Gold price over $4000 — what does it mean for gold miners?

EPISODE 10. The gold price hit $4200. Anthony Milewski and Christian Purefoy are joined by special guest Victor Cantore, President and founder of Bay Capital Markets, to talk about the high gold price and AMEX Exploration, a gold exploration mining company in Canada.

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Transcript

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So gold has hit $4,000. So, we thought, who better to talk to than Victor Cantore? See, last time I checked, it was +$4100 Well, it's difficult to keep up, the thing is moving so fast. Anyway, Victor Cantore, and we are Anthony Milewski and Christian Purefoy. So welcome to Boom, Bust and BS The most amazing backdrop. Victor. In, I mean ever, right. We've got gold I think on its way to 5000 myself. Based on the global macro environment. You know, every day there's a new Heywood financing. It seems like, it's it's completely different than a couple of years ago. You know, what do you what, do you see it out there in the market? Well, the market's great right now. Like, you're seeing all these finances. Everybody's getting money. Everybody's. You know that. That's great. Put the money in the ground. You're going to get you're going to make more discoveries. For us, AMEX, we're already we're already financed. But it's but it's really interesting when we look at gold because here I'm going to say I'm going to really go like crazy. You're like, why should if we're going to do a reset with all these geopolitical issues out there and, and looks like every country is bankrupt and we need to do a fiat reset, why shouldn't gold go catch up to Bitcoin or Bitcoin comes down and you know we...... so you saying are you saying gold could be 100,000 or something like that. Or do you just mean it could go to 10,000. Let's look 10, 20, 30, 50,000. Like, think of this. If we were last year doing this last year and I would tell you, Anthony, gold is going to $4,000, you would think I’m crazy. I would say you're crazy. Yeah. Even even two years ago. Like like it's crazy. Nobody ever thought the gold is going to go up is going to go to 4100. You know, China is really is it looks like they're they're hoarding all the, all the gold. And it’s not like there's these massive discoveries going on, everywhere like those, those big 20, 30,000,000 ounce deposits, like they're, they're harder, harder to find. And if you know, you want to protect your country, you want to protect your and you want to protect your currency, well, you gonna need a lot of gold. Like, look at Canada, for example. We don't have any gold reserves. Well, you know, but how does it change? Like I remember last cycle, you know, hey, I got this great gold deposit. The all in sustaining cash costs are 750, and we'd all sit there and say, well, that seems kind of tight with gold at 1100. You know, I don't know if I'm going to do this. And now we are at 4000. Does that unlock a lot of projects that, you know, we wouldn't have thought about or what? Like how do you think that price impacts to some of these, like lower grade disseminated kind of deposits. Yeah it does it does impact it a lot because then you look at you look at the price of gold. I mean depending which, which, which price you're going to, you're going to take like so in Canadian dollars, like you're looking, you're looking at around $170, $180 per gram. Like that's expensive rock. That's really good rock. You know, you know, a lot of deposits. You look at deposits and you know, you're looking, oh, it's going to be at least $100 worth of rock. It's going to be more than that. I mean, now any one gram deposit is worth at least that in Canadian, in Canadian dollars. So it's really makes it and then again and then if you have a high grade deposit, well, I mean, I mean, look at ours, in the champagne zone you're looking at, like fully diluted. You're looking at ten grams, and then otherwise at 16.2g, you know, multiply that by $180. That's that's $1,800 rocket, ten grams per ton. It's quite a visit. Does this does this gold price open up some of the more remote projects in Canada like I know on the north of this ring of fire or, you know, these, these different places where we've talked about them, but it's, you know, it's $500 million to build a road or something crazy. Does it, does it open that stuff up or not necessarily. If gold sustains and if it starts trying to catch up to to Bitcoin. Yeah, I think it will. It will open up projects. It will open up the lower grade, not just lower grade, even even the high grade that are completely remote. That would cost, like you were saying,$500 million to put into production. Yeah. Yeah, absolutely. It's going to start it's going to start opening up all those, all those projects. And tell us a little bit about what's going on with your project. I mean, what you know, obviously you guys are fully funded stocks way up. It's looking great. You know, tell us a little bit about the success you guys are having. Yeah, absolutely. So we're we're we've embarked on, on a dual path. It's really exciting on the exploration side. Like, we're really moving forward, drills. We're going to announce it soon. Drills are started turning again. We're getting some really nice success. Also on the on the Ontario side, we're still looking to expand the land the land package like, you know, from 45.6km². Right now we're at 197km², all on the greenstone belt. And, you know, advancing it to production. That's that's really that's really exciting. Like, we've we've started moving forward, with the feasibility study for the first 4 to 5 years. And we're going to be moving those first 4 to 5 years. I mean, we're still going to be producing over 100,000oz, you know, with an ASC of 1165, for the first, for the first four years. And it comes down after that once, once we build our own mill. But, you know, the first production coming out of the, coming out of the, not the total milling, but coming out of the bulk sample that's going to be sometime in 2027. So we're waiting for the government to grant us the permits, and then we're going to go straight, straight into construction. But it could still be like really good ounces there. Like if they grant us, 20 if they grant us 20,000 tons, we've asked for 40, but even they ask us for the grant is 20,000 tons. You're looking at over 10,000oz in Canadian dollars. Like, what are we looking at now? $5,500 an ounce? You know, that would that would translate to 50, you know, to $55 million if they give us the 40,000oz which which I think they should because it's really we've you know, we've done a great job on how we how we applied it. I mean, that would be over 20,000oz because you're actually in half an ounce. Fully diluted, you'd be pulling out half an ounce material from where from where we're mining. So I'd say it permits. There's been a lot of talk lately that Canada is going to make it easier. Are you experiencing that yet or is that still just talk? No, I think it's it's really it's really moving. Like Quebec got really aggressive. The the premier of Quebec fired his environment minister because he he thought it was going to slow and he took over. He took over the he took over the file. So I and you know, it's great for us. It's really perfect timing for us. We're just going to move forward and hopefully, hopefully we can get the permanent a lot faster. And you know, again we're putting together a full size portal decline ramp. So in in one that's going to take one year of construction from the date that we get the permit at about 12 to 15 months. So after that when we get the full permitting, not just, for example, the footprint, we can go straight into production because it's a it's a production size, portal. So, so immediately they're, we're gonna, we're going to end up going well over 100,000oz a year at the beginning. And then, and then we're going to ramp up from there. That's amazing question. We cut you off there. But what do you have? Yeah I got it I know works. Well we're we're just putting out a piece on the idea of peak gold Victor. So you know basically where it's like, well under 60,000 metric tons of gold left in the world, and we're mining, you know, like 3 or 4000. I mean, you just talk about how you can get yours, you know, built up in time and what, you know, if gold in theory is disappearing in 20 years time. I mean, do you believe that? And what impact would that have on you? Because, you know, as you said, that's going to raise costs, raise prices, everything. Yeah. I mean, look at look for us for us. It's really amazing where we're like, yeah, I'll call it a honeypot because we're right. We're right beside the city. You have you have hydro electricity. You know, and we can pretty much go into production quite easy. Our metallurgy is great. It's really it's really clean. And, you know, if there is peak gold, like, I expect the price of gold to really to really ramp up, like, I mean, I know it's a bit crazy talking about, you know, like crazy numbers, but yeah, it's it can definitely it can definitely go. I really want to 5000. I think we're going to see 5000. Not sooner than later I think it's I agree I agree 5000. I, I'm pretty sure it's going to hit it pretty pretty quick. And then, and then we'll see from there. Right. It's going to it's going to be a lot faster going to fight from 5000 to 10,000 than it was going from 1000 to 4000 or 1000 to 5000. It's going to it's going to ramp up. You're going to have those days where gold goes up a two, three, $400 a day. It's going to get there. And silver. Silver is amazing. Silver is doing silver is going to go to 100. I mean this is so what 50? I didn't looked at it 5152 I didn't I was a 54 I didn't I didn't see. But yeah you know silver can easily go to 100 I think in fact the original meme coin was silver right. Yeah. You had the Hunt brothers. They'd try to squeeze silver and I and I, you know, it's at all time highs now, right? We've cleared the all time high, I think. Yeah, it's all time. It's all time. That's right. You have to go back in the 80s when the when, when it hit the 48, 49 or something like that. And now look at that. Well, well over 50 and I again, I still think both both will there's lots of room for both, both with different reasons. But they're, both gold and, and silver are going to continue continue moving up. You're going to have your days where it comes off a little bit, but that's that's healthy. That's, for, you know, looking from a technical factor, that's, that's a healthy thing. So and tell us about your team, Victor. Our team is great team. Look, I, I brought over, so I on the board, I brought in Phillip Brumit It is, he's an excellent dean person. He's a mining engineer with lots of, lots of underground experience. So he's definitely providing a lot of work. You know, helping out our team. I brought in a mining engineer, that that was working, that was that was working for Equinox at the greenstone mine. So I really I put down the team, like for on both angles now, both on production and also on on exploration. Like the team is great. Like, I really, And we're going to continue building it. The team is going to continue building. We've hired an environmental and a public relations person to we're going to be opening an office, in town. So, you know, the local residents could come. And, you know, what's really great with us also is we have community backing. They want the project to start tomorrow morning. And and that helps out with the politicians. And we also have backing from the First Nations. They want to they want to move this project forward as fast as possible. Also. Yeah, it is a lot of milestones, a lot of milestones coming in, including soon we'll have to announce where we're going to be sending the where we're going to be sending it over to that's that's a question that I get asked all the time. So your first four years, where are you going to, where are you going to toll mill to so we're we're going to we're going to announce that shortly I mean, for me, my preference would be, we'll be going north to Hecla mine. Well, we'll see what who we who we sign that, who we sign up with. That's exciting. I mean, a lot going on, and and certainly the price of gold and silver are ultimately helping all these guys, especially you guys here. Oh, absolutely. And when I look at, you know, we look at the market like so you had the you know the strong moves where the you had the royalty companies then you had the strong move with the producers. And you know, the one after that is going to be the, it's going to be the explorers slash developers. Like, I think we've positioned the company nicely as a, as a near-term producer. And again, it's not small ounces like we're talking about an excess of 100,000oz a year starting from starting from 2028. So, you know, if I'm if I'm a retail investor and I want to be buying, I want I want to be buying all the all the near-term producers because they're going to end up taking advantage. They haven't really had a big move yet. Yes, they've moved, but they haven't had a big move yet. And I think that's the next wave that's coming is all the all the near-term producers. Yeah. So I mean, okay, we've had this massive move in gold and we haven't quite had the similar move in gold miners and explorers. And so there's still the opportunity right. Yeah. Look you take you take my PA So so my numbers you know I'll throw you some numbers. Right. So a $3,400 gold, which is, you know, $700,$700 below where spot is right now. So my payback period after tax payback period is point two. Like, that's like two and a half months. Three months at $3,400 gold. I say it's a $4,000 gold. What is it? I mean, it's it's like it's. Yeah, the first month you pay off the project like it's paid. The project is completely paid. You know, the, the the pretax. And I like using that number. It's, it's a big number. So a $3,400 gold, the pretax free cash flow is $5 billion. It's $5 billion — with a “B” in case of you didn't hear properly how much is it. How much is it at 4000 now or maybe already higher. That is insane. No, no. Our numbers our numbers are really, And the one, the biggest takeaway for me is that. And even post-tax. So post-tax is, the, the payback period. Post-tax is, is, 0.4 and and the way, the way we structured it. So you know, when you look at your, you look at your, your, your NPV over your CapEx. So the way we structured it so anyways, usually it's two times it's good. Four times the spectacular, it's seven times a $2,500 gold and 13 times it's 13 times at $3,400 gold. Like like you know look at our our numbers and start to start adding, adding it was we'll see. You know, these numbers are going to be reflected in the feasibility. So I mean most likely not going to be using $4,000 gold as a base case. But it's quite spectacular when you, when you look at these are the type of projects you need to look at. They're low risk like payback periods are really, you know, IRR is triple digit. Sometimes when you look at these projects, it surely isn't someone going to come and try to take you out at some point. I mean, like, I, you know, it just. Yeah, someone's gonna try to buy you, right? I mean, there's no one like that. Those numbers are crazy. if your cost is 1165, so call it 1200. And you know, you're selling gold at 3100, I'm going to go all the way down to whatever 3200 is $2,000 an ounce U.S that's $200 million a year Canadian. Sorry, $200 million US that you're making per year of free cash, a free cash flow, you know, add another thousand dollars to that would be $300, $300 million. You know what? What is that number in in in Canadian dollars? I mean, we all our expenses are all in Canadian dollars. Like it's it's really spectacular and that's why grade is king. This is where I would be looking as an investor. I'd be looking for high grade good jurisdiction and and definitely good, good infrastructure. But like, like you were saying before will those projects, you know, remote projects going to go through. Sure. I mean, the economics will work now about $4,000 gold for some of those lower grade and, you know, remote projects. Look, I mean, Victor, it's always great to have you up and catch up with you. Super exciting time. Not just for the gold industry, but in particular for your project. I mean, just spectacular economics and dynamics there. So we're following it closely and always appreciate your time. Great. I always love I always love being here. I'll come on anytime, anytime you invite me, I'll be here. Thanks a lot, Victor.