With markets looking past the disputed election and a stalled stimulus, editor Neils Christensen said gold is trending down in the short term. On Friday Christensen was joined by correspondent Paul Harris and mining audiences manager Michael McCrae to record Kitco Roundtable podcast. Special guest was Patricia Dillon, former president of the PDAC.
With markets looking past the disputed election and a stalled stimulus, editor Neils Christensen said gold is trending down in the short term.
On Friday Christensen was joined by correspondent Paul Harris and mining audiences manager Michael McCrae to record Kitco Roundtable podcast. Special guest was Patricia Dillon, former president of the PDAC.
Gold has been on the backfoot. This week saw massive gold-backed ETF outflows, which weighed on the precious metal. But the market held its ground at the critical $1,850 an ounce level and managed to end the week on a slightly more positive note, with December futures last trading $1,872.30, up 0.58% on the day.
Despite the outlook for another government stimulus in the U.S. starting to dim, Christensen said investors believe the good vaccine news may result in the economy getting back to normal sooner, thus the pressure on gold. But Christensen believes the fundamentals still support precious metals going higher.
Governments have added debt in the trillions, and there are no signs of reversing, which is tying the hands of the federal reserve and other central banks.
"It's the perfect storm for gold. Whether there's a vaccine or not, gold is going up...and gold should continue to go up," said Christensen.
The panel also talked about SQM's expansion plans due to lithium output rising, rising diamond sales at De Beers and plans to host PDAC virtually.
Follow the panelists:
Neils Christensen Twitter
Paul Harris Twitter
Michael McCrae Twitter
or see normalcy. And that could be bad for gold. Welcome to kick a round table. I'm your host. Michael McCray with me is editor Niels Christianson. Hi nails. Hello, happy Friday, happy pre-Thanksgiving for all our U S people. And then we also have a kickoff corresponded. Paul Harris welcome Paul Nelson noon, everybody and special guest is past president of the PDAC and a newly inducted member of the Canadian hall of fame.
Welcome and congratulations to Patricia Dillon. Thank you very much. Patricia has a long list of accomplishments, a career at tech as a geologist heading up the PDAC and spearheading mining matters and towards sustainable mining. There's a lot I want to cover with you, Patricia, but, uh, I think since we're getting into the Christmas season, I think I really want to lead with mining matters first.
Can you tell me about the initiative what's going on? So, first of all, binding up matters is a charitable organization that grew from the work of the PDAC education committee in 1994. We, um, right now we're produce educational materials for the virtual world, uh, for educators and students that promote mineral literacy and specifically understanding and knowledge of the minerals industry, the role of metals and minerals in society and career opportunities.
Within our sector. So it's, it's really about helping the public and students and educators understand how critical our industry is to society. Uh, I know that Keiko is looking forward to, uh, partnering with, , mining matters. Uh, my kids, uh, love the coloring books.
I just, I needed to put that in there. They love the coloring books. Wonderful. And they're learning about the mining cycle as they color along. Yeah. They're like they understand what daddy does a little bit better. So, uh, the one problem with the, uh, COVID-19, that's the one thing I'll miss as seeing like the, a little yellow hats at, uh, the Roundup, uh, when, uh, people are going around and doing their mining matters tours.
So thank you very much, Patricia. Uh, look, uh, we're going to get into it more with you, cause there's a lot to cover, but, uh, we always start with gold and we always start with Neil and Niels. What is wrong with normalcy? Well, it's terrible for the gold market, but I agree. I mean, we had, now, now we have two vaccines now with, you know, over 90% efficiency.
, and yet gold is still holding on. Um, gold is still holding 1850, which I think is it's less to do a boat. You know, the virus and the vaccine and more to do with, um, how do we get to normalcy, especially? How do we get to normalcy in monetary policy and fiscal policy with all of this stimulus money just floating around the market?
All. Well, yeah, I mean, people are looking at the, beyond this COVID and COVID vaccine, the fact that you mentioned stimulus and government debt in the trillions and growing and not showing any signs of getting small anytime soon, and basically tying the hands of the federal reserve and other central banks, they can't raise interest rates so that, you know, it's the perfect storm for gold, wherever there's a vaccine or not gold is going up or positive for gold and gold should continue to go up.
Hmm. And I think, um, we do like, so longterm picture, there is still in place, you know, monetary policy. Isn't going to be changing anytime soon. Um, I do think we have to worry though about the short term. I mean, I'm watching 1850 really closely and, and some of the people, some of the technical analysts that I talked to say that it could break, um, for example, uh, the gold survey this week.
So, uh, Kiko news publishes a gold survey every week. Um, among retail investors, this, this Friday, we've had the lowest bullish sentiment in the marketplace in 18 months. So I think near-term, we should prepare for lower prices, but, um, yeah, long-term, it's, you know, this, this stimulus, it took 10 years for us, for, for markets to, and the, and the federal reserve to, uh, Deal with the, the stimulus that was created during the 2008 financial crisis.
Um, we've gone far and above that in this past, you know, six months, seven months. Um, so it's, you know, we've got a plan for another decade of unwinding, this, this stimulus trade. That's sort of the 1850 1860 level seems to be a pretty solid bottom and looking at the three month chart, um, gold prices approached it one, two, three, four, five times in the last three months and always move way back above it.
I think there was a point made with this. So with your interview with Steve land at, uh, Franklin Templeton, Neal's where, uh, there was, uh, just, uh, uh, investors are just not coming into the minors right now because they're seeing if they can actually hold onto their profits. Yeah. So that's, you know, so that that's going to be a big thing, you know, and, and as the, as the, the.
Gold price has stayed this level. I mean, even if, even if we go down to, uh, 1800 or even 1750 gold miners are still profitable. And I think that, you know, investors want to see that. And I think maybe the mining sector instead of gold, maybe the mining sectors is what we should be looking at for sure. That value play, especially in the short term, especially as, you know, as we're looking through to fourth quarter earnings, um, cause there's, you know, margins are still going to be massive and, you know, profits are still going to be up there.
And most of the major gold producers still have their reserves at $1,250 an ounce or 1300 an ounce. So as you say, big fat margins still, even at 1750 or 1800. Let's switch to juniors up past a friend of the podcast pass guest a that would be who agro. He had this pea at his idol project. Was there anything good, Paul?
Yes. Um, The the PA was for 72,000 ounce a year open pit heat leach operation. There's seven year mine life as an initial phase one. So it was really, I think, just an initial flag in the sand about what the potential is. Audiences training costs, I think was 1050 $7 an ounce, which is right at the front of the curve compared to existing in operation, open pit heat leak.
Projects or mines in the United States. And the bigger picture in the future is the potential for second phase mill project. Um, which words, uh, uh, if that's feasible, then that would be a 300,000 ounce a year. Of of production. So, um, I think a good stop, um, a little more work to come and a lot more, uh, news and exploration results, et cetera, to come out of a bear track on there.
Okay. I, it just seems that there's just always a lot of news lately. That's out of Idaho. I just don't recall this much news out of that region. In, you know, since I've been covering the sec has been a busy week, um, yesterday, um, integrity, resources put out or drilling results, very high intercepts from a war Eagle today.
There's news regarding my discoed and, and, um, you know, rattling the battling, the, the, the car there. Um, yeah, I think it's just coming ways. It seems. Yeah, we're also doing some sponsorship work for group 10 as well. Uh, I, you also love noted, uh, Chicho resources when we're doing notes on this, uh, Inuit, you noted that, uh, it's resource has grown after some minimal drilling.
Well, the company is called serious resources and the project is teacher. Um, w we spent five minutes prior to this, trying to pronounce it correctly. Um, but since James Bay, Quebec in, in, in Canada, um, so. Yeah, they've increased their resource by so 22% to about 1.9, 6 million ounces. Um, interesting thing, and why it caught my eye, um, was the fact that, um, there.
In talks with their neighbors, the neighboring land package, and to be able to push back the pit wall onto it, onto their property. And if they can do that, um, that could add, um, just at least another 400,000 ounces just by getting that agreement in place. Um, so that seems to be sort of building out is very, very quickly.
Uh, switching to the minors, uh, everyone in the Yukon touts a Victoria gold, uh, through your old gold mine that is having a huge impact on the region. But Paul, you noted that there's some stacking issues at the mine. Yeah. So they put out their third quarter results and, um, you know, I think it'd be fair to say they were disappointing.
According to the, uh, updated feasibility study. They published December last year. They should be producing at around 200,000 ounces a year. So, so 50,000 ounces a quarter, I don't want it to sustain the cost of seven $74 per ounce. So, um, their actual results of about 35, just over 35,000 ounces. I dunno, all-in sustaining costs of $1,315 and announces it is quite a mess.
And they attribute that as you mentioned to, you know, stocking issues and other things, um, which they're endeavoring to resolve. What was notable for me was a lithium giant SQM which plans for a fresh expansion of its chilly lithium operations by 2023. According to reporting by Reuters, SQM said it had sold 17,700 tons of lithium in the third quarter of 56% from the same period, the previous year that's, despite the downturn and the coronavirus pandemic, the company said in a statement announcing its quarterly results that it would likely sell 30% of them.
Lithium more lithium in 2020 and in 2019 and predicted a similar jump in sales volume in 2021. And on, uh, looking forward, uh, metals or commodities that are looking forward in diamond sales of rough diamonds, that DeBeers Rose more than 12% in the latest sales cycle. It's per an Anglo-American set on Wednesday as demand improves on the back of ease and COVID-19 restrictions and head up the December.
Festive season, , Patricia, I want to bring you back into this sky when we started at the beginning there, um, you know, we've covered the points in juniors and we've covered the points of minors, but, , , we're getting through this season right now. Conferences and, uh, Paul Neil's myself, we certainly had a lot of zoom conferences.
We certainly had a lot of people that have transitioned over to those types of conferences, but with your hat at PDAC, which is, um, you know, your, where you were past president, what is going to be planned. just so I know that people don't go or that people don't attend, but I mean, that is the largest mining conference in the world.
That's held on an annual basis. Yes. And the PDAC is just announced, announcer a change in the date, uh, for, for the conference, because it will be a virtual conference. Uh, the dates have shifted to make sure that they are within the working period, certainly not interfering with the weekend.
And so the confirmed dates for the conference now, or are Monday, March 8th through to Thursday, uh, the 11th. I think that this was, uh, a great decision to not. In, you know, in Penn, John on people's weekends. I mean, when we were all gathering together for social events and networking events, it was great to get together on, on the weekend, but for a virtual event, let's, uh, let's keep it within the, you know, the, the Workday really there's going to be a lot going on, very excited about the fact that a virtual conference can in fact increase participation.
In the events because it can have our global reach. So there's a huge cost savings just in terms of travel and accommodation. So, so that makes it very, very exciting. And it's offering the PDAC is going to offer the full suite of networking events, social events. I'll be it through a virtual platform, but I think it's going to be very exciting and it's, it's the world we're existing in now.
So everybody's had an innovation. And at a gem. So has the PDAC while maintaining its premier position, as you notice as the largest mining expiration conference in the world. Right. I just think it goes to show too, of just how big the, the, the pandemic has had the impact that it's had on, on the economy.
Um, you know, this is, this is, uh, um, a conference that we're planning for March. Uh, you know, we're talking about vaccines today, but you know, like we're really, we're going to feel this impact. For months and months to come, even, even as we talk about a vaccine and I'm really happy that it's going to be virtual, but I'm also really sad that the Toronto economy is, is going to, you know, sort of really feel the impact of missing this, this conference and, and 30,000 people attending.
Yeah. Wow. You're right. Everybody's just had to adapt to the pandemic. So, uh, Patricia, I worry to get into the weeds, but, uh, you know, we've done a lot of conferences here ourselves. Um, you know, but we've certainly done them on a scale, I guess. Maybe in the hundreds or, you know, as, uh, uh, maybe in the thousands, but, uh, when you're dealing with something of PDAC, if it's size, uh, is there been a kind of a best of class or a type of software or something?
Has that been hard to source? Well, certainly the, uh, global research was done on the vest. Platforms, uh, frankly, that's, that's not my area of expertise, but I know that they have come up with a platform that they feel very comfortable and confident is going to be able to deliver. Uh, so many of the elements, including things like breakout sessions.
Uh, matching, um, like-minded people helping with the networking and making the connections. So it, it has to operate on many different levels because people go to that conference for different reasons. I mean, it's, it's the technical expertise that they can, uh, pick up, but it's also making those business connections to help with, with their own own business priorities.
I can understand how you can transfer a lot of the speaker program and content and courses to the online environment. But what about the, uh, the exhibition halls? That's one of the key benefits for, for 10 days, you know, walking around the investor exchange or the, uh, the technical exhibit area to find out, you know, the latest on drilling or technology or whatever is it you're going to try and replicate that.
Is it possible to replicate that. Yeah, certainly looking at how best to deliver that for the exhibitors. So, yes, it's going to be a virtual, um, trade show, investors exchange, but.
Well, that visitors will be able to contact the companies that they're interested in, have those conversations that that would take place on the exhibit floor. It'll just be virtual,
so there's. Many many moving pieces. It won't just be the conference organizers. Uh let's uh, you know, you've got a lot of hats, Patricia, so I have to swing around to some other ones. I do want to switch to talking about, uh, towards sustainable mining. Uh, what is it? And, uh, what makes a companies commit to it?
, it's a series of frameworks and protocols that drive improved performance by the companies. And if you're a member of the mining association of Canada, you have to participate and. Adapt to the towards sustainable mining initiative.
period. And one set of, uh, reporting to provide information around their operations that, uh, meet these, these performance criteria. I get a lot of these reports, uh, that comes. So, uh, you're talking about, uh, your company that you used to be with tech, for instance, and then it's committing to, , carbon carbon goals around a Paris treaty.
, . Can you talk about all of these various frameworks? Maybe just, if you could thumbnail. how did they interlock? . Well, I think it's most international companies would be well aware of the ICM AMS protocols. If you're a Canadian company and a member of Mac you've got TSM, Australia would have its own series of protocols, but it's that it's the coming together.
Of these, so that companies aren't burdened with multiple reporting and, and audits. Uh that's that's, what's so exciting about the collaborative work that, uh, mining association of Canada is down through it's towards sustainable mining initiative. So, um, for example, um, one of the standards that been.
Coordinated through this as the world, uh, goal council's responsible gold mining principal, um, the copper Mark and the responsible minerals initiative, risk readiness assessment. And of course I mentioned ICM M just to name a few. So, so that's like I said, this is, this is a wonderful collaboration for the benefit of, of the mining companies.
And I think it's really starting to take root. Um, it's increasing number of news. Yeah. It's about companies and what they're trying to do to meet the goals of these various initiatives. Um, just this past week, for example, copper mountain, uh, talking about using X assist technology and it's a copper mountain mine in British Columbia.
If it will Smith got some funding from the EU grant, from the EU to work on reflux, flotation, cell technology, um, the governments, Canada and Quebec, um, providing funding for, um, electric smart transportation for the mining sector. So a lot of initiatives are really starting to come to surface. I want to move on to a number of the week. , that is a number that. , it was notable, we always start with a guest.
So Patricia, what was your number of the week? I've got three numbers, but they're all related that the numbers a hundred. 31 and seven. So the women in mining, UK released it's hundred inspirational women in mining its 2020 report earlier this week. What's exciting about that report is the women, uh, come from 31 different countries around the world.
And we're very excited that there were seven Canadian women that were recognized in this year's study. So that's where my numbers come from. And by, by way of comparison, um, I was very honored to be named one of the hundred inspirational women's in there.
I presented 16 countries and, uh, but there were 15 Canadian women that year. So, so it's, it's, it's exciting to see that, uh, women now from many more diverse mining, jurisdictions are being recognized for their, their contribution to our industry. Paul what's your number number is perhaps a little bit more dying or more mundane, but it's three points away. corporate, is it a two and a half year high?
Neil's what's your number? The week? so according to, , Kitco news, , quoting, , standard charter, uh, 50 tons of gold in outflows in ETFs , this month,
, my number is 5 billion. This number comes to me via Bloomberg. There was three corporate companies that entered this quarter with over 5 billion in cash.
It was Shopify air Canada, and the other one is. Eric gold companies have seen their war, chest balloon for different reasons. Barrack and Shopify are prospering. While air Canada has gone on a mammoth capital raising spree to secure funds to survive the COVID 19 pandemic.
I want to thank, , our guests, uh, Patricia Dillon, uh, for joining us on the podcast. That's it for us. If you like, what you hear, tell a friend and don't forget to subscribe through iTunes and leave us a nice review.
Next up our interview with Gary Wagner on gold and how it's trending.