The Canadian Investor - Unpacking Why Subprime Lender Goeasy Stock Crashed 60%

Episode Date: March 12, 2026

In this episode of The Canadian Investor Podcast, we break down the stunning collapse in Goeasy after the company shocked investors with a major financial update ahead of earnings. What was expected to be a gradual deterioration turned into a full-blown blow-up, with sharply higher charge-offs, a suspended dividend and buyback program, withdrawn guidance, potential restatements of past financials, and debt covenant issues that could become existential for the business. We walk through the key details from the release, why the market reacted so violently, and why the company’s comments around LendCare, delinquent loans, and prior reporting practices raise even more questions. We also revisit the red flags we had been discussing for months, including ballooning interest receivables, aggressive loan book growth, and the growing disconnect between goeasy’s reported performance and the broader credit environment. To finish on a more positive note, we also discuss strong results from Franco-Nevada and what higher gold prices could mean for the royalty giant going forward. Tickers discussed: GSY.TO, FNV.TO   Watch the full video on Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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Welcome back to the Canadian Investor podcast. I'm Simone Belanger and I'm here with Dan Kent. We're back for an episode. of news and earnings, mostly news, because we had a surprise yesterday. So we're recording this on Wednesday, March 11 in the morning. A little earlier than usual because pretty bad ice storm happening in Ottawa. So I'm hoping that won't lose power while we're recording this. Fingers crossed. But yesterday, GoEZ came out. If people remember, they had pushed back their earnings release date, I think, to March 25th,

if I remember correctly. So the regulatory deadline is March 31st for companies that ended their Q4 at the end of the calendar year. So they were really pushing it back to the end here. And we talked about it because it was really strange for a company like Go Easy, who had, as far as we could see, always reported their Q4 earnings right around mid-February. So take February 14, give or take pretty much four or five days. And every single year, they were. reporting on that date. So that was definitely a head scratcher. And yesterday, we learned why that

happened. And I think we've both been very vocal about GoEasy ever since the short report. And we'll go over what exactly happened here. But I'll just start by saying, I thought things would start getting pretty bad for GoEasy. I personally thought it would be, you know, maybe this quarter, charge-offs or delinquencies would start rising and would keep increasing from quarter and quarter and quarter for various reasons, but the ballooning interest receivable, which I think was a leading indicator for what's happening. And for those not familiar with it, essentially they were booking interest as income before they actually received the payment. So that goes into as an interest receivable. And then it was starting to get bigger and bigger. Over a few years,

it went from around like 15, 20% to above 40% of the interest income. So definitely pretty alarming. But I thought it would be a gradual thing. But boy, was it not gradual. This was basically worse case scenario, like even worse than I ever thought it could be. So anyways, your initial thoughts before we actually go over what they mentioned. Yeah, I mean, I did not expect it to get this bad. I mean, we had talked about how it probably would have got worse than it is now. But I mean, what do they say? Like when you find one cockroach, there's always more. Yeah. There's almost always more. And I think not only the charge-offs, and I mean, we'll get to this eventually, but there's a lot of stuff in that short report that came out about them, you know, maybe not doing or I guess, you know,

kind of booking interest payments or interest receivable, as you had mentioned, that we're never going to get paid. And there was a bit of this that came to light. And I think the company is being very, I guess I can't say for certain they're being dishonest in the report, but I don't believe them. There's going to be a lot of stuff in here where I say, like, I don't believe them. I do not believe what they're saying because, I mean, again, where there's smoke, there's fire. But yeah, it was, it was an ugly, ugly day yesterday. At one point, it was 60. us, wasn't it? Well, I finished a day down 57%. So pretty much close. And I mean, it just started getting worse. Once the report got out, it just like, I think it was down 30% and just kept

increasing increasing. So let's start here. So the reason behind the report, which I'll put, and for those interested, I'll put a link in the show notes. Just so you know, we're not making this stuff up. It's actually, yes, it was in the actual report here. So I'll give some big takeaways. What happened, Dan, feel free to chime in as you see fit here. So what they ended up saying is they said that they're charge off. So basically what they're writing off is just going to be much worse than they had previously thought for the year that was finishing last year. That was the first part. So they said for 2025, the net charge off rate, it was updated to 12.9% for the whole business up from a range of 8.75 to 9.7.7.

And we talked about this. And even before the short report, we were just kind of scratching our heads as to how they were able to keep it so low compared to peers as and really as loans were growing. And we'll talk a bit more about that in a little bit here. But that was always like a bit confusing. But the other thing that was even worse, and it gets worse and worse, don't worry here. their 2026 net charge off, they said their guidance is for the mid-teens. So take a moment and think about that. So they went from last year saying it would be originally before they just changed it

around, let's just say, 9%. 9.25%. And now they're saying that 2026 will be in the mid-teens. Like this is almost a clean double in terms of charge-off. This is absolutely massive. And the company said in the release that it had to write off an additional $178 million in bad loans from what of its subsidiary LendCare. So Lendcare here, I have what they offer. So essentially Lankerr offers like I think they're a point of sales loan. So I guess people are like automatically approved or anyways, it's a very rapid process.

So they offer, I'm on their website. So lendcare.ca. The website's kind of finicky. So the consumer part doesn't really, there's like no page that works anymore. But for businesses, if you go on there, auto financing, power sports financing, home improvement financing, retail, boats and watercraft financing, recreational financing, healthcare financing, auto repair financing, vet services financing.

And obviously I just lost my dog so I can understand people going for vet services there for a loved one, a pet that they, you know, they love and their family. But aside from that, it's all stuff that's kind of, yeah, it's stuff that's a bit risky. But not to digress too much here, this was primarily due to bad auto loans and power sports, power sports loans, so as said back loans. And it sounds like those, a lot of them were like, remember during the pandemic, how like you could literally sell these like C-DU. and stuff like that for more than you actually had bought them because there was just so much demand.

Yeah, the shortage for a lot of, yeah, same thing with vehicles. It was a crazy, crazy time like supply chain wise. Yeah, exactly. And they also said that it will likely need to revise previous financial statement dating back to 2024, really not good. The company also said it withdrew its Q4 2025 outlook along with its three-year forecast. They said in the statement that rising loan losses will cause them the breach of debt covenants with lenders, but the lenders have temporarily agreed to not enforce those while new terms are renegotiated. And this is the scariest part.

So if you own this company or you're thinking of buying on buying the dip here, that is the scariest part because what this means is these lenders, they have agreements with them in place. So probably the agreements is that they have to keep a charge-off ratio below a certain things. There is just certain types of things that they have to mean. And if they're in breach, basically the lender, they can say like, okay, well, we want our money back. And the lifeblood of a business like this is essentially borrowing money and then lending it at higher rates. And then they pocket the difference minus the charge-offs. So you can see how it's really bad because the one part of the charge off is ballooning. And then now they breach the debt covenants.

So their lenders basically have all the leverage. And the lenders, obviously they don't want to own the business, although they'll probably have a little bit of flexibility there. But they can basically dictate the terms, whether it's higher interest, whether it's even more stringent requirements in terms of charge off and things like that. Yeah, obviously they're trying to sound optimistic in the release, but this is the most existential thing for the business out of this whole release. Yeah, the covenants are obviously just agreements that they set out with the banks. Like, it could be like a return on equity target as well, I think like a charge off rate of return on equity, some sort of target that they've breached and now, yeah, I mean, the bank can just ask for their money back.

It's, there's so many things that they released all at once, which is why they're. this stock got obliterated. Like the effectively LEN care is blowing up like that. Yeah. And I remember we had talked about this and there was a lot of people who spoke about how good their secured loan portfolio is. Oh man. And we even mentioned like these auto loans, these see-through loans, whatever it may be,

are absolute wet paper bags in terms of secured loans. Because first off, like Go Easy is not in the business. of repoing these automobiles or whatever else they may be in selling them. And even if they do, they're not really going to get that much money back. And this is where it got absolutely hammered. So yeah, the secured loan portfolio, this was fairly obvious that it wasn't as strong as it is. And I mean, we're starting to see it right now with LENCare getting wrecked. And I mean, it's, I don't know, it's hard to imagine that they didn't know.

And I think, yeah, like I think another element of this is it's hard to imagine that a lot of, you know, management did not know that this was going on. And I guess we'll talk about the re-doing of the financial statements in a bit. But yeah, I mean, it's, there's a lot of things going on here. That's a lot of charge-offs. I believe the full year for 2025, yeah, 331 million now. And I know a lot of people say, oh, it's only the 331 million on a loan book of 5.5. billion like no that's that's bad that's a that's really bad yeah that's really bad and i think i don't know if i mentioned it they suspended the dividend and share buyback until further notice so

clearly they're in liquidity crisis mode like that's the easiest way to put it like it there's no ways around that and now back to what they mentioned about land care so one line is especially alarming so the expected incremental charge of charge off reflects go easy's their determination that all available efforts to drive substantive recoveries on certain late-stage delinquent loans receivable of lend care has been exhausted. So basically they're saying like they've tried everything and it's worse than they thought. That's essentially what they're saying. They're also saying that they are going to try and essentially get lend care, integrate them better with easy financial, which it just, it just baffles me because they're almost trying to say, well, you,

You know, our main business is great. It was just like this subsidiary. As if they bought it yesterday, they bought this in April of 2021. So this is what's even more mind-boggling is they bought this almost five years ago. So to me, I'll be very blunt and we'll keep obviously talking about this. Like, this is literally one of two things. Either management is completely incompetent and they don't know their business. That is option one.

option two is they there were things that they were trying to hide here because you don't go off and have this happen without like like I said like how could they not know unless they're really incompetent people will point to the CEO he's only been there I think since December because the other one left because of health issues which was one of the many red flags that we had highlighted but the problem is Patrick Hines I think is his name. He's been president of Easy Financial, one, an executive there at the business since July of 2024. So to me, how did you not know as well? Like, you're bringing a guy here that and then if you add to the fact that the CFO left in September, the new one, okay, sure,

can be excused a little bit because he only been there for about six months. He less than September. I can't help it but think that he just like knew it was going to get. bad and just you said, you know what, I'm just going to leave. Obviously, I'm just speculating here, but it's hard not to think that. Then you got the short report. Then you had go easy do a close call with sell site analysts only that were essentially trying to manage the messaging afterwards, not opening that to shareholders. We were very critical of that. I was extremely critical of it. I remember because I thought that was a slap in the face for shareholders. And then later on, a few weeks later, they had a statement which really did not provide any additional information. And then

they had their earnings. I think it was Q3 earnings. And they had some question about those ballooning interest receivable. And again, they just said, well, you know why we grew our loan portfolio, but it's asset back. So it's all good. We recover more because they're assets back. Yeah. Secured loans. Yeah. Secured loans. So yeah, how's that working out for you right now? And then obviously the CEO leaving. And then the last drop was really the pushback of the earnings released. And I got into it on Twitter, even with some people that are CPAs. And they were like basically like, I don't know.

I think it's just ego thinking that they know more than everyone else because they're CPAs. But this guy just got washed basically. So I basically pointed out, you have to be careful, buddy. I think I can tell that your ego is taken over. and ego should never have your ego as part of investing. That's a surefire way of losing money. But yeah, so I think that's kind of my original thoughts. I'm sure we'll talk a bit more here,

but I'm sure you have some more stuff to add here. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who spend the most time in the market. I've been a quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing. With no commissions on stock and ETF trades, you don't have to wait until you have thousands of dollars saved up to make a move.

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BMO All In One ETFs simplify the process. Whether you're new to investing or looking to streamline your existing holdings, these all-in-one solutions are designed to help you invest smarter. With management fees on popular portfolios now reduced to 0.15%, you get professional diversification at a lower cost. Check out the asset allocation ETFs at bemoetifs.com. Yeah, I mean, I'll just, I guess kind of go back to when I started to, and I mean, there was nothing really in the numbers.

Well, I guess there was. Like, yeah, I had covered this company from pretty much 2018 to 2024. And in 2024, I kind of looked at the loan. originations. I looked at the charge off rates. I looked at the earnings growth. And I just said, like, there's no way this company can be doing this good. Like, we've seen all the big banks tighten up liquidity, like tighten up lending, like they're getting tighter. Whereas a company like this, like, I just don't, I could not understand how it wasn't getting worse, especially like economically, we were in a lot of trouble. And I mean, they were just, the loan book was growing at a

crazy pace. And then obviously you get hit now. Like the charge-offs are not as good as perceived. I mean, they were nowhere, like we're looking at what 13% now they're going to recast 2025 to 13%. And now you're going to look at mid-teens in 2026. So I mean, as you had mentioned, it's down, uh, it just FYI. It's down another, uh, 14% today. Yeah, like we've, we've round tripped to pretty much prices back when I started. covering it in 2018. It's crazy. And I mean,

that's the, that's the fear of a lot of these alternative lenders, especially when you get, and I don't know if you want to talk about the, do you want me to go over the, the recasting, the revision to the historical report? Yeah,

I mean, the only thing I'll add here is, it never made sense. Like, we would talk about it, even before the short report. And we would always, like, we'd look at it.

I'm like, man, their loan book is, growing like crazy. The charge officers are like the delinquencies are barely moving when peers are starting to see rising delinquencies and the problem with these companies and we've talked about this time

and time again is they could be really good companies like I know some people think they're predatory I'm just thinking about like just a company in terms of making like profits for now and these companies can be really good investment if you get them really at the bottom of the

cycle so when things like economy basically bottomed out, that's the time usually to buy them because then the economy is on the upswing. Well, they were just making loans, increasing the loan book like we showed here for joint TCI viewers. The loan book was growing like crazy, yet all the signs we had the trade war with the U.S. starting now over a year ago. And all the signs were showing that the economy was starting to slow. And this is the cohort of people that is the most at risk because they're going to go easy because they cannot get loans with some of the large financial institutions. So typically in a downturn, these are the people that will start getting affected first. And yet somehow,

these charge-offs rate were just amazingly staying high. And you'd have people bullish and say, oh, look, their loan book is growing. It's great. Profits are growing. They're refusing tons of loan application. I mean, it doesn't matter. It's not like you're getting the cream of the crop applying for loans to begin with. So that was an argument that was constantly used. And when you'd push back and say, well, yeah, but historically, like, this has always been, like, essentially when the peak happens for these companies, they would just brush it off. They'd say, oh, management is great.

I just trust management. That is one thing I kept hearing and hearing. And they would just dismiss all the red flags. Well, I mean, the one thing, there was a lot of comments on, like, how they've navigated other crises, I guess, in the past. And I mean, their pitch deck, if you look at their pitch deck, a lot of the crisis that they kind of mentioned in that, they were all U.S. related and like not really hitting Canada. Like, it's still impacted Canada, but not as hard.

So, like, I think the only one I've, found that was like remotely relevant to like Canadian specific was probably the 2014 oil crash. But I mean, a lot of people mentioned COVID. Do you imagine how ugly it would have gotten for for a company like Go Easy if the government hadn't have stepped in and bailed everybody out? Like that that is a completely irrelevant time span where, you know, this company was was doing well. And and I mean, like for me in like the summer of 2024. it was just kind of like good news is bad news.

Like this company was reporting crazy growth, crazy applications. Like as you said, they were talking about how they were, you know, it's got to be good because they're denying a whole bunch of people who were applying for loans. But it just kind of seemed,

it kind of seemed too good to be true. Yeah. As I had said, the banks, you look at the big banks, they were tightening up lending massively, reporting big provision jumps.

Meanwhile, go easy's charge offs are, are declining. The loan book is exploding. It's exactly what happened. Like if people watched a big short movie and essentially the great financial crisis, like those ninja loans, those no income, no job loans for mortgages, this is exactly that what was happening at the peak is they were like the loan books were increasing.

There was incentives there to make more loans because of the fees that they would generate. And then at some point it just exploded. Obviously, I'm sure they had more rigorous application, although. I do wonder what Lentcare with how bad it is, but it's essentially just the same kind of thing that happened with GoEasy. But you want to talk about the financials here? Yeah. So let me bring their report back up here. So this was obviously we had that short report that mentioned that GoEasy was effectively booking a bunch of interests that they probably will never collect.

And effectively what happened here is they're going to. have to restate some financials from Lendcare. So it says, and they mentioned the impact of this correction to the income statement, balance sheet, statement of cash flows and statement of equity is not material. But it's not necessarily the fact that it's not material. It's the fact that they did it. And the short report is, again, it's a theory of if you find one cockroach, there's probably more.

So it says the historical reporting practice resulted. when certain customer payments being recorded as received, while they were in fact in the process of being settled that month in, some of which were never collected, and also impacted the company's reported delinquencies. So like this is exactly what that short report was saying. Well, even that, that could even say like,

yeah, that's, but that could even be worse, no? They're saying that it was collected when it wasn't, because typically what they would do is like an, an interest receivable is they they are adding it to the bound sheet but they're saying it wasn't collected that almost not collected yet yeah yeah not collected but they're actually being

transparent about that part this is saying to me like no they're saying it was collected but in reality it wasn't yeah yeah exactly so it's actually probably worse yeah so i think this like i actually think this is what drag this could be this to me without knowing this could be like this sounds like it would be fraud whoever did this. Like if there was no, it's true, right? It is. Yeah. Literally lying on your statements.

And I do hope that the SC will investigate this because there's just so many red flags is right now. I don't. Yeah, I think they will. Huh? I think they will. Because this is like, this is what, when I read this, I was like, wow. Like, this would make me the, the charge off and stuff, you can think like, you know,

obviously we're at a very, very poor. cycle for an alternative lender. They obviously did some bad things in terms of just lending to pretty much whoever walked through the door. But generally, you see, you know, you can buy these companies at the bottom of the cycle and usually make quite a bit of money. I mean, Go Easy went from 30 to 200 over, you know, 2018 to a leading up until now. But this is actually what made me really think, like, I will never touch this company again.

because there is a lot of, you know, and a lot of people kind of cast that short report aside too. Like, oh, you know, this is pretty, this is pretty typical. I remember somebody saying, I can't remember who it was, but it was on X saying like, oh, they can do this because a lot of the loans are secured. Like they can do this. It's. And now you have them coming out saying like, hey, you know, like we, we book some,

some payments as being received and we ultimately never collected them. So now we have to go back last year and kind of. restate some financials. And they say it's not material, but I don't think that's the point. The point is they're doing it. Yeah, exactly. And we talked about it. Like, we've, I even did the research. I said, look,

car loan recoveries are not that great. No. They're like we, I remember like looking at them. What was it? Like a range typically between like 35 and 55% of recovery rate. Like in that range because obviously people will, if they know it's going to be

repo, they won't take care of it. They might not be doing maintenance. They may not have enough money to do that maintenance. They might just trash the car. All the fees associated with that, the fees associated with selling. And that's why we were so concerned is like people were using this as a blanket statement and not even doing the basic research to understand like, okay, what do recovery rates actually look like for car loans? Like there's a reason the big banks got out of car loans. Like there's pretty much every one of them. I think there is maybe one left. And that might have been TD, but legacy portfolio. They don't even add anymore. It's either BMO or TD that still does it, but they're not really.

Yeah. Yeah, like when you see these very profitable, gigantic loan book banks exiting the space because there's really no money to be made and then, you know, a company like Go Easy is entering that space aggressively. Yeah. They were what, they were, they were talking. And even their he locks. I mean, those are for the vast majority going to be second mortgages. Yeah. So I mean, those aren't even the top end of secured. And, yeah. And a lot of it is in Ontario and the Ontario market is not doing well whatsoever.

Well, and the thing with those second mortgages, I mean, I'm pretty certain in the event that your equity shrinks. Like they can call that, they can get rid of that. They can say we want our, you know, you got to pay your balance back and we're not lending you this money anymore. So. Yeah. Well, the first mortgage will get. a priority and then property taxes, I think property taxes are first. The first mortgage is second and then the second mortgage gets whatever crumbs are left. Oftentimes there's not much,

if anything, because there's also fees associated with that. So it's really, really not good. Yeah. It's continuing to bomb. It's down 20%. Yeah, I know. It's down 20%. Yeah. Oh, 20? Yeah. Yeah, it's like we said, like I think it's just a good reminder. Like we're not trying to bash on this. Like I know maybe some of you listening had a position in there. I do hope if that's the case. I'm sure lots did. It was a very popular company. I hope it wasn't a large position. I mean, obviously we kind of flagged our concerns with it. We've been very vocal. It's not hindsight 2020. You can go back and listen to our episodes. You'll see that we were flagging a lot of stuff. But again, we didn't think it'd be that bad. I thought it'd be more slowly. I did not think it

would get this bad. Yeah. Yeah. But this is just to reiterate, like this, this could be existential. Like I'd be very careful starting a position right now, dumpster diving, because the lenders, that's the biggest issue. Yeah. You don't know what the outcome of that will be. And who knows between now and the actual release, like the kind of developments there could be, there's two weeks between now and their earnings release, exactly.

So they're probably going to still be working on some stuff. There might be some more details on what those loan agreements will look like, those loan covenants. So I would be, if anyone's looking to start a position, please just wait until the call. That's what I would say at the very least and then hear what they have to say and then make a decision. And I guess the last thing, I know you talked about the short report, but it's really important to not dismiss a short report when you own a company. I never do. There's been shorts on companies I own and I will look at them and I'll look at them objectively. Usually what I'll do is I'll try to validate stuff that I can actually validate because statements from employees, past

employees that you can have employees that are, you know, they're not happy with the company, they love, they want payback or something. So this gruntled employee. So I always take those with a grain of salt, but the interest receivable, I know we keep coming back to that, that was verifiable. That was literally in their financial statement. So there was something there. and unfortunately a lot of people,

a lot of smart people just really dismissed it. And that's too bad because, I mean, you got to give it to the short seller. You really saw something there. Props to. If he didn't close it yet. Yeah, I wonder if he closed it.

Yeah, I wonder if he closed it. But no, props to Josephine research or whatever was it. Like I can remember. It starts with a J. I can't remember who it is. But props to that short seller group

because they clearly saw some. something and they gave investors a chance to get out and cut their losses. But unfortunately, a lot of them just dismissed it as another short report and believed everything management had to say despite all the red flags that were there. Yeah. Yeah. I mean, I've been part of quite a few of them. I think Shopify, Shopify, Lightspeed, WSP.

I mean, there's been numerous other ones. There was Dollarama. There was Canadian tire. For the most part, they've turned out to be not. as bad as perceived, but go easy and light speed, definitely two companies that they hit it on head, but I'm not saying, you know,

to believe all of it. I'm just saying like look at it objectively. There was all I'm saying. Do not dismiss them outright. I think that's, that's all my messaging is. Well, and even the,

the light speed one was a lot of it was unverifiable information. Whereas this go easy one, like you said, It was right there. And then, you know, they really didn't, they didn't talk about it. They didn't answer the obvious question. And just the way they acted to doing that, to me, the closed call with cell site analyst. Yeah.

It wasn't, that wasn't good. Yeah. But anyways, I think anything else you want to add for Go Easy or we talked about half an hour on it. No. Maybe we'll try to do one or two earnings before we wrap it up here. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom.

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Yeah, so you want me to go into Franco Nevada? Yeah, let's do a bit more positive here. Yeah. I don't know how the price is doing this morning. I mean, the quarter was, I'm standing. Yeah, Maybe like some of it was priced in a little bit for Franco. Yeah, so it's about flat down like close to close to 1%. So I let's just say. Yeah, a lot of it is kind of flat. Yeah. I mean, when you have obviously the price of gold going up a lot of, you know,

the market is going to be able to price in how these earnings will likely look. So the numbers, I mean, the growth is insane. So revenue increased 86%. Adjusted earnings doubled and adjusted ebid. But it was up 95% gold equivalent. ounces was up 18%. So they pretty much take everything. They produce silver, oil, natural gas, LNG, like gold, and they compile it to a gold equivalent ounce. So that increased 18%. Precious metals were 90% of fourth quarter revenue. So this really shouldn't be all that

surprising because precious metals have pretty much gone straight north and price. So I mean, even if GOs were to stay the same in these two areas, I mean, oil hasn't really moved until now. Gold is on through the roof. So you're going to get a ton of precious metal revenue. On the year, revenue increased 64%. GEO's 15% and earnings by 74%. And the Cobra, Panama situation kind of remains up in the air. So the mine is still in care and control. A few things were restarted. Apparently, they have to do like annual audits, get things up and running to make sure that, you know, if they were to start the mine back up, it would function properly. And they have a bunch of copper that is stockpiled there that it just needs to be approved to be removed.

The company did not include this in their forward guidance, but there's a very, very good chance they get access to this copper. So the market has probably priced that in. I don't really think it's going to be a shock. It just, you know, what it really needs is for the mine to open back up. And in terms of guidance, gold production is quite wide. So it'll either, so this is 2026 guidance. It'll either be flat to upsink.

up double digits. Silver production is expected to be at best case flat and diversified revenue, which would include those things like oil and gas could potentially come in at double digit growth. And the interesting thing here is if oil stays elevated, I think you could see this area grow quite a bit because what they factored in $70. So their guidance factors in $70 WTI. So obviously we're what are we now? Are we in the 100s still? Are we in the 90s? But it's much. Yeah, 80, 90. because you had, I think a lot of G7 countries said they would look to start releasing strategic reserves to try and get the price down. So yeah, control, yeah.

We'll see where that settles. If it does end up, you know, above $70 WTI, they're obviously going to make a bit more money in there. And then the company did make some interesting comments on long term guidance. So they issue five year guidance. And I'll just, just to keep it easy to explain. I'll speak on the high end of guidance for a baseline. So GEOs on the high end could be 18 and a half percent higher than they are today by 2030. However, the company mentions that the restarting of Colbray, if it would, if it did happen, could add material GEOs.

So that could bump that number up to the high end on the high end of their guidance to north of 40%. So that is a substantial bump. I did not think that it factored in that much. I knew when it was shut down, it was like 20% of, EBITA, but I didn't think it would factor in that much to growth. And then on the quarter, sorry, this might have been, yeah, so on the quarter, average gold price per ounce was $4,145, but on the year it was $3,425. So this kind of tells you, like, you know, despite growing by 80% plus, there's still room for upside here in turn, if, if Franco can continue to see high prices of gold.

price of gold now since the start of a year. I'm pretty safe to say that it's been at least 5,000 and ends on average. Yeah. So you're looking at them, you know, 86% growth and revenue. Oh, I guess that's, sorry, that's on the quarter. On the year, 64% earning 74% and that's at 3,400-ish realized gold prices. So if it stays elevated, you could see another big year from Franco. I was going to look at the call this morning, but I,

I didn't, because we recorded early, I didn't get a chance to look. So that's, that's all I got. But it was, I mean, it's an amazing quarter from them. Yeah, and they still have some decent silver exposure too, right? Yeah. So they, it's not like, I mean, gold is the vast majority here. I just, I'm looking at what they, they produce for the year and just roughly here. Yeah, like gold is probably like three quarters, roughly.

Yeah. Like 75% just kind of top of my head, math. and then you have silver probably around like 10 to 15% range. So yeah, I mean, oil is actually a bit lower than silver, but even higher silver prices. I think silver has probably been trading an average of probably 80 around there since the start of the year. I guess I should have checked there. I don't know what their realized price of silver is if they reported that.

I would imagine. I would have been really probably half of that last year. Yeah. Well, maybe even less. Yeah, yeah, I would say. Yeah, yeah, probably. Yeah, say it was probably around $35 if I remember correctly. But yeah, just a good amount of upside.

But again, it's hard to say what to what extent that's priced in. I think that's, it's pretty. Yeah. And just to be clear to we both own Frank Co. Yeah. Yeah. Just want to be clear about that too. Yeah.

You have the commodities that it gets royalties and streaming agreements with. They're kind of, you know, the public, it's public. pricing, right? So you can kind of price the earnings of a company like Franco in a little bit better than you could. I don't know. I can't think of an example of something else. But the prices are kind of obvious and the margins have been so consistent. You know very predictable in terms of what it's going to earn. So the market's going to price it in long before it actually happens. Yeah, exactly. More than private credit or private equity. Yeah, exactly, much more. Not price to market, price to model, very different, which we will be talking about on the

Monday episode. Originally, people may have guessed we had more earnings to talk about. So Monday will be a mix of, I guess it'll be still kind of newsy. You'll talk about the consolation earnings and conference call, right? So I think a lot of people will be interested to hear that because I know it's a widely held name. We also both own that. I'll be talking about Canadian natural resources and some private credit as well. We might have time for something else. We'll have to see. But really, the go-easy, thing really came out of left field. We had no idea. You texted me what like maybe at 945 my time. So 745 roughly. You're like, did you see like? Yeah. He's like go look and go easy because I'm probably, I've probably been even more vocal than you on that. I feel like because. And then I just, I couldn't believe it. Yeah. I couldn't believe. So we that's why it took a bit more time here. Well, I guess the case. So the final thing I'll mention is a lot of, you see a lot of, I mean, I would call them fear. mongering accounts on Twitter that say like this is the you know this is the first domino like go easy you're talking they have a 5.5 billion dollar loan book it's not because a lot of people you know a lot of

these doomsday accounts are saying okay this is it this is it for Canadian banks like it's it's not even not even no yeah I saw one he's like I never heard a go easy before and then he's commenting I'm like okay like okay yeah maybe you should comment that maybe he shouldn't come in comment on it he's like, oh, I've never heard of this. Like, I mean, first of all, like, there's like, in Ontario at least, like, I know of a few go easy financial spots. Like, oh, they're all over here. They're all over.

So, I mean, the fact that, like, are you really in Canada? Like, I just don't know. But anyways, that's besides the point. But just saying you never heard of them, like, you clearly have no idea what's going on with this business. And basically what had been building up for the better part of. like six, seven months, if not longer. So if you had been paying attention, but again, I think it does create some warnings in

terms of, I think it's the way I would see this in more of a macro term is one thing is clear is that there is definitely starting to be stress in this supply market. I think that is safe to say. is it going to start translating to the prime market to larger financial institution? I think that's too early to say already. It could very well be that two, three years down the line we start looking back and say, you know what, go easy and subprime lenders. That was the warning that was starting to kind of roll over for the economy

and the over levered Canadian consumer as well, not only the subprime, but those who had better employment and maybe AI will have something to do with that. I have no idea, but I think it's a bit too early to make that kind of doomsday prediction. It just annoys me a little bit because we know this name pretty well. And clearly, like a lot of these accounts, like they had no idea that even there was a short report on Go Easy. Yeah, it's just you're talking about the ticker that's going to get the most engagement. Exactly. Like the guy was showing the ticker of the stock. And like I could just remember, I won't mention the name because I think sometimes he just should show.

shut up instead of like talking but he had like a live video and he's like I've never heard of this name before go easy and he's like a Canadian like markets commentator I'm like what the hell are you doing like really but anyways I yeah it's if you own Canadian banks and you're reading a lot of the oh this is the first domino like I don't think so this is like the main thing that's blowing up in this business is what the big banks do not lend for that is why people go to this, you know, the subprime market, the auto vehicles, the, the, like, 15% APR, C-Dos or ski-dos that they're, they're financing. Like, no, it's a completely different, different area, different market.

What's the other subprime lender? They'd have more an operation in the UK and the US. Propel, yeah. So I had some people asking me about propel. I don't know the name enough, but I know most of their operations. is not in Canada. So I think you just have to be careful. I mean,

it is a subprime lender. Yeah. I think you know the name better. I don't know what their charge off rate are. It's held up very well price wise. Like I expected when GoEasy was down 50%, I expected to see Propel down 20. But I think it is such a different market.

Like they're mostly U.S. UK. Yeah, it's not not the same. And I don't know what kind of charge off. Maybe they were like more. transparent and realistic with their charge off rates. So maybe they were already 11, 12, 13%, so the market was kind of pricing that in.

Yeah. Yeah. And it's, yeah, I mean, go easy. Yeah. Yeah. And maybe the last thing too is just to remember like, go easy is not getting a bailout. Like these are not well regulated banks. Like these, the banks, you know, I know people don't like to hear that, but banks would

likely get bailed out because, you know, it's a systemic. risk to the financial system. And not only that, they have depositors money. That's how banks end up making money is they have a very different business model. They take in deposits. They pay low to no interest on it. Then they go out and loan that money. And why the banks are able to be very profitable is their cost of funding is very low.

And then so they can keep some of the best borrowers with them. They can lend out money at much lower rates because the borrers are much higher quality than a subprime lender. The subprime lender, like I mentioned earlier, it's a completely different business model. They have to borrow money, and then they lend it out, and they pocket the spread minus the charge-offs. And it's a much different model because they borrow at a higher rate. They lend out at a higher rate, but they lend out at a higher rate because the borrers are not very good quality, and for the most part they're terrible quality.

So they kind of pocket the difference. So I just wanted to mention that because I think it's easy to look at the systemic risk. But again, they're very different business models. And I think that's really important and put the emphasis on. I'll just say maybe it is a precursor of things to happen for the larger financial institution. But I think it's much too early to say that. I would not bet on that specifically myself. Yeah.

Yeah, there's nobody coming to save this company if need be. I mean, back when the regulators. halted dividend growth for the banks. Like Go Easy wasn't even in that area. And they could still bump it. It's, yeah. Yeah. I think that's a good point to wrap it up.

OSC, if you're listening to this, please, please, at least open an investigation into this. Like, there's just so much stuff. I can't imagine there isn't. Oh my God. There's going to be a lot of, there's going to be class actions as well. Yeah. I would guarantee. Yeah.

Yeah. Yeah. But there has to be an investigation by regulator. Like, how can there not be? Like, if there isn't, then we need new regulators. Yeah. It's as simple as that. Like, I'll be very blunt.

Like, if you do not investigate this, what the hell are you there for? Like, really, why are you there? Yeah. So, anyways. And I guess I kind of feel for people that lost money in this just because they were relying on what management was saying. And clearly, that was their line. Yeah.

Yeah. And that's, that was the constant, right? people were saying like oh I believe management like they're saying this they're putting out these results like ABC and C ABC and D and they got shafted by management that essentially what happened yeah there's no other way to put it like I mean I didn't see this coming you didn't see that coming we just were highlighting red flags and we never thought it would happen like this so yeah regulators if you if you took a loss on this please reach out to regulators because on honestly like yeah there is something does not smell right here no and i mean this is just kind of

you know it's unsystematic risk and is why you need to you know not there's nothing you really could have done i mean i guess you could have done something about this but it just would have been based on pure speculation like us kind of predicting something was going on incomplete information in complete information and taking decision based on which is not always easy. So this is exactly why I don't, you know, have 10 or 20% in a single equity because something like this, you, you never know, something like this. And there's, it's really hard to detect because they just slammed you with a report on a Tuesday morning. And it's down 50%. So yeah, it's, yeah, it sucks. It's terrible. No, they shouldn't be doing this. And I guess,

I said this a few times, but I guess maybe the last thing I'll say here is they did that. Yes. yesterday because they thought it would be worse if they waited until the earnings call. Remember that. Yeah. So what if, yeah, earnings could easily be very, very ugly. Yeah. So they thought it would be better to do it now than to wait two weeks and do it on the earning. So keep that in mind. Maybe this was a way, I don't know what their reasoning was to do this, but maybe this was just a way to say, you know what, it might actually be worse on the earnings call, but at least people, will be prepared. I don't know. I don't know what the reasoning is. But they, you know, they're not, there's guys with, you know, that have high, high jobs at other places. The CEO worked,

I think, at Capital One. They, they had to know that this would tank the stock. Like, there's no way they didn't. Oh, for sure. Yeah. Yeah. So anyways. Okay, so I think let's wrap it up at this. Yeah, hopefully you found this useful. Again, really sorry if you lost some money on this. Just take it as a lesson learn. Hopefully it wasn't too big of a position. There's see it as a learning opportunity. That's how you can't change anything in the past. So yeah, hopefully you enjoy the episode. If you want more content from us, we do have our YouTube channel. We are looking to do a bit more of YouTube lives. We're toying with the idea of doing one on Monday mornings when the market's open. So just subscribe so you don't miss anything there. You can go to join TCI if you're looking to get the podcast ad free, our monthly portfolio update.

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We will be back on Monday for another episode. The Canadian Investor Podcast should not be construed as investment or financial advice. The host and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.