Cal Everett: Inflation Will Not be Transitory
Tom welcomes geologist Carl Everett to the show. Cal is President, CEO, and Director of Liberty Gold Corp. Cal begins by explaining why inflation won’t be transitory and possible reasons for the recent smackdown in gold.
It’s essential to study and learn from the mistakes of others because these lessons are free. Follow the track record of individuals and find those that excel at making discoveries.
Cal discusses the underperformance of the GDX and why it has a lot of room to move. He believes the volatility in gold is scaring off some investors. Producers have cleaned up their balance sheets, cut costs, and most are making good money. We could see another minor leg down in gold and the miners, but we should head higher later this year.
Cal gives some examples of why jurisdiction is key for both taxation and risks of expropriation. Blockades are also a growing concern as these in certain regions. He provides a few examples of promising projects in far safer jurisdictions.
Since 2018 institutions have begun buying into the sector, and we are just at the start of this next cycle. We are in a new merger and acquisition phase, and most of the good companies will be acquired as discoveries are few. This cycle has legs and will continue for a considerable period. All of the senior miners will decline in production over the next five years. This will drive additional mergers and put pressure on the gold price. Most discoveries today have low grades, and viable discoveries are few and far between.
Cal explains his preferred geological gold deposit type along with the costs of developing these mines. Lastly, he explains some of the risks to consider when looking at core and sample results from exploration companies.
Time Stamp References:
0:00 – Introduction
0:50 – Inflation & Dollar
3:57 – Industry Lessons
6:32 – Presentation
7:50 – GDX Factors/Targets
10:54 – 2012 to 2018 Cycle
14:08 – Sector Analysis
15:39 – Hedging & Cashflow
16:58 – Geopolitical Risks
25:20 – Consolidation
28:32 – Gold Mining Cycle
31:48 – Production Declines
34:24 – Lack of Discoveries
42:04 – Conclusions
44:00 – Gold Deposit Types
47:17 – Reclamation Costs
49:13 – Profits & Projects
50:22 – Experience & Teaching
54:22 – Concluding Thoughts
Talking Points From This Episode
- Why transitory inflation seems unlikely.
- Management and learning from the mistakes of others.
- GDX and where we are in this gold cycle.
- Mergers, discoveries, and tips on evaluating reports.
Cal Everett is President, CEO, and Director of Liberty Gold Corp and advisor to New Found Gold Corp. He is a geologist with more than 14 years of surface and underground exploration experience with senior mining companies. He moved to the financial sector in 1990 and spent 12 years with BMO Nesbitt Burns, focused on resource equities, and seven years with PI Financial Corp. in senior resource institutional sales and capital markets. From 2008 to 2015, he was President and Chief Executive Officer of Axemen Resource Capital. Mr. Everett holds a Bachelor of Science degree in Economic Geology from the University-New Brunswick.