Bill Powers Interview - Most Lucrative Junior Mining Sector Pricing Ever
And new ways to think about value
On Friday August 8, 2025 Bill Powers of MiningStockEducation.com engaged me in a wide ranging interview about the junior resource sector which partly builds on an hour long interview he did on October 12, 2021. That one I did with a slide presentation while the new one at 48 minutes long was done without cue cards. To make it easier to digest I have broken it down into sections and added some graphics to illustrate certain ideas.
0:00 - Introduction - Most Lucrative Junior Mining Sector Pricing Ever
00:50 - Where do you see value in the junior mining sector right now?
There is a huge disconnect between the price of gold and the market illustrated by these three charts. The first chart I call "Gold in Perspective" tracks $400 gold in 1980 CPI inflation adjusted to the present, which reveals that the current gold price represents a 113% real gain which is very recent and a big deal for resource juniors if it is here to stay. I suspect the aversion to both discovery and ounce in the ground resource juniors is rooted in deep fear that gold will collapse back below $2,000.
The second chart tracks the gold holdings of the GLD ETF since its launch in 2005. GLD gold holdings have tracked the gold price trend until late 2022 when the investing public seems to have lost interest in gold, perhaps lured away by bitcoin. I suspect the reason is that the traditional American gold bug audience senses that the gold price has become an inverse proxy for the credibility of the United States.
The third chart is the Gold Producer Index I created at the start of 2020 featuring companies producing at least 100,000 ounces gold annually. What it reveals is that during the latter part of the 2010s gold producers lost their status as a leveraged proxy for the price of gold which emerged when gold’s $35 fixed price ended in 1972. The result has been a failure by the producers to outperform the gold trend, though the recent round of earnings reports is lighting a fire under mid to top tier gold producers. The prevailing sense has been that the producers are enjoying what will be a short-lived cash flow windfall and then it is back into the dumpster. The ounce in the ground and gold exploration focused juniors will continue to lag until the historical role of gold producers as a leveraged proxy for gold is restored. The gold juniors are not priced to reflect the current gold price, let alone a spike into the $5,000-$10,000 range.
03:02 - How have you tweaked the rational speculation model over the past 4 years?
The most important change has been a chart redesign which allows me to assign a future target outcome value for a project and then plot the blue fair speculative value channel for all the stages from grassroots to production, plus the yellow S-Curve channel, also known as the Lassonde Curve, to illustrate the discovery frenzy and feasibility demonstration value trough that can take place in the market. These charts show how the market is currently pricing a project relative to the fair value and S-Curve channels.
I have used the IPV charts for the Haldane silver project of Silver North Resources Ltd to illustrate the concept. The first chart presents the pricing in absolute future Net Present Value terms on a 100% ownership basis. Silver North's Haldane project is plotted according to the formula fully diluted times stock price divided by net interest (in this case 1 for 100%).
The second graphic explains the basis for the CAD $500 million target outcome and the certainty ladder that underpins the rational speculation model with corresponding fair spec value price ranges for each stage, plus the price range possible if S-Curve market dynamics erupt.
The third chart is also a relatively recent tweak in that the fair and S-Curve channels are plotted in stock price terms. The caveat here is the assumption that the fully diluted figure will not change as the project marches through the exploration-development stages toward a production decision or buyout. But that is not a major issue during the discovery delineation stage and these charts are intended to illustrate what "should" and "can" happen to a stock's price during the early stages of the exploration-development cycle.
8:37: How do you calculate the probability of success for any given junior?
12:59: Why do you focus on the speculative side of the market?
The graphics below represent the two extremes in the world of pre-production resource juniors. The first implied project value chart is for the Golden Crest project of Solitario Resources Corp in South Dakota. Although the story has potential to deliver a mirror image of the 90 million ounce Homestake district in the northern part of the Black Hills, which would be worth tens of billion dollars, they have only provided geological context so far and are still trying to drill an indisputable discovery hole. I have thus assigned a world class USD $2 billion target outcome which would imply a future price of $21.75 compared to $0.73 today. Solitario cannot deliver a Homestake endowment over the short term - it would take hundreds of thousand metres of drilling to demonstrate that outcome. But precisely because such an outcome is plausible in the geological context the junior has developed over the past five years, you can see how S-Curve market action during a discovery frenzy could deliver a stock price in the $10-$20 per share range. Not only can crazy amounts of money be made, but it is also a lot of fun to be part of it when a discovery is unfolding.
The second IPV chart is for Vista Gold's Mt Todd project as defined by the 50,000 tpd feasibility study done in early 2024. The USD $3 billion outcome is based on $2,500 gold. That scenario comes with a $1 billion CapEx which top tier producers are not yet interested in spending on a deposit with a grade below 1 g/t, and that amount is currently too high for mid tier producers which are still struggling to regain credibility as leveraged proxies for the price of gold. Vista Gold recently released a feasibility study for a 15,000 tpd scenario with a $425 million CapEx and grade above 1 g/t which should make it appetizing for mid tier producers. The $1.05 price of Vista Gold is far below even the valley trough of the Lassonde Curve compared to a future target price of $23.21. Why is that? There is a lingering concern that Mt Todd is fatally flawed, something management has addressed during the past decade of economic studies. But more importantly, if gold collapses back below $2,000 the economics of developing Mt Todd fall apart. Mt Todd is among the more advanced ounce in the ground projects with mine approval in place. There are many less advanced ounce in the ground projects to which the market is reluctant to assign even a $2,500 gold price. There is thus remarkable opportunity at both ends of the spectrum for resource juniors focused on gold.
Of these three charts the first is is an implied value chart with a USD $3 billion target outcome based on $2,500 gold which in addition to showing the market is pricing Mt Todd as worth only USD $136 million, also shows how the markets are pricing single mine producers with a similar output scale.
The following two charts are based on the discounted cash flow model applied to the details Vista Gold published in its technical report. The first presents Mt Todd in 100% NPV terms, the second in NPV per share terms. I created this chart type so that I can see how the NPV behaves at different metal prices using both a 5% and 10% discount rate. The industry likes to use 5% in a gold project economic study, but the gold producers would use 10% or worse in figuring out what to pay to buy out a junior like Vista Gold.
The other chart presents the NPV ranges in per share terms, with the caveat that it is assumed fully diluted will remain unchanged.
What these charts do not do is apply the rational speculation model certainty ladder ranges for the stage of the project. The table below is related to the $3 billion target outcome chart above. The target outcome value is in the eye of the beholder though the market price reflects the eyes of many beholders. The rational speculation model is a framework to help one identify perceptual inefficiencies in the market, at the optimistic and pessimistic ends of the spectrum.
Here are some critical metal price charts which partly illustrate why critical metal plays are difficult for resource juniors. Lithium is a classic example. At $30-$35/lb lithium carbonate nearly every deposit is in the money. At $4/lb no pegmatite deposit is in the money. The elephant in the room is China with its dominant supply capacity for a lot of critical metals, including rare earths. Because China is a communist-capitalist hybrid it can manipulate supply by operating at breakeven and not mitigating environmental costs, which creates a global China price other jurisdictions cannot compete with.
28:13: What would you do to make American mining more competitive?
31:04: How do you deal with environmental groups that stall projects for decades?
39:59: How have you changed your subscription model over time?
KaiserResearch.com continues to be a do-it-yourself research portal covering all resource listings that costs USD $450 for the rest of 2025, after which it shifts to $200 per month or $2,000 per year, though KRO members at the end of 2025 will be able to renew at the $450 rate for 2026. I am continuing its role as an incubator of the Bottom-Fish Collection, of which there are currently 111 members. These are juniors with decent management teams and stories but are missing some piece that keeps them trapped at the bottom. Trying to explain to newcomers why really big gains can come from owning juniors with "missing pieces" is a bridge too far.
The Favorites Collection is a smaller set of resource juniors, currently 26 companies, to which members of the Bottom-Fish Collection are graduated when missing pieces have fallen into place, if I can still see substantial upside. The new subscription model for 2025 aimed at a much larger audience is KaiserResearch Substack, which for now costs USD $10 per month or $100 per year. I use this platform to publish comments of a general nature which are free, and company specific comments which are for the paid Substack subscribers though usually with a free preview.
The 2025 Favorites and Bottom-Fish Collections will be continued through 2026 though at the end of 2025 I will discard some Bottom-Fish and add a new batch I have sniffed out during the tax loss selling season. Favorites can be added or closed out any time.
Any chance you could look at some of the plays in the golden triangle. Thanks for your work it's the best analysis I've ever seen covering the sector.