Jayant Bhandari – Inflation, Rising Commodities Prices, And Finding Value Creation In Mining Stocks
Jayant Bhandari joins us today to reflect on the run higher in commodities we’ve seen the last few months, and why he feels that most of the macro factors driving things higher are really due to raging inflation, and not as much the war in Ukraine. He outlines that even if the war was to resolve immediately, that only 10-15% of the commodity price moves would come off in most cases, and feels there are longer term structural and supply demand trends in place behind the higher oil and nat gas prices, base metals prices, and agricultural commodities.
Next we shift the conversation over to reviewing value in the gold mining stocks and Jayant highlights that West Vault Mining (WVM) is a company showing good potential for a rerating in value on their Hasbrouck & Three Hills projects in Nevada. We go on to discuss other companies that are creating value by reinterpreting and looking at historic projects in new ways that highlight this value to the market place and we mentioned Artemis Gold (ARTG), Prime Mining(PRYM), Gold Mountain (GMTN), and Zacatecas Silver (ZAC) as other examples of daylighting value from historic projects.
I thought this was a particularly good segment with Jayant, and an interesting topic of the value that can be daylighted by competent management teams through reinterpreting old projects through a new lens, geological understanding, or approach to development, and then rebranding that project to the marketplace.
Yes, great discussion. Really impressed with the moves taken by GMTN to create maximum value from their assets. Good discussion at ceo.ca focusing on the mining and haulage contracts and how they could change with increasing fuel prices.
Yeah, I saw that discussion on GMTN over at ceo.ca, and I think people didn’t realize they had fixed contracts on the trucking at least for this year, so the fuel cost increases weren’t going to really impact them. Regardless, the margins on Gold Mountain’s ounces sold are so fat that even if fuel prices doubled or tripled, they’d still be banking it, albeit, on only 19,000 ounces per year for the first 2 years. Their goal is to get their permit where they can ramp up production to 65,000 ounces and that would be a significant bump higher in revenues, and would accelerate their exploration, and likely allow them to make an acquisition.
“…and I don’t like Biden at all”.
Don’t hold back Jayant.
Today is the feast of the Annunciation in the Orthodox Church, and also Greek Independence Day in Greece. Russia, France, and Britain helped Greek liberation from the Ottoman Turks.