This year’s annual Stockhouse CEO Martini Party featured three capital markets heavyweights, in an event that hosted over 200 public company CEO’s and deal-makers. Leading the discussion were: Mark O’Dea of Oxygen Capital, Marin Katusa of Katusa Research, and Michael Gokturk, Technology Angel Investor.
It was a rare opportunity to hear industry leaders speaking to their executive colleagues. In a wide-ranging discussion, these panelists shared their perspectives on gold, Blockchain, energy metals, AK47s, and more.
The full transcript is available. For readers without the time to absorb the whole discussion, highlights of their views on general investing and important market trends are presented below.
Mark O’Dea on Industry trends
On metals markets:
- I spent the last hour just talking to people around the room, and I heard a lot of lithium, and rare earths, and cobalt, and niobium, and blockchain, so I feel completely ancient and out of the loop here, as I’m just involved in gold. Times are changing.
On the current political scene:
- Political landscape? It’s a huge factor. The 2 filters we look at every project through are, “Number one: does this have the legs to be a mine?” And if it does, the next question we have immediately is, “Can we work in this place?” Are we going to own this deposit two years from now, after we invest $200M in it, or is it going to be taken away? Are we going to get hung up in regulatory red tape for the next seven years? Time is your enemy, this is a business where you have to do things quickly, because the IRR clock is ticking. Some places in Canada are terrible for that – if you are going to be stuck in permitting for 5-10 years, don’t go there.
On the “changing of the guard”:
- Another important point is one of the trends we are seeing in the industry, is a trend of “changing of the guard”. It’s a theme we hear a lot, but people who’ve had full careers as CEOs are stepping aside and making room for new ones to come in, and one of the things we generate in Oxygen is new, first time CEOs.
On cheap gold stocks:
- The bottom line today is that in the gold space, stocks are dirt cheap, because there is no money out there. It is not flowing into the space, it is in other things. Things are dirt cheap, and the equities have decoupled completely from the price of gold. So if you are patient and you pick your spots, now is a great time to load up on very selective names, that are backed by good projects in good places, and good people.
Take on the deals where you have little to no competition. Go where no one else is going.
- Marin Katusa, Katusa Research
Inside the mind of Marin Katusa:
Why a contrarian?
- I try to be a value contrarian. For reality purposes, let’s use what I did with Northern Dynasty two years ago as an example. At the time, it was one of the most hated stories on the street. You really get to know who the people you are backing throughout a process like that. “People” is the most important aspect, and I really believed in Ron Thiessen and Bob Dickenson… After being involved in raising over $40 million and becoming one of the largest shareholders of the deal, the stock dropped another 25% lower than my cost base. Your testicular fortitude gets tested during times like that.
On picking companies:
- Stick to great people with promising world class projects in non AK47 nations that are loved and you will make a lot of money in the long run, although you will have to learn patience until the love comes back. Try not to go to the flavor of the day, because you are going to be overpaying. Right now, one of the most expensive things in our market are CSE shell deals. Two years ago, people would give them away for free.
On what he avoids:
- If I see an exit that is profitable, I’ll take a serious look at almost anything. What I won’t touch is very, very illiquid fly by night operations – life’s too short, and I hope the regulators go after the bad guys as it tarnishes our whole industry.
On Electric Vehicles (EVs):
- I think cobalt is a sector you should really be paying attention to and very few ways to play it. I’m a huge believer in EVs and copper is a great way to have exposure in the EV revolution which will happen. Look, everyone knows about my involvement with Copper Mountain, been on the board for 12 years, I’m a mega copper bull. For the EV spectrum, it is lithium, cobalt and copper that you want exposure to.
On cryptocurrency and Blockchain:
- I think what Michael is onto is going to be very big. The trend is your friend, whether you believe it or not. If your religion is gold only, and that “digital is fake”, you need to give that up… It took me some time to really understand the potential of the sector and its huge. One needs to at least educate yourself in it.
On the Green Energy Revolution:
- I also think green energy is real – there is such a myth that green energy is uneconomic without subsidies. That is so false. Donald Trump is now applying subsidies to coal to compete with green energy! Feels like the Twilight Zone.
“What won’t I buy?” At this stage of my career, I don’t want to go somewhere I have to pop on body armor to go explore for gold.
Michael Gokturk on cryptocurrency and Blockchain
On disrupting investment patterns:
- Listen – mining is dead. This is the new mining. Talk to your kids. I don’t want to be “that guy”, but talk to your kids. Who is buying gold right now, and who is buying bitcoin?
On Blockchain:
- Any time you are moving money around the world, whether paying suppliers, or vendors, from gold into dollars, back and forth, hedging, transport costs, we are working on the solution to move that money around faster with as little risk as possible, as quickly as possible.
On Blockchain impacting different sectors:
- …health documents, licenses, anything that requires this long, antiquated, drawn out process where you are waiting, those are the people that Blockchain will replace. Now as business owners; who wants to remove those 25-page subscription agreements? Anything that requires a long, drawn out process, that’s what Blockchain addresses.
On new ways to raise capital:
- Today, you have probably heard the term ICO, Initial Coin Offering, there’s a lot of bad actors, just like in any industry, but when you do a coin offering, you can raise a quarter of a billion dollars within 13 minutes.
And the $100,000 question, posed by Marin Katusa:
“Mark O’Dea – if you had $100 grand, and you could only buy one gold stock, what would it be…?”
For the full discussion, read the transcript here.
Forward-Looking Statements:
All statements in this document, other than statements of historical fact, are "forward-looking information" with respect to any public company discussed herein within the meaning of applicable securities laws, including statements that address potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold, and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources, timing and likelihood of deployment of additional drill rigs, successful delivery of results of metallurgical testing, the release of an initial resource report, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of the public company’s mentioned and there is no assurance they will prove to be correct.Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information.
The material published in this transcript is for informational purposes only. The material is not to be construed as an offer to buy or sell, or the solicitation of an offer to buy or sell, any security, financial product or instrument; or to participate in any particular trading strategy in any jurisdiction in which such offer, solicitation or trading strategy would be illegal. No Determination of Suitability Made; Not All Risks Disclosed; Private Advisors Recommended Readers should not view any of the opinions expressed in this transcript as offering personalized legal or investment counseling. Investments discussed in this transcript should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question.
The opinions expressed in this transcript are those of the panelists and not of Stockhouse Publishing Ltd.