And so it's also a pushback against China. I was happy to see that in the politics it would have been much easier for Putin to take over Kazakhstan. Then he would have taken over all the nuclear, the real big nuclear supply. And that would have been very easy for him to march over a small population and take control of it. Ukraine is the food basket. It also has huge natural gas.

53:30 And if you take a look at a lot of the best technology, people are coming from the Ukraine. So his his movement is interesting for me. So I think that if he did get control of Ukraine, then he then would go for Kazakhstan. Then what would happen to nuclear prices? So I think you have to turn around and realize that characters like him are 3 steps, 3 steps ahead as a chess player playing geopolitics. And he's the richest guy in the world because he's alleged that he gets a dollar for every barrel of oil they export. It shows up in Switzerland somewhere. And so now you think about it, he knows commodities. He knows very steep in commodities. And he sees a technological boom in America. And so he's trying to play on that game. So I think that we're very fortunate that he didn't go to Kazakhstan, but I think nuclear prices trade much higher, uranium prices trade much higher.

54:27 And I think that we're going to see a real shift within $1.2 trillion. You know what that really is? That's like between 7 and $10 trillion because there's a multiplying effect. The multiplying effect, we know it's always the biggest in housing. The multiplying effect for $1 going into housing was always $12 to $14 because it employs so many people from title companies from mortgage companies. Everyone's got their hand in that that $1 recycling. When you have a big industrial infrastructure spend, it's 6 to 8 times. So, and it's over the next 8 years. So I think that for your listeners is to be saying what's going to move next. There will be opportunities 12 months out, and there's going to be great long-term opportunities in this supercycle of green.

55:21 Yeah, Peter, if you want to add on to that, it makes me think, my question about sort of will governments need to change their approach to copper mines, it almost, there's almost a, there's a choice there. Do you want, as a government, to dive into that multiplier effect that Frank was just talking about? And if you're in the developed world, to use that term, you're going to have to push against the sentiment that doesn't want the copper mine, but apparently does want the jobs. As an investor, does that mean that you broaden your horizons and look at whether it's Saudi Arabia, whether it's various African countries where permitting timelines are shorter or easier? What are your thoughts on that sort of thing? So, yeah, I think that you're right. We will have to broaden our horizons and start looking at some of these places that, you know, have maybe not seemed so friendly in the past.

56:13 I've heard Rick Rule say that, you know, he's made a lot more money with good people in bad places than with bad people in good places. So that kind of sums it up. But if we go back to, I'm actually kind of hopeful even for Western countries or Western governments, because if you look at the example I gave in 2011 after Fukushima, you know, governments caved to, I feel, caved to the sentiment, the negative sentiment around nuclear and uranium. And yet, if you look in the last, and obviously, hindsight, that was a big mistake with what just happened in Europe this past year. But if you look at what has also happened in the past year, is that you've got a bunch of Western governments who've really started to embrace, in the States, for example, Frank, you probably know this better than I do, but they're certainly starting to open up to and want to fast track things like mining for critical metals, realizing the implications of the green transition and how they have to secure the supply of some of these things if we're going to make this transition happen. The fact that we're de-globalizing right now has a lot to do with it as well. And so, you know, I guess bottom line is I'm actually hopeful. You know, we in at least that aspect, it seems like we're seeing, in my view, at least the right decisions

57:43 actually come from from Western governments, one of perhaps the few things that they seem to be doing right now. And I like to compliment that because what we're seeing in the UK is that people, a lot of people don't realize that during World War II, the British were producing 150,000 barrels a day of oil. One reason why Hitler wanted to get control of the UK was to get the oil. The same thing going into Romania was to get the oil. He didn't believe in gold, he was a socialist, but he would turn around and go and get the gold of the countries because they wouldn't take Deutschmark. In these other countries, they take the gold. The Japanese did the same thing in China to get the gold to be transferred to be able to get commodity assets. So what did the UK come up with? Fracking, because they have all these coal seams that shut down. They don't have to mine coal, but they can turn around and use American ingenuity and technology and all of a sudden start producing gas in a domestic country. Off the Netherlands, there's a huge gas discovery, epic in size, but the previous government didn't share with the people. They didn't hover with their costs, et cetera.

58:50 They've got to change their mindset, but clearly something's happened in the UK that's opened that. And I think the other big part of being proud, being a Canadian was going through Africa and I always find Canadians in the bush that were geologists and Canadian engineers were building operations. In the Congo, as an investment we made, we were 15% of all the cobalt back in 2004. And who's running it? A French Canadian. Why? Because the Congolese are French and he knew how to operate mines So you're gonna see that the Canadians have this uniqueness in all these countries that are respected They can come in with their ingenuity, their high standards of care. I've seen that with the silver mines in Mexico.

59:37 They build their own little health medical hospitals. They build their own school systems. They help the local community. Even in Mexico, they got worried. They wanted to put an extra tax on it so they can keep the local politicians involved because the Canadian model will come in with Sustainability was just all-encompassing and still be profitable So I think Canadians are well positioned and there's a something interesting is common law If you look at Dubai, it is 1 square mile and that one square mile is all based on common law and that is now owned predominantly by Brookfield, Canadian company who bought that in 2009 and it's beautiful and what's interesting is that you buy a apartment, a condo, everything is conducted under a common law and and if there's a dispute, it'll go across the highway Sharila and they'll accept it. So, that that evolution you're seeing is is so key and you're seeing that Canadian companies are all common law and and the royalty companies notice that that they wouldn't go directly into Russia. They'd have another Canadian company what they would do something with would go on because the rule of law under common law is much more innovative and creative.

1:00:53 Chapter 11 in America is much faster than it was a civil law country. And even when you think about the Chinese, when they started with Deng Xiaoping, creating 6, 7 tax-free zones, Shanghai was under common law, that the stock exchange, the commodity exchange is under that rule of law. Well, Canadians are the best at this. So I think that Canada has so much to offer globally for our ingenuity and our ability to have best practices for sustainability and non-polluting. We could certainly talk for a long time. I'm going to ask one more question and I think I'll just pose it to Frank. It sort of wraps this up. There's quite a few questions that have come in about very specific opportunities or challenges in this green transition, like direct lithium extraction or power grid and EV charging capacity in America, sort of specific challenges to some of these things that we're describing as opportunities.

1:01:51 We talked at the beginning about paradigm shifts and the unstoppable nature. And yet there's these challenges that crop up that make it seem like that paradigm shift might be tenuous. What do you say to that, Frank? You're a technology guy. What is your approach to how technology responds in situations like this? Do you have confidence that direct lithium extraction or EV charging will rise to the challenge? I think that it's a big super cycle and the early adoption has bigger volatility and as it goes through the process, it will cleanse itself. The volatility will change and institutional money will come in. I think you're going to see a lot of institutional money come in because the regulatory world, the SEC, all this ESG requirements, etc. All that stuff is going to make it much easier for institutions, even though so far, the idea of ESG would attract all this money and funds that has it, and they're not good performers, because you do have to go for the cash flow return and invested capital model. Yeah. And you layer on what is their ESG strategy?

1:02:54 And I think that in the US it's happening and it's just going to be waves. And for people to understand, there's the 4 year presidential election cycle. There's a 10 year big technology capital cycle. And then you have these shorter two-year cycles that happen when you have commodities and technology overlapping. There are much faster and up and down cycles. So that's what makes it exciting and that's why they're going to need writers like yourself and educating people of where things are and where you are on that super cycle. And I mean, certainly, thanks for saying that. Certainly, that's why I started writing newsletters in the beginning, and I know that's why Peter did as well, because I think a lot of people can see opportunity in, name the arena, biotech, metals, the green transition, but to be an expert in it and to understand all the different cycles and how they overlap and what's happening now and where the opportunity is in this moment is basically a full-time job. So that's the thing that Peter and I are trying to offer is that we'll take on that job and obviously lean on others who are very knowledgeable like yourself to try and identify the right opportunities at the right times and help people understand them to the extent that you can when it's not your full-time job.

1:04:10 So Frank and Peter, thank you so much for joining me here today. I think this was a really useful, interesting conversation. To the audience, thank you very much for being along for the ride. We hope you found it interesting and informative. If you have any questions for any of us, please either contact 6 or you can find any of us and I'm sure we would be happy to answer any other questions. But for now, we'll say goodbye And I'm sure we will do this again sometime soon. Thanks, Frank. Thanks, Peter. Thank you. Thank you. All right, everyone. Bye-bye. Bye. Bye. Bye. Bye.