We Study Billionaires - The Investor’s Podcast Network - TIP235: Gold Miners and Other Commodity Companies w/ Marin Katusa (Business Podcast)

Starting point is 00:00:00 You're listening to TIP. Hey, everyone, welcome to the show. Today we have our guest that's back by popular demand, Mr. Maran Katusa. Maran is an expert in the commodity sector and has participated it in over a billion dollars worth of deals. He's a regular contributor on the Wall Street Journal, Bloomberg, The New York Times, and CNBC. As an investor in hundreds of commodity businesses through the years, Maron has visited

Starting point is 00:00:24 and toured over 500 different commodity businesses in the sector. And he's the New York Times bestselling. author of the book The Colder War, and he's the founder and CEO of Catusa Research. So without further delay, here's our interview with commodities expert, Marne Katusa. You are listening to The Investors Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. All right, everybody, welcome to The Investors podcast. I'm your host, Preston Pish, and as usual, I'm accompanied by my co-host Stig Broderson.

Starting point is 00:01:10 And like we said in the introduction, we have Mr. Maran Katusa here with us. So, Maran, welcome to the show. My pleasure. All right, Maher, so Stig's got the first question for you, so he's going to take it away. Fantastic. So the main topic of today's discussion is gold, really where you are one of the top authorities. I was studying your research, and I read that you found that the gold sector went from an almost one-to-one debt-to-equity ratio in 2007 to over 17, to over 17, to one just a decade later. Keeping that in mind, which implication does that have for the retail

Starting point is 00:01:44 investor strategy? So this was a massive research project that I sent one of my analysts for three months going back to 1900. We went through every newspaper and public document we could find in every single producing gold company and all of their dividends. We combined this massive Excel sheet and essentially what we came up with is a few things. You know, when you're growing up, you'd always hear the saying from the older people in your family about, wow, that's a gold mine. Gold mines used to pay people an incredible dividend, and it was valuable to have something. What we found was going back from 1900 to about 1960, the average dividends for the gold producers was actually over 10%. Some of these were as high as 30% dividends a year. But things started changing in the late

Starting point is 00:02:30 70s and 80s. And when you look at, for example, the debt that you mentioned, For example, the executive pay from 1900 to about 1970, the executive pay used to be somewhere between three to five times the mine manager. So the president or the CEO or the chairman of the company would get somewhere between three to five times what the actual mine site manager of the gold mine would make. In the early 80s, this started to change. And especially in the last decade where the executives, the CEOs, the presidents, the chairman, They would get anywhere between 30 to 100 times the pay of a mine manager.

Starting point is 00:03:10 And the reality is in 2007 to this decade, when you talked about the debt going from one to one, so on the balance sheet of all the gold producers, it had about 17 billion in equity and about 17 billion in debt. Fast forward a decade because of the GFC, the global financial crisis, the gold producers dipped into that cheap money just as every other company did. And they went from one to one in 2007 to just under 18 to one, actually. So what happened there? Well, the executives got paid on average 50 times the mine manager. The debt, recall, replaced the equity for dividend payments.

Starting point is 00:03:46 So where the investors used to get dividends, now the debt guys get paid. And the problem with debt is you eventually have to pay back debt. And they take first security, meaning that the debt holders who've lent this executives, who, A, pay themselves enormous amounts of money. B, the debt guys are guaranteed their interest rate, which has replaced yield. And then the investors who are in second place, the equity holders, the shareholders, they get left with the shaft. I call it the mine shaft, right?

Starting point is 00:04:14 So they're not left with much. So if you look at, for example, fracking, enormous technological revolution that is really unlocked America. Yet during that same time from 2007 to 2018, that decade there, the oil production growth globally was just over 20%. Yet gold production increased 33% during that same time. That's when people talk about what the debt has happened. And unfortunately, it's not changing. You're seeing a consolidation of companies. And it's become this thing where you're too big to fail. And the bigger you are, the lower your cost of lending is. So that's kind of where the sector is going. So, Maureen,

Starting point is 00:04:51 you have a newsletter that you send out to your subscribers about some of the picks that you're currently interested in. And I'm curious if you could talk about some of the gold miners that you are finding more valuable these days. Sure. You know, I'm not the guy to go to if you're looking for a quick return. I'm not a day trader. I'm not a momentum guy. I'm what you call a contrarian value investors. So I get into things that are not popular. It's probably on page 15 of the newspaper or not even in the newspaper. And as it gets to the front of the newspaper, I start selling. Because something's not popular or people may not understand it today. I go to these site visits. I go underground. I go to the pits. I spend a lot of time. Most importantly, I become one of the largest

Starting point is 00:05:33 investors in these deals. And now that it's popular and everyone's talking about it, I've already sold all my paper. So that's kind of my style to what I'm doing. I think the one that I think people need to pay attention to over the next few years. And again, this is not going to be by summer or American Independence Day, a 10 bagger. But I think over the next two to five years, it's going to be one of the biggest successes and I'm also one of the largest shareholders and you can buy stock today. You have to start with the people. There's a guy named Ross Beattie who's a legend in the business. Very few people have returned their investors bigger gains than Ross has. Because of that relationship with Ross, I started becoming the larger shareholder in a company called Trek where I

Starting point is 00:06:12 brought these assets together. And I kind of talked to Ross and he put some money in initially. And then I kind of had a big vision for Ross. And since then, that company became Equinox. And Ross has invested over $100 million of his own money. They have two producing mines. By next year this time, they'll have a third producing mine. If you think of it this way, the nav of the company's trading at 0.4. To put it in perspective, when I did Fosterville, it was trading at 0.4 nav, but today it's trading at over two times navs. So I think Kirkland Lake's a little bit overvalued. You're paying for its success. Whereas Equinox, it's about a $500 million market cap company. You know, the insiders, I'm like what, fourth largest shareholder, Ross is the

Starting point is 00:06:52 largest, Richard Bork, the second largest. It's about going and buying big assets, multi-generational assets. So one of theirs is like Arizona, that's going to have a 30-year mine life oil to produce 200,000 to 300,000 ounces eventually. Right now it's going to produce about 150 a year. The company will be at this time next year over 300,000 ounces of production a year. And it's about low cost. You look at, I don't need $2,000 gold to make money there. I don't need $1,300 gold. This company will make money at $950 gold. That's the thesis. is to partner up with the best people in the industry, and you go and buy assets in a market where other people are selling because they just have to pay their debt or for whatever reason.

Starting point is 00:07:32 So fortune favors the bold, and I think everyone should take a look at that one for a, if you have a five-year outlook, I think you'll have a very, very happy ending to that one. Now, I would like to go back to your research here because you and your team has studied 35 years of data and 340 individual gold buyouts. This is gold buyouts for at least 50 million. And this goes back to the early 1990s. Could you, for the audience, who might not be familiar with the concept, explain the concept of buyouts for gold stocks and the six important qualities that determines exactly what lots gold miners are looking for in theirquisition process?

Starting point is 00:08:08 There really is three phases to the sector. There's the boom sector where everybody's talking about future potential. Then there's the bust. Reality kicks in. And then there's something called the echo where you really have to develop and do what these management teams said they were going to do. So we're in the echo phase. And if you look at a lot of the MNA, so the mergers and acquisitions or the buyouts in the sector,

Starting point is 00:08:29 it happens during the boom times, but then the smart guys, the guys like Ross Beattie and Lucas Lundee and the guys who've become billionaires and made their investors, you know, worth hundreds and hundreds and millions of dollars, they buy at the end of the bust right at the beginning of the echo. You know, when you look at an exploration success story, a bunch of geologists go, they find something, well, they're geologists, they're not engineers. So the whole concept is you take a high risk exploration. project, if you find something, a big producer will come and buy you out because they are the

Starting point is 00:08:57 developer. Well, a lot of that happened in the boom time, so from 2004 to about 2011, and then write downs happen. So the management teams realized that, uh-oh, you know, the metallurgy didn't work, or, you know, there was peg, potentially acid-generating rock, or the permitting became much more difficult, or the CAPEX became, they thought it would be 700 million and it came in at three or four. There was a project I know I visited about 12 years ago. The CAPEX was thought to be 900 million.

Starting point is 00:09:25 It got bought out by one of the largest copper producers. It turned out to be an $8 billion capx. So you have to make sure that you look at the reality. What do the big producers look for in a buyout? Well, you know, it all depends. There's such a wide perspective. You know, is it open pit? Is it underground?

Starting point is 00:09:42 What type of metallurgy? Jurisdictional risk? Permitting risk. That's a big one. So you'll see a lot of these companies that are in development. So they've already discovered the deposit and they've moved it towards permitting. Once you de-risk the asset, you're most likely to get bought out because now in the current market, a mid-2 euro or a big cap, a big company doesn't want to take that permitting risk and

Starting point is 00:10:05 that timeline risk on their balance sheet. So that's another factor that they look at. And the politics changed, so Argentina for a while was a hot, hot place. It's become a very difficult place moving forward. You look at the success Chile and Peru have had. Alaska has its boom and bust. BC was a great place in Canada, Western Canada, British Columbia was a great place. Then it became a very difficult place.

Starting point is 00:10:26 Then it became a great place. And now it's starting to become a harder place. So there's this cyclical shift. So you have to look at all the different factors in the M&A. So it's a pretty complicated game that you just can't think, well, this is a great project that's going to get bought up. What are the factors and across the metrics? Why will it get bought out? That's the biggest question you have to ask.

Starting point is 00:10:44 And we basically broke down all those six factors for people. So, Maureen, I would like to take just a moment to dig a little bit deeper into the analysis and the metrics that you're using to conduct some of your valuations. If we were looking at a business outside of commodities, we'd look at things like the inventory turnover rate or how much the average consumer spends. But with commodities is just a little bit different. So I'm curious if you could talk to us a little bit about the specifics of the commodity industry. This is a very deep dive question. And so what you never want to do is when you look at the share price of the executive team, and if they're at $1,000 and the stock's at $5, now you're not in the same wavelength.

Starting point is 00:11:22 The skin in the game is different. So that's the first thing. So I will very, very rarely ever buy a stock when I'm paying a huge promo to the management team because it's all about risk to reward ratios. Then you look at the project. And in mining, they say, grade is king. But you know, you have to look at what type of grade is it? Is the metallurgy work?

Starting point is 00:11:42 Is there a lot of pregg robbing or is it refractory? I'd rather own a one gram per ton oxide that's clean met than a twice or even three times the grade, which is refractory because then you have to have five or six hundred million capex for a roaster. So a lot of people get caught up on what type of grade, but grade is king. Metallurgy is absolutely important. And then the size of the deposit. The reality here is that a major, like the big caps, like a new crest, gold core, new mont, barrack. They're not going to buy a one or two million ounce deposit if it's drilled out. They want essentially a 5 million ounce deposit that can produce 4,500,000 ounces or more a year

Starting point is 00:12:22 and have an IRA after your capax of at least 15%. So they want a big mine life. That's called a tier one deposit. A tier two deposit is somewhere around 3 million ounces of gold that can produce somewhere north of 200,000 ounces a year and have an IRA of at least 20% or greater. So you have to look at where does your deposit come in? The problem with the industry is, you know, everyone uses these cash costs. Well, cash costs don't include your debt and GNA and all the different costs.

Starting point is 00:12:51 It's just on-site costs. I use an all-in sustaining cost. So all-in, as a shareholder, what is my cost of that gold production? So that's another factor. And then you have to look at your jurisdictional risk. What's the cost? Are there streams or royalties on it? All these factors come in.

Starting point is 00:13:08 So if you just go through all of these questions, you'll realize that, you know, of the 2000 listed companies, it's Pareto's lot. You really need to only focus on 40 or 50 companies. And then from there, you narrow down to which one you think is the best. And you don't need 25 gold stocks in your portfolio. That is a huge mistake people make. With myself, I have maybe four or five. Don't overexpose yourself too early.

Starting point is 00:13:31 Buy in tranches and follow what I call the matrix of questions to ask. Interesting. As a nice takeaway to that, let's talk about. about the different types of gold stocks, you have stocks that are more sensitive to the price of gold than others. Why is that? And which type of companies is that? Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the

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Starting point is 00:17:39 Sign up for your $1 per month trial today at Shopify.com slash WSB. Go to Shopify.com slash WSB. That's Shopify. com slash WSB. All right. Back to the show. If you look at the leveraged place, so for example, let's take someone like in Canada, very big open pit deposits called the detour mine detour gold owns it you have a lot of big

Starting point is 00:18:09 fund managers battling over but the reality is it's a high cost producer you know at 1300 gold you're essentially and i'm not trying to take a slag at the guys look i'm not short it i'm not long it i don't own it at all i'm using them as an example here yours essentially moving rock and creating jobs there's no profits for the shareholders at 1300 but if gold gets the 1450 1,500 that's actually a massive cash cow because the margins go from nothing to much higher. So that these one mine producers that are high cost as gold goes up, they get the best leverage. So those stocks can go, you know, I remember there's a couple of in the US. They went from $1 to $40 back to $1.00. And remember, leverage works both ways, just like gravity. If the gold price goes down, these stocks get punished

Starting point is 00:18:55 hard. The other way is if you look at these gold banks, so assets that gold deposits that have been drilled out by other companies in the past. For example, the top one right now in the TSX is a company called Gold Mining Inc. Ticker symbol's GOLD. Probably the best ticker for a gold company that you can have. And they just went and bought out these assets. And it's kind of a smart strategy because just in 2011, the companies that owned the different assets that they have had a billion dollar market cap. Now this company today has a hundred million in change with over 10 in cash. And as gold gets to 15, 1600, those ounces in the ground, which have been drilled out already and they're moving them towards permitting and towards a development.

Starting point is 00:19:35 They're just going to spin those out just like Ross Beattie did with lumina copper and eventually it'll get back to that higher price. So that's kind of the two types of plays that you have the top leverage. For a lot of the big producers that have 15 different mines, you know, the price of gold moving from 1,200 to 1,300 is positive, but they're not going to get the massive lift that someone like a detour or gold mining would have. I don't really base my fundamental decisions on that. I use, A, you have to pay attention to the U.S. dollar. Remember, U.S. dollar is the king of currencies currently. And if you look historically the relationship between gold and U.S. dollar, you pay attention to that.

Starting point is 00:20:13 But really what I pay attention to is mine supply. I look at all the major mines. I have a spreadsheet that I publish. And it's of all of the producing mines in the world today, above 50,000 ounces of gold. Who owns it? You know, where's the mine going? Is it depleting? Is it increasing in production?

Starting point is 00:20:29 And there's this myth that every asset is going to shut down shortly. Well, look at Fosterville or look at some of these great mines that actually start producing more. I base my analysis actually more on a supply. The demand kind of meets itself. I don't focus too much on the demand. I focus on the supply in the sector. Really, when you look at the cost of what type of supply comes on, I published a lot on the Australian producers who are much more disciplined than the North American producers.

Starting point is 00:20:57 And they use about, on average, about $1,000 an ounce gold, U.S. dollar per ounce for their reserves. Now, remember, reserves are how many ounces do I have currently economic at that price of $1,000? Where if you look at a lot of the North American guys are using $1,300, $1,300 as their economics for reserve. So there's a lot of conservatives in the Australian guys, and they won't put mines into production if it doesn't meet its economic threshold at $1,000. I use $9.50. I like a margin of safety. Like I said, I'm not a gold bug. I'm a profit bug. I focus on things that are going to make me money, whether gold's at 1150 or 1450. That's my analysis. So, Marron, you talked about gold reserves. And whenever we read about gold reserves, a lot of the times is about how many hundreds of thousands of ounces they might be mining. But how much can we actually trust those numbers? And more importantly, how are those numbers being measured? A lot of the numbers you have to go through. And if you look at the difference between, so in North America, we have something called a 43 101 because of the Breaks disaster, the biggest scam and mining ever.

Starting point is 00:22:06 They brought in these thresholds, so you have to get an independent audit. But even those, like what type of ounces are there? There's so many projects that I know of that I've been to that say, well, we got 8 million ounces. Fair enough, you have these ounces, but it's refractory or there's pregg robbing there. you're not going to produce 8 million ounces at $1,200 gold. You're going to need $2,000 gold. So the question is, those ounces are there. What price do you need to bring them into production economically where the shareholders get rewarded?

Starting point is 00:22:34 That's the key question. But there is no shortage of gold. The question is, at what price does that gold become economic? That's the key question. For oil, we know that at different price points, a barrel of oil might become profitable, even though that the reserve is not as accessible. For instance, $125 plus, you know, Arctic oil might become interesting. And a $200 plus, you know, ultra deep shore oil might become interesting.

Starting point is 00:23:01 How much gold can be mined at which price points? Well, right now we're hovering between, say, let's call it, the $1.50 and $1,350 range. And we can maintain over 100 million ounces of gold production currently. What people have to really break down, there's primary gold production. So it's actually like a company that produces gold, like Equinox. It produces gold. You know, there's a lot of gold that's produced as a byproduct, just like silver. Silver's main production is actually byproduct. But if we focus just on primary production, there's over 100 million ounces currently

Starting point is 00:23:36 that's economic at the current prices. Now, if we drop to say $1,000, you would see that number go down. There's no doubt about it. But you have a big chunk of a secondary production that it's primary metal like copper or whatever the primary production is. Like a copper gold porphyry, you basically get the gold as a secondary production. It doesn't carry the value because about 70% of the value comes from the copper. When people ask that question, what price of gold you have to look at? Well, what about copper?

Starting point is 00:24:07 Because a lot of gold comes as a byproduct with copper. So that said, if we go to the reverse question, if you ask me, what about $1,600 an ounce? It takes these mines many years to get from a production decision to ordering the equipment, like for example, a sag mill. These are massive, massive equipment. For example, up at our copper mine, you have 280 ton trucks. It's bigger than, say, a 3,000 square foot house. That's how big these trucks are.

Starting point is 00:24:34 The tires are 12 feet tall. These are $40,000 tires, and each truck has six of them. So it takes about two, three, four years to put a mine into production. So if gold stays at 1600 for a few years, we could easily get to 120, 125 million ounces a year of production. And as it goes higher, as long as the price stays there, the problem is the price is so volatile. It's hard to plan a mine production and build a mine based off of a floating gold price. Looking at the business cycle and looking at the credit cycle, where do you think that we are right now? And how does that affect gold mining stock specifically?

Starting point is 00:25:12 There's the three phases. There's the boom, the bust, and the echo. I believe right now we're in the middle of the echo phase. I stated this. And again, even at my own conference, people were frustrated because they want me to say, this is the bottom of gold and now's the time to buy. I don't think that way. I think that we're a few years away from a real bull market in commodities. I think we will test lower gold prices. I believe we will test lower copper prices. It's not like I'm bearish, but I take a longer time view. So everything that I play, I don't play. Oh, in four months, I have to be out of this stock. I'm not a momentum trader. I'm not a generalist fund. A lot of these generalist funds will hop in and out. That's another factor of why the mid-tieres and the juniors are trading as such a discount to nav because the big funds, so much much much money is managed by these ETFs and these generalist funds. They don't have the ability to do a deep dive and true value of mining.

Starting point is 00:26:04 So they just want to buy a very liquid stocks, which means it has to be a big cap, that they can get in and out and make it meaningful for them. So I believe we're in the middle of the echo and we have a few years to go. I could see $1,100 gold be tested here. And people get shocked when I say that, but I also believe we'll test to 40 copper. So, Moran, I'm curious, we've been talking a lot about gold, but are there other types of commodities that you like just as much? I think there's great opportunities in gold, but, you know, there's only so much of your portfolio you can expose to one sector.

Starting point is 00:26:36 I always remind people that there's never, ever, ever more than 10% of your portfolio A in any one stock. That's just too risk. And I've done it in the past where I've gone big because, you know, I became a director of the company or the larger shareholder. I don't recommend that. I recommend prudence. And I think a sector that is so beaten down and so cheap, if you're a true contrarian and you want to buy value, I would look at uranium.

Starting point is 00:27:01 Uranium is a great place. But again, I tell people, be very, very careful in your. uranium. I came up with like a phrase that the sector hates, I call it the AK-47s. So many of these projects, they're recycled. You know, it was drilled out in the 70s by SO or some of these oil companies. The energy companies were actually some of the biggest producers and developers of these assets. You know, in Canada, there was a massive deposit called the Kitschelin. Back in 2006, it had almost a billion dollar market cap. And I went up on stage and said, this is a POS. You know, like this will never be in mind. Back in the 80s, at $40 uranium, it could.

Starting point is 00:27:36 couldn't work. Well, if you inflation adjust $40 uranium to today, that's over $100 per pound uranium. And if it couldn't fly back then, there really isn't any crazy innovations that could make it economic. So it's just too low grade. It's just a tough area to produce. So I think you have to look at lower costs. And I use for the upside, I think $45 uranium. If your project doesn't work at $45, I'm not going to be a shareholder. There's just a lot of people expecting uranium to go to $100. I think that would be a great time for. me to sell all my uranium holdings, not buy my uranium holdings. So that's a sector that I think is super cheap. It's interesting how you talk about different sectors and how much to be exposed

Starting point is 00:28:16 to a sector. You also talk about precision size. How do you think about entering and leaving a sector or a stock for that matter? And how much is just good old buy and hold? You have to treat your portfolio like any other relationship. You have to spend time on it, just like going to the gym. and you cannot buy and hold and forget in the resource sector. It's too risky of a sector, for example. If the management team are meeting their milestones and doing well, well, you hold the stock. But let's just say the stock is cheap, but the management team are not hitting their milestones. Well, you either become a proactive, active investor.

Starting point is 00:28:53 Or you don't want that fight. You sell your stock because even if it's cheap, the management are hitting the milestones. If you're not willing to fight for the asset, sell your stock. But when stocks get fair value or above, it's time to move your money somewhere else because you have to grow that money. But also, keep a nice position of cash because luck is being prepared when the opportunity arises. And what really set me apart from all of the other funds in the sector was in 2012 by serendipity, I went cash and I just believe the sector was fairly valued.

Starting point is 00:29:24 Everyone thought the bottom was 2014. Well, it dropped another 30, 40 percent. And that's when I made my big moves on Fosterville, Northern Duffalo. dynasty, Altera in late 2015. So you have to have cash. Like I've never been fully invested in the sector. And when the stock starts running, you do have to sell some. You know, if a stock triple, sell half, get your principal, keep it or ready for a new opportunity and let the rest run and ride. And if it doesn't work out, you can sell. You've still made money, but you have nothing at risk. That's the key. If there's one thing your viewers take for me, it's about risk mitigation

Starting point is 00:29:58 because resources is so different than investing in a technology sector, biomedical sector, or utility sector. There's so many things that can go wrong in the resource sector because you're moving significant rock and you're extracting the ore from that rock. Look what's going on with the tailing ponds. There's so many factors you have to invest in and understand in the sector. So if you can mitigate your risk by pulling out your capital, that is the absolute best strategy to succeed in the resource sector.

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Starting point is 00:33:40 can be found in the income fund fund funders.com slash income. This is a paid advertisement. All right. Back to the show. It's absolutely amazing bringing you here on the show, Maure. I'm sure when everyone saw the title and then we're going to talk about gold, they would be like, oh, Mario must be a gold buck. And you have all of us just been bashing that, which has been really interesting addition here to the discussion. It's about making money in a bad market. And if you can mitigate your risk, I guess I'm the pin that pops a lot of people's investment fantasies. And they don't like that. And you're a crappy recycled project in an AK-47 region that means $90 uranium to even bring into production. A lot of people don't like to hear the realities. And it's crazy. This is investing. You're supposed to be not emotional. You don't fall in love with the stock. You have to almost be robotic or you can't have sympathy for the management team. If they're not doing what they said, they did sell the stock and go to someone who does what they say they're going to do. Very interesting how you keep on talking about the downside. And as you're saying, the upside will take care of the self if that is indeed

Starting point is 00:34:47 true. That's why I love private placements. First of all, the whole private placement model and allowing retail people, as long as you're a credit, the big brokers, the big fund managers, they get access to deals because they go on TV or they have a following or they're at the conference. And I said, wait a second, they have an edge. So of course they're going to sell their stock and they ride their warrant. So what I created was, hey, wait a second, if I'm going to get into a stock, let my people get in at the same price at the same time. We take no fees. There's no way a company can buy their way into my newsletter, the KRO, we call it, the Kutusa resource opportunities, unless I'm buying at the same time with my subscribers and we get a warrant.

Starting point is 00:35:23 And then when I update even one more, I'm saying, look, let's list these warrants. So they trade like a share also. And we've done it many, many times. That's how you can get an advantage of buying your first tranche in a financing. And if the stock, when you talk about its upside takes care of itself, you can sell your share or your warrant, one or the other. And then you can ride the profit with the upside of the warrant. So you nailed it. Cover your basis, mitigate your risk.

Starting point is 00:35:49 The upside will take care of itself. But if you can invest in private placements, that's how you get a double whammy for your dollar. So this is really quite fascinating. Private placements is one of the things that you talk about on your Catusa Research Opportunities Report. Could you tell our audience just a little bit more about this? And just in case you're wondering, we'll put some links in the show notes for folks if they want to dig into some of these reports a little bit more and learn a little bit more about private placements. First of all, if I'm going to publish something, my subscribers get in at the same price at the same time as myself. And I'm usually one of the largest investors in the deal.

Starting point is 00:36:23 So the report that you talked about is exactly that. I created a very conservative, almost like a short report, and how do we make money in the sector? And then here's the company opportunity. Another great opportunity I published for free on my website was when I did the whole Northern Dynasty story. The companies, they're not producing anything. They need money to move towards a permit or to drill their whole. or for whatever even GNA, they need, they have no income because they're not producing anything. So they need to go investors and do a financing.

Starting point is 00:36:52 So a PP, a private placement is when they take outside investors to invest in it. So when I did the Northern Dynasty and all my subscribers who wanted to get in at the same time, we published that. It was a 45 cent unit. A unit comes with a share and a warrant. So it was a 45 cent share and you got a 65 cent warrant that's listed. So it's free trading for five years. an option on a stock that you can exercise for 65 cents.

Starting point is 00:37:18 And by less than 12 months later, the share price was $4.5 and those warrants were trading at $4.5. So let's just say hypothetically, you only bought the stock. You bought the stock at 45 cents. It went to $4.5. You made about 10 times your money. But if you had those warrants, you haven't really paid for those warrants. They're listed in free trading and they traded at $4.

Starting point is 00:37:38 Now you've made 18 times your money. So that's why I love these warrants. If you get it right, you get paid twice and you get it. really, really paid right. That's what a private placement's all about. Very, very interesting concept. I definitely encourage everyone to check out that free sample. Morin, thank you so much for coming here on the show. Where can the audience learn more about you and Catusa Research? Just go to the Katusa Research website for you. We've decided to publish a very conservative report to see my style. You have to spend time on these reports. This isn't a two-page report. I think it's a 20 or 30-page report.

Starting point is 00:38:14 that we're putting up for your crowd. And it's showing what the style is. My style is like, you can't just own a gym membership and think you're going to be successful. You actually have to go to the gym and do the work. You have to spend time reading my material and go through it and see if it's right for you. It's not right for everyone.

Starting point is 00:38:29 If you want a quick hit or you're a day trader, again, I'm not your style. If you want a deep, deep research and dive and understanding the technical terms, I try to make it entertaining. I try to make it fun. So if you go to the website, there's a lot, there's five years of publishing

Starting point is 00:38:43 for free. I publish every week for free. Just go to Kutusa Research forward slash tip and you can get the report there and plus my second book for free. That's absolutely amazing. And again, I'll 100% encourage everyone to check that out. So Kutuzerresearch.com for slash TIP. And we're also going to link to your free samples and the other resources you mentioned here. Martin, thank you so much for coming back on the investors podcast. We hope we can convince you to come on a show one another time. It's always a pleasure. Take care of yourself and have fun. That was all that Preston and I have for this week's episode of The Investors Podcast. You see each other again next week. Thanks for listening to TIP. To access the show notes, courses or forums, go to theinvestorspodcast.com.

Starting point is 00:39:30 To get your questions played on the show, go to Asktheinvestors.com and win a free subscription to any of our courses on TIP Academy. This show is for entertainment purposes only. Before making seeking investment decisions, consult a professional. This show is copyrighted by the TIP network. Written permission must be granted before syndication or rebroadcasting.

We Study Billionaires - The Investor’s Podcast Network - TIP235: Gold Miners and Other Commodity Companies w/ Marin Katusa (Business Podcast)

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