Rob McEwen Shares His Insights Into McEwen Mining, The Mining Sector As Well As Gold And Copper

Rob McEwen Shares His Insights Into McEwen Mining, The Mining Sector As Well As Gold And Copper

hello everybody and thank you for joining me today it’s allenberry labuan with the rocks and stocks news program we have one of our good friends of the show and Rob mchan joining us today from mchan mining Rob thank you very much for joining us happy to be on Alan thank you well um since we last spoke it’s been a few months uh he had a series of really good result uh news out Rob and uh I wanted to pick your brain about that and also maybe get your views on some uh of the mining sector uh stuff gold and copper in particular go ahead all right let’s start with the the series of news that you guys have had out you had uh drill results uh or an update on drilling at the Las aulas project you were able to do a financing at really Ben beneficial terms to mchu and Mining that are significantly higher than the current price uh and then you also had an update on the um uh the work you’re doing in Ontario on your projects there to bring a new project into production um where do you want to start Rob I guess we could start with Los aulus okay it’s our biggest asset at the moment um we had 22 drill rigs on the property drilling this year so a big program um and a lot of it was confirmation drilling trying to lift uh the resource from an inferred and indicated to indicated and measured so that we could Define the payback pit quite extensively and also uh just lifting the confidence level in that resource that 37.6 billion pounds of copper um we found that we stepped out of the M the model pit area that defines that resource and we went to the North and the South um and extended it 400 m one way and 700 meters the other way and we did and it’s really early we went over the mountain and 3 km away and found indications of another poery um it’s there was copper oxide on Surface there was quartz veining similar to what we see at Los aulus and there was a mum signature that stretched more than 5 kilometers so um and that’s important because the copper is soluble and it’s leached and Molly stays behind and is an indicator of copper so that’ll be a big area where we drill next season so we’re in the southern hemisphere in Los aulas so the winters the onset of winters happened there’s no drilling taking place at site um all the work right now is moving us along to a um a feasibility study that we’ll have out in the first half of next year drilling will start restart in October when we can get back up on the mountain so Argentina is becoming a pretty hot place uh the londin have they to the north VI I believe have done some great work uh and getting some pretty high valuations for their stocks but uh you guys are are quite Advanced um uh compared and asset to asset uh have pretty favorable comparables there as well um did you know Argent Ina has me pretty excited these days with the new government and what’s going on there so how does that all play into your thinking the the interest in what the londin are doing the comparables to you and where Argentina is going I’m very optimistic about Argentina about a month and a half ago I had um an hourong meeting with the president um and he was describing how he wants to attract foreign capital and what he needs he believes he needs to enact to get it done uh recently he put a number of uh initiatives before the government the lower house took a few out but um they approved it it went to the Senate last week and the Senate approved it so it has to go back down to the lower house to reflect the changes but large scale foreign investment has been approved they’re talking about lowering the tax rate from 35 to 25% uh removing the foreign exchange controls that are there um improving the importation putting some restrictions on labor actions um so we looked at it and it increases our npv if it’s all approved by about a third um so um and we’re at 2.7 billion right now so that’s ett so it’d be very positive I seen um when I was in the Middle East in the in the past three weeks people over there are looking they’re going what do you want looking for that copper copper copper um and they’re going uh well we we’ve been over to Argentina in the last month or so some of the biggest funds over there looking at the country saying it’s very very perspective it’s along the same belt the Andes that Chile and Peru are on and those two countries provide 40% of the world’s annual production of copper so this is the most important place in the world for copper Argentina as you mentioned lundine has three properties that whole western side of Argentina is it’s like Chile 2.0 yes and so lundine properties are in the province of San Juan where we’re located as well they’re a little further north than we are when you look at them they have um feasibility studies um so they’re a little more advanced than we are at the moment in terms of their studies U their capital is significantly higher than ours they’re at higher altitudes we’re at 10,000 ft um the top end of filo is at base camp Everest oh 177,000 fet so and that has an impact on the efficiency not only of the Machinery but anyone working at that level of course and so we’re closer to infrastructure roads and power I personally know about that Rob because I when I was in my teens I I did some forest fire fighting in British Columbia up above the the the where the trees grow and I was a hockey player then I was in very good shape and my God that was hard work up there Rob just walking around and that and you’re talking about even higher much higher yeah wow wow so we’re um I think Jose Maria one of their properties is in Goldman Sachs estimated in the highest cost cortile we’re in the lowest cost cortile based on the metallurgical work that we’ve done recently our cost of production would be a dollar two a pound um sorry I didn’t turn this off no no worries um so we’d be A1 two a pound cash and uh A1 58 Allin sustaining um and a 27-year life um 400 million pounds of copper a year for the first five years you’re like me Rob I tend to convert things into what this would look like as a gold project I I kind of do that with every deposit I look at silver gold copper whatever it may be and um the metrics if this is looked at as a gold mine are just off the charts I do exactly the same thing because I’ve been in Gold most my life and this is equivalent to a 70 million ounce gold deposit um producing gold at under $600 an ounce cash cost and under around low 800s Allin sustaining with a three-year payback um and you look at it it’s a powerful powerful project and if you think of the 70 million out gold equivalent that’s the same as the Hundred Years of gold production coming out of the timman skin and that’s the most prolific area of gold in Canada and there’s very few gold miners that have those kind of reserves resources that that’s a big chunk of equivalent gold in the mind of a gold guy yes that’s so it’s an exciting project we’ll have feasibility out in the first half and at this rate uh we hope to have a permanent Environmental permit by the time we get our feasibility out uh construction starting in 26 and production in late 29 so not only are you doing the work to um make this a a a good place to work um physically because of the elevation but you’re also doing some fantastic things to uh design a a mine of the future uh that that will be a a an attractive place for workers to want to work that that’s people are an important part of the whole mining scheme they’re critical yeah sort of yeah and and certainly in North America Europe we’re facing a a shrinking labor pool there um because of the negative impression of mining that most people have um it’s affected the number of students going through schools so there’s been a precipitous drop in the number of people going through schools of geology and and M Engineering so you don’t have the youth the talent and the technology coming in there and there’s a lot of people retiring they have gray hair like me or they have no hair I saw this firsthand when I got into the business um it was in 1993 I was 27 or 28 years old and at that time they were talking about The Lost Generation uh of all the because of the 80s and 90s how people hadn’t been coming into the mark uh into the business and it has never really been fixed in fact it’s getting worse oh yes you know like you say all my friends are half of them have retired I’m I’m I’m too dumb to to retire I love this so much that I I think I’ll be doing it until they put me in a box Rob but uh um it it’s uh it’s quite an issue that people don’t really understand in the maybe even in the business um no well it it it’s just it’s quite serious and you think well how are you going to attract the best talent in a shrinking shrinking pool of talent um and um what will that do to Future production we have we’re looking at demand curves for the metals increasing and yet the supply we haven’t seen the enough investment more like a ramp than a curve yes but it’s a downward ramp I mean well demand is like this but the ability to to supply is going down you exactly time to get approvals has lengthened the number of people is shrinking so the capacity of the industry to increase production to meet demand is really uh compromised and I think that that requires you know some better work I mean you’re kind of a lone wolf Rob where you’re you’re out there banging the table about you know this industry needs to communicate what it does differently than the past currently and where things are going into the future I don’t hear enough Executives like you out there telling that story of how things are reated these days and the how you know how they’re going about mining now and into the future and I really think the industry needs to do a better job of that well the indust I think the industry is focused on improving their environmental performance and stewardship um and they’re doing terrific work but they don’t Bang the Drum about it well we’re we’re also working against the a very entrenched belief that mining has destroyed the environment and it’s taught from kindergarten all the way through people are conditioned to believe that well think of the old picture of them ripping up the environment they’re not seeing and they’re not the government isn’t providing examples of this the education system doesn’t support this it’s a one-sided story of a rapacious industry and not showing all the good work that’s being done showing great examples of reclamation every once in a while there’s a disaster that just reinforces the belief that mining’s bad but it’s it’s few and far between today absolutely you’re right the communication could be much better and I think the industry should be insisting of going back to all our suppliers and saying look we’re paying you a lot of money to keep our accounts to raise money for us to do the legal Affairs all these suppliers you’re making a lot of money off us why aren’t you talking about the benefits that we provide it’s even in their best interest it’s definitely in their best interest and I’ve been encouraging mining companies uh to go sit on their lawyers sit on their accountants and say and going to the government your pay tax and all of that um this is a fundamental industry it’s a high paying industry rob you um your video went out we can hear you fine but your video went out can you uh in the bottom Corner you’ll see a little video camera uh can you turn it back on it might have a a x a red line through it I see leave whiteboard but I don’t see a video on the left hand side it should be a video camera nope oh well they’re going to have to suffer with my face and listen to your uh your commentary Rob if you don’t mind yeah I don’t know what happened there I hit the table to be emphasize a point and blank but I didn’t hit the keyboard the literal banging on the table yeah you know Rob I think that the industry could do a tremendously better job of um of telling the story uh and uh and sometimes it shocks me that they they don’t do more of that like you said lawyers can get out there suppliers can get out there um and and tell that story uh and and you know the and I I think another thing that it’s incumbent on them to do Rob is I don’t think people you know you hear a lot about e electric vehicles and modernizing the world now ai has come out of the out of the woodwork and you know that’s a tremendous user of energy and all of these things don’t happen without mining so you know if you want those fancy new toys um you need mining to make them work yes yes um and that’s the the U naive approach uh the public has has adopted U that we’re going to shut down mining we’re going to shut down oil and gas and we’re going to transition position but not realizing that if you shut those down we’re going to go backwards in terms of standard of living and that’s why I entitled my speech that I gave in New York that you referred to earlier on called become a nudist stop mining because all sorts of things disappear um and we literally would go back to the Stone Age if there wasn’t mining yes well I encourage people take a look at our website there’s a video my speech is in there but it’s interspersed with a number of videos yeah to make that point yeah and you know the reality of what all these wants and hopes and dreams they are crucial mining is crucial to having any of those and I I don’t really see people looking at it realistically even if you look at the internal combustion engine and the EV Revolution you look at the reality of EV oh you’re back on rob you look at the reality of electric vehicles if everybody in California owned an electric vehicle came home after work and plugged their the electric power grid can’t even support when it gets a little hotter and everybody has to turn on their our air conditioning this happens in Texas uh California in 2025 before going through rolling blackouts it’s just mindboggling to me and this would only get worse if everybody had an electric vehicle so I see that that reality is not being looked at and the transition between you can’t just go from a a interal combustion engine to an electric vehicle there has to be transitions in there one that I’m looking at lately is hydrogen Vehicles this is a tremendous opportunity for transition to electric vehicles and it could continue to compete with electric vehicles in certain usages and but this whole this whole story is not well understood yeah Rah R raah let’s get an electric vehicle but what about how you power that where do you get the energy from what do you cause to your your local power grid in California and Texas and other places uh what is the transition between this and that um I just don’t see it being well understood and I don’t see the industry banging the literally banging the desk to uh get this better understood well beyond just EVS consuming a lot of power just take a look at the AI programs the generative Ai and chat gbt and all of that um and then Bitcoins the manufacturer of cryptocurrencies um they and cloud computing Cloud yeah so they’re all huge huge consumers of electrical power and reducing the capacity to charge vehicles uh and it’s been very easy for politicians say well let’s switch but they’re not dealing with what you need to do that switch what do we have to upgrade our electrical system and how are we going to do that and what type of investment the intent is very very good absolutely but um we may be disappointed in the speed at which it happens because of the Capa current capacity and the lack of investment to increase the capacity to generate electricity before we say okay everybody in and get it all electric and then you go why am I wai waiting to recharge my car why I can go to a gas pump and fill it up but I can’t the places I go and I go to charge and I got I have to wait in line sometimes I I’ve had a number of I’ve had two Teslas and I in hybrids and I like it it’s simple less maintenance it’s good for the environment but you’re finding there is range anxiety uh when’s my battery going to run out um and they were at service stations it used to be really easy you you pull in you charge um there might be a convenience place you get a coffee or something now you’re having a meal in some cases before you get your charge your car charged anyhow they’ll all be solved as we go forward but well I think we need you know we’re we’re an industry that’s kind of well known for being promoters uh and I think the promoters of those uh electric vehicles and cryptocurrency and alternative energy and other things are kind of putting us to shame in this industry Rob yeah I just put my water glass down in the video disappeared again oh God how it’s coordinated like that but before I leave you rob um I I wanted to go back to your gold um because I think there’s a big Catalyst coming for gold mining stocks I think when we see the second quarter um there’s going to be some windfall profits for gold mining companies and uh because this will be the best quarter ever for the average price of co uh gold uh and I think that that’s going to be the Catalyst that starts to bring some of the uh generalist investors into the gold stocks what do you think about that analysis certainly the price has improved costs have gone up um I do think people it’ll raise people’s eyebrows that there is money being made um the effect will be there should be dividends being increased at some point and for the marginal producers the high cost producers all of a sudden you’re swinging from being a break even or a loss to into the money and and that will attract investors but it it’s been a sector that has been ignored and that’s why I think there’s a big opportunity for people to uh take some positions now while we’re in the sort of the May doldrums summer doldrums it’s often case and you see a cyclical swing come in October September sometimes it’s those U marginal producers that can be uh big movers in a transition to a Gold stock bull market I think that they’re not all created equal uh if they’re not doing the work to bring down the cost increase production make more make more money not just from an improved gold price uh that that is what separates them and that’s where mchu and Mining fits into this whole not only do you have a great copper asset but you have a a marginal M gold mining that you’re doing the work to turn the TA turn the corner on increasing production and bringing down costs while also enjoying the higher price we’ve seen in the second quarter of 2024 yes well we’ve invested quite heavily in Exploration um particularly well at at Fox and at Los aulas um at Fox there’s about a million and a half ounces we’ve defined um we’re switching from one area we’ve been mining to another uh we’re seeing the cost will come down because we’ve eliminated the transportation component we were mining one place that’s from FR to stock yeah we had to transport about 30 miles um and there was a a large net smelter royalty on that production that won’t be on and will a the rock the hardness of the rock is lower meaning we can in the processed plant move more ore through it and produce more gold I mean it’s not a huge mine but it it’s 45 50,000 ounces we think we can get it up to about 70 bring the cost down uh and then there’s another deposit short distance away called gray fox that has over a million ounces at it as well so um it’s um it’s exciting right now um we’re exploring it gold bar um and our partner down in Argentina in our San Jose mine it’s a underground gold silver mine their finding encouragements and production cost of coming down and getting more reliable and delivering so oh know it’s pretty good well and something that I know you will never be lost on you but might be lost on the audience uh is that the big um the big transition the big turn from from a a struggler to a big success was gold Corp that you and under your tenure at Gold Corp you did did that with the drill rig and I can see the actions that you’re actions speak louder than words and you guys are focusing a lot of drilling um and I think that that that is trying to follow a bit of the gold Court path is that a fair way to yep absolutely um I’m I’m a sucker for distressed assets um probably because entry point is low C cost wise it does take longer for it to turn around um but it at Red Lake um a red Lake mine it was high cost a history of difficult Labor Relations short life um we committed 10 million to exploration we went down um we’re exploring a mile below surface we hit a highgrade area that discovery res set the geological interpretation of the region kicked off of gold rush in that area and we went from producing 50,000 ounces a year to 500,000 ounces a year and our costs went from dropped from $360 an ounce to $60 an ounce and you’re mining High agre yeah we’re mining high grade it was a 60-fold change in the economics wow um and it made you the reward for that was it made you one of the best performing gold stocks in the business and you did a couple of uh interesting things while you were there rob you had the gold Corp challenge which helped you guys to find that deeper targets and the big success but you were also holding back some of your production I don’t think a lot of companies follow that path like you did back then Rob as I said earlier we we were low cost at $60 an oun um you’re paying a lot of tax so in the province we’re in or we’re in um they had announced the tax rate was going to be lowered over the next four years and I we were kept finding more gold and I was of the Mind the gold price was going higher it was around $400 at the time so I thought well if I don’t sell the gold I don’t have to pay tax until a later date I can borrow against that financial asset on a pre-tax basis so because I’ve increased the value of my financial assets by the reciprocal of my tax rate um and if I’m we deliver it four years later we’re paying less tax because it’s a lower tax rate and if gold goes up as I thought it would which it did go um we’d be making more money because we could sell that gold at a later date at a higher price kind of making the tax is not that big of an issue right so our Tim’s property we bought at a discount a large discount that what had been put into it we’ve struggled through there for the last few years but it’s stabilized and coming on costs are coming down as we increase production exploration has found additional resources and we still think that most of that is still considered shallow uh in the district in which we’re in which has Deep Roots um so we’re still running there strong and uh I like that the other areas where we have gold and I think every investor should have gold I mean if you look at the portfoli composition today it’s probably less than 1% of the portfolio it globally have any exposure to Gold central banks are buying at record levels um which is probably a good indication of where the price of Gold’s going in the future well I I look at it as a debt situation I think we’re in a death spiral of debt in the in the in the world in United States in particular and then I look at the debt that’s out there and how much of that debt is backed up by gold and I I have made what some call an outlandish uh um projection of gold price in not too distant future and what’s your number 20,000 within 10 years well that make a few gold mines quite profitable and what the basic behind that is Rob is I believe these Central Bankers have to back up that debt with more gold and that is what will be the end you look at just the brics Nations doing it on a small scale relative to their their debt right now and they brought gold up to a record prices and I think if it as we go back to a gold standard uh I think that not only will the debt be backed up more with gold but there will be more gold transactions and international trade done and that combination is why I’m I’m making such a big number call and I’ve never done that in my career I usually try to stay a year ahead but looking at the pipeline looking at the demand looking at the grades of in the deposits uh I was willing to do a 10year projection and uh some people think I’m crazy but I didn’t just throw it out there without looking at some hard reality numbers well definitely fat currency is something people are focusing on and I think even the youth are looking at it and saying my purchasing power is disappearing um you see in China the youth over there buying gold bead beans just sort of little round balls of gold uh but you know uh City Bank came out and said they figured $3,000 this year Bloomberg said 7,000 in next year U you and Pierre Lon are up around 20,000 um he’s 19 to 20 you’re a little ahead of him at 20 yeah and the Brick Nations have been on a tear buying gold so um I’m seeing a return to the gold standard Rob I you know the debt the growing everything through debt and crazy spending and I just see that pendulum has swung too far and the only way to bring it back is through returning to a gold standard yes well even if that the price just went a quarter of the way to your target you’re looking at $5,000 and you go all right what’s going to move if go goes to $55,000 gold stocks absolutely absolutely I don’t need to be 100% right if I’m 25% right I’ll be a happy camper you I I was in a grocery store the other day and I bought four items and I thought how could they cost this much I mean and I think you and you look at groceries you look at rent you look at housing prices you Insurance gas insurance that that is one thing that I you look at it and their insurers pulling out a certain markets like if you’re on a sea on a coast they’re saying we can’t do the we’re not a number of them are pulling out um if you’re on a mountain at a ski Resort or something there’s Wildfire issues that are coming in and I have a home in Colorado and we uh replaced the roof the building code for the area were was Cedar roof when Cedar Shake roof and a couple of years ago they started saying well if any house sells here and it has a cedar Shake roof we won’t ensure it until they put a f a synthetic roof on and our ours was an older roof so we put a synthetic on and the insurer we were using said we’re no longer providing Insurance to this location oh my gosh and you start thinking so even with higher premiums they still won’t take your business they still won’t take it and it’s really troubling if you think if you’re going to buy a house and you’re going to get a mortgage you have to have insurance yeah if you can’t get insurance you’re not getting a mortgage and what’s going to happen if they can do that to your house what’s going to happen with the Aging Baby Boomers health insurance life insurance those premiums are going to go crazy yes well the insurance companies have sustained huge losses from floods tornadoes fire fires um and they they’re just pulling out a markets where they’ve been losing money there was a really good article in the New York Times about that um I’ll send a copy of it I had to digitize you know what what we hear this smoke and mirrors numbers that come out of the government about how they they you can call it manipulation whatever you want but it’s smoking mirrors when they put out the inflation numbers and they exclude this and they exclude that and they but the consumer can see through the smok and mirrors because they don’t get to live in the world of government smok and mirrors numbers they got to go to the cash register and pay for things they got to pay interest on when they use their credit card they got to pay insurance and and everything they know that these these numbers coming out in the government are smoking mirrors well it yeah the insurance is a big point because these insurers are pulling out one because of the the claims they’ve had to settle but two trying to rebuild the Co construction costs of also reflecting inflation and and much more expensive and similar to the mining industry not as many people went through the trade schools so you’re looking at trying to get service on your house that’s costing you more too you better off being a plumber and a roof roof Builder and a house Builder than you are you know some of these University degrees that people get well there’s where you’ve also seen huge inflation that you’ve had a lot of people going through schools and getting degrees Finance by student loans and they can’t get a job so they’re going from an undergraduate to a graduate to postgraduate um to no job to no job and and that’s really sad that someone’s been taught to believe that going through University they’d be able to get a job but maybe no one told them that there’s certain courses that won’t get you a job you may be more balanced as an individual but we’ll give you the debt you you can have the debt no problem to and then all these schools of higher education have expanded their programs and become more expensive to go to they the free money that was essentially given and student loans and it’s becoming free with the Forgiveness of the loans and you have to think you know if I went through and I repaid my loan why are these people getting off free yeah and why am I paying for it as a taxpayer uh the government the government might have to do the same with their debt yes it off maybe we should ask the politicians to start paying for all the mistakes they’ve made and they’ve made a lot of them and that’s why you know I looked at this death spiral of debt that I’ve been commenting on a lot and I do things when I know I have confidence to do those things and to call it a death spiral of debt and keep harping on about it and the that it’s driving us towards a gold standard um you you just look at it’s not you don’t have to be a rocket scientist to figure you got to be reasonably good at basic math yes yes that’s key and they seem to have been neglected that course in school you look at look at Rob the United States is gonna within a year they’re gonna o o they’re GNA be paying close to two trillion dollar just to service the dead and that’s bigger than defense budget exactly and it’s only going to grow because you’ve got 9 trillion that was built up during the uh during the free money era that now has to roll over to five five and a half percent do the math you know that’s going to double your your your costs and they keep on spending money yes the the debt is now the debt in the United States is now 35 trillion I think by the end of the next President’s first year it’ll be 40 trillion and before they finish their first term it’ll be 50 trillion so look at that debt servicing cost you know that’s a 50% gain in debt it I mean it’s just numbers that are so hard to comprehend it’s shocking what does it do to the services the ability of the country country to service provide services important Social Services to every I think the bricks nation’s got the right formula Rob they need to go back to the gold standard to have something real I don’t just think it should be a gold standard by the way I think they should build up their strategic reserves of silver copper everything that a particular country needs to manufacture what they produce they should be holding strategic reserves of that um so I think we need to go back to a metal standard or a raw material standard uh led by gold and I think gold will bring us to that well there were strategic reserves and they’ve been depleted absolutely absolutely go we got to go back to the future to go to the future we have to go backwards and and go back to this you know basic economics well we have to regain the values that we used to believe in and those been been badly eroded I remember and I’m I’m 59 years old now I remember when people used to talk about debt more yeah in a in a manner that wasn’t complimentary yeah exactly exactly politicians used to PO uh campaign on debt taxes regulations now they just campaign on what they can promise yeah no it’s uh we’ve moved a long way away from the values that the founding fathers have founding fathers all over the world well we have to get back there those ways I gotta you’ve been super kind with your time I know you’re a busy guy thank you very much for spending time with us uh everybody do your homework speak with your financial planners theq and Mining has a great story on on transitioning uh their higher cost operations and gold mining to lower cost they’re moving forward on the copper uh the copper project is a worldclass project that the world needs for copper production I can’t wait until the day that you can merge all your fin anals together into a copper equivalent number and what that’ll do to the B bottom line but uh again Rob thank you very much thank you Alan have a wonderful day you too my friend talk to you soon byebye cheers

Mining legend Rob McEwen joined us at Rocks And Stocks News for an in depth discussion providing his insights into a wide range of topics.

Allan Barry Laboucan is the founder of Rocks And Stocks News.

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