Dr. Kal Kotecha, editor and founder of the Junior Gold Report, spoke with the Investing News Network at the 2018 Prospectors & Developers Association of Canada (PDAC) conference in Toronto.
Kotecha said he thinks there will be a big crash in the stock market in the next two or three years, and “individuals who prepare themselves now are going to be quite happy down the road.” He believes the stock market is inflated and the next crash will be debt based. He said both gold and silver have been submerged, and that prices for both precious metals will go higher, with silver possibly breaking a high of $19.50 in the next year or two.
He added that a lot of the “easy money” has already been made in bitcoin and ethereum, and believes that “if the stock market is going to crash in a couple years, so will cryptocurrencies — but not gold.”
In terms of commodities, Kotecha is bullish on silver, cobalt and lithium in 2018. His favorite companies include MGX Minerals (CSE:XMG), in which he owns shares, and Noble Mineral Exploration (TSXV:NOB), which recently released an update on drilling at its Lucas Township gold project in Ontario.
Kotecha said he likes MGX Minerals for its management under President Jared Lazerson, who is “very sharp, intuitive and has a sense of integrity that I think a lot of individuals in the junior markets lack.” He noted that MGX Minerals is in the lithium space and is developing an efficient technological process to extract lithium from wastewater and is “also cleaning up the wastewater into cleaner farmland water.”
Watch the interview above for more insight from Kotecha, or read the transcript below. You can also click here to view our PDAC 2018 playlist on YouTube.
INN: Tell us about your experience with the Junior Gold Report. How did that get started?
KK: I started in news business in 2002 with the Kotecha Resource Report and it subsequently changed to the Junior Gold Report in 2010. So I have quite a few fortunately really good subscribers that read the content so it a varies on gold the economy to base resources and things like that. I also have a feature column, on the home page of StockNews.com.
INN: I wanted to ask you as well, since you cover gold stocks, what can we expect the price to do this year for gold?
KK: In my opinion has not been parachuted down from heaven, so it’s just my opinion right? So I really think that by the end of the year, towards the beginning of next year’s when you get to see a higher price for both and that has be a lot to do with the economy and what’s happening both sides of the border as well which I can get into, you know on other questions. But I believe that we will see higher heights and possibly even break the high of $19.50 or so, otherwise a few years ago, you probably see that in next year or two.
INN: And you touched in your presentation on some of the issues that are coming up in the next couple years with the stock market. Can you talk about that and how that could affect gold going forward?
KK: I really think the next two or three years in a lot of other pundits reflect the same narrative I do, is that we are gonna see a pretty big crash in the stock market and it was mortgaged based and derivative based 10 years ago. This is gonna be more debt based, okay. So I really believe that people, individuals who prepare themselves now are going to be quite happy down the road and you know, I always go on and hit the highs and saw that, buy at the highs and sell at the lows. But if you can properly try to forecast and then you can start preparing yourself but I really believe the stock market is totally really inflated. It’s only a certain amount of boundary, it can go even higher but then I believe gold has been submerged and especially silver as well, which we can get into and I believe that’s where the true and high interest money is going to be.
Now that does not necessarily equate that precious metal stocks will follow. Because in 08′ when the market crashed, so did precious metal stocks but gold and silver bullion actually stayed the same and appreciated a little bit. So it’s a baby with bath water, everything is just going to go down the toilet, right? I believe including junior mining stocks down the road. It doesn’t mean it’s gonna happen now, this is just the next couple two to three weeks I believe. So there’s still a lot of money to be made in this market.
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INN: How does that affect silver going forward? Will we see silver follow gold when there’s market trouble?
KK: There’s three different options. Right now, we have an 80 to one ratio of silver to gold. So historically, that means that either gold is overvalued, silver is undervalued, grossly undervalued or both of them are undervalued and I believe both of them are undervalued. But silver taking on a lot of base metal characteristics as well and being a cheap man’s gold, I believe it’s gonna propel itself quite a bit higher. So when gold starts moving on a percentage basis, silver will accelerate that and it is only so long you can submerge something. If you go back in time you’d think, “You know, I should have bought Cryptos in 09′ or 010.” “You know, I should have bought equities in early 09.” I believe this is where we are in silver at this point.
INN: What about the gold vs. cryptocurrency debate? We’ve been hearing a lot about that, people have a lot of different opinions — what’s yours?
KK: In my talk at the conference was on gold versus cryptos and basically my thesis on that is that a lot of the easy money has been made in bitcoin and ethereum and that’s just- it’s not a new novel forecast for that. But if you look at the little correction we had in the stock market, about a month ago, bitcoin follows, bitcoin fell from about eleven thousand to in the seven thousands before recovering again, just like the market is recovering. So bitcoin has not, and the cryptocurrencies have not gone through a recession. So bitcoin was invented in ’09 and that last crash we had was in ’08. so I believe that bitcoin is in essence tied in with the stock market in many respects. So I believe if the stock market is going to crash in a couple years, so will cryptocurrencies but not gold. Because there’s an inverse– I’m beginning to see there’s an inverse relationship between cryptos and the price and the equity market.
INN: What other commodities do you think will do well this year? We’re hearing a lot about cobalt, lithium, some of the battery metals.
KK: Correct. I believe cobalt will continue, lithium will continue as well this year and I believe silver. Silver is one of my favorites.
INN: What’s your basis for the outlook for silver? Is that based on industrial demand?
KK: I think it’s more based at it’s- gold is used as a store of value and also silver has been submerged for so long. And when gold does appreciate, silver appreciates quite a bit more historically and when gold depreciates, silver depreciates at a percentage basis as well, quite a bit more. So looking at those factors and historically, silver spark the pot in my opinion.
INN: Right. You do a lot of research, what are some of your favorite companies right now?
KK: I work with MGX Minerals, so you know as a disclaimer, I do own stocks, stock options, shares, warrants, repeat, private placement I have participated in but I really like MGX Minerals and for a number of reasons. First of all, I really like the president, Jared Lazerson. He’s very sharp, intuitive, and has a sense of integrity that I think a lot of individuals in the junior markets lack. He’s anomaly in the junior market space there are handful of good individuals and I believe he’s one of them, for the couple years I spent with him. Secondly, they’re in the lithium space, so they have a process right now that we are actually, and then you have the part of project ready. And the premise of the technology is, that it can extract lithium from wastewater and a fraction of the time, as solar evaporation does and then also cleaning up the wastewater into cleaner farmland water so it’s a really good process.
INN: Is that a new technology?
KK: Yes it is. They’re in the process of expanding it and deploying the projects that we have coming on and the plans that we have coming on, and bringing on more and advancing in technology even further. So it’s a very disruptive technology and a lot of information can be found on [their website].
INN: That’s great. There’s a lot of excitement about lithium, so I’m sure people will definitely check that out. Is there anything else you’d like to add?
KK: There’s another company I’m looking at I’m just finding a more about it Noble Mineral Exploration and I’m just found out about it very recently, so I’m looking at that. I believe the symbol is NOB. I’m just hearing individuals talking about that and then they’re in the Timmins area, the players behind it are pretty strong so I researched that. I always look at management number one and I think Rick Rule echoes the same sentiment as well, is management is key, and that’s bodes well for MGX Minerals and Noble Mineral Exploration.
As for your question of what else I’d like to add, I believe we’re gonna be in a big roller coaster ride not only in the mining space but also the technological space advances have been made so quickly on technology. The next phase will be artificial intelligence I believe. You know, a lot of individuals have made a lot of money into the cryptocurrencies, a lot of money still can be made but artificial intelligence is also exciting, it’s on the forefront. And I had the opportunity to teach at the University of Waterloo for a number of years which is lead in artificial intelligence. So I got to see first hand what’s happening there, in the category of artificial intelligence. I would watch the price of gold and silver and watch for a possible economic crash in the next couple years, just because of the finance related and all the debts and who is going to buy the bonds in the States at this point to keep fueling the debt crisis and we have a similar crisis here in Canada as well of an increase in deficit. Which is an anomaly in good times when the government is increasing deficits where at this point they should be not having a deficit and saving it if needed for economic downturn. So this is all gonna precipitate into, I believe an economic crisis the next couple years. But you know timing is really hard to predict, right?
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: MGX Minerals is a client of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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