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:How’s it going out there? It’s April third, and I’m Frank Curzio, host of the Wall Street Unplugged Podcast, where I break down the headlines and … tell you what’s really moving these markets.

Have to start off with the NCAA Tournament. Bit insane. Well actually, you know what, the first two rounds were really bad. And I was just tweeting that, at Frank Curzio. Gonna tweet a lot more.

First two rounds, no real upsets, right? No [inaudible 00:00:45], maybe one, not too many. It was kinda boring, lots of blowouts.

Then you have the next two rounds. And holy cow! Duke/Virginia Tech, Virginia/Oregon, Purdue/Tennessee …

You got Purdue/Virginia, which was an amazing game, although I do think the Purdue coach kinda lost that game for them. Carson Edwards, what an amazing performance. I mean, 40 points, I think he scored 40 points in two games. One, one of the first people to do that in a very long time in NCAA Tournament. But the guy was clearly, clearly out of gas at the end of that game. I mean, his only points came from a banker off the three, a three point bank shot with like three minutes left, and then he had that turnover at the end.

But his whole team was stagnant. Every time Carson would pass them the ball, they’d give it right back to him. Pass the ball, give it right back to him. And he was unbelievable, but at the end of that game, they had two, three guys on him. I mean, just back door ’em, just pass it, you woulda had layups, and … Just call time out or something.

That guy was so tired, and he had a turnover at the end, which was such an amazing game, but he was out of gas with three minutes left, and they still fed him the ball. I thought it was opportunity, they have a good team to really – they got another great three point shooter on the team … But what a game, right? I mean, a little bit of luck there for Virginia. Pushed it into overtime.

But yeah, Duke/Michigan State, another great game.

Gonzaga/Texas Tech, Houston/Kentucky, I mean, every one of these games is really close. You had Auburn blowing the doors out of North Carolina, and then beating Kentucky. I mean Kentucky, I thought Calipari did a great coaching job. I didn’t think Kentucky was that good at all, and … The fact them beating Houston was a great game, and then when … Yeah, they had a shot, actually, going into overtime, but at the end of the day, listen.

Auburn looks really good. They have one guy that got hurt that’s out, but I can’t remember a better sweet 16, Elite Eight set of games ever in the Tournament. I mean, that’s how amazing those games were.

Now, we look at the Tournament, which I broke down. Duke losing should come as no surprise to you. I told you, they can’t shoot threes, they can’t shoot foul shots. Very aware those are the two qualities you’re gonna see in every past champion, being able to shoot threes, being able to soot foul shots, and they couldn’t. I think it was 85, close to 90 of their points come from the paint.

I mean, they shoulda lost against UCF, they didn’t play that good against Virginia Tech, and then finally they lost to Michigan State.

Texas Tech should not be a surprise either, that was one of my sleepers. Although I thought Michigan matchup would be tough for them, and they destroyed Michigan. But I did say if Texas scores over 70 points they’re gonna win the tournament. And they scored 75 against Gonzaga. They only needed 63 to beat Michigan, but they held them to 44 points. They’re the best defensive team in the league.

They won … Whatever it was, 12 or 13 games leading up to the tournament, but lost in the very first round. I don’t know if they were one or two seat in the big 12, but they lost to West Virginia, which is not a good team- I think it was, yeah, West Virginia.

And they just fell off the radar for everybody. They beat Kansas by like 25 points in that run, and they just look fantastic. But they lost that game, and everybody was just like, “Three seed … ”

Again, off the radar, especially being in that tough bracket with, what was it? Gonzaga and Michigan, but … For me, I did put money on Texas Tech, $100.00 to win the bracket, which … That’ll be 550. I also have another 100 on them to win the whole thing, which would net me about 1700, and I think they have a good shot.

But when I look at the whole NCAA, even Michigan State, I think we had a lot – I was analyzing the stuff, but what I really got wrong is North Carolina.

Because … I mean, Auburn really smoked them, and they played great, but that was my NCAA champion. I thought they had everything, they just really played terrible. They totally got outplayed and it wasn’t even close that game. But having North Carolina as a winner just destroys everything. Every single bracket, so that’s on me.

But Texas Tech should be in there, Michigan State should be in there. You shouldn’t have too many surprises there. Virginia as well, Virginia guys is a really really good team.

I think Virginia’s probably the best team that’s left. The team could always play D, we knew that, but this year their offense is really, really good, and that’s why they’re able to hang with Purdue and when that game. Thanks to a little bit of luck, that last second shot put them into overtime, and being Carl Savage was just on fire …

But, when you look at all the teams, again, I’m breaking this down early for you guys because I get a lot of question and plus there’s nothing really going on with the market, other than lift, which I’m going to have one of the greatest educational segments in a minute.

There’s not a lot going’ on with the markets right now. So, we’re just gonna finish this out, give you guys my scoop for the final four. Because ho’s gonna win it all?

Well, Michigan state playing’ with a lot of confidence, have a great D, their offense is clicking.

Texas Tech has the best D in the nation. Their offense has been great the past two months, under the radar.

But I kinda have to go with Michigan State here. I mean, I want Texas- I hope I’m wrong on this, ’cause I got money on Texas Tech to win the whole thing. But, simply because Tom Izzo, who’s the best coach in college basketball.

You can say, “Oh, [inaudible 00:05:44] and these guys always get players.”

Tom Izzo, his team is not that great this year on paper, and they’re playing like it’s one of the best teams he ever had. I remember I saw them play against Kansas early on, Kansas beat them, they just weren’t that good. Now, they play with loads of confidence. Beating Duke, they got that momentum.

So, I think you’re gonna see Michigan State advance.

Teas Tech coach is not that good, he hasn’t been there. I’m unfamiliar with him because I’m a Kansas fan in the big 12, but they do have a great team. On the other side, Auburn being down a player is significant. It wasn’t significant for Kentucky, but I think it’s gonna catch up with Virginia. Virginia has a chip on their shoulder from last year.

I kinda think if you ask any team … Number One C, that if you could lose the first round – which happened to Virginia, first time in history they lost as a number one seat. Any team has lost by a number one seat in the Tournament.

But if you could ask any team, “Hey, if you could look back and say, ‘okay, you lost first round as number one seat, which makes you look horrible, again you’re on the map,’ and then come back the next year and win it … ‘

I think a lot of coaches would be like, “Cool, I’d do that.”

Because it’s really hard to win NCAA Tournament. It’s really, really hard. It’s one of the few sports where sometimes the best team, the great- I thought North Carolina was the best team, they got smoked. Duke’s not gonna win, I mean, these are good teams, but Virginia has a really good sot of winning this thing.

I think they’re gonna come in and they’re gonna beat Auburn. Auburn’s down a guy, again, it’s gonna catch up to them. I could tell you, it erases everything that happened with Virginia last year, because nobody’s gonna care. People [inaudible] comeback stories.

I think Virginia’s gonna beat Auburn. I think it’s not gonna be close, I think they win in double digits, which has Michigan State against Virginia . I think Virginia’s gonna cut down the nets to one shining moment.

That’s my prediction. I hope I’m 100 percent wrong on this, but it’s not like the Super bowl, I’m usually pretty good other than North Carolina. To give you a couple of pretty good sleepers, there. But, yeah, I just thought North Carolina would do better.

So. Gonna be a lot of fun coming up this week. Final Four in Minneapolis where the Eagles won the Super bowl. It’s gonna be an amazing venue, I was there … Not too long ago, a little over a year ago, lots of fun. And it should be really really good. Really good teams, really good coaches, and it should be a good Final Four.

I mean, I like it. I’m excited about it. Good teams, nice to see North Carolina, Duke, Kansas, all those guys in it. A lot of first time teams in that Final Four, and yeah, it’s pretty exciting.

Moving on.

Gonna interview a familiar guest. His name is Jonathan Awde, who is the president and CEO, also the co-founder of Gold Standard Ventures. This is a company I’ve followed for many years, which made my subscribers a lot of money early on, over 300 percent gains. But I recommended this name several times, and we stopped out of it. So there’s two other times I recommended we stopped out.

It wasn’t because the management team wasn’t executing, it wasn’t because the company reported bad drilling results. They actually significantly expanded their signature project over the years. It’s down because the resource market has been terrible, and this stock has been down more than others. Because Go Corp has a position in this company, and people worry that … They said they’re gonna sell non-core assets, that might result in these guys stilling the stake in the company. I don’t see it because they have a strong hold in Nevada, and all these mergers and acquisitions is really about Nevada, and positions and sells better in Nevada.

So, on paper you might say, “This isn’t a core asset,” but it kinda is for Go Corp. The stock has come down a lot. I love the fact Jonathan reached out to me and said, “Hey, I wanna give your investors an update. I know I’ve came on in the past, and I just wanna tell ’em where we are right now.”

And he’s gonna give us an update on the company, the catalysts that are coming up, and why Gold Standard is in a great position to benefit from the next bull run and goal which seems to have started in January.

This is a cyclical market, guys. It seems like it’s been a secular decline because it’s been so long, other than, maybe six month, seven month people in 2016, early 2016? January through … Whatever, August-September, and other than that, five, six years now, 2011 to 2012, it’s been really ugly or this industry.

But there are factor, especially when it comes to the macro part of it, which Jonathan and I are gonna get to right at the beginning of the interview. But there’s a reason why I bring on a lot of mining companies for you, some of the ones that I like that I think are gonna benefit tremendously when this market turns, and I just wanna [inaudible 00:10:16] you guys in these names, because these are names I followed for a long time, management teams I’ve followed for a long time, and Gold Standard Ventures is one of them.

So you’re gonna hear from Jonathan in a minute. Then later on, in my educational segment, I’m gonna break down one of the craziest companies in the market right now.

That company is Lyft, which IIPO’d on Friday, came out blasting first aid training. Now it’s trading below its IPO price of $72. So I’m gonna break down this thing for you and let you know if you should be buying on this pull back, or avoid the company all together.

Now, guys, if you’re interested in learning how to research companies … I’m talking about real research, not, “Hey, the P is 11, and company training at book value, so it’s a buy-”

No, nonsense. If you’re interested in learning how to dig deep on companies, really go into the fundamentals, management teams, catalyst, everything. Definitely give this segment a listen. You may not agree with my call and that’s cool, but you’re gonna get a much closer look at the homework I do to determine whether a company like Lyft or other stocks make it into my portfolios.

The Curzio Research Advisory, which more large cap mid gap, orCurzio Venture Opportunities, which is about finding those very small micro cap companies that have huge, huge broker potential. But it’s a huge process. I’m gonna dig into the research, and it’s gonna be really cool, and again, maybe you agree with it and maybe you don’t, but you’re gonna see why I came to this thesis on Lyft and really break it down.

So guys, definitely give this section a listen, I’m not hyping this up. It’s gonna be a lot of research, I really looked through this company the past two days. And it’s gonna be really really cool when you see why – I won’t even give it away whether I buy it or sell it – but you’re gonna understand why that I came to my conclusion. So I’ll leave it there. Hopefully I built that up enough for you guys.

But first, we’ll get the education segment. Let’s get to my interview with the president and CEO of Gold Standard Ventures, Jonathan Awde.

So Jonathan, thanks so much for coming back on the podcast.

Jonathan:Pleasure to be here, Frank.

Frank:Well, let’s talk about the macro first before we get to Gold Standard Ventures, your company. I would say about 70 percent of our file knows about it. I’ve recommended it before, but we have a lot of new people on our file.

But before we get to gold Standard Ventures, I wanna talk about the macro, which is always important, I don’t care who is on your board, I don’t care what the discovery was or whatever.

The market’s been horrible. It’s brought down every single company over the past two years, but we’ve seen a little bit of life right now in the gold industry where the macro’s getting a little bit better, at least to start the year, we’re seeing the fed come out and say, “Hey, no more tightening, we’re probably gonna end up easing again.”

Inflation kind of in check, but it seems like there is money going into gold right now. Gold prices are rising a little bit. What are your thoughts? Is it different this time? I mean it’s a cyclical market you guys are in, but it doesn’t seem like it’s cyclical. Looks like a secular decline, it’s been so long.

Is it finally starting to turn? What are you hearing from the people you speak to in the industry?

Jonathan:Yeah. Look, I actually think the backdrop for gold going forward is setting up really well. I think you’ve got the broader markets approaching all-time highs now again. You had a lot of utility in the dow and the FNP late last year. The dow kind of peaking in that almost 27000 and went down to just below 22 and now it’s sort of back to 263, and it looks like it wants to make a run at those new all-time highs. So money is still kind of flowing back in.

But historically when you have the last kind of round of corporate buy backs, that’s when you typically get that push, and then when that subsides, I wouldn’t wanna be owning the broader market. And I think that the feds signaling that it’s not gonna be tightening this year, and now there’s a really divided street where a lot of people looking at … Well, maybe they start easing rates next year.

Frank:Yeah, and that looks like it’s gonna be the case next year. Now, you’ve been traveling a ton, just like a lot of people in the industry, . Because you had PDAC, which is basically a large mining conference, BMO conference, too, which is in South Florida. You also went to London and Geneva. Even my friends in the mining industry the past month and a half to two months, that’s kinda like when they travel, meet investors.

In the middle of this, what are you seeing? Even at some of these conferences where we’re looking at the majors starting to merge, right? Barrick tried to get involved with Newmont, you have Newmont Go Corp …

What are you hearing on that end? Because one of the things that has been a concern for investors from what I’m hearing out there, at least from big investors that wanna invest in the space, is when these guys are merging, they’re saying that, “Hey, you know what, we’re probably going to sell some of our non-core assets.”

And I also know Go Corp has a position in your company as well, but people are looking at this and saying, whoever Go Corp or Newmont, has a stake in it, they may sell and it’s adding pressure.

What are you hearing out there? I mean, you have amazing asset, but probably considered non-core for them, or maybe not necessarily, but is that a worry? Is that a concern? What are you hearing out there from that point of view? Because that is definitely a concern, what I’m hearing on my end.

Jonathan:Yeah. So, first of all, I mean, you’ve had this unprecedented wave of large scale mergers. You had Barrick and Randgold merge, and it was … John Thornton, the chairman of Barrick has done a phenomenal job of cleaning up the balance sheets … Basically merged with Randgold to get arguably the best mining CEO on the planet, to Mark Bristow.

We were at the BMO show, and on the first day of the conference, Barrick goes hostile on Newmont and during that time, Newmont was already in the process of trying to acquire Go Corp. So Bristow was trying to do two things by going hostile on Newmont; he was to A, derail Newmont’s attempt to buy Go Corp, and B, and arguably more importantly, force Newmont to do a joint venture in Nevada.

Two weeks later, Barrick canceled his bid to acquire Newmont, and they announced the joint venture where Barrick is not only the operator, but has 61 point five percent of the JV. So Mark Bristow in two weeks did what no other mining CEO, or either Barrick or Newmont could do in 20 years.

It’s unprecedented, and then, yes. To segue into your comment about what does it mean for Gold Standard, what it means in the short term is that there is more uncertainty. At first it was, was Newmont gonna be successful in acquiring Go Corp? If they were, what would the share position of the new model be inheriting from Go Corp and Gold Standard? What are they gonna do with it?

And then it was the joint venture/ What assets re gonna be in? What assets are gonna be out?

Gold Standard’s land package is within the area of interest. Gold Standard’s share position, we don’t know whether it’s gonna be in the JV or outside of the JV.

And yes, there are gonna be assets that come out of this, but I think the most important theme is that Nevada is home base for gold exploration and production. It has the largest deposits in the world. It’s the best jurisdiction. And a lot of this big fight was over Nevada.

So I think there’s gonna be a period of uncertainty, and we’ve already been through that for the last couple of months. I think you’re starting to see investors say, “Well, wait a second here, fundamentally what has changed?”

If you look at our chart, October 12th we were the number one performer in our peer group in 2018. The next day, Go Corp announces their disastrous Q three earnings, their stock goes down 20 percent in one day, and the market says, “Oh, Go Corp can’t buy them right now, it has to be at some point in the future.”

Go Corp was very supportive. They had bought seven and a half million shares out of the open market. They filed that in July. They came into a funding in late September, early October at 205 Canadian.

For us, nothing had changed. And then it was the GDXJ rebalancing, which we got caught up in again, going ultimately from a one point two percent waiting to a point five over the course of two years. And you had the whole black rock rumor, that they were gonna go from an active fund to a passive fund, and then two other active funds having to mandate the pools and almost 10 million shares of selling into the market.

So, while it’s been a challenging six months, I think there’s incredible opportunity for generalist money to come in, or even specialist funds to look at stories that maybe they looked at a year or two ago and thought, “With these evaluations, I don’t like.”

And now you can get these same sort of opportunities for 30 or 40 percent less than they were trading at. Where some of these companies, some of these assets, have been significantly de-risked.

Frank:And you brought up something interesting, John. That’s what I was going’ with is where the fight between these guys is about Nevada, and why don’t you talk more about your company, your location, railroad, fourth window, just for people who aren’t familiar with Gold Standard.

Why don’t you give us that scoop because I think that’s important to the whole thesis here.

Jonathan:Yeah, so … Gold standard has amassed the second largest land package in the [inaudible 00:19:55] trend behind Newmont. And we have an oxide discovery called Dark Star that we’re moving along, that’s high grade oxide, really good recoveries, low strip

So, it’s a project that Gold Standard can build on its own. TLT is the highest grade, undeveloped oxide deposit in the state. If you look at Newmont’s portfolio in Nevada, the only true oxide deposit they have is Long Canyon, and they bought that back in 2011. So there is a massive depletion of oxide ounces in Nevada, and Gold Standard, when you look at Dark Star [inaudible 00:20:32] is sitting on between two and a half to three million ounces of oxide ounces.

It puts in a position where we can control our own destiny. Where we are not held hostage by having to use the processing facilities that belong to Barrick and Newmont, and we have a number of satellite deposited that we’ve been drilling and advancing and moving along.

So we think this has the beginnings of making a mining camp where you have multiple pits, multiple declines, hole in the grounds. A big operation where you can get that scale. And it’s a 45 minute drive from the town of Elko, Nevada. We have power to the project, we’ve got water, everything’s there. Despite the fact that we’ve been drilling on this project for seven or eight years, there’s still a significant portion of this project that has been untested.

Frank:And when you look at your project here, because I’ve been following this story for … I would say over five years now, right? Six years since we knew each other. And it’s done incredibly well, and I know that entire market has come down, but I’m looking at it now, and where you guys have taken it … I mean, could you talk about that compared to where you started and where you are now? Because when you look at the evaluation, trading same levels you were two years ago, three years ago, whatever it was …

And what you’ve accomplished over that time, it’s not like, hey these guys have – With our market where it’s more about earnings, right? So if earnings are gonna decline, your stocks are gonna decline, but it’s almost like … You don’t have earnings, obviously, but the discoveries, the quality has risen significantly while your evaluation has declined.

Could you take us through those numbers, maybe over the past three or four years, because where you are now is the best position you’ve been in in terms of drilling results, exploration. But yet, your evaluation’s probably lower than it is over the past two or three years.

Jonathan:Sure, and that’s a great point. If you look at our chart over the past five years, Dark Star was what really got us out of the depths of the 2013-14 bare market. We are now trading below where we were when we made the discovery of Dark Star. And when you talk about de-risking, so when you make a discovery, the next thing the market wants to see is, okay, how big is it?

And then they wanna see, well when you tighten up the drill spacings, is the continuity gonna fall apart? Is the gray gonna be more erratic and spotty? Continuity is fantastic. And then, for an oxide deposit, the higher the recovery – so when you put it onto a leach pad, big open pit, when you put it onto a leach pad, how much gold are you gonna be able to get out? Anything north of 70 percent is very good. We’re getting 85.

And then, during that time, OceanaGold has bought 15 and a half percent. Go Corp has bought 14 percent. And Kinross owns four point nine. So it’s rare to see three seniors in your registry. We’ve got an excellent list of institutional shareholders, and we’ve unfortunately been faced with some of those shareholders having redemption and some of that money leaving the space, or having their active mandates yanked from them. And then, unfortunately being caught up in this GDXJ rebalancing.

But you look at since October, stock was two dollars and 40 cents Canadian, and it is now basically 140 Canadian. To say that it’s on sale and on discount is an understatement, and when you look at what’s actually happened … I mean, there’s nothing fundamental to support the stock went from 240 to 140 except that we had what I just outlined. GDXJ rebalancing, a couple of active funds going passive, and the perception that the competitive tension has been lowered.

Now I think that’s true maybe for the short term, but I don’t believe that anything fundamentally has changed about the assets. If anything it’s gotten significantly better.

Frank:So, let me ask you this, because when it comes to people investing in your company, they wanna see catalyst, they wanna see drilling results. Talk about that because you do have an aggressive drilling program, I believe through at least the first half of 2019, which provides catalysts, right? Especially if those drilling results are good, especially with your stock at this level.

So what are some of the things that investors, if they wanted to invest in your company, say today, that they could look forward to over the next three to six months?

Jonathan:Sure. We just finished up our phase one program at Dark Star, and we moved those rates over to Lewis project. The goal of the Dark Star program was to keep expanding it, both North, West, at depth and to the South. The results we put out over the last two months support that thesis.

We’ve got another … I think, 12 or 15 holes left that we have to announce, that we’re waiting for [inaudible 00:25:37] back. So we’re very excited by what we’re seeing, and our expectations for Dark Star remain high. We moved those rigs over to Lewis.

So Lewis is our project that’s about an hour West of Dark Star, and it’s conveniently continuous with the Phoenix Fortitude mine that belongs to Newmont that will be in the Nevada joint venture. And the interesting thing about Lewis is that there’s a quarter million to 300000 ounce historical resource, it’s all oxide, it’s plus one gram, which for oxide it’s high grade, that at some point, Newmont or this joint venture will have to lay back on to expand their pit.

SO it has not only strategic value, but it’s got a lot of expiration upside, and that’s why we’re going back in there. We picked that one up through the acquisition of a public company called Battle Mountain Gold, which closed in April of 2017. Very rare to get 6000 acres next to a core operating mine that belongs to Newmont or Barrick.

We think there’s a lot more for us to do there. So we’ll have some drill results there. And then, we’re just finishing up all of the met work and the modeling on Dark Star and Pinion to come out with a PFS in the fall.

And that’s gonna be … I think you’ll see the cost at Dark Star in the lowest core tile. You’ll see a very manageable CAPAX, and you’ll see an internal rate of return likely in that 40 percent plus level.

So I think, again, these are not final third party numbers, these are Gold Standard’s internal numbers, but I think that when you look at what Dark Star is compared to anything else that’s new or oxide, Dark Star stands on its own. And that’s what people care about, and I think we’re gonna be able to deliver that.

And then we start up the next phase of drilling here over the next three to four weeks. And we’re gonna look to get back into some of the targets that we had some success on and that we feel were on the cusp of a discovery or that particular target turning a corner.

Like [inaudible 00:27:51], like Dixie, like LT. We have a new target called LT where we have 10, 15 grams in oxide at surface in gold and soil, gold and rocks. Looks really interesting. This one’s about a mile and a half north west of Pinion in the same package of rocks. So, we’ve got a lot to do this year, and yeah Frank, it’s been a tough market for seven years where you have pockets of money flowing in, and kind of short lived.

But for the most part, if you look at our chart of gold, it’s been a pretty bumpy ride. But back to the macro picture real quick, Frank, no one is really talking about an all-time record monthly deficit in the US of 234 billion dollars.

234 billion dollars. Now, that’s bigger than the GDP of some countries, and that’s not sustainable. So, I think the story for gold is really starting to come into its on, and I think over the next year, you will see gold start to continue to go sideways and then go higher. I think that key number is 1370. And if we’re able to get through that, I think you’ll see generalist money piling in there.

I think, when the fed ultimately turns and starts to cut rates, I think that’s when you’ll see that parabolic springboard move where gold is now suddenly 1450 or 1500.

Frank:Yeah, I mean, the market’s been so terrible, it’s just … And I’m a believer, I think gold is gonna come back.

I’m just curious, I’m not too sure if it’s the safe haven, right? Everybody says, with deficit it’s more of a safe haven.

I don’t know, it seems like bonds, treasuries are more of the safe haven, but it just seems like fundamentally, with few discoveries and it is a cyclical market where gold has been … Just the landscape is positive for gold right now, I think, if you’re gonna look over the next 18 months.

But it will be interesting, because I think we both thought that like a year ago as well, right? Last time, I thought we were ready to-

Jonathan:Yeah, and I think that’s what you’re seeing. You’re seeing that skepticism in the market with generalists saying, “You know what? There’s been so many false starts in gold, I’d rather pay five, 10, 15, 20 and higher in some of these equities than be early and be wrong again.”

So that’s why I think that more investors are looking at gold and saying, “You know what? Should gold break through that 1360, 1370 … ”

I think the real number is 1400 for a lot of generalists to really start piling in. And again, if you look at the average generalist portfolio, over 90 percent of Americans have no exposure to gold.

So forget 10 percent. I mean, five percent, two and a half percent of generalist money flowing into the gold space. The gold space is a very small industry when you compare it to other industries, so it won’t take a lot of capital for this thing to get really exciting.

Frank:Yeah, nah, definitely makes sense, makes sense. The last thing here, too, is I saw your presentation that your drilling program is for – you budget 27 million to drill 2018-2019. You already drilled in 2018 and a little bit in 2019 and I think you have 18 million in the balance sheets, so … Is that enough to cover your drilling costs for the next six months or nine months, or is it, “Hey, we may look to raise money later on depending on the drilling results?”

I just wanted to see where you are with that.

Jonathan:At some point this year, Frank, we will go back on the market, we’ll see what our corporate shareholders wanna do before we proceed forward, but the drilling of Dark Star and on the project won’t resume until kind of that second half of May.

It’s not gonna be as big of a program this year as it was last year. And then we’re … The only other spend, Frank, is to move this thing to a PFS. And that is just doing a lot of the engineering work.

We’re doing what’s called HPGR, which is kind of a crushing technique where we think we can extract a lot more gold and get better and improved recoveries. So, we’re doing that, and that work should all be done in sort of June-July and looking at having an August-September PFS.

So, I think we’re gonna have a smaller program with a couple of rigs, and really dig stuff out. We’re gonna be drilling some holes underneath Dark Star. So with Dark Star, you’ve got this nice oxide cap, and we’re starting to see high grade underground grades into the sulfite zone underneath Dark Star. Which is a really exciting pattern to see, you see that in all the big deposits in the Carlin trend, the Cortez rehab, that oxide cap, and then you transition into a sulfite zone, and we’re seeing that at Dark Star, which is really exciting to see.

So we’ve got a couple of deeper holes planned there. We are also gonna go back into our North [inaudible 00:33:14], which is on the same flagship project, about six miles to the north. There’s a large endowment there, and we think it’s all connected to the [inaudible 00:33:24] to the north, which currently belongs to Newmont but likely with go into the JV.

So, interesting times, Frank. But seriously, I wouldn’t want to be anywhere else in the world but Nevada. Nevada’s fantastic, has its challenges, but I think from finding an elephant, and being in a safe jurisdiction, I think that it’s really important in today’s environment.

Frank:It definitely makes sense, and I guess we’ll leave it there. And I respect the fact that you reached out to me and said, “Hey, here’s a good time to come on. The price is right.”

A lot of times, the CEOs of companies reach out to me when their stock is really moving higher, and it’s not always the best to get our investors and people that I know into these stocks. But I really appreciate that, because I know you guys are working hard, you’re doing the right thing, and I’ve been a part of that and your company for well over five years, which did very very well on early on.

I really appreciate coming on-

Jonathan:You’re a value guy, and you understand cycles just about as good as anyone, and sometimes being a bit of a contrarian is taking a bit of leap of faith, but I think, as you outlined earlier, we de-risked this project and this company significantly. I think we’re well positioned as this market wants to move higher.

Frank:That sounds great. So listen John, thank you for coming on and giving us an update, and I’ll probably talk to you in a few months from now.

Jonathan:Thanks, Frank.

Frank:Okay, that was great stuff from Jonathan. I’ve known him for a very long time, and Gold Standard Ventures is a great company.

Recommended the last three years, and we recommended twice, and we stopped out for losses, but before that we really recommended them. Able to get into this company very very early and meet Jonathan, meet the management team, Dave Mathewson, geologist, and it did fantastic. I think it was 2010-2012, it made a lot of money for subscribers.

Saw it come down, I didn’t think the market was gonna be that bad, and then I tried to re-recommend it in think in 2015 or so, 16. Or maybe it was a little bit after that. And again, the stock just fell. Really due to market conditions.

But right now, look, it’s an awesome company … I would wait on it right now, I wouldn’t go in there and purchase it. It seems like it’s cheap at these levels. I’d like to see some kind of uptrend, because there is …

I asked him fair questions and said, “Hey, what about the Go Corp investment?”

Go Corp is 10 percent plus owner in the company, and if they decide to sell that stake, that’s gonna be significant. There are people who are worried about that. They’re not worried about that, they are in Nevada, so maybe it is seen as a core asset and not a non-core asset for a company like Go Corp.

Right now I wanna see a little bit more momentum in. I wanna see more people coming in, I wanna see those shareholders who own it increase their positions and stuff. That’s something I would really like.

But Nevada exploration I brought on recently, and also on resources interview the CEOs of those companies and executive teams for those companies. Those are in a much better position right now to go a lot higher, I think.

Gold Standard Ventures, listen, keep it on your radar. It’s a fantastic company, but it’s gonna need help with the market. It’s gonna need help with the market, people are a little worried right now. It’s one of the companies … It had an amazing run till October, but then it came down, and it’s one of the few companies that had been trailing downward as the rest of the market’s kinda been going up since January.

If you look at a lot of charts, especially of Nevada exploration, you’re looking at on resources. So this is one I wanna throw in front of you. I think it’s a name that you have to keep on your watch list, but … I’d probably wait, I wanna see a few calcs, I’d like to see better drilling results over the next three to six months and probably get in after they raise capital because the drilling results are weak. That stock’s gonna come down if they raise capital, they’re gonna have to do it at even more of a discount and you’d probably get it a lot cheaper.

If not, if they report good drilling results, that’s fine too. I mean, the stock’s gonna go higher, but I’d rather buy it 10, 15, 20 percent higher knowing that you have those fundamentals, those drilling results below you that they just reported which will provide a base. I don’t mind buying hat 15, 20 percent higher considering it’s down tremendously off its highs. And now that you have fundamentals behind it and you have probably … Those drilling results are really good, guys. Not to beat this to death, but you’ll probably see a lot of the major shareholders – which they have very, very quality shareholders as the larger standards in Gold Standard, they’ll probably increase their position and it might be a better chance to get it.

But, I wanna thank Jonathan for coming on, awesome guy, someone who I had known for a very long time.

Now, let’s get to the educational segment.

We’re gonna break down Lyft. I’m breaking this down because I’m getting lots of questions on it. I even saw a bunch of old friends last weekend and one of ’em like, “Hey, what do you think of Lyft? I gotta buy Lyft.”

I’m like, “Eh, be careful buying Lyft.”

This is when, of course, it came out and it went to 80 something, or whatever. So, they IPO’d on Friday in the NASDAQ. Stock opened up at $87. So it was up 20 percent from its opening price of 72.

Gave a company evaluation of 29, 28 billion, something around there. But over the past few trade in days this week, Lyft started to fall, and it fell sharply, to under $70 a share, which is below the IPO price.

So it’s a 20 percent decline within the first week of trading. That’s not a good sign for any company who just IPO’d, nevertheless one that’s extremely popular, since this is a service many investors are familiar with and even use.

You’re familiar with Uber, you’re familiar with Lyft’s competitor. Now, you’re looking at the stock coming down, and it’s a name that you’re familiar with. I put this like in the Facebook category, when they came out, investors were like, “Wow, I could purchase this to my Etrade account and my … ”

Whatever account you have now that would charge you $3 in trades. Robinhood, wherever you wanna go.

Anyway.

Now that it’s pulled back, you should use this pull back as a buying opportunity, and you know what, let’s break it down. So I’m gonna go over a lot of stuff with you here that’s really good, really quality, you’re not really gonna find this any place else. At least I haven’t read this any place else.

And let’s break it down.

So we have Lyft says it captured 39 percent of the market in the US as of December 2018, which is up from 22 percent in December of 2016. That’s significant. They said this new growth comes from new riders, drivers, as well as more frequent rides from existing users, right/

Now they said that they have 18 point six million active riders. I guess how they define active riders is riders that have probably used this service multiple times over the past month. And they have a little over one million total drivers.

Now again, they captured 39 percent of the market. But, I read an interesting report. Because Lyft is basing their numbers, in terms of market share, on a consulting company called Rakuten Intelligence. R-A-K-U-T-E-N. Rakuten intelligence, right?

That’s the study that came out and said, “Hey, they captured 39 percent market share.”

Rakuten is a big investor in Lyft. I don’t know if anybody knows that. So again, they’re saying that Lyft has 39 percent market share in the US, but there’s another consulting firm out there that tracks this data as well. It’s called Second Measure.

They’re fully independent. They don’t have a stake in Lyft, right, just report the numbers. According to them, Lyft only has a 29 percent market share, and they say Uber has close to 70 percent.

That’s a very very big difference. When you’re looking from 29 percent to 39 percent of a market that big, that’s a massive difference. But they’re reporting, it came out in their perspectives that they own 39 percent market share.

Yet the company that doesn’t have a stake in them, that’s fully independent, this consulting firm Second Measure says its 29 percent. So, to me, that’s just one red flag. Because if the data from Second Measure is accurate, then Lyft only gained about seven percent market share over the past year, not the 17 percent that they’ve been telling everyone, that people have been buying the stock off of. Especially as they launch over the past week in IPO.

Where I look at the numbers.

Last year, Lyft reported a net loss of 911 million dollars. Okay, that’s up 32 percent from the previous year. Sales during that period came in at two point two billion. Okay that’s double from the previous year.

So right now, even after the 20 percent decline in the stock, stopped trade around 70, we’re looking at a company that’s trading at 11 times sales.

Okay, the average company has to be 500 trades at two and a half times sales.

Now, being expensive doesn’t mean you should sell the stock. If that’s the case, you would’ve never bought Netflix 10 years ago, you wouldn’t have bought Apple 15 years ago, and you certainly never woulda owned Amazon.

Okay. You have to see that growth.

Now when I look at their growth, they’re expected to grow sales north of 50 percent next year, which is good. Add to the capital raise, they have over five billion dollars in cash. That’s also good, because they’re really gonna need that cash. Because the company has been aggressively raising prices for its services into the IPO.

So right now, the average rider pays $36 per trip. That’s how much they pay when they get into it on average is $36.

So I wanted to see how much that was compared to over the last year/ Just the last quarter they raised prices by 10 percent leading up to the IPO. And over the past year they’ve raised prices by over 25 percent.

So you’re raising the price by 25 percent, you’re reporting a much much bigger loss. You’re generating more money, why isn’t it filtering down to profits at all?

You may say, “Well, Frank, Lyft has pricing power. They’re able to raise the price 26 percent.”

They’re still seeing demand, at least as of their report, let’s see if it goes further now that they’ve significantly raised prices. But I don’t think they have as much pricing power as you think.

Uber is cheap as well. Not that much cheaper anymore, but cheaper than traditional taxies. But if you’re gonna continue to raise prices, there’s a level where you can’t raise ’em anymore because then you’re getting to back to where taxies are charging.

And I can tell you at that price differential, not a lot of people … I use Uber. I take taxies sometimes form the airport, because it’s a lot easier from the airport than walking like a half a mile to that space where they have Ubers and Lyfts. And it used to be 50 percent, now it’s probably like 20 percent, and I had actually taken a taxi that was cheaper than an Uber for the first time, and that was about two weeks ago.

Might have been a situation, might have been rush hour, might’ve been whatever. But I’m just saying that you don’t have pricing power that you could raise, raise, raise.

There’s gonna be a level where you raise it and people are gonna be like, “You know, I’d just rather take a taxi.”

So I don’t know how much pricing power they had. They did a good job raising it into the IPO to get enough demand on it. Everybody being able to sell this thing to the market was great. But when I look at Lyft specifically, and even really both companies, they’re paying more per driver. They have to incentivizes their drivers, right, they have to pay them more to drive during peak hours.

Most people don’t like driving during peak hours, but hey, if there’s incentive it’s almost like overtime. I work overtime I’m not gonna see my family, but if you pay me time and a half, yeah, okay, it’s worth it.

That’s what they have to do for their drivers right now. And this costs at least Lyft a lot of money. And they need to do this, because imagine trying to get a Lyft at 5PM in New York City, and then they’re like, “Oh, we’re not gonna be there for 20 minutes or 30 minutes.”

I mean, you’re gonna jump in a taxi in a heartbeat if it’s available.

So they need to incentivize their drivers, which increases the costs.

Now, I’m looking at the company, and they even said they’re not projecting generate profits in the foreseeable future, and again, that’s okay if you’re growing, so Netflix, especially Amazon over the past decade plus, right, those stocks are up tens of thousands of percent.

And people said, “They’re expensive, they’re expensive,” but they were growing.

They captured the markets that they were in. They’re in massive markets, they’re industry leaders. You look at Amazon, whether it’s … Cloud has been unbelievable, retailer everybody knows, more than 50 percent of sales of anything being sold in the US goes through amazon, I think read a stat like that, which is insane.

But when I look at Lyft, I don’t know if they’re gonna continue to grow like they’re expected or like they’re saying. Because the losses right now at Lyft are insane I mean, they lost close to a billion dollars last year. That’s net operating profit after tax, which is 40 percent more than they lost in the previous year, and remember they’re raising prices.

Why that loss accelerated so much. And I can’t remember an IPO ever ever coming to the market while losing that much money. I can’t. Maybe you guys can. I looked it up.

Snap loses a couple hundred million dollars, there waw a couple of others, but not a billion dollars, I haven’t seen that. That’s pretty insane Again, these losses are expected to continue, this is the company talking. Which means that, even though sales are expected to jump 50 percent next year, it’s not translating into profits for some reason. And that’s pretty scare for investors looking to buy this stock trading at 11 times sales right now, which is super expensive.

Now you look at their growth … Uber has more of an international presence, they don’t. They’re gonna try and expand outside the US, but again, that’s gonna cost a lot of money. And since you’re losing a billion dollars anally right now, that five billion dollar plus in the back doesn’t look so attractive anymore since, again, more money is coming in.

You’re losing this money. It’s okay to spend, and the results of that spending are increasing sales, which they’re doing, but it’s just not filtering down to the bottom line at all. That’s what scares me.

Now there’s something else that’s interesting and no one is really talking about with LYFT. Because Lyft discloses that it has 46 million in restricted stock units. That represents about 20 percent of the shares outstanding, and they have another 13 point eight million in restricted stock options which represents about five percent of the shares outstanding. So together with the RSUs, right, stock units, and employee stock options, they’re worth over five billion dollars.

A lot of this stuff is hidden, you gotta find this stuff, but it’s important to understand if you’re thinking of investing in this stock. Because you’re gonna get the shit diluted out of you by 25 percent. That’s a big dilution. Nobody’s talking about that.

Now what does that mean, dilution? In short, that means if Lyft’s market cap was around 25 billion right now, and if you’re pushing that five billion, it makes that market cap more like 30 billion, 30 billion plus. And what does that mean?

Well, the stock’s currently trading at 11 times sales as of 2018, but if you include that dilution, it’s trading closer to 14 times sales. Pretty incredible. People aren’t really talking about that.

But I’m looking at a company that did everything it can to create as much excitement. They raised prices … Coming out with this offering, it was just really, really hyped up, but it’s position for a lot of the insiders to make a lot of money. Especially with its percentage of stock units, employee stock options, these guys do very, very, very well on those.

So looking at the valuation, it’s at insane levels right now. Even the company growing sales by 40 percent is spending tons of money to gain market share. It’s not Resulting in profits. They’re in a competitive market that seems to have low barriers of entry. That’s why I don’t see how you have pricing power here. You have Juno, just entered the market, Bubble, which uses first responders as drivers, which is pretty cool.

“You’re always gonna be safe!”

I didn’t know that people have heart attacks or whatever when they’re riding in cabs all the time, but I guess in today’s day and age everybody’s really nervous, scared of everything.

But, when your model is, “Hey, we’re gonna raise prices here,” which they’re doing, you open the door to the competition.

And there is a limit on how much you can raise prices, because if you start changing more than taxies, then people are gonna start jumping in traditional taxis again.

So it’s interesting that market share’s a little … I don’t like that market share number. I don’t like the fact they’re losing a ton of money and said, “Hey, we’re gonna lose money forever.”

So, you’re able to raise prices and your sales are gonna go up by 50 percent and you’re still gonna report really big losses, but besides all of this, right, so besides everything I just mentioned …

If I made no sense to you at all, that’s fine that’s cool, whatever. All right, so I wanna dig deep into this thing. But so far what you learned, it seems like it’s pretty crazy to buy Lyft here.

But, this is the most important part of research, I think.

Forget fundamentalists, forget technicals, forget all that garbage. You gotta use your common sense. That’s what’s gonna separate you from everybody else. When you’re looking at common sense …

When a company IPOs, yeah, all the individual investors get excited, they can buy Facebook for the first time.

Twitter, Alibaba, Lyft, they get excited.

You need to understand. An IPO is a liquidity event for the people who bought the stock at much cheaper prices. Those are the shares being sold to the public, to you. Shares these guys had at $10, $5, even a dollar, and they’re selling them to you for $72. Which that went up to $87 and fell below $72 in the first week.

And you may say, “Well, Frank, aren’t these guys locked up for at least six months?”

Some of ’em. There’s plenty of ways you can hedge your position by shorting the stock, believe me.

And you may say, “Well, Frank, how do you short the stock? Isn’t that illegal since you need to have possession of shares, and the shares usually offered in IPO, it’s a small float that’s being sold during the IPO. It’s usually locked up by the underwriters.”

Not true, guys. There are ways to short a stock during that IPO period, right when it comes out. As long as you know where those shares are. Yes, it’s called naked shorting, which is supposed to be illegal, but it’s done all the time. As long as you know where the shares are, and they do.

Believe me, you got guys at Morgan and Stanley, Goldman and Sachs shorting the crap out of this thing right now. And they should because people shorting are the people that are in this stock at much cheaper prices that wanna lock in those gains. It makes sense. They probably know the stock is gonna come down tremendously over the next six months.

And when the full lock up period ends, a lot of these guys who bought it for 10 even up to 20 or 25 dollars a share, they’re gonna look to dump this thing immediately.

So as of yesterday, I looked at the short position, six million shares are short right now.

“Whoa, whoa, how did that happen How can it be short? I mean, that’s 450 million dollars.”

I think these numbers are gonna go much higher even though it’s super expensive to borrow too short for Lyft right now, but you’re talking about people, the investors are in this thing at 15 dollars and under, they’re looking to lock in their profits. They don’t care how much it costs to short this thing, to borrow.

Again, once that six month lock up period ends, watch out. I gotta tell you something, Lyft better report blockbuster numbers in the quarters ahead, which 90 percent of new companies who IPO fail to do.

Because it’s not easy going from a private company to a public company, it’s a whole new ballgame.

They’re reporting. You have to report every quarter, every number, the conference call, the lawyers, accounts, regulation compliance. Do you know how difficult that is? You’re a private company that nobody needs to know anything about you, other than the people that are investing in your company in the private rounds.

Now you have to report everything, every number, it’s not easy. Especially for a company the size of Lyft, which has a 25 billion dollar valuation right now.

And by the way, that 25 billion dollar valuation, guys, if this doesn’t make you skeptical. That’s 70 higher than what the company was valued 9 months ago. But last time the company raised money in the private markets, I think it was around June, it was private … 70 percent in 9 months. What happened with this company to be valued 70 percent higher at the markets?

I think Google might’ve came in at that round. Good for them, they came in at that round a year later, boom. You think Google’s not looking to lock in their gains, or trying to short the stock, or just trying to hedge their position here, which means they’re gonna short it?

Believe me. The guys at Morgan and Stanley and Goldman and Sax are very very very smart. Their short business is gonna get bigger and bigger.

So guys, be careful buying Lyft here. They really need to do a ton to fit in their crazy valuation.

Is it possible? It’s possible. It is. Maybe the company does, they take more market share. They kill it, their losses go from a billion to three hundred million, they say they’re gonna be profitable a year and a half from now. They could do it, it’s just based on what I’m seeing right now, that ain’t happening.

It ain’t happening.

They don’t have much more pricing power before they start losing business to other services like Uber. Generating massive, massive losses, which they say, “Hey, this is gonna continue for a long time.”

And it’s just crazy that his is a company that’s spending more money, able to increase sales, yet that money’s not able to filter to that bottom line. We need to see that to change first.

Now I’m betting against them. I don’t think it is. I think it’s a really hyped company. I think the investment firms, the underwriters did a great job to hype this up, to get this thing launched, and when you look at the underlying fundamentals, even the companies that are covering this thing, one put a sell on it with a 40 something target price. Another one’s in neutral with an 80 dollar target price, which I can’t even justify.

But how do you justify this thing going to 100 dollars here?

Maybe it does, I don’t know. Maybe they find a way, maybe they come up with a way, autonomous vehicle just for ride sharing, whatever it is, I don’t know, but a lot has to happen for this company to really go higher from here, and I really don’t see it happening.

So that’s my analysis, let me know what you thought. Frank@curzioresearch.com.

Again, it’s not just P rations, it’s not just fundamentals, it’s not just technicals. It’s common sense as well, looking at all the details, looking at the options, looking at how much money these freaking guys are making, and they’re trying to sell you the stock the individual investor, basically trying to cash out if these guys made huge, huge profits.

We saw the same thing with Facebook. Facebook came down tremendously when it came down. Below 30, I think at 29 from its 50 something IPO price.

But Facebook figured it out. They figured out how to make money. How to raise money, advertising dollars, they figured it out and the stock took off.

I just don’t see Lyft figuring it out. I don’t. So guys, I would avoid it. I wouldn’t buy it here.

I think it’s very dangerous. Again, I could be wrong on this thing, but … Man.

I would definitely wait till they report next quarter, their first quarter results and their second quarter, just to see where they’re at. Because that’s when the company’s allowed to pronounce their projections. Right now, you’re not supposed to announce your projections.

I went through this Curzio Equity Owners. Okay, you can provide the numbers of the past years but you’re not allowed to project.

So now that they’re a public company, on their call, now they’re gonna project. People are gonna ask them, “Okay, what is your projection? What do you see for the next year?”

And they’re gonna say, “This is what we see for the next year.”

I’m curious to see what they do see for the next year. How much they’re gonna lose, how much sales are gonna increase … I think it’s gonna be a lot less than what people think on the sales side, and I think those losses could accelerate.

Anyway.

Guys, hopefully you enjoyed the podcast. That segment on the NCAA bracket, which I’m done with now. Right, I won’t talk NCAA anymore, but again, there’s not too much going on in the market, we’re in between periods here with earning season and stuff like that, but it’s gonna start getting really busy again, and we’ll focus on really, really good stuff.

Economic stuff. Bringing on great guests. Give you lots of stock picks.

So, you know, again, anything you guys need give me a shout. Frank@curzioresearch.com. That’s Frank@curzioresearch.com.

Thank so much for listening. Appreciate, as always, all your support.

I’ll see you guys in seven days. Take care.

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