David Erfle, Kerry Lutz and Brian Leni Share Their Key Takeaways from The 2019 Vancouver Resource Investor Conference

In this episode, three experienced resource investors will share their first-hand testimonies regarding the Vancouver Resource Investment Conference held on January 20-21, 2019.  David Erfle of JuniorMinerJunky.com, Kerry Lutz of FinancialSurvivalNetwork.com and Brian Leni of JuniorStockReview.com share their key takeaways from the conference.  They discuss sentiment among both investors and CEO’s at the conference as well as their thoughts on the current precious metals market and junior mining sector.  David and Brian also share regarding a few companies they met with at the conference which they think could be quality investment opportunities.

DAVID ERFLE INTERVIEW

Bill: Well I’m catching up with David Erfle, the Junior Miner Junky. He’s at the Vancouver Resource Investment Conference and we’re gonna get his take on sentiment in the mining sector and the occurrences of the conference. So Dave, what are you gauging right now in terms of investor sentiment at the conference?

David: Yeah, well, there’s some optimism here, but it’s a pretty sparse crowd. I think they had like 9,000 register, but they did paper a lot of that. A lot of that was given away for free and they did charge a small fee. So I figured it would be a little more crowded than this. This is Monday (when the interview took place) and the big retail crowd was here on Sunday. There was more people here on Sunday. It is a little sparser today, but I’m gonna have to cart out the old jewel, “cautiously optimistic”, that’s kinda the feeling here at the conference.

Bill: As you went from booth to booth and talked to the management and I’m sure had one on one meetings, what’s the feedback you’re getting from the management teams?

David: Well, you know, we can’t control the gold price. We can’t control the market. We’re just gonna keep doing what we’re doing. The companies that I like are making good headway. They’ve got cash, they’ve got good projects, they’re getting good results. So they’re just gonna keep doing what they’re gonna keep doing. You just gotta make sure that if a company doesn’t have enough cash for this year, make sure that they access to it or they have a plan to get it and they get a good deal with the cash, not give away the farm with a warrant or bad deals or anything like that. Just make sure that they have access to capital, they’ve got some lined up. So the ones that are cashed up, they’re happy, they know they have a good project, the market’s gonna turn around sooner rather than later now. They just keep plugging away.

Bill: Would you say the general consensus is among gold mining CEO’s, when you talk to them, that even if we don’t see gold break through that $1,375/oz onward to $1,500/oz this year that they’re still optimistic over the next, let’s say three to four, five years?

David: Oh, absolutely. Yes. They know that these big mergers that are happening right now, they always happen at tops and bottoms in markets and we’re definitely not at a top. They know the story, they know that these major mining companies are running out of high margin ore and they need to replace it and they know the M&A in the juniors is coming, like we all do, we just don’t know when. So, like I said, they just keep proving up their deposits and keep drilling and pretty much that’s it. We can’t control the market, we know that it’s gonna bottom soon, but we just don’t know when.

Bill: When we were at the Beaver Creek Precious Metals Summit in September, Pershing Gold Corp didn’t show up, then the rumor was oh, they’re gonna be taken out, which they were a couple weeks later, then the share price rose. Were there any companies scheduled to attend that didn’t show up and now there’s some rumors swirling about?

David: I didn’t notice any. No. I didn’t notice any not showing- I don’t see any empty booths, if that’s what you mean.

Bill: Any feedback you’re getting from like the base metal mining companies and what are you hearing at the conference regarding base metal companies?

David: Well, you know, they know this trade war is gonna end, they just don’t know when. They know the copper situation is good for the long term, but for the short to medium term it might not be so good. They have the same mindset as the gold explorers and developers. They can’t control the market. If they know they have a good project, they’re just gonna keep doing what they’re doing and not raise a lot of money if they don’t have to, just raise enough to do what they gotta do and just keep plugging away.

Bill: Are there any companies that you were really impressed with that you’d be willing to share about?

David: Sure, absolutely. Right now one of my favorite early stage exploration plays is Sun Metals. They’re in Mark O’Dea’s Oxygen Capital Group. They have a very exciting project in B.C. They just raised a large sum of money, $5.2 million. It was a flow through, so they’re gonna have to spend it this year on their project and the back end was taken by Teck. Teck now owns 12.8% of the company. And it looks like a very good project.

Bill: Any other key takeaways you’d like to share with the listeners, David, regarding the conferences and what you’ve learned or what’s of pertinence?

David: Well, I would just say that this gold price is now backed away from $1,300/oz, which is very, very strong resistance. The juniors really haven’t started to bounce just yet. They bounced a little bit after the tax-loss selling was over. We always have that bounce that at least lasts for a few weeks and we had that. I’ve seen a few of them start to bifurcate from the sector, but on a whole, it’s a great time to accumulate, but do it cautiously and do a lot of research and make sure you maintain at least a 10% to 15% cash position right here because things could get a little bit cheaper.

Bill: You can find David on the web at JuniorMinerJunky.com. You can sign up for his free email list there and if you’re looking for guidance in the sector, you can email him. His contact information is right there on the website. Dave, I thank you for taking my call. I know you’re a busy man running about at the conference.

David: My pleasure, Bill. Always nice talking to you.

 

KERRY LUTZ INTERVIEW

Bill: Alright, I’m speaking with my friend Kerry Lutz of the Financial Survival Network. You can find Kerry online at the FinancialSurvivalNetwork.com. He’s also featured weekly on the front page of Kitco under the commentary section. A very popular podcast, many of you I’m sure have heard of and if you just go on your podcast app, type in Financial Survival Network, there Kerry will come up. So, Kerry, thanks for coming on.

Kerry: Hey, it’s my pleasure, Bill. Great to be with you.

Bill: And you are attending both the Metals Investor Forum and the Vancouver Resource Investment Conference. So I’d like for you to share with my listeners, what can you tell us about investor sentiment? What are you picking up on right now in the resource sector?

Kerry: Okay, so it’s very difficult to pick this up when we’re kind of in a market that’s kind of muddling through. We’re not in a market with a specific direction. We’re more like in a market that looks like it’s semi-stable now. It took a big hit last year, it’s retraced a large portion of it, but it’s not going higher, it’s not going lower. So, when you can’t figure out what the trend is, you look at what the trend was. The trend was down, so we’re still in a down trend. So putting that aside, there’s money there, there are people who are very interested. All of the sessions have been well-attended and there’s a feeling, I would call it, of guarded optimism where you don’t know what’s gonna happen next, but it appears that the stars may be aligning and I guess I’m a little into the stars right now after last night’s super wolf moon and the lunar eclipse. I watched that and it makes you realize that there’s so much that’s out of our control that’s already been cast…destiny.

So, I’m into the stars and you just see that it feels like everything is lining up for the sector to advance, but there could still be bumps along the way and I think that the maturity level of the investor group that we’re seeing has greatly advanced over the past seven, eight years from a lot of disappointment and a lot of declines and a lot of bumps in the road.

Bill: What about when you talk to CEO’s? A big part of this conference is going booth to booth. There’s just hundreds and hundreds of mining CEO’s. You’ve talked to a number of them. What are you picking up on from the CEO’s?

Kerry: Well, you know, their job is to be cheerleaders for the company and boosters for the sector. So, I always try to not put a lot of value necessarily in what they’re saying, but in this case, I get the feeling of genuine optimism or the beginnings of it, put it that way. ‘Cause look, they’ve been through this cycle themselves here for eight years now, going on eight years, Bill. So, they don’t wanna be overly optimistic and saying wonderful things and then get burned again ’cause their credibility’s on the line. So, while they have to be optimistic, they don’t have to be cockeyed optimists and I’m getting the fact that they feel that the situation is just lining up for the sector. That’s my feeling.

Bill: When I first started investing in mining stocks, I was told never invest in a junior exploration company if the CEO of a small exploration company is wearing an Armani suit, so did you see any Armani suits with junior explorers there?

Kerry: Geologists and mining engineers are not known for their fine taste in haberdashery, but there’s always some guys who are well-dressed. Those are generally the guys who’ve been successful in the past and are probably gonna be successful in the future. But, you know, like when you’re out in the field and kicking rocks and developing these projects or “pro-jects”, as our friends to the north would call them, they’re more outdoorsy types for the most part.

Bill: In conclusion, any key, pertinent takeaways you’d like to further share with the listeners?

Kerry: Yeah, just that hey, we talked about it on my podcast before and it bears repeating again, that there’s been this golden cross where the 200 day moving average is crossing the 50 day moving average and that’s usually cause for celebration, but we’ve been frustrated by it before, it’s been unreliable over the past eight years. Happened, I think, three times according to one presentation I saw, so don’t get overly optimistic and enthusiastic just because of the golden cross in and of itself. We need additional confirmation before we get excited about the space. But overall, based on economic trends and activities and destructive policies of governments around the world, this is gonna be the place to be at some point, It’s not a question of ‘if”, it’s just a question of “when”.

Bill: Well said. Well Kerry, thanks for stopping by and sharing your insights.

Kerry: Hey, my pleasure. Always there for you, Bill.

 

BRIAN LENI INTERVIEW

Bill: Well I’m chatting with Brian Leni of JuniorStockReview.com. Brian’s in Vancouver at the airport right now and the last couple days he was at the Vancouver Resource Investment Conference, so just giving him a ring. Want to get his perspective on what he experienced and what some takeaways would be for us, the mining stock investors. So Brian, thanks for chatting with me.

Brian: Thank you for having me, Bill.

Bill: So what are some key takeaways for those of us that weren’t there? What would be some key takeaways that you could share with us?

Brian: I think with most of the people I spoke to there’s still a lot of uncertainty into where the markets headed, and understandable given what we went through in 2018 and kind of how we ended the year off, I think, with the Fed announcement and the kind of lead into another two possible raises this year. So yeah, there’s definitely uncertainty and people really don’t have a good idea of where the market is headed.

Bill: And what about investor attendance? What is it compared to previous years? What did you notice there?

Brian: Personally, I would say the attendance is down. It was well-attended by companies. I would say definitely the companies at the VRIC were probably a good 30% more than there was last year, but in my personal opinion, I would say that there wasn’t as many retail investors there, more so people from the industry itself.

Bill: Would you say that in general the vibe you picked up on, investors would’ve been more positive 12 months ago at this conference than they were today?

Brian: I would say so, yeah. I think after kind of getting beaten down over the course of 2018, typically people look at the last three months and they project that out, at least in my experience, which is also, I take it as a good sign that maybe we’re near that bottom, especially with the precious metals. The base metals, I think a few other things need to happen before we can really start to see strong metal prices again. But for gold, that uncertainty is usually a good thing.

Bill: I assume with your initial comments you’re referring more to gold or are you referring to the whole commodities complex and mining stock sector when you’re talking about sentiment?

Brian: Yeah, it’s mostly about gold. That uncertainty definitely plays in and we’ve seen that strong gold price to kind of start the year. The base metals, yeah, it’s kind of a different thing all in itself.

Bill: What about companies that stood out to you? I think there were hundreds of companies there. Any companies that stood out that you’d like to share about?

Brian: Sure. I had a great meeting this morning actually just before I left with Minera Alamos. I was able to sit down with Doug Ramshaw, the President of the company, and he kinda took me through the business model. It’s a much different way of looking at how to develop a gold company. And I think they deserve definitely a closer look moving into the rest of this year, especially with a strong gold price.

The other one, it was in the news not too long ago, was ATAC Resources up in the Yukon. With Barrick Gold pulling out, their share price had plummeted and I myself having been there last summer was kind of wondering, okay, I wonder how they deal with this moving forward. But I got to speak with Matt and Graham and they’ve kind of switched their focus to the, I believe the west end of the property, which is actually more accessible from Keno City and now they’re going after, it looks like this skarn deposit, which has had some great grab samples in terms of copper and gold.

So, it’s very encouraging and it puts definitely a different spin on what the story was if you rewind back a year. So, yeah, those are two companies that stood out, at least this morning, to me.

Bill: And then what about as you talk to the actual CEO’s or the upper level management of these companies? What kind of feedback can you give us regarding those interactions?

Brian: It’s quite interesting. Even though I’ve talked a lot about uncertainty, there’s a few companies that are, kind of regardless of what the broader market looks like, they’re moving ahead business as usual. And talking to those CEO’s, they’re really unfazed by what’s going on. And actually a great example is Adventus Zinc who, it was just released this morning, sold a royalty on their Curipamba project to Altius and raised a further US $10 million. In a tough market, those companies that, even that upper echelon, the cream of the crop, are able to raise money and they’re able to progress projects further. Talking to those CEO’s, you’d kind of never know that they were in sort of a bear market.

Bill: So the quality companies can still find money in this market?

Brian: I believe so. I believe so, yup.

Bill: Alright, Brian. Anything else as we conclude?

Brian: It was a great event. Probably the best that I’ve attended even though there was that uncertainty. I had a really good time and there was a lot of quality presentations and companies at the show, so I’m encouraged by that and I’m looking forward to PDAC in March.

Bill: Well, I’ll make sure to catch up with you at PDAC. I’ll be at that one. And if you want more information about Brian and his writings and what he offers, please go to JuniorStockReview.com. Brian, thanks for chatting.

Brian: Thanks for having me.