Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you, on Main Street.

Frank Curzio: What’s going out there? It’s December 18th. I’m Frank Curzio, host of the Wall Street Unplugged podcasts. Where I break down the headlines and tell you what’s really moving these markets. It was interesting watching the financial media shows this week, actually, maybe not this week. We can go back for the last three, four weeks and I hear comments when I talk about this and so many people’s email me, “Oh, these shows are complete BS.” And of course everyone goes on there with an agenda like they are supposed to. They just bringing more attention to the stocks in their portfolio or maybe brag about the calls that they made. I mean it’s normal, I’m not picking, I’m making fun or anything, but these shows are actually very, very important to me. And there’s a reason why I watch them every day or at least have the TV on tuned at my office to CNBC most of the time where I’m just looking at the headlines, seeing what’s going on, if something I like or someone I see that I like, I’ll put the volume up.

Frank Curzio: But it’s pretty much on all day when I’m at my office and there is a reason why I watch it every day. It’s because these shows, are one of the best ways to gauge investor sentiment. Or you can ask yourself, are the analysts negative that are going on there? The people there, are they negative? Are most of the headlines on the bottom of the page while these guys are talking a lot throughout the day, are they negative? By negative maybe the trade deal with China is not going well, impeachment which obviously can have a major effect on the stock market if Trump was getting impeached, which 100% he’s not going to because it’ll never go through the Senate. Talk about earnings, right? It is a year over year decline in earnings that really no one’s talking about, and yes, we know Carney’s grew tremendously from the tax reforms 2018, but year over year is supposed to pick up a lot quicker next year. But year over year they’re negative, you talk about geopolitical risks in North Korea.

Frank Curzio: So you see these headlines on TV and not only could you gauge the overall sentiment of the market by paying close attention to just a tone, right? If it’s negative if it’s positive, but also for certain sectors. And you’ll look at oil right now, everyone’s bearish on oil and it makes sense. Companies need to produce to pay their enormous debt commitments, which they pushed out three years ago to kinda now. So they produced one commodity, the prices have been kinda coming lower on oil in week, but these guys have to produce in order to make money to pay down their debt. So you’re looking at that, if you think about it for a minute, we have lower oil prices yet supplies is going to continue to rise which basically means all prices are probably going lower. So that’s why you see most people negative on the oil sector or almost everyone, right? These other the past few months.

Frank Curzio: Now for me, I use this sentiment as a gauge and this is one of the best indicators you could use. One of the best indicators to use. And I use it to actually be a contrarian investor. For example, everyone hates oil, and rightly so just based on what I told you. But these conditions have pretty much been the same for at least the past 12 months, almost the past 18 months and most oil stocks, even the high quality ones have collapsed. The worst performing sector’s been terrible outside of materials. A lot of that can be factored in and maybe that explains why energy is one of the top sectors seeing inflows right now from institutions. This is according to Merrill’s hedge fund monitor, which they track trillions of dollars into institutional money and the so called smart money, which is hedge funds money management every single week. See a lot of money push into that even though everybody they see on TV is negative.

Frank Curzio: Now I’m getting to a bigger point here because I’m going to surprise the hell out of you right now. As you know, if you’re listening to this show or follow my newsletters, I’ve been telling you to buy just about every single dip over the past five years. I got cautious in 2017, I saw slower earnings growth, but then Trump has new tax reforms and we saw our earnings in 2018 skyrocket. But overall, I’ve been extremely bullish and not just because earnings are very solid, you have interest rates very low and looking back historically, the stock market was never really super expensive over the past five years. Just trading in around 17 times forward earnings and below that level probably since 2011-12 and the five year average is around 15.5 so you could say, “Well a little expensive.” But when you go on historically we talk about interest rates being much, much higher.

Frank Curzio: I mean you could say stocks could be trading at 18, 19 times earnings and still be relatively cheap because you can’t really compare it to a time period, especially in the ’80s when interest rates, mortgages, whatever, 20% it was crazy. Now the reason why I was optimistic, there were still a lot of bears out there. Dana Marks had to crush 30, 40, 50%. I enjoy making fun of these guys because they’ve been saying that since the day they were born for the last 50 years, that’s okay because they’re permabears and you have perma-bulls, whatever that’s cool. You have your own audience, that’s great. But even if you look at top investment banks, I mean Goldman, J.P. Morgan, very cautious on owning stocks through 2019. Now, I always thought that was a good thing because of my 25 year plus history of allies in the markets, also as a portfolio manager as well.

Frank Curzio: I never ever saw a market crash that everyone was predicting. Crashes don’t happen that way, they catch you by surprise. Mostly when everyone’s leaning to one side, which is the bullish direction, that’s when the biggest crash has happened. That’s when everyone’s like, “What the hell happened? What’s going on?” Look at the credit crisis, look at 87, you look at the recession 2001 too. Even last year around this time, I mean that caught everybody by surprise when the market fell, what? Over 20% in the last I think September through the end of December and really collapsed in December.

Frank Curzio: Caught a lot of people by surprise like, “What the hell is going on?” And of course you rocketed high and we’re having a great year this year. But when I look at the markets and please listen up to this, because you guys know I’m not a perma-bull or a permabear. I can’t find a bear anywhere, anywhere. In fact, even the biggest bears are saying that stocks aren’t likely to go higher in 2020. Why? Well it’s an election year, Trump’s folks on S&P 500 we have low interest rates, the Fed’s going up saying, “We’re not touching anything there’s no inflation, so they can keep rates low forever.” Yeah, pedal to the metal. And you know what? That scares me.

Frank Curzio: But watching a financial media shows today, I mean you have to find it funny that the allies who’d telling me to get the hell out of the market over the past three years, are the same ones after the market is up tremendously over that timeframe. The same ones that are extremely bullish now. I’m not going to go into individual names, but I will tell you that Goldman and J.P. Morgan are very bullish on 2020 all of a sudden, yet they were telling you, “Get in 2019, we’re cautious.” Maybe it’s how it look, look at the headlines, Google it, and when I look at TV, you can’t find a single animal anywhere, anywhere. If you look at Fast Money, you look at Cramer’s show, you look at everything, all this, nobody bearish right now. I mean it’s not even like, “Well there’s a couple of guys.” It’s zero.

Frank Curzio: I mean these guys aren’t even saying, “Hey, let’s take profits.” And some of the sectors how you bid money in or be cautious, just buy, buy, buy, just keep buying, buying, buying. And for me, when I see these types of conditions, this type of sediment, where everyone is leaning to one side, you know where I’m going here, usually means the opposite is going to happen. I’m not telling you to sell all your stocks right now, I’m not predicting a 40, 50% crash or a momentum train that’s going downhill right now, you want to jump in front of it, so pricey stuff continue moving higher, at least through January.

Frank Curzio: Plus if you’re looking at the overall market, a lot of the gains and the big indexes are mostly due to a select few stocks, a bigger look at Apple, biggest stock in the world. I mean look at the chart of Apple, how high it’s gone. It’s incredible. Facebook, Google, the biggest technology companies roads, your biggest bank, J.P. Morgan, look at the charts, some of these things just keep going higher and higher and it’s a higher concentration, a lot of these indexes. So not all sectors are at 52 week highs. The energy, materials are not, a lot of small caps training 30, 40% off their highs. But I have to tell you, I’m cautious right now. Came from someone who’s been telling you to buy the dips and telling you, “Stocks are going to continue to hit all time highs.” And they have, but they’re going higher a lot faster, especially over the past three months.

Frank Curzio: And by me saying this, I’m not sure if that makes me more credible than the next analyst, I’ll let you decide that. But to be honest, I give a shit about you, you know that. I don’t want to see you lose the gains you made in the market over the past few years when this market collapses because nobody’s scared, nobody’s worried. “It’s an election year, they have to go up.” But look how much they went up this year, they went a much, nobody had them good, no one had stocks going up that much this year, nobody. They had them rebounding. It’s pretty crazy when you look at these gains this year. So for me, I suggest taking some profits it’s some of your biggest winners. That’s about selling your stock out completely, I don’t have a crystal ball, I could be wrong, believe it or not, I can be wrong. You guys know because I cover my losers I am wrong sometimes.

Frank Curzio: But take profits maybe are some of the tech companies that you’re up over 50% on this year. Why would you do that? Because it’s a win win for you. I mean think about it, if the stock goes higher, you’ll still owe in, I know it’s not a full position and your greed kicks in but you making money. If stock goes lower, you’re not going to be pissed off since you sold half and you can even use that money to buy back into the position if it goes lower. But I will say don’t take profits right now before year end, right? I mean most sectors are up, you’re probably doing well, that means you could end up with huge capital gains that you’d be taxed on this year. Because you should be sitting on a lot of winners, but just a strategy to think about in early January.

Frank Curzio: I just think it’s a good idea to take some profits but more important, in 2018, I launched a new newsletter called Moneyflow Trader. And it was to use option strategies to bet against stocks. For me, I thought the timer would be perfect. I mean, some of the firms in market that we’re up tremendously, this is right at the tax reforms a lot of this is baked in and so many stocks have had incredible run, but it’s been a screaming boom market since then. Again next year I’m not predicting a crash or a 30% decline, it is an election year, I’ve been telling you that and we have a president that knows the biggest indicator for him to get elected is the S&P 500, he understands that.

Frank Curzio: Well, we could see a rotation out of tech maybe into materials energy value, and I’m not saying we could, we actually seeing that now. But I think next year you’re going to see a lot of names get hit because when I’m doing my research right now, it’s not as easy to find new ideas. I mean, a lot of these things are trading at crazy valuations only because the overall market to use is to move higher, especially in the tech sector.

Frank Curzio: If you’re subscribing Moneyflow Trader, I have a feel that’s going to be one of our best performing newsletters in 2020 simply because there are tons of names to choose from right now that have a huge downside. And think about it, if you looked at the S&P 500, right? Those 500 stocks. And think about if you went through every single one them, which would require a lot of work, how many do you think you’d be buying right now? Right now today after this move higher? I think you’d be more inclined to sell much more than 50% maybe 60% of that index. Because again, it’s concentrated with a lot of the biggest names that’ve had the biggest gains, which is pushing the sector up, but if you look, it’s not the whole list of S&P 500 that’s going higher or it’s gone sharply higher, technology has been a big deal. If you’re not a Moneyflow Trader subscriber, that’s cool. I’m not hear to promote the newsletter I’m not going to offer you a special deal. I’m saying that if you can and it shouldn’t be difficult, find a way to hedge your portfolio a little bit, be smart.

Frank Curzio: That could be using option strategies, which is Moneyflow Trader is all about, or even using inverse ETFs. You can go to any single sector, look it up on Google. I see just hedging yourself a little bit here. Even if that means selling 130 of positions that you’re up a lot and over the past 12 to 18 months. And if you’re wrong or if I’m wrong I should say, right? On this forecast, you’re still long right? Stop marks are going to go higher, you’re still long so you still have the position, but if I’m right, you’re going to have a lot of dry powder on the sidelines to put into a lot of ideas that maybe down 15 to 30% over the next few months. I know what you thinking, 15 to 30… I’m not calling for the market to fall 15 to 30%, it’s a big number, I’m saying individual ideas.

Frank Curzio: But when you look at the statistics those aren’t big numbers, 10, 15, 30% decline. And just look at what happens when a momentum named Mrs. Earnings or Guys Lower it gets smoked. These stocks fall 20% plus in a blink of an eye. You want proof Shake Shack, Dollar Tree, Pinterest, Grubhub, Etsy, Twilio, Wayfair, Kohls, Movado, Kirkland.

Frank Curzio: These are names that you heard of, these aren’t names I’d… What do they do? Where are they from? No, these are quality names, brands that you see all the time that you’re familiar with. Yet every one of those names I just mentioned fell between 15 and 30% right after the report with terrible earnings. I mean, you go to the Lyfts, the Ubers, Beyond Meats, SmileDirects some of the biggest IPOs of 2019, they’re down huge. Nobody talks about them. Everybody thinks all stocks are high, it’s not. It’s not all stocks, but the valuations on some of these names are very, very scary where they cannot afford to make a mistake. If they meet their earnings expectations next quarter. It could be the Q4 quarter, but they lower guidance. These things are going to get nailed. I mean, they trigger premier evaluation someday, special technology, 25, 30 times earnings. Even Apple’s getting up there with 20 times phone earnings. I suggest you’d be prepared, especially for these types of drops, individual stocks.

Frank Curzio: Since I’m looking at a market where nobody, nobody is bearish, and when that happens, I know it’s hard, I like being on the by myself, it usually means you’re right, more times than you’re wrong. But yet that does not let you. You may be able to say, “Well, this guy’s a bear, this guy’s bull.” But they’re not out there, they’re not saying anything. Everybody is completely bullish just saying, “It’s election year. Trump’s going to do everything he can to get the market higher, it’s going to go higher.” He can’t do everything he can if everyone’s really taking profits, but at least you definitely going to see rotations and you start to see it now from technology into value beaten up names, and to energy and also material stocks. That’s where the smart money is going right now.

Frank Curzio: It’s easy to track to 13 F’s, if you have the right resources, which we do. With the Merrill Lynch and access sell side reports and things like that. But just be careful. Again, I don’t have a crystal ball I could be wrong, but I haven’t seen sentiment and people this optimistic on the market going into next year. I mean, I can’t even remember. I didn’t want to put a timeframe on it. I don’t know anyone that’s like, “Hey, you know what? I’m just taking profits or going into bonds.” No, no, nobody. So just be careful. Let’s move on.

Frank Curzio: Let’s have a greater duty today with Marin Katusa. Marin’s a founder and CEO of Katusa Research, one of the best deal makers in the entire resource industry, which you’re going to find out about right now. Fantastic, put together an amazing deal that a lot of you are invested in, it’s doing very, very well right now. Marin is also a good friend, and today he’s going to break down the junior resource sector, companies that he’s looking on, he’s very specific, he’s not investing in a lot of names and talk about how to position yourself going into 2020.

Frank Curzio: And then Marin’s going to break down the uranium industry, a new stock that just came public, Uranium Royalty, which he’s a big investor in, I’m an investor in it as well. Which he’s going to talk about because it just came public. Very exciting. Just gonna let you know now the time to get into this sector and why you better be careful on what stocks you own in uranium sector. Seriously. If you own stocks, any stock any stock in uranium sector this is a must listen to interview. And then finally, he’s going to share three ideas, three ideas and not just stocks that are going to go high in 2020, junior resource stocks. Actually it’s two junior resource stocks and one larger stock, but believes that these three companies are actually going to get taken over and probably in the first half of the year. So enough of the intro, let’s get to my interview, with Marin Katusa right now. Marin Katusa thanks so much for coming back on Wall Street Unplugged.

Marin Katusa: Oh, it’s a pleasure. I was wondering who dropped out for me for you to call up the B team.

Frank Curzio: I know there was about seven people that dropped out. So then, you know it’s been a while since we talked and I know you’ve been crazy busy, I’ve been crazy busy with a lot of stuff, even on the personal side as well in business, so I’m glad to have you back on, man, because no one gives a better perspective of the resource market than you. And I want to talk about what you’re seeing in the industry. So we had pretty good year where if you look at gold stocks, right? A lot of the majors royalty companies did well as gold pushed higher, but we didn’t really see that follow through with juniors. And do you think that’s going to change in 2020 and becoming more selective? Is it just like, “Hey, the whole sector is going to rocket higher.” What are your thoughts going in 2020 for the juniors, which is the market that you cover the most?

Marin Katusa: It goes back to what I said, it’s all about selecting the right team. We published our numbers, our gold stocks are up over 45% year to date, so you don’t need 30 stocks. The days of following some old guru that has three or four analysts writing for him that can’t own any of these stock and they have 25 gold stocks, you don’t need that. Just pick five of the best ones and you don’t need to have your whole portfolio exposed to gold. So that’s what’s going on now. So at this time last year, you had the big Randgold and Barrick, and then you had Newmont Goldcorp. So everybody thought, “Okay, that’s it. This is all we’re going to know.” Look what’s happened with, for example, Equinox. You saw the beginning of the company has started here in my office.

Marin Katusa: Now there are top 10 gold producer within three years and they’re rocking. It’s been a great year for them all in sustaining costs under 1,000 bucks. But if you look at the pattern, Ross Beaty’s writing another $40 million check to maintain his 9.9% of the companies, as chairman. That’s the type of teams you want to follow. Another stock I talked about on your podcast that’s over a double this year for us is Liberty Gold. Now that’s a junior, it doesn’t produce anything, but you look at the management team, you got Cal Everett, Moira Smith, brilliant geologist. The Black Pine deposit is going to be a monster, and I introduced my old buddy Ron Perrott who discovered Long Canyon and took him down to the site, organized it for him to follow up my own research after our two site visits.

Marin Katusa: And he thinks it’s a monster, so he’s joined the team. And these are guys that don’t do this for the money, they do it because it’s the passion. Ron was involved in Twin Creeks and Long Canyon, both companies were sold for $2 billion or more. So you got to be super selective Frank, and moving forward, one thing I’ve been writing about for a while, it’s about the cost of capital for that acquisition. So what do I mean by that?

Marin Katusa: Let’s use Equinox as a real life example because all my subscribers and a lot of your subscribers have watched the inception of that. So in three years, the company went from an idea to now it’s going to produce over 700,000 ounces of gold, and by 2021 it will be doing a little over a million ounces of gold. That’s some serious production now, okay? When we first started our cost of capital, when you did equity and the debt, that was around the 12%. Now it’s about 4% with the banks. So bigger is better from a bank’s perspective. It’s almost like the mortgage nonsense. But that’s the reality from the bankers and it’s all about cost of capital. So if you’re a one little mine company and you’re saying, “I’m going to go develop this.” Okay well be careful when these analysts or whatever analysts you’re following because they use an NPV of five. A 5% discount net present value of a 5% discount.

Marin Katusa: But the cost of capital we just said for a little junior with one asset it’s going to be somewhere between 12 to 15%. So right off the bat, your analysis is wrong if you’re using a 5% discount because you need to be doing the discount of your cost of capital and then add on the inflation rate. Do you see what I’m getting at? So the whole industry upside down has to restructure itself on how do we present the numbers and values. So where I believe I’m positioning myself, I remember Frank, I’m a big shareholder in these companies and my subscribers is what is the next cycle? I think the mid tiers and the big caps are actually getting away from the risky jurisdictions. Again, it’s about cost of capital.

Marin Katusa: People went to the DRC, people went to areas in South America and areas in Africa, I nicknamed certain risky jurisdictions as the AK 47 areas because it was so cheap to get in there and it was cheaper than the North America. But now there’s incredible assets in North America that are trading a lower discount than these risky places in let’s say somewhere in Africa.

Marin Katusa: I’m not trying to pick on Africa, but somewhere in Africa. And you sit there and go, “Wait a second, I like Nevada or Idaho.” And I can take my kids there and have my wife come over for the weekend versus popping on body armor. I’ve been there and done that, and it sounds cool, and it’s a great story for newsletter writers to hop around the world and sound like an Indiana Jones, but that’s not how you get wealthy. It’s a lot easier to go down to Nevada, which is an incredible jurisdiction, or Idaho. That’s where I see the bigger companies trying to look at the Australian invasion. The Australians are using their lower cost of capital to take over the North American companies that are coming here. So that’s the trend, that’s where I see it happening and you want to position yourself in assets that are advanced, management have skill in the game and I believe that there’s takeout opportunity in the market right now.

Frank Curzio: I want to go back to the Equinox deal because I was one of the ones that really saw it firsthand of what you were doing behind the scenes. And if I had to guess, because I’ve seen you put together lots of deals, the quality of people that are involved in this deal, the amount of work that you put in, I mean if I had to guess, I’d say it may be if not the top, at least one of the top deals that you have to put together. Explain that process because even when you put it together, I know there was some doubt in shareholders because the market wasn’t that good and now just to see it come to fruition. And it didn’t that long. Three years is not a long time, and yet in this market everybody wants 300% gains tomorrow. But talk about how everything came together because you’re talking to a lot of big players, which means a lot of big egos, but you were able to get all these people together. I remember going to a dinner with you, talk about that process because that was pretty amazing, man.

Marin Katusa: Well I guess to deal with big egos you have to have a bigger ego. Let’s start with that. But you were actually on the plane when the inception started. It actually started with David Lowell, he’s an absolute legend. Remember when we were walking through, and you and I spent three days with him just going through geology, what a treat that was.

Frank Curzio: Yeah. It was amazing.

Marin Katusa: So anyways long story short, on the flight back from Alaska by total fluke, David was sitting beside me, and he just looked at me and you know how he has that… He’s an older fellow and he was just staring at me and smiled and he goes, “You know Marin, let’s do a deal together. I want to be a partner with you on something.” And I said, “David.” And remember we’re coming back from the Northern Dynasty site visit , which he wrote a big check and all that. So he goes, “I just like the way you roll.” And I said, “David, I’m trying to slow down.” And remember that was the day before my house flooded, I was just dealing with so much stuff at that time. And he goes, “Marin you remind me of my partner 40 years ago. When you walked into the room, you looked like him, you act like him. I had to do a double take. I thought it was a reincarnation.”

Marin Katusa: And I go, “Oh, whatever happened to him?” He goes, “Oh, he died of a heart attack.” And I went, “No!” So that touched me pretty quickly. And I said, “Look David, I don’t want to do another deal, but do you have any orphans, things that haven’t worked out because I never walk away from a deal.” And he goes, “Yeah, I’ve got this thing called JDL.” And if you recall is named after him, James David Lowell.

Marin Katusa: And I said, “Well, I got the thing called Gold Mountain.” And he goes, “Let’s do it.” And I said, “You’re going to run it?” He goes, “No, I was hoping you were going to run it.” I go, “No. I can’t do that.” So I went through my mental rolodex and I thought, well there’s another guy that I believe in and his name is Greg Smith and that was Anthem United. He was running, in this toll milling company.

Marin Katusa: I tried to negotiate with him four years earlier, couldn’t come to terms. And that’s how Marcel and Dave Dewitt and Nolan got involved. So Nolan Watson from Sandstorm. So essentially we landed that night, I called them all up, I said, “Let’s meet tomorrow.” And that’s how JDL was structured. So all excellent guys, you got the Sandstorm guys, you got David Lowell and his team and then me and Jim O’Rourke, who you’ve met many times. And that was from… Remember when we started Copper Mountain, we were pretty confident we were going to sell Copper Mountain. So we said, “Hey, we got this great team, let’s do…” And I wanted to get out of copper, I wanted to do gold. So we created Gold Mountain, right? You have the brand and Jim liked the mountain theme and the market turned around and so we created that.

Marin Katusa: So we looked for a bunch of assets and we had about 70 million in cash and a couple of assets, but nothing world-class yet. And that’s when the guys who were running Luna, Christian Milau, and David at the time they came to me and said, “Hey, we’d like you to potentially finance this.” And I said, “I don’t like your structure because there’s a fund there.”

Marin Katusa: And it was called Pack Rowe out of Australia. And Pack Rowe had the company over a barrel. So nobody could really do anything with the asset because this one fund dictated the terms. So I met with the fund manager, him and I crossed swords and I think I got the better of it, I won that battle. And then from JDL we took over Luna Gold and that was when Trek was created. Now I hated the name Trek and during that time it was very difficult because we had one good asset that we’re trying to put into production. So the cost of capital, like I said, was around 12, 13% and I knew to be competitive and to execute the business plan, we had to get bigger assets and there was only so much more I could finance the company and be the lead order. So that’s when I pitched Ross Beaty on his assets.

Marin Katusa: So this is the thing about winners, they never ever, ever give up. He had something called Anfield that didn’t quite go well, but he had around $55 million in cash. At the same time, a guy named Richard Wort, who we did an incredible deal in Columbia with, it was a massive win and Richard and Ross were very close and that’s how the three-way happened. And because I didn’t like the name Trek, I said, “Ross, I’m going to come up with the name.” And that night I messaged him a bunch of names. I go, “I think the best name for this would be Equinox, because it was the first company you sold and I think this will be your last deal.”

Marin Katusa: He loved it, and that’s how Equinox was created. And then we had the castle assets in California, we had the Luna and then Ross was the spearhead to go get the Mesquite Mine, which is a lower grade, but heap leach low cost asset and also in the US, so then that was how we had the two operating mines. And then Ross went and spearheaded just recently and took over the Old GoldCorp pass to Mexico Hill pillar through Leagold, and now we’re at 700,000 ounces of gold. And that sounds easy, but it was not. And no deal in the last 20 years has gone from zero to 700,000 ounces in three years. We’re the first to do it.

Frank Curzio: Yeah. And that didn’t sound easy. That’s why I want you to explain of how many moving parts, not just the projects, the people involved in these projects, getting the right people together and it just goes to show you how much the boots in the ground is important. Right?

Marin Katusa: Here’s best parts. Here’s the best part, Frank, your subscribers and my subscribers and myself and you, we got in at the same price on the same terms as management. We set a record for the exchange for most subscribers in, because usually it’s, four or five big fund managers and some of the big boys, they get all the seats rounds and then they move it forward. There is no cheap paper in this. Ross Beaty’s cost of capital is the same as our subscribers. So this deal doesn’t need $5,000 gold, it works at today’s gold prices. And that’s the difference of what you and I are doing by writing checks alongside subscribers. Because trust me, there was many, many nights where I’m sitting there going, “How do I make this work?” And you’re right, there are many nights when the shorters and the shortened distort and there’s just groups that don’t want to see you succeed. And the gold market was shaky, the resource market was shaky, and you go after a deal and you don’t get it, and people see, ‘”Okay, what are they going to do?” Nothing’s easy, but you just don’t give up.

Frank Curzio: Nah, it’s great stuff. And speaking of writing checks, your check was much larger than me in this particular company, but there was a lot of buzz around a company called Uranium Royalty, right? Which, Amir Adnani, it was one of the people put together who’s a good friend of ours, a great friend of yours and one of your best friends. And it just made sense over the past couple of years. But yeah uranium, I think people were surprised by especially the last two years, we haven’t really seen any gains, I know you’ve been calling to be a lot weaker than expected. But now this company just IPO’d.

Frank Curzio: Talk a little bit about that company because yes, we are investors in that company, but it just IPO’d now, and I want to hear your thoughts on it because they were able to raise a lot of money in a terrible market, but even the structure in a way compared to every other Uranium company out there which they are not a lot, right? That you can really put a lot of money into is a lot of juniors out there, talk about that deal, because that just went public. That deal I’ve followed along the whole entire way, at least what is it? Those two, three years? Talk about that entire process.

Marin Katusa: So like Amir’s the spokesman for the Uranium sector in the West. So right off the bat, you start with the best people. Him, Scott, their whole team, they’re just winners, they know the industry, they’ve been in it their whole lives, not a better team out there. So I started with that, and I knew I took a very different view than even Amir on the spot price during the time. And you know Scott well, and here’s the guy that was the president of chemical USA, he was the advisor to the world’s largest producer in the world, Kazatamprom, and he’s like, “Marin, it’s going to go up him.”

Marin Katusa: I’m like, “I just don’t see it. And here’s my reason, the whole cut to kill, so let’s move forward.” People forget that uranium is a massive by-product and a lot of mines. There’s copper mines that produce uranium, there’s gold mines that produce uranium. And people are like, “Really?” I’m like, “Oh yeah” uranium is not rare, but the problem with a lot of this stuff is that you’re dealing with radioactive material. So how you deal with it? And there’s costs to that and that’s the byproduct.

Marin Katusa: But then you look at the primary production, it’s again about cost of capital. So if you look at the royalty companies, Franco trades up to 2.4 times NAV, net asset value. Now mining company that’s going to try to go build something is trading at let’s say 0.4 NAV. So you’re talking about a six times different in cost of capital. Who’s going to win that battle? So it’s a lot cheaper for the mining company to go and deal with the royalty company and stream or do a royalty on a portion of their production to advance the asset.

Marin Katusa: Now, interestingly enough, just in the last 90 days, there’s been a bunch of deals that we’re looking at. And you see, that the uranium developers and producers are off 20% because the price isn’t there, now you’re in tax law season. So for these guys to go and issue paper to raise money the traditional way through financing and private placement. It’s not 20% more expensive for them because of the discount to their NAV. So does it make sense for them to do that? So if you take, we’re the only pure royalty streaming company in the whole royalty sphere and there’s some senior executive, the presidents and chairman of other royalty companies that participated in this financing because they’re like, “We can’t do this because it’s not like gold.” You got to have true expertise on radioactive material on how to do that. Interestingly enough, the company went and said to the exchange, “We’re going to raise 20 million, over $50 million.”

Marin Katusa: I think it was 55 or $58 million in demand came in. And then that’s why they raised 30. interestingly enough too, if you look at how the retail audience, because I was a big voice there because I started out as a retail guy in the crowd and I said I want to have a bit more influence in the Rick Rules of the world. The retail guys got pulled back less than the institutions so that’s the first time that’s ever happened. So that is a big thing for me that the retail guys get a front row seat and get the institutional guys in the backseat.

Frank Curzio: Talk about what a royalty structure is, which we both know about. But I want to get the audience involved here because I think what people may not understand is these are just the basically financing companies, right? So you don’t have a lot of employees, it’s not a company that’s building or has production costs or anything. They basically see a project and say, “Okay, we’d like to take a piece of this project, and once you produce, we’re going to get a certain percentage.” I want you to talk a little bit about that because the question I really have for you, is I would think there are people lined up around the block that have uranium assets that are looking to partner with somebody because uranium flow in the sector hasn’t really been doing that well. I would think it’s definitely in Uranium Royalty’s favor and I think people, I wouldn’t use the word desperation, but I could picture you guys getting amazing deals because they are looking for funding right now, right?

Marin Katusa: A lot of guys go, “Hey, how did you do what you do?” And I said, “Well I’m not the smartest guy in the game, I don’t think I’m smarter than anyone. I’m just a hardworking guy.” But the key here is, to be one of the few people because there’s very, very few guys in the sector right now. And rather than exposing myself to the exploration risk, the development risks, the production risk, the royalty strategy, the longer uranium stays lower, it’s the better it is for the royalty company.

Marin Katusa: Think of doing a gold stream back in 2003 when gold was less than 500 bucks an ounce. That’s what we’re doing in the uranium sector. So for example, I just say a mine wants to produce two million pounds a year and we say, “Okay.” They have a runway of three to five years before they start producing. They say, “Okay, we’ll give you 20 million today or 30 million or whatever number they need and we will take a percentage of your production and we’ll agree to it at a certain percentage of the spot price.” So hypothetically, let’s say we’ll take 5% of your production and we’ll take it at 15% of the spot price moving forward, rolling over. So, if uranium gets to 100 bucks a pound, we pay 15 bucks for that moving forward for the life of mine on all of the assets. So then if there’s a discovery somewhere else and the best place to find more of uranium or more gold or more copper is where there’s already the gold or copper or whatever.

Marin Katusa: You get that royalty stream stays on that asset, right? So if you look at the big successes of any other royalty and streaming companies, that’s the whole point. You don’t take any of the risk, but you’re providing a very key feature for this company and it’s really financial alchemy if you want as close as alchemy as you can have are the royalty companies because their cost of capital and in a world where so much money is managed by the passive guys, these passive management, they don’t really want to assess the difference between these three or four companies, but they like the royalty model because it’s liquid, it trades above NAV, it’s easy to understand, you don’t have the risks of the producers and developers. And you see, that’s why Franco’s Silver Wheaton and Royal Gold and Sandstorm trade at significant premiums to their NAV, because you have all that upside and you don’t have the actual production risks and the market, that’s where it’s going.

Frank Curzio: Marin, when I look at this too, I mean I’d never really seen an industry like this because even with the royalty companies and the zero royalty companies and the oil side, even more royalty companies in the healthcare side that I’m familiar with. But when it comes to uranium, I mean if people really want to put money into uranium, they could do it through like juniors, which are not really liquid. And a lot of these companies just they just diluted the hell out of themselves say in the past three, four years they had to right?

Frank Curzio: I mean not generate revenue and price has been down and they still need to explore as much as they can. But it’s like Cameco, and then you have UVC and then nothing else. But Uranium Royalty from what I hear from big investors, they’re looking for a way where they could take a position in this because I think there’s not a person out there that doesn’t think, five, six, seven years from now, probably going to be less than that, that uranium prices are half this go a lot higher from here, and this industry is going to be booming again. But to me it’s amazing how this is a perfect company where if you really want to get exposure to uranium here it is. And not only that, like you said, people don’t realize what royalty company is. It’s better when the price is low because that’s when you’re going to get the best deals and you want to lock in the most deals, right? Before these prices go up, which eventually they will.

Marin Katusa: I agree with you. For example, two years ago a company made a big splash called Yellowcake. They have a very, very strategic alliance with Kazatamprom and it just has a better deal than Uranium Participation Corp on all metrics. Right? They don’t have to go into the open market to buy uranium, whereas Uranium Participation Corp passed this. So every time Uranium Participation Corp goes to raise money, the trading of the uranium is such a small market that the buying that Uranium Participation Corp is forced to do because that’s what their used to proceeds that are. They themselves up the prices and the traders are playing against the company. Yellowcake gets the uranium at a discount to the spot straight from Kazatamprom. I remember, because Kazatamprom, produces is 40% of the world’s uranium. It’s the equivalent of Opec in Russia in one company, in the oil sector.

Marin Katusa: That’s how dominant they are in uranium. And then the largest shareholder of yellowcake is Uranium Royalty Corp. A lot of people may forget that. We have the biggest stake in that company and we also get the same terms moving forward as Yellowcake with Kazatamprom. So if you want the exposure to pure Yellowcake, we have that. We have the exposure to royalties, there’s many things that we’re looking at doing, and I’m not here to promote the company and I don’t get paid by the company, never got a penny from the company out of all this. I paid bucks 50 for the paper just like everyone else here, I was the a lead order, but I put my money where my mouth is and I’m going long on it because man, I’ve been in uranium market for almost 20 years now and I just don’t want to be banking on these geologists and hoping for 50, $60 in uranium because at that point the big money has been made.

Marin Katusa: And you don’t want get stuck in these, illiquid stories based off of pounds in the ground and all that. So it’s how I’ve decided to play it, Frank, it’s created me to be public enemy number one in the uranium sector because all these companies, what’s their number one pitch? The uranium market’s cheap via exploration assets now. Because when uranium goes to 50 bucks, we’re going to be worth 10 times. Then you’ve got Marin up on stage saying, “Yeah, I actually don’t think that uranium is going to go up that fast anytime soon. And if you’re smart and strategic and an alligator, you’re going to want to sit back and pick off all the royalties and streams and then when it goes really to 50 bucks then you’re truly laughing financially.” The market don’t like it, but that’s the way to go.

Frank Curzio: Yeah and it’s interesting that you say that too because I hear the same pitch and I’ve heard the same ptch for the past, how many years? But yet with these companies, yes, gold prices went higher and for the first time that I know, you’ve covered the industry much longer than I have, we haven’t seen juniors participate. In the market, if you see a certain sector like rural higher, terrible stocks go a lot higher, usually, right? So it’s the crappy ones you want to own that usually go much higher along with the rest of the industry. And same thing with the downward market where those are the ones that are going to get it the most.

Marin Katusa: And I think that’s going to be like uranium too. Because it’s all about cost of capital and passive funds. There’s more money being managed passively now than actively. And like I said, they don’t want to pick one gold company out of 300, they’d rather play the royalty or the big caps. Right? So that’s the new normal. That’s just the reality. And I think our markets haven’t figured that out.

Frank Curzio: Now. It definitely makes sense. I mean, even when I look at some of these companies, maybe you could talk a little bit more about it and I don’t want to get too much into it, but even when I look at a company like Fission Western Athabasca, I mean, there’s no infrastructure here. And I mean, they talk about the grades are amazing, everything’s great. It’s going to cost, I mean, from what I’ve seen, easily of a $500 million, probably a lot more than that to actually develop this stuff. And you’re looking at prices where the break even for something like that, it’s probably 70, 80 we’re still under 30 really. So I don’t know if these are the best plays right. We’ve where the junior monitors were the best plays actually, the majors and more quality companies, Equinox to one that are producing the best place. So a lot of these companies I’m seeing in these areas, it’s pretty crazy.

Marin Katusa: One thing that I can’t even believe the exchange allows. And I’ve gone up on stage and I’ve literally had these IRR guys try to troll me online and everyone’s a tough guy socially. So I went up to the guy at this conference, I said, “Hey, I’m right here. I dare you to say to me what you said online.” And the guy shit himself, “Get the fuck out of my face.” The point here of what I’m trying to get at is, Frank, if you read a feasibility study, a bankable feasibility study, and it said, “Look at these amazing economics at $2,500 gold.” What would you say to the company or the analyst?

Frank Curzio: I’d say, “You crazy.”

Marin Katusa: But why is that acceptable at $50 or $55 uranium? But you just told me at $2,500 gold that you’d be laughed out of the park and I totally agree with you. But we’re at $1,500 gold or 1,475 whatever. That’s not even a double, we’re at $25 uranium and everyone feels it’s acceptable to have a $50, or $55 base price for uranium in their feasibility study. And nobody’s calling out that the… I’m sitting here going, “All right, good luck with that.”

Frank Curzio: Yeah. Now we’ll move on. Because this could be a whole conversation on itself because I wanted to get into a big event that’s coming up. I know we would have fun with this one. But a big event is coming up, which is the Vancouver Investment Resource Conference. Talk about your role in this conference. First of all, because this is more than just a conference that you attend and some of the things that investors can expect for 2020 because it has been mostly a bearish market in 2019 was better. But I’m just curious, what investor is expected that are going to actually be there?

Marin Katusa: Okay. So we’ve got truly a star studded lineup. Obviously my close friends like Ross Beaty, he’s actually going to open the show with me on Sunday and then he’s literally straight from the show. He’s going to the airport because he’s going to a cop no, sorry, Davos right after that. All these billionaires get together to solve…

Frank Curzio: Yeah, that’s another level of Davos.

Marin Katusa: So then I got Conrad Black, I don’t know if you remember that name or not, but he’s a very, very, very controversial Canadian. He was a media mogul, Donald Trump pardoned him. He was in jail, so I’m going to get him up on stage. He’s an incredible writer if you ever have a chance to read his books. So I’m going to have him up there. And interestingly enough, I got the actual founding scientists of Greenpeace.

Marin Katusa: This is a guy that a lot of people forgot about, Dr. Patrick Morin and I’m bringing him up on stage and I’m basically going there for 30 minutes, we’re just going to find the dirty secrets of Greenpeace, the truth, the good, the bad and the ugly. I have no agenda against Greenpeace, but here’s a guy that was there from day one and now he’s at war with the guys who took over Greenpeace and we’re going to see about what behind the scenes, the NGOs and what the true agenda is behind the stuff for resource development. So that’s going to be fun. Stephen Moore is coming, Trumponomics the book. So him and I are going to do a one-on-one live and really those are great, Ross will tell you how to make money.

Marin Katusa: The other guys are interesting, they’re not going to give you specific stock picks, but then I’m bringing in the best needs in the industry. They’re up on stage and then I’m going to talk about who I think is going to be bought out and why and bring them up to the show and people can see firsthand if Marin’s right or wrong or whatever. But leave with a lot of interesting investment ideas to think about. And I think it’s a great show. We’re expecting around 10,000 people at the two day show and once we put up that Frank Curzio is coming, we took maximum square footage because we expected all the female audience to start buying tickets to the show. For all you listeners because you’re a Curzio fan, you’ll get in for free.

Frank Curzio: No, I will definitely put a banner up on the site and that’s from 19th to the 20th. I think once that announcement is made to hear him speak, I think it might go down. It might go from 10,000 to 8,000 so hopefully it doesn’t…. All right, so you’re saying an investment ideas. Let’s end with this buddy, because you only as good as your latest pick. So you’re good right now with Equinox, you’re good with Liberty Gold. But you know I’m kidding, but it’s so true. That’s the steak. But–

Marin Katusa: I’ll give you three ideas. I’ll give you three ideas and you know my style, I like advanced assets, I don’t like early stage, I don’t like backing a geologist with a box of crayons, I like buying intrinsic value. So one that I believe is going to get bought out as Pretium. Pretium is a very controversial asset because it’s so high grade and is it 11 grams? Is it eight and a half grams? Well, it’s variable and some quarters is going to be nine grams. Other quarters it’s going to be the average head grade will be eight grams, and then you’ll see 10 grams. The company, they built this thing, they’ve done it fast.

Marin Katusa: It’s runned by Bob Quartermain, who’s a legend in the business, the truly underrated superstar. Just a great, great guy. And I look at it and say, “Okay, how’s it going to get bought on?” And I published this Frank, this is what I truly think, you look at these big caps, a mid tier can’t buy that because the share price, it’s exposed too much. Produces over 350,000 ounces of gold this one mine. But the difference between eight and a half grams to, even nine and a quarter, it doesn’t sound like much, but for a single asset company or even a company with two assets, that’s a big variance. And analysts get nervous and everyone doesn’t know how to model it because it’s so sporadic, the grade.

Marin Katusa: Okay, but what if they’re a big company that produces four million ounces? It’s a decimal point to those guys and they really don’t care if it’s eight and a half grams or nine and a half grams. Of course they want a higher grade, but it ain’t going to rock their boat, that difference. Now, if I was one of these big caps, first thing I would look at is where are my biggest tax losses historically that I have on my books? And then I could use those credits with the government to reduce my cost of capital.

Marin Katusa: And Barrick has historic tax losses for the assets in Canada through the companies they’ve bought out. Those don’t just disappear. So when they ended up with all these assets from the old plaster dome days, you have these assets and yes, a gold deposits and asset, but so is a tax loss. It’s a financial asset on the balance sheet. So I believe Barrick will bio Pretium because the cost of their capital to bio Pretium will be cheaper than anyone else’s because of that tax loss credit. That’s one idea. Another idea that I’m very bullish on is your old buddy Jonathan Odd. Now, a lot of people may not know this, but I was a major shareholder in the pre-IPO over 10 years ago. My style, I waited very quietly, this guy is a superstar, he is in the league of Amir and Ivan Bebek, and he’s our generation for the next generation, like the Ross Beaty’s of the world.

Marin Katusa: And his company, because big funds like BlackRock off the top had to sell anything under a billion dollar mercy caps. The share price suffered, but they’ve advanced their assets, they have their study out their PFS and you look at this and say, “Hmm.” just little things like when I went through it, I went, jeez, I was surprised that they didn’t like the equipment. A truck you don’t really need to buy, you can lease it. And what we did at Copper Mountain when we leased our huge fleet, the upfront cost is way different. Now, don’t get me wrong longer term, but it’s all about my cost of capital today. So right off the bat they can reduce their upfront costs easily by 25 to 35 million depending on the specific fleet that they have by leasing it. And in their study. I just redid my model and I’m like, “Wait a second. There’s a lot of low hanging fruit here.” And I think a mid-tier company or someone even larger can look at those assets and say, “We don’t need to buy nice shiny new trucks. We can lease these things.

Marin Katusa: And because our cost of capital will be lower, I think gold standard ventures will be gone in 2020.” Then I think the big wild card here, let’s go back to the two big boys. I think Barrick’s going to do something very, very interesting. And what I would do with them. A lot of people don’t know that they have a two year non-compete with Newmont. That’s the second largest producer in the world. But the real assets that Barrick wants are the American assets. Remember my whole theory that, I’d rather be exposed to US and Canada than elsewhere in the world because I think the risk is less at home than outside. But the last 20 years has been the opposite model, I think Barrick will go after Newmont, but they can’t do that right now. But a better idea would be if someone like New Crest went after Newmont, took all their big porphyry projects and Barrick ended up buying their a great base in assets.

Marin Katusa: So that’s a very complicated deal but I do believe Barrick will end up owning Newmont’s in the next two or three years. But next year I think Freeport will be gone, I think Barrick should make a move. Now you’re talking about Indonesia and Grasburg, big, that’s putting pebble into production, but still in production. It’s a tough area. Again, there’s only a few balance sheets that can afford it and deal with the volatility of the government and not rock their share price. And I think that’s a Barrick move. I think Mark Burstows is looking at Freeport too. So there’s four ideas there that I think, two or three could happen next year. But I’m publishing ways on how to plate Pretium to get your maximum bang on your buck. And I don’t know if it’ll happen in March, April, or November, but I do see it happening. So that’s the stuff we’re we’re looking at.

Frank Curzio: Yeah, so lots of ideas and we covered a lot like we always do. Marin, I really appreciate it. Look forward to seeing in Vancouver and just one little last thing here, do you have your Santa Claus suit? I mean with your kids now you got to dress up like Santa Claus. Don’t you?

Marin Katusa: Trade in the leather pants for the red velvet.

Frank Curzio: I know to bring everybody in. Yes. Marin used to be a rock singer back in a day and I did see videos of it with him in leather pants. So that’s why he’s saying that. But that was awesome. But we always got it.

Marin Katusa: I guess it’s fitting that I don’t fit in the leather pants and I think the velvet is a more a comfortable outfit for myself and–

Frank Curzio: No. It’s definitely true. Well listen, I know how busy you are, thanks for stopping by. Really appreciate it. And I’m going to see a couple of weeks and if I don’t talk to you before the holidays, make sure you and your family have a great holiday, but I probably will.

Marin Katusa: You too buddy. All right, take care man.

Frank Curzio: All right guys, great stuff from Marin. I love having Marin. He wears his emotions on his sleeve, which I love as you could tell a couple of curses there which are cool. It shows the raw emotion, but I was with him with that Equinox deal and he did take a lot of shit for that deal. I mean he put together some of the biggest names and resources. You saw how hard he worked and I know it was a lot of short sales that attacked him and went after him and it was tough on him. It was definitely tough. It’s not easy when you’re doing something where everyone around you is just doubting you and telling you, “You are full of shit or this and that.” And look where that company is coming at.

Frank Curzio: I have to give him credit because he’s a grinder and he said something interesting too where he’s like, “Well, I’m not the smartest.” And I feel the same way. People say, “Well Frank, you know stocked, you’re smart.” It’s not that it’s, I have a passion for this and so is Marin where we just work hard and everybody else, I mean, I love this stuff. I’m working all the time, this is my life. You could tell resources, it’s his life as well. But if any of you guys out there, especially new to Curzio One members that are going to be in Vancouver. Also, I’m going to be attending the consumer electronics show from January 5th to the 10th and I believe the Vancouver Investment Conference is the 19th and the 20th I’ll put a banner up, do not get any place else because you guys are going to get in for free. Marin always offers a deal to you guys. So if you in Vancouver, you can go to that conference for free.

Frank Curzio: I think it costs like two, $300 or something like that. So you guys don’t have to worry about paying anything. But I’ll put a banner on the site and I’ll let you know as we get close to that probably early next year. And last note here, I just want to say thank you. I mean the demand for Rich Suttmeier’s 2-Second Trader newsletter, it’s the first product we launched here in close to 18 months. Demand has been very strong, we’ve received lots of positive reviews. Rich’s made his first trade last week and his next one is coming out on Friday. But if you’re still interested, subscribe and make sure you do so through the link that we’re sending you. And if you’re not getting that link and you’re not seeing that deals because you’re not on a free mailing list, just go to our website curzioresearch.com put your email address in there. But if you’re thinking about subscribing, do it soon because this offer is going to end this week.

Frank Curzio: And after that we’re going to be selling this newsletter for the full price, which is about double the price that you’re going to. I’m currently offering you right now through this link, so if you’re interested, just a few days left, great deal for the newsletter, but I just want to say thank you for everyone that subscribed. I really truly believe you guys are going to be very happy to subscribe to that product and I want to put out great products in front of you with great people who are passionate. Rich is passionate, calls me all the time, just totally into the markets. This is his life, he loves it. These are the people I want to try to put in front of you and yeah, I’m happy you joined us. I’m happy we got his black box system on the site, which you guys could check your own stocks on which is an added tool.

Frank Curzio: So you’re getting bored and just Rich in his newsletter. But I just want to say thank you and guys, if you’re interested, just make sure you sign up through that link and that deal because that’s going to be the best deal that you’re going to get. And if you do so please, or if you’re going to do so, do so in the next couple of days because I think we’ll pull out either Friday or Saturday very, very soon. So again, I just want to say thanks for all the support. So guys, that’s it for me. Man, holiday season’s here. It’s crazy getting everything done this way you could give your employees and everybody else off so it’s nuts. Hopefully you guys are going to have a great holiday.

Frank Curzio: I’m going to be publishing this next week as well, which is going to be gone at 25th. I’m going to tape it a little early, but I’ll have something for you. You could listen to the 26th, 27th, but I’ll definitely have a podcast for you. I’m not too sure. I think I’m going to have a guest. I am going to have a guest. Actually, I’m going to have a good guest. The guest that was supposed to be pushed out, but I think we’re going to have him for next week’s podcast. So he’s a fund manager, very big fund manager for a very long time. So yeah, I look forward to interviewing him and you’ll get that podcast and it’ll be published on Wednesday, whatever, but that is going to be the 25th but there’s definitely going to be at Wall Street Unplugged Podcast on that. So guys, that means I’m going to see you in seven days. Do take care.

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