Record Gold Profits, But Growth Still Flat | Joe Mazumdar

Joe Mazumdar, editor of Exploration Insights, joins Kitco Mining’s Digging Deep with Paul Harris to unpack a record-setting earnings season for gold producers, where higher margins, stronger free cash flow, and rising shareholder returns are reshaping the sector.

Mazumdar highlights Newmont and Lundin Gold as standout performers, but says the bigger issue is that organic production growth remains constrained despite higher gold prices. With producers trading at a premium to the assets they are acquiring, he argues M&A may be more attractive than building new mines in a high-cost environment. “Why take the permitting risk? Why take the capital escalation risk that we're seeing in some of these underground projects when you could just get a producing asset that you like?”

The discussion also covers exploration spending discipline, risks behind aggressive junior drilling programs, assay delays, rising drilling costs, Cameco’s downstream nuclear strategy, and why companies are packaging non-core assets into more focused vehicles.

Don’t forget to subscribe to the Kitco Mining & Kitco News YouTube channels to stay up to date on the latest industry news and interviews.

Recorded May 07, 2026

00:24 - Q1 Gold Earnings Surge and Record Margins
03:41 - Cost Pressures, Streams, and Weak Performers
06:08 - Divestments, Debt Paydown, and Project Builds
08:05 - Growth Constraints and Exploration Spending
11:57 - Why M&A Is Cheaper Than Building Mines
15:50 - Junior Drilling Boom and Execution Risks
19:23 - Rigs, Labor Shortages, and Assay Delays
22:28 - Australia Gold Deal and Reporting Differences
27:12 - Uranium Momentum and Cameco Strategy
31:45 - Spinouts and the Non-Core Asset Shift
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Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Transcript

SPEAKER_00 0:00

Kitco Mining, Digging Deep with Paul Harris.

SPEAKER_02 0:05

Hello and welcome back to Kitco Mining's Digging Deep with me, Paul Harris, in which we take a closer look at some of the most interesting news items in the mining and exploration space. Today is Thursday, the 7th of May, and joining me is Joe Mazumda, editor of Exploration Insights. Joe, welcome back to Kitco.

SPEAKER_01 0:22

Thanks, Paul. Thanks for the invite.

SPEAKER_02 0:24

Now, Joe, we are in the midst of first quarter earnings season. There is a raft of results out today. Records are being set right, left, and centre, with record free cash flow, record profits, record cash balances, record returns to shareholders, etc. etc. The best gold performers are now enjoying all-in sustaining cost margins of more than 3,000 US dollars per ounce, which is basically what the gold price was a year ago. Some standout performers include Equinox Gold, who repaid about$1 billion of debt this quarter, which essentially means the debt it assumed when it brought caliber mining 2024 has been cleared. That in just under two years. Also, Londine Gold and Artemis Gold have achieved all-in sustaining cost margins of more than 77%. Joe, um, you've been following the results very closely. Whose results have you been particularly impressed about and why?

SPEAKER_01 1:19

Well, I mean, all of those companies that you mentioned, uh, you know, Londine uh especially was one of the best performers in 2025 in terms of the top five companies uh of the 30 peer group that I looked at. Um and one of the reasons is uh they've always been able to generate free cash flow, they've always had uh uh good margins, and they basically maintain their cost profile. Uh and but importantly for them, uh they also deliver some of the highest, if not the highest, of that peer group, almost 60% uh shareholder returns, uh 100% in dividends. And so that's another attractive part of uh uh of London gold. Uh but you know that's that's to compensate for the fact that they're a single asset producer in Ecuador. Um in terms of the big companies like Newmont really impressed me, and that's not because I used to work for them, but you know, even though they produce less gold, and this is an important trend to keep an eye on, uh Q1 2026 versus Q1 2025, they produce 16% less gold. So you take that, but recognized gold price uh you know was about 66% higher, you know, year on year, Q1 versus Q1. Um, so that engendered an EBITDA of about$5.1 billion for them, which was almost double what they produced uh the same period last year. So that's very encouraging uh for a big company. Uh and in terms of balance sheet net debt, they have one of the best positions in that peer group, uh, which is you know, for a big company to not only uh have the best, you know, one of the better margins, but also to be uh producing uh you know um the generating the uh the one of the better balance sheets. So they're controlling their balance sheet in terms of debt, generating more cash flow, and they're also uh delivering more shareholder returns between uh I think they're committing another six billion dollars in buybacks uh uh going forward, and uh they've committed to about$1.1 billion a year in dividends. So that's all very attractive for generalists going forward.

SPEAKER_02 3:41

Now it does seem that the the companies are becoming increasingly competitive on their shareholder returns. It's very easy to sort of just look at the the upside and the companies that are really excelling. Uh Joe, has any have any companies disappointed you?

SPEAKER_01 3:56

Well, if you look at 2025, and this is important for people to realize, like you know, uh they're looking at the gold price go and they're wondering maybe why isn't my company going? Uh some of it could be their the financing transactions that were related to streams that were imposed on individual assets. So you could look at what the gold price was, and then if you go to their financial statements and find out exactly what they recognized. And for some companies like Sentera Gold in 2025, in terms of that list of 30 companies, they had the lowest recognized revenue, uh recognized uh price, gold price, uh, because of a streaming agreement they have on Mount Milligan. Uh so that's another thing to know. So if you do look at a producer, you know, look at how many of these streams they actually have that might deliver the company uh to the gold price. Uh and then some of the ones that higher had higher all-in-sustaining costs were like Allied Gold in West Africa. Uh, they got bought out uh by a Chinese firm, uh, probably for a lower valuation than people wanted. Uh but you could see that they they they did have all high all-in-sustaining costs. And they also generated uh uh one of the lower margins, as did Centera in 2025. So, in terms of corporate costs, uh what we saw as well was Equinox in 2025 had the highest overall costs uh in terms of GNA financing. They don't do any exploration really. Uh yeah, I think they were over 14% of their revenue was dedicated to that. A lot of that was that financing. Now, as you said in Q1, last year they sold their Brazilian portfolio and they sold it to a Chinese firm for a billion. Uh 90% of that was upfront cash. That's the cash they used to pay down their debt, which was also very high cost, which was very important. And so going forward, they're much more uh uh better off in terms of their corporate costs uh and uh uh you know, in terms of the gold price and everything like that. I think they're much better off. And and then we see a lot of that, where not only were big companies divesting non-core assets, we saw that almost two-year plan by Newmont, uh a multi-billion dollar divestment scheme that only ended recently with the uh sale of the coffee project at Gold Corp bought Kamanac, Newmont bought Gold Corp, and they ended up with it. And that was the last project in their uh portfolio with respect to divestitures. Uh we saw Barrick with Hemlo, but now we're seeing intermediates do it, you know, uh because they you know they're all over the place in terms of portfolio. Equinox is focused on two uh major uh open pit gold deposits in Newfoundland and in Ontario Hard Rock and uh Valentine. Uh so um the other ones don't matter, they don't move the needle. Uh and they found a company, uh a Chinese company, that uh they don't end up with shares, they get cash up front, and that definitely improved their balance sheet. So what I saw with most companies are doing the right thing, the ones that generated the lowest free cash flow yields uh in 2025 were the ones that were building projects, like your Artemis's, uh uh that, and also uh El Dorado Gold. Uh they also disappointed disappointed in a free cash flow yield basis, but they're they're building two or three projects, and now they actually acquired um uh uh Foran, uh a base metal project, uh gold and copper project uh in eastern Canada. So, yeah, the ones that are developing projects right now look worse in terms of free cash flow yield, but if we keep going with the commodity prices, they should do better going forward.

SPEAKER_02 7:52

Okay. Now interesting, those Brazil assets have been uh sort of the subject of pass the parcel in recent years. They've been through several hands, not just Equinox and the new Chinese owners, Yamana Gold, um Li Gold Mining, etc. etc. Um, Joe, you you're referring a lot to back to performance from 2025, and I want to bring in uh the fact that you recently published in Exploration Insights a review, a 2025 review of the gold sector results. That was about three weeks ago, which was an excellent read and stuffed with thought-provoking data points. You highlighted that profitability improved substantially as the average audience sustaining cost margin rose to about 53%. Balance sheets strengthened considerably, as did shareholder returns. However, I want to sort of talk about this point here. You noted that organic production growth remains constrained, if not flat. Um, with companies generating record profits, balance sheets never been in better condition, lots of cash on the balance sheet, total liquidity even greater. Where does the gold sector go from here, Jo? Um bigger exploration budgets, more Evan A. What are your thoughts there?

SPEAKER_01 9:00

I know through the uh uh the social media that a lot of people are talking about the lack of exploration expenditures uh by big companies uh as a percentage of revenue. Uh and uh they're correct. Um that's one way to look at it, and I do look at it that way. But but exploration is a little bit like exploration that's not capitalized, that's expensed uh in the income statements, sort of like GNA, sort of like um uh financing costs and other things. Uh there they're usually you have a budget and it might be, you know, whatever, 200 million, 300 million. If the gold price goes up, you don't double it uh because you'd have to hire more people, generate more programs, you might not have the capacity to do that because you don't run an expiration program like this. You shouldn't. What you should do is run with a stable expiration program, a multi-year program that's continually funded uh for at least five years and have a uh program. So if you're making more money, yeah, on a percentage basis, yeah, you're spending less on expiration. Uh but on an absolute basis, you haven't changed. So it's it's it's a bit wonky to look at it that way sometimes, because it's not something that that is tied uh to the gold price, even though I too look at it like that. Uh, but you really want stability in that budget. So but going that way, regardless, uh their growth in their their ounces hasn't done a lot. I mean, we've we've saw an average uh higher reserve and resource prices around 300 bucks an ounce, didn't really change the reserves that much. Uh it in it it increased their total mineral inventory, you know, their in uh they're inferred. But in terms of growth, if you take like the metric I use is sort of like inferred over total mineral inventory, which is measured, indicated, and inferred, it hasn't really changed much. It's about 28 to 30 percent. There's no change. The gold price hasn't changed anything. Um, it's still difficult to find things that uh that make sense for you, even when you expanded your uh your uh price assumptions. Uh but granted, those price assumptions are still way below the current price. So a lot of the average is around over 2,000 for reserves. I'm sorry, uh yeah, around 2,000 for reserves, I think maybe nine, no, 1900 for reserves and maybe 2200 for resources. Uh, but still that's a fraction of the gold price right now. Uh, you know, I are people gonna go up and is that really material? Um, right now I don't I don't know because the problem has been that the costs have been going up to build some of these projects such that you know uh they might not be viable in this current environment. Um, you know, so that that's the other component. But in as opposed to expiration, a lot of the bigger companies now the intermediates are you know going towards uh uh MA. And we've seen, like I've documented 18 transactions, material ones, since July 2024. What's notable, and I think always existed is there's a premium that the producers enjoy versus the intermediate, are they the assets they acquire. But that gap seems to be bigger now. So the difference between an enterprise value per ounce uh for a uh for that 30 uh group peer group of North America listed companies was about over$1,500 an ounce uh uh after uh uh Q1. Uh so versus their acquisitions, I mean, their meaning uh those those uh 18 transactions was about$828 an ounce. So that's an 84% difference on the reserves. So anything they buy is accretive in terms of that metric. And then on terms of a total mineral inventory, it's almost double. So whatever you buy, it's gonna be worth more in your portfolio. So why take the permitting risk? Why take the capital escalation risk that we're seeing in some of these underground projects when you could just get a producing asset that you like? I mean, AgNico had been looking at ICURI for the longest time, and you could see how they've leveled up in terms of taking an equity stake in them and then putting somebody on the board, and then understanding what the issue was with respect to ICURI. Um, it is a great open pit deposit that's constrained by property boundaries with a joint venture from two different companies, and so they had to do an amalgamation of the entire district, which is exactly what it needed. Usually companies wait, and this is why the transaction took a long time, for the juniors to sort themselves out and clean up the structure, and then they would pay a premium for it. That never happened. Uh and so I'm you know a little bit unfortunate uh for uh some of the shareholders is they couldn't get that bump up for that consolidation. You know, uh they they they got picked piecemeal. Uh it would have been better if they had basically done this transaction a year ago. We owned Agniko shares, and we would have you know done much better uh because Agniko did much better than uh than the companies that were actually getting consolidated. Um so that would have been a better outcome. But you can see my point is that AgNico, Newmont, and these other companies have done much better, such that for them to acquire companies is is a much better idea than uh than to build.

SPEAKER_02 14:50

Thank you, Joe. Um, you were talking about the uh Rupert resources in Finland and Orion or Orion resources there. Um and yes, AgNico did seem to lose patience with the juniors being able to get together, and so they just stepped in and did it themselves. However, I must say that they they did pay some pretty pretty premiums. I think Rupert got 60 to 70 percent, and Orion got, or Orion got 40 to 50 percent premium. So um AgNico did sort of you know stump up relatively speaking.

SPEAKER_01 15:18

Um, but if you look, if you look, they underperformed AgNico, so they had to stump up and they didn't mind doing that. I mean, you can look at the premium, but look at the valuation, that's more important. Um, and they had to get the deal done. Um, the other thing was Kitzla was going down, they have all this infrastructure in Finland, and that one made the most sense to to buy because they bring all this Arctic experience, and Finland's a great place to build. Uh, so it makes sense for them uh to do. Uh and you don't mind paying up for that.

SPEAKER_02 15:50

Okay, well, let's get back on the exploration theme. Um, interesting, your comments about uh the what what's perhaps limiting the the major mining companies, the producers from exploring. Um, however, that's not necessarily a constraint on the explorers, and recent weeks have seen the number of explorers announcing record drilling programs or upsizing drilling programs on the back of large financial raises. These past few days we've seen Gold X2 mining expand their drilling at the Moss project in Ontario to 160,000 meters. Tectonic metals in Alaska launched a 40,000 metre drilling campaign at its flat project. Onyx Gold expanded drilling at its Mumro Croatures project near Timmins in Ontario from 75,000 metres to 110,000 metres, and Talasca Resources increased its program at Brelawney in British Columbia from 30,000 metres to a whopping 105,000 meters. Explorers are certainly being more aggressive and looking to progress their projects faster and maybe undertake pure exploration holes. Joe, um is there a danger here that quality control will slip and that the let's say the geological signal will get lost in the drilling noise for these companies?

SPEAKER_01 17:05

There's always a risk, as we know. Um I would say with some of these programs, uh uh when you're doing expiration, which is grassroots, uh, which some of them might be doing and some of them might be doing infill, uh, is that you don't want to get ahead of your skis with respect to understanding what you're doing and not try to do a um an uh infill program too early without understanding the deposit. And that you know, that would be a lot more uh, you know, trying to check the limits of it, uh take a lot more chances uh on the program uh as opposed to drilling as much detail as you can on where you uh hit the intersection. Now, I mean there is a rule, I don't think it's a bad one to you know, don't drill away from where you actually find it. Uh, but to understand it, uh, you probably want to do uh more drilling that's that's exploratory, and then you would drill based on those results, and so you wouldn't commit. The problem is some of these programs like Tectonic and anything in the Yukon, you have a smaller uh window, and so you want to hit it hard quickly, and so it's not only the meters, then it's the availability of the rigs. And uh, you know, with all these bigger programs, we'll also see results take longer. Like we were looking at, you know, a priority before was three to four weeks when during the field seasons now, because people have much higher budgets, we've seen three-month waiting times for results. Uh, so we should expect that same impact uh going forward. Uh, and then also the other issue is that for some of these projects that are copper projects or base metals uh that are deeper, you know, the meters there, but you know, they might be drilling 700 meters to a thousand meter holes. Um, you know, uh and so that's the other thing is how how how deep are these guys drilling. Uh and for the gold ones, some of these ones are high grade but highly variable, such that they might need the meters to figure out the deposit with respect to getting it into even an inferred resource, because the spacing they have now would not engender a resource, according to their consultant.

SPEAKER_02 19:20

Now, uh some interesting themes here, Joe. I mean, extending your theme about um the wait times at the assay labs, but before we even get there, you sort of touched on this the availability of drilling companies, drill rigs, and uh experienced drillers. Um, technical service availability in certain jurisdictions is certainly becoming constrained, particularly in Canada, where companies are looking to use up their flow-through financing budgets. Um, does that potentially mean is there a danger that companies will basically use third string drilling teams and therefore run the risk of perhaps losing more holes or not actually getting what they think they're buying?

SPEAKER_01 20:00

Oh, yeah, but that's already been happening. Uh a lot of the higher costs and drilling have been happening over the last couple of years, especially in the states, uh, where you know, for uh a year two years ago almost, like I went and saw a project in Western US, and you know, I would I was shocked that you know they had no camp. You could drill up to the you walk, you know, you could uh drive right up to the drill pad. And they were at that time, two years ago, they were paying$450 US uh per meter. Now that number is more like 600 plus uh with no infrastructure, no helicopter, no nothing. Um so in Canada, uh for whatever reason, uh some of these projects uh that are remote with helicopter don't look as bad now compared to those uh, you know, taking into account the exchange rate. Uh but you know, anything you do in Alaska is easily a thousand bucks a meter. Uh, you know, uh the Yukon and that uh probably around the same, depending on the helicopter support. Um Northern BC, similar, but I've I've been amazed uh at how some of these people have been drilling for under 500 meters, uh$500 a meter, sorry. Um uh and so the problem uh has not been the number of rigs, it as you point out, it's the people. And you can't control that. So the smaller program you have, the more likely you're gonna get the tier three tier three driller because the big company can promise a drilling company a protracted program, uh, that you know, and they and then the their best drillers will go on that program because that's a client relationship and they want to do well and they want to keep that contract going. The guys that drill 3,000 meters here and that will probably not get the best drillers uh unless they have some kind of special relationship. Um and so with the juniors. That commit to bigger programs, they're more likely to get better drillers than the junior that commits to a smaller program because you're more likely to get the second tier or the third tier guy that's in training. And that'll cost you more per meter than the guy that drills that 50 to 100,000 meter program and has a commitment from the drilling company to give them your best people.

SPEAKER_02 22:27

Okay, fair enough. Let's get back onto MA, which you touched upon in the sort of previous segment. With the valuation delta between the producers and the non-producers, it does seem there's very healthy terrain for more MA activity. There was another gold MA transaction this week, this time in the antipodes in Australia as Regis resources is to buy volt minerals at a 10.7% premium, creating a 7.7 billion US gold producer. That will be Australia's third largest gold producer with a production annual run rate of about 700,000 ounces a year, placing it firmly in the global mid-tier category. Australia's gold sector often gets overlooked by people in North America, but it does have some very big players. Joe, Regis, it looks like it certainly wants to become a much bigger player. This transaction is focused on Australia. Do you think it also in the future wants to expand its reach more globally or does it have better advantages staying focused in Australia?

SPEAKER_01 23:27

Well, I would say if they want to get to the next level, uh they would have to list in the US and then produce financial statements that uh parallel what we produce in North America. Uh because they tend to produce half-year financial statements, and that can be frustrating for some people, uh uh me included. Uh and uh they don't look like the financial statements. So the only ones that North American listed companies that were actually uh that I had in my list was evolution, because they actually produce financial statements that I could read. Um so if they want to get there, I would I would say that's the way to get there. Uh if they want to follow the model to attract those kind of generalists from North America, meaning the US, then it would involve shareholder returns uh and and getting that. If if if that's what their intention is. Their intention might be more growth domestically with a prime focus in Australia. But then there's probably U.S. investors and European investors for sure that would be interested in a company that's just focused in on Australia and has that geopolitical uh low-risk sort of jurisdiction um basis. Uh, but to get it uh to them, um, you know, for resource equity funds, it's not such a big deal for ASX companies, but for some generalists it might be. Uh so if they want to get to that next level, that might be where you go.

SPEAKER_02 24:54

Oh, just uh an aside joke. In your list, you include Goldfields and Angular Gold Ashanti. They're two of the biggest gold producers at two or three million pounds a year, but they also report half-year.

SPEAKER_01 25:04

Yeah, but they they are listed, and and so they produce good financial statements that I can read. Uh uh granted, sometimes I'll tell you the hardest thing to get from some of these companies is the reserve and resource statements. Um, some of them have them right there on the website in terms of a tab, easy to read and that. Uh, others, they're all over the place, very hard to get. And some of them have reserves, I'm sorry, resources exclusive of reserves. Some of them, and this is an interesting one as well. You know, when I'm doing the average of the reserve prices and resource prices, what you find is a lot of companies have different prices depending on the asset. Uh, so they don't have one price for everything. Uh, they have different prices depending on uh what what the asset is, which is kind of interesting. Um if everybody could just do it the same way, it's easier to compare them.

SPEAKER_02 26:03

So, Joe, sorry, I'm gonna be a bit cute here. Uh, the the thing I took away from that is that you can't read Australian English.

SPEAKER_01 26:10

Yeah, well that's I I lived in Australia, I went to school there. I have all the best, you know, memories of working and living there. Uh it's it's just you just get used to doing something a certain way. Uh I'm sure if all I did was Australian equities, I would have no problems uh comparing everybody. Uh but since I'm coming from here and looking there, uh that's an issue. Um, I mean, that's how the black swan got started because nobody thought there was a black swan until they went to Australia. So uh right now I I find it a little bit more difficult. And and I thought with the 30 company peer group, I had a good enough slice of companies to uh to make conclusions. Um but yeah, if I did all ASX, uh, you know, it it wouldn't be a problem. It would be more apples to apples.

SPEAKER_02 27:02

Yeah, I know exactly where you're going through. I'm going through the quarterly results when companies format them in different ways. Yeah, it knocks you out of Kilture a little bit. Um, okay, let's move on. It's not just gold miners cashing in on high commodity prices. Uranium producer Kamako announced an 87% increase in its net earnings driven by higher uranium sales volumes and improved realized prices. Joe, the uranium price has been rising on the back of the electrification narrative, and due to geopolitical tensions that arose after Russia invaded Ukraine in 2022, um, and that seems to be now being supercharged by uh the Iran conflict and greater concerns for energy security. Um what are your views on what's happening in the uranium space? Obviously, Iran um is having a big impact, is restricting oil supplies, the oil price has gone over 100 US dollars per ounce. Uh, people are talking about building more uh reserve capacity in different nations, and imagine some of the bigger companies as well. Um, nuclear is getting uh another look because uh another way to wing countries off oil and perhaps safeguard domestic power supply. What's your view of what's happening in the uranium space?

SPEAKER_01 28:18

Well, you could I guess you could look at Chemical and see that their interest uh in the future of the uranium space was more downstream in the the the Westinghouse acquisition in in Europe. Uh they signed an agreement with Brookfield in the end of October last year uh to build Westinghouse reactors in the US, something like a potentially an$80 billion future transaction in terms of what that looks like. Uh they signed a long-term agreement uh with India to supply them with uh uh with uranium. Um their EBITDA has gone up 30% 2025 versus 2024. Their share price has done very well. And it's a liquidity thing as well. When you think about uranium, you think about now vertically integrated, uh you think about Camiko. Uh and not only they're they're not you know uh uh uh wary of where they get their uranium, they mine it, but also they're not giving it to somebody else all the time. They're actually uh got the downstream part and building their reactors. And and that's a big deal in terms of the not only the processing part of it, but actually building the uh, you know, when you build the reactors, you're building the demand for your supply. Uh you're not waiting for anybody. And it's interesting for me is that they went downstream as opposed to upstream, where they didn't buy a lot of the development projects in Saskatchewan and build up their reserve base and start building these projects. They actually went downstream uh and levered to Russia being out of the uh the nuclear uh game in Europe, which worked, which worked really well for them. And now, as you point out, with with the the Straits of Hormuz and the oil and that, and people looking for still with electrification, AI needing even more power, potentially more EVs, because people want to wean themselves off of oil, nuclear has become more uh a topic of discussion. Europe is now uh a big advocate for it, uh, as is the U.S. A lot of people talking about these smaller nuclear reactors for mines and for remote uh areas, uh, as opposed to using diesel, even in the Yukon. Uh so uh yeah, it's getting a lot talked about, but some of it is about the technology uh that drives the demand. Uh and uh I get the impression that they're willing to wait for some of these companies to blow up with respect to capital uh and then buy them out, as opposed to you know trying to pay a premium on a capital number you don't believe because you've done it yourself and had issues.

SPEAKER_02 31:02

Okay, um maybe blow up a bit of a Freudian slip there for you, Joe, talking about nuclear and uranium companies. Uh but seriously, um I listened to the Camico conference call and the CEO Tim Getzel, he was talking about the AP1000, the small reactors, uh, the Westinghouse reactors, and you know, he he was pretty adamant that these things are gonna be widely deployed. And he referred back to the uh announcement last year that the US Department of Energy is gonna invest, I think it was$80 billion in rolling out nuclear. And you know, to paraphrase him, he basically said, you know, that was a purchase order. That's not speculative, that's a purchase order. So he's very certain that that's gonna come uh come along downstream. Um obviously a lot more to watch for in the uranium space. Um, I want to sort of finish on um on a on a different note, if I may, Joe. A lot of people, a lot of commentators talk about the fact there's, in their opinion, too many companies in the mining and exploration space, and juniors are too quick to spin off unloved assets into a new orphaned, unloved, underfunded junior. Um, but it does seem that the big boys are starting to get in on that game as well. Evidence of this is tech resources. They're working on a deal with Kodiak Copper to sell their respective Mojave and Copper Hill projects in Arizona into a new entity which they're going to call K Copper. Similarly, B Metals is acquiring Prospectum Metals non-UConn exploration projects, and that will be rebranded Lightning Resource. Um, Joe, what's going on here? Do you think?

SPEAKER_01 32:34

Well, I think these are non-core um projects in in both the portfolios, and tech doesn't want to do the exploration. Uh on they probably could fund their own exploration, but they don't want to do it. Um, but they probably looked around for somebody to say, hey, our project by itself is not good enough for an IPO. Is there anybody else that wants to throw in some more projects in Arizona and have an Arizona-focused copper explorer? Um and you know, uh that discussion happened, and Kodiak had a non-core asset in Arizona that they couldn't work on, they didn't want to work on, they didn't want to allocate capital to because most of the money they're getting in is for their uh, I think it's MPD project in uh in uh in British Columbia, the emerit. Um so for them, they get equity in a company uh that's going to raise capital to explore their asset, uh, which makes perfect sense because otherwise they would get no news flow of it and it would just sit there like a dead asset. Um so uh that's a positive. And but you're selling a product, which is this new company that's got a thematic in that, oh, Arizona is a great place for copper, which everybody knows, and now permitting is a lot easier uh under the current U.S. administration. So, and copper, domestic copper is a big deal. So uh let's build a theme for that. Let's not mix it up with stuff from Quebec or stuff from British Columbia or stuff from anywhere else. Let's just focus in on this. Uh, and that'll be easier maybe to sell to some people uh in terms of exploration. Um and B Metals did the same thing with uh with Prospector, as you said, but that was more Canada focused. So Prospector has a big portfolio, they want to focus in on their UConn project, uh, which they're drilling. Um I think they're sending the crew out now soon. Um uh and so this other projects they weren't gonna work on. Uh so it makes more sense to throw that into um uh a portfolio with B metals that that wants to divest probably uh of their projects in Japan and Zambia, which is geographically everywhere for them for a junior, and focus in on Canada. Uh so uh that that that makes sense as well. Uh you know, a theme and then have the assets that underlie that theme.

SPEAKER_02 34:59

I understand what you're saying in terms of simplifying the proposition, having a theme, makes it perhaps easier to for an investor audience to digest. But um, yeah, playing devil's advocate, Joe, do two non-core projects equal a core project?

SPEAKER_01 35:16

Um in the sense that like it's only non-core because that's not your focus. Uh you're focused on this project in BC. Uh, prospector focused on this thing in Yukon, that's what they raised all the money for. Uh their investors right now don't care about that project in Arizona for Kodiak, and they don't care about all their assets uh uh that Prospector has outside of the one that they're drilling. So that makes it non-core. Uh so it's it's it's very similar to uh uh like you know uh a company divesting. So I'm divesting Hemlo for me, Baric Hemlo doesn't make any sense anymore. It's immaterial.

SPEAKER_02 36:02

Let me sort of butt in there and pick up on that. Hemlo is you know, it's proven it it can survive and exist as a standalone asset. And Hemlo, is it Hemlo Mining or Hemlo Gold Mining? They're they're sort of doing well with that. But with the what we're talking about here, it does seem that the part of the rationale for putting together assets from different companies is that the individual non-core assets are unable to sort of sustain and go it alone. They can't, you know, they're not.

SPEAKER_01 36:28

What is core and non-core is in the eyes of the beholder. Uh so uh Liberty Gold had a non-core project called Gold Strike. The market gave them nothing for that. Uh, and they weren't spending a lot of money in it because they're focused on black pine. They don't they can't raise money to work on gold strike, so they sold it, and I think they sold it for 70 million, something like that. I can't remember what they sold. Sorry? Heliostar. Heliostar bought it, yeah, for shares and some cash. But for them, it was you know technically non-dilutive because the market was giving them zero for it. So for them to come out of nowhere and sell it, uh was uh was a very big positive because now they can take that funding, not raise it in the capital markets and use it for black money. Um so I I and and the same thing with Newmont. They had a whole bunch of assets that they weren't gonna spend any more money on, they just had accountants looking at it, they were not material, but they could be material to somebody else, you know. Um and that's what ends up happening. I mean, so you can't say it's non-core, you can't put two non-core and make it core, but it all depends on the company that's acquiring it. Because it could be core for them, and that's what they want. You, it doesn't matter to you because that's not your focus. Uh, and and investors demand focus. They don't want companies, like like the B metal problem was they had things in Zambia and Japan and all over the place. And then people were saying, Well, what are you gonna drill? Well, we're gonna do a little bit here, a little bit there, and see what yeah, well, who cares? Uh so now they're they've got a theme where somebody could say, okay, let's focus in on that. Okay, that's something I can get behind potentially because I just want Canada or I just want Arizona and copper. Um, you know, I can get behind that. Um, so so for me, it's not because they're non-core doesn't mean that they're they could not they it doesn't mean that they're not material. They could be, but the thing that they nobody's allocated enough cal capital to them to prove it one way or the other.

SPEAKER_02 38:35

Okay. Uh thanks for that explanation. Um, and that concludes this week's edition. Joe Mazumda, thank you very much for joining me again today.

SPEAKER_01 38:44

Thanks a lot, Paul.

SPEAKER_02 38:46

And of course, if you like what you see, don't forget to hit that subscribe button. I'm Paul Harris, digging deep for Kitco Mining.

SPEAKER_00 38:53

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