The Politics of Gold

0:08 As folks are trickling in, I just wanted to wish everybody a good morning, good afternoon, good evening, depending on where in the world you're signing in from. Looks like everywhere from Alaska to Singapore to Perth. So the sun never sets on this panel, which is always good to see. Today we'll be discussing Gold's Big Jump and its intersection with the world's dirtiest word, politics. So everybody's ready to get canceled today. I'm just kidding. The event is being recorded and the replay will be available late this afternoon. I got some questions for the whole panel followed by some specific questions for each speaker. But this is also an interactive event. So please do pose any questions you'd like for the crowd in the chat button on the bottom right of your screen. I'll try to get to questions as soon as we're done with the original panel questions. Now we do wanna keep today's event on topic. So you have specific questions about the securities or events represented here today. I'll forward them on to the relevant teams so they can answer after the show.

0:59 And That's enough blabbing out of me. I do want to give everyone here the opportunity to introduce themselves before we get started. So I'll shoot it to you guys, introduce yourselves, the organizations you represent, starting with Diane, then Rick, then Brian. Good morning, everyone. Thank you for joining us. I'm Diane Garrett, President and CEO of Highcroft Mining, where we're developing our world-class scale asset in Nevada, USA. I'm Rick VanUyenuiza, President and CEO of Contango Ore, up here in Alaska, where we are developing the Manchur Project in partnership with Kinross. And we are pretty close to production here. Hopefully By July will be pouring gold. So I look forward to the conference. Thanks

1:42 Hello everyone, I'm Brian London I am the editor and publisher of Gold Newsletter, the longest running precious metals advisory in the world, and the producer of the New Orleans Investment Conference, which is the oldest investment conference in the world.

2:01 Awesome, Thank you very much. So let's get right into it. So a few months ago, a couple of us discussed our targets for gold prices and we've already hit some of the more conservative projections for the year, going right past 2100 and past 2150 more recently. Now, that being said, it's only the end of Q1, and it's potentially a volatile year. 1 factor that keeps coming up again and again when people discuss it is when the Fed will drop interest rates. So what I'd love is I'm going to put everybody right to it right away and see if we can give you a prediction for when those rates will change and how many times this year. We'll get started with Brad.

2:35 Yeah, thanks, Romeo. You know, if you look at the history of the predictions for when the Fed will pivot in December, we got to an all time high in the gold price, really nice rally while everybody wasn't paying attention. And that's because the market started to price in, thanks to the Fed rhetoric, a

2:57 Fed pivot as early as the March meeting, which was obviously just last week and that didn't happen. And what we saw was the price bounce around. We saw expectations shift as economic data came in much more positive than people had expected. And the Fed rhetoric kind of shifted. So what happened at that point was the markets were in a bit of a turmoil, gold specifically, as they started to argue about whether there was going to be 3 or 6 rate cuts this year and when they would begin. One of the points that I made at the time was let's focus on the important things. The Fed is going to pivot this year. We know they are.

3:44 And when they do that, they're going to shift from perhaps the most harsh rate hiking environment ever seen to a rate cutting environment. So these tremendous headwinds are going to be shifting to tailwinds for gold. Now gold gained from trough to peak about $400 during this very harsh, very severe rate hiking environment. So what's going to happen when they pivot?

4:11 It should do much, much better than even that. And I think one of the things we're seeing is that the market is pricing in that pivot and the inevitability of it. I think the market and the Fed have kind of converged on 3 rate hikes this year. I think It's very likely to start in June.

4:32 About a week or so ago, I was thinking it would probably be July. But we saw Powell kind of dubbish in his comments last week. I think it's probably going to be June. The market, the Fed Fund's futures, are pricing in about a 60% chance of that happening in June, almost assuredly by July. But the issue is, if they wait till July, they start getting very close to the election. And then everything seems to get a little more politicized and their impartiality starts to be questioned a bit. So I think June's the month, frankly.

5:11 I would agree with that. I think those are really good comments. And I think we're starting to see the expectation in the market because you have investment funds that are starting to dip more and more into the equities in anticipation of these rates coming down. So they know that's where they're going to need to pivot their dollars, whereas before when you can get 4% to 5% free money, essentially, they're going to be in the treasuries. And then I think you touched on it a bit there, Brian, but the fact that incumbent presidents tend to want to provide this illusion of a very healthy, you know, prosperous economy, and so they tend to want to support loosening of policy, but you're spot on, you wait too late, and then the motive is a good question. So

6:02 I would agree with everything you said. I don't really have a lot to add to what Brian has said. I think he's very accurately commented on Powell's comments and to what we've heard. I do wonder, you know, if it is an election year, there's some extraordinary events taking place over the weekend in Russia, or I guess it was early last week in Russia. You know, those large scale geopolitical things do affect decisions. And I do wonder how political the Fed wants to appear. So part of me wonders if they'll do any move this year. We have also started to see slight increases in inflationary rates and core inflation, things like that. So

6:59 part of me wonders if they'll do anything right now and just kind of go the distance with the rates that we have to be, to appear. But things are stable. That's not necessarily a bad thing. But to either to go aggressively reducing rates, I think might be, seem to be being political where they, I think the federal wants to do that. There's always the, at least the appearance that they'd want to be non-political. I do want to crank up the controversy just a little with the next question. So I'll say, unlike us vibrant youths in the room, there are 2 geriatric fellows in D.C. And Florida, respectively, who could arguably have a significant impact on gold. So with an election looming in November, curious, and this is specific to the presidential

7:51 electoral result, what result would have a bigger impact on gold and in what direction? I'll start with you, Rick. I think both candidates are going to spend more money, more government money, more printing. They'll spend it on different things, different priorities. But

8:14 I think Either 1 that gets in is going to continue to, we're on pace for what, $3 trillion of additional debt. Was it every 100 days or so, another trillion. So I don't see that, you know, Trump's certainly not shy of debt. He's built his empire on it. So I don't see that as being any different. Like you say, they may spend it on different things, but I think it would be more of the same.

8:48 Yeah, I would agree with that. I mean, I think, look, we've seen gold rally before and after elections that are won by both parties. If you look back in history, that's pretty much true of what we see over and over. And I also think that a lot of the movement in gold somehow gets baked in before the election, so then after the election you see some kind of an immediate reaction based on the outcome and then anticipated future expectations. And anticipated future expectations. So I do think that

9:26 the performance of gold following the election, In my view, I think it will have an impact, but because of the enormity of the chaos and the geopolitical tensions going on around the world, I think the fundamentals for gold will still remain strong. When you see the central banks that are buying gold and they're unwilling to let go of that gold and sell it as the gold price is moving up. Tells you that there's a bigger undercurrent here. So I think regardless of which party wins the election, I think gold's set to have a very strong performing effect. And that's why we're wrong. No, I'm kidding. I agree with both of you on that.

10:12 You know, you can look at it on one hand that the Democrats perhaps are more eager to spend than the Republicans. I don't know that the record really backs it up to any large degree.

10:26 And as Rick said, Trump is an easy money guy and he likes low interest rates. I don't think we're going to keep power in office, you know, once Trump gets in. So either way, I don't know that there's a big difference between the 2. I think it's the big issue is the macro environment is so bullish for gold right now. Now, if either party actually had an inclination to solve the debt and deficit spending issue, that's at the core of everything right now, then maybe we could have some hope for but

11:02 2 things. I don't think either party is really inclined to do that. I think the record holds that up. And the other thing is it's beyond repair at this point. I mean, it's too far gone. The debt is so large that we have to have interest rates that are below the rate of inflation. In other words, we have to have negative real rates going forward or the size of that debt just absolutely crushes the federal budget. The federal budget, we're already spending

11:32 a trillion dollars a year just on interest costs on the federal debt. And that's before the debt load, the treasuries have reset at higher rates fully. I mean, they've only partially reset at higher rates. When they do, we're going to be pushing $2 trillion in debt service costs every year. So the situation is too far gone for either party to really have an impact. And again, I don't think they're really inclined to do it. So I think the macro factors are going to overwhelm whatever the election outcomes would be and whatever implications those would have. Yeah, that's fair. And moving beyond just the presidential race, Whether we'd like it to or not, Congress is very impactful on domestic politics.

12:21 The current iteration of Congress amusingly polls worse than head lice among Americans, which I always find funny. I'm curious what you guys think a Republican sweep of both houses would mean for the price of gold, if anything. So outside of the presidential, do you think congressional change would have any impact on the price of gold? Diana, I can start with you. You know, it's hard to say. I mean, certainly when you troll both houses, then there's definitely a, you know, a recipe there for being able to get more things done, whatever your particular policies are that you're pursuing. I think for gold, I mean, look, the Democratic Party tends to be, you know, big government, big regulation. And the Republican Party is more, you

13:10 know, less regulation. We saw when Trump was in, he changed a lot of the regulations around the United States,

13:20 and other industries. So you could make an argument on either side of what would it mean. What I wonder is, one of the things that's been really a big topic that we've all lived in for the last couple of years is the trade union debate. So I'm not so sure how those parties have a strong impact on gold. I think gold's got to kind of behave on its own because all the fundamentals are very strong in the perspective of the party. But I do think we need to reach out and talk about other commodities, not that that's the topic of this forum. But you may see from the Democratic Party pushing more and more to the EVs and less fossil fuels, where I think the Republicans are sort of taking a more transitioned approach to it. So there could be some added momentum to the commodities in that space, but gold, I think, is going to follow its trajectory based on these kind of, you know, purely wider concept beyond our domestic pointers.

14:25 Yeah, I would add, I think Diane makes a good point that the Democrats are much more inclined to push for some version of the Green New Deal and critical minerals being

14:39 developed. Or the need for, in other words, they're pushing for the policies that would require greater production of critical minerals, including copper, but they are largely inhibiting the actual domestic production of those minerals through regulation.

15:02 Republicans are really 180 degrees opposite. They're going to try and push for less regulation and easier and production, less government interference in permitting and production of metals and minerals, but they aren't going to push the demand side of that through legislation pushing for more EVs, etc. And in fact, Trump has come out steadfastly against that. So it's going to be a mixed bag. I think again, the end result, it will be the same. What we're looking at is decades of very similar policies toward ever easier money, ever greater debt creation.

15:48 And where we are now, I think the implications and repercussions of that multi-decadal trend are gonna overwhelm everything else. Yeah, I would agree. I think,

16:04 as we've talked about before, I think, you know, politically, the 2 parties will spend money on different things. And if you've got a sweep in the House and Senate and a Republican president, there'll be a lot of things that will change. And that'll all cost money. And they'll print it. I think, as Brian points out, the most encouraging thing I could see is we'd actually get some mines permitted under a, I think we'd get permitting reform if you had a Republican-controlled House and Senate and a president that could sign legislation that would mandate that we actually do have a domestic

16:52 sourcing policy and to actually mine things here and develop things here. I've always found it funny that or odd that

17:05 we talk about the critical metals and we have a policy, but we don't, we haven't mined any more. We haven't approved any more mines to that end. And yet we're spending a hundred billion dollars in Southern Africa to build infrastructure there so that we Get the metal out of the Congo and maybe a doubt to an eastern port which I sort of understand the geopolitical ramifications of why you want to a Western exit to all that copper there. But where you don't, having copper ore on the Western coast of Africa, where's it get smelted? That's the important thing. We only have 2 smelters in this country. So until we, you know, if we really truly want to be metal independent, we actually have to produce metal, which means smelters, which means you've got to invest in that and you have to have regulations that allow air quality and water quality regulations that are permissible to have an integrated

18:05 mining system. We don't have that. We don't even know. We're still whenever I've gone to D.C. And talked to people about that, they just they don't get it. They don't understand that it's having more copper concentrate on the West Coast of Africa doesn't help anybody. Yeah, fair enough. I want to jump one question from the chat, actually, a rather censorious question from Biobillionaire Will. He starts all banks seem to be insolvent. So he's curious if bank failures can set off a major gold squeeze. Brian, I'll start with you on that one.

18:38 Yeah, you know, absolutely. Because what happened during the last kind of near bank run in the US last year. If you looked at it, watched it very closely, and I did at the time, you had Fed Chair Powell and Treasury Secretary Yellen,

19:00 who obviously didn't compare notes. They had fear, almost panic in their eyes when they were asked about this. And 1 would kind of ratchet it up and say, of course, we're not gonna let, you know, people be subject to bank failures and we're gonna back the banks. And the other one said, well, we're not there yet. And then they got there yet. And so they were they were getting to the point where they were going to say, yeah, everybody's covered.

19:29 And which would be great. That could seemingly halt a panic. But the size and the scope of that kind of a bailout of every bank past the $250,000 limit, that's massive monetary creation. You know, when I had, And there's more and more beyond that because you've gone and taken the few half dozen or so too big to fail financial institutions, which includes investment banks, etc. And now you've expanded it to every bank in America is too big to fail.

20:04 I remember a few years back when I had Alan Greenspan speak at my conference, I was asking him about all these big monetary issues, primarily the federal debt. And he told me that what really scared him the most was the fact that post the 2008 great financial crisis, every too big to fail bank then had its derivative exposure backed by the US government, backed by Uncle Sam. And even those institutions didn't know what their derivative exposure was. But generally, it was generally known that it didn't begin with a T began with a Q. So it was massive. And just sitting out there. And once those first dominoes start to tumble in any kind of a financial crisis, which would be another bank run in the US.

21:00 The potential exposure is is just, you know, mind boggling and it's all going to be backed by the Treasury and the Federal Reserve. That means just everything that we've seen before will just go into hyperdrive as far as monetary creation and expansion of the monetary base. So, yeah, it will eventually it will affect gold will be bullish for gold. The thing you don't

21:30 want necessarily to see and probably will see will be somewhat of a some kind of a liquidity vacuum in the markets like we saw in 2008 and like we saw in the first day or so of covid. But then everything bounces right back because they know what the Fed's reaction will be. And that will be more and more monetary accommodation into a greater degree than whatever they did in the previous crisis. I appreciate that. I'll throw it to Diane next. Diane, if you could speak a little closer to the mic. I think a couple people are having a little trouble. Oh, sure. Sorry. Is that better? Sounds great. Thanks. Okay. Yeah, you know, you make a good point.

22:16 You're going to ask me a question or … Oh, sorry. It's the same question from the chat, which is, Do you think bank failures are likely to set off a gold squeeze? Yeah,

22:24 absolutely. I mean, you know, we talked about Brian was just talking about, you know, if if the government backs, you know, all these banks that are quote-unquote too big to fail, which is all of them, but back it with what? I mean, more debt, more money that's being issued, and all of that plays right into, you know, gold. I mean, after the 2008 financial crisis, you know, we saw that gold didn't rally at the short term. You know, It took a while because there's a subtle that there's a short factor. Money moves to the sidelines to assess it all. Is it medium-term?

22:57 Is it going to continue on and how deep and wide are the impacts and the effects going to be? And then you saw gold really rally. So late 2008 through 9 and 10 were great years, which we all expect to come back to the 80s again very soon. The physical metal is doing great. But yes, any kind of a banking crisis, anything like that is certainly just in shockwaves because we keep thinking every time it happens that all of the guardrails are put into place and it can't happen again and yet we see it happen again and again. I don't think it's unrealistic to assume that we'd all see something of that nature. And I'm very concerned about that. Absolutely. Yeah, I don't think I have a lot to add. I mean, if the solution to bad debt is printing more money, then that just seems to be a very self-fulfilling prophecy. And it's great for gold and probably good for crypto as well.

24:01 Speaking of other impacts that could have on the gold price, I want to avoid sounding ghoulish at all while posing this question, but with the war in Europe and the Middle East and the geopolitical environment feeling increasingly unstable, it's both on, I think, vibes, but also the reality on the ground. Curious what you guys think are other events, Black Swan events, et cetera, that would have the most significant impact on precious metals prices that perhaps haven't already happened or are in the midst of happening. I'll start with you. Yeah, go for it. I'll just jump in with what just happened in Moscow last week. I mean, I'm sure there'll be many, many conspiracy theories as to who done it and what, who is responsible. And, you know, Russia's view versus the US and British view and the Ukrainian view. I mean, kind of bottom line, I don't think Russia gives a damn and they're going to, in part, blame Ukraine and then they're going to level the place.

25:11 And I think that's going to play out and it's already playing out and will have widespread consequences expanding that war, unfortunately. And if NATO is going to send troops in, that just gets that much worse. And if we send troops in, I mean, you've got a huge escalation there. And the potential for that is all real. It's not, you know, when 150 people die and many more are wounded, that, you know, you see, you know, you remember what we had, what the United States did as a result of 9-11. This isn't quite a 9-11 event, but to Russia and to have the exit route go to Ukraine is not a good thing.

26:04 So I think one of those black swan events just happened. And I think we're gonna feel the consequences of that. And unfortunately, those are always usually good for gold price. Right. I agree with what Rick said. I think it's the culmination of all of these different events that are currently, you know, happening and the new events like we just saw, which creates this amplified effect of uncertainty in the market. Look, in addition to everything else going on geopolitically, and those are those black swan events, and I think if we've learned anything over the last couple of years is that this has become sadly and unfortunately more the norm, and I think we'll see more of these brush fire events occur.

26:50 But in addition to that, you've got the dollar weakness. You know, the central banks don't want to own the US dollar anymore. You've got huge debt here at home, you know, tremendous spending, inflation, international political tensions. I mean, all of these are setting up very, very well for gold. It's sort of sad because when gold does extremely well, it's usually because people go to it as a safe haven because it is a currency. And, you know. So it's that others in the world and around the world, or even domestically here are not doing well, but it's what gold's role is. And I think all of those things set it up very well for having a very significant impact on the precious metals prices. I hope you can hear me okay now.

27:37 I'll work on my budget. I know we had that issue last time too. It's improved, it's improved. I'll throw it to Brian. Yeah, I think that there are a host of geopolitical potential that geopolitical issues out there as we've seen, but I've never been a big proponent of geopolitical issues, either being a reason for anyone to invest in gold, or, or ever being any kind of consistent a longstanding influence in the price of gold. Usually if you try to bet on that you end up holding the bag because the sharpie traders have bought before you can and they sold before you could based on that kind of a thing. And there's really no rationale for buying gold in the face of a geopolitical issue.

28:23 It's all monetary. I think that's what really drives gold over the long term. That said, there are a There's a list of potential dominoes that could fall as long as your arm right now, perhaps as long of a list as we've ever seen from a lot of them, emanating from the size of the debt, the Federal Reserve having to again finance the debt. We have commercial real estate loans in the US, just under a trillion dollars of that is coming due this year and will reset at higher rates. That's inevitable. That's simple math. That's going to happen. We have, you know, potential surge in inflation, we have all kinds of things that could upset the US economy or recession at any point.

29:12 And all of these things, any one of these things would start off a chain reaction that would lead the Federal Reserve to not only pivot, but they would have to take emergency measures that would be much greater than what they've done before. We saw in COVID, They did everything that they did after the great financial crisis, you know, and after great financial crisis, it took them 4 to 5 years to get to double the size of the balance sheet, maintain interest rates at 0, quantitative easing, etc, etc. Quantitative easing, etc, etc. Well, they did all of that post COVID in 4 to 5 days into a much greater degree. So what's happened is the markets and the economy have become addicted to ever easier money.

30:01 And because of this growing tolerance, there's much more needed to be done. You need a greater dose of monetary adrenaline to get the same effect. So anything could tip us over into that kind of a crisis. There are a number of potential catalysts out there. And when it does, you're going to see something that's going to be truly shocking coming from the Federal Reserve and the US Treasury, not just monetary policy, but fiscal measures. And again, that exacerbates the trends that are already in place. So, yeah, nobody knows what the future holds. But the one thing we can be confident in is that you're going to want to own gold, have a significant position in that going forward. Makes sense.

30:47 1 group that certainly agrees with you is central banks across the world. Their gold buying has maintained a very high level of consistency across the last more than a year. That's not just the usual suspects of Russia and China, though they do make up a significant portion of it, but across Central Asia and Latin America as well. Curious if you guys think those are likely to change this year and your thoughts generally on the different levels of Central Bank Bank. Brian, I know you've written about this recently on Twitter, so I'll throw it to you. Yeah, it's an amazing thing. You know, we the most you look at the rally that we've had, we've had really a March medals madness in gold virtually from the first day. Well, literally from the first day of March, we've seen a rally that's just been absolutely stunning.

31:36 And the most interesting thing about this is nobody knows why. You know, there's not been 1 precipitating factor that we can point to. Is it, you know, the market pricing in the Fed pivot? Well, you wouldn't know that from Fed rhetoric. It's been, if anything, the opposite. So what's been happening? What we've seen as the data has come out is that central banks bought gold in 2023 at almost the same record level that they did in 2022. And we've seen that this buying has been largely price insensitive. So it really points to central banks during the buying. Because if you look at the holdings in the largest ETF gold ETF GLD, they've fallen off the board even as the gold price was rising. So Western investors haven't been buying Asian investors are usually price sensitive.

32:32 They usually don't buy on a uptrend. So it really has been that pointing towards central bank buying as being this price insensitive huge bid underneath the gold market. Just over the past couple of days. One of the best researchers out there for global gold flows. I think the best is beyond you and heist. Actually Rick and probably correct me on the pronouncing of his name. Virtually the same of just the van not in front of it. But Jan is really a great gold analyst. And he came out with a really explosive report. He's tracked the vast majority of the gold buying to China and it's not just People Bank of China, the central bank buying it.

33:27 Now that's stunning enough. He says that they bought 735 tons of gold, most of it surreptitiously in 2023 and a large degree of it in 2022 and not only that but they imported and this is domestic demand 1411 tons. So you have over 2100 tons of gold, which is two-thirds of annual gold production being absorbed by China itself. Now, why are Chinese citizens buying it? Because they can't get money out of China. They have their list of options to diversify their holding is limited to the local real estate market, the local stock market, and gold.

34:16 Real estate and stocks are in the dumpster in China. So they plowed everything into gold even as the price has risen. And as far as central bank demand, you can trace the surge in central bank buying back to the capital controls and the sanctions from the US following Russia's invasion of Ukraine. So, you know, that has not hastened, in my view, that weaponization of the dollar. I don't think that is hastened the demise of the dollar as a global reserve currency, but what it has done is really spawned a surge of central bank buying into gold. And these central banks just do it on a program that basis. They don't really care what the price is. They're just buying and buying and buying. And this is frustrating the hell out of the shorts on the comics and everything else and trying to drive the price down because the bids just keep coming in. And so that it's really it is unique. I have never seen this combination of a central bank and Asian buying on a price rise.

35:28 And now we're starting to see Western investors come into the market is GLD holdings have just started to increase. So you get all 3 of those sources buying gold. It has the potential to truly be explosive. And I think we've entered a new era for the metal right now as all 3 of those big sources of demand are coming to the floor right at the same time. Was that enough of an answer for you? I love it. I love it. I'll throw it to you, Diane, Just to follow on with any additional thoughts. You know, there's not much I can add to that. I agree with everything my esteemed colleague said and it really is quite staggering, but I don't see any slowdown in central bank buying either. So can't add too much to that conversation.

36:20 I would only add that, you know, Brian touched on it, the sort of weaponization of the dollar. I think that just, and Now you've got, not only did we seize the Russian assets, now we're having congressmen say, oh, we should cash those in and use that money to restore Ukraine and rebuild Ukraine and send more weapons to the Ukraine. I mean, it just takes it to another level. I mean, that's outright theft. I don't know if that's really the sort of thing that US government should be doing. But the fact that we're talking about it probably just scares the hell out of just every other country that has U.S. Bonds and Treasuries. So, yeah, this isn't going in a good direction.

37:16 So, once you start walking down this path, it's kind of hard to turn back to. So yeah, this is, I mean, and the West is buying the treasuries and getting unhappy with the 5% interest rate, whereas everybody else is saying, yeah, I'm not so sure I think I'll buy that gold. I do have a kind of adjacent notes. I got a bit of crystal ball gazing. Curious when you guys think generalist investors will start talking about precious metals miners again. You'd think that the siren song of leverage to these rapidly rising prices would eventually attract them. So far, it hasn't really materialized. Diane, I'll start with you there on when you think they'll catch up.

38:05 Yeah, it's I was just thinking as we were having this last conversation on central bank buying that we spent a lot of time talking about all the fundamentals and what's going to be positive for gold, but really as an investor, you know, you think about owning the physical metal, but what does it mean to you and to Rick and myself running mining companies to get to attract the investor in? Like, What role do the equities play in this whole scenario? We understand that, you know, and believe that the conditions are right for, you know, an acceleration and a very bullish, you know, tailwind for the gold medal, but when will the equities policy, And I'll have to say it's been a complete disconnect than what we've seen in probably my career, which is as long as your career, Rick, in the business.

39:03 Okay, you're 20 years younger than me, but anyway. But, you know, we've never seen anything quite like this disconnect between the equities and the physical metal. And, You know, I do think that there's this, you know, there's other competing interests out there. There was Bitcoin and we thought that it lost its legitimacy and now it's roaring back in a big way. We have this frenzy around AI. There's all these competing, you know, venues for the investment of the dollar. But I have seen that some of my marketing recently, there's more conversation to have. There's more interest, understanding that things are at a deep discount now and then seeing that all the conditions are so right for a continued momentum and also the fact that gold has really outperformed in the beginning of this year. But a lot of people were speculating is that it might hit, you know, 2300 or thereabouts by the end of the year, but we're starting to see it earlier.

40:07 So I do think that we're gonna see a window where the generalists are gonna come in, which is when we take into really cool fire. But, you know, we've seen some very successful financings recently that were well subscribed to order by institutions and some generalists in North America as well as Europe. And so the timing, my crystal ball is very cloudy. It can't come soon enough for the equities to perform as well. But yeah, it will find its way here. It's not that we haven't seen this before, but it seems to be a bigger disparity than we have witnessed before, which hopefully just means that when they do come in, it will fuel fire a lot faster and stronger.

41:00 Awesome, Rick, I'll throw it to you, I think, next. Yeah. I think Diane makes a lot of good, all the right points. And I think a couple of things that are different, because we do see a big disparity between equity values. And it's not just with junior development exploration stage companies, it's with Newmont and Barrick themselves. And traditionally, the generalist investor watches what happens to Newmont and Barrick first. And the other thing that's, that I would say in parallels changed in the, this time around is that Newmont and Barrick and others are paying dividends And investors have gotten used to them paying dividends.

41:51 And once you pay dividends, that cuts into your capital growth and what you can afford to spend on capital to build new mines or acquire new projects. Another aspect of paying dividends that I think the major companies are dealing with is if I acquire something, like Ken Ross buying Great Bear, That's a whole group of investors that I've got to pay a dividend to on an asset that won't be producing for 5, 6 years. So that's a disincentive to go out and acquire things. So I think all this dynamic is starting to play out in the market, I think they'll get there because that's the only way the major companies grow.

42:37 And they're on a pretty hefty treadmill to replace ounces. So they cannot not grow, or not grow in terms of total ounces, but just grow in terms of acquisitions to to meet their their production Requirements. So I think as that plays out I think this whole thing just takes a little longer to play out than you know, we didn't used to because of those events But you know, it's coming Brian mentioned the ETFs were all selling Gold while the Asians and the rest of the world has been buying gold, central banks in particular. So when the ETFs actually start loading back up on gold, which I understand they're starting to do very tentatively.

43:26 Diane mentioned, you know, we do have the retail competition of Bitcoin and the cryptos. So that isn't going away. So we're, you know, it's a little different this time, but I think we'll see the same thing play out as gold continues to perform and companies start generating more cash flow. And I think it'll trickle down to the to the developers. And we're certainly seeing it. We have a lot of interest in a in a gold story that is going to going going from exploration code to a producing company. We've done quite well just being, seeing an increase in our value related to the increase in gold price?

44:19 Yeah, I would reiterate what Diane said. You know, we've had the, to some degree, we've had the misfortune, just bad luck of having this big surge in gold coincident with, you know, the Mag 7 and crypto soaring and anything with an AI focus at all, just rocketing higher. So there's been a lot of competition there. All of that said, we don't need to have all those people plow into gold and gold related investments. We just need a very small fraction of that because we just need to dip a ladle into that liquidity pool that's invested in that area. And it would be enough to really propel this relatively tiny mining metals and mining sector.

45:09 And in regard to the companies themselves, there's been a lot of discussion over rising ASICs, rising costs of all in costs of production for the big miners and where that number is and how it's been increasing for all these inflationary pressures. But most of the mid tier, virtually all of the mid tier and major miners were making good money over the last few months and whatever their margins were, they've added $150 to it over the last few weeks. So when we start getting those earnings hitting the in the quarterly, it's going to be hard for the markets to look at that and still not buy these major miners. And it's going to trickle down, I think, pretty quickly to the right down the food chain to the juniors.

46:01 Agreed. Yeah. And speaking of competition to mining securities, I did want to before I jump to our individual questions, 1 that come up the chat a number of times, I'm going to try and group them into one question. But really, it's how do we think the rise of digital currencies and alternative investment vehicles of that nature you think it's going to permanently impact the traditional role of gold and economic systems it's been around for 8 000 years but things could always change I want to throw it to you guys just to see what you think about crypto and its role compared to gold. I'll start with Diane. I knew you were going to start with me. It's so unfair. Good luck Diane. Yeah, thank you. I'm waiting. Eye contact. I'm on your team here.

46:48 Well, I am going to go out on a limb here and tell you that the whole crypto world is something that is an enigma to me. I have listened to many presentations. I've talked to a lot of people about crypto and, you know, maybe it's old school, but I want to, I want to be able to touch and feel my investments and my assets and where they sit and be able to go and look at it if I need to. So I don't know. Every, you know, when we had the FTX thing happen, I mean, we thought, okay, well, there goes crypto. Okay, now we understand we need to get back to the physical metal that, you know, this, the whole crypto thing is not the way to go. And then it's turned around and it's bigger than ever.

47:37 So it's certainly a sector that I don't really understand. I would say that, you know, I think it's been around too long to say it's a fad. I don't think it's going to go away. And then you've got the NFTs and all of that. And I think it's just an evolution of how the younger people are investing today. I think structurally and fundamentally, and we talked about it on a previous 6 webinar, is that we're just, the industry is changing. And that doesn't mean, you know, for better or for worse, it's just evolving as everything does. And so I do think there's always going to be an element of the investors that are focused on that. And some money will come out of the space. But I thought Brian made a great point, which is our industry is so small and it is so absolutely critical to your cell phone production and everything else that we need gold for is that, you know, Brian, you were saying that it takes so little investment to come into this sector to really propel it to enormous heights.

48:49 And I think we will see that because I still think there is an element of institutions who will invest in the equities. And I'm not saying to the exclusion of Bitcoin and cryptocurrencies. I think there's a role for them too. I think there's a big enough landscape here that everybody can participate, but I don't think it's going away. I don't think it will replace the physical metal or the gold equities, But I do think that, you know, we'll start to see some money coming back into the equity side. Throw it to who wants it next. Both look ready. I think Diane said a lot of the things I would say. I would just add that I mean, I think crypto is here to stay until the government decides it's not.

49:42 And some governments have already decided it's not. So I think that'd be the thing if I were if I owned a lot of crypto, that's what I'd be worried about and I don't I don't think that goes away anytime soon either that that worried that maybe this whole thing just, you know, legislatively disappears. So when you have physical gold, you get physical gold. And we've got the 5000 years of history behind us. So, yeah, Good point. Yeah. You know, I have a big problem with Bitcoin. And that problem is that I didn't buy it 10 years ago when people said, get me to buy it. Yeah. And so I have to get beyond that emotionally.

50:30 But trying to do that and hopefully succeeding in doing that. You know, back then it was pitched to me as this great way to opt out of the global financial system, which seemed great. Great way to have, you know, personal independence of your finances, which I really loved. And it was pitched at the time of being completely transparent and completely anonymous, which was I was a little curious about how that worked and that hit kind of a logical, you know, tripwire in my brain, which might be the reason why I never bought it. I think we've found, we've discovered that it is not anonymous. And that's the big advantage that gold retains over it.

51:17 You're not on a blockchain, which in some aspects is a real advantage. And why I don't think Bitcoin's going away, I don't think crypto in general is going away, I think it's going to evolve and nobody is really sure where it's going to evolve. Although some very smart people that I respect a lot have very firm convictions in where it's going. I personally don't think, I think we just don't know where it's going to end up. But gold will always have, even though there are moves afoot to put gold on the blockchain, which I think are great. I think gold will still largely be available in a completely anonymous fashion and in un-transparent.

52:06 And I think that's its big advantage over anything else, any other currency on the planet. That makes sense. I've got a couple of individual questions and then we'll jump into I think 1 or 2 more from the audience. And everybody remember those questions we don't get to. I'll make sure that the team's connected to that question and get back to you. First question's for Rick. Contango is going into production this year on one of its projects. Curious what you think a shrewd investor, I know a number of them are on the line, would do to make sure they have maximum leverage to gold prices. As we discussed, it's sort of a perfect storm of the year for gold prices. What would a shrewd investor do to take advantage of that? Well, buy Contango. I mean... That was a setup.

52:54 No, we're about to go into production. So I think we will make that sort of natural jump from being valued at a discount to our cash flows to being valued at our cash flows. And as the price of gold goes up, the cash flows go up. So and we have a Moncho will be in production in early in the second half, I think by July we'll be producing gold. Our second project, Lucky Shot, we have a similar plan to do the same thing, basically get to production quickly and by not building a mill in a tailings facility and just simply taking advantage of the ones that exist at Fort Knotch.

53:44 So I think that strategy is going to play out well in this, you know, increasing gold environment. We're on a relative basis. We're much higher value than our peer group of development stage companies who are in the Lassonde curve, valley of death or killing fields. I mean, that's, and they're gonna be there, not forever. I mean, the money will come back and investors will come back into that space. But I think that's gonna be an interesting opportunity for a company like Contango that we can use our relative value to take advantage of and look at other opportunities to continue to grow our exposure and leverage to gold.

54:31 Great. Some of these questions are asking toasters how they like their bread. So bear with me here. I got one question for you, Diane. I know IACROFT has recently made and is targeting additional significant silver discoveries. We mostly talked about gold so far today. So I'd love for you to give your perspective on why silver prices might follow gold prices this year and maybe why we could see silver break out even more profoundly than gold. Sure. Well, keep in mind that Highcroft still has over 10 million ounces of gold in the ground too. So yes, we've had a silver discovery, but we on a revenue basis, we're about 50, 50 gold and silver, which truly makes this a unique asset and having this much silver in the state of Nevada, tier 1 mining jurisdiction.

55:19 Our high grade silver discovery underground is truly a game-changer for Highcroft. It's you know it's no we've now understand what's controlling the high-grade mineralization and we as a result have identified this feeder system to this large resource. And we think we have multiple feeder systems as evidenced by our geophysics and we're applying first principles to pursue that. So we're really excited because high grade underground potential means less capital upfront, better economics, shareholders, better returns. So this is truly a game changer of seeing this. And this is something, was one of the reasons we came in to Highcroft is just thinking that there's gotta be more to this ocean of low-grade and what is sourcing that massive resource. So we're real excited with that discovery.

56:10 Look, silver will tend to follow gold. It does. It is a precious metal as well as gold. But silver also has some industrial applications. And one of the things that can help propel silver even beyond, you know, the parity that we see with gold is the fact that, you know, it is required in photovoltaic cells. With solar panels, it's got a industrial application. As we've talked about in the market, we have a lot of sulfur and high cost. And if we pursue a rose green technology, we'll generate a significant amount of sulfuric acid, which is required for the lithium industry. There's 5 lithium mines in Nevada. So in addition to our over 10 million ounces of gold in the precious metals space, we also play very nicely into the green metals and the metals for the new economy.

57:04 But, you know, we'll, as we see gold move, we're starting to see silver. Will it break out and have a run on its own separate and apart from Bill. I don't know, but certainly because of the feeling of the new metals and the green economy, it certainly has the ability to do that. Well, appreciate that. Brian, 1 for you. So obviously you run one of the preeminent investor conferences in the Americas. When I was there last year, I read all the historical placards to see, you know, all the politicians and speakers that have been. You're coming up this year, I believe on your 50th anniversary of the conference, if I'm not mistaken. What do you think is gonna have investors the most stoked when they show up in New Orleans and what will have them frowning in terms of what's what's going on in the world from here to November?

57:54 Yeah, I think they're going to be frowning over the whole geopolitical macro environment and what that portends. I think I think everybody at our event is smiling because they're finding all the opportunities to take advantage of that to protect themselves and to profit. We've just about seen everything. Now, obviously, As I say, that's the next crisis will surprise us and come out of left field. It'd be something we're not really anticipating much. That's always seems to be how it happens. But what we've proven, I think, over the literal decades at our event is that we bring together the experts who have considered these options, considered what's going to happen, and have really good ideas and insights in what you can do to protect yourself and to profit from them. Every crisis, monetary, financial, even geopolitical over the past 5 decades has been predicted at the New Orleans Conference.

58:57 And we're known for bringing in that caliber of speaker who can really help you figure out which way to go. One of the things that's really pleased me over the last few years is that there are a number of analysts out there and commentators who have, who are really coming out with great thoughts, great views on the macro picture. And I kind of liken it back to the early days of the hard money movement in the 70s and 80s, which we were also a part of where you had this underground form of communication through investment newsletters. Well, now we're seeing kind of the same thing. That's not the mainstream news, but a kind of counterculture, counter media through social media primarily.

59:51 And after the many years I've been in this business, I know who the best thinkers are out there and I've been getting them. And we don't, I don't think you can find a lineup of speakers that can surpass or rebring every year for New Orleans. And that's what I'm focusing on doing this year for our big gala 50th anniversary. I tell people that It's going to be a really a blockbuster year. I urge people to try and sign up as soon as they can. Look at the speaker roster from the past few years and what we're building for this year. And it's going to be the kind of an event that You're going to kick yourself if you miss it, but I don't think you can really afford to miss it in this kind of environment that we have coming forward. And a lot of it's going to come to a head, I think, by this fall, precisely when the conference is being held.

1:00:46 I appreciate that. Now, I know there were some questions we weren't able to get to. I promise I'll pass them on to the right people to get you an answer from the respective companies represented here. So don't worry, we'll get back to you as soon as possible. But overall, thank you everyone so much for a very spirited comment section and for joining us today. And Rick, Diane, Brian, thanks so much for agreeing to speak. I hope everybody had a great time. Thank you