The Big Short’s Porter Collins Is Betting on Gold Miners

0:05Good morning. Happy Friday, everybody. Welcome to this week's long form episode on Mining Stock Daily as we get you into the last trading day of the week into the weekend and then obviously traveling most of you up to the Beaver Creek Precious Metals Summit here in Colorado. Best time of year for us as everybody comes our way. So look forward to seeing as many of you as possible. We are closing out the week with a great conversation with the one and only Porter Collins, value investor, short seller, two-time Olympian. And, you know, as what he says on his X feed, always looking for the next big short.

0:42But he talks a lot about diving into the mining and metals sector. Big conversation. Also, general conversation, what he's seeing in markets right now, specifically following the FedRate hike this week. So, great conversation. Wonderful opportunity to listen in on your travels to Colorado. Special thank you to Revival Gold, Integra Resources, Equinox Gold, and Visa Silver for their continued support of Mining Stock Daily. I'm looking forward to catching up with all of them next week. And also of note, Tara Hutton, if you are interested in your online presence and digital format of a site visit, Tara Hutton helps make the invisible investable.

1:24They are going to be here in Colorado over the next couple weeks. If you're interested in learning more about that platform, which is incredible and it's really awesome to see it all work together, shoot me a message or I'm happy to get you in touch with that team over at TerraHut and the team will be here willing to give you a deep dive into that platform. All right, let's jump into my conversations with the one and only Porter Collins. Have a great weekend. This might be a first here on Mining Stock Daily in the many years we've been publishing long-form episodes. Not only is it a first that we've had Mr.

1:58Porter Collins onto the podcast to talk all things macro and how he is approaching markets, but it's also the first time. I think we've had somebody whose character has actually been represented in a Hollywood film. So, Porter, it's a pleasure to have you on. I'm not only – I mean, obviously, you've really embraced this over the last number of years. I mean, your picture on your ex feed is, you know, from the film. And it seems like, you know, you've never shied away from it. You've just kind of used it and accepted it. You know, well, thanks for having me. It's a first for me as well. You know, I'm not sure I'm an expert here on your show, but I'm going to have fun with it.

2:39And yeah, no, it's been good. If you go back to the book, not that many people read the book, but everyone sees the movie. And kids these days, almost every high school or college, for TV shit, for classrooms, they're watching the movie. So it's been fun. Yeah. I mean, I have seen that film so many times. And it's 99 % accurate. So it's great. They did a really good job with it. Very good. Well, it actually, I'm glad we can really embrace it because I didn't go back and watch the film the entirety in preparation for the interview, but I did go back and watch a few just kind of clips from the film.

3:26And it's interesting because you guys are formerly from Frontpoint now, Sea with Capital. It's like you're getting the band back together. And you've done so in the last couple of years. Well, you know, Vinny and I have been working together since we, since FunPoint started, which is 2001. And so we've never not been working together since then. And, you know, with Steve, we got on a podcast with Steve the other day. And it's, it's, it's always fun to, you know, talk with Steve because, you know, we have such a shared history together. and we sort of think similarly or at least understand each other similarly and Danny's always in the mix with it as well.

4:12Danny's our partner with our new Substack we have and so that's been fun. Well, the reason I had brought it up because watching moments in the film, it was obvious that the four of you always kind of pushed each other and provided ideas that maybe Steve didn't always agree with. And actually, I was thinking, and it hit home because I'm actually reading, I'm going to pull this up, Annie Duke's Thinking and Bets. Have you ever read this book? I have not, but I know of it, yes. Yeah. And part of the book is she talks about forming a group of people that you know do not share one's own bias, and you create better decisions by understanding the other side.

4:59And it really kind of hit on watching some of those segments in the film and really understanding and seeing you guys actually communicate recently, that you did provide a really, you continue to provide a really good platform of pushing back ideas, sharing ideas that maybe others within that group are not necessarily thinking about. But that's incredibly important, especially on a contrarian investor standpoint, to understand the other side of the argument. And you've always, it seems like you've always been a contrarian. you've maybe been pigeonholed as a contrarian. But can you maybe help us walk us through the investor mindset of being able to accept ideas that maybe you're not going to agree with, that you're emotionally disenfranchised with?

5:42It's a good question. I mean, I don't know why you kind of get pigeonholed. Basically, when you start your career, obviously you have good moments and bad moments. when I started my career is that sort of the dot-com bus was just taking form. And for whatever reason, you know, I tended to be a little bit bearish. And maybe that's the thing we all do share is that we can go zero to full bear pretty quickly. But, you know, we try not to have political views because that really distorts your mind. And we try to be very flexible because the market is flexible. And if you're rigid, you know, the market's going to going to chew you up.

6:26So, you know, as far as being contrarian, you know, you can have contrarian trades. Maybe, you know, as of yesterday, you know, we got peak hawkishness from the Fed and, you know, 10 year rates have had a big run and maybe they come back and mean revert. But I sort of like thinking about it and tying it to fundamentals. And, you know, if I think about things in terms of the capital cycle, you know, high rates of return attract capital and, you know, low rates of return, you know, completely repellent, right? And so if you think about the mining cycle, you know, in 2011, peak bullishness, same thing with oil and gas, peak bullishness, and then it all came crashing down.

7:17And, you know, no capital has really returned to the sector. I mean, there's obviously there's capital in the sector, but there's, you know, there's not a lot of individual mining funds out there, you know, putting a lot of capital and you don't see private equity putting money into gold or copper miners, right? They take 15 years to build a copper mine. So you don't see that. And so, you know, look at the most recent example of oil refineries. Like five years ago, I mean, even recently, the Chevron shutting down oil refineries in California. Right. And so when when capital just flees and exits, usually that's a good time to get in because fundamentals are about to return.

8:03You know, we have a, you know, part of our, you know, bucket of investment theses, we have oil rigs like Transocean, right? You know, they're never going to build another oil rig. Same thing with, you know, the oil supply vessels. Think about copper or coal mines. Like, they're never going to build another thermal coal mine. They're just not going to do it. and so if you think about stuff that you know left for dead how can it get better things you know things it would take to improve that and get better or inflection points like you had within refineries recently right you had this big inflection point where you know Ukrainian was taking out all the Russian refineries you have all the Middle East stuff going on and you know crack spreads go through the moon and there's only three players that can benefit from that And so that's really the contrarian stuff that we try to look at.

9:01Well, as a contrarian, I mean, you can be right. But if you're too early, you could also be wrong. And I mean, I think that was represented, you know, with the housing short, you know, obviously. And you took a lot of grief. And it's the same thing with, you know, kind of being long miners, either with the cycle of a specific operation or the cycle of the entire mining market. and where the metals prices are, the commodity market, right? So how do you size the position that you believe could take years to work? Is there a fundamental playbook here? Well, you know, there's always an answer, sort of.

9:41But if you think about the miners versus gold, there's a lot of people that says, well, you know, the physical has massively outperformed the miners. And if you look at Newmont stock price, I think it's flat since 1987. Right. I think that's something like that. Right. And so, you know, there's a lot of capital destruction going on at the same time. And so picking winners and picking good companies is paramount. Right. And so you could have a great thesis, but, you know, you know, flat for 30 years is not a it's not a great outcome. And so I think that, you know, one of our, you know, our sort of three largest gold miners are no particular order, but, you know, Aniko, Alamos and DPM Metals.

10:29And all of them sort of have the same discipline about them in terms of, you know, stick to what they're good at. You know, like, look at what Eniko has done. They have this mind plan where they can self-fund a lot of the growth, you know, over the next, you know, 10, 20 years. And they're bringing in projects like in Finland recently where that's not going to play out today, tomorrow, right? And you're not going to get instant gratification in the stock price. But, you know, over the next five to seven years, those are going to, those investments are going to layer into earnings. And, you know, the way I look at stocks like these and, you know, they may not be the sexiest gold miners and they might not go up, you know, thousand percent or whatever it is.

11:17But, you know, they are cash flow machines. You know, look at the EBITDA margins, you know, at$4 ,500 gold or$4 ,300 gold. um you know the EBITDA margins are you know between you know 60 and 70 percent those those are high returns on capital and they have and versus 2011 cycle these a lot of these miners were heavily indebted and now uh you know AEM has three billion dollars in cash net cash no debt And so I just think that a lot of things are flipped recently and, you know, there's only one miner in the S &P, right? Not just gold miner, but one miner, right? And so it's, you know, that's where we're kind of looking at.

12:08And, and, um, yeah, I think Porter, if I may, I think you were kind of playing down just your, your, your knowledge on this sector, just hearing this little ramble of you. I mean, you're obviously, it seems like, excuse me, it's not necessarily a contrarian play anymore. It seems like it's a, it's a great place for value in your portfolio. I think so. I mean, where, where, where I don't have my expertise is in, in, um, exploration and the geology. And that's where, you know, a lot of these guys are going to be a lot better. And, and honestly, recently, you know, in thinking about, um, real, um, you know, exploration and development type situations, you know, we've sort of outsourced that to, um, uh, Dundee, uh, Corp, which is, um, sort of a, small, odd ticker, but it has the, you know, it has a development portfolio and it has a bunch of engineers who've done it for 30 years and they know the assets and they know the geology certainly a lot better than I do and probably better than anyone else in the world.

13:18And, you know, I've sort of said that, okay, if I want to dabble a bit in high torque exploration, this is where I'm going to do it. And that's what I've done recently. And so I sort of have a barbelled approach in the way I invest in the gold sector. You know, a bit of high quality cash flowing miners that can, you know, self-fund exploration for a long time. Again, discipline management teams and then a little bit of exploration and then just sort of core gold, you know, gold and silver. Yeah. Can we talk about how you got here? I mean, what was the process and the discussion you had to make the decision the metals and the miners was probably the best place to allocate capital?

14:13knowing that you're mainly a generalist. You've probably been pigeonholed way too many times as a short buyer. But how did we get, when was it? Yeah, walk through that process of how you got here and really some of the homework and lessons learned you had to learn to start allocating. Well, you think about our roots, especially with Vinnie and I, and we are financials guys. And so, you know, the income statement in a financial is probably the last thing you look at. Right. And we look at the balance sheet and we look at, you know, what, you know, it's a totally different way of thinking because you don't know your cost of goods sold until much, much later.

15:02right? Because you're investing in, you're putting out a loan now that's not going to pay off for, you know, a long time. And you don't know the eventual loss for a long time. And so it's just a, it's a different way of thinking about things. And obviously there's a lot of leverage involved in banks and then interest rates have a huge play on financials. And so we've been deep in the weeds in the Fed and Treasury and monetary movements for years. And so that's kind of how we got here. And, you know, the first time I got there in terms of started hoarding physical gold was back in 07 when we thought the banks were going to collapse.

15:49And I don't think people really truly appreciate how close we were to, you know, you go into your ATM machine and not being able to, you know, get money out and, or having a bank holiday. And, and in that sense, the fed saved us there from a real calamity. Um, so that, that was one. And then two, you know, the, you could see this, this us fiscal crisis or global fiscal crisis, it's sort of been a slow moving train wreck for a long time, you know, and, and, you know, I think, you know, you talk about, you know, the GFC, you know, the way they got out, they printed. And we sort of had this thesis that, you know, when it happens again, they're going to print the money.

16:34And so it comes to COVID and they, you know, really brought out the printer. And, you know, they also, you know, debt financed everything. And so we haven't seen a balanced budget in years and the deficit keeps growing, the absolute level of debt keeps growing. And now, you know, I say this all the time, but you have interest expense plus entitlements is greater than tax receipts. Everything else to turn the lights on in the government is not covered. And so I sort of think you're at a past a point where no return. And I mean, it sounds bearish because it is, right? And, you know, rates are high because it's a problem.

17:16It's a problem all over the world. And, you know, it's not just the U.S. It's Europe. It's Japan. It's everywhere. And so it's the U.K. And, you know, that's the way I see it. And the only way out is going to print. And they are printing money, right? And so, you know, they call it, you know, I think reserve management exercises. I forget what they call it now. But they're printing money now. And they're going to continue to print. And so you have Besant out there trying to do all the gymnastics and you have the feds saying stuff, but there's nothing they can do right now. Yeah. Right? There's really no way out.

18:00In the couple decades you've been working in markets here, Porter, I think it's safe to say you probably found some standard of pattern recognition. Yeah. What does, if we sit here today, Thursday morning, September 17th, 2026, do you find a pattern, a recognized pattern here? It seems there's things in the back of my mind, it seems like there's a lot of things that's rhyming, but there's something specifically the inflationary story, which is a little bit of a curveball, not only for, you know, people trying to manage the economy and governments, but also for me as, you know, a capital allocator myself.

18:40and a person who's watching markets. So this is a unique one. But what kind of, is there a pattern recognition you see today that maybe reminds you of 2028, maybe even earlier, early 2000? Well, there's pattern recognition and then there's history, right? And I think that to be a successful long-term investor, you have to know the history and you have to know the history of, you know, fiat. If you're a gold investor, you have to know the complete history, right? The history of fiat money, the history of exploration in terms of a lot of the Columbus and a lot of the conquistadors. That was all the search for gold, right?

19:30And money and the history of money. And so that's where I think that, you know, how we blended in and use history, pattern recognition and long-term pattern recognition to, you know, focusing on what we do. And so, you know, the people are trying to rhyme with the 70s. You know, right now there are similarities, but there are a lot of differences as well. You know, we had a lot of population growth in the 70s. we have none right now except for some immigration. You know, we have a lot of debt right now, but we didn't have a lot of debt in the 70s. And so yet inflation is kind of accelerating, right?

20:13They went from, you know, the 2 % level to something higher right now, right? It's kind of, I think he said yesterday, it's closing around to 4%. And so the periods are not, you know, perfectly analogous, but they rhyme, right? And so finding patterns and finding things that fit your eye, I think, is important. I would like to get some of your comments and reaction to yesterday's Fed meeting and decision for a 25 basis point rate hike. Because after 24 hours, and I'll be completely honest with you, Porter, I'm really surprised that gold and markets are actually in the green today. I felt that the hike was priced into markets going into the meeting, and that's why we saw a lot of selling, a lot of volatility, specifically in precious metals.

21:07But the rebound today is something I think is worth noting. I don't know if I should be surprised, but I am. I was kind of waking up this morning expecting to see gold down 50 to 100 bucks. Those people were kind of thinking about, oh, they'll hike again later in the year. is that is this all out of surprise to you or is this just maybe a relief that we're starting to you know buy the news and after we you know sold the rumor i mean i'm i'm not i'm not surprised i mean i i get it and and people love the correlation between higher tenure rates and um lower gold but that correlation really broke down because we're looking at at not all-time high prices but you know, pretty, we're at$4 ,300 and the 10 years back at five, right?

21:59So there, if you look at the correlation over the last, I think it's sort of 2024 cycle, we've sort of broken that correlation where higher rates means lower gold. And so, you know, I see it more as, you know, for lack of a better term the feds sort of fucked here right they're in a horrible horrible situation right they they don't have any power they they used to have all the power and the market would do you know exactly what it wanted to but they have no power they can't do anything because inflation's higher they can't print the money um they can't lower rates they can't do anything right and they're forced to just chase what the market's doing and so when you when you have this uh fiscal dominance where you're you're you're two trillion dollars in deficits every year and no one seems to care except for idiots like me or or or crazy gold investors and and the fact that that you know the gold investors are the crazy ones is is nuts right we're the only sane people out there seeing saying hey you know how can i preserve my wealth against all this other of crazy stuff that's happening.

23:19And that's how I think about things. And, you know, I'm not trying to get rich quickly here. I'm trying to preserve my purchasing power. I'm trying to, you know, find miners where they can grow production, you know, 10, 20 % and have, and have leverage to a higher gold price. Right. And not do stupid things, you know, and, you know, have mine integrity and stuff that good management teams do. And so that's the way I look at things. The inflationary aspect of this economy is a little bit of a head-scratcher to me. And let me maybe provide a little pre-context before I get into my question. One of the reasons I reached out to you to see if we could schedule this interview is because you are going to be presenting at Jared Dillian's Dirtnap Conference.

24:15I'll be attending. That's later in October. Another friend of mine and person who's frequently on the podcast is Barry Knapp. He's also going to be presenting Barry Knapp from Ironside's Macro. And Barry is constantly saying inflation is always a monetary fiscal phenomenon, not a supply-driven phenomenon. that's monetary fiscal decisions what really drive inflation but the inflationary pulse we are seeing right now really is supply if at least it feels like it's supply driven given the energy prices and the war in iran do you feel could it be possible that we are not accepting again coming back to creating different ideas to maybe consider that this inflationary impulse, we're just seeing the numbers and not really understanding where that higher inflation data is coming from.

25:20And maybe if we shut down, maybe the war in Iran ends, all is said and done in maybe six months, we see inflation back to 2 % because supply sides are back to normal and equilibrium. Is that a possibility? Because I get both sides of the argument, you know, monetary inflation versus supply side inflation, which one we're dealing with right now. I think you just, I approach it sort of, try to approach it pragmatically. Like, first of all, real inflation is much higher than what they say it is, right? Because you just look at the CPI calculations. Yeah, 100%. They adjust, they idonically adjust.

25:57I think there's something like 100 ,000 adjustments in every CPI print. Right? 100 ,000. And so they seasonally adjust it, they hedonically adjust it, they adjust everything, right? And so that's done on purpose, right? Because the government's cost of social security is CPI linked. And so they're in a, they don't want it high, right? And so they fake us out. So that's one. Look at M2 growth. It's off the charts right now. I don't know the exact number, but look, I've seen the chart recently. It's moving higher. And then you start putting in, you know, consolidation in a lot of different industries.

26:55Right. And they've we've consolidated power among a lot of different firms and they have these big corporations have a lot of pricing power. Right. The insurance companies that we've consolidated down to very few insurance companies and there's a lot of pricing power there. You know, the the health care companies, you know, and so I think you're finally seeing a combination of it all. Like where you're not seeing inflation is obviously that the higher rates are a real problem. And so the housing market is is not inflating right now. It's, you know, in most of the southern states, the data says that the rents are, you know, going are decreasing right now, not in northern states, because, again, there's no supply of housing in the northern states.

27:45there's supply in the southern states. And so when you limit the, you know, go back to the supply-demand argument, when you hit the supply button, you know, prices do come down. So it's a little bit of, I don't know if I answered your question there, but. Well, actually, you brought up a good point. It was kind of an angle I did want to bring up with you, and that is, you know, the housing market. Obviously, you have a little bit of experience with that. In 2007, it wasn't, the tell wasn't necessarily the housing market. It was that the people originating the risk ended up owning it and couldn't market.

28:18So any similarities you're seeing today is we have obviously higher interest rates, higher now than it was yesterday. We were adding 18, I said last news, I think$18 billion of interest payments by the federal government overnight. How do you describe this market today and the fundamentals that you were studying and looking at almost 20 years ago? Well, one thing's for sure is that the equity markets are a lot different than they were. You know, passive just controls so much more of the market than it did a long time ago. So there's just less participants like myself and active managers really looking at stuff, right?

29:07Most of the money is guided by two investment decisions. Did I get money in? If yes, buy. If I have outflows, I sell. That's the only investment decisions they come to. So the market's just a lot different than it was before. And I think if I think back, and I'm not going to compare this to 2007 because it's just stupid. Um, but if I think about hidden debt risks out there that I see, you know, one, I think that that's sort of, uh, coming out now is, is a private credit risk. Um, it's, it's coming out a little bit in the insurance companies that we're, we're seeing, right? If you think about what this guy, Mark Walter, and he's been forced to sell the Dodgers, the Lakers, the Chelsea football club.

30:06My Chelsea football club. You're probably happy about that. You know, they were taking hidden, you know, concentrated bets and trying to hide it. Right. Right. And so, you know, the private credit stuff is very illiquid and you're never going to see the marks. You know, you're you know, that's that's another thing that's hidden. But when when the when it gets to a point where they're forced either by the regulator or by the market, you know, that's the explosion point. And we just happened to time the risk well in 07 with the 228 arms where everything was ratcheting higher. We sort of nailed that timing well because we saw the inflection point there.

31:01So hidden risks are very hard to uncover and when they're going to finally matter. So what about all this AI debt? you know are they gonna you know the the it's clear that open ai and anthropic need capital they have a lot of debt but probably you know on their own never you know be able to pay it back that's a whole different story um but there's a lot of debt and then you think about um commercial real estate there's a lot of commercial real estate that needs to be rolled as well and so So I think we sort of have a rolling debt problem. How that ends, God, I don't know. I would be, you know, we'd all be very rich if we could figure that out.

31:43But do you see an inflection point with this rolling debt? I mean, like some sort of, you know, anything on the calendar that would say like, man, this thing's got to get, there's too much debt rolling over, you know, rolling over at a certain point. Well, we know the answer. If there's a problem, the Fed's going to print the money. Of course. So that's what I keep. That's my default mechanism. And that's the history of fiat money. That's what they do. And so you don't see any urge by the public or by the politicians to change the retirement age for Social Security. there's no you know thrust to cut costs there's no thrust to do any of this stuff to make the prudent fiscal measures that would make me say oh look the government's getting getting active they're going to change things right none of that there's not even a the slightest of signs in fact we're spending more money on this stupid war right and and exacerbating the inflation problem that we already had so i'm not going to make this a political debate but this is just asinine what we're doing.

33:02Maybe there's some long-term plan. There better be because, you know, otherwise we've really hurt ourselves here. Yeah. My favorite part of the big short is the opening scene when it's just a party. You know, it just shows exuberance and nobody's losing. So much winning. I guess you could say. And then obviously it sets up for the crash. Yep. And every time I've watched that, whether it's at home or on an airplane, I'm thinking like, fuck, man, this feels exactly where we're at right now. We have UFC fights on the White House yard. We've got people paying thousands and thousands of dollars to go see a concert, you know, anywhere, big stadiums.

33:58people are spending money on travel they're spending money on leisure and college football athletes are getting paid millions of dollars just to you know you know which is tossed a no offense to which is tossed there or whatever they the random colleges out there right you're paying you're paying a sophomore quarterback five million dollars um to play third there's a lot of insane things out there but we've all become dulled to it right it's it but it's just there's so much money and there's we're not going to pull back on the amount of money we're just going to create more of it you know and it's it's like how much when you stop when you stop the transaction you know capitalism they've stopped the capitalism mechanism things aren't allowed to fail when things are allowed to fail like in some you know they they allowed you know um coal companies and and oil refineries to fail because it was the name of VSG.

34:56But that was about it. There wasn't anything else that was allowed to fail. You know, the, you know, an open AI, are they going to allow that to fail? Probably not. No, no. Why do you think that is? Why do we keep, it's almost like, especially this week when they're out saying, oh, maybe we need to slow down the development of AI. And I kind of feel like it was the meme of Homer Simpson walking backwards into the bushes, right? You're watching this and it's like, yeah, because you don't make any money, you know, and you have complete government backing by sovereign governments. I mean, what, why slow it down?

35:36I mean, what do you, how do you kind of, how did you kind of approach that news this week? Oh, geez. I mean, that's a whole, that's a whole other can of worms that this is a totally different podcast. I mean, I use my. Brandon, give me a few minutes. Give me a couple minutes. I mean, I use my$20 Gemini a month, and it pretty much does everything I needed to do or I wanted to do, and I don't feel like it. I want it to take over my life, and I want it to be able to be, you know, help me, you know, schedule things out for me. You know, I use it sort of as an assistant. I use it in some of our, you know, we have this sub stack called What Are We Doing?

36:17and, you know, I help it edit my stuff. It's great. But, you know, I help it use for background knowledge of a mind that we're looking at. You know, tell me about this mind. What's the history of it? You know, that's a quick version and then I can kind of go and start to dig deeper. But it's a good sort of base. Is it going to change the world like the internet did? I don't know. The internet changed the world a lot. And so, you know, I think we're always dealing with a lot of change. I think that a lot of this, you know, it feels like the railroad, a lot of unproductive capital coming in, it's probably going to get destroyed.

36:58You know, right now there's, you know, one Amtrak train track that goes from DC to New York, right? We seem to have lots of different, you know, we have one worldwide web that everyone uses. It's not like, you know, everyone, I don't know. So I don't know if we need all these different models, Chinese models, cheap models, expensive models. It seems like it's a lot of, and then everyone seems to be, well, I got to keep my own information in-house. So I'm going to have my own data center and keep my, you know, assets in a data lake so no other AI can see it. It feels like a lot of redundancy. It just sounds like a lot of copper to me, too.

37:42And so, you know, that's, you know, we're going to go, you know, the copper store before was EVs. I still think that's going to be the case. You know, we're starting to roll them out here in my neighborhood. um you know way most you know now comes to my neighborhood and i can go to here to the airport or here to dinner so yeah i think a lot of this is you know here you know the demand is going to keep going to keep continuing especially if if the the fed back stops it and and m2 keeps printing money but you can't print a copper mine right we live in physical constraints and that that's kind of where my head goes and trying to understand where the physical bottlenecks are.

38:29That's a popular term these days, but, you know, and we've been long-term Uranium bulls, sometimes right, sometimes wrong. Like most Uranium bulls. Yeah. I still think that's the cleanest, best use of energy long-term. You know, it's a miracle that we're able to harness that energy, but, you know it's hard a lot of mining is hard a lot of a lot of this stuff is hard as well how do you approach the uh re resupplying of the or reshoring of the supply chain excuse me with your conviction on the metals and the miners do you have any sort of weight more allocated towards U.S. dominated jurisdictions or places where those mines could potentially be or in operation?

39:23Or do you expand that to just, you know, tier one and scale? You know, how do you, I mean, I'm just kind of curious, like as a generalist now, obviously pretty bullish on physical assets, how do you approach the jurisdiction in your portfolio? First of all, I've been doing mining probably names for a better part of kind of 10 years now. And, you know, like, you know, I try to do a little bit of everything and make some mistakes, figure it out. And, you know, to understand where a mine is located, the costs associated with it, you know, the real costs or the bribe costs or whatever the costs are or the royalty costs, you know, mining in Bali is different than, you know, mining in the Abitibi, right?

40:11And so trying to understand where the infrastructure is and, you know, we've, you know, B2 Gold's doing this project, you know, close to the Arctic Circle, you can only get resupply it twice a year, right, through boats. And so there's, you know, there's good geographies in bad countries and there's bad geographies in good countries. So I think it's a little bit of nuance to it all. That's kind of how we approach it. Okay. Let's talk about the best bang for buck right now within the mining sector. So walk me down the curve here. If we maybe start with the bullion, go down the royalties and streamers, producers, developers, juniors, where do you think you're actually being paid for risk today?

41:04Where's the best place? this is probably getting uh outside my expertise curve in in terms of um some of the stuff but you know i i think trying to think about it a little bit longer term you know we've owned uh aniko for the better part of you know kind of seven years and it's a it's a forex name you know and i think i want to be right long term and i and i want to sort of try to project out you know two to three years you know a name like uh eris mining if they can get their their their minds on track in you know the next two to three years and they produce um they produce gold like i think i'm going to get paid on that and um you know so i try to look out a couple years and see what the production is, see where the margins are, see the free cash flow, look at the balance sheet, look at the shares outstanding, you know, check my dilution or even, you know, buyback abilities and sort of try to use a little bit of reasonableness.

42:17And, you know, where I have the highest conviction is usually, and the most capital, is in good management teams that I feel safe every night that I go to bed, I'm just like, I feel good. And the Fed hikes rates, okay, that's fine. I'm not scared at this point. I see what the fiscal situation, I call it a U.S. fiscal crisis, it looks like in the U.S. I don't think there's a way out. I think we'd keep debasing ourselves. Go back and read the French history after you know during the french revolution right there's a there's a lot of uh historical examples of this stuff like this that happens you know look at the the british the british pound um the devaluations occurred there like it's everywhere and so i i sort of see it as why would I want to own bonds?

43:22Why would I want to earn, you know, even T-bills? I'd much rather own gold. And that's me personally. And maybe I'm too bearish. Maybe I'm, you know, I should be more optimistic about the world. But that's not the way I see it. Being long bonds was the ultimate, the most contrarian position you could be 24 hours ago. I'm just incredibly contrarian. Do you think, has that been put to ease at all? I mean, do you feel like we could find a little bit of a bounce in debt here? I know people on both sides of this aisle. Listen, the cleanest, easiest way for yields to come down is for us to end this war.

44:07Yeah. Right? Yeah. Because, you know, it's the best interest of China, the U.S. You know, the Chinese are paying a lot more for oil than we are. You know, diesel prices are a lot higher than the, you know, we don't consume Brent crude. We consume diesel. We consume refined products. And those spreads are a lot wider, as we were talking about. And so, you know, the quickest way for yields to come down is to end the war. and so I don't know if we can do that but that's if I were to be a contrarian and make a bet on that I'm not going to make a bet on the fiscal situation improving that's for sure maybe I can make a bet on Scott Bessett manipulating the yield curve or doing some financial engineering that's part of the bet but as a core, you know, things are improving with the U.S.

45:11fiscal situation. No, I'm not going to make that bet. Yeah. That was a little bit of a sidetrack question. Yeah, sorry. But back on task here, back to the miners. I mean, obviously you were watching these miners back when they busted in 2011. There was a lot of incredibly bad decision-making made at that time by the producers, a lot of terrible capital allocation. but this cycle feels a lot different. There are a lot more strategic and, you know, just patient here. It seems like you gotta be, are you pretty happy with how they've allocated capital? I mean, maybe with some of the producers within your own portfolio, but just in general, the entire industry, given the margins where they're at.

45:55I mean, look, you know, I know Alamos has kind of had some issues recently, but you know, they bought really well. They have an excellent balance sheet, and they're very patient with it. You don't see them splurging and buying a lot of stuff. Niko's been doing it, but they have the currency to do it, first of all, and they've sort of been doing it around a lot of their core infrastructure and a lot of their core assets. They're not going crazy places. I don't see them doing stupid things. um you know d you know dpm metals has made some you know pretty good acquisitions over the years um you know they keep finding more and more gold in in their um you know in their areas and so they're they're trying to provide value through the drill bit and so i try to look at at um at things like that and where i don't have expertise i you know i jonathan goodman has at Dundee has a lot more expertise and I'd rather put my money there than probably the GDXJ, which is just a, again, if I get money in, I buy.

47:08If money comes out, I sell. Yeah, yeah. That makes sense to you, right? So he has a 15-person geology team that goes in and sees these mines and they make capital allocations and there's not a lot of capital being put into a lot of these smaller mines, right? And, or projects. And, you know, a lot of times these projects need a lot of capital. And if they don't do it at the correct price, you know, it doesn't work, right? You can't dilute yourself so much that the project doesn't work. And so I think, you know, flexibility, what they're doing and flexibility in terms of providing money, providing expertise.

47:58And so that to me makes sense as an investment longer term. So if gold, God willing, goes to 6 ,000, I get torque from the price, I get operational torque, and then I get exploration torque. And so I get everything I want. so yeah i was just john goodman's such a good guy man yes excellent i i'm always grateful for the time he's given us and given me and just you know he's there's a lot of people who in this industry are like you know have this aura about them but they're very difficult to have one-on-one conversations with and i will say john is not one of those people he has this aura but he is absolutely willing to sit down and talk to you.

48:48And I'm a big fan of, of old hands of the market, right? People that have seen a lot, you know, and, and, you know, when he talks to you about a mine that, you know, that, that this mine reminds him of another mine that he did 20 years ago, or someone else did 20 years ago, and it has the same geology and has the same aspects to it. It's like talking to a, an old yen trader or take talking to an old bond trader, like they, they know the market, right? That's why we call them old hands. They, they, they, they've seen despair. They've seen what death looks like. They, they've seen what good management teams have done, right?

49:25They, they take it all into, to account. They, they, they, um, you know, it's like Druckenmiller, right? He, or, or the, or these people that have been around a long time. They've seen a lot of cycles. Um, and I think today's cycles is scary as it's been in a long time. You know, I know the market goes up every day, But that doesn't mean it doesn't have risks. What about any young people in the sector that you've started paying attention to that you have a lot of cred with? Well, again, what happens when capital leaves the sector? You know, jobs leave the sector. So, you know, I feel like I'm the young guy in the metals and mining sector.

50:06Yeah. Right? You know, there's the petroleum engineering school at the University of Texas is probably not the most happening place. You know, the business school is probably the place where everyone's going. You know, so when sectors are cold, people don't go in there. Right? The kid with the Harvard MBA or Ivy League degree is not going to want to go search for tin in Africa. Right. The smartest kids in the U.S., that's not what they're doing. they're not going to spend you know six months in the wilderness trying to find gold under the ground or copper it's really unfortunate actually I know it is but that's just the way it is and so and so if you have old hands that have been there a long time and mentored people and mentored people in the organization understand culture and they understand how to do things correctly.

51:21And I think, you know, Enico does that pretty well. They have a good culture of trying to, you know, you don't see a lot of high turnover, right? It's not like open AI where they have a new engineer that leaves every day, right? So, there's a culture to these things that that's why good firms and good companies exist because they have good cultures. And that transcends not just the mining industry, but every industry. I got one more question for you and then I know we're kind of coming up to our time here, Porter, but before I get to my question, I was thinking in the back of my mind, you know, it'd be hilarious if you like did a spoof scene of the front point guys back in the office and literally just debating the valuations of a mining company.

52:04And I mean, it'd be very niche, but if you got all those characters together, like what would that dynamic really be like? Well, it goes back to the balance sheet. You know, you'd probably, we'd probably, you know, look at some of the balance sheets in, post-GFC and look at the leverage and want to throw up. Right? That probably happens at Seawolf. That's the first thing that we usually go to is go look at the balance sheet. Go look at the leverage. Right? And so that's one of the things that makes me sleep very well at night is that of the companies I own, almost all of them are net cash. Hard to run into problems when you're net cash and you're producing, you know, 60 % EBITDA margins.

52:55Some short report comes out. Oh, well, I'll buy back stock cheaper. You know, we have an earthquake. We, you know, we lost one of the shafts in the mine. Oh, well, stock goes from 40 to 30. We'll buy back stock, fix the mine, and still produce gold. so that's that's the way i i look at it and um you know there's no there's in life there's no get rich quick scheme you know the best you can do is apply logic and history uh to uh and and financial uh discipline to to your process and if you understand that i think you can make money over time i think listen money management business is tricky you know where you're you're wrong a lot of the time.

53:42And so that's why you have to have a lot of humility to say I made mistakes, you know, oh, you know, like, you know, even fumbling around in the mining sector, we've made a lot of mistakes and trying to, you know, we shouldn't have done that. Let's do more of the good stuff, less of the bad stuff. So. Yeah. Oh, very good. Uh, so we are coming to a very, uh, incredible season, uh, for the miners. It's just so many kind of conferences and, investment events happening. Obviously, we kick off next week, Beaver Creek Precious Metal Summit, Denver Gold Following, jump into October, London Metals Week.

54:21There's going to be a couple of just generalist macro events you and I are both participating in in October as well. Just kind of curious. So if you look over the next month and a half here, Porter, specifically on the mining side, what's some general themes or questions that you kind of have in the back of your mind that you would like to have kind of answered throughout all your conversations? I don't know if I'm going to answer your question exactly, but listen, these companies have a lot of cash flow. They have a lot of ability to do exploration. You know, we own a company called Farrakko International, which, you know, if I go back to, you know, picks and shovels, they help, you know, they own the equipment to mine.

55:08And so I think some of these industries which have gone through, you know, 10-year death cycles are finally coming out of. And I think you're going to see a lot of, you know, drill results from companies because there's a lot of exploration going on. And I think you're going to, you know, one of the things about being a generalist in the sector and having AI, I can put my durable resorts into my AI machine and say, oh, I understand that. Explain to me like I'm an idiot. And you start to understand, is that good? Is that bad? And so I get a tutorial, a free tutorial along the way. And that's sort of our journey of understanding miners is just been through hands-on research and trying to understand stuff and understanding what a good drill result is.

56:03and, you know, from sort of a higher level perspective. Thank you so much for your time. Great conversation. I loved every single minute of it. You are doing a lot on Substack with your note that what are we doing on the desk? Yeah, what are we doing is that you can find it on Substack. It's with myself, my partner, Vincent Daniel, and Danny Moses. We do a daily, a weekly podcast. We have a Discord room, which in there, there's a I Love Gold and Silver channel, which a lot of ideas going back and forth about mining names and stuff like that. And we have some former mining executives in there that talk a lot.

56:49And so, yeah, we try to get around. Yeah, very good. Well, if you ever call a short on the mining sector, please come back on the podcast and give us a heads up, will you? All right. It doesn't sound like that's going to happen for a little bit. Porter Collins, thanks so much. We'll see you on the road here this fall. That's a wrap on Mining Stock Daily this week. We'll see everybody next week in Beaver Creek. Safe travels throughout the weekend. Look forward to seeing you up at Elevation, and it'll be a great week. All right, Porter, thanks so much. Take care. The information presented should not be considered investment advice.

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