A Comment -- General Comments From an Expert (A Commentary)

Tariffs Trumps's proposed steel and aluminum tariffs don't make sense, but they could happen. He hopes this goes beyond a tit-for-tat tariff retaliation by Canada, and believes cooler heads will prevail. Steel tariffs are really a NAFTA bargaining chip.

Mining. There's a lot more smart money into the sector. It's a good time to look at these stocks. He's positive about minerals. His method of evaluating a company hasn't changed from five years ago. He's still looking for the highest-quality deposit. He wants to be involved in a discovery early on to attract a buy-out from a major. Exploration hasn't been that successful in the past 10 years, but the industry still needs new discoveries. Now, the juniors are willing to do this exploration, moving to a place and doing work through locals, whereas a major that moves to, say, Mongolia is a big deal.

Gary Cohn quits White House. Another one bites the dust. Trump is an imbecile. As the Mueller investigation goes on and ties between Trump and Russia are exposed, we're looking at potential impeachment a year from now, which will be negative to the U.S. dollar, which by default is positive in the gold price.

Effect of Trump tweets on gold companies. The volatility of his tweets, like the steel tariffs, has a direct impact on the economy, trade deficit and the gold companies.

Mining. Gold always gets attention, but silver is picking up. Copper and zinc and also picking up, but not uranium. Cobalt is picking up. Discoveries generate a lot of return, like Ivanhoe which made him a 700% return. He's agnostic about the commodity per se.

Gary Cohn quits White House. This creates uncertainty. Constant change and volatility in the White House is bad for the U.S. dollar and good for gold.

Lithium and cobalt oversupply? He was more bullish on lithium last year before the SQM deal. Now, they're allowed to expand their production. There could be a balanced market in the near term. He picks lithium projects in the lower-cost quartile. He used to play lithium and battery elements (anything with lithium on it) in the beta, but now you need to find an alpha play. Make sure the right people know the technology in lithium.

Bitcoin vs. gold. Last year, Bitcoin was saying, "We're a fraction of the gold market," and they attracted some investors, but he doesn't think Bitcoin has attracted the gold bugs.

Unrest in the Congo on cobalt mines? There's a lot of production here. This is one reason why he sold Ivanhoe--political instability in Congo. This will impact the price of cobalt to the upside--it would be good. Remember that 98% of cobalt is a by-product. So, the copper or nickel price really impacts the cobalt price.

Market. The PDAC is one of the two great mining conferences in Canada. The other the Cambridge House International Mining Investment Conference, which is May 15-16 this year. That is good for small mining companies. PDAC is a great barometer for the market. When the big crowds are coming to the conference, the cycle is probably near its end. This show is busy but not overcrowded. The US tax changes are increasing disparity rather than putting more money into the hands of the consumer. Short term, it sounds good for the economy but the deficit will bring a day of reckoning. The fall of the US dollar will probably be good for gold. Gold moves in a opposite direction to many asset classes, but it is not a safe store of value. It moves widely, from $250 to $1800 per ounce. Similarly, real estate doesn’t store value. It can go up, but it also goes down. One of the best ways to guarantee a good future is to pay off your debts.

Market. Is this just an aggressive tactic that Trump is taking or is it the beginning of what people feared when it look like Trump would be president. Maybe it is a negotiating tactic. Trade anxiety is going to filter into the market and he does not think it is priced in yet. It would be hard for the markets to make new highs right now.

Educational Segment. Volatility and uncertainty in political events around the world. The commentary on the Italian elections was all about uncertainty. The key test is whether the market can make a new high in the next few months. We still have the risk of more volatility and of retesting the recent lows. There is not a strong reason to price in a recession right now.

Floating rate notes will do far better in a recession than high yield. FRN-N and HFR-T are good examples.

Market. There are two types of gold owners. (a) a hedge and (b) investors looking at risk/return tradeoffs. US debt is still increasing and gold is a hedge against the failure of the currency. In 20% draw downs in the markets, gold goes up. Equity markets continue to rise and this distracts people from gold.

There is more interest in base metals than gold right now. Copper, zinc and nickel are all up this year. A lot of the interest is coming in from two longer term demand factors: Electrification of Asia and electric vehicles, which will increase demand for all kinds of metals. He has a lot of exposure to lithium as a way to play electric vehicles. Demand is going to double.