BULLISH Picture For GOLD, Stagflation & Barrick Gold & Newmont | David Erfle

BULLISH Picture For GOLD, Stagflation & Barrick Gold & Newmont | David Erfle

we had GDP data we had inflation data and all that data started to show stagflation so um you know that’s the big Bugaboo for the fed you know and of course yesterday Jerome Powell said you know I don’t see any stagflation of course what’s he gonna say I see stagflation like the 70s um even though that’s what we’re starting to see he’s not going to say that I mean um if you take a look at at uh the GDP number it was 1.6% and the the CPI inflation rate is nearly 4% it’s only a matter of time to to where the gold price finally ends this consolidation and goes up towards its next next Target which is $3,000 an ounce hello and welcome back to sore financially where we discuss the macro to understand the micro my name is Kai Hoffman I’m thejr mining guy on Twitter and the CEO of the sore financially group truly appreciate you joining us here for a phenomenal conversation because we’re bringing somebody back that we haven’t had on the channel for over two years I believe and I have no idea why we neglected that because he’s a good friend of ours we love chatting with him it’s David earthley he’s the junior minor junkie with the Y and we have so much to discuss L Lots going on and he’s somebody also we can talk about the Big M the big companies a sector I don’t follow too closely of course I watch what Newan baric and Niko are doing but I don’t I don’t follow them on a daily bases he has better insights there and we’re going to talk about their numbers Q q1 numbers just came out and I’m personally hoping that it is a bit of trigger for the sector that we can see or I’m I’m suspecting that we can see maybe some more free cash flow being added to the balance sheets and maybe that trigger a bit of an m&a rally we’ll see a lot of speculation some of the questions I will definitely ask David before I switch over to my guest quick reminder hit that subscribe button it uh it helps us tremendously get more visibility on on YouTube reach the Right audience and of course educate and tell tell a good story uh keep keep in mind that none of this today’s investment advice we will be talking about some single stocks but uh again not investment advice do you due diligence we’re trying to get a sense of where things are headed we’re trading at over $2,300 an ounce for gold why haven’t the stocks really moved so we’re going to get to the bottom of this and now without much further Ado David it is great to have you on the show thank you so much for joining me it’s been way too long yes always great to talk to you Kai yeah thanks again for having me on I know it’s been a while but I’ve been looking forward to it too same here your highlight of my week uh you know we’re we’re getting ready here in Frankfurt for do go Mesa but this conver I I always enjoy chatting with you wherever we see each other at conferences and definitely value your opinion because one thing that separates you from other newsletter writers you invest your own money you have to generate a return to make a living and we we’ll get to like how are you’re doing that in in a second but let’s zoom out first like what does the world look like David how strong is the economy and what is really driving gold yeah uh it’s that’s the big picture we have to look at here right I mean um if you take a look at what was going on in into in in to the end of q1 uh the gold price was bottoming around $2,000 an ounce and the stock market was peaking so that and and at just as we went into Q2 the stock market rolled over and the gold price started to take off so this is what we’ve been waiting for um is is for the gold price to to get stronger is the stock market rolling over but you also have that geopolitical component as well when things in the in the Middle East started heat up that’s when gold really started to take off so the gold price moved $450 in the space of two and a half months and within that move you had a a breakout of a of a 13-year cup and handle and we’ve had that you know the gold price was trying to get above that $2,000 price level for 13 years and then when it finally did we had that strong move and it was mostly driven by geopolitics but you also had the FED debt situation come into Focus so you had this perfect storm for the gold price you had the geopolitical you had the macro and then you had the technical of a of a 13-year cup and handle breakout that was very powerful so the gold price ran up almost to 2500 which is the the initial uh cup and handle Target and now we’re in consolidation I mean this is a healthy consolidation when when per price of anything moves that far that fast you need a healthy consolidation and that consolidation right now is happening within $150 it’s it’s gold price is is is trying to bottom around 2300 yeah I was going to say like I’m just looking at it 2303 it’s extremely steady it dipped below 2300 briefly the other day I think two days ago but it’s hold holding in there like the question is what what is holding it there and you you mentioned three drivers for the gold price and I’m curious which one is the main one um that is pushing gold to those levels or holding it at the levels J Politics the fed or um I didn’t write the third one down geopolitics Technical and the technical part the C handle breakout right so which one is the like if you were to give percentages which one is the most uh important well most important is the macro but I think what was driving it mostly towards that 2500 level was the geopolitical and then when things calmed down that’s when you saw the the gold price start to correct and then everyone was starting to focus on the macro because we had the Federal Reserve meeting coming up we had GDP data we had inflation data and all that data started to show stagflation so um you know that’s the big Bugaboo for the fed you know and of course yesterday Jerome Powell said you know I don’t see any stagflation of course what’s he gonna say I see stagflation like the 70s um even though that’s what we’re starting to see he’s not gonna say that I mean um if you take a look at at uh the GDP number it was 1.6% and the the CPI inflation rate is nearly 4% that’s twice the fed’s fantasy Target of 2% and then it’s it’s its preferred inflation number pce inflation is around 3% so it’s and now the the the third major component of stagflation is jobs right and now we get the jobs report coming out Friday so we had a lot going on this week it’s brought a lot of volatility in the into the gold price it’s got brought a lot of volatility into the stock market which continues to to roll over um you know we had uh the S&P 500 lose its 50-day moving average last week come down to close to near uh H 5,000 and if it gets below 4,900 that will signal a a bare Market I think um because if once you see um that uh that 50-day moving average is is now uh resistance we’ we’ve seen a back test of that and now it’s the 18-day moving average which is providing resistance and that’s sharply moving lower now and if you look at the 18we moving average that’s where the S&P is at right now so you see uh AI stocks uh showing showing cracks um you know the Magnificent 7 is no longer magnificent 7 it’s magnificent four and you know they’re all we all know they they’re priced for for Perfection and they’ve got bubble valuations they’re starting to roll over uh Bitcoin has lost 60,000 so all these are are creating a a bullish picture for the gold price to go higher once this consolidation is over F fully agree lot lots of really good reasons for gold to hang in there and uh I’m just looking at the main markets and uh I’m trying to understand like how do I phrase that David it’s like I I need to cut that part no I had a good question like up like that’s what that’s what edits are for right oh Absolut like no I’m a bit like a bit all over the place today no um no David those are very great fantastic reasons for gold to hang in there the question though is do you see a correction maybe down to 2150 or how do you see that current correction phase sort of play out for gold because it has been a massive move higher and uh you know backfilling that Gap might make make sense the question is how far do we have to backfill yeah well you if you take a look at Gold’s 50-day moving average which is sharply Rising now um it it could it’s getting close to that 22 50 level so um I wouldn’t be surprised to if if you see a a fantastic on the surface jobs report number tomorrow you know we could get algorithmic based trades sending the gold price below 2300 towards that 2250 area because you know we know that uh all these these major um announcements by the FED are set up with with computer-based trades so what this this is why it’s very important to to to basically step aside and wait to see what the Fallout is after it’s happened uh because you know if if if it’s a if it’s a fantastic number then you know these AI the these algorithmic trades are are are are set to sell a strong number and then real investors come back in after sifting through the the numbers because if we take a look at the last jobs number which was a blowout number right um most of those jobs that were created were created by the government and a lot of these j a lot of the a lot of people now are have finding it really hard to make ends meet so they’re so so they’re working they’re working two or three jobs to keep up with W with inflation and Rising prices so these government jobs don’t create GDP and that’s why you’re seeing the the G the GDP numbers lower even though the the jobs numbers are higher because Public public jobs don’t create GDP and and you saw reports come out this week you saw manufacturing jobs are not being created that’s 10% of the economy right there so if you look under the hood of the of these jobs reports they’re not as as rosy as as they seem no they’re definitely not and the government reports like I think I looked at one quar I didn’t look at detail I think 190,000 jobs were created 880,000 of them were government jobs like how is that reality exactly right exactly um definitely D David I want to just explore the the term stack flation with you a bit more and the impact on the gold price like what what does does that really mean uh stack inflation I think is you know a slowing economy and Rising inflation I think we have to lift the skirt a little bit and just try to understand like okay is the economy really slowing and why is inflation increasing right now and what are what is the impact on gold yes I mean stagflation is is basically slowing growth in in in a sticky Rising inflation environment and of and I was and I was alive back in the 70s to experience stagflation I was I was I was a child but still I was I experienced it and it’s not a lot of fun um so you know if if if you compare what happened back in the 70s to what’s happening now um the inflation was created by the Vietnam War right so um all of a sudden you’ve got uh this stagflationary environment and you got the Federal Reserve who who had to raise interest rates up to TW up to 20% and uh the gold price rose right along with the interest rates because of this stagflation and you had the oil price going crazy because of what was going on in in in Iran so and then you had um Russia rolling into Afghanistan and that’s what caus that’s really what caused the gold price to double within a few months because the gold price had already ran up from $100 in 1976 to about $400 in late 1979 and then the geopolitical component kicked in once Russia rolled into Afghanistan and the and the gold price went from 400 to 850 within about eight within about eight weeks and that was a blow that ended up being a blowoff top but but I digress here it’s basically um you know you had the you had um poell come out yesterday and poo poo stagflation and of course he’s gonna say that because that’s that’s the last thing that that that the FED wants to see but he was also saying the same thing about in the first place he was calling it transitory for months they should they should have started raising rates well before March of 22 when they did start to raise rates so how we how we expected to believe a man that told us that inflation was transitory as it was running up to 9% and now he’s telling us that there’s no fear of flag stagflation we’ll be able to get it down to our 2% Target while at the same time he was chastising government for for for for their for their for their uh for their fiscal problems of of continuing to issue debt to buy the old debt it’s a ponai scheme and that’s what the that’s what the gold price has figured out that’s what the market has figured out that that the FED is stuck I mean back in the 70s our our national debt was moving in on a trillion and the GDP debt to GDP was 35% now we create a trillion dollars of debt every hundred days and we have to we we have to uh reprice this debt at higher rates and it’s a ponai scheme and it it continues to go higher that the debt is is over is going to be over 35 trillion by the end of the year and uh there’s no end in sight it’s a debt spiral no 100% I fully agree the question is like how do you break that cycle right that’s I think the number one question I don’t think anybody really has an answer for it the only answer really is like The Logical one would be default but nobody sees that happening so yes exactly the the dollar is still the world’s Reserve currency and they continue to to to uh to to to uh uh rate that privilege right they they continue to take advantage of it you know most of the dollars are held overseas everybody needs dollars to pay off the debt that that’s denominated in dollars and the United States takes advantage of that and they they continue to fund War what another hundred billion dollars to fund Wars in Ukraine and and Israel and then what’s going to happen when China finally de Sayes hey it’s looks like a good time to go into iwan with with the us having having their hands tied in in F fighting a war in Ukraine that’s a losing battle and then giving uh Israel more money so it’s only a matter of time to to where the gold price finally ends this consolidation and goes up towards its next next Target which is $3,000 an ounce I might use that for a YouTube title next Target $3,000 but uh don’t get irritated by that but Dave like last macro question I have for you if you were in Jerome PA’s shoes what would you do wow that’s a great first of all I wouldn’t have taken the job I don’t envy him that position well he’s only making $180,000 a year so I’m not sure how interesting that is well if you take a look at at at uh previous fed Governor stock transactions I think they’re making more than that but I digress on I was going to say we’re going to talk about your mining transactions how much you made how much you made in mining in a minute here as well but uh but all jokes aside like if you were jome Paul what would you do I’m do I do exactly what he’s doing you know he just continues to Jawbone uh in inflation saying we’re we’re we’re going to keep trying to get it below its 2% below the 2% Target that which is you know impossible because they can’t control what’s making inflation what’s keeping inflation sticky which is you know funding of of these wars and and and the balance sheet and and uh there’s just no fiscal restraint in Washington they can’t control that and it’s funny he came out in in in public and and and basically chastised his boss the US government on a 60 Minutes interview I was I was blown away by that so um I mean he’s I think I think he’s doing a pretty good job you know considering the mess that he’s inherited no no fantastic I think we can put a b around the macro discussion here I think we’ve set the scene next Target is $3,000 for gold the question is now how do we play that as mining investors it’s been absolutely dire over the last two years um you know maybe um I think my camera cable keeps resetting so I do apologize for the freeze frames here here and there but um Dave before we actually talk the miners I think you should run us a bit through your investment philosophy since you haven’t been on in like two years um run us a bit through how you’re investing what you’re looking for and where do you generate your returns yeah well I pretty much uh left alone the um exploration side of the market um you know early stage explorers anything any company that doesn’t have at least a pea with a with a with a defined resource that that shows a high margin project contained inside of a district scale package that’s that that’s run by a su serly successful management team that understands how to how to maneuver these very treacherous Capital markets while having uh while H still having a decent share structure at the same time those companies are becoming fewer and fewer so those are the companies I I like to uh concentrate on so basically late stage developers that have all those attributes and um growth oriented producers small cap growth oriented producers under a billion dollar market cap that I see exponential growth within the company okay I I just wrote down a question and I’m going to ask you that later because I think it fits in better when we talking maybe about the micro the micro end of the market but I want to start at the top like I want to start with the newans the barracks and the agnos we’ve just seen the q1 reports come out the q1 financials and I’m curious like what what did you see like what trends do you see emerging and are they generating more free cash flow here absolutely yes and and to to toh preface this I I own both igno and numont in my uh my SEP IRA account my retirement account but something very interesting happened last week in in the Newmont report um you know that was the that was the that was the uh the first quarter where they had to combine assets with with new Crest and they reported a blowout quarter and they they reported the fact that that investors needed to be reminded of what’s happening right now is the gold price is finally outrunning inflation and that means that these major these majors and M these minors are basically showing that the margin compression is is becoming a thing of the past so what’s been what what happened as you know the last four years was the margin compression killed the miners mining sector I mean they they’ve done a great job of keeping their balance sheets healthy and um you know producing dividends for their for their uh shareholders and announcing share BuyBacks but at the same time they weren’t making as much money because of margin compression well when you when you saw um newmont’s quarter come out showing that they made they made lots of free cash flow and that margin compression is becoming a thing of the past the stock went up 12 and a half percent on a day that the stock market was down a couple of percentage points so you had numont the only Gold Miner on the S&P 500 up 12 and a half percent as the as the stock market is rolling over it also produced a breakout of its downtrend so what is happening to numont is very important for the rest of the sector because it’s the general right it’s the world’s largest gold miner by far now it produces twice as much gold as AO Eagle which is now the number two who’s replaced baric as number two so if the general is not moving forward and continues to go down then why would anybody invest in juniors if you’re a generalist so Newmont breaking its downtrend is very important and um it’s coming back to test that breakout right now as I speak on lower volume like that’s what’s happening in the in the gold sector right you seeing the the gold price is is consolidating its move that happened on on Rising volume on lower volume so that’s a consolidation and the same thing is happening in in numont which is the General in in the gold sector mining sector operationally how how does numont perform versus like a baric or an Neo like is there big differences do you see them outperforming underperforming or like how are all three performing right now if you were to mix them together I see them concentrating now on higher margin projects see that they they’re d testing I think six mines and they’re concentrating on their top tier mines with that are high margin so they’ve got you know they’ve got over three billion in cash and they’ve got a a share buyback program going and the last time they did a share major share buyback program was when they when they took over gold Corp and that worked they took over gold Corp at the bottom of a cycle and then once that that um merger was was brought into in into into the company the stock took off at the same time that they were that they announced that share by buyback program so I think there’s a really chance of this happening again because the go the stock topped around 80 in early 2022 and the gold price was was uh double topping at the time at 2000 so numont has a lot of catching up to do I know there’s there’s been some dilution in there because of of of the merger but it’s it’s it’s got a very solid balance sheet and um they’ve got they they they’ve got top they’ve got top tier gold mines in safe jurisdictions so I really like numont and I really like iGo BEC if if you take a look at what happened with igno you know they announced a blowout quarter right after numont did and and their margins actually went even higher because their all-in cost went down as as the gold price went up well that I haven’t seen actually costs coming down and nio seems to be managing that really well because they have Canadian assets mostly like in in tier one jurisdictions and I looked at the Newmont all in sustaining cost actually 1439 which are really high really high for all the majors and um that that’s what you mean like I think we need to explain that margin compression just a little bit I’ve been mentioning it in other interviews but when when gold was trading at 1300 numont was producing maybe 750 Allin so let’s assume 500 $50 but when gold was trading at 1750 they they’re all in costs were 1250 right so those costs as you said outpaced um the the gold price developments and uh that that is reversing I think is is a really really important Trend Dave absolutely yes so um I think that’s I think we’ve said that on the majors like the only question I have now is like do you see more m&a happening I think your guess is as good as mine but I still have to ask like what what what are they going to do with a free cash flow I’ve seen baric announce a quarterly dividend personally I don’t give a crap about quarterly dividends quite honestly I want to see share price appreciations and ideally they buy my junior but uh right where do you stand on that like do you like Dividends are you more growth or more value oriented no I’m I’m with you but in in but in a in a point that you mentioned there um of course I want them to buy my junior but at a lot higher prices right we don’t want to take under which which we consider we continue to see a lot of these take unders which which need to happen I mean any merger is a good merger in this sector right now because a lot of these companies you know there’s too many companies and there’s too few Capital to fund them as you know um so a lot of these companies still need to go away there has been some some positive mergers um you know the the the recent uh reunion uh G mining uh merger that’s that’s positive and I I I think there’s probably a good chance that we might see a bidding more for reunion that’s a that’s one of the best projects out there so um and you then we yeah but we had another take under also we had silver Corp who got who who got who lost out on their bidding more for or Corp uh took over adventus and they’re moving and they’re moving into into uh Ecuador but a lot of you know many people don’t like uh to invest in in in a silver cor because of the because of the the Chinese risk so um but we do need to see more of this m&a and I think we’re going to continue to see it because the gold price is breaking out we now have a we now have a Sol floor at 2100 which used to be strong resistance um I think I think that a lot of investors and even even the miners also are waiting to see um what the result of this consolidation is going to be will it come back to to test that 2100 2150 area uh that breakout area before continuing higher um I don’t I don’t believe so uh but anything can happen in this space you know you I’ve learned to to never be surprised by the gold market market and what and what takes place absolutely no I fully fully agree there Dave um you know the big major is like you brought up new and new Crest that merges just still being digested but quite a few projects are on the chopping block as you mentioned like do do you see that happening who who’s going to buy coffee for example and uh who will pick that up are we going to see new MERS being created or is it just going to be a major picking it up maybe a junior making a leap what what are your thoughts on that what are you seeing yeah something like coffee I I don’t I don’t see a major taking Maybe mid tier will take it but um yeah I mean I any kind of merger any kind of m&a activity is is good but what I also want to see Kai is I want to see more strategic investments in these Juniors we’re starting to see it we’ve seen a couple recently um but I want to see more of that because we need to because a lot of these companies what they need is is they need to see that investors need to see that they have that access to Capital to build the mind right because a lot of companies have gone down their market cap have gone so low they need to raise two three four times their market cap to build the mind so investors want to see the access to Capital investors want to see a credible timeline to being shovel ready and fully permitted they want to see these things before they invest their money um so I I think that a lot of these a lot of these mergers in Acquisitions are are are going to start to pick up once the gold price has has shown shown that it’s that it’s bottomed at a certain point and starts to move towards that 3,000 that next $3,000 Target so it needs to get back over 2500 first and this healthy consolidation is like I said it is healthy and it and it needs to take place and it it’s happening at a high level and you’re what you’re starting to see also is you’re starting to see the the the gold stocks outperform gold for the first time in quite some time um you know the gold price has come off 5% and yet the mining sector only come off 5% so you know the Leverage is there in in the upside and the downside in the miners and and uh the miners now are showing that uh they’re starting to catch up no and that’s exactly what we want to see like people are starting to understand what is happening we have the big billionaires like Stanley dragen Miller talking openly about acquiring gold and gold stocks we we need that type of publicity right we need those Main Street or main main mainstream media headlines to to sort of push us to to the next stage because I mentioned it in a couple other interviews we’re still not seeing the journalist investor coming Downstream Upstream Downstream down to the Juniors right like the juniors are still lacking and before we hit the record button we briefly talked about the bifurcation in the market and where the funds are flowing and I think your investment philosophy covers that perfectly right um you’re only looking at later stage development companies companies that might have already generated a paa um so the question I wrote down earlier that I hinted at I was going to ask you like what would it take to bring you down earlier stage again Dave it’s going to take um the financing window open a lot opening a lot wider as you know it’s got a little crack right now um the the the capital markets have are are being very very selective and we’re seeing a lot of these early stage expiration companies just getting keep the lights on money so I want to see big financings in earlier stage companies um with preferably even without a warrant that’s you know that’s that’s highly unlikely giving their giving their early stage but I want to see big money being put into some of these early stage companies it’s still not there like the oreg index we’re still like our five week moving average is still around 50 which is not bad don’t get me wrong I think we’ll have a solid and healthy Financial year money raising wise but it’s not going to be frothy like we’re far from frothy if you look at the 100 level that uh of that index it was set back in January 2011 so it’s a bit maybe an unfair comparison we we’re doing much better but we’re still far from those levels uh we need to get back to those absolutely um Dave like there’s a few more things I want to talk to you about like we’ve talked extensively about gold obviously um as it is the main focus it tracks the most Capital um how about silver it’s still trailing gold and to Performance wise yes it’s up slightly above gold maybe 30% versus 25% but it should be 75% you know based on history like why are we lacking and why hasn’t silver BR30 we had a little excitement generated there because we saw silver run up to 30 on the back of geopolitical news so the so the the geopolitical uh component kicked into silver that was nice to see but $30 again became you know that’s multi-year stiff resistance and once uh gold got over 26 26 was was resistance for a couple years and now it’s come back to test I 26 I think this morning there’s an open Gap there at 26 I I think it might have been filled this morning in the Futures Market uh but that’s now that’s now bouncing from there so we had a retest of the breakout above 26 but if you look at the if you look at the silver stocks and you see you’re seeing a lot of bifurcation you’re seeing uh a lot of bifurcation in the silver stocks because you know let’s face it there’s really not a lot of silver stocks that are silver related stocks that are investable especially in the Juniors so you have to be very selective um but you know there’s still a lot of upside to be had in in these silver Juniors you just have to be in the right ones but as far as the silver price is concerned we need to get over 30 so what we need to see to get the bull market really going in in in in in the mining sector you need to see $30 ceiling in silver become a floor and you need to see that gold silver ratio T trending below 80 80’s been the number to watch on that gold to Silver ratio each time it gets there it goes right back up again and silver silver starts to lag gold again so we need to see both of those things because if you take a look at GDX gdxj and the silver price they’re almost mirrored in their stock charts so we need to see yeah we need to see uh $30 in silver become a floor now you you brought up the GDX gdxj and the hoie I’ll I’ll throw in there as well and I’ve been making comments and I’m almost annoyed by it but on a 12-month basis we’re still down despite the massive rally and in Precious Metals prices right still haven’t made a 52 we High GDX and gdxj yet they’ve they’re they attempted to the last week but you know we’re seeing we’re seeing we see we’re we’re seeing them both sharply hammer in the last two weeks we had strong sharp bullish hammers in the last two weeks off 40 in gdxj and 3250 in GDX those those were those were pretty strong resistance for the past year and a half or so and now they’re trying to become support right now it’s trying to to to produce a third bullish weekly Hammer off those levels as as we speak right now going into the jobs report tomorrow let’s talk we talked about the economy in the state of the economy shrinking economy is usually not good for the copper price so I’m curious um why is copper price railing right now we’re trading over 460 a pound over $10,000 a ton what’s been driving copper prices I think it’s a a few uh smelters in China were shut down I think that was that that that that’s a big reason and um you know silver I mean copper I think needs to get above five dollar and and $4 dollar needs to be a solid floor in Copper but I mean people are are are you know starting investors are figuring out the fact that hey we need to replace all this all the all these These Old copper mines that are being depleted and you know what is it one Bingham Canyon um needs to be uh replaced every year or something I don’t know what the with the figures I’m not I’m not as as well studied on copper as I am in gold and silver but I do follow copper and I do have several copper juniors in my in my portfolio but um you know we need to see uh the copper price get above five dollar I think now there are not too many copper Juniors out there no I had a I played a game with a friend a friend of mine the other day that I saw on a site visit and I was like how many ER M companies can you mention can you name and that is a challenge like think of it takes a think it takes some thinking it’s not one of those snap reactions right exactly ex that’s why that’s why I like it but you got to be very selective and very careful because you know it’s it’s like uranium you know there’s not a lot of uranium Juniors out there and if you pick the wrong one then then you’re gonna get killed well there’s there’s 10 I think so um Ju Just on copper real quick Da I wanted to ask you about uranium we’ll get to it in a second but just on copper be a P announced that they want to buy Anglo American what is the signal there like how can we interpret that that’s huge I mean what that would be the biggest mining deal maybe ever I mean it’s it’s it’s huge and you know ofo Eagle I mean U um um Anglo came out immediately and said no that’s too cheap this is and then a report came out this is this is the price this is the fair price and um if the deal gets gets done or it doesn’t I don’t think I think it matters more if it does but it still it it it brings a spotlight onto the sector which is what we need we need to see more eyes on the mining sector because if you take a look at the mining sector how small it is in relation to to the rest of the market I mean what is it 1% you know is in relation to the rest of the market I mean that’s a a century low I mean nobody cares about mining right I mean and that’s why that’s why we’re continuing to hold and we continue to have optimism because we know that’s going to change it’s just it’s the timing right we don’t know when that time is is going to happen and we thought it was going to be when the gold price finally broke out above 2100 but it looks like that maybe gold price needs to break out above 2500 before we get more you know more generalist eyes on our sector I was gonna say I love how we’re moving gold posts like I I can remember doing interviews like oh gold just got to go above $2,000 and we’ll beor right and then everybody will have 10 Baggers in their portfolio right no so now we’re saying 25 it’s interesting because it’s it’s really tough to time you don’t know what the trigger will be like why don’t the generalists believe right exactly and mean and that’s why you pretty much you have to you have to accumulate a basket of these Juniors if you want to play and you know with a lot of them that you accumulate for a while you have to make sure that they don’t dilute your your upside too much right because there’s a few companies that I own that I started getting into them when they had times upside now maybe they only have three or four or five times upside which is okay but um you know we we we get into these things because they’re high risk High reward right we want the we want the multi-baggers because it makes up for the mistakes that we made in in in picking some other ones because it’s you know it’s it’s basically like uh like a batter in baseball right if you get three out of 10 you’re doing pretty good and that’s that that’s the way you have to look at your portfolio in in your in your Junior portfolio and and uh you know your returns and and your wins and your losses and um but that’s what makes this sector so exciting and so fun right because it is such a challenge if you can if you can beat the junior sector you feel like you’re the king of the world you could beat almost anything because it’s it’s a very challenging and difficult sector to master tell me about I’ve been in it for 15 years I still haven’t figured it out you know um da have two more questions for you um so 20 oh I feel bad for you it’s getting grayer you’re you’re still only like what is it 39 so yeah 60 pal no um they have two question one is a philos philosophical one and then of course I mentioned we need to talk uranium um but maybe we’ll start with a philosoph philosophical one is do do you rather take in dilution or do you want to see the companies like be stagnant meaning like maybe I’ll give an example by what I mean fire weed zinc or fire weed Metals took in the londin and other big shareholders but they had to dilute by 40% but now there’re they’re they’re in a decent position of growth and they can expand and explore but dilution was an issue so the question is like how how where where do you stand on the topic of dilution versus value creation well it all depends on where the money comes from right if if it’s if it’s a strategic if it’s a ma if it’s a minor if it’s a strong partner if it’s you know a a strong Mind Builder you know then that’s a positive finance and the stock is going to take off on a positive Finance but if it’s just a a lower a lower number and it’s just a b mostly retail and the book is not strong then it’s going to be seen as uh a desperate move and the stock is going to go lower that’s pretty that’s that’s that’s that’s really what you need to look at where the money’s coming from how strong are those are those uh shareholders that are coming in and are they going to be beneficial to the project evidently being uh eventually being built no strong points and I fully agree like I personally I don’t mind dilution if it takes me to the next level of development right exactly value creation like and you gotta watch the warrants too right if it’s a full warrant at like three years that they have to give up then you know there they desperate and they were and they and and they had to do a lot of shucking and jiving to attract the capital right exactly well as an investor I do want the warrant but as a you know the company rep I don’t want to give out warrants right I’m a director of two companies I’m fighting truth and nail not to give them out but sometimes you have to right that’s what big money says um there’s no way around it um da let’s wrap up the conversation I mentioned we we need to talk uranium real quick uh I think we’re trading at 9230 a pound again uh so maybe versing that downtrend and maybe that correction phase here’s what you’re thinking about uranium and uranium stocks in general well you know that’s not my area of expertise anymore I’ve I’ve kind of shunn the sector um for the past several years I I I unfortunately I didn’t get get in on the big move up I was concentrating on gold and silver and copper but um you know I I’d what I’d like to see is some of that money coming into the to gold and silver as as the stocks are starting to come off a bit I mean you are seeing some some m&a in uranium as well um but it’s you know if if Junior Gold and Silver and copper stocks are are very risky and and and very volatile and and they’re pretty much hugely they are hugely very risky and very volatile then uranium stocks are even more so so that’s that’s a that’s a higher risk and higher volatility sector that I’m I don’t feel comfortable holding stocks for a long period of time because what I like to do is I like to see I like to see you know two three four five years upside in holding a stock and holding a junior silver cop uh silver gold or or copper stock and i’ like to feel comfortable holding that for a long period of time and I don’t feel comfortable holding uranium stocks for that longer period of time uh you and I are very similar in that regard I’m a hodler uh I’m a hopeless dreamer and romantic Junior mining yes H I’m the worst Trader so um we definitely have something in common there we’re both liking like like I look at the long terms like I want to build something like I want to exact not a Traders like I’m not in for a quick Flip or even chasing one right I believe in these management teams I believe in these projects and like I like you said at the opening you know I invest in these things I’m investing my hard-earned money along with my subscribers so I want to see them I I want to see them do well I want to see them invested in the company I want to see them participating in financings I wantan to I want to see them drisking the projects in in in in a fiscally sound manner you know R you know man man managing Capital markets is a big one if you mismanage Capital markets then you’re out of the game I mean you know I mean you could be like Sado and end up having to sell your best asset because you mismanage Capital markets right I mean and and this happens to the best of them I mean this is a man you know Sado is a fantastic management team they made me a lot of money with the with was Desert Sun was one of my first big wins in the mining sector when I got into this space 20 years ago you know they did a fantastic job with that with that that project they sold you know that everybody made money and they were trying to do it again here with uh with Monto D Carmo which is you know Mark Brennan said himself was one of the best assets he’s ever seen and unfortunately you know they they are big shareholders and they didn’t want to over dilute themselves so they waited too long and they ended up mismanaging the Capital markets and unfortunately they had to sell their best asset Junior mining is such a Fickle Beast like there’s no winning formula which is really interesting what worked during the last bull market isn’t might not work during this bull market right I mean look what happened during the last bow Market nobody did did anybody even care about permitting no they didn’t they nobody was saying anything about okay how long is it going to take to permit the mine when are you when are you looking to be um shovel ready nobody cared they just wanted ounces low grade high grade they didn’t care ounces at any price now remembers like the narrative is slowly changing because everybody’s talking about oh $100 ounce in the ground now everybody looks at like well I might sell it for 20 yeah you I mean now the average is what 30 3040 an ounce in the ground is what these it’s definitely coming down right and then at the top of the last bull market you had uh uh What uh uh redb taken out at $1,000 an ounce on the ground and then you had uh the company that owned the Midas uh project um that uh spun-off pilot gold that’s now Liberty gold uh starts with an F I don’t remember the name I’ve been to it sold $1,200 an ounce on the ground $1,200 an ounce on the ground now these things are trading at 30 40 some are trading at$ five an ounce and they have multi-million out projects in safe jurisdictions you know in a jurisdiction like Idaho but the ne process to get thing permit takes like three years same in Arizona yeah absolutely Dave da absolutely wonderful conversation I could keep this going as as you notice like this is turning more into a discussion now and I absolutely love it yeah sorry out here in Frankfurt off topic oh it’s a fun topic like both we both know a lot about it obviously and it’s fun debating and again I do apologize for the camera cutting in and out I think it’s a wonky USBC cable but Dave you got to come out to Germany you got to join me here at the Weston Grand next time oh yeah my if if you do it during the summer my my wife and kid could come with me I’m there maybe over Thanksgiving next time yeah maybe we did it over Thanksgiving last year so I have to look at the dates for 2025 and uh you know Dave where can we follow your work where can we find more uh well um every week I put out a uh weekly column for KidCo at it’s kitco.com and uh you could find me on my website Junior minor junky with a y.com phenomenal Dave like I really enjoyed this conversation it been way overdue it’s too long since we’ve properly chatted and I can’t wait to see you again hopefully it may be precious medals in September me too Kai thanks thanks looking forward to it pleasure everybody else thank you so much for tuning in really enjoyed this discussion with Dave earthley I’ve known him for a number of years great sounding board he does a fantastic job on the mining side and as I said like he invests his own money that really separates him so he looks at things very differently because you can’t afford to lose money quite honestly who can and uh you maybe it adds an extra you know step of due diligence which is really important and as you’ve noticed he understands the macro picture as well he sees where things are headed he’s adjusted his investment principles accordingly moved later stage and as you as you’ve heard I’ve asked him what takes what does it take to come back to the Juniors well more money in the market we need the generalists investing in the junior stocks more placements or private placement or money flowing into private placements if you enjoyed this discussion please do us a huge favor hit the H that subscribe button leave a comment leave a like where are you investing how do you see things going obviously gold next Target according to Dave is $3,000 um and numbers like I’ve said in another conversation sounded absurd and crazy not even 12 months ago when people mention it now it seems the norm even City Bank raised their price target for gold to that level and uh that seems to be the new normal and I’m excited about it what it will do to the junior mining stocks or the mining stocks in general follow us for more we really appreciate you tuning in and we’ll be back thank you so much here from Frankfurt from the do gold method

This interview was long overdue – David Erfle, The Junior Miner Junky, returns to Soar Financially. From my hotel room at Deutsche Goldmesse, we dive into several important topics, like the FED being silent about stagflation, the bullish picture for Gold and of course, the trading behaviour of the mining stocks, including Newmont and Barrick Gold. ENJOY!!

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Thank you to our #sponsor MONEY METALS. Make sure to pay them a visit: https://bit.ly/BUYGoldSilver
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Guest: David Erfle
Company: The Junior Miner Junky
🌎 https://www.juniorminerjunky.com/
🌎 https://www.kitco.com/author/david-erfle

Recording date: May 2nd, 2024

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Chapters & Timestamps (AI Generated):
00:00 Intro
00:06 Stagflation Indicators
00:43 Guest Introduction
02:14 Discussing Gold
03:16 Key Drivers of Gold
05:02 Jobs Report and Market Impact
06:24 Fed’s View on Inflation
10:10 Stagflation and Gold Impact
13:42 National Debt and Fiscal Issues
15:01 Fed Strategy Discussion
18:07 Major Miners: Newmont, Barrick, Agnico
20:53 Operational Performance
23:33 Mergers and Acquisitions in Mining
29:31 Silver Market and Stocks
32:57 Copper Prices and Industry Trends
34:33 BHP and Anglo American Deal
38:10 Mining Sector Discussion
40:01 Dilution vs. Value Creation
44:02 Uranium Market Trends
45:50 Wrap-Up and Closing

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