Jamie Keech: Positive on Junior Mining, Northern Vertex and "Project Shadow"
Trevor Hall Hey everybody, this is Trevor Hall with Mining Stock Daily. It's Friday. We have another in-depth interview. Thank you so much for tuning in as you do each and every day. It's always wonderful to get some nice notes and compliments from everybody. Bring it my way. You can e-mail me at Trevor@clearcreekdigital.com. We have a great interview today with the one and only Jamie Keech from Capitalist Exploits and Resource Insider. I always enjoy my conversations with Jamie even when we are just having a beer and conversation together. Jamie goes in depth a lot with about his trip to Northern Vertex and they get a video that's launching later today. Be sure to check that out on YouTube. So we talk Northern Vertex, we talk a couple of the deals that Capitalist Exploits are working on for its members and also how people who are not members of Capitalist Exploits can find subscription and potentially find some more information on how to participate. Real quick special thanks to our sponsors that's Integra Resources, Pacific Empire Minerals, Western Copper and Gold and a new sponsor to the family, that's the Association of Mineral Exploration. They're in Vancouver, British Columbia. Thank you so much for your support. So without further ado, I'm going to switch over to my conversation with Mr. Jamie Keech. Thanks so much. Enjoy this interview and have a great weekend. We'll talk to you on Monday.
And joining me right now is the one and only Jamie Keech. He is the founder of Ivaldi Venture Capital and also a co-founder and CIO with Capitalist Exploits. Jamie, welcome back to the show. Good to have you, how you been my friend?
Jamie Keech How's it going Trevor. Thanks for having me on yet again.
Trevor Hall Yeah it was great to spend some time with you in Beaver Creek. We were meant to do something then but I kind of had some technical difficulties, I will admit so I apologize about that. But I'm glad we could connect again now. And you've got some updates to share on a couple of different things that you're involved in. But before we get into some of those specifics I did want to chat with you a little bit about just kind of where sentiment is with the Junior Miners right now--specifically on the investment front. We're seeing gold still in kind of this holding pattern around $1500 right now, some geopolitical events seem to maybe keep that at that spot but not a whole lot of love amongst Junior Miners right now. What are your thoughts on what it's going to take to get some of those smaller explore co's share prices moving?
Jamie Keech Yeah. Well I'll answer your initial question. My sentiment is really high, actually. I actually am loving this as you called it holding pattern. Where everything is sort of holding in its place. You know there's interest in this space again which there hasn't been in what feels like a very very long time. But there's still a lot of very good deals to be had out there. And you know we're seeing gold kind of up and down up and down around this $1500 range and I think there's this misconception amongst people that gold has to go to $1800 or $2000 or whatever that number is for the real opportunity to begin. And in my view that's really just not true. There is a lot of good opportunities happening at $1500 gold as there were good opportunities happening at $1300 gold. And it's a matter of finding those companies that have the projects that are going to be profitable and successful at today's gold price or hopefully even lower. And then getting into those I think, you know we all hope that there's going to be a ton of money flooding into this industry that gold price is going to go to $2000 plus, I think that that will happen. And I think probably most of your listeners listening to this podcast, the guys that listen to my podcast, you know they're of that view that mining is undervalued and it's only a matter of time. I don't have a crystal ball, but I do think there are lots of great ways to be investing today that you'll see returns even at a $1500 gold price or less.
Trevor Hall I've heard a couple of different ideas of what's really going to get the Juniors moving. You know I've heard you know $1600 gold on a daily close basis. I have heard $1550 on a two quarterly close basis and I actually think with maybe some of the financial numbers and production numbers starting to come out this week and next week, maybe that could be a catalyst as well because this would be the first time that a lot of those producers have had $1500 gold in their production numbers, right? Have you seen some of that coming down?
Jamie Keech You know I think those sentiments are in general are frankly bullshit. You know if you would have asked us at $1200 gold what would have happened at $1500, we would have all said gold stocks would be flying right now and they're doing better but they're not flying and we don't fully know what's going to happen at any given gold price. What's going to make a difference is when generalist investors decide it's time to own gold and I don't know like they're not going to want to own gold as a reflection of a high gold price, they're going to want to own gold as a reflection of what is happening in the world and believing there's better value there than in general equities or bonds or wherever they've been putting their money previously. So I don't want to speculate on what the number is going to be but it is going to happen and an increased gold price and therefore an increase, you know run in juniors and mid-tiers and majors is going to be reflective of the flow of capital, not the other way around, in my view.
Trevor Hall Well we've seen a good inflow of new investment dollars into some of the major gold ETF's like the GDX yesterday, the GLD--that type of thing so volumes seem to be high. You know it's, so that's a good sign right. But it's still not necessarily where it needs to be.
Jamie Keech I mean that's the first step I think in the process, right? It's going to go to the stable low hanging fruit. The as you said ETF's, the majors, the royalty and streaming companies. And then it's going to trickle down through the gold and mining environment in general. And I think the next area we're going to see this sort of influx of cash is going to be the mid-tiers. And that's an area that I like to focus on myself. You know you get a lot of the--we get a lot of the benefits of having a producing cash flowing mining company insofar that it really undercuts the risk profile. But you still have this--you still have the opportunities to see multiple returns, you know doubles, triples or who knows how high they could go in the event of a take-out or consolidation or M&A or even just an increased gold price.
Trevor Hall Well let's talk about one of those mid-tiers, Jamie, that I know you're not bashful of mentioning and that would be Northern Vertex. Northern Vertex trades on the TSX V with the symbol NEE. The share price up until June really saw some consolidation and downward momentum but once mid-June hit, I mean things really started moving. It jumped from $0.18 In June and looks like it's about $0.28-$0.29 right now at time of recording. Give us a little bit of insight of Northern Vertex--what you like about the project and maybe some analysis of what that price movement has meant the last few months.
Jamie Keech So me and my members we invested in Northern Vertex earlier this year at the time we got in at what was an all-time low. We got a full warrant. You know I went and spent a couple days on site, got to know the management team, got to know the project, what was going on. I spent a lot of time talking to people before we did this and what I saw at the time was a massively undervalued company that had a few kinks to work out. And then they were you know really going to see these returns that you're talking about now. So, the problem and then the correction of the problem is really a perfect storm there. So, this summer what happened was a few things. One, Northern Vertex basically started hitting their production targets. And the reason they weren't was because this is a heap leach operation and heap leach operations are notoriously hard to get flowing properly. So, for those listening at home we don't know what that is, you're basically pouring cyanide over a massive pile of ore and out of the bottom trickles cyanide containing gold. And getting that flow going properly, it takes time, it takes trial and error. It's typically possible for most heap leach operations but they normally take a lot longer than one would anticipate. And that was exactly the situation Northern Vertex had found themselves in. They were in a startup phase, they were ramping up, they were putting ore on this pile, but the gold wasn't coming out the other end as they had anticipated. They hired a new team. They went in, they applied better management practices and ever since they've come on we've seen increase in production month over month over month over month. There was another aspect in this, too. In the last deal that was done, the debt to Sprott was taken out by a stream from mavericks. So, they eliminated a big portion of the project's debt. But there were some shares. There was an equity component associated with that. With respect to Sprott, and Sprott was selling some of their stock into the market which created this downward pressure on the share price, that sentiment cleaned up. And then the last thing is you know we went from, I think it was $1300 gold to $1550, at the highest. So, all these things came together for Northern Vertex at around the same time. And that's why we saw their share price in Canadian dollars going from something like $0.17 to $0.35.
Trevor Hall So as we see production numbers increase over the last few months, what's your expectations for the next set of financials with Northern Vertex. What are your thoughts here?
Jamie Keech So my thoughts in general is what is going to be happening and continue to happen is that they're going to perfect their process. And as a company typically perfects their process and you know this is my experience as a mining engineer, you get more consistent returns. You know Northern Vertex, I believe around 3000 ounces per month, over the last couple months and that's going to--if they continue to meet their targets, continue to grow into the high 4000 range. And I don't see any reason why they're not going to be able to sort that out. You know they've put in some great people on the team. They've sorted out all their issues and this is a company that's really been trading like a failing mining company and it is not failing. They're actually doing a fantastic job and that's what we saw going in that there was this opportunity there to tweak a few things and really unlock this river of gold that could come out and turn it into a cash flowing company. What's particularly--let me finish sorry. What's particularly interesting about this is how these heap leeches work is you're constantly stacking ore on it and that ore is containing gold. And because they were having problems getting gold out of the heap leach early on, there is an essentially a surplus of gold locked up in there that is just waiting to get extracted and to flow out the other end. And I think that putting in the pieces now that there's the potential to see a big, some big big numbers over the coming months now that they're sorting that out because that locked up gold wants to come out. It wants to get diluted into the cyanide and out the other side. So, it's an exciting time for Northern Vertex.
Trevor Hall Do you think that it's a real strength of yours to go look at these projects as a trained mining engineer and to look at those projects that are in the development and production stage to see where the catalysts are going to lie and where the upside potential as an investment might be. As opposed to say an exploration project where you're trying to figure out you know taking some IP data information to decide where to put the drill and build out a project.
Jamie Keech I mean, frankly yes. To my knowledge there is nobody else with my background doing the kind of work that we're doing, in terms of creating a newsletter and giving this information to people. I am a mining engineer. I spent most of my career both on the technical side working for big consulting groups like Hatch Consulting or Leighton Asia, an Australian contractor, all over the world. And then I spent several years here in Vancouver where I am now working for what became Equinox Gold, in essentially a corporate development role. I was manager of technical services but that primarily involved looking at new acquisition targets and most of them were later stage or developing projects. So, I got a lot of experience in terms of looking at these things and evaluating them and trying to get an understanding of their value with respect to where they're trading at. To answer your second part of your question, you know a lot of what we do is earlier stage stuff. They're not producing, they're not developing and it's a geology question and I'm not a geologist. However, I know a lot of geologists and I've worked with a lot of geologists. And you know this is a bit of a pet peeve of mine, but we approach things at Resource Insider, my newsletter, a little bit differently than I think a lot of newsletters do. We don't--I don't claim to be the mining guru that knows everything about anything and can predict the future which is something you see on the Internet a lot. I approach this in the same way that I would approach mergers and acquisitions and corporate development whilst working on a corporate development team in a company. And what that means is I draw on other resources. When I have a geology problem, I talk to a geologist. And I don't just talk to any geologist, I find a geologist that is the expert in that type of deposit in that part of the world and I run it through him and hopefully one of his peers and I build a consensus and I rely on experts to make expert decisions. And I consolidate those opinions and then I make a decision how I want to spend my money and how you know what we want to tell our members what we're doing and give them the opportunity to participate into.
Trevor Hall Well Jamie, I know we got a little bit off track talking about Northern Vertex and I do want to ask you about Capitalist Exploits and some of the opportunities you are providing to your readers and members here in just moments. But I do want to briefly say you published a video about Northern Vertex with a recent trip there right. That's publishing today.
Jamie Keech That's right. So, you know something I've spent a lot of time thinking about is how do you show people at home how we'll mine or an exploration project or a big construction project actually works. What does it look like? What are the components involved in that? And you know it's hard to do that over a newsletter or over a podcast. So, what we set out to do was to create a video--a short video about 15 to 20 minutes, where we actually take people to the mine through the different stages and we explain what's going on. We explain the challenges. We explain you know, what you should be looking for. And we did this with Northern Vertex. I had a relationship with them. They had a beautiful operating mine that was easy to do this at. And you know what, we make it fun too. There's lots of information about the region. We talked to a guy; a local historian named Gunfighter Mike in the nearby town. And you know it's a cool experience and it's a good way to understand what the hell is actually going on in these things and visualize the scale and the scope of things, which is often very very hard to do at home. So that's a new web series. It's called Unknown Capital. You're going to be able to find it at our website which is resource-insider.com. So that's where you'll find it--Unknown Capital at Resource Insider.
Trevor Hall Very cool, I look forward to watching that later today. Alright now let's move on to Capitalist Exploits. And for people who are listening to this and maybe are unaware of what Capitalist Exploits is and Resource Insider, it's an investment service focused on providing subscribers with independent research and access to investment opportunities in the mining and metals space. I know there's a little bit more to that than was just in that quick mention there, Jamie. But give us give us a little bit more of what kind of private placements you and your team are working on that are going to be available to subscribers moving forward.
Jamie Keech Yeah. The concepts are really simple, Trevor. What we're basically doing is looking for where to apply our own capital, where we want to invest to hopefully make the most money. We set up a subscription service. All our members, they hear where we're investing our money. They get to come in alongside us on the exact same terms, on the same timescale and they get to hear all the information that I'm looking at in turn to make these decisions. So, this is going to be a detailed report. It's going to interviews of management. It's going to be photos and video from site visits. All the sort of things that I'm thinking about when I actually want to invest in a company. What we're looking at now is we are focused on gold and we're focused on gold in Nevada. And the next project, the next deal we have coming up we're calling it Project Shadow. We do use code names because it takes--sometimes we're not allowed to release the information publicly. But it's a really really compelling story. I can't say who the company is yet or who the people behind the company are but it's a really crack team of geologists and you know business financial people that have spent a career in Nevada. They recently sold a company for $117 million. They did it in under 18 months and now they've spent the last year looking for a project that they're able to replicate this on. And after looking at I think it was 80 to 100 projects, they found this this gem really close to Reno with all the indicators that they're looking for. So it's huge. It's got historic drilling on it--that's really perspective. It's in an area that's permittable and they were able to get it for a really cheap price. So you know what I like about a story like this is there are guys that are not trying to reinvent the wheel. They're basically trying to do exactly what they have done before, with the team they have done it with, with the backers that they have done it with and fortunately they've invited Resource Insider into a chunk of this deal that was highly highly contested. Sorry when I mean contested, I mean sought after. It was highly sought after. It was oversubscribed. We were able to cordon off a good chunk for our members. And so I'll be investing my own money. Our members, I assume will be coming in and anyone that signs up for Resource Insider before that will have the opportunity as well. I should note that Resource Insider is for credit investors only. The vast majority of the things we do are private placements, you need to be an accredited investor for that. That's unfortunately the reality. So anyone interested, please reach out. We can give you some more information on it, but you do need to be an accredited investor.
Trevor Hall I'll try to be sure to put a link into the show notes here on the podcast as well for people who are not members and may be interested in seeing if that is something they'd like to inquire about. Does that good, Jamie?
Jamie Keech That sounds great. Thank you, Trevor.
Trevor Hall Yeah, you're welcome. Jamie, that's about all the time we have. I know it was a quick almost 20 minutes, which is a little bit more time than I thought. But you know that's good information. I look forward to watching the video. I look forward to seeing Project Shadow get off the ground. I love code names. I think that's awesome.
Jamie Keech It's a clever name, too. When the actual deal comes out, you'll see I'm quite proud of this one.
Trevor Hall Awesome. Awesome. Well Jamie how can listeners reach out to you if they would like to inquire about any projects or questions they might have.
Jamie Keech Yeah go to our website. It's just resource-insider.com. You can find me there, you can find my contact information there. Alternatively, you can follow me on Twitter, it's just Jamie_Keech. And please check out Unknown Capital. We're really proud of it. We put a lot of work into it and we're hoping people like it because we want to do more. And something that I'm really passionate about and I think this industry is missing is a format by which to really show how these operations are working for people at home who don't get the opportunity to go on site visits every month like like you or I, Trevor.
Trevor Hall Alright. Well you know you and I have had many conversations around that topic for the last couple of years so we will continue to have it. Maybe this will provide some sort of a solution, so I'm proud of you and putting that content out there. That's Jamie Keech of Resource Insider. Jamie, thank you so much for your time. Hey man, you be well my friend, okay?
Jamie Keech Awesome. Thanks a lot man.
Trevor Hall Mining Stock Daily and its affiliates are not responsible for any loss arising from any investment decision in connection with the material presented herein.