Dispatch from Toronto 2025

Our Dear Leader has swapped the warm sunshine of Cape Town for the freezing snow of Toronto as he attends the pre-PDAC conferences and the PDAC itself. He finds it quite frustrating that Indaba and PDAC are so close to each other as it does keep him out of the office at a time when it is also busy in the UK Markets, and in fact our Dear Leader and VSA are very busy currently and we have seen him smiling a lot which is good as we haven’t seen that for quite a few years!

Last year when he reported from Toronto and PDAC, he was confident that a major rally in commodities was going to happen, well he still is but just a year later! A lot has happened around the world in the last 12 months and in truth most notably in the last two months or so with Donald Trump being re-elected. We are now looking at a possible solution to the Ukraine war and with tariffs flying around all over the place we are seeing China starting to further restrict the export of certain niche but vital commodities. The world does feel a little chaotic with the frankly crazy outburst by Trump and Vance on Zelensky. Geopolitics has become much more complicated with no one quite knowing who holds the Aces; will Russia come in from the cold, will Europe become the global policeman (a role it had about 200 years ago), will China sense weakness in the USA and take advantage. China is the key really to a major commodity rally as it is such a huge consumer and the fact that the Chinese economy has been struggling and infrastructure development in China has had a dramatic slowdown has meant that commodity supply and demand has been relatively balanced. But China may be starting to come off the bottom and the possibility of some economic recovery is looking promising, and this could be the starting gun for a major rally. Well, every year that goes by does make it more likely!

Andrew hit the road running on landing and is attending the very successful Red Cloud Pre-PDAC conference where there are 80 junior companies presenting and Andrew does actually listen to quite a few of them. They only get 15 minutes so we guess suited to his concentration time span! On day one he tells us he was very impressed by Midnight Sun (Ollie’s pick last year) Apollo Silver and Avino Silver and Gold. Andrew has always liked Mexican silver stocks but we do suspect that maybe he is just angling for a site visit to Mexico as we know he has never been there. At PDAC itself Andrew also met with Mithril Silver, Guanajuato Silver, Sierra Madre and Starcore which are also all Mexican silver and gold miners - he really does seem to be on a mission!

On day 2 of the Red Cloud conference Andrew was back asking questions again and the Companies that caught his eye were in a true mix of different commodities, F3 (uranium) Tinka (zinc and tin) and Pulsar Helium.

At last year’s PDAC, Andrew asked a lot of questions of the companies and this year was hogging the mic again. He also asked for a couple of questions of the VSA team and we thought we’d check up on how they did. The bright spot at last year’s event was the rising gold price which has since made multiple all-time highs. Andrew asked the team where it would be in 12 months time. Andrew’s winning 12 month forecast of US$2,500/oz now looks conservative but he was dead on that the US$2,000/oz level could be smashed! All of the team were right on silver that it would do well with a rising gold price and this continues to be a top pick for VSA. Andrew was right again on lithium which has struggled to bounce back and is lower still on a one year basis. Tin was another commodity the team as a whole liked and although we have some way to go before it hits Andrew’s US$50,000/t figure it has been strong in recent months and was the top performing LME metal last year. Of our other picks on commodities, Ollie’s call on zinc has worked out well up 15% and his top stock from PDAC was also the best performer; Midnight Sun is up 196% since last year’s conference showing you can in fact make money in junior mining.

This year Andrew wanted to know what their bullish and bearish predictions would be and also which companies this year stood out.

Andrew

I am pretty bullish on commodities full stop for 2025 as a major bull market looks inevitable soon and the geopolitical mess just helps that. Many people are saying that gold has peaked but I think it can go higher to US$3,500 and drag up other commodities like silver and copper but my top commodity pick is tungsten, which had been trading around US$325/mtu but following the Chinese export restrictions is starting to move higher and I feel we could see it up over U$450/mtu. I can also see tin significantly higher at a similar increase from US$32,000 to Us$45,000.

Picking any individual stock is hard as so many look cheap but any gold producer today is probably trading at about half the value it should be. Also watch out for the currently private company Cayenne Copper in Malaysia which has just raised C$25mn and maybe IPO this year

Ollie

On the commodities side I think uranium looks like it could be due a run. The spot price has dropped over the last year which in part drives the equities as the short term flows that are also a factor in pricing mean that it is a barometer of sentiment while the contract pricing which is more closely linked to the fundamentals has continued to rise. It’s also less geared to a China recovery than other commodities and with datacentre etc requiring more power nuclear seems a necessary addition.

All commodities should benefit though from a weaker dollar and last week’s events certainly will make people further question whether US treasuries are as safe as they once were. The rally in gold and breakdown in relationship between interest rates and the gold price shows a rotation into hard assets which should benefit all commodities in dollar terms. It’s pretty hard to be bearish.

Sierra Madre’s ramp up at La Guitarra has been going well achieving commercial production after six months of test mining and upcoming results should start to show the impact of strong gold and silver pricing and stable production at nameplate capacity. At the exploration end Zeus North America Mining has an interesting land package in Idaho amongst the majors following the land grab that followed Hercules Metals discovery and Barrick’s investment. Zeus were in place before all this and are set to drill this year. Midnight Sun was a top pick last year and their team has been progressing a gold project in Egypt privately where grab sampling and channel sampling has yielded very encouraging results including 1m at 215.1g/t Au.

Paul

Also bullish on tin and silver and sticking with what we have been saying for a while. The supply side is constrained in both cases while the increased M23 activity could have a real impact on commodity flows in central and east Africa. On the negative side I’m looking at the US and Russia and wonder whether that might lead to some easing of sanctions. This could have an impact on commodities like potash where Russia has a significant role in supply.

In terms of companies I’m going with Omai Gold Mines which podcast listeners will know I’ve liked for a while. They are developing a project in Guyana which they completed a PEA on last year but recently announced a 774m at 1g/t Au drill hole. 

And finally, our Dear Leader says that after a very successful Indaba and also PDAC he will be doing more marketing as he knows that as pools of capital decrease in equity markets he has to find new pools of capital which means getting out on the road - next stop he tells us will be New York in mid May for the SME mining conference and also a return to China and Hong Kong in the Autumn. Andrew takes the view that he must do “bamboo investment banking” and swing in the wind to where the capital is to be found so if you want to meet in any of those locations get in touch before he gets booked up.