Transcription
Hello everybody and welcome into Commodity Culture, where we break down the commodity sector with the goal of making you a better investor in the space. My name is Jesse Day.
Before we dive in today, standard disclaimer: nothing here is investment advice, do your own due diligence. Today is April 27th, 2026, and I am joined by Rick Van Nieuwenhuise, CEO, and Sean Kungun, president of Contango Silver and Gold, a company that engages in the exploration, development, and production of gold, silver, and associated minerals in Alaska and the Golden Triangle in British Columbia. Gentlemen, it is great to have you both back on the program.
>> Yeah, Jesse, good to see you again.
>> Good to see you, Jesse.
Well, let's kick things off with your current view of the gold market. We've seen gold take a bit of a hit in the aftermath of the war in the Middle East, and it's largely chopped sideways since then. It seems like whenever it looks like peace could be on the table, gold rises, and whenever it looks like the war is on, it falls, which is contrary to what a lot of people expected. I'm wondering what your take is, Rick. I'll start with you here.
>> Yeah, I mean, I think gold's just taking a bit of a breather. I mean, you know, look, we we we've gone up to $5,500, uh, and we've come off, you know, sort of a healthy 20, 25% correction. So, I don't think there's any, you know, nobody should be panicking the streets or anything. Uh, you've had central bank buying and central bank selling. Uh, I was just reading about, uh, Turkey and Azerbaijan as two examples. I know China always gets all the headlines, but there are other central banks that that buy and sell gold. And Turkey, for example, when they bought a lot of gold, uh, previously, the value of that went up, and so then it becomes, you know, more of a, a higher percentage of their portfolio than they're comfortable with, so then they sell gold. So, um, it ebbs and flows, but the, I think the main point is that it is central banks that are putting a floor in the gold price and and buying and selling according to their, you know, internal, uh, principles and guidelines. Uh, it's not, it's not speculative retail that's that's pushing the gold price yet, and I think that's still to come.
Sean, any thoughts there, and in particular on the way gold has reacted in the face of global conflict, which a lot of people expected would put rocket fuel under the price? It hasn't seemed to do that, and any thoughts as to why?
>> Yeah, look, I I think Rick's point on just, you know, we've had a big run-up. Like when when I look at the the gold question, um, I see three sort of three things that explain the current price action. Uh, we're coming off a really big move, right? So, you know, going from under $3,000 to over $5,000. We're digesting that move, but the first thing that comes to mind is I think real yields dominate, right? And uh, there's an inverse relationship there. So, as yields rise, gold falls. And I, like, I'm not trying to oversimplify it, but I think that's always been sort of the number one cause for, uh, gold going up or down. And so, that's one thing. You know, dollar strength. You know, whenever there's, you know, you you referenced the war, the instability, you know, there's often a fight for dollars or to to the dollar. So, anything priced in US dollars, including gold, gets that short-term hit. I also think that, you know, and this may be more anecdotal, but you look at where, you know, the conflict was centered, and you look at, you know, a big market like Dubai, um, you know, that, you know, so much of the world has gone to Dubai, so much trade has gone there, so much activity. Um, and when that gets interrupted, hit, and you've got people fleeing the country, it's disruptive. And in that part of the world where you often save in gold and and, you know, there's a big gold trade in that center of the world. Um, and, you know, when when you know the hotels aren't full and the restaurants aren't full, and that, you know, excess savings and capital isn't going into gold, yet it's actually selling gold for liquidity. Um, on the back of a big move. Um, you know, I look around the world, uh, you know, I'm here in Vancouver. You look at our our real estate market, you know, you look at our condo market. We've got 4,000 condos that are coming online in a very, in a relatively small city. You know, if if you're saving in gold, which a a lot of cultures do, that's a great place to go get liquidity at record prices.
>> Yeah, some great points there. I want to move on to silver. It's been in the headlines recently, specifically the fact that China imported the most silver ever in a single month in March of this year, which was reported by Bloomberg. This, in addition to the country implementing export restrictions on the metal at the start of this year, could have some big implications for global supply. What are your thoughts on this development? How do you think it could impact the price of silver? Uh, Sean, I'll go to you again.
>> Yeah, I think this is actually really, really important structurally. You know, China is the largest industrial consumer. They've got, they're a key refiner and a key trader. And um, you know, importing record amounts while restricting exports is, I think, very, very, very significant news. And uh, you know, to answer your question about like, what what can that do to price? It's it's tighter global supply, right? So, you're going to have a bifurcation. Um, you're going to have sort of the China price and the rest of the world price. Um, and uh, you know, for me, it just reinforces this idea that silver is becoming more and more of a strategic metal. Um, and I think, you know, in the short term, you you could have some noise, uh, but I think longer term, it's very, very bullish for the long-term price.
Rick, I'll turn to you now to discuss gold and silver miners because the mining stocks continue to underperform many investors' expectations. In fact, as of the time of this recording, the GDX ETF is currently dead even with gold year over year to date, which is absolutely incredible. And the SIL ETF outperforming silver by around 9% over the same time frame. I mean, Newmont just reported record earnings, they're down over 3% today. And gold is only down 67 basis points, something like that. This is a far cry from what most believe should be happening in the middle of a precious metals bull cycle. What, what, what do you think is driving this price action?
>> Well, I think, you know, the the gold price action, as I mentioned earlier, is being driven by central bank buying and uh, and, you know, economies like China buying silver, whereas, uh, the the retail investor right now today, like, you know, unlike 2020, 2011, when you had that bull market that was driven by by retail investor buying and speculation, this isn't. So, those investors are still on the sidelines, uh, and still, I, and I think still yet to come. And and and when they realize how much money's making producing gold and how much money Contango is making producing gold, uh, I, I think they'll they'll show up. But it's, um, you're, you know, they are basically sitting on the sidelines for the most part. And I'm talking about, you know, the generalist investor, obviously, people who are more focused on gold and traditionally focused on gold and silver and and really understand what's going on. And they're ahead of the curve. Uh, but the generalist investor is definitely on the sidelines. We're using $3,700 an ounce for our guidance. Uh, and that comes from Kinross. It's not a number we made up. It's, it's, it's guidance from Kinross, which is, you know, among the larger gold producers. So, when we say we're going to make for our 30% share, amount show, we're going to make $55 million based on our 40 producing 45,000 ounces of gold. U that's conservative guidance, given that, you know, gold's trading closer to $47. So, that's $1,000 more margin an ounce, which is another $45 million of free cash flow. So, um, I think the generalist investor will eventually have to pay attention to just the strong cash flows that the gold mining business, uh, is making and and just from that standpoint, uh, uh, start to give the valuations that I think, uh, we deserve. But you're right, we're, uh, we're over, we're par with the gold price right now, which is not traditional.
>> Yeah, I think it's a major buying opportunity for those who understand the thesis. Sean, any thoughts you'd like to add there on on the gold and silver mining stocks and and what it will take to raise investor awareness to perhaps get more people to realize the value proposition there?
>> I I like Rick's point about the generalist. I think, you know, um, generalists are still very, uh, tech-focused, very AI-focused, um, large-cap focused. And so, you, you, c, it's all about capital flows, and we just haven't seen them in the mining equities. But I kind of have the view that this is all typical, that the equity explosion in terms of share price happens late cycle. And so, you know, I don't think the market is broken here. Um, I think it's kind of typical of mid-cycle behavior. And I think if you were to go back to 2018, uh, 2019, and, um, and think about where some of these stocks were, Agnico, Newmont, they've actually had a pretty good run. Um, GDXJ was up 200% last year. Um, so those are those are decent numbers. And I know, you know, for investors, you, you look at something like SILJ and you say, well, SILJ's in line with the performance of silver. I think what we're seeing here is we're seeing the metals perform so well that, uh, you know, and I know the equities haven't kept up, and I, I think it's still a show-me story. I think there's still a lot, lot of carnage from the last cycle, um, in terms of, you know, we came from such a defensive footing, right? That the sector was so unloved for two decades, you know, the 80s and 90s were just dead for the mining equities. That when we had that big run-up in the 2000s, a lot of companies reacted, they went after, you know, low-grade projects, they took on a lot of dilution, they, the industry went up 40 times in debt. Um, so I think those lessons have been learned. We've got, you know, I look at Contango, for instance, you've got a company that because of the lessons of the last cycle has 33 million shares outstanding, you know, so we're very, we're allergic to dilution, as I, Rick and I were joking when we were in New York last week. Um, but those are all from lessons in the past. So, you know, and we're, we're going to be spitting out so much cash next year. We're spitting out a lot of cash this year. Um, it's, it's actually just on a whether we're producing gold or widgets, it's just a good business. And I feel like that's resonating throughout the entire sector. Um, but I do expect that explosion to happen happen later in the cycle.
>> So, to your >> Yeah, >> great buy, great buying opportunity.
>> Yes, I think so too.
Let's dive into Contango Gold and Silver, or Contango Silver and Gold, I should say, because last time we spoke, the merger between Dolly Varden Silver and Contango, or was not yet finalized. Now that we're here and the merger is complete, how do you feel about the prospects of the company going forward, and what is the game plan? Uh, Rick?
>> Yeah, well, I mean, we've got a growth profile that, uh, I think is unmatched in the in the in the business, especially for a company with 33 million shares outstanding and the ability to self-finance that growth pipeline. So, um, you know, we've got, uh, in order, you know, Muncho is producing, we're going to produce 45,000 ounces of gold this year. We're going to produce about, uh, 75 to 80,000 next year. So, very strong cash flows that pays for advancing our Lucky Shot project, which was next in line, is a direct shipping ore model. Uh, that's, uh, that is with the work we're doing this year. We're, we're doing underground drilling. We got about 20,000 meters of drilling that's ongoing now. We have a brand new discovery of a new vein, uh, at Lucky Shot. The the one we've been drilling, the Lucky Shot vein, is, is, we're hitting the target and we're hitting gold. We'll be renouncing results on that in the next week or two. Uh, but we've got this new vein that we're exploring. Uh, we expect to be in production, uh, in 2028, producing about 50,000 ounces of gold a year. We'll have a feasibility study done roughly this time next year. Uh, so that adds 50,000 ounces of production and it's going to add another $100 million of free cash flow on top of Muncho. Meanwhile, we advance, uh, our our Johnson Track project, uh, through permitting and get it ready for permitting by the, uh, middle of 2020. Uh, and then, uh, we, uh, get that into production by 2029, 2030. And more or less the same timeline for our Kitsault project, which of course is a silver-rich. Johnson Track is gold-rich, Kitsault is silver-rich and polymetallic. So, uh, the other thing is they're, they're very synergistic in terms of how we're going to process them. So, we're going to do about, uh, 40,000 meters of drilling at Kitsault this year, and that's, uh, to augment the, uh, the the studies there to determine a, a, uh, production pipeline or production timeline for the Kitsault Valley projects. Uh, again, they're silver-rich, so they, again, they're synergistic with our our gold-rich, uh, Johnson Track project. And when you add those up, you get Lucky Shot on in production. We're producing 100,000 ounces of gold. We're generating a couple hundred million of free cash flow a year. You get Johnson Track and Kitsault into production, and now you're up to 200,000 ounces of gold and about 5 million ounces of silver. So, uh, it's a hell of a growth story. They're all high-grade. We're talking about things that are, you know, 9, 10, uh, 9, 10 grams per ton gold and in the order of 350, uh, grams of of silver, uh, per ounce. So, you know, very high-grade deposits that, uh, you know, if gold does have a have a reset to, you know, $3,000 or something like that an ounce, we're still making very good cash flows. So, it's a strong growth story, and we're fully financed to execute that plan.
And Sean, I'd love to hear your thoughts as well because obviously a very robust portfolio of projects as Rick was outlining, uh, post-merger. Uh, would, would love you to walk us through some of the highlights from your perspective, where the focus of the company is, and how you plan to advance these projects while maximizing shareholder value.
>> So, so Jesse, I'm, I'm calling in here from Vancouver, and I, I usually get on the road at 5:30 to get into the office before the market opens. And I was driving in this morning, and I, I was, I, you know, I, I like to either listen to a podcast, sometimes it's your stuff. Uh, sometimes I just like to get on the phone and and talk. And so I called a friend and I said, "Hey," I said, "You know, look, I, I want to pitch you on Contango." And that's typically not what I do, but I said, "Just, you know, hear me out for a couple minutes." And I said, "Look," I go, you know, we're, we're doing about 60,000 ounces a year production for Muncho, okay? We're making on average about $100 million a year. But I go, you know, next year is going to be a big year where we're going to do 75,000 to 80,000 ounces. The costs are going to come in probably sub-$500. You know, that's the guidance we're getting from Kinross. So, we're going to make a lot of money next year. You know, $200 million, uh, dollars, you know, depending on where the price of gold is, maybe $300. It's going to be a big year. It's going to be a really big year. So, you got this business that has not a lot of shares out. You know, maybe 15 million shares are in the hands not of management or not of strategic investors. So, it's a small float. We got $100 million in the bank. But I go, you know, for $50 million, we're going to put Lucky Shot into production, back into production. There's another permitted mine. So, now the profile goes from 60 to 100. And then we've got these juicy projects, gold, one's gold, one's silver. Um, and it's all tier one, and we get those in line by 2030. And as Rick said, that's going to lead to 5 million ounces of silver production and 200,000 ounces of gold. And, you know, when I look around the industry and I look at, you know, for investors, you can buy the Newmonts, right? But, you know, what I've learned from previous cycles is the time to own the big royalty company or the big producer is early in the cycle, not late in the cycle. Because later in the cycle, the one you want to go down market. Now, if we look at our peer group, okay, there's we have peers that have a $3,000 AS6. Like, that's the reality. And so, you know, they're going, "Well, we, we're making $1,000 an ounce right now, but what if gold corrects temporarily?" You know, you, our projects are a lower cost. So, I think we're in a real sweet spot. Um, not to mention it's all tier one. And and then I think that you've got this silver story that is not been uncovered here. You know, a lot of investors had bought Dolly Varden Silver for the silver, right? And now we have an an ability. I was actually telling this friend about Torbert. He goes, "Why have I never heard of Torbert?" And I said, 'Well, because we've been so focused at the Kitsault Valley of finding new Torberts like the Wolf, but the big ounces are at Torbert, now we're going to go and try to develop them and bring them back into production.' And so, I just think for me, uh, we're excited. Uh, you know, Rick and I are meeting up, uh, tomorrow night in Florida, and we'll be down there for 3 days, meeting with probably a hundred investors over the next 72 hours. And then we're going to go up to Atlanta and meet with another 25 or 30 investors. And we were just in New York opening the bell at the New York Stock Exchange, where we met with some institutions. And and this type of work is going to continue for the quarter and for the remainder of the year. And it's, and, you know, we're both really energized by our new teams and, uh, just really excited about this new company.
>> That's awesome. And and I do want to pivot into discussing, uh, the team because I'm wondering how you have leveraged the merger to improve that team and the overall level of expertise that the company brings to the table. Rick, maybe you could speak to that.
>> Yeah, so, you know, this was a merger of equals, and, uh, we were both, uh, you know, had very good teams that obviously had been very successful in their own rights. So, we've just, it's a one plus one is three kind of a story. We, you know, there's the, both teams are still intact. We've added a few people, uh, particularly for the Johnson Track project and the and the Lucky Shot project. We have a new mine manager. Uh, we have a VP Operations. Uh, and we have a project manager at, uh, at Johnson Track for the construction, their construction manager. So, you know, we, we're, we're growing. Uh, we'll continue to to grow as the projects continue to, uh, continue to advance. But, you know, this was a merger of equals. So, um, you know, we, we weren't trying to, uh, uh, you know, go through layoffs and have, uh, you know, some synergies and, uh, administrative synergies and things like that. No, we're, we're both growing companies, and, um, we're just growing faster and bigger now.
>> Fantastic. Well, I'd like to ask about the company's cash position at present. What does the balance sheet look like? How much cash on hand? How do you plan to deploy that cash? How much runway does it give you? And what's the plan to raise more capital as needed? Rick, I'll go back to you for this one.
>> Yeah, we'll say zero, zero chance of, uh, needing any money to advance our projects right now. So, we have $100 million US in the bank. Uh, we're generating, as we've said, on average over $100 million in free cash flow. Uh, a little lower this year, but a lot more next year with the, uh, uh, increasing production at Muncho. Uh, this year's spend is about $65 million. Uh, we'll complete about $60 million or 60,000 meters of drilling between, uh, uh, our drilling underground at Lucky Shot and our 40,000 meter program at Kitsault. So, lots of news flow. Uh, I guess the, the first, in terms of catalyst, the first news flow is going to be a, a resource update, mineral resource update for Kitsault. That should be out by the end of June. That'll help guide our our 40,000 meter drill program, a portion of which will be infill and extension of high-grade, uh, zones, uh, silver-rich zones. Uh, Sean mentioned, uh, you know, the Torbert mine. Uh, the road actually goes up, up to the Torbert mine. It was historically in production. In fact, it was a DSO, a direct shipping ore mine. So, uh, we're going to focus on this drill. This, the year's drill program is going to focus on outlining a mineral development plan for the Kitsault Valley, which will, uh, wrap up in a preliminary economic assessment or initial assessment in US Parliament, uh, for about this time next year. So, we'll have a, you know, development plan for Kitsault outlined at that preliminary level next year. Uh, meanwhile, we continue to advance, uh, Johnson Track. We have the, uh, road construction that's going on. Uh, we're on the Fast 41 dashboard for permitting. Uh, it's a critical metals project in the United States. Of course, the Trump administration is very focused on critical metals. So, we'll see that project permitted, fully permitted on the federal side, uh, by the middle of, uh, 2028. And then, of course, a Lucky Shot, we're, you know, it's a drill, baby, drill. We're underground drilling. We'll have, uh, results out, as I mentioned earlier, uh, probably in the next week or two. And, you know, we just, we'll be drilling all year round there, uh, with the aim of completing a feasibility study next year. Um, so, you know, a lot of news flow, um, and we're, we'll end the year, uh, with a significant amount of of cash on hand. Uh, we're going to spend, you know, about $65 million, but we're going to make about a hundred. So, uh, we're, we're in good shape financially.
>> Fantastic. Well, I'm going to end by opening the floor to both of you. Anything we haven't yet touched on, or anything you think it's important to emphasize the potential shareholders of Contango Silver and Gold should have their eyes on? Sean, I'll start with you.
>> Yeah, my goal here, Jesse, is I want to create a must-own name in your portfolio. You know, I want to own, uh, you know, like if you, if you, if you put a group of mining investors into a room and say, you know, how many of you own Newmont? You know, a good chunk of investors will put up their hands, and and that's that's what I want to do here in terms of the mid-tier space. You know, we've got a company that's trading under a billion dollar valuation today that, based on the portfolio and the plan, should get revalued, you know, really five, maybe 10 times that in the coming years based on the execution. So, it's, I, I just think we've got a business here, and if we go into some of the projects, they're really special projects in terms of their grade, and they're all in a safe location in terms of jurisdiction, and it's all self-funded. Um, the other thing that I want to mention is liquidity. You know, uh, Rick and I, you know, we both came into companies that didn't, didn't trade any volume. You know, in the case of Dolly Varden, we were trading about 20,000 Canadian dollars a day. On launch, we're trading about $10 million US a day liquidity, right? But my goal, I have a goal to get up to, and again, this is going to take years, but I, I'd like to see the the stock trade $250 million a day. And um, if we, if we reach that goal, and that that may take us three years to get there, but we get that type of liquidity, your cost of capital essentially becomes zero. And there's a number of processing facilities, uh, you know, one, two processing facilities that are idled, underutilized, that we want to own. Um, there are a number of high-grade projects that are too small for the Newmonts, you know, they're, they're sub-5 million ounces, but again, would make nice bolt-on acquisitions in the future for us to continue to grow that nice production profile that we have, that 5 million ounces of silver, 200,000 ounces of gold. So, look, you know, we've got a wonderful platform here. Uh, we, we got some great people. You know, the bench strength has increased technically, you know, as they've come together, so has the capital markets expertise. So, it's a, it's a wonderful, um, you know, great synergies here. Um, so, look, you know, it's, it's, it's a name that I think is extremely undervalued. We're trading at about 0.04 NAV, so, you know, the, the pure average is about 0.08, and then if you factor in grade and location, you could argue for, you know, 1.1 to 1.2 too. So, I think there's a wonderful opportunity, and we're going to do the work to get the message out over the next 9 months.
And Rick, any final thoughts you'd like to leave us with on Contango Silver and Gold?
>> Yeah, I'll just wrap up and say that, you know, we're an emerging gold producer. We're going to become mid-tier in terms of our production profile, 200,000 ounces of gold, 5 million ounces of silver. We have the assets, we have the team, we have the money. It's all about execution. Now, uh, we've both demonstrated, both companies have demonstrated that we know how to execute and we know how to market. So, you know, as Sean said, we're going to be out there. Uh, if you're an investor and you're looking for exposure to gold and silver in a safe jurisdiction, um, I, I think you need to take a look at Contango Silver and Gold because we're, we've got the dollars, we've got the team, we have the assets, they're high-grade, they're in North America, uh, and we are going to execute. So, we're going to, we're going to achieve our our objective here over the next four to five years of becoming a mid-tier silver gold producer.
>> Love it. Well, I'm going to put a link in the description below to Contango Silver and Gold's website as well as social media so people can follow along with the company. Sean and Rick, thank you so much for coming on again. It's been a blast.
>> It was a pleasure, Jesse. Thanks.
>> Thanks, Jesse.
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