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Transcript
Dan of FMT: All right greetings and thank you for joining at Futuremoneytrends.com. I’m here with Marin Katusa of Casey Research. He is the most disciplined stock picker according to Doug Casey.
I’m happy to have him here. He annually has some stock suggestions for people. Let’s just kick it off there. Marin, how’s it going?
Marin Katusa: Excellent. Yourself?
Dan of FMT: Great. What are the stock suggestions, or are you comfortable talking about the stock suggestions? I know it’s a paid conference, so I don’t want to mess with KC.
Marin: No, I’m very open about it. We’ve got 16 companies here and I brought two of them.
Dan of FMT: Now, when you say you brought two of them, you invited two of them?
Marin: Yes. Our shows are invite only. You can’t come unless you’re invited by one of the editors. Louie brought 14 management teams, I brought two.
One of them is Keith Hill from the Lundin group, and that’s Africa oil. We’ve been long supporters of the story. Our subscribers have made a great run on that story. We were the first people to recommend the stock under a buck. We took profits many times and we eventually sold. Stock did get up to 12 bucks a share. It’s been a great run.
Dan of FMT: What’s it at now?
Marin: It’s about $6 or $7. It fluctuates around that.
Dan of FMT: Are you still suggesting that [inaudible 01:10] ?
Marin: No, what we did now is we’ve sold it in the newsletter. I also like to bring the company, because it’s such a high quality management team, and more importantly I have such a respect in Keith Hill. What he has done here is built world‑class assets in East African rift.
I’m trying to show our subscribers what a case study looks from beginning to end. Because I do believe the company will be bought out. I’m just trying to understand more, as the resources develop more, at what point will they get bought out. It could be 12 months, 18 months, 16 months, or it could be 36 months. I don’t know.
We were the first ones to ever talk about the company, we’re the first ones to bring them to a conference, and they keep coming just more to educate subscribers and keep them up to date. When I do re‑recommend the company, which I will when I’m ready, people are up to date with the company.
You’ve got to do your homework. It’s part training. You can just play in the season and during off‑season do nothing. You still got to keep up to date with what’s going on with the company.
Another management team that I have a huge amount of respect for and a bunch of our Casey Club subscribers on the Monday following our show, which ends tomorrow. On the Monday, we’re taking 50 of our subscribers up to the Hobson Uranium Processing Facility, which can produce up to two million pounds of uranium.
What Amir Adnani and his team has done there has been incredible. How many of these companies go from exploration to production? Less than 1 in 3,000.
You bring these companies out there so they can see what’s going on. This company, when we first recommended it in our newsletter, was a buy under 25 cents. Yes, it took profits along the way to get a Casey free ride, but it’s in our 10 bagger club. It went to seven bucks. Imagine buying a stock for less than 25 cents and it went to seven bucks.
Dan of FMT: Life changing returns for some people.
Marin: It is. You put 5 thousand, 10 thousand. That’s a big return…
Dan of FMT: It is.
Marin: …In less than 30 months. Just recently we recommended a stock under a buck five. You’re well aware of that. Had a great run of luck. Now we’re putting another buy on it, because I truly believe in the company.
Dan of FMT: What [inaudible 03:05] about a buck 30 right now?
Marin: Yeah, it’s about a buck 30, a buck 40, fluctuating around.
Dan of FMT: OK. That mine tour is going to be a pretty big deal. First of all, have you been to this [inaudible 03:16] ?
Marin: Yes, I’ve been a few times to the process.
Dan of FMT: Is this the first time Casey Research has done something like this where they’ve taken people to the project?
Marin: No. Look, I love what I do. I’ve got a lot of friends in the business. A few years ago, I had the idea of, “Hey, Vancouver is the hub of all the junior resources.” We had a conference there.
Olivier, who runs Casey Research is absolutely incredible guy, great president to run a company said, “Look, Copper Mountain, which is Canada’s third‑largest producing mine,” which I’m not a board member of, “the management team have done an amazing job.”
I look at someone like Jim O’Rourke and Rod Shier. These are world class guys. I said, “Look. We got so many Casey subscribers coming to this conference. Why don’t we get the day before the conference, to bring up on a bus all of our Casey Club subscribers and show them what I see all the time and what Louis sees?”
They loved it. That feedback got me to go, “OK well here’s another gold mine.” I took 50 people to a gold mine. They could see what’s going on. Once a year, we have a conference somewhere in the US once we’ve had it in Canada.
What I do is, wherever it is, I go OK, well a buddy of mine, or I know a management team have a mine here or somewhere close, within a day trip. Because we’re having this conference in San Antonio by fluke, Hobson’s only 90 minutes away. We leave at 8:45.
We’re going to have 50 people go through a processing facility. Understand the process of why I like WISR, which is a warm ISR production. It’s the lowest cost production in the US. They’re back in the same day. It’s a great experience for subscribers.
Dan of FMT: A lot of people I don’t think understand. If you wouldn’t mind just touching or teaching us on how this process works. Because it seems like it’s a hose almost to where you could just turn it off and then turn it back on. Whereas most people think of mining as open pit or…
Marin: Moving rocks.
Dan of FMT: …Then maybe [inaudible 05:03] inside of a ground.
Marin: Let’s start. There’s two ways to mine uranium. There’s the conventional way, which is moving rock, crushing rock. Then concentrating the uranium out of the rock. That’s expensive. That doesn’t work under $60 anywhere in the US.
Then there’s ISR, which was a North American technology. Started in the 60s, it really got refined. Wyoming is a great place for ISR except it’s very cold. When you move water, basically you inject soda water, you go through the rock, you pregnate the solution, you run it back to your processing plant. It’s as essential as a water bottling facility except on a much grander scale.
You’re just processing water. That’s it. Why I like WISR warm ISR, it’s shallower because of the geology in Texas, so you don’t have to drill as deep. You don’t have to have hetero houses or insulation in your pipes.
When you move water, cold weather, freezing weather, ‑10 degrees Celsius, is not good for moving water, because water freezes. In Texas, you don’t even need the hetero houses insulated. You don’t need foundations. You don’t need to do underground piping, you lay it all on the ground and there is a cost advantage to that.
Dan of FMT: What was your talk on today?
Marin: I had a few talks today. Really it was about energy. That’s what I focused on, my book “The Colder War” which is expected to crack the New York Times best selling list by the presales.
Dan of FMT: Well, congratulations.
Marin: Thanks. That goes on sale on November 10th. It’s really talking about the paradigm shift in energy. Look what’s going on with Russia. I’ve been talking about this for years, now it’s on the front page of the newspaper.
What’s next? Well, Russia is working with China, India, Brazil, and South Africa. There’s a new Brick’s Bank which is going to compete with the IMF. Is the petro dollar at risk? Yes it is. What’s going to happen?
Well, Obama is very rattled and confused. He’s going to be proven to be the Wizard of Oz. He’s a confused man and Putin has just exposed him as a confused Wizard of Oz. He’s just a voice behind. He’s got no agenda.
Unfortunately, the Americans have a very failed foreign policy and it’s been exposed. With today’s technology and today’s communications, it’s not like it was 60, 70 years ago. The actions of Putin are completely…Putin’s playing chess on a chessboard while Obama thinks he’s playing checkers.
Dan of FMT: Do you think that ultimately Russia, China, or…What could even replace the dollar? That’s why I’m thinking like, the dollar is such an important aspect of the global economy, 32 percent of nations are using it, pegged to it, or have type of a major link to it for their economy. What could even replace it? Is this a decade you’re talking about or 30 years from now?
Marin: The process is already happening Dan. If you look at China and Iran, they’re not using US dollars anymore. Iran’s looking at selling oil in terms of gold.
Russian and Iran, they’re doing a $400 billion deal. I can assure you it’s not in US dollars. That’s the biggest energy deal ever. You got to look at what’s going on and it’s happening in front of us. It’s going to be slow.
For the Americans, the petrodollar is basically the sustaining way of life of the American dream, and if the petrodollar goes, so does the American dream.
Dan of FMT: What about all the fracking that’s going on? Couldn’t that be a game change and it puts the US back on top with exporting oil?
Marin: Not under Obama’s administration. Fracking has been a game changer. There’s a reason why the Europeans pay three times more gas than the average American. That’s because of fracking.
North American technology is going to get into Mexico. It’s starting in Mexico. Now it’s starting to get applied in Europe. The Russians are using the technology. The Chinese are using the technology.
Yes, there is a way. Unfortunately, let’s talk about LNG. Everyone’s saying, “Well, America has so much gas.” Well, they’re already 5 years behind what the Australians are doing, and 15 years behind the Russians and Qatar. Qatar’s a massive LNG producer and they can produce it for half the price.
The biggest risk on LNG isn’t about what America’s going to do or Canada’s going to do. Two countries consume 50 percent of the LNG in the world. About 38 percent is Japan, 12 percent’s Korea. Would you want to invest in a sector that two countries make up half of the demand?
It’s all because of Fukushima, and that’s why uranium is working out right now. If your viewer has a plate, the spot price of uranium is up 25 percent over the last month and a half. Gold isn’t up 25 percent over the last month and a half. Oil’s not up 25 percent over the last month and a half. Uranium is the place to be for your resource portfolio. You need to have some exposure to uranium.
Dan of FMT: You talked about UEC in this interview. I know Amir Adnani is here with Brazil Resources as well. Another strong recommendation that you’ve made to us in the past, the RIA project. Is this a game changer for Brazil Resources?
Marin: It is. This is what I mean by investing in the right management. It’s a bad junior gold market right now, and that’s good if you’re a country and investor. That’s why Rick Rule and I, in our fund with that Doug Case, we’re backing the right management teams. Because the right management team will capitalize in this market.
They went after a company that had a market capital of over $125 million, they bought it for one‑tenth of that. On top of that, they doubled their ounces in the ground, so let’s just say the gold alone was a great deal.
Within that deal, a family that did a major multi‑billion dollar deal with Areva had these assets. The highest grade uranium ever drilled in the Athabasca basin is on the western side called the Maybelle deposit.
Now, nobody even talks about it because it’s in a major company called the Areva ‑‑ that’s the French national nuclear company. If it’s drilled by a junior, everybody in the world will know because of their promotion, but who has a joint venture with Areva on the property surrounding Maybelle? BRI.
That project alone is going to be a game changer because the grades that are associated with on Maybelle. We’re talking over 50 percent was on that project. It’s still early days in its exploration. They came out with the 43‑101 report, but who better to have an asset like that and a joint venture with Areva, than the same guy who built the uranium mine in the US.
Dan of FMT: Do you think the Amir is better off further developing and exploring his gold properties or do you think he should actually focus on the property up there in Canada?
Marin: Well, the advantage of having exploration projects in Canada, is you can raise money at a significant premium because of attacks advantage called “flow through dollars”.
I believe what Amir is going to do is have a two pronged approach and Amir is a very good business man.
Now that he has a joint venture with Areva, he has a 43‑101. I’ll tell you, one of the guys, I won’t say his name, but he’s a very well‑known individual and Rick Rule and I, we were all at a public forum in Vancouver. He sold his company to Rio Tintos, so you can kind of figure out who this is. He said, “This is one of the best projects in the world that nobody knows.” That’s the Re project.
He said that no junior’s going to be able to get from Amir. Amir is going to be able to maximize the value. Now, what I’d like to see Amir do, what I believe his mindset is from what I understand is, he’s going to make BRI become a major producer of gold and it’s going to take time.
He started with nothing and now he’s got four million ounces. He’s already done more than any other junior during this time frame. Now, the Re project is going to attract a lot of attention for it.
Will he spin it out or add more value, I don’t know, but you know Amir is going to move it forward. As our fund is the largest reporting shareholder of the company, that’s what we want.
We’ve added to our position over the years because you have backed the right management team and whether the stock price, yes, uranium is in a big up‑swing right now. That’s irrelevant to me, because I’m looking for like a 5‑10 year progression with Amir.
I always talk about building a franchise. Take it back to a sports team. If you’ve got Michael Jordan in his second year in the Chicago Bulls, why would you sell him?
You can build a franchise, build multiple championships. That’s what Rick and I are planning to do with Amir Adnani.
Dan of FMT: Marin, uranium in general, how do you profit it? What I mean, because you can’t buy the stock price, assume you can’t, the individual investor like you want to buy gold, you can buy GLD. Like what’s the best way to profit from uranium?
Marin: Well, actually as an individual, you can buy physical uranium. There’s few different way to do this. You can invest in UPC ‑‑ that’s Uranium Participation Corp. All they have is uranium, U308 and UF6, that’s it.
That’s one way to approach it. We’ve done that in our newsletter, we’ve made over 30 percent and we sold it, because it trades at an half. If it’s a discount an half, we buy it.
Then it moves up because people figure out, “Oh my God, Uranium Participation Corp is trading at discount.” Then when it moves to an half, that’s fair value, you sell it. It’s a very simple trade.
Then what I would look at is, I don’t like juniors that are hedged for production. Why would you deplete your reserves, your finite reserves, in a bad uranium price market? That’s why I’m so bullish on UEC. It has been a great performer for our subscribers.
That’s why I invite them here because everybody’s made money on UEC and we’re taking them to a site, so people can see with themselves what’s going on.
They’re un‑hedged, they have zero hedge. That’s what I’m very bullish on because it’s a bad price. Why would you hedge here? Let uranium run, and they’re permitted for up to two million pounds of uranium in that processing facility.
If uranium got to, let’s say, $60 in the next 8 months or 12 months or 18 months, he can ramp up production. He doesn’t have to wait for permitting or building his mine or raising the money, it’s done. He just needs the higher prices.
Dan of FMT: In closing, a lot of the attraction of Casey research is the gold and silver bags and crushed to metal investors. It’s been a rough market out there, a lot of people thought with the junior’s bottoming essentially not making newer lows in over a year, gold not making any new lows and now here’s silver on Friday, did make a new low.
I just wanted to know, what’s your overall assessment of the precious metals right now, as far as gold, silver specifically.
Marin: Look, the junior resources are at derivative of the actual commodity of gold and silver, Most of these companies don’t actually own any gold or silver. Their value is derived from the value of gold and silver, that’s why they’re called derivatives.
Now, I’m really pushing the limits of why it’s called a derivative, but you have to be very careful when you invest in these juniors.
This type of market, and I’ve said this for over a year and a half, is my kind of market. Because if you invest in the right management teams, they will take advantage of this market.
You don’t want to invest in a company that’s going to consolidate the sector at $1,800 gold because everything’s expensive. You want to consolidate when there’s blood on the streets. That’s where you make money.
Be very careful. Now, if your company needs $1,500 gold, don’t own it. It’s that simple, because there’s no value there. The value in the junior resources are in the management teams, and the right management teams will find the right rocks in the right jurisdictions. The wrong management teams are going to lose your money.
Dan of FMT: Marin, thank you so much for your time. I appreciate it. Look forward to your…Are you going to panel tonight or is it tomorrow?
Marin: Tomorrow again.
Dan of FMT: That’s when you do your big picks for the next year?
Marin: Correct.
Dan of FMT: How’re your picks last year from this year?
Marin: Actually, we’re doing very well, and now, in all fairness, we’re in the energy sector. It’s been a great run at the energy side, so we’ve had a fantastic run, and it’s been a great market for energy. Just so people know, $90 oil is a great price for oil.
If you’re in the right management teams, you can make a lot of money at $4 gas and $90 oil.
Dan of FMT: All right Marin, thank you so much.
Marin: Thank you very much.
