A decade of pain and three months of ‘beautiful times’ – Steve de Jong on mining’s long cycles

A decade of pain and three months of ‘beautiful times’ – Steve de Jong on mining’s long cycles

hey everyone I’m Jeremy saffron and this
is Kiko news as the AI driven future
reshapes Industries copper and other
precious metal demand is soaring and
today’s guest is at the heart of this
transformation he speaks to the miners
every day so let’s check in to see how
the sector is doing Steve dang CEO of
verifi is pioneering the way we explore
and invest in mining with cuttingedge
technology and he joins us in the studio
today Steve thanks for being on with us
let’s start by talking a little bit
about where M where the mining sector
was last year as a very difficult year
for junior miners access to Capital we
didn’t see a ton of activity a little
bit of m&a and then come into this year
we have all-time highs with gold uh
what’s the sector been like with these
new prices uh well looking back it’s
almost like we’re all those of us been
in the sector for enough years it’s
almost like if I think of say the last
10 years it’s like you get three months
of beautiful times and then nine and a
three quarters of a year of absolute
pain last year was just another one of
those years um now for me it’s internal
Optimist I think you have to be in a
sector but seeing these commodity prices
take off you hear a lot of chatter about
how come the equities aren’t reacting to
the commodity prices to me that’s the
best environment in the world because
that is your opportunity it’s when the
equities are tracking the high commodity
prices that’s sort of the kind of The
Upside is shrinking by the by the moment
yeah um so right now I think it’s to me
it’s the most exciting time and like
you’re seeing alltime highs in the price
of gold um you’re watching the copper
price run and everything else I I think
back to like prior to this I was running
a a junior gold company and the things
we would have done for $1,500 gold and
that wasn’t that wasn’t that long that
sort of six seven years ago $1,200 gold
was a norm we’re sitting here at $2,400
Gold I also think that um as we start to
see assuming this metal price sticks
around or goes higher which I think I
think it will as you start to see all
this kickout in quarterly kind of
production and revenue and everything
else that’s when the rest of the world
will really start waking up and is that
when you think Equity prices will kind
of catch up to the prices precious
depends Equity prices if you’re talking
about Equity prices for Majors yes and
minors and producers and things like
that I think the equity prices for the
Explorers I think they’re tied but not
there’s not a perfect correlation I
think that the Catalyst for the juniors
is going to be a little bit different
yeah talk to me a little bit about how
high the cost of capital has been and
what a struggle it’s been for the junior
miners I mean last year you could hardly
raise anything unless you went to
someone larger uh this year might
hopefully be a little bit different but
is it you know the cost to Capital is
high we have labor costs higher it’s
been a struggle yeah I I think that’s um
it is such a volatile volatile sector
which works in your fa works for you and
against you right um share prices go up
these are 90% of the funding that comes
into the sector is through Equity so as
share prices go up cost Capital reduces
as the cost of capital reduces the the
sector becomes more attractive so then
that in itself brings in more Capital
share prices go up and you get into that
um sort of self-fulfilling prophecy
almost and I think we’re starting to see
that if you look at even just last two
three months You’ see these these share
prices run and um one of the other
issues that I think have made it really
hard for companies to raise money is
there hasn’t been much liquidity and as
share prices run more interest comes in
volume starts ticking up institutional
money can now finally look at the sector
liquidity liquidity for a for a um
public compan is an asset in itself so
as their liquidity profiles increase
that also attracts more capital yeah the
flip side of that is if if you see sort
of liquidity dry up and share prices
fall cost of capital go up you get into
that sort of death spiral that feels
like we’ve been in almost like a a
10year death spiral that we’re just kind
of pulling our way out of so I don’t
think it’s I I I think it is very much
the cost of capital to to Really Drive
the sector forward is just inherently
tied to kind of the level of interest in
the sector at any given time given this
the primary funding funding mechanism
that we tend to use is issuing shares
right well let’s talk a little bit about
the retail audience looking over at
mining again specifically on the junior
side looking for these opportunities if
they were to go to the S&P and grab 20%
30% swings maybe Bitcoin it seems
they’ve been looking towards those
directions uh as these prices start to
come up on the gold side and investors
are starting to look at other
opportunities do you think that that
retail audience will slowly start coming
back this year uh I yeah I think without
a doubt I think if you’re retailer ins
institutional any any type of investor
you’re always looking like what is the
best opportunity um in the past like if
if we dial back say two years or so
you’re looking at sort of a um the
general markets continue to plow forward
so if I’m an investor and I’m I’m
completely agnostic I don’t have any
sort of spe special attachment to
Commodities versus something else if
something’s performing and something’s
not performing I need a really good
reason to risk something that’s a known
or something that’s winning to invest in
something that um isn’t now but I’m
essentially trying to call a bottom what
we’ve seen now is we’re in an
environment where everything has
continued to rise in those General
markets and if we if we look at some of
the indices of um they’re really being
held up by just a few big companies um
whereas you have this complete
Detachment from commodity prices and the
equity prices in our sector um that
didn’t exist before yeah so if I’m now
as an outside investor again completely
agnostic to what sector I’m looking in
that is the most attractive environment
I could find myself in because you’d
think that two one of two things is
going to happen commodity prices are
going to come back down and the equity
prices are going to be in the right spot
or the equity prices are going to turn
around and catch up with commodity
prices I don’t think the Junior market
and the commodity Market in general the
equity side is a leading indicator to
the commodity price I don’t think it’s
that efficient of a market I think the
commodity prices are what they are and
right now there’s a play to be had in
kind of getting into the equities and as
it starts to catch up to where the
commodity prices sit talk to me a little
bit about the narrative that you’re
hearing because again you talked to
these you know major producers and the
Juniors um when you start to look at
permitting risks for instance we
political broke this story yesterday
about Amer medals uh getting a road cut
off in Alaska by Biden we’re at this
Crossroads it seems as though everyone
understands we need more mines in
operation and that it takes a long time
to get there but then these things
happen is it a friendlier environment to
be a minor right now um yeah I don’t
know if in yeah no I guess in a lot of
it’s I think it’s difficult I think if
we look at it from a from a put a
political lens on it I personally think
all these decisions are made from a
political lens whether it’s um like when
when you think of Permitting and so on
and I I’ll use the example of Our Own
federal budget that just came out too I
think every decision within that is
based on a place of what if I allocate
this money to here what what kind of
what votes will that ultimately get me
and I I think that sort of most of the
decisions that are made from permitting
and kind of the example you gave and
whether or not that’s going to go for is
entirely based on what kind of votes and
what allocation of of votes and my model
of what votes I need to get elected yeah
um unfortunately right now it seems like
like government bodies are often kind of
speaking out of both sides of their
mouth yeah like we need these resources
we need the jobs that come from these
resources we need the critical minerals
from these mines to fuel that energy
transition that we all believe and have
built policy around but at the same time
we’re going to make it as difficult as
possible to kind of get these things
permitted and and and so on
um yeah ultimately I think it’s it’s and
I think politics often go that way I
think there’s a bit of confusion and a
lack of Direction in what um where where
we actually need to end up right I think
it is in personally I think it’s in
everyone’s best favor to find
environmentally sustainable responsible
ways to permit these things as quickly
as possible I personally don’t think
time is necessarily correlated to the
quality of of the review process it just
seems to be this default the longer it
takes it must be more thorough and I
don’t think that’s the
and I think governments should really
focus on how do we really
responsibly accelerate the permitting
process and ensure that the the minds
that the world needs that our economy
needs that that we need for the energy
transition get through that process as
quickly as possible and we need to
detach it from like this is
automatically a 10-year period because I
don’t think that’s in anyone’s anyone’s
benefit no it almost seems as that they
don’t even know how long it’s going to
take to get into production let alone
permit hire everyone raise capital and
and going back to your question about
cost of capital if I’m in investor in
something and I don’t know how long it’s
going to take for you to get to that
point what’s the point of being investor
yeah so like investing whether we like
it or not is what can you do for me now
and if I don’t know that your mind is
sort of one or 10 years away I’ll just
wait till you know and can give me that
answer and then I’ll come back and
invest in it yeah the problem is if
these are for the most part public
companies if doesn’t if you see that
Exodus of investment Capital into your
mind what happens is your share price
goes to zero or or a very low price your
cost the capital goes through the roof
and then even just to maintain yourself
through that permitting process becomes
very difficult right and it’s one thing
I don’t think that’s governments
specifically really have a full
comprehension of of sort of the KnockOn
effects of these decisions that they
make it’s sort of if you create the
perception that a jurisdiction is tough
to permit in what you’re the knock on
effect of that is you’re you’re
essentially making it way more expens
expensive and less likely that anything
will actually take place in in that in
that environment right okay well I mean
supply and demand seem to be an issue
for copper I mean we have a huge huge
demand a little bit of a supply problem
may be happening we see of course
fredman talking about this all the time
I’m curious
about technological advancements in
mining and you know this whole Supply
crunch we’re not where we need to be yet
but talk to me about the opportunity we
have to get there so it’s
um one of the things we’re doing so I’m
Co of verify technology one of the thing
we’re doing at verify is is work along
with clients in their data to see if we
are there opportunities within Tech
using technology to help identify areas
that may have been missed for
mineralization and um you you’ve
probably heard the narrative before in
the sector all the easy stuff has been
found we need to go to the far off
corners of the Earth or dig three four
kilometers deep in the earth to find the
next um wave of dis for the next wave of
discoveries and minerals I personally
don’t believe to that or ascribe to that
um company I ran before made a big high
grade gold Discovery two kilometers from
two of Canada’s biggest mins and a big
part of that was just it was sitting
under a swamp and and wasn’t um there
was nothing at surface surface to look
at right the work that we’re doing at
verify now and and and uh kind of really
trying to harness that machine learning
artificial intelligence primarily
machine learning to look at existing
data sets to see if we can identify new
things that in in the first two months
it’s our heads are exploding and every
time we see these results um in that
kind of the amount of potential that we
see just using existing data from from
the data that these companies already
have just taking a new technological
lens and applying it to it is incredible
so again very much kind of drinking our
own Kool-Aid here and biased but I
honestly think the next wave of
discoveries are not going to be from
crazy new technologies or or geophysics
or things like that I think all those
tools are great I think we’re vastly
vastly underestimating the value and the
data that we already have today and just
by taking a new lens and looking at it
we’re going to see so much and from that
I do believe there’s going to be a whole
new wave of discoveries that are made
and help kind of fuel that need for or
or um Supply that that uh create that
supply that there’s going to be demand
for like copper and and other things
like that and how much of a demand for
this technology is needed I mean you’re
talking to people every day on the
street people excited about this
technology they want it they want to
probably understand where these assets
are it’s it it’s Yeah it’s you’re you’re
in an environment so people are always
looking for imagine if I you could take
sort of your acid as it exists today and
without actually doing anything more or
kind of drilling more or spending a
bunch on a whole bunch of new expensive
studies and so on you could take it
process it and say like actually here’s
two or three opportunities that may have
been been overseen and here is actually
a geological technical reason why those
are really exciting um opportunities
areas for for mineralization right um in
this environment it’s kind of I would
say the best way to describe it is we
drink it from the fire hose and a big
part of that is is you’re in a
everyone’s very conscious of their
expiration budgets ultimately what we
need is we need to keep exploring though
if you as as an expiration company and
even for the big producers your
expiration upside is still a big part of
your Val valuation that’s the lever
that’s going to help kind of get you to
the next level um the amount of demand
we’re seeing for that is yeah it’s it’s
more than I I wouldn’t say it’s more but
it’s it’s really really exciting the
other side of it too though is I’m a big
believer and we’ve been really vocal
about this is I believe you’re going to
see this separation of the market
between the companies that actually
fully Embrace technology and those that
say we’re going to just keep on keeping
on the Market’s going to come back our
share price will go up we’ll raise money
and keep drilling not to say that that
won’t happen but if if you think of like
think of the market like the the auto
market and look at the market cap of
Tesla and the multiple that has versus a
Ford or anything else if you give them
each 10 billion dollars of Revenue Tesla
is going to be 10 times the share price
and it’s because Tesla has been able to
bring in a tech multiple and it has lots
of other things it’s doing and I think
there’s a massive opportunity within our
Market or within our within the industry
to embrace technology in a way that
allows the investing public to say I’ve
never really known much about this
sector I never have kind of stayed from
it or you digging holes in the ground to
get Metals out or what but now that
you’re using artificial intelligence and
things like that that’s enough for me to
take another look at it and I do think
you’re going to start to see a real
separation between the companies that
Embrace artificial intelligence and new
technologies and those that are really
just waiting for the commodity price to
give them a market where they can kind
of get back to work give me a couple of
other examples as how technology can be
used even from a marketing perspective
because as you said we’re kind of in a
sector it’s almost a little bit more old
schooled it’s more difficult to get
those flashy Bitcoin investors to come
over the side is there a way to open up
Tech to digitize mining a little bit you
know be it 3D glasses and mine tours I
don’t know just wondering how you’re
going about getting those new eyeballs
uh it’s timely question I walked over
here from a two-hour meeting we just had
with our 3D team trying to solve that
exact problem so I’d verify we’ve spent
six years building a a visualization
platform for the sector so now that this
work that we’re doing in artificial
intelligence to help um build predictive
models on where mineralization might
occur to help you hone in on Where to
drill we’re plugging that immediately
back into our visualization platform and
the problem we’re trying to solve is
essentially if you think of the the
expiration side of the industry it’s
essentially a treasure hunt that’s
that’s all it really is pretty much it’s
kind of like we’re kind of using Clues
to kind of guide us to something and if
we find it everyone’s going to be
rewarded um it’s not actually not that
different than a video game and so the
the challenge I gave to our team today
is like how do we recreate all of this
instead of like trying to take these
very technical geological models and and
present them in a way that the whole
world can understand which I think I’ve
kind of learned as almost an impossible
task can we recreate this in a way that
and the average investor says I don’t
fully understand the technical
geological geophysical details of
everything but I’m really excited for
you to go drill that thing so a
digitized 4311 you can have something
where you can actually visualize totally
what the opportunity is yeah and it’s
it’s to be honest like the ideas that
that we’re starting to work through with
some of our initial clients and doing it
and and that the team is coming up with
is is it’s really exciting and I spent a
lot of the last five years with tech
investors running a technology even
though we service mining it’s a
technology company and the one thing I
will say is they are fascinated by our
sector and that sort of you have an idea
go stake some ground but then your
public like in the tech sector you’re
you’re going public is like the you get
to 100 million in revenue and then
eventually you’ve earned the right to go
public we like set up a website email
address and a public listing all on the
same day they there there’s a whole
world that’s fascinated by our sector
the fact that we’re public early the
kind of the incredible outsized returns
if it’s done right I think what we need
to do is just find a way to get them
excited about it and I think personally
I think this sort of using artificial
intelligence in a way and presenting it
back in a way that makes sense to them
is going to open up a massive pool of
capital for a sector and if that’s
happening at the same time you’re
watching Comm commodity prices hit
alltime High go there is no better
environment and that’s kind of why I to
to that um to the early part of this
it’s why I think mining and mineral
expiration are kind of too different
like the catalysts that are going to
lead to those Industries changing um or
sorry really appreciating in value is is
is somewhat different um and the same
right talk to me a little bit about m&a
in the environment right now last year
we saw new mod obviously people going
and purchase a couple things there’s
been a little bit of activity do you
think with the cost of capital being so
high that you’re going to see some of
these big guys come and suck up to
juniors
I think what you’re going to see is if
the if the producers um if the producers
and typically they do their share prices
and their multiples are the leaders and
a Junior’s leg they’re going to play
that Arbitrage because it’s going to be
a lot cheaper for them to go buy a
junior than it is for them to do it them
themselves and if their cost of capital
um if the if the if the majors or the
acquirers in that scenario if their cost
of capital has gone down because their
share price has gone up and they can use
their shares to buy these companies I
think you’ll see it all day I think that
window is starting to happen in which
case like there are lots of there are
sorry there are not that many really
attractive assets out there right so I
think what you probably have is a bunch
of Majors kind of waiting for sort of if
their share price starts to outperform
that Juniors and they they’ve all
sitting on their analysis watching it if
that window opens I think you’ll see
them jump on it yeah there’s quite a few
people looking at it right now I’m sure
I’m I’m sure there’s a whole lot of
people looking at it right now yeah talk
to me a little bit about your outlook
for uh 2024 I mean again you’re you’re
in the the environment where you’re
talking to these Juniors every day and
you’re talking to the minors so how do
you see this going I mean we got a an
election coming up in the United States
and 70% of the countries around the
world actually and um all-time highs on
gold prices you know Middle East
problems where are we
at yeah I don’t know it’s it’s you watch
whatever your news source is I think
it’s easy to focus on all of the the
sensation ISM around all the things that
are going wrong I think it’s I think
2024 is going to be awesome I think it’s
I think it’s a really exciting year um
there’s going to be all kinds of things
that that go on in the world if we think
of it just from within the sector I
think there’s never been a more exciting
time when you’ve got bottom basement
Equity prices and skyrocketing commodity
prices so I think that’s really exciting
um I actually didn’t know 70% of
countries in the world were had election
population wild yeah that I think the
hard part with that Canada us are all
the same is that it’s the hard part to
digest as the average person is like
it’s you see so much policy made and
decisions being made on the fact that
there’s an upcoming I’d like to think
we’ it’d be really nice if we could
beyond that and start making long-term
decisions as as societies and so on but
going back to your question I think 202
for if if looking back and so much of my
own life and those of us in the sector
is affected by the state of kind of the
industry at any given time right most
excited I’ve been in in a long time um
and that’s because I think again I think
technolog is going to unlock all kinds
of really cool things we don’t even know
what those things are at the same time
like our industry which has not had an
easy couple years as you know is is
moving into a really exciting Place yeah
and even walking around p pdac a couple
of months ago it was interesting because
we had alltime highs then and people
were walking around as as though it
wasn’t really happening it was almost
disbelief it’s like H what’s going to
happen next it’s kind of the same right
now totally it’s a yeah pex’s always a
surreal experience because you’ve got
like 500 companies all jammed into a
room together and it’s sort of um always
fun let me tell you yeah exactly all
right Steve deang coming on with that
CEO verify hey thank you for coming
today appreciate your time yeah thanks
so much for having me that was a good
macro Outlook I’m Jeremy zaffer for all
of us here at K thanks for joining don’t
forget to subscribe and to like our
video and we’ll see you next time
[Music]

Resource investors are living in the “best environment”, noted Steve de Jong, CEO of VRIFY.

Last week Jeremy Szafron, anchor at Kitco News, interviewed de Jong.

De Jong discussed the impacts of high commodity prices on mining equities, the complexities surrounding mining permits, and potential increases in mergers and acquisitions.

The metal sector has been on an upswing with gold hitting several all-time highs in 2024 and copper prices rallying. De Jong noted that the cycles are long.

“Those of us been in the sector for enough years…you get three months of beautiful times and then 9 3/4 years of absolute pain,” said de Jong. “Last year was just another one of those years. I’m an internal optimist. You have to be in this sector, but seeing these commodity prices take off…you hear a lot of chatter about how come the equities aren’t reacting to the commodity prices. To me that’s the best environment in the world because that is your opportunity. The upside is shrinking by the moment,” said de Jong.

VRIFY is a technology platform that helps resource companies present their businesses. VRIFY, which is based in Vancouver, serves over 130 clients across 70 countries, including mineral exploration companies Southern Cross Gold and Integra Resources, as well as major mining companies Teck and Kinross Gold. Last year the company announced a $6 million series-A raise.

Prior to VRIFY, de Jong was president and CEO of Integra Gold, a Quebec-focused resource exploration company focused on advancing the Lamaque Gold Project. De Jong led the business from a C$10 million valuation in 2012 to a C$590 million acquisition by Eldorado Gold Corporation in 2017. The Lamaque Gold Project is now a fully operational mine which produces approximately 200,000 ounces of gold per year and employs more than 400 people from the local community.

The conversation also covered how technological advancements are reshaping exploration and investment within the mining industry, offering insights into the macro-outlook for 2024 amid rising metal prices and evolving market dynamics.

Follow Jeremy Szafron on X: @JeremySzafron (https://twitter.com/JeremySzafron)
Follow Kitco News on X: @KitcoNewsNOW (https://twitter.com/kitconewsnow)
Follow VRIFY on X: @VRIFYTechnology (https://twitter.com/VRIFYTechnology)

00:00 – Introduction and State of the Mining Sector
02:15 – High Commodity Prices and Their Impact on Equities
04:07 – Retail Interest and Investment Trends in Mining
06:01 – Permitting Risks and Political Impacts on Mining
08:06 – Technological Advancements and Efficiency in Mining
10:21 – The Future of Mining Exploration with AI and Tech
13:06 – Mergers and Acquisitions: Current Landscape and Predictions
16:28 – Closing Remarks and Outlook for 2024

#preciousmetals #gold #miningstocks #copper #MiningIndustry #CommodityPrices #JuniorMiners #MiningTechnology #InvestmentTrends #MiningExploration #KitcoNews #Mining2024 #mining

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