Dave Lotan – Macro Trends For Investing In Natural Resource Companies
Dave Lotan, activist investor in small cap natural resource companies and Chairman of Aurion Resources (TAX.V:AU – OTCQX:AIRRF), joins us for a general discussion on investing in resource companies and the trends he is paying attention to. We review the mergers and acquisitions we’ve seen over the last few years, and the kinds of deals we’ve not seen, and what that may mean for junior mining developers. Next we discuss the impacts of inflation on development stage projects, and some of the recent big misses by producers with cost overruns. Dave also addresses jurisdictions he avoids and those he likes, in combination with the types and mining approaches being proposed. We wrap up with some thoughts around the commodities and sectors related to energy and food, and how both the fossil fuels and energy metals have interesting futures ahead of them for the foreseeable future.
If you have any topics or questions you would like us to discuss with Dave in future calls, then please email us at Fleck@kereport.com and Shad@kereport.com.
Thanks! Excellent discussion, esp. as an adjunct to the above.
Agreed BDC. It’s very insightful to listen to how activist investors like Dave and Michael approach investing in the resource sector and their collective experience and wisdom having seen the good, the bad, and the ugly in management teams over the years.
Hi Ex, one of the points that Dave Lotan discussed was the fact that there are many deposits in great jurisdictions like Quebec that have one million to one and a half million ounces of gold that will never be developed because they are too low grade and too deep to ever become a mine. Investors need to be aware of these sorts of traps.
I am also very wary of companies that do a financing with one full warrant attached. Investing in the resource sector is fraught with hidden traps and difficulties and these are just two of the many out there. Great interview it is well worth the time to listen in. Michael Gentile, Brian Leni, and Bill Powers, are also featured. DT
Agree- Thank You Ex
Exploration Insight’s Joe Mazumdar – Inflation is eating miners’ margins but there is a saving grace
Kitco News – May 21, 2022
> On Tuesday Mazumdar and analyst Brent Cook sat with Kitco.
“Margin compression has been ratcheting up over several quarters,” said Exploration Insights author Joe Mazumdar. “Almost every cost center had gone up whether it’s consumables, labor or energy. It’s flat across the board. We’re talking anywhere from 30% to 50%. And when you look at capital costs, we’re seeing the [mines] that are getting into the news the most are the marginal-grade, large, milling, open pit operations,” said Mazumdar, citing Cote and Magino projects.
In December Argonaut Gold announced a 56% jump in capital costs for its wholly-owned Magino project in Ontario, Canada. In May IAMGOLD said its Cote development project was challenged and withdrew cost guidance.
“Some of its scoping, but a lot is cost inflation. They’re getting squeezed, but a lot of those precious metal companies are…balance-sheet-wise, in a much better spot than they were at the tail end of the last cycle.”
Hi Ex, everyone has a differing opinion as to what is about to happen. Most people expect The Fed will take steps to ease the money market and check any downward movement in the stock market. This sort of judgement has been going on for decades, and because of the faith that most have placed in The Fed they have failed to hold them accountable. Ask The Fed to allow an auditing of their books, that is a reasonable request, but it won’t be allowed. The Fed is just too powerful. Big Mistake if you ask me. DT
The Fed’s existence is UNreasonable, immoral and unconstitutional.
Stocks and bonds are going much lower in the months/years ahead, especially in real terms as the Fed will accelerate the destruction of the dollar’s buying power in response.
Hi Matthew, The Federal Reserve is so over capitalized that they depend completely on the hope of profits from the stock market. DT
Hi DT and Matthew – Agreed on all points. Not only is the Fed too powerful, and un-auditable, but central banks in general are “UNreasonable, immoral and unconstitutional.” Well-stated guys.
This seems to fit here. Posted elsewhere tonight:
The American (U.S.) Constitution is deficient in its handling of money, and therefore the wealth which its money should primarily represent.
It is basically relegated to a legislative branch that is subject to the vagaries of elective politics, rather than to experts beholden to the people – and seen to be so.
The missing fourth branch is a structural deficiency, the lack of which more easily enables “the love of money” to supersede all else.
I couldn’t disagree more since we’d be just fine if the constitution were adhered to. Let’s face the fact that human nature is the problem that can’t be fixed. Every politician of the last century+ has wiped their rears with the constitution and often with the blessing of the great unwashed. We did not here because of any defects in the constitution. We’re here because it was completely ignored by politicians and sheeple alike.
Central banking is the ultimate tool of tyrants and is therefore incompatible with individual sovereignty/natural rights and America’s founding principles. Even most Republicans are way too ignorant to understand it despite the fact that it underpins the overwhelming power of the leftist globalists that they are rightly against.
Those who fear power should try living without it.
Yes, those people should but who are they?
Matthew,
You fear the power that centralization brings.
Enemies that have it now do not.
BDC, I don’t fear it, I despise it. Something is very wrong with those who do not.
Centralization and decentralization are tactics.
When out of power, promote decentralization.
When in power, centralize.
Power itself is a generic necessary for survival.
With power comes responsibility.
The wrong people have too much power today.
Those are convenient illusions at best. Power has been concentrating into fewer and fewer hands relentlessly for the last century and through good times as well as bad. Of course, even self-professed limited government “constitutionalist” types turn a blind eye when their guy does it. Reagan, Bush, and Bush, for example, all oversaw debt growth that should make any lefty proud. How many Rinos know that only the FDR and Woodrow Wilson (two horrific dirtballs) presided over greater debt growth than Reagan? Perhaps a better question is, how many care? Obviously, few know or care because few have any clue what it means. How many know that debt-to-GDP was about 30% when Jimmy Carter left office and was over 50% when Reagan’s last term ended? How about the fact that it hit almost 136% under Trump?
But all that is beside the point. The centralization of power for any reason is never a good thing for individuals/individual rights nor for truth or justice. Just look around you today. We have a de facto ministry of truth that has been and still is pushing absolutely criminal lies about everything related to the “pandemic” and countless lives have been ruined by it. Centralization also allowed for the ridiculously criminal and arbitrary lockdowns that had zero scientific support and also ruined countless lives.
The rule of law and due process (civilization itself) are on their way out if people don’t wake up fast and centralized power is the reason.
It’s ALWAYS the wrong people that have too much power. It’s axiomatic.
We can already see how right Alvin Toffler’s prediction was/is and centralized control of education and media is the reason…
“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”
Power has been concentrating into fewer and fewer hands …
People accumulate power, it does not accumulate itself. Good people are cajoled into fearing power by expert manipulators who maintain their hold by doing so.
Break their evil grip!
That’s a distinction without a difference. Yes, people are cajoled in every way imaginable and people “accumulate” power. The problem remains the centralization of power. The most powerful individuals rule every aspect of the little guy’s life because the little guy is so easily fooled by his own ignorance which is both natural and cultivated. Why do you think propaganda is the primary tool of the most powerful coconspirators? They rule by consent because of it.
A dependent, stupid and divided people is no match for the organized puppet masters which is why:
“In all ages, whatever the form and name of government, be it monarchy, republic, or democracy, an oligarchy lurks behind the façade…” — Ronald Syme, book The Roman Revolution
A dependent, stupid and divided people… nearly always lack good leaders — good leaders with power. Does Burke mention the power good people need to defeat evil?
Good people need only knowledge to defeat evil because evil is ignorance. Centralized power (and all collectivism) is built on the ignorance of the people.
Many, particularly the young, are ignorant.
They must be led to truth or may fall away.
Great points to all! Unfortunately what would life be like if Allwas good and everyone was sane.
Good retrace for gold exactly what we wanted to see. Consolidation in this zone 1835-1850 is fine with me. In fact even if the monthly finishes here, I would not be one bit worried. We are headed higher and June will provide that thrust!
As matthew mentioned the daily, weekly , monthly and quarterly has never looked better and all lined up! These markets have a way of bucking most stay strong I can’t express how happy you will be in 6-9 months.
Started positioning myself in a little perpetua today.
Some eye opening comments, his “walking dead” remark concerning IAG and AR being just one of many.
Michael Boutros: https://www.youtube.com/watch?v=acoh-MlgfuM
05:25 – Kitco mentioned! 45:23 – Gold & Silver.
Two years of the same opening.
This week is far from over but I like what I see…
https://stockcharts.com/h-sc/ui?s=%24HUI&p=W&yr=5&mn=0&dy=0&id=p30716528299&a=1153732189
I am getting a slow turn around today, but my computer is slowing down also. Maybe a lot of abnormal volume or a bad server.
You need a reboot! DT
That was #2 after a French Maid.
Aussie gold miners had a pretty good Wednesday
Pro Mining Investors David Lotan & Michael Gentile Share Insights, Tips & Advice (45-min roundtable)
Mining Stock Education – May 19, 2022
“Strategic resource investor David Lotan and Michael Gentile share mining stock insights, tips and advice from their decades of experience investing in resource companies. Have a listen to this 45-minute roundtable discussion hosted by Bill Powers and Brian Leni of JuniorStockReview.com.”
https://youtu.be/kEECRMRcZNw