5 Key Takeaways from the 2024 Precious Metals Summit - Beaver Creek, CO

Our trip to Colorado last week solidified our current thesis of the global economic landscape

Last week, the Beaver Creek Summit solidified and reaffirmed many of our views on the current state of the world and markets, particularly within the precious metals and commodities ecosystem.

Below are 5 key takeaways that I believe investors should keep in mind as we approach an important week for the FED and the markets:

1. Gold’s momentum hasn’t even started yet.
2. The sector is ridiculously cheap, with deep-value gems hiding in plain sight.
3. M&A activity is only beginning to heat up.
4. The global commodity shortage is a golden opportunity—for those paying attention.
5. Follow the smart money—and you might find yourself ahead of the pack.

1. Gold’s Potential - Not a Stupid Pet Rock

While the “shiny pet rock” is up almost ~25% YTD, the reality is, it has much higher to go. During a keynote panel with Frank Giustra and Alexander Deluce, the discussion centered around massive global deficits, particularly in the U.S., where the government will ultimately have to inflate its way out of a complete economic collapse, through some kind of a crisis. Additionally, many central banks globally are not prepared to handle debt servicing costs north of $1T per month (yes, that’s a T, with 12 zeros). The mainstream media won’t even mention the ~$100T of unfunded liabilities on these balance sheets. Historically, the rise and fall of economic empires were often precluded by policies where central banks had to inflate their way out of economic collapse. This is mega-bullish for gold, silver, and commodities in general—not to mention the current global uncertainty with regional wars breaking out in Eastern Europe and the Middle East (I’ll leave that to you to figure out why).

2. Bargain Hunting in Junior Miners

Right now, many junior miners are trading at multiples as low as 0.20x to NAV—this is a buyer’s market and a once-in-a-lifetime opportunity for the pay-tient investor. I was fortunate enough to have 27 meetings with various exploration and late-stage development companies, and it reinforced a key point: with a bit of research and a face-to-face conversation with management, you can learn years’ worth of insights in under 30 minutes. - of course, conduct your own due diligence !

My mining watchlist just expanded, and we’ll be sharing some new positions in our upcoming Macro Chronicles newsletter at the end of this month. Some of these names, if they execute, could generate potential returns north of 1,000%.

3. M&A Activity Is Heating Up

There were two major M&A transactions this year that will likely kickstart a wave of bidding for late-stage projects by major players in the space. Filo Mining was acquired through a joint venture with BHP and Lundin Mining for $4.1B CAD, and Gold Fields acquired Osisko Mining for $2.15B CAD. After speaking with several other management teams, it’s clear that the level of interest from big producers is heating up, due in large part because of these bargain valuations. With the level of free-cash-flow being generated from the recent rise in commodities and metals prices, it’s no surprise their war chests will continue to grow every quarter. I expect to see more of M&A moving forward, and if you’re holding one of the names when the acquisition is announced, it could certainly add to your own war chest.

4. The Global Commodity Shortage

Global conflict and geopolitical instability is prompting many countries to tighten their grip on resource allocation. We are witnessing an economic conflict between Western and BRICs nations unlike anything we’ve seen before. Right now, there simply isn’t enough metal production to meet global demand, especially in industrial metals like copper, nickel, zinc, and palladium, to name a few. Copper, in particular, seems to be at the highest risk of global shortage. The smartest players in the industry are strategically allocating capital to mining projects with strong teams and significant resource assets. These global shortages, topped with conflict, will drive commodity prices higher. Hence most of these companies are likely due for a re-rating. You can’t use a smartphone or live in a home without these metals—they are the cornerstone of a functioning society.

5. Follow the Smart Money

It was quite clear, the brightest minds are open for business. Rick Rule, in particular, delivered a great keynote on the types of companies he is actively looking for, and as he said last Tuesday, “Rick is open for business.” His philosophy is simple: buy what everyone else hates right now. This is where the greatest upside is generated. He also spoke about the importance of having the right teams behind specific projects. I also spoke with other portfolio managers overseeing substantial institutional capital, who are buying some of the most beaten-down junior stocks in the market. I mentioned a few names that I liked to them, which further reinforced my conviction. Some of these are trading well below $0.30/share.

The Bottom Line

When the mainstream financial media begins banging the drum on gold, silver and commodities and major financial institutions start allocating 1-3% of their capital to this sector, the time to get in might be too late. I believe there is still an 18-24 month window to allocate accordingly—but don’t quote me on that specific timeline.

The time to shop and allocate is now.

If I could leave you with one final thought, it’s this:

When all else fails, what is the one metal that has stood the test of time?

Special thank you to the entire organizing committee for hosting an epic event in one of the most scenic places in North America.

Happy bargain hunting everyone !

Disclaimer: Nothing here is investment advice — all views expressed in this article are my opinions only. Investing in mining is considered high risk and highly speculative. Consult a financial investment professional going forward.