Gold Just Snapped Back. i-80 Gold CEO Sees a 20-Year Bull Run

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Another smart move? Getting help from one of State Farm's 19,000 local agents when you choose to bundle home and auto. Bundling. Just another way to save with the personal price plan. Prices are based on rating plans that vary by state. Your jobstions are selected by the customer, availability, amount of discounts and savings and eligibility vary by state. That recap almost killed me, literally, whereas mining which historically was capital intensive smaller margins, now we have huge margins. We're in for 5, 10, 20 year run both in gold and commodities. Hard assets, I think, is the way the future over the next decade. The difference between talking to institutional investors who are really graded on quarterly performance versus retail investors who are thinking longer term is night and day. So I haven't met a single retail investor at this conference who wishes they would have sold or is bearish. I gave a presentation on day two and, you know, look, there's been a structural shift in the gold market with central bank buying. So I've been in the space for over 35 years and for the first 20 central banks were selling. And since the GFC, they've been buying and they've stepped up that purchasing following Russian invasion of Ukraine. And I think that investors here at this conference recognized the structural change. And what a number of them said to me was they've been buying our stock on the dip. So rather than running for the door, they're stepping in judiciously, just shows the intelligence and the work that they've done. But I believe that we're in for, you know, 5, 10, 20 year run both in gold and commodities as we move forward. And you know, as I mentioned to you at dinner last night, our family's all in on gold equities. And so we put our money where our mouth is and we believe in it. You're incredible. Okay. The truth is, Trey, is that, you know, the high tech companies have now gone very capital intensive and they're going to show smaller margins, whereas mining, which historically was capital intensive, smaller margins, now we have huge margins. And as the industry and as we all look at our life of mine cash flows and our opportunities, we're going to have to find ways to return capital to shareholders, whether it's buybacks or increased dividends, which is exactly where Apple and Meta and those companies were before the AI revolution. So I think it's a sector that's going to get a lot more focus in the coming years as we deliver incredible earnings and cash flow numbers. As a footnote to your comment about the duration, I always tell people building it, gold mine is among the most long term duration endeavors on the planet and yet people trade gold stocks like, you know, water. But I want to put out as a footnote, I always tell people as well. No one would ever think of Warren Buffett as a big fan of gold, but his moat analogy, there's no industry where it actually applies more if you have a mine like detour or melodic and it's completed when you complete your four. There's nothing where there's a bigger moat, you know what I mean? It would be impossible to recreate some of these mines in less than 20 or 30 years. Well, you're right, Trey. I mean, I had a slide on that. You made discovery today, Trey, in your little exploration company, you're probably pouring gold if you're lucky in 15 years. Right. So, you know, hard assets, I think, is the way the future over the next decade. And as you said, we've got moats around us, and so these high quality assets with long my lives and good stable jurisdictions are going to be very valuable. Everything we do on this channel has one goal, to make you a sharper, better informed investor. Someone who understands the macro forces shaping your money before the mainstream catches on. But information is only half of it. The other half is acting on it, and that's what wealthy on membership is for. That's how you go from watching these conversations to putting them to work in your own portfolio. Membership opens three doors, access to advisors, helping build real assets into your portfolio, and for accredited investors, access to specialized funds. To learn more, the link to become a member is in the description box below. So I want to talk a bit about your seven factors. I think it's very educational for viewers who are looking at mining companies and considering investment, how they can judge these seven factors that you shared with us. But before we do that, I hate to ask you the typical question. But could you, you know, a paragraph for two, give a price C of your four mines and what IAD actually represents? Yeah. So under prior management, they did a wonderful job acquiring four past producing gold mines in Nevada that were owned by Berrakanewa. And so we have over the past five years invested in exploration programs that have found larger ore bodies and with a benefit of gold price and further engineering will be putting those back in production. Excellent. And now we're going to get into the meat of what I enjoyed taking notes on in your presentation. But you do a great job of sort of listing the seven factors that you think make sense for investors to study in terms of measuring prospects for success in an emerging gold miner. Can you run through them for us? Yeah. The first is location. And so Nevada is the number one jurisdiction to explore for gold, according to the Frazier Institute. And it's also the state where investors pay historically the most value for an asset in production and that jurisdiction. But that being said, I've worked in West Africa. You can build mines and make money. You just don't get as much credit in the capital markets for it. And that's partly because the geology is so beneficial and lost in Nevada. The geology is unique and phenomenal, but it's good everywhere. It's just a little bit easier though the geologists won't like me to say that. Historically, since I've been in mining, Nevada, a gold ounce of Nevada, and it used to be back in my early days, if it was worth $200 an ounce of Nevada, what was now to gold in the ground worth everywhere else? And it was always the most valuable. So location's important and we've got good location yet there's a lot of good locations if companies can operate well there, but frankly Nevada is the best. And then look, you've got to have scale. If you go from 10,000 to 40,000 ounces, that's four times, but still it's not the scale. And so we've got an ability to move from 50 to 600,000 ounces, so we've got scale. And as you mentioned, the geology. The geology in Nevada is disseminated gold. It's just in most of Canada, Western, West Australia, as well as Africa. There are greenstone belts, a little bit more complicated. Converting resources to reserve, generally it's 30 to 50 percent, whereas what we're finding in Nevada is about 100. So what you mean by that, just for viewers, is resources, to reserves on a one-to-one basis, whereas a lot of resources that companies claim they can't get those proved up to reserve on a one-to-one basis, it might be six tenths of a-- That's right. So, you know, even I work in prior companies. And just again to explain the reason is the consistency of the deposits, is that oversimplifying you? You know, that's exactly what it is. So, as opposed to narrow, high-grade veins, with sort of a, you know, halo around it, this is more disseminated, so it's all throughout your body, the system. So, it makes it a bit easier. So, I interrupted. That was geology. Yeah. So, we've talked about location, we've talked about scale, we've talked about geology, you know, we talk about the team, and how important the team is. And we've got a group of people that led by our chief offering officer who I think is the strongest technical person that I've ever worked with, and a team in Reno that I refer to as Nevada Gold Royalty, they've worked at some of the biggest mines in the state, they know everyone. And we've got a trauma support group that has, you know, probably done 12 financings. And we've really strengthened our board. Governance is critical, and we've added board members who have the technical skill set from their district to really support us, whether it's tactically permitting from a finance and accounting perspective or a capital market. So, we've really strengthened that group. Yeah, I mean, I think I talked about a couple others, but those are really the main ones. And so, it is, and I've been doing this for a long time, and you know, I've known each other for a long time. This is a real opportunity, and the whole team is just loving being in Nevada. I'd worked in Nevada in the 90s, some of the people are bored, and that I work with, where people I work with, American Gold Strike. It's just a wonderfully neat opportunity to be able to be at I-80. I'm looking at my list. Fundamentals and expensive. Okay, so we covered most of those. I think that the most impressive thing that you've done since you've been there, it's probably what you've been spending the most time on. Yeah, thank you. That recap almost killed me, literally. So, when I first came in for the interview, I went down to Reno and I sat with a group, and at the time, they've been focused on a baseball strategy in doing a joint veteran. And there was $200 million on the balance sheet that was coming due over the next 12 to 24 months, and we had no realistic way to repay that. And so, I sat with a group, and they're a really good team, and I'm like, "Okay, what would you do if you're in charge?" And we put that development plan together that we announced in the fall, you know, in one afternoon, and we've been executing that since then. You know, I think when we announced that plan, I thought the stock would go up, not down. I think, you know, we underestimated how shareholders were focused on that joint venture, solving the balance sheet issue, as well as what the prospectivity was of the base metal opportunity. Which, well, it's significant, it's much earlier stage. And we needed to put a plan together that would allow us to borrow more money so that we could repay the money we owe, so we could repay all of it in the normal course. And what made the recap so difficult was everyone who had invested in I-80, they see the large resource base. And you understand from 10,000 feet why you've invested in it. But, you know, you've got five goal projects, and then you've got that loan tree process plan. And, you know, we had a mismatch of what was permitted and what had a feasibility study. If the entire portfolio was permitted with feasibility studies, it would have been the easiest recap ever, because it's in Nevada, it's gold. But the problem was, is that mismatch. And, you know, even the Franco team, who I've worked with through every company that I've worked through, so four previous companies, approached them early and, you know, they really struggled. And then, you know, we started to advance the portfolio. And then, you know, we move forward in the fall of 24, with five different term sheets for senior debt, as well as Franco. And we were concerned that ultimately the banks may not be there, because this is not traditional for them. They don't, they don't lend. They never lend, generally speaking, if you don't have permits and fees. So this was really out of the box for them. And so we didn't know what the 11th hour weather credit would say. It's too risky. So we had five term sheets. We took three all the way through to committed term sheets credit approval. And, and selected the banks, in part, because as we look forward, we're going to look for a revolver from the banks. So the banks came in after about four months of work. Franco came in after about four months of work. And then, with, you know, essentially 250 from each of those groups, we were able to execute on the convert. And we used BMO and National Bank. And what was interesting about that was-- Converts are usually the kiss of death. Why did you that not happen to you? Well, you know, it, in order for us to execute on this plan, we needed a billion plus. And that, the market investors, we raised more than we said that we were going to raise in part because we may be able to flip phase two and three, which would require us more capital upfront. But, you know, there was really no other source of capital. But you're convert went especially well. Can you talk about why and how you measure success in the convert? Yeah. So we use BMO out of New York. And they're phenomenal. And they, they are the convert specialists. They're on the lead table and they do it for all sectors. And so from their perspectives, they viewed it as success. And we walk across 22 firms. What does that mean? Well, so before you launch public convert, or maybe an equity offering, you will walk across for 24, 48 hours, some large institutional investors who can be the anchor investors. So that means going over the Chinese wall? That's correct. That's exactly it. That's right. Bring them over the Chinese wall. Okay. And, you know, you, you provide a presentation to them. And, and then ideally, the numbers limited to 30 or 10, you know, it depends on strategically what your advisors think, you know, there have been times where groups of cross 10, sometimes 20, sometimes 30, it depends on what's required. And so 22 groups were all crossed. And then that was the Monday Tuesday. And then Wednesday morning, you have this all party call at 630 and it's a go-no-go. And at 630 on Wednesday, it was great. At seven o'clock, it was not. Oh, you'd already launched. And that three-day period between the 16th and 18th was just crazy for the cold sleep. And so what BMO did was they called every hedge fund and they said, look, if you weren't wallcross, you're not getting anything. Or maybe you get five million. So don't go short the stock. We traded like a hundred billion shares or 150 million shares over that two-day period. So it was a, it was a crazy market. And so ultimately, when we priced on the Thursday morning, we had, we were going out for 250. We had 1.1 billion dollars in the book at tighter margins than we even thought before we launched with a horrible gold tape. And all 22 firms that were wallcrossed participated in the offering. And so BMO said, you know, that was unheard of. They had, that was a record for them. Interesting. And, you know, I'd love to say it's us and then we did a good job on the wallcross and everything. But the truth is, they're just the overall market, including convert and debt providers. They see the structural change in the gold market and they wanted, and there aren't a lot of opportunities because mining companies are making so much cash today. They don't need to do converts, generally speaking. So there are very few opportunities for them. This was one of them. And so the demand was extraordinary. - So you did 250 with Franco for a 3% royalty. You did 250 with the banks. Was the rest the convert or? - Yeah, 288. And then we had raised, if you recall, just before this conference last year, we had raised equity with a half warrant and that brings us in another year. - Also, that's where the other, yeah. - And that was at 80 cents, I think. Painful 80 cents. - 50 cents. - 50. - 50. I looked up the recent offering. So that was a tough pill. - The whole thing, like I would say, two things. You know, when I took the job, I didn't realize how much upside there was in the asset base. So that's been a positive surprise. But I didn't think it'd be easier to recap the company than it turned out to be. And it was much more expensive than I think we thought. But, you know, the rationale was, as I mentioned earlier, we believe that we're kind of an eight to 10 billion dollar nav. That there was enough upside that, yes, it was more expensive. But it was critical to move the portfolio forward to realize that value. And so even with the higher cost of the dilution on the equity offering, as well as to convert, we believe shareholders are gonna make a lot of money on this, as we execute. - So that's a perfect segue. We set the whole thing up on how you basically, I think, took I 80 back from the financial brink. And now we're, I've talked to you in the past about the individual projects. And viewers can go to the website and get a very exhaustive description. - You know, so we've got those five projects that we put PAs out a year ago. So we will have either pre-feases or pre-feases on those five over the course of the next 12 months. And we believe that, so in the PAs, we had cash loads at the end of the press releases. And so we believe that, as we complete the-- - You use $2,200 gold, I think. - $2,175 or something like that. We believe that as we complete the phases or the pre-feases over the course of the next 12 months, we will confirm the ounces that were in those PAs with potentially more upside. So again, as you move from a PAs to a fees, the level of engineering throughout from the drill spacing, the network, the geotech work, costing is at a much higher level that will confirm the value. I think a couple of things that have come out. So we put that development plan together, as you mentioned, that was we talked about in September of 24 before the election. And look, this administration is ProBusiness Promining. And so there may be an ability to move mineral point, which is our most valuable project that we had in phase three in a phase two. And I think that would materially benefit our shareholders in the value of the company. And the flip side is that, as we've been doing the infill drill programs for three underground mines, they're gonna feed that central mill that's currently being refurbished. Two years ago, we thought we needed all three of those in operation to feed that mill. With the drill programs that underway, we now believe that we only need two of them, which would allow us to push the third development project that was currently scheduled for 28 and 29, probably out a decade. Again, so saving on capital and improving our cash flows as we move forward, so it's been very positive. And so over the next, call it 12 months, we'll probably have, well, we will definitely have tech reports for all five projects. - So those are very big signposts, right? In other words, you don't have one pre-phase, you have five coming. So over the next 12 months, that's really the big, those are gonna be the big news items that people are gonna react to one way or the other. - Yeah, that's one. Two, the refurbishment of our loan tree process facility will be wrapping up. - Is that the auto-clave? - That's the auto-clave. So we're one of two companies in Nevada with an auto-permitted auto-clave, Nevada goal mines being the other. We're spending over $400 million on that refurbishment. You know, that will largely be working its way through to commissioning by the time we come to the conference or shortly thereafter next year. Will you be tolling for anyone else at that auto-clave or using the whole thing? - We will be using the whole thing. We will likely have that facility full for, at least the next 20 to 25 years. - Interesting. - Yeah, so a lot going on. - How about on the drilling side? Is that not a big area of focus or you're drilling everywhere as well all the time? - So we've, our drill program this year's about $85 million. And it's primarily to support those-- - How does that compare with past years? - This is a large program that we've ever run. This is a large program I've ever been part of in my life. I think including all my years in parent. And this is for three feasibility studies that we're working on. And so this is a high watermark for us. And so, as I mentioned earlier, it will largely confirm what was in the PAs. And so, you know, this is really an infill drill program and then as we move into 27 and 28, they'll be step out in exploration programs. And, you know, so these were non-corassists by Barrican New Want, particularly the two Barric assets, granite creek. We own that when I was at Barric. We never talked about that project. I don't know if we even knew what the GM's name was. And so, you know, the issue with that is there were some drill programs there that were never followed up 'cause it was never deemed material to move the needle. And the same at Ruby Hill, which is another Barric project. So, you know, as we transition and complete these feasibility studies, there were really good drill results that were never followed up on both those properties. And so, as we move into 27, 28, 29, we'll be following up on those programs. They won't be expensive, but they could be significant. - Okay, so that's quite a bit to look forward to in my opinion. I guess I would ask you one last question. When you look at shareholders, what type of time frame do you think shareholders buying I-80 should have in mind? What's a good legitimate shareholder for you? - Great question. First of all, maybe I would start off with our current shareholder base. We have some institutions led by Sprott and Orion, but we've got, - Sprott or Eric Sprott? - Sprott. - Okay. John Hathaway. - John Hathaway. - And, you know, we've got some institutional support, but what's interesting, Kondar being our large shareholder, we have a number of wealthy individuals who have bought, like, material sums of the company, who are not looking for a double or a triple, they're looking for the 10-bagger. So they are focused on our team executing through the end of the decade. Look, I believe that there will be certain periods of re-rate, I thought we would re-rate after the equity issue. I'm sorry, after the recap, but the markets were kind of crazy. So I think that's still to come. I think as we move through phase one, and well, through the feasibility studies, that's potential re-rate. I think completing phase one with the refurbishment of the autoclave, moving from 50,000 to 200,000 ounces, will be a significant milestone. And then, as we complete the permitting, and ideally beginning construction, a mineral point as early as late 28 early 29, will be a significant milestone for shareholders. So, you know, I can see re-rate opportunities through the end of the decade. Excellent, and your ultimate goal is 600,000 ounces annually in the early 2030s, or-- Correct, and ideally being able to show a path to be able to produce at that level through into the 2050s. That's our goal. And this is all without what I think are pretty bullish expectations for the gold price as well, correct? Well, that's correct, that's based on current gold prices. Excellent, well, this has been a great update, Richard. Thanks for taking the time to join us. IAD is certainly on the top of my list of companies I want to be involved with over the next three to five years. and we look forward to staying in touch and monitoring your progress. Try, thank you very much. Appreciate it as always. Thanks.