Michael Howell on The Issue With Gold & Silver Stocks + Troilus Gold & Capitan Silver CEO Interviews
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Timestamps 00:00 intro 01:00 Why does global liquidity matter for gold & silver? 04:45 How would Michael Howell invest $1M? 09:55 Will gold be part of the new 60/40 portfolio? 14:15 Are we at the beginning or the end of a cycle? 16:10 Will fear be pushing gold & silver higher? 17:45 Why isn't liquidity coming into gold stocks? 19:35 Will institutional capital come back into gold stocks? 26:15 Will central banks keep buying gold? 29:05 Will the dollar remain the world's reserve currency? 31:30 Will China keep investing in natural resources? 36:25 Does Michael Howell own gold stocks? 43:30 Which jurisdictions does Michael Howell not like? 49:03 What is the biggest challenge in global macro? 55:15 Troilus Gold company overview 59:10 Troilus Gold CEO interview 01:46:41 Capitan Silver company overview 01:51:33 Capital Silver CEO interview
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Global liquidity cycles, driven by debt refinancing rather than traditional business cycles, are the primary driver of asset prices and require a shift from traditional 60/40 equity/bond portfolios toward holdings in gold, bitcoin, and real assets as fiscal dominance replaces monetary dominance.
- The 5-6 year liquidity cycle reflects debt maturity structures ($350 trillion of debt with ~5-year average maturity) rather than interest rate policy or capital spending
- Shift from monetary dominance (low inflation, central bank discipline) to fiscal dominance (government deficit spending, monetary inflation) fundamentally changes optimal asset allocation
- Gold prices reflect monetary debasement of paper currencies rather than geopolitical uncertainty or headline inflation, making it a structural hedge in the current regime
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Gold is not primarily driven by geopolitical risk or headline inflation, but by monetary inflation (debasement of paper currency), making it the historical benchmark for monetary value; gold is not rising but rather everything else is falling against gold.
“what seems to come out very strongly is Monetary inflation I mean gold is a monetary standard it's really The Benchmark it's the historic Benchmark that many people have used uh you know if you look at the at the names of currencies it all goes back to sort of Weights of precious metals you know a pound of sterling silver for example”
Central banks and governments outside the West (China, Russia, BRICS members) are accumulating gold rapidly; as of the beginning of 2024, BRICS gold holdings surpass the amount held in Fort Knox for the first time ever, signaling a major trend shift toward gold as a monetary instrument.
“if for example you calibrate the amount of gold Holdings by the brick economies and their friends so-called friends want to join that bricks Club it now it now surpasses the amount of gold held in Fort Knox as of the beginning of this year for the first time ever”
Alberto Orosco is President of the Sonora Mining Cluster in Mexico, providing insight into Mexican mining policy, regulatory changes, and opportunities; this position offers strategic advantage in understanding the political and business environment.
“I am the President of the Sonora mining cluster here in Mexico and that's very relevant with Sonora being the largest mining State um all the opportunities that that gives us to to understand about what's happening in Mexico where things are going and uh and I feel that that you we're going to have to we're going to continue to have the capacity to move things forward”
China's structural economic imbalance stems from the state capturing a disproportionate share of national income, leaving households with lower income shares than in the West (domestic consumption ~50% of GDP vs. 70% in the West), which limits consumer-driven growth and forces reliance on government spending and exports.
“China's sitting on this I mean CH China as we know or probably most people will understand is an economy that structurally imbalanced okay and whereas uh in most western economies the household sector enjoys a large share of national income in China it doesn't so if you like the Party Machine um or the state-owned Enterprises and the state gets an unusually large slug of national income which they control”
Governments could attempt to demonetize gold through legislation (as the US did in 1934), but this strategy has ultimately failed because private investors and non-Western nations now widely hold gold as a monetary asset, making prohibition impractical.
“what happened in 1934 with the with the gold act and then it was basically uh a clear case that holding gold if you're a private sector individual was impossible it was became illegal uh you got whacked with a whopping great jail sentence and a huge huge fine uh some so you certainly wouldn't even think about cont wouldn't contemplate holding gold you'd hand it back to the treasury and that's what happened um so that was one way that the government's tried to demonetize Gold uh it was successful for a long time but I would say they've now failed”
Investing in commodity-based countries requires monetary stability; jurisdictions like Zimbabwe or Argentina with political and monetary instability are poor investments even with abundant natural resources, while African countries are becoming more stable due to Western competition with China.
“you've got to invest in jurisdictions that have got monetary stability I mean that that's for sure uh you know I mean maybe to to use a sort of crazy example I mean you know Zimbabwe is a country with a lot of Natural Resources but it may not have been a wonderful place to invest because actually it was politically unstable monetarily unstable and so you know you wouldn't have got very much even if you got the right resources you wouldn't have made a lot of money”
Global liquidity cycles are driven by a 5-6 year debt refinancing cycle, not the traditional 10-year business cycle, because approximately $350 trillion of debt with an average 5-year maturity means roughly $70 trillion must be refinanced annually through financial markets.
“the five to six year cycle is really a debt refinancing cycle so the average maturity of debt out there is about five years and you've currently got something like $350 trillion of debt with a 5-year maturity so that says you've got $70 trillion of debt on average to finance each year and that's what financial markets are about they're big debt refinancing mechanisms”
Gold became a major component of invested portfolios during the 1970s high inflation era, with Swiss banks holding 15-20% of client portfolios in gold, which came down to nearly nothing but is on the way up again
“in the 1970s during the high inflation era gold took up a very large component of invested portfolios I mean I can remember you know even when I began in the industry in the mid in the mid 80s uh what you saw was uh a lot of European Banks particularly Swiss banks still had 15 20% of their client portfolios in Gold okay now that very quickly came down to probably nothing but it's on the way up again”
We are transitioning from an era of monetary dominance (characterized by tight central bank policy, fiscal discipline, and low inflation) into an era of fiscal dominance, where governments print money to fund budget deficits because mandatory spending (Social Security, Medicare, defense) is politically unchangeable while taxes cannot be raised.
“we're moving into an era now that many people will kind of dub fiscal dominance and what that really means is that central banks and maybe the banking system generally are slaves to what governments need in terms of funding their their budget deficits and the only way the governments actually managed to fund themselves is by printing money”
The Chinese Yuan is structurally overvalued because China functions like a dollarized economy (a 'California')—the trade surplus drives dollar accumulation, which actually pushes the dollar higher and the Yuan lower, opposite to textbook analysis.
“China is effectively a dollarized economy so it's like thinking what you ought to be thinking of is China like California that's the right way of thinking about it but you know basically it's a dollar earner so the more that China uh accumulates in terms of a dollar Surplus that's actually driving the dollar higher not lower uh and it's driving the Yuan down”
It's not in the interest of the Chinese Communist Party to enfranchise the consumer because there's a risk the consumer would become too powerful and kick the party out, so they maintain control over the system by controlling a large share of resources
“it's not in the interest of the party the the Chinese Communist party to do that they basically can't enfranchise the consumer because I think there's a risk of the consumer basically becoming too powerful and maybe kicking the Communist party out so they wanted control over the system which basically means them having a large control of resources in the economy”
Troilus Gold's Rouyn-Noranda project in Quebec is one of the largest undeveloped gold-equivalent deposits in North America with a feasibility study showing a 22-year mine life, $1.07 billion after-tax NPV5, ~14% after-tax IRR, and $150 million in annual free cash flow, but trades at a $100 million market cap due to sticker shock from the $1 billion+ capital cost and slower equity market access.
“they own one of the largest undeveloped gold equivalent deposits in North America and I'm saying gold equivalent because as I mentioned it's copper gold and when looked at through the copper lens it is the largest permitting stage copper project in the province of Quebec this is also a there is a past producing mine on the project so it is technically a brownfields project where uh copper and gold came out of the ground for almost 15 years and that was between 1996 and 2010 since then multiple things have have happened on the property as you can imagine all of which has culminated into a final feasibility study so an FS showcasing a rather large open pit 22-year mind life asset with a base case mpv5 of um a little over a billion dollars”
Institutional investors are increasingly selling asset allocation (balanced funds) and buying individual asset class funds (tech funds, crypto funds, commodity funds), shifting discretion from professional managers to retail momentum; this structural change delays gold equity appreciation but eventually creates larger overshoots.
“a lot of institutional investors are not selling asset allocation anymore what they're selling of products right and what I mean by that is there are fewer balanced funds and there are more specialist funds so in other words people can go and buy a tech fund they can buy a um um um I don't know a crypto fund they can buy an energy fund they can buy a commodity fund okay whereas before that was wrapped up in a balance fund structure and maybe there was more discretion for the investment managers the professional investors to say we want to allocate more to mining or you want to allocate more to Gold okay in that Dimension now you've got to rely on the advisors or the actual retail investors themselves who again that's a momentum phenomenon”
Western economies are characterized by a huge buildup of debt that overhangs markets, whereas capital spending is minimal (particularly in the West), making debt refinancing—not interest rate policy—the primary cyclical driver.
“there's not a huge amount of capital spending going on right now particularly in the west... what we see in the west is this huge buildup of debt uh which overhangs markets”
China is sitting on a vast economy with lots of wealth but has capital controls; if they removed capital controls, capital would flow out in huge size, and there is probably already a leaking capital account, which is one reason the Chinese yuan is depreciating
“China was sitting on uh you know a vast economy with lots of wealth but it's got Capital controls if they took those Capital controls off would Capital go in or would it come out it would come out in huge size we know that there's probably a leaking Capital account already which is one of the reasons that the Chinese yuan is depreciating in value because people want to get their assets out of China”
Liquidity is the most important factor driving markets, more important than interest rates, as demonstrated by the last 5 years including COVID and the 2008 financial crisis where 'it's all about money flow'
“that's why we look at liquidity that's why it's important in many cases we think this is the most important factor and it's certainly a lot more important than interest rates I think as anyone will test over the Last 5 Years they'll have lived through covid uh Etc or even go back to 2008 with the global financial crisis it's all about money flow”
The dollar will remain the dominant global reserve currency because no viable alternative exists; the Chinese Yuan cannot serve this role due to capital controls and the risk of capital flight, making the dollar the default major currency for lending and borrowing.
“where we are now we're living in a world where uh the dollar is still the dominant currency what other currency would you lend and borrow in I can't think of one really um and so the the dollar is by default the major currency and I don't think there's any way that any country can really get off the hook of the dollar”
China will want to avoid US financial assets and won't put their dollar surplus directly into treasuries, but they have to because there's nowhere else to put it; they can try to channel money into gold but the gold market simply isn't big enough
“they'll want they'll want to avoid US Financial assets as far as they can one would imagine right we don't know how the Chinese are thinking but one we would imagine that's what common sense would say given what happened to Russia so they won't want to put it directly in treasuries but the trouble is they have to because there's nowhere else to put it they can try and channel money into gold okay but the gold market simply isn't big enough”
China will continue and extend Belt and Road initiatives not just in Africa but in Latin America, Central Asia and elsewhere as countries seek to deploy their trade surplus and avoid holding US financial assets
“it won't stop at Africa it will go it will go elsewhere China will be uh you know moving that belt and Road initiative it will be upping the anti on that and extending it as far as they can they'll try and put it into Latin America they'll try and move it into Central Asia they're already doing these things so this is inevitable”
The Breton Woods financial system is still in place with the dollar at the center, the IMF and World Bank policing it, and floating rates have actually increased the dominance of the dollar rather than decreased it
“we've still very much got the architecture of Breton Woods in front of us okay the Breton Woods Financial uh you know the international monetary system as sell up by Breton Woods in 1944 is still there you've still got the dollar at the center you've still got the IMF and the World Bank policing the system the only thing you don't have is fixed exchange rates uh but that was never an integral part of Breton Woods anyway uh we've got floating rates but actually ironically floating rates have increased the dominance of the dollar rather than decreased it”
The Cruz de Plata project was overlooked by the exploration market during 2011-2020 due to a bear market in silver and lack of capital; it was held by prospect generator Riverside Resources before Capitan acquired and focused specifically on the high-grade silver vein opportunity.
“this was actually in in another company before a prospect generator company called Riverside resources Riverside had a model of um doing getting Partners to develop the projects and they actually did that it was through those partners that they started developing the project I in fact had looked at this project back in 2011 maybe a little just in the early phases before they did the drilling and we found it at that point to be really interesting but what we were looking back then was something more advanced more developed that had a resource or that you could see a resource being formed and after Riverside in that period between 2011 and 2015 with a couple of other partners put 7,000 M of drilling into the gold system and 3,000 M of drilling into the silver nobody was looking this was the point in the market where everybody was cutting their budgets”
High-grade shoots in silver vein systems occur naturally and predictably within veins; following them up requires drilling rather than geophysics, but once a vein is confirmed to be continuous and mineralized, finding additional high-grade shoots is primarily an exercise in drilling coverage.
“the high grade shoots occur in any vein deposit that you see it doesn't matter which one you pick you could pick one of the ones we've been talking about you could pick Silver Crest uh mag visla doesn't matter which one if you look at a long section you're going to have higher grade shoots uh in in some parts it's just the way that the geology works and and the vein systems work so all we have to do is drill it it needs to be a drilling exercise”
The era of monetary dominance brought in by Paul Volcker in 1978 was characterized by fiscal discipline, non-accommodative central banks, and low contained inflation, and this environment was fantastic for a 60% equity, 40% bonds portfolio with nothing in gold or crypto
“that was an environment of monetary uh monetary dominance you had uh fiscal discipline uh you had central banks that were uh not boosting uh you know growth willy-nilly they had a they had an organized and robust monetary policy and inflation was basically low and contained for a long time that environment of monetary uh monetary dominance as I called it was fantastic for a 6040 asset allocation of equity 60% bonds 40”
The historic Troilus mine closed in 2010 partly due to low gold prices but primarily due to operational issues (lower grades and recovery rates than expected) caused by pushing production tonnage without investing in mill front-end improvements, leading to coarser grinding and declining recovery rates.
“the recoveries were poor at trist but what you have to understand that was at the end of the life the Mind started in um at 10,000 tons a day and they were crushing to a mesh of about 75 microns which happens to be exactly what we're going to crush and at 75 microns uh they were getting recoveries in the mid 90s very very good recoveries from 87 M from J they then expanded and this this is important Fus was and the opportunity for us adding 13 million ounces I have always said it's not that Mt did bad work it's Mt did no work um their capital in the company went to every other asset except troilus so when they did get a bit of a spike in the gold price they expanded the mine from 10 to 14,000 tons a day what they did is they pushed more tons but they never invested any money into the front end so they went coarser”
Troilus bought back a 2.5% royalty from First Quantum in September 2020 for $20 million, which was unpopular with shareholders at the time but is now seen as one of the best strategic decisions because it preserved upside and avoided encumbering the asset with royalty payments.
“we purchased um our two and a half perc royalty back from first Quantum in September of 2020 for 20 million and at that time I don't think our shareholders were very happy that we did it however in hindsight it was probably the best move we've ever done to tell you the truth um because that leaves us a huge amount of fle ultimate flexibility down the road when we permit the mind”
Troilus's brownfields advantage is worth approximately $500 million in avoided capital costs due to existing infrastructure (roads, power lines, water systems, permitted tailings facility) inherited from the previous mine operator and upgraded.
“we've inherited a significant amount of uh of existing infrastructure through the past operation that you described and we've upgraded it so the roads are in the power lines are in the substations are in um a lot of the preliminary Civil Works are completed water septic sewer for up to 1800 man campus in and probably most importantly our our tailing facility it's not only in but permited and ready to go and so that brings about a us$500 million in Capital Savings um to our project”
Troilus has conducted extensive metallurgical test work on all four deposits and ore types (10,000+ kg bulk samples, pilot plant testing) confirming blended gold recovery above 90% and copper recovery rates, providing confidence that recovery rates will match design assumptions.
“we have uh we have done metallurgical test work on every deposit every or type and every subzone of that and from that uh we just put out some x22 results as well uh we're incredibly happy um you know the results vary from kind of 86% or 85% in the southwest up to 95 in in next uh in 87 um but on a blended basis we're going to be able to get well over 90% gold and silver life of mine”
Troilus has 25+ years of historical data (from 1996-2010 operation plus 10+ years of monitoring) showing that its waste rock does not generate acid rock drainage; published peer-reviewed research with the National Research Council of Canada supports this finding.
“uh with regard to the waste rock always a concern in any mindsight about Acid Rock drainage I think the beautiful thing again about troilus is that it operated for 15 years it's been sitting dormant for another 10 so we have 25 years of data that our waste rock does not um does does not generate any Acid Rock as well we've done full 100 Year cell tests on it they show the same thing um this is very technical we're actually public publishing a paper with the national research Council of Canada which is the government who's permitting us um on the neutralizing um properties of our waste Rock”
Capitan Silver's Cruz de Plata project in Durango, Mexico hosts a 1.3 km strike-length high-grade silver vein (Jesus Maria) plus a cross-cutting gold-rich zone (Golly Fault Zone) with surface expressions continuing for 2.5+ km, and a pit-inferred resource of 305K oz Au and 15M oz Ag at ~62 g/t silver (open in all directions and at depth).
“this land package also has an pit infert resource already of uh 305,000 ounces of gold at about a half a gram per ton as well as 15 million ounces of silver and about 62 gram per ton which Capitan says uh remains open in all directions as well as at depth”
Capitan Silver's team (Alberto Orosco, CEO and others) previously worked together at Argonaut Gold and Endeavour Silver, developing four other mining projects in Mexico, bringing proven operational and exploration experience to Capitan.
“myself and and our team uh in Capitan currently today we work for Argonaut gold uh all of us together before that a lot of us also with pediment and in in that period we went through probably most of the advanced projects in Mexico uh particularly during The Argonaut phase because we were focused on acquiring something that we could we saw the potential to expand quickly and put into production”
The copper-to-gold ratio has two components: the gold price in dollars (driven by monetary inflation) and the oil-to-gold ratio (driven by business cycle and technical factors); if business cycles expand and copper usage increases, copper will outperform gold even as gold prices rise.
“Commodities have two moving Parts uh one is a currency of denomination which you can think of as an element like the gold price and the other is if you like a business cycle effect which is more a technical factor which is thinking of let's think of an example the O the oil to gold ratio so if you think of the oil price in dollars as being made up of two things the gold price in dollars times the oil to gold ratio so the oil to gold ratio will move with the business cycle and the gold dollar price will move with monetary inflation”
High Street inflation (consumer prices) is a hybrid of monetary inflation (debasement of paper currency) and cost factors (oil prices, taxes, productivity); over the past 30 years, cost deflation has dominated due to technology and rising productivity, but going forward, if costs remain flat, the sole driver of consumer price inflation will be monetary inflation.
“High Street inflation is actually a hybrid of two different concepts it's monetary inflation a devaluation of the paper unit in other words devation of the dollar or the pound sterling or the Euro whatever it may be as well as um a cost Factor so outside of where the governments are devaluing their paper money what happens if oil prices Spike or uh t or taxes go up I suppose that's a government effect or productivity slows or whatever it may be those are factors that affect costs and it's outside of the monetary sphere”
The traditional 60/40 portfolio (60% equities, 40% bonds) is no longer appropriate in an environment of fiscal dominance and monetary inflation; instead, investors should reduce bond duration, hold more cash, and replace bonds with gold and real assets.
“if you're in an environment of monetary dominance a 6040 Bond Equity allocation 60 Equity 40 bonds that Bond Equity allocation makes a lot of sense if you're in a period of fiscal dominance and monetary inflation then you want a very different asset mix you certainly do not want a heavy Bond portfolio you want to get bond duration out you want to think maybe of holding more cash not having long duration or long maturity treasuries and you want to think about replacing them with assets like gold or real assets”
The Federal Reserve could aggressively raise interest rates in the next 12-18 months to force investors back into bond markets and discipline speculative behavior, though Howell sees this as a temporary opportunity to buy gold rather than a refutation of the bullish case.
“I certainly would not rule out in the next 12 months uh or maybe yeah let's say the next 12 months or 12 18 months let's think about the Federal Reserve hiking interest rates aggressively to try and force people back into the bond market for the simple reason they've got to discipline investors they've got to get uh this sort of speculative or investment fever out of people's minds”
Challenges to the dollar will come from commodity-linked units like Bitcoin and gold, not from another paper currency; these alternatives serve as long-term hedges against monetary debasement but not near-term replacements for dollar dominance.
“the clear will be challenges to the dollar but it won't be another paper currency it'll be a unit like uh Bitcoin it would be a unit like gold”
Major mining companies are not currently replacing depleting reserves organically and are increasingly interested in acquiring large-scale, long-life, low-cost assets like Troilus; the market for such assets is just beginning.
“Majors are in no rush they are they've been very busy merging with each other cleaning up their balance sheets turning into real businesses um paying off debt buying back shares and I think we're just now beginning to see the asset purchase stage the growth stage of majors and mid- tier companies coming into fruition because I'll sound like a broken record not from me but from everybody else we do not see Majors organically replacing exploited reserves”
Gold mining equities have not yet rallied despite gold price strength due to short-selling by bullion banks and the lag before retail capital flows to small-cap stocks; once momentum builds, there will be massive leverage in mining profitability, but it may take multiple steps up in the gold price to trigger this.
“I think there's a there's a number of of ansers and I'm not going to say I've got the definitive ones but I think you know one is a question of time I mean what we've really only seen at the early stages of a gold rally and you know gold is moving uncertainly right uncertainly right now and part of that is that I would imagine that what you've got is a lot of shorting going on from the bulling Banks I mean that's not untypical uh behavior and so what you see is that gold tends to move in quite sharp steps and it may not be the first step that really enlivens the miners you may need one or two steps before they really get going but what we do know is that once the gold price goes up there is enormous leverage uh in the profitability of these of these counters”
Treasury TIPS at over 2% real return are a fantastic opportunity because it's very difficult to earn more than 2% real return in investment markets, and they provide inflation protection
“I think treasury tips at over 2% are a fantastic opportunity because it's really difficult in investment markets to earn a real return of more than 2% so if the government is giving you 2.2% which they are currently uh in the tips market for 10 years uh that's actually worth worth having”
Bitcoin is the modern generational equivalent of gold and should be considered as a monetary inflation hedge; it behaves like exponential gold and is a reliable indicator of liquidity available in markets.
“I would be the first to say that I think it also makes me uh optimistic about C crypto particularly Bitcoin because I think those are maybe the the the modern Generations equivalent of gold um and you know I mean I've talked Loosely before about maybe Bitcoin being exponential gold because it certainly behaves like that in terms of its performance”
Bond market yields in leading markets (especially Japan) have broken 20-30 year downtrends, suggesting a regime shift away from disinflation toward inflation; Japan was first into disinflation and may be first into monetary inflation.
“if you look at look at the trend in bond markets for bond yields uh you've seen b bond yields in many markets break 20 or 30e downtrends okay and maybe that uptrend is not not definitive yet in the US Treasury Market but it seems to be definitive in leading markets like the Japanese government bond market which was the first into the disinflation and it may be first into a monetary inflation”
Cash is currently giving 5% nominal return which is pretty good in real terms, so investors should have 10-15% in cash for liquidity and optionality
“then in terms of um of what other assets I'd have cash because cash is currently giving me 5% real sorry 5% nominal which in real is is pretty good so uh again I'd have money in cash maybe maybe the other u 10 15%”
Troilus is exploring off-taker agreements for its ~75,000-78,000 tons of concentrate per year, which would be 10-12% of the Horne smelter's feed (a Glencore operation receiving $1B in upgrades); securing a long-term off-take agreement would provide non-dilutive financing and operational certainty.
“you definitely want to have a a a large program that really tests the extents uh of this project and at some point you're going to find its limits uh no no system goes forever uh or you decide that uh that it's a good enough point that you could put out a resource estimate what we wouldn't want to do do is is put a premature resource estimate out right now”
Capitan has a tight share structure with no warrants outstanding, preserving shareholder value and avoiding dilution; this disciplined approach contrasts with companies that use warrants to fund exploration.
“I'll just uh wrap it up by saying again that I think we've we built a really interesting company uh for investors to to come into we've been very disciplined in in our approach trying to keep it low cost tight share structure no warrants and consolidating this project uh efficiently”
Troilus expects to be fully permitted by late 2025 and move toward construction in 18 months or less, which is significantly faster than the typical 4-4.5 year permitting window in Canada, due to the brownfields status and pre-consultation work already completed.
“towards the end of next year troilus could be completely permitted and so we are not talking about a cash flow window that's four years away we're talking about a mine that's going to be permited we will have financing in place we will have an operational team in and or a partner in and we will be moving towards Construction in a matter of um you know 18 months or less”
Troilus does not use cyanide in its process (instead produces concentrate), whereas most gold operations use cyanide, making Troilus's footprint and environmental permitting significantly simpler.
“we don't have a heath Le that's one um uh we're not... they are vertically challenged there... everything is built up... the majority of majority of gold operations do full blanket statement trus our process uses which is is not Innovative we're producing a concentrate we use absolutely no cyanide at site”
Troilus's tailings facility will remain only ~12 meters high with a few additional lifts, never reaching 100+ meters like Eagle, due to flat terrain and ample space, reducing long-term stability risks.
“our tailin um is only about 12 meters high now we'll have about another uh five or six years with a couple lifts so it's never going to be a 200 foot or or 100 meter plus item it's going to be very flat and down”
The yield curve inversion will begin to steepen aggressively, which is normally a precursor to stronger domestic and world economic growth; the business cycle will peak around 2026, with the liquidity investment cycle peaking around late 2025, about a year ahead as is typical.
“I think the yield curve which is inversed is going to start to steepen quite aggressively and that is normally a precursor to a stronger uh domestic and World economy I think that's the that's the way we're going so 2026 I would argue is when you see uh the business cycle peaking uh and I think in uh terms of the liquidity investment cycle our view has been sometime in late 2025 about a year ahead a year ahead of that”
Liquidity is expected to rise into the US presidential election and beyond because the Treasury and Janet Yellen (implied as Fed chair at the time of speaking) will not want to risk market accidents before the election, requiring continued support for market liquidity.
“I think liquidity's got to go higher in the period up to the election cly up to the election and probably Beyond because I can't believe that the treasury in Janet wants to risk any accidents uh before the election I think they've got to keep markets liquid”
Mexico's new president (Claudia Sheinbaum) appears to be more balanced and science-based than predecessors; her cabinet includes mining-friendly appointees, and while the government will be demanding on environmental and social standards, it is not more demanding than international norms.
“I'm feeling very up optimistic about the the presidency of Shane bom I think she is already showing that she's going to be a more balanced president that her term is going to be very based on science we've already started to see some of the uh people that are going to be in her cabinet and are seemed favorably by the mining sector um so I think that that the current government is definitely going to be demanding of the mining sector but not beyond what we're seeing internationally”
Capitan is currently not drilling (aside from final work on one hole) and has shifted to low-cost surface exploration (mapping, sampling, geophysics) to generate additional targets and understand the project better until the market improves and capital becomes less expensive.
“so you don't have to go back to the market that at this valuation that's kind of your that's kind of your your goal I assume is not to have to go back to the market at this valuation no at this valuation we we don't really need to go back you we're funded obviously we start drilling that that consumes a lot of your cash very quickly and we want to be conservative in in this current market okay so what what then are you doing this year outside of preserving uh GNA like what kind of what kind of work are you going to be doing uh we we're going to continue looking at the surface expression of these structures we want to do the more targeting we're evaluating also ways of creating further targets that are not that uh not too costly that are very cost efficient”
Trump's stated policies are unambiguously inflationary (tax cuts, defense spending, deregulation), which is reflected in rising Treasury yields; this supports the gold bull case by reinforcing fiscal dominance dynamics.
“if Trump is the ultimate Victor his program is unambiguously inflationary and what you've seen is the treasury market sunning off on that concern”
Troilus does not need to raise capital in 2024 but may consider non-dilutive financing options (royalties, streaming, partner investments, off-taker agreements) if opportune; the company wants to avoid dilution and preserve shareholder value.
“so you don't I mean just to clarify you don't need to raise Capital this year we don't need to this year okay with emphasis being on you don't need to but if money is there you'd take it it has to be the right circumstances right people and the right price okay”
Troilus is re-routing an existing diversion channel (straightened arrow) in a way that creates a more naturalistic, restored channel with migrations and spawning areas, done in collaboration with Cree partners and approved by them, actually improving on the original channel rather than degrading it.
“we are moving a diversion channel... it's straight as an arrow we are we are re-routing that diversion channel... we're basically building a new Creek with um uh with migrations in it spawning areas”
Troilus will have to maintain significant ongoing G&A and infrastructure costs even during the pre-production/permitting phase because the site requires active maintenance of pumps, dewatering of pits, and preservation of existing infrastructure.
“we have this significant infrastructure at site it's a huge cost center but provides an unbelievable amount of ultimate value to us... you know our cost of operations is always large because we have to keep the pumps running on on the on the tailings uh we're actively dewatering the pets right now um so there's a lot we have to do for maintenance of the existing infrastructure to make sure that it doesn't degrade”
The Troilus FS is the first feasibility study in recent years that takes into account the true picture of current inflationary costs in North America mining, making the capital number ($1B USD) reflect actual costs rather than inflated assumptions.
“we are the first uh feasibility study really in the last few years um that takes into account the true picture of the current inflationary window especially in within North America”
At spot prices (higher gold prices), Troilus's NPV5 becomes ~$1.6B and after-tax IRR reaches ~20%, showing significant upside sensitivity to gold prices beyond the long-term base case assumptions.
“if we look at the long-term pricing um sorry not long-term uh spot pricing today you know becomes a $ 1.6 billion after tax IR as of today and about uh sorry MPV and about a 20% after tax IR”