The Mining Paradox: Record Low CapEx Just Created A Generational Buy, Here's Why | Tavi Costa

Jerome Powell claims inflation expectations are anchored, but skyrocketing commodity prices are telling a much darker story. Tavi Costa joins Jeremy Szafron to break down why the Federal Reserve has lost control of the inflation narrative and why a historic hard asset breakout has just begun.

In this Kitco News interview, Tavi Costa of Azuria Capital details why the global economy is entering a 1970s style stagflation cycle. Costa explains that with federal debt at record levels, the central bank cannot raise rates to fight the current energy and supply shocks, leaving them entirely trapped. He exposes the massive divergence between official CPI data and the real cost of raw materials, warning that this inflation impulse will only accelerate.

Beyond the macro picture, Costa reveals exactly how he is positioning his own portfolio to capitalize on this massive market disconnect. He explains why the recent pullback in gold and silver was a generational buying opportunity and shares the exact criteria he uses to pick mining equities. Costa even names the specific mining stocks he is buying right now, arguing that record low capital expenditure across the industry has created the ultimate asymmetric trade for investors.

Recorded March 30 2026

Follow Jeremy Szafron on X: @JeremySzafron (https://x.com/JeremySzafron) 
Follow Kitco News on X: @KitcoNewsNOW (https://x.com/KitcoNewsNOW) 
Follow Tavi Costa on X: @TaviCosta (https://x.com/TaviCosta)

Chapter Timestamps:
00:00 The Fed inflation trap and commodity breakout
01:31 Why central banks cannot stop this supply shock
03:32 The US debt crisis and the return of the 1970s
06:01 The CPI illusion vs official inflation data
09:35 Will rising energy costs trigger social unrest?
13:13 The hidden buyers of US Treasuries
16:32 Sovereign gold selling and emerging markets
19:50 Why the mining cycle is nowhere near a peak
23:42 The structural deficit in copper and silver
31:13 Why Tavi Costa is buying the gold and silver dip
35:50 Top mining stock picks Orla Mining and Aura Minerals
41:00 Final thoughts on hard asset positioning

#Gold #Inflation #TaviCosta
__________________________________________________________________

Like, share, and subscribe to Kitco News—and turn on alerts to stay current with expert interviews, market insights, and breaking news coverage. 

FOLLOW US:  
X: https://x.com/kitconewsnow  
Instagram: https://www.instagram.com/kitconews  
Facebook: https://www.facebook.com/KitcoNews  
LinkedIn: https://www.linkedin.com/company/kitconews

Learn more about Kitco News: https://www.kitco.com/news/about/ 

For more information on advertising, sponsorship and marketing promotions – please visit our online media kit at: https://www.kitco.com/advertising  

Disclaimer:  
The videos are not intended to provide trading advice, and the views expressed do not necessarily reflect those of Kitco Metals Inc. Kitco News, its anchors, producers, and reporters are not responsible in any way for the performance or actions of any sponsor, advertiser or affiliate of Kitco News. In no event will Kitco and its employees be held liable for any indirect, special, incidental, or consequential damages arising out of the use of the content in this video.

Disclaimer:  
The videos are not intended to provide trading advice, and the views expressed do not necessarily reflect those of Kitco Metals Inc. Kitco News, its anchors, producers, and reporters are not responsible in any way for the performance or actions of any sponsor, advertiser or affiliate of Kitco News. In no event will Kitco and its employees be held liable for any indirect, special, incidental, or consequential damages arising out of the use of the content in this video.

Transcript

SPEAKER_01 0:00

Kitco News in Focus with Jeremy Saffron.

SPEAKER_02 0:03

Welcome back. I'm Jeremy Saffron. Gold is hammering the$4,500 level. Oil is pinned above 110, and the central bank is quietly admitting it cannot control the supply shocks driving both. Jerome Powell recently noted at Harvard that the Fed has limited ability to counter these types of war-driven disruptions while arguing that longer-term inflation expectations remain anchored. Now the bond market has rallied and traders are aggressively pricing out rate cuts. This comes as shipping through the Strait of Hormuz remains severely disrupted, leaving the market to deal with a major supply shortfall. The hard asset complex is responding, but not in a simple way. Spot gold is catching a strong bids while silver pushed uh past that$70 mark. Now, it is a market wrestling with inflation risk and growth fear at the exact same time. Powell says stay calm. Tavi Costa says the system is trapped, and the market is trying to decide which one is right. Now joining us to cut through the noise is Tavi Costa, of course, founder and CEO of Azuria Capital. Tavi, good to see you. Welcome back to Kitco. Thanks for having me. Looking forward to this. Yeah, me too. We were chatting before. It's never really a dull moment. And there wasn't a ton of substance coming out of this talk from the Fed and of course Jerome Powell. But I just want to kind of start with those recent comments. I mean, he was talking at at Harvard and we saw a little bit of a market reaction. I mean, Powell's effectively saying that the Fed cannot do much about the oil shock, but he's also saying inflation expectations remain anchored, and there's no immediate need to respond. I mean, does that support your trap Fed thesis? Or I mean the easy ballpark question is does it suggest that the market is kind of absorbing this better than the stagflation camp expected?

SPEAKER_03 1:44

Yes, there's a sort of an illusion out there by traders to think that the Fed can hyperate substantially or do anything to tighten financial conditions in the situation we are currently. And I just don't believe in that at all. I think I do think that inflation is likely to stay higher for longer. What we're seeing perhaps with the resource markets, the world is still just not understanding the potential for sustainable moves of resource prices to staying higher than historical levels. And if that's the case, central banks, this is like the 1970s without a central bank that can really have the capacity to raise rates at all, and if if any. And if that's the case, inflation is going to be fairly unleashed. And a lot of assets that tend to perform well under a suppressed interest rate environment with inflation running hot are likely to be big winners. That's why I keep hitting on the idea of owning hard assets and things of that are sort of in that realm. And so it's going to be a lot of opportunities too, because markets are just thinking through very short-term lenses here that the Fed has any control over the situation. And the problem of the resource markets, in my view, is that this is coming from a lot of people are looking from a demand side. I'm looking from a supply side. And the real problem here is the fact that we don't have a lot of supply of most resources in the world, metals in particular, but others too. And by raising rates, we're not really fixing the core of the problem here. In fact, by having higher energy costs, it's just making metals availability much harder. So yeah, there's a lot of issues and a lot of dominoes to fall still.

unknown 3:36

All right.

SPEAKER_02 3:36

So Tabby, I mean, you're you're you're saying that the market still believes the Fed can respond, but but your argument is that it kind of cannot here. I mean, what exactly is the market still misunderstanding? Is it underestimating how constrained central banks are by debt and deficits and the sheer lack of spare capacity in resource markets?

SPEAKER_03 3:55

Yeah, I think there's lots of things going on, in particular with, I mean, history is taught us a good lesson about the British Empire in the 1800s when we basically had to restructure their debt. It was about 200% of public debt to GDP at that level. And you know, you can grow your debt as much as you want until you actually reach a problem of interest payments to GDP at about 4% to 6%. So, in other words, you have to grow the economy at 4% just to pay down your debt. That sounds incredibly familiar to today. So we're gonna have to force rates lower, allow inflation to run looser. And the world we're living today, it's like the 1970s, but with a Fed that simply cannot raise rates at all. Like back then, we raised rates by double digits. We can't do that today. So, what we're gonna be having to do is letting well de-globalization is taking its course, which is caused by the overwhelming levels of debt. Debt creates tensions geopolitically, and so that shouldn't go away, that should continue to stay in place. And so it's causing now G7 economies to do onshoring and to reduce reliability with other economies. And on top of it, uh you have a situation where not just China but other economies like the US are looking to build critical uh mineral reserves, and that's going to create a structural demand for resources overall. And so this is all sort of coming together with a Fed that can't do anything, has no ability to raise rates, maybe, maybe can raise once or but I just I just don't think that it is even possible. I mean, look what's going on. Private equity is imploding, the banks imploded not too long ago. I think we're seeing some of the the digestion happening in the technology space, given how multiples are so uh uh you know large relative to where rates are. So the cost of capital is starting to have a real impact on valuations, which we all know are highly inflated uh in in the US. It's all frothy. And so I don't know if the system can really withstand uh rates going much higher. So the policy becomes lowering rates. The policy, regardless of inflation, regardless of labor markets and other things, you have to focus on lowering rates at all costs. And so I think us as investors, we really need to be then looking at the world with the lenses of, all right, well, what tends to benefit from an unleashed inflationary environment and a Fed that can't do anything about it? And so there's a lot of things. It's gonna be a whole world of things to invest that I think are gonna do quite well. Uh and it could be hard assets, it could be commodities, of course, um, and then it could be businesses that are linked to that, it could be emerging markets that tend to do quite well uh because of that as well. So it's gonna be a combination of companies, countries, and asset classes that have been neglected for a very long time, and it could perform quite well in this next five to ten years.

SPEAKER_02 6:53

And I remember you you seem to like some of those emerging markets too, as you and I were chatting. Um, I want to bring up a chart. I think, Louie, you have it. It's you just shared it on X recently, and it was interesting. I mean, you're showing commodities going completely vertical while the official CPI flatlines near what, 2.4%? I mean, looking at this divergence, how long before that raw material inflation bleeds directly into CPI and shatters the narrative that inflation expectations are actually anchored here?

SPEAKER_03 7:21

Well, it's so hard to say because the yellow line is real inflation and which is commodities and raw material prices going higher. And then you got CPI, some smart PhD economist, I'm not going to name who, basically made a study about what's the impact of energy cost on CPI. And his conclusion was that was going to increase by, I don't know, two to three percentage points, you know, an increase of gasoline price prices of over 30 to 50 percent, um, you know, only has an impact of 3% of inflation. Uh, what type of world are these people living in? I mean, if you look at any research for the bottom 50% of the population, that's at least 25% of their budget, usually. And that though I looked into the some different types of research that that is a range as well, between 15 to 25 percent of someone's and a lower 50 percent of the income uh window would actually be spending about 15 to 25 percent on on fuel. So you know, how about food prices? Now, if we usually when we tend to see energy costs rising, the next dominant or fall, if you will, which is not falling, it's rising, would be agricultural commodities. Agricultural commodities has a direct impact on food prices. And then you have inequality on top of all this. So, can we see social unrest and and those consequences in protests on the streets and things like that? Um, so like the Arabic Spring, but maybe in the US, maybe in developed economies. Uh, we're not too far from the inequality issues that we tend to see in more emerging markets economies. Like I'm currently in Brazil, there's a lot of inequality here, but the US is not too far behind. I mean, we're seeing some real issues of disparities of income in in those areas, and so people are going to not like gasoline prices approaching, going above$4 and so forth. I mean, that's going to be a real problem for consumers. And so I think that again, going back to a point I made earlier in the conversation, the world is just looking at this situation from a PhD lenses that CPI is not going to move and all. And that is becoming not just you, just it's not the real world. I mean, it it we know inflation is a lot higher than what's CPI. And I'm not coming here from a doom and gloom perspective by no means. I'm just saying that I think that we're getting to a point where people are coming to the realization that these metrics are just meaningless in a way. And so I I cover macro for a very long time. And um, look, I don't pay attention to those numbers anymore because I it just doesn't add to my my research. In fact, I think I think the policymakers have to act on the debt problem regardless of inflation and and the labor markets. That becomes their main mandate at this point. Um, and so yeah, I do think there's a lot of issues going on with this. And I do think that his statements today, Jay Powell in in particular, that said that inflation is likely to come back to normal potentially by the end of the year. I think that's that's that's crazy and irresponsible to say that. Because I mean, look at the chart that I just showed there. I mean, the relationship is clear, and if that's the case, which one do you believe? That commodities will keep going higher, or or they're gonna actually catch up on the downside and follow CPI much lower. I mean, come on. And you know, to me, this is just, you know, it's sort of not trying to get angry here, but uh it is a little upsetting to see that type of commentary from uh from a you know Fed chair.

SPEAKER_02 11:00

Yeah, and to your point, I mean, I hear about it uh often too, that Main Street versus Wall Street divide, certainly in this position. I mean, is the deeper problem that policymakers and economists are are looking through it like you said, that PhD lens through models and abstract baskets instead of you know the real world where households feel energy and food first and hardest. And does that mean that they will stay behind the curve because the data they trust legs the actual pressure people are living through?

SPEAKER_03 11:28

Yeah, look, the problem is that uh everything is this the system is so lavered in the US that uh rates cannot rise. I mean, the the biggest war that we're having here is not Iran, is rate is rates going ballistic here, right? That's the biggest ballistic missile we're having here in the US economy, is not Iran, is rates going higher. And we got to do something about this. Now, I do think the markets also are underestimating what the government could do here. There's plenty of tools they can be using to fix the interest rate problem. Most of them have very, very inflationary consequences. You can debase debase the currency, you can um restructure the debt. All of this are going to have very important inflationary implications. This is why, when you focus on those constraints and what's going to cause policymakers to do, otherwise the system will break, will actually cause the reflection of that would be that hard assets are gonna actually go a lot higher in prices. And so this is why it always comes back to that, uh to that sort of dynamic in markets. And so it's so important to think it with through through through that way because it's uh eventually the suppression of rates and the weakening of the US dollar have to become part of the policy here. And look, recently we've seen yields moving a lot higher. And I I actually think that there is a very important macro trade, if you will, that I see it every few times in my career that is emerging here that could be quite significant, which is basically betting that rates are gonna go up substantially lower. And I don't know if it's because it's driven by a recession or simply driven by a Fed that has to cut rates because of the debt problem. And so I do think it's an interesting, again, it's a trade. That's not a structural shift in the economy, such as what we may see with mining, uh, energy, emerging markets, those are structural changes. That's more of a tactical view of things actually having to fold uh in order to not allow the whole economy to implode because the cost of capital is has exploded.

SPEAKER_02 13:41

Yeah. Yeah. Do you do you think you know that that kind of turn-driven, do you think it's it's driven by recession, by stress in sovereign funding markets, or or by kind of that realization that governments simply cannot carry these debt loads at current yields?

SPEAKER_03 13:56

Well, I'll just give you some stats on this, right? The banks in the US just bought, since Trump got elected, about almost$400 billion worth of treasuries. That's not a small amount. Like that's that's QE stuff, right? I mean, the QE you know bought maybe a trillion or or or or two in, you know, in the course of, I think in the course of the same, I gotta look this this up, but I I think it's not too far from what what the window of QE did during the same time uh in terms of purchases, it might not be too far. So all I'm saying is what they're purchasing of treasuries, either because they're being forced to do it or because they're doing naturally, I don't know, and I don't really care. It is very substantial and it will have an impact on creating new demand for treasuries over time. Now I know that a lot of people talk about, and I I, including myself, talk about the the reduction of demand coming from you know other central banks. So yeah, it that's kept that's definitely happening. Central banks are revamping their balance sheets by owning gold. And so the the local authorities need to come up with their own, I don't know, their own ways to to create demand for treasuries and be the buyers of last resort. And I it it could be through some sort of yield curve control, it could be QE, it could be through the banks, it could be so many different things, buybacks through the treasury market. There's all sorts of mechanisms. So I think that the the market is also perhaps underestimating those sort of radical and drastic changes that the government and the Fed have the ability to do when rates are rising and they simply cannot attain that. So I think that's a very real possibility that we can see rates going substantially lower given despite the inflation, despite all that that's occurring today. It could be driven by a recession too. Um and and maybe maybe a self-inflicted recession. A lot of people think that what's happening right now is a self-inflicting recession kind of situation, which would cause rates to fall in a normal world, of course. Um, and so yeah, look, I I I think I think there's all sorts of scenarios. There's a lot of optionality to that view, which is why I like it.

SPEAKER_02 16:10

Yeah, yeah, you're not kidding. And you know, we're seeing massive historic moves in the physical gold market too, but the motivations seem to kind of be splitting here. I mean, we saw reports that Turkey sold and swapped 60 tons of gold, about$8 billion worth to defend the lira from economic fallout of this war. And at the same time, I mean, Hong Kong is actively wooing central banks to build a gold clearing system to rival London. I mean, I guess, Tabby, is is gold becoming more important as a reserve asset or more important as collateral in a stress system? So is gold being bought as trust or sold as emergency liquidity? Does that wave of force sovereign selling from these emerging markets like Turkey? I mean, does it threaten the gold bull market?

SPEAKER_03 16:52

Yeah, look, I I I think you can see things through two ways in this case with Turkey. Is are they the exception or is this becoming contagious? And I do think it's more of an exception situation given what's been happening there. I actually thought was more driven by Iran. I still have that view because they're selling oil and trying to be outside of the dollar system. And if they're smart, they're not taking you one, they're taking gold as their currency. And I do think that there is a potential that they own a lot more gold than we think we think they do. And if that's the case, if they're having to sell those uh those reserves to finance their war, you know, that that may be having a larger impact. I don't think Brazil, I don't think um India, I don't think China will be selling their gold. So I don't think this is a systemic issue in the gold market driven by emerging markets at all. I think this has been very misreported by a lot of the the you know media outlets out there, particularly Bloomberg, that came out with a story about this. I just don't, I really disagree with that view. Um, I think that's you know, Turkey is a one-off in my two cents. There was another narrative, and and you can kind of tell these narratives are just being sort of injected in people's minds. It's crazy about gold being liquidated and that and that that this is a liquidation, and and when markets get liquidated, gold gets liquidated first. I don't know how many decades or years of people's markets experience, but that's not what happens. Gold does not lead a liquidation, never, ever, ever. And there's other things that lead a liquidation, and usually is you know, the flavor of that decade, which is usually technology, banks, whatever it was that was doing quite well, private equity, that's a liquidation issue, right? Now, what's happening with gold, I you know, I fade those narratives. I do think gold is becoming probably one of the most important assets in the world. Um, it's it's it to me is going to become more meaningful than even the US Treasury market here. And uh it is remarkable uh that uh that that people are always looking for a narrative to or an excuse uh um to reduce the relevance of of the metal in in the global economy. And I think if anything, this this sell-off, we're not gonna have many, in my view, during what I believe to be a secular bull market in gold. And so to me, this was an incredible window of opportunity to acquire some gold. I haven't bought gold in a while. Uh why? Because I bought a ton a while back and I have been holding my gold and my miners for a long time, and they've been doing so well that I just felt bad adding to on top of it. And I already own enough. But now with this pullback, oh yes, I did buy it. I I haven't bought it in a while. I bought gold, not silver, not the miners. Not that I don't like them, I love them, but I bought gold because gold was down substantially, and I just think that was a one of the most oversold levels we've seen in history. And it doesn't do it doesn't do there very often. A lot of people are seeing this as the 1980s or other peaks. We don't peak with capex for the miners at the at the toilet, right? Like we we peak when when capex are going you know insane, when companies are throwing money everywhere, they're doing MA at froth evaluations. Uh, we're seeing production increases. We're not seeing that. This is a completely different world. Exploration budgets are at three to four year lows. This is a this to me is still this early evenings of a mining cycle that is just seeing a correction. So, yeah, I did buy it here and I was very vocal on that. And um, I I do think it's gonna be uh proven right in my view.

SPEAKER_02 20:46

Yeah, okay. Well, we've got to get into some of the mining equities, and of course, our time always goes too fast, but I still got you for some of it, and I need to go back there. I mean, it was too big of a story, not too tabby. And I think a lot of the mainstream kind of misses it. I mean, if Iran is moving towards gold over Yuan, I mean, then it's not, you know, it's a lot bigger than just de-dollarization. It suggests a loss of confidence in fiat alternatives themselves. Are we watching gold re-emerge as the settlement asset of the last resort? Or I guess I could ask it differently, is the real shift no longer dollar versus yuan, but but paper claims versus hard settlement?

SPEAKER_03 21:20

100%, yes. And I I think I think slowly we're moving into a world where eventually we're gonna see the, you know, I do we still we still need to see a lot more lack of discipline and cheap money to allow inflation to run hotter and de-laver the world. But once the world is fairly de lavered by inflation, we're then gonna see most likely a big move towards, in my view, um, you know, comp our countries starting to use gold uh as a currency, either through uh a gold standard, uh fixed uh you know, a fixed state of their currency with gold. Um backing gold in a certain way with their fiat currencies. I think this the lack of a stability of fiat currencies is reaching a level of confidence right now that is starting to require uh policymakers to act. And I think gold is is going to be that avenue uh for those uh policymakers to to do something about it. And so and it the interesting thing about gold is is it it's not just gonna come from central banks. I mean, that's just the first wave of things, but we're yet to see real portfolio uh um portfolios like pension funds and and either family offices and and others uh is starting to actually acquire gold as a way to protect their own portfolios as a defense asset as well, um, which is going to be a much better and more attractive way to invest in things like fixed income over time. And so I do think that we're gonna see a lot of that transition still to occur that will create a lot of demand for the metal. And on top of it all, what I what I do find it remarkable is just the the mindset of the industry, of the mining industry, despite these increases in gold and silver and copper. I just find it fascinating the fact that we're not seeing more spending overall, uh, more confidence uh of companies to put projects into production uh and and and and actually look to expand their businesses by acquiring others, there's lack of boldness in this industry overall, uh for whatever reason. I I I would I would have suspected that gold prices at these levels would have triggered some of that already, but it hasn't. And the perversely, the longer it takes for that mindset to shift, which will eventually, but the longer it takes, the longer it will take the cycle as well. So it is it is crazy to say that, but you know, there is a lot of visibility for those that cover mining uh and as an industry uh to know what's likely to be the case of supply in the next five to seven years, because the projects that are coming online now are the ones that are gonna be bringing you know supply in the next five to seven years. And there are not many in the gold, silver, and copper space that are gonna be coming online anytime soon here. So supply is unlikely to change. That's very constrained. Structural demand coming. So yeah, I don't see how this creates the end of a cycle. I think that a lot of technical analysts are missing the fundamental analysis behind commodities.

SPEAKER_02 24:38

You know, there's you got a good point. I mean, there's no real, I mean, there's some MA happening, but no real big MA wave. There's no serious capex push, no behavior that would kind of tell you management teams actually believe this metal price is durable, it feels like. So what is that telling you? That executives still don't trust the gold price, or or that the industry is too you know financially scared to respond to it?

SPEAKER_03 25:01

I I do think it has a lot to do with that. It's those decades that we've had um here recently of low metal prices and a very difficult environment to raise capital and access to liquidity has caused most of these CEOs and management and board directors to be very, very conservative. And yeah, we did see some um enthusiasm. I mean, come on, we should. I mean, gold prices were hitting 5,500. I mean, we should see some level of enthusiasm, but I don't think it's over the top at all. Like, I actually think I would have expected a lot more. Um, like if you just have a calculation of aggregated capital spending by all the miners and adjusted by gold prices. Why gold prices? Because that's real inflation. We're not gonna use CPI. You could use CPI, you're gonna see something similar, but gold prices is a probably more realistic way to measure this. You're gonna find that capex for the whole industry is at all time lows, right? Like you don't see that. Go look at I I've just I would challenge anybody to show me one time in history that the mining cycle ended with CapEx at all time lows. Never, right? I mean, every time is it all the way around. Why? Because CapEx drives everything, it drives new supply, it drives valuations, it drives MA, it drives everything. Um, it will drive new discoveries. Uh, and I don't think we've seen any of that yet. So, yeah, how long does it take? Years, decades, maybe. I don't know. And then on top of it all, uh new stats that I thought was phenomenal recently. A good friend of mine uh will work for um the US uh government to uh secure medals for the critical reserves that they're gonna be building and so forth. They told me they're gonna be spending$200 billion into this industry. Look at the size of the industry. That's just one player.$200 billion is more than this entire industry, right? Like this is going to fundamentally change the valuation of this, it's gonna re-rate everything higher. What if Europe decides to do that? What if Canada decides to do the same? What if any emerging markets decide to do the same? So, look, I what if institutions outside of sovereign institutions, private institutions, decide to do something like it? So, you know, the mining industry still is about 1% of global equities. Back in other years, we used to be 13, 14, 15 percent of global equities. I would argue that in today's environment, given the deglobalized environment we are in, given where we are with onshore and AI and all that, the mining industry has never been this relevant. It's probably one of the most relevant points in history with the lowest valuation we've seen. And so I think there's a lot of things to change here.

SPEAKER_02 27:54

You know, I guess you can call it the paradox. I mean, it's kind of you know, terrible industry behavior today is exactly what sets up higher prices for tomorrow. I mean, where is the bull market? In the metal or or in the equities?

SPEAKER_03 28:09

Oh, I I like I like everything personally. I like, I think copper is about to break out in a big way. Uh, I love the way it's reacting despite the weakness in the economy. I love how it's becoming less and less of a cyclical commodity because of the needs that we have. And um it's unlikely to give you the same signal they used to give you in terms of being the doctor, they used to call the doctor copper the only metal that has a PhD in economics. No longer is the case. And and the reason for it is because the supply uh curve is just so drastically uh mismatched with the demand side of things that it it you know it won't react with the same cyclical uh behavior you used to have in the past. That's a critical change. I like you know, silver needed some digestion. I mean, we were$120 an ounce, we came down, and what I think media is being reporting is oh, silver is down 50% from its peak. How about the fact that we are actually 50% lower now, and at these prices we're higher than any other time in history, right? I that's that that's what it should be reported is the fact that resources, almost every resource you look around you is making new highs in the last has made new highs in the last three to five years. And you know, and when I say new highs, some of them as have drastically gone above their their prior highs, you know, silver being a great example. And I don't think this is the end of it. I think we're just in a digestion period, and we're probably gonna be settling at these prices and then moving higher. Um, and that that to me is is a world where you know we're in the build-up phase of all sorts of things, you know, infrastructure for uh manufacturing, industrial, um, AI, and so forth, you know, revamping electrical capabilities, all these things require a lot of metals. And so it's highly unlikely we're at the end of this. And so I I think I think if metals be belong a lot higher, then the mining industry belongs, you know, substantially higher because they're trading at levels just like what your comment was a go uh a bit ago was was about how most of the CEOs and the management, well, this is happening with investors, they don't believe that metal prices will stay high for uh for longer, and therefore, why the miners have uh underperformed a little bit. But now you're seeing that despite the decline in gold and and and silver and copper here recently, the miners actually behave quite well. And I think it has more to do with the fact that they're saying, well, look,$4,500 is not a bad price environment for the mining industry. Um, that's my view, at least. I mean, you know, we you know, I have insights of companies that that I own personally. Um, they are producing at$15 silver prices today, silver prices at 60, 70, 80, who cares? It's more profitable than Google, Meta, uh uh, Nvidia, perhaps. You know, these these are like technology-like margins. And so I think it's it's a it's a world people are still dismissing a lot, and and it's unlikely to be a peak and more more likely to be the kind of early early stages of of a big move.

SPEAKER_02 31:24

All right, Tabby. I mean, miners have been hit hard even at these prices. A lot of investors may be wondering if they bought at the top. I mean, a lot of people not used to seeing a drawdown of 30% in some of those miners. Uh is that just indiscriminate liquidation? Uh, was it the top? I mean, it sounds like you're buying the dip.

SPEAKER_03 31:42

Yes, I I am. I mean, if I would have told you that silver prices would be down 50% from their peak levels, would where do you think you know silver miners would be trading? 80% lower, you know, that's but that's not the case. Um, I think that markets are starting to realize that these companies are making money finally. And in my view, we just, you know, the the the the generalists are still warming up to understand this this overall space. I mean, it's a very complex industry, and I would think that we're gonna see plenty of these kind of 20, 30, maybe even 40 percent drawdowns during this this cycle. That's just normal. Back in the 1970s, we had about a few like 70, 80 percent declines, and that's on the overall index. A few companies went down a lot more than that, and so look, I I my view, what did I do? I I revent my portfolio a bit. I had the opportunity, I was sitting on cash here recently. Um, and what I did was I bought some quality miners that I haven't bought in that I always wanted to own, and I haven't bought them yet. And so I revent my portfolio a bit. Uh, and why? Because I do think that the quality things are gonna come back first, and there is no, you know, there's no rush for me to be deploying capital here, but I did put some capital to work um into gold, as I said. Majority of my capital went to gold, and I put a little bit into um a little bit more than a little bit into um two miners that I really liked. And uh look, I I look forward to if there's another another pullback or so, I I I you know I wouldn't mind adding to another one. I'm always keeping dry powder. I do think that every investor in the space that you're if you're if you're if you're dealing with the mining industry uh at a large scale of your portfolio, you should be aware that there's going to be drawdowns in situations like this all the time. Um, and if you're you know, and having dry powder powder to to act on situations like that are absolutely critical. It's it's you know real wealth is created when you're thoughtfully putting capital to work on things you have high conviction on. And I do have high conviction on this, and so once I once I have these types of situations like we had a few weeks ago where everybody is is is puking, I tend to act, you know, you know, in a way, and and I tend to um look, I mean, like I said, the most indicators I look at in terms of gold itself were extremely oversold. I I you know maybe we'll go a little lower, but I I think this is a great price to be buying and and averaging uh you know for for the next five years, three years even. So yeah, I was I I felt I felt very lucky to to be in the position to uh to put capital to work again in this in this space. And it's a good reminder that you always have you will never rush into an idea. Like there's a lot of you just said about a lot of new investors came in, retail investors, never rush into an idea. There's gonna be a window. Don't worry about it. There's always gonna be a window, there's always gonna be a your thesis will always get tested at some point, and then you come in. And so, emerging markets. Oh, I missed it. You didn't miss it. We're early innings there, you know. Wait for a pullback, we're gonna have a pullback and you come in. We just had a pullback in emerging markets as well. I did buy some emerging markets too. Uh, those that looks incredible. Oil, a lot of people miss the window here in oil. Well, don't worry, we're gonna have another window. This is not the end of it. It's not, you know, the it's not just a one-way, you know, uh uh uh uh one way for for the trade. There's gonna be a pullback here eventually that is gonna test that thesis once again, and you're gonna be able to deploy capital. So I keep sort of rotating my capital into this long-term thesis that I have, and I I love gold right now.

SPEAKER_02 35:36

You know, it's interesting. I mean, I I know, Terry, I've interviewed you before. I know you're not gonna give me those exact tickers of who you bought, but let me ask you to it a little bit. I mean, you've got some dry pattern out there. What did you use at reset to kind of upgrade into? Is it better balance sheets, better jurisdictions, better optionality? Because I mean, does that mean you're kind of cutting those lower conviction stories and you know, concentrating into fewer high-quality names just because this next phase will reward discipline, not just beta?

SPEAKER_03 36:05

Well, my portfolio is is is is made of a few things. I'm not by no means I want to sound like I'm a genius uh or anything like that. But I have a lot of high uh risk and potential high reward um investments in exploration, uh, very illiquid. Those are probably not worth talking about it because they're either gonna do very well, um, and I mean multi-packer or zero, and that's just part of the game. Now, on the quality names that I own, I don't mind sharing those names. I I added to um Orla mining, um, and I added to our Aura Minerals as well. Uh I like both um, you know, equally even. Um, I I I think the management of I think the mining industry, my you know, simple understanding of the mining industry is that you you want to combine three factors when you buy a company. I'm simplifying, very overly simplifying this, but for those that don't know anything about mining, I think you want to focus on three things specifically. Um, high quality assets, the obvious one. Always buy a high quality asset or a company that owns multiple high-quality assets. That's the case here. Number two, quality team. Um, that's very subjective. A lot of times you can see teams that have done over and over and over again. And usually in a cycle, high-quality team will run circles around other people, okay? And that's almost always the case. So those two have very high quality teams. Uh, especially, I mean, I um I know a few people at Orla, I work with people at Aura, love Rodrigo Barbosa, the CEO, very, very sharp. Um, I think he's gonna run circles around a lot of people. Um, and thirdly, the the other part that is so important is capital structure. You gotta make sure you want something that has a good foundation of capital backing that company. In one side of it, Orla, I think, speaks for itself. There's plenty uh institutional backing, but also uh Pierre LaSon and others uh that own the stock. On the other side, you have Aura, where you know 40 to 50 percent ownership is is by one family, Brito family, and the other 50% partially is owned by well, there's management, there's also uh other institutions. There's just not really a lot of stock out there. These are the companies that usually tend to have a big run as as things play out. And so, you know, it's it's a bet on all these three things, right? Is the cap structure being tight, is a high quality asset, uh, giving them the prop the possibility to find things and do things, and then a team that is able to perform. You got those three things, you own the stock for the whole for the whole cycle. So I'm very uh a few very lucky in a way uh and prepared uh to um to deploy capital into those shares at 35-40 percent discount. So yeah, it's a great, you know, great, great time, in my view, uh uh to be to be deploying capital there.

SPEAKER_02 39:10

So is this correction you know kind of a gift for stock pickers, or does it tell you that that easy money phase in miners still has not even begun?

SPEAKER_03 39:18

Um no, there's gonna be phases of easy money again. I I think we just went through a two-year phase of easy money, uh, but there's gonna be more. Uh, I just don't think that it's gonna be you know as easy after two years of very good performance. It should see some digestion here. This is why I kind of like having some real quality names in my portfolio. There's a few others that I want to own that I just I wish I had endless capital to deploy, but unfortunately I don't. And so I have to be very picky. Um, but it's it's I I I have a few in my my radar that I really want to own it. Um, you know, in particular a few companies that are, you know, I I think if there's a little bit more of a pullback here, I can probably buy two or three other companies that really would like to buy. Uh there one of them is not down as as much. Uh it's about 25%. I wish it was down a little bit more, but you know, it it it it's it's sort of how um, you know, I'm patient. I'm not gonna be able to get a lot of things.

SPEAKER_02 40:16

These are the these are the higher, these are the higher-risk juniors, though. They're not royalty stories and the streamers, you know, you're talking you know, a little bit more high, high alpha.

SPEAKER_03 40:24

Yeah, no, I I I think these these are uh sort of mid-tiers that will be seniors at the end of this cycle, sort of thing. I I that's my bet. I think that these guys are gonna be intelligent seniors uh at the end of the cycle, then you know, then it's it's time to move on. But that's you know, I want to own this um for you know for for years to come and add to my position over time.

SPEAKER_02 40:51

Yeah, yeah. Well said. Uh okay, well, this has been really, really important. I mean, uh, you know, uh before I wrap up, I I can't believe looking at the time job, it goes too fast. But for you know, viewers trying to position right now, because we, you know, Mondays are a little bit crazy, everyone's looking at the geopolitics of things. I know that that long-term, you know, gold is up a lot, percentage year to date and and year over year as well. But for viewers trying to position, I mean, is the bigger mistake right now owning too little hard asset exposure, or is it owning the wrong kind of hard asset exposure?

SPEAKER_03 41:23

Hmm. I think the biggest mistake people make is usually chasing the story that's on the media. I would caution people a lot on that. Um, right now, like I love energy. Don't get me wrong, I rotated a lot of my energy. If you, I think I'm guessing you interviewed me maybe six, twelve months ago. I would look back on that because I'm I'm very likely I spoke about energy and and the and the potential there. And I I I remember talking about how the best way to protect your portfolio on the mining side is to own energy because that's your cost in the mining space. A lot of times your cost is linked to energy prices, particularly open pit projects and so forth. So own some energy if you have a very large exposure to mining. Now, recently that energy hedge, or I should say it was it was definitely not a hedge, it was an exposure, um, has grown to become too big of a of a of a size of my portfolio. So I cut back in in some of those positions, and especially because I saw this opportunity in gold, and I just redeploy into into some miners that were down 30-40 percent, and as I said, and I bought a ton of gold. That's what I did. Um, and I own some treasuries as well, um, just as a hedge. That one is a hedge, and I I have high conviction on that too. Um, it's just a smaller part of my portfolio. If I lose on that, then it won't change much my world. But uh I think there's a lot of asymmetry given that I know all the viewers will disagree with me, and that's fine. I I'm I'm I'm very comfortable being by myself on the trade, and I think that's a trade that I'm by myself right now.

SPEAKER_02 43:10

All right, mate. Well, your contrarianness has worked for you in the past. Uh, we'll have to leave it there. Tavi Costa, always a sharp and critical perspective on the macro landscape as well. And and important for people to hear on the minor side. I mean, I get written constantly. I mean, there's a lot of this volatility scaring people.

SPEAKER_03 43:27

Well, always do your homework, yeah, always have high conviction ideas, make a list of things you want to buy, say the price, you know, put the price that you want to pay for them, and and revisit them all the time. And once you see those prices, go ahead and execute, right? I mean, it's so hard to execute if you don't have a plan in situations when we had in a few weeks ago when gold is plunging, if you will. I hate that word because it's not really plunging, it's down 10%, whatever. Um, and The same thing is happening with uh with silver and others, silver did plunge. Um, but you know, it's hard, it's really hard, mentally difficult for a lot of people, including myself. But if you have a plan, it's much easier to act. So that's my biggest suggestion. You know, take a piece of paper, work on your high conviction ideas, and if they're too stretched right now, take your time. Don't don't act on it right now. Take your time when there's gonna be a market window there, you're gonna be able to buy this again.

SPEAKER_02 44:32

Yeah, yeah. A lot of people, a lot of people I know buying the buying the haircuts here, going and doing some shopping days, that's for sure. Uh, all right. Well, thanks for joining us. Appreciate you making the time with us today. And uh thanks, Tabby. We'll have you back soon. Thanks for having me. Appreciate it. All right, and for our viewers, the global financial system is moving faster than ever, as you can tell. I mean, to stay ahead of these structural shifts in commodities, energy, and precious metals, make sure to hit subscribe, like the video. Guests, great guests coming up all week long. I'm Jeremy Saffron. Thanks for watching.

SPEAKER_01 45:02

Kitco News in Focus with Jeremy Saffron.

SPEAKER_00 45:07

Kitco's new and improved award-winning Gold Life gives you access to the latest market price quotes, charts, precious metals news, and expert opinions in familiar but improved and exciting user experience. All the news and information you love in a better, faster, and more intuitive package of our existing app, used by millions of users with an average user rating of 4.5 stars, customizable widgets, and market alert features. Download the official Gold Live app and get all the latest updates so you're always on top of the latest precious metals, finance, stocks, and mining news. Download now on the App Store or get it on Google Play.