Kitco MINING

The gold miners should show some conviction in their product and hold more of it on their balance sheet, said David Baker, managing partner at Baker Steel Capital Managers. 

Last week Baker spoke to Kitco Mining at the Gold Forum Americas/XPL-DEV 2024 in Colorado.

Baker advocates for gold mining companies to hold onto some of the gold they produce rather than converting it all into cash. He argues that this strategy would better align with the companies' messaging about the long-term value of gold as a hedge against fiat currency depreciation.

"Holding a bit of gold...send a message to the investors: they've got confidence in the product," said Baker. "Gold is an asset that basically should protect your purchasing power. [We are] already seeing gold starting to outperform inflation...so I think it's a reasonable place to start holding gold."

Gold's strong performance this year could trigger a "capital rotation," said Baker. 

"If the trend continues, it's going to be very hard for investors not to buy gold," said Baker. 

Baker emphasized the importance of capital management for mining companies, particularly those generating significant cash flow. His focus is on larger companies, typically above mid-cap, that balance growth with capital returns, which he considers the "holy grail" of investments.

Coverage of the Gold Forum Americas/XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

There is a lack of big discoveries in the mining sector, said Willem Middelkoop, founder and CEO of Commodity Discovery Fund. 

Last week, Middelkoop spoke to Kitco Mining at the Gold Forum Americas/XPL-DEV 2024 in Colorado.

Middelkoop expressed optimism that the gold price could reach $3,000 before the end of the year, potentially marking the start of a new bull market.

"Gold could be on the verge of a breakout. This could be a violent move," Middelkoop said. 

He cited key factors driving the rise in gold prices, including currency debasement, a shortage of significant new discoveries, and heightened geopolitical tensions between the West and the rest of the world. 

"That's why we see many people fleeing towards gold—even central banks. And I think the last point is the most important reason for this rise in the gold price," he added.

Middelkoop explained that bull markets in gold typically begin with the major producers and royalty companies gaining momentum, followed by intermediates and eventually juniors. However, he noted that junior mining companies have remained flat this year despite the increase in gold prices.

Despite this price surge, Middelkoop expressed disappointment in the industry's lack of major new gold discoveries. He observed that many companies are simply rebranding old projects rather than finding new deposits, which underscores the need for mergers and acquisitions (M&A) to drive growth within the sector.

Coverage of the Gold Forum Americas/XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Miners with a sizable ownership stake in their own companies are crucial to ensuring business decisions are aligned with shareholder interests, said Brett Heath, president and CEO of Metalla Royalty & Streaming.

Last week, Heath spoke to Kitco Mining at the Gold Forum Americas/XPL-DEV 2024 in Colorado.

Metalla Royalty & Streaming Ltd. (TSXV: MTA) is a royalty and streaming company with exposure to gold, silver, and copper. The company holds around 100 royalties and streams, with key assets including IAMGOLD’s Côté and Gosselin, G Mining Ventures’ Tocantinzinho, Equinox Gold’s Castle Mountain Mine, and First Quantum Minerals’ Taca Taca.

Heath discussed the impact of rising gold prices on the mining sector, noting that gold is reaching all-time highs. He emphasized that unlike previous gold price surges, costs have not significantly increased, meaning gold producers could experience record margins, potentially clearing over $1,000 per ounce in profit. This price increase, combined with stable or declining costs, could lead to significant profits for producers, particularly in Q4 2024.

Heath also highlighted the implications for investor interest. Despite the gold price rally, the sector has been underappreciated by generalist investors. However, he believes that as profit margins grow, institutional capital will flow back into gold, potentially driving up the share prices of major producers. Heath noted that global gold ETFs have recently seen inflows, signaling renewed interest in the sector. Some gold company shares have already appreciated 50% to 100% year-to-date, which could attract more attention from outside investors.

In terms of capital allocation, Heath expects that much of the new free cash flow from higher gold prices will be directed toward growth, including mergers and acquisitions (M&A), as companies seek to acquire strategic assets. Heath is optimistic about continued gold price increases, predicting that prices could reach between $2,600 and $3,000 per ounce by the end of 2024, driven by central bank purchases and renewed investor interest.

Metalla recently adopted a minimum share ownership policy to ensure management's alignment with shareholders. Heath explained that the policy formalized a practice already in place, signaling to investors that management has a vested interest in the company's success.

“Look, we’re aligned,” said Heath. “I’ve got the majority of my net worth in this business. It was just a formalization of something that was already there, but it was something we wanted to do as part of the company’s evolution.”

Coverage of the Gold Forum Americas/XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Reaching an agreement with the Malian government helped propel B2Gold’s stock price, CEO Clive Johnson noted.

Last week, Johnson spoke to Kitco Mining at the Gold Forum Americas/XPL-DEV 2024 in Colorado.

B2Gold (TSX: BTO) is a senior gold producer headquartered in Vancouver, Canada. Founded in 2007, the company operates gold mines in Mali, Namibia, and the Philippines. The Goose project is under construction in northern Canada. B2Gold forecasts total consolidated gold production of between 800,000 and 870,000 ounces in 2024.

In September, the company announced it had reached an agreement with the Malian government, allowing the Fekola Mine to continue operating under the 2012 mining code, while new expansions will follow the 2023 code. Johnson said the agreement removed significant uncertainty surrounding the mine, leading to a 13% rebound in B2Gold’s stock, one of its largest single-day gains since 2009.

“We knew that this was going to be a difficult year,” Johnson said, calling the agreement a “huge relief.”

Mergers and acquisitions have been heating up in the mining sector.

“The best protection for a takeover is your stock price,” Johnson said, noting that concerns about the Goose project and issues in Mali had partly become “poison pills” that prevented the company from becoming a target.

“We work for our shareholders. Any reasonable offer is the shareholders’ decision, not ours. We’re open to whatever makes sense going forward,” he said.

Johnson noted that investors would like to see more consolidation, but forecasting the gold price remains a challenge.

“I think it’s a real dilemma for the industry. Investors want [consolidation]. They want fewer mining companies. They want better-run ones. We’ve seen some of that, but at the end of the day, if you’re looking at M&A today, what gold price do you use? And it’s going to be competitive.”

Coverage of the Gold Forum Americas/XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Kazakhstan is far afield, but low costs make it an attractive draw, said Darren Klinck, president of Arras Minerals.

Last week Klinck spoke to Kitco Mining at the 2024 Precious Metals Summit Beaver Creek in Colorado.

Arras Minerals is advancing a portfolio of copper-gold assets in Kazakhstan. The company is exploring a porphyry belt.

Klinck said the country has an all-important cost advantage compared to other jurisdictions. 

“I think one of the big challenges we have right now is cost structure,” said K. “It's a low cost jurisdiction. It's not only…cheap to drill compared to many other parts of the world—you're at 200 meters above sea level. Your cost to mine…is some of the lowest in the world.”

Klinck said the country is well endowed geologically. 

“We think we have a very good chance of making a new tier one discovery,” said Klinck. 

Coverage of the 2024 Precious Metals Summit Beaver Creek in Colorado is sponsored by Newcore Gold.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Cost containment is key, so investors benefit from high gold prices, said Ammar Al-Joundi, president and CEO of Agnico Eagle Mines. 

Last week,  Al-Joundi spoke to Kitco Mining at the Gold Forum Americas / XPL-DEV 2024 in Colorado.

Agnico Eagle Mines Limited (NYSE:AEM) is a Canadian based gold mining company. It is the third largest gold producer in the world, producing precious metals from operations in Canada, Australia, Finland and Mexico.

With gold hitting several all-time highs in 2024, the company is reporting good financial results. 

“We love the gold price and in particular we love all the cash flow we're generating for our owners,” said Al-Joundi. “This is a good time to be in this space. Our mines are running well. I've been in this business for 25 years. I've been in this business for 25 years. This is the strongest pipeline I've ever seen.”

Al-Joundi said cost control is critical. 

“For us, it's essential…that when the gold price goes up, that money accrues to our shareholders,” said Al-Joundi. 

Al-Joundi said he is not betting on copper or gold. The quality of the asset is all that matters. 

“We're not setting a target,” said Al-Joundi. “Whatever position we have in copper is going to be driven by the opportunity to make money.”

Coverage of the Gold Forum Americas / XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

There are more opportunities for consolidation in the gold sector, said Mike Fraser, CEO of Gold Fields. 

This week Fraser spoke to Kitco Mining at the Gold Forum Americas / XPL-DEV 2024 in Colorado.

Headquartered in South Africa, Gold Fields is a 918,000 ounce gold producer. In 2022 Gold Fields tried to acquire Yamana Gold. Agnico Eagle Mines prevailed after Gold Fields' investors soured on the deal. Gold Fields CEO Chris Griffith left the company. Fraser took over in October 2023. 

Fraser discussed Gold Fields other purchase, Osisko Mining's Windfall in Quebec. Gold Fields had initially acquired a 50% stake in the project 18 months ago. Recently Gold Fields completed the acquisition by purchasing the remaining 50% for C$2.16 billion. 

Fraser explained that the two-phased acquisition allowed the company to gradually familiarize itself with the Quebec jurisdiction and operational conditions before fully committing. 

"I think the way it's played out has really been the best way possible for Goldfields to enter into 100 percent of that asset," said Fraser.

The Windfall project, which holds 7.4 million ounces of gold reserves, is seen as a strategic move by Gold Fields. Despite a 55% premium on the second tranche, Fraser highlighted that the acquisition came with several financial benefits, such as cash already on hand and relief from funding further exploration. He described the acquisition price as fair, considering the future value it will generate. 

"M& A is only one leg of our strategy to grow and improve the quality of our portfolio," said Fraser. "We also have a very strong brownfields program where we explore around our existing projects, but ...[these] bolt-on acquisitions are really going to be opportunities to move forward. The gold sector is highly fragmented...compared to other industries, and there definitely are opportunities for further consolidation."

Coverage of the Gold Forum Americas / XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

The broader markets won't be able to ignore the gains the miners are making, said Rob McEwen, chair and chief owner of McEwen Mining. 

Last week McEwen spoke to Kitco Mining at the 2024 Precious Metals Summit Beaver Creek in Colorado. 

McEwen Mining is a gold and silver producer with operations in Nevada, Canada, Mexico and Argentina. 

With gold hitting record highs, McEwen believes investor interest will grow, particularly as investors realize the rapid price increase and potential gains in the sector. However, he noted that while the price surge has benefited senior and intermediate miners, junior miners have yet to experience the same enthusiasm.

McEwen Mining also holds a 48.3% interest in McEwen Copper, which is developing the large, advanced-stage Los Azules copper project in Argentina. Despite the copper project, McEwen still likes gold. 

"I've never deserted gold and it's very much in my blood," said McEwen. 

McEwen emphasized that investors are likely to focus on undervalued junior miners as gold prices continue to rise. He expressed confidence that now is an excellent time to invest, particularly in companies with significant resources or those nearing production but undervalued due to a lengthy permitting process.

"There are certain times when the market gets overheated," said McEwen. "We're not in an overheated market right now."

Coverage of the 2024 Precious Metals Summit Beaver Creek in Colorado is sponsored by Newcore Gold. 

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Cost containment and productivity gains are a priority at Newmont, said Natascha Viljoen, Executive VP and COO of the company.

This week, Viljoen spoke to Kitco Mining at the Gold Forum Americas / XPL-DEV 2024 in Colorado.

Newmont is the world's largest gold producer by output. It also produces copper, zinc, lead, and silver. Over the past year, the company has been active in mergers and acquisitions (M&A). In 2023, it acquired the world’s fifth-largest gold miner, Newcrest, for $17.4 billion. The company is now in the process of divesting some of its assets. This month, Newmont announced plans to sell its Telfer and Havieron stake to Greatland Gold for $475 million.

Gold has reached several all-time highs in 2024. With high metal prices, the company has room to take a long-term view of its cost structure, Viljoen said.

"It’s absolutely a focus with this portfolio of assets that we have today," Viljoen said. "The current work underway is to reevaluate productivity, mine design, and the fundamentals of mining to address challenges."

Viljoen emphasized that the company is not speculating on the long-term outlook for any particular metal.

"[We are] not specifically focused on copper or gold," Viljoen said. "We are focused on value generation."

On the topic of investing in more junior companies, Viljoen stated that the primary focus remains on Newmont's existing pipeline.

"If there’s capital allocation that will truly generate value, I think that would present an opportunity," Viljoen said. "But we would be hard-pressed to look beyond the value we need to generate from our existing, newly expanded portfolio."

Coverage of the Gold Forum Americas / XPL-DEV 2024 is sponsored by Metalla Royalty.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Despite gold hitting several all-time highs, the mood in the junior sector is subdued, said Matt Geiger, managing partner at MJG Capital.

Last week Geiger spoke to Kitco Mining at the 2024 Precious Metals Summit Beaver Creek in Colorado.

Geiger highlighted several major mergers and acquisitions (M&A) over the past six weeks, noting that these deals have generated significant activity in what is typically a quiet period. Major transactions included Filo $4.1 billion acquisition by BHP and Lundin Mining, Gold Fields' $2.1-billion cash bid for Osisko Mining, and First Majestic Silver's acquisition of Gatos Silver for $970 million. All these deals show that the mining sector outlook is improving. Geiger said there was about C$11.5 billion in deals made over the past six weeks, a time of the year that is usually pretty quiet.

"I can only imagine that there's more deals being hatched right now as we speak," said Geiger. "We're really in a hot and heavy...M&A cycle at the moment."  Despite the high metal prices, Geiger noted that the show participants were subdued. Juniors are not seeing much of a lift yet. He did note that there is more money in the sector now.

"I'd say the space...is actually pretty well cashed up," said Geiger. "I think that's one of the arguments in favor of mining stocks, at least over the next six to nine months: they're more cashed up than they've been in many years."

He said that means less financing and more news flow.

"All things equal, those two factors result in higher and higher share prices."

Coverage of the 2024 Precious Metals Summit Beaver Creek in Colorado is sponsored by Newcore Gold. 

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.