Is Earth Running Out Of Gold? Will Price Skyrocket? | Michael Henrichsen

Is Earth Running Out Of Gold? Will Price Skyrocket? | Michael Henrichsen

Michael Heron joins us today he is a CEO of goldf resources taker gshr on the Toronto Stock Exchange Venture exchange we’ll be talking about his outlook for not just the commodity overall but his strategic vision for taking this particular project this junior company to its next step goldshore has outperformed gold dramatically it’s one of the few companies that have done that this year the stock is up 100 100% year-to date how do they do it what’s next Michael welcome to the show thanks for having me good to be here your GE just by background you’ve worked uh many years at the world’s largest gold producer Newmont uh you’ve told me offline about your story transitioning into uh the junior space so we’ll talk about that I’d like to tap your brain and educate us on how to pick projects today from a geologist perspective but first let’s talk about this concept that’s been discussed a lot in the media over the last couple years Peak gold we know about peak oil the concept that perhaps uh the volume of oil production has peaked uh the same analysis one could say could be extended to gold in the sense that the amount of gold that has been found so far um has been sort of maxed out in the sense that the volume of production going forward can possibly Decline and perhaps the uh rate of dis the rate of change of Discovery where the new rate of new discoveries will also decline is that happening yeah look it’s certainly getting harder to discover new or bodies there’s no doubt about it um some of the easy easier ones have obviously been found now it’s it’s where are you going to find them you know for me it’s all about jurisdiction you want to be in a jurisdiction you’re comfortable with um we can go to far- Flying areas of the world where there may be a lot of potential but there’s obviously a lot of jurisdictional risk associated with that um so with respect to are we seeing Peak gold we could very well be uh what I can tell you is it’s getting harder and harder to find uh you know sort of potential tier one Assets in in good jurisdictions that’s that’s the truth well that that so as a geologist you’re looking for assets with not only a substantial amount of high grade gold but also in jurisdictions that would yield a reasonable return for whatever company you’re looking for we working for and the investors meaning it can’t be too inaccessible and it can’t be too uh expensive to operate in how do you strike that balance well look I’ve had the opportunity to work in sort of you know I think it’s 40 countries worldwide and I’ve seen all sorts of problems play out I think for me at this stage of my career I just if you can be in a a tier one jurisdiction like Canada like goldshore that’s a huge advantage to you you know we there’s certainty in terms of tenure you know we we know what we’re going to have to do from a permitting perspective and I think investors can feel quite comfortable with that so that’s that to me is the distinguishing feature that I now look for um you know I’ve been across parts of Africa and and in various other parts of the world that that are difficult you know they’re inaccessible they’re they’re hard to understand the regulatory framework so you know to me this is this is the safest place to put your efforts and your money is in a place like Canada no doubt how does Canada differ from let’s say a um a jurisdiction like West Africa in terms of not just the availability of deposits uh but also um the ROI from a drilling perspective I mean West Africa for gold is an amazing jurisdiction I spent a lot of time working there yes I know yeah so I have very fond memories of some discoveries that were made there but you know when you when you look at some of the places I I visited over the over the years Burkina Faso or Mali or guinea you know these are tough places to operate in now security is a major issue um again it just brings me back to wab being in Canada at home because here it’s very simple process you know you get you go to work and and you know what to expect uh there are not going to be those kind of surprises that you would otherwise potentially find yourself in what kind of surprises are we talking about I mean I mean for West Africa as an example I mean Bina Faso is from a security standpoint is a tough place right now you know there’s been some some issues with respect to Mine Workers uh you know running into into guns and obviously nobody wants that um so I think it’s really a question of understanding the region you’re in you know if you go to South America one could argue that you know some of the some of the political changes that have happened over the years you know Peru has become harder to work in over the over the last 5 to 10 years just because of left leaning governments you know so you just have to find yourself in a spot where you’re comfortable whether you’re an investor or you’re working on a project like myself um it’s really important to just understand where you’re placing your time and your money and I think to me that’s not often considered enough you know you can get some splashy numbers some great projects but if you’re in the wrong spot it won’t help you let’s identify a wrong spot then I mean you can give examples if you like but generally speaking how would you define a wrong spot I think for me I I I Look to can you be sure of security in Bina and Maly right now probably not you know that would be tough place for me personally um so that’s how I kind of there’s no wrong spot David I mean you can people have been successful in all of these countries and will continue to be successful in all of those countries but it’s the degree of difficulty that that you have to look at and that’s that’s where I’ve kind of come back home ultimately you know to to work in Canada uh I want that degree of difficulty be to be decreased I want to be in a framework where I know how to operate and it’ll be secure for the years to come how is the permanent process in Canada different from a third world country well I think at the end of the day we know the steps that we have to take and I think the regulatory framework in in some third world jurisdictions is fine you know it’s not like you can’t do it I mean we have Majors operating in all of these jurisdictions I just think it’s a question of are you going to be surprised that’s really it generally faster let’s let’s put it this way faster and or easier to permit in Canada or let’s say the US than let’s say South America uh Papa New Guinea or West Africa for example um I mean that presumably would play into a role in deciding where to operate right yeah certainly I mean each Project’s going to have its own challenges right I mean there’s no doubt about it so it’s sort of Project Specific in terms of how the permitting will will will go I think again you know for instance if you’re in the midst of um if you’re in the midst of Permitting and you had you had a good relationship ship with a government like say in ner for Uranium as an example uh and then all of a sudden uh you see you find yourself with a a very different political Outlook all of a sudden that’s just a that can wipe you out in a in a heartbeat so I think that’s again I just come back to steadiness it it’s not so much the time frame it’s are you going to be surprised and that’s what I’m trying to avoid in my own career and and for our our investors okay what happened this year with the share price price it’s up 100% we know the gold price is up significantly so clearly there’s a leverage Factor but like I stated in the introduction not all companies in the gold sector have outperformed gold what did gold Shore do differently if anything well I think uh for the start we were just completely undervalued I mean we all know the kind of market we’ve been in it’s being atrocious um there’s just a massive disconnect between gold shares gold Shore share price and and the value of the ounces in the ground um that was recognized ized by a strategic investor uh called the saf group in November of last year they just saw this disconnect they saw the the asset just off the Trans Canada Highway in Ontario and they said okay we we have to invest in this you know there’s just too much it’s such a deep value play um and then from that kind of coming out of hibernation the company’s getting active again you know we’re moving forward there’s a new management team obviously I’ve Come Aboard May one that’s probably why you’re seeing that we have that strategic backing with a great asset you told me Offline that if you were still on Newmont working as a geologist there you would probably take a look at the MOs gold project uh that gold Shore has as a potential uh Strategic investment or buyout opportunity so before we talk about the project itself what are the criteria that a major gold producer has on their checklist scale is obviously the starting point you know Major’s not going to go after million ounce deposit you know that is that is absolutely a fact um what you want to see is is something probably north of 5 million ounces to really have the attention of a company like a Newmont or a Barrack I think also being in uh you know what I call a tier one jurisdiction like a Canada or the US that obviously is extremely helpful um for the reasons we’ve just been talking about and I think you also have to look at does your project have some optionality can you can you see good economics early you know that’s obviously something that everybody is wanting to look at and those are the those are the checklists that people will want to see you know if you can if you can demonstrate some good economics early in the mind life if you’re in a good jurisdiction and you got scale of course you’re you’re going to be on people’s radar okay so walk us through how gure fits that criteria yeah absolutely I mean you know it kind of comes back to how did I make my decision to come here you know and it starts with the assets so first off you know we have a resource of 6.7 million ounces 6 million of which is contain in a single conceptual open pit we are exactly about 110 kilometers to the west of Thunder Bay the city of Thunder Bay in Ontario you drive down the Trans Canada for an hour you take a left and there you are uh extremely uh easy to get to the infrastructure is beautiful um you know those are just the the scale and the infrastructural alone set gold Shore apart to my mind you know and then the other thing that really is set it apart for me is just there’s some lwh hanging fruit for growth you know right in and around the deposit you know currently there’s 6 million ounces in this conceptual open pit does it get bigger we certainly think it does we’ve already started our first drill campaign uh since I’ve arrived uh here this last week and there’s low hanging fruit where we can add ounces into the top 200 meter that are going to be high margin ounces ultimately you know that can impact the economics of this project going forward and then I think the other aspect of growth that we need to to look at is you know everybody is going to be looking like a major to go back to what would be their Criterion well what’s the blue sky are you sitting on 10 million are you sitting on 12 are those possibilities is it reasonable to ask that question and certainly in Gold Shore you know the exploration picture is quite immature given the size of the deposit here here’s my obvious question okay as as a potential investor looking at this stock it’s already up 100% year to date has the window been passed for a buyout I’m a major looking at this I’m like well I could have bobbed this last year now it’s you know now it’s double the price what’s your answer to this oh we’re still undervalued I mean I think for a major to come in and and whether it’s a Strategic investment or you know if they were looking to buy they’re going to want to see those first set of Economics come out right and that’s what we’re doing we’re we’re launching into the first economic study a paa we’re going to be quite rigid with this in our approach it’s not a marketing document we want it to be realistic which will give that guidance to to Majors Etc um and to the investors for that matter I mean at the end of the day we’re still undervalued it’s 10 bucks an ounce in the ground right now and if you look at some of our peers they’re trading anywhere from you know 20 to 60 one of the challenges I’ve seen some other Juniors face this year is of course fundraising even with today’s gold price near $2,400 they’re still seeing challenges fundraising and in fact uh diluting the share price um or diluting the shares rather has taken a has caused the share price of some of these companies to take a hit uh how would you I guess approach this problem or uh avoid a similar situation all comes down to the iic backing that we have um with the saf group uh and Brian Pace Braga who’s who’s a an entrepreneur in the mining space who’s had a number of successes over the years um that sort of financial stability that they are going to help us with in terms of lead orders moving forward that allows us to to sort of rise above the the typical scenario that comes back to my first point I mean Juniors need strategic backers these days you know that’s ultimately how they’re going to perform better um and obviously you know we’re looking we’re very sensitive to dilution we’re not going to go out and raise money at current share prices we feel we’re still undervalued and so our job is to to have some catalysts come out to the market to show the growth to to show some some very positive economics and and raise money at higher higher prices I mean I know everybody says that um but ultimately strategic backing is critical in my mind let’s talk about the company um finances right now so how much cash do you have right now and um what do you plan to do with this well we roughly have um $3 million in the till right now uh there was 1.4 Million worth of flow through so you know we were starting to execute on a short 2500 meter drill program that program is designed to test zones immediately adjacent to you know the open pit uh that’s defined by the mineral resource estimate and just show growth immediately um you know with that Strategic investment that saf made uh and and the principles around saf made in November there are warrants attached to that uh you know I expect that money to come in um you know within the next couple of months and and what that will provide us is is a good cushion you know we don’t U we’re not going to have a gun to our head to raise money that’s also another really important part of the junior space you know as soon as your treasury is low financing gets extremely difficult and and you know you’re going to see lower share prices again you know know to to know that we’re we have approximately $4 million of warrants that are going to come in in safe hands strategic hands long-term hands that just makes our job easier on the financing perspective and and also from uh you know keeping dilution to a minimum okay well you recently stepped into uh the shoes of CEO so congratulations Michael tell us about um what your strategic vision is and what you plan to do differently than I guess the previous management team well I think look um you know to step into to this role you you you just have to quickly take a look at the people you’ve got involved in the project uh you’ve got to take a look at the asset and you got to take a look at how do you how do you create value in the shortest amount of time possible so for us there’s really three pillars we’ve got the growth pillar right immediately adjacent to the deposit of course we want to Define ounces in the top 200 meters improve your economics reduce your strip ratio have the ability to feed higher grades into a mill early um we have the blue sky Discovery potential again you know does this thing go to plus 10 million or 12 million of course we want to find that out so we’ll be working towards that sort of Discovery uh in the next couple of years economic study has to come out people need to know what’s this thing worth what what kind of what kind of rate of return are we going to see from this thing you know that has to be defined and then finally you know the the third pillar of the approach is is you got to take care of your permitting process as if it’s your baby you know we we have to be proactive as to how we engage with that process because you don’t want to not proactively make a decision and then find out okay because you didn’t do some baseline work you’re delayed by two years you know no investor wants to see that so we’re just taking the approach of we’re going to try and move this forward in growth the economic studies and the permitting simultaneously never have a delay on the permitting process and that gets us to the construction decision ultimately I’ve heard that in 2011 there was a trend of I guess overspending from the seniors or projects many seniors um made mistakes when purchasing projects um perhaps this bull cycle they’re a little more reluctant to repeat some of those mistakes and that’s why we’re not seeing as as much m&a where do you stand on this topic I mean ultimately I think majors are going to we’re going to see an m&a cycle um you know they’re getting flushed with cash here um there’s deep discounts in the junior space and it’s just going to take a it’s going to take a good project obviously and and you’re right you know there’s been some wonderful Acquisitions and there’s been some ones that have been problematic for people so I don’t think it’s across the board that you can say okay every acquisition is been terrible um in fact there’s been some beautiful ones yeah the job of the junior is to make it easy for a major and I think that’s where you know my experience working for Newmont and our VPX you know he’s also X neumont this is his 10th development project around the world that sort of gives us the ability okay we know what they need to see we know the style of work that they’re going to want to take a look at so let’s get there fast that’s that’s the advantage of working uh together with a former former numont person as well well tell us about your experiences as a geologist tell us about how uh the process is for a major company to to explore and in particular what are some of the mistakes that a major company producer like newon has made when it comes to exploration that you as a junior would strive not to repeat yeah I mean I think Juniors obviously were more Nimble for a start I mean you know there’s there’s a quite a quite a large amount of bureaucracy in the majors which you know soaks up a lot of money um in terms of some of the techniques that I’ve learned at newon of course I’m going to apply them you know they’re they’re the standard um so I think it’s just a mix of knowing you know what to apply in terms of techniques of exploration and to just you know what a junior can do that a ma might be a little slower with a major we get to the drill bit quick you know like I just got here and we’ve got a drill turning you know that’s a real Advantage you know we’re not fighting a global budget scenario which I which I used to do you you know where you’re pounding your fist uh on the table saying no my my jurisdiction is better our projects are better than than the others in the company so you know we’ve just just got a singular Focus I think that’s a big Advantage truthfully look I go to these trade shows all the time and I see rows and rows of Juniors and they all claim to have the best project and the best deposit in the world all right so what do you have that makes you stand out scale infrastructure and strategic backing simple as that okay you know was going to do in a sentence what’s the next step in your timeline here you mentioned you have a paa in the process yeah we hope to get a paa out uh no later than the end of q1 in 2025 it might be a bit earlier that document to me is absolutely critical as it defines not only the first sort of realistic set of economic indicators of what this asset can can do uh but also from a permitting perspective it allows us to move forward um so that that document is going to be critical at the same time of course you know we’ve got lwh hanging fruit in terms of growth so we’re going to go execute on low hanging fruit all day um you know we’re we’re following up on historical intercepts that are that are right right adjacent to the pit that weren’t part of the mineral resource estimate you know that we can then get a new estimate done feed that into the next economic study which would be be a pre-feasibility and Carry On You know I every you’re right every Junior of course is is going to say we’ve got the best um the question is can you go execute and and in these in these choppy markets that’s been obviously very problematic and we’ve seen you know massive discounts on companies because of it okay so you’ve got a let’s comment on the capital structure for the viewers here so you got you said you have a strategic backer roughly what percentage of the shareholder uh um uh distribution is owned by this backer versus the the public versus management yeah so if we take if we take it very broadly and we say Okay insiders strategic backers and people who are very close to us that’s 42% of the company that you know we can fit into into a room practically so that’s that’s a big differentiator right there and you know with respect to we have two insiders we have luty Investments and we have H Brian Pace Braga who are are insiders who own over 10% so you know we’ve seen their buying in the market here uh over the last month you know they are extremely supportive getting a little bit more technical now uh I noticed that this is an open pit mine correct uh generally uh is there a preference from a geology perspective or geologist perspective um as to whether or not you should be operating in an open pit mine or versus underground are there major differences in costs benefits so on and so forth yeah I mean underground mining is is obviously more expensive uh to to execute on so you got to see higher grades um continuity of mineralization will be absolutely critical in an underground mind you know where you’re dealing with a big bulk tonnage open pit it’s probably a bit more forgiving um and obviously that’s why you see the capacity of these mines to produce at lower grades I think at the end of the day when you look at an open pit mining scenario what you and everybody else should should look for is are you going to be able to get high grade into the mill early you know because that payback period is critical on your capex you know the return of capex so that’s that’s what we’re trying to do here in our in our first paa is to see you know what exactly that looks like you know internally we feel that we we are going to see some higher grades going to the mill early on and that’s going to be a huge economic differentiator assuming no bids come before then um from other companies but at what point would you look at your indicated or um uh your yeah your indictive reserves and say to yourself look this is this is looking good we’re ready to go into production well you got to go through the steps David I mean I think you know um all your economic studies obviously the permitting is is Mission critical uh community relations saying Mission critical um you know for me what we have to do is we have to scope the project properly and you know we can potentially look at a phase production approach smaller smaller scale stage one pit and then you know expand to a much bigger production scenario and take a much bigger part of the resource into phase two you know those are the kinds of things that that are going to differentiate us at the end of the day you know that’s that’s the job we have at hand right now finally are you looking to expand into other regions maybe outside uh the mo Moss project at another deposit in Ontario or BC perhaps I’m just you know throwing out places but are you sticking to one asset for now look obviously we’re we’re always looking I mean every geologist is always looking you know and particularly if we can see some currency in our share price where others are lagging you know and maybe there we can be opportunistic of course we would you know I mean that’s we’re here to build a gold company at the end of the day we’re here to to get towards a construction decision and if there’s opportunities along the way uh that are creative then absolutely we’re going to take a look at them okay very good thank you very much uh Michael uh tell us where we can learn more about your company well you can uh take a look at our website uh obviously we have a big social media uh presence as well uh the standard sort of places David at the end of the day but goldshore resources.com we’ll put the link in the description down below so make sure to follow goldshore resources there thank you very much for your time Michael speak again next time yeah thank you David thank you for watching don’t forget to like And subscribe

Michael Henrichsen, CEO of Goldshore Resources (TSXV:GSHR | OTCQB:GSHRF), discusses peak gold, and the upcoming mining M&A cycle.

*This video was recorded on June 26, 2024 and is sponsored by Goldshore Resources

Subscribe to TDLR newsletter: https://davidlinreport.substack.com/
Listen on Spotify: https://open.spotify.com/show/510WZMFaqeh90Xk4jcE34s
Listen on Apple Podcasts: https://podcasters.spotify.com/pod/show/the-david-lin-report

FOLLOW GOLDSHORE RESOURCES:
Website: https://goldshoreresources.com/
Twitter (@GoldShoreRes): https://x.com/GoldShoreRes

FOLLOW DAVID LIN:
Twitter (@davidlin_TV): https://twitter.com/davidlin_TV
TikTok (@davidlin_TV): https://www.tiktok.com/@davidlin_tv
Instagram (@davidlin_TV): https://www.instagram.com/davidlin_tv/

For business inquiries, reach me at david@thedavidlinreport.com

*This video is not financial advice. The channel is not responsible for the performance of sponsors and affiliates.

0:00 – Intro
0:55 – Peak gold
3:15 – Jurisdiction risk
6:05 – Mine permitting
7:40 – Goldshore share price
8:53 – Criteria for mining acquisition
11:55 – Goldshore’s strategy
14:00 – Cash and funding
17:20 – M&A cycle
19:55 – Goldshore’s timeline

#gold #stocks #investing