Maybe the gold miners should buy bitcoin - Kitco Roundtable
Several miners released record cash hauls at year end, but investors are showing the sector scant love.
On Friday Kitco Roundtable podcast featured editor Neils Christensen, correspondent Paul Harris and mining audiences manager Michael McCrae. Special guest was Sam Riggall, CEO of Clean TeQ.
Riggall's company is developing a nickel-cobalt-scandium project in New South Wales. The company is positioning itself to supply materials for the electric vehicle materials market.
Riggall said the project is large.
"Sixty-five per cent of the current U.S. passenger fleet could be converted to fully electric vehicles using the nickel and cobalt in our Sunrise resource in Australia," said Riggall.
Turning to gold Neils Christensen said precious metal miners are generating record cash flow, but investors are generally ignoring the sector.
Some of the miners who released 4Q earnings this past week were Agnico Eagle and Kinross. In 2020 Kinross had operating cash flow of just under $2 billion compared to 1.2 billion in 2019. Agnico's cash for the full year was C$1.19 billion, up from $882 million the year prior. Newcrest had its half year with earnings per share up 121% compared to the prior period. Half-year free cash flow was $439 million.
Despite the big numbers, investors aren't responding. Over the past month, the GDX ETF, which tracks the major gold miners, is down 6% to $34.78.
"I don't know what it is going to take to shake this malaise," said Christensen.
Kitco Roundtable reprised anchor David Lin's interview with Alex Mashinsky, CEO of Celsius Network, which aired on Tuesday.
Tesla has stated in its latest annual report that the company has updated its investment policy to now include bitcoin, gold, and “other assets” as possible investments.
"What they’re not telling you is they don’t trust the U.S. dollar. They’re saying by voting for Bitcoin and putting gold as a reference. They’re basically saying we do not want our treasury to be held in U.S. dollars because we expect high inflation, we expect debasement, we expect everything besides good news about the U.S. dollar,” Mashinsky said.
Tesla's announcement that it invested in bitcoin sent the stock up 2%, although the stock has since settled.
McCrae referenced Neils and his concern about the gold miner's lagging share price.
"You use all that extra money to buy bitcoin," quipped McCrae.