# Old West's Brian Laks dives into metals, mining, and uranium Yet Another Value Podcast · 2025-08-14 · 57 min · https://www.youtube.com/watch?v=IOdUqsyyc4E ## Transcript Andrew Walker You're about to listen to the yet another value podcast with your host me, Andrew Walker. Today's podcast has Brian Laks from Old West Management on. He is a repeat guest. He's been on I think this is the third time. We haven't had him on in a while. He came on a few times in 2021. Brian in specific and Old West in general have deep deep knowledge of particularly the metals and mining sectors. He was very early on the big uranium call that a lot of people just smashed out of the park over the past few years and he was one of the first people on to that. We dive deep into all things metal mining exploring. We start with uranium, then we go to gold, then we go to copper, we touch on a bunch of other different metals. Hopefully, you're really going to enjoy it. It's a little bit different, but you know, if you're looking for macro views, commodity views, everything, I think this is the podcast for you. So, we'll get to that in one second, but first, a word from our sponsor. This podcast is sponsored by Portrait Analytics. People ask me all the time, "What's your favorite stock screen to run to look at for ideas? Is it low price to earnings, high dividend yield, what what is it?" And my answer is simple. I don't run screens. I somehow doubt that there's serious alpha and sorting through stocks that are trading under 10 times price earnings on Yahoo Finance. But portrait analytics has completely changed the game on screening. It lets you create bespoke screens to generate actually unique ideas. Let me give you an example of one that I've been using recently. 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Uh they it also showed me exactly where the company was talking about, how their valuation compared to peers, so I could see, hey, was this a one-off or are they consistently talking about in a way I think it's interesting. Anyway, I think it's completely changed the game for screening and for generating new ideas. If you're looking to up your screening game, you should check out Portrait Analytics at portraitanalytics.ai. I'll include a link in the show notes. All right. Hello and welcome to the yet another value podcast. I'm your host Andrew Walker. Uh with me today, I'm happy to have on Brian. I think it's the second time, but it might be the third time from Old West, Brian Laks. Brian, how's it going? Brian Laks Going well. It’s good to see you again. It’s been a while. Andrew Walker I’m super excited for this. I’ve been meaning to do a podcast on this sector for a while. I’ve got lots of questions on specific metals, metals outlooks, and all that. I’d love to just walk through those, but why don’t I start here? At a high level, where are you and Old West’s heads at on the metals and mining sector and the world in general these days? Brian Laks Sure. Again, thanks for having me. I think the first time we talked was maybe 4 years ago, on uranium. If you remember at the time, it was kind of right in the middle of it. I guess it was late 2021. There was a flurry of activity, and you were starting to see the stocks really start to react. But you’re right: we were certainly early to that one. When we were building positions in 2017, 2018, and 2019, it was kind of a ghost town. There weren’t a lot of people involved. There were a few specialist funds and a couple of maniacs on Twitter, but aside from that, it was really just a combination of apathy and disgust, I guess you’d say. Andrew Walker There are always maniacs on Twitter. That’s one thing my work has taught me. But yeah, I remember when we were prepping for the podcast, I saw your articles and write-ups from around 2018. I was like, “This is really early on the thesis,” so please continue. Brian Laks Yeah. Some people say early is wrong, but I guess in that case it wasn’t. As long as you believe you’re eventually going to hit your target, you don’t want to wait forever, either. There’s an opportunity cost, but we had a view that it was a few years away. I think what surprised us was that we built the positions in the late teens, and then in 2020 and 2021, you really saw them start to play out in a big way. So much so that, in late 2021, we started dialing them back because we’re always really grounded in valuation. I think what you saw there was that, as the uranium price went from 20 to 50 that year, or even higher, a lot of these stocks started pricing in 80, 90, or 100. So we said, “Hey, this is great. We expected to be here for several years, but if the market wants to pay us in a much shorter time frame, we’re happy to take it.” We dialed back a lot of the lower-quality positions and really focused around more of a selective basket, which we continue to hold to this day. In fact, just earlier this year, we saw the flip side. We saw sentiment get so bad that, even though the fundamentals were strong and a lot of these projects were several years closer to development, we actually started dialing the uranium weights back up. Andrew Walker Perfect. That’s perfect. So, look, I guess we can just start there. The thing I know you guys most for is uranium. As we’re talking, you guys smashed it out of the park, and I was just looking at the uranium chart. I remember you were telling me, I think when we were talking in 2021, uranium was in the 30s, I want to say. I could be. Brian Laks It’s funny because I specifically remember the day we talked, because I think the spot price had a huge jump that day or within a few days of when we were talking. It was kind of playing out right at that moment. Really, over the following few months, some companies were doubling and tripling in a matter of weeks. We’re here for the value. I think one of the criticisms we might have of ourselves is that we don’t stay at the party the full time. A lot of times, you underwrite these things based on valuation, but there are times when you get to a full valuation, or at least under a conservative framework, and then the market might have its own idea. You get all these retail traders, all this froth, and you get this huge multiple expansion that happens. That can be a big part of the overall return, or at least from trough to peak. We’ve tried to balance that out by maintaining a little bit of exposure, even when we think something’s fully valued, because there is always that extra bit. If you think something’s worth 20 or 30 times earnings and it goes to 100 times earnings, that’s a 3-to-5x on top of what you’ve already underwritten, and it can make a spectacular return look even better. The problem is, it’s hard to justify holding it for that extra bit when you’re really just counting on investor psychology and sentiment for the extra little bit of juice in the orange there. It’s really hard because, for every story where you buy a stock at 20, sell it at 40, and then it rips to 80, 120, or 160 in your face, there’s a story where you buy the stock at 20, it goes to 40—and I’m just using 40 to say that was your fair value—and then it goes to 45 and you hold, thinking, “I think this is going to squeeze.” Maybe it goes to 50, and then it comes back to 40. Or, even worse, they report disastrous numbers and it goes back to 20, and you say, “Oh, I had a fair value of 40. I held it, and then they reported this terrible quarter. Everything’s gone wrong, my fair value is lower, and now it’s kind of back to where I round-tripped it.” I don’t know if people think about the counterfactual of holding for that mania and having everything go wrong. A cycle turns in metals and mining or something, but neither here nor there. We’ve had a few of those where, like Enphase, we were buying it at $1 and it ended up going to $300. But how do you justify that last bit? When it gets to 20 or 50, you’re like, “Wow, this has been one of the best investments of my career, and yet the valuation’s a little stretched. They’re continuing to execute. Do we want to hold it?” You’re scaling out of this thing, and then, yeah, I mean, that’s another 2x, 3x, or 5x on top of that. So it’s difficult. I don't know. That's a great problem to have if people are criticizing you for saying, “Hey, it should have been 100x,” and you only made 20. I feel like— Andrew Walker That problem all day. Brian Laks There are bigger problems in the universe. Andrew Walker Well, let's start here as we're talking again. When we talked in 2021, I think spot might have been in the 20s and then jumped to 30 the day we were talking. Right now, spot's in the 70s. If I remember correctly, a big piece of the thesis was that the global supply-demand curve—the global supply curve—kind of tops out in the 60s to 70s. I'd love to talk, as we talk today with spot in the 70s, about how different that is from 30. Obviously, the world has evolved a lot since then. What is your outlook for uranium? How are you guys thinking about that these days? Brian Laks Yeah, I think there are a few pieces to that question. One is, you have to separate what spot price is doing, which has its own mechanics, from the long-term price, which is around $80 today. That's where contracts get signed, and they don't get signed at a fixed price. They'll get a blend of fixed and market, with ceilings and floors, so there's a lot that goes into that. I think what you've seen in the last 5 years is a lot of inflation on the capex side, and potentially the opex side, where we used to think, in 2017 and 2018, “Hey, if you get from $20 to $50 on the uranium price, that's great,” and a lot of these things look good in that environment. I think the last few years you've seen that break-even price creep up to $60 or $70; maybe it's even higher now. You see some of these producers that are turning back on still struggling to make decent money even at today's price. So, look, all things equal, we would expect the uranium price to probably continue higher. I think you look back at the past peak, which was maybe $130. That's not out of the question, given the environment we're in today, especially with all this groundswell of support for nuclear power. Whether it's reactor life extensions, new builds, or the whole SMR thing with these small modular reactors, uranium is a great way to generate electricity. That was the core of the thesis almost a decade ago, and that's still true today. Especially now with all this additional demand for electricity, particularly from AI and data centers. That's really what gave it that second leg after the initial 2021 peak. A lot of these stocks retrenched pretty dramatically—50% over the next year or so—and then it really took until early 2024 for them to exceed their old highs. It took the uranium spot price getting above $100 to reignite enthusiasm in the sector. Then it pulled back, and a lot of that hot money went away. That's what I alluded to earlier: earlier this year, spot dropped from $100 to $60 over that 12-month period, and sentiment was washed out. A lot of people said, “Oh, this is horrible. Why would I ever want to participate here?” And that's exactly what we look for: these extremes in sentiment. That lets us know that we have the fundamental knowledge of what these things should be worth and what our normalized price-range environment is. Nothing moves in a straight line, so it'll overshoot in one direction and overshoot in the other direction. If we can take this core position and either augment it or shrink it, and kind of zig when the market is zagging, I think that's how we've been able to really do the best with the whole opportunity set. We had a lot of uranium in 2019 and 2020, when these things were trading at 10 cents on the dollar. But you're right: it's a different mindset buying Cameco at $70 than it is buying it at $7. You have to really think about, “Hey, what is the outlook from today?” And then how does that compare with all the other opportunities I have in my opportunity set, my watch list, whatever it is? And that's why we said, “Well, hey, this might be a good time.” Going back a few years, when a lot of the things where the rising tide lifted all the boats, maybe some of the leakier boats we can trade out for some of the things that were on our watch list, and then the really solid ones will continue to hold. Sure enough, I think Cameco is a great example of one that, when a lot of the companies were selling off in the 2022-to-2023 timeframe, just kept chugging along. I think it really does highlight that when valuations change, you have to be a little bit more selective. We've talked about this a lot in our letters and the interviews we've done. Andrew Walker So, 2 quick questions. Number 1, let's go back to spot price. I do want to drill down on something you said, but let's just go back to spot price real quick. Spot's at $70 and long-term contracting is at $80. That's probably right around what the marginal producer is producing uranium at right now. Am I thinking about that correctly? Brian Laks Yeah. Well, look, it's going to vary project to project, but I think at this price, especially, a lot of the high-quality stuff should be getting the green light. Now it's just a matter of how long it takes, right? You have to have your permits and construct the stuff. That was always our view: price alone is not enough. It's the signal that this thing has to happen, but now it just starts the clock. Then there are some of the marginal guys that, yeah, maybe they can squeak it out here, but there are people that participate in the sector just looking for that really high-torque, high-cost stuff. Andrew Walker Yeah. Brian Laks They're going to be the ones that fly the most. Like I said, I think the last time we talked, we would never have estimated or predicted ahead of time which specific name would do the best, because there's a path dependency there. How does it move? Is it the spot price moving it? Is it a steep move? Is it an easy, gradual move? That's why we built this basket. If you remember, at the time, what a different environment. There was 1 uranium ETF, and they puked all their stocks at the bottom in 2018 because they were all illiquid microcaps. It was a total bottom signal. Now you've got half a dozen of these things, and everybody loves uranium. It's just night and day, the environment that we're in. So, in a rambling way, to say: yeah, today the price is good for a lot of those high-quality projects, and we think they'll get moved forward. But I think the bigger issue is: are there enough? Can this gap of unfulfilled utility requirements be supplied with some of these projects, especially as you get out into the 2030s? I don't think so. I think you'll see continued higher prices. So, really, it's what is your time frame for saying, “Should this thing go higher? How high should it go?” We're always trying to look 1 to 3 years out, because I think that's long enough where you can find situations where there is a big difference in price and value. But it's also not so long that you're waiting and your investors are like, “Hey, are you right?” There's this trade-off: we want to find this big upside potential, but we don't want to have to wait forever for it. One, we might be wrong, and two, there's a big opportunity cost of things playing out in the meantime. So, we've kind of found that little sweet spot where we can build positions in an area, and a few years later it starts to work. In that intervening time period, we're looking at some of these other things, and we kind of stack a few of these things. So, there's always something in your portfolio working, even though they're all on this rolling 1-to-3-year horizon. Yeah, I don't know. Can uranium go to $200 or $500? Maybe, especially if there's this lag between when the price signal gets there and what the supply response is. We've always liked mining in general because that supply response does have a big lag. It's not easy to flip a switch and say, “Let's say uranium went to $150 tomorrow.” You can't speed up the construction of a mine. Maybe you can fast-track a permit, but there's still this real-time lag. I think that's how you get this scarcity pricing that occurs in a lot of commodities, where once the price starts to move, it's probably too late to start making those decisions. Even when you go back a few years, in 2022 and 2023, when commodities were all washed out, the consistent thing we would say to our investors was: look, the longer prices stay down here because of some cyclical demand concerns, the less likely it is that these investments that have a long lead time are going to be made. That makes the eventual problem that much worse, because eventually cyclical demand returns, but the supply problems are structural. They take a lot longer to change, and that's how you get these big price movements. We're not in it for a spike. I think that's great if it happens. But really, we're just trying to think: what should the marginal price be? Who makes money there? Who doesn't? If it goes above that because of all these different factors, hey, that's great. That’s a bonus. But again, it goes back to what we were talking about earlier, which is how do you stay long enough at the party when things start getting really volatile? Andrew Walker I want to ask you about a few points you hit there in 1 second, but I just want to ask 1 more thing on your rating. I guess the point I was trying to drive at—or not drive at, but I was trying to build to—was when we talked 3 or 4 years ago, it was, “Hey, this is below the cost of supply,” right? Today, it’s gotten pretty normalized. But when I look at the market and everything that everyone on this podcast listens to, or the stuff you alluded to earlier—Constellation restarting Three Mile Island, the huge rush for nuclear demand, Talen supplying all of its nuclear power to Amazon, governments around the world seeming to reverse course and, outside of Germany, trying to keep their nukes open—I look at that and say, “Okay, cool. The uranium thesis is kind of on track with what Brian laid out 4 years ago and what some other people laid out 4 years ago, but it actually seems to be on a much more bullish track.” Yes, the price has worked, but are we in a scenario where the market hasn’t caught up to, “Oh, my gosh, 3 years from now, the demand is so much higher than we were thinking 3 years ago”? Prices could just continue to spike. You’ve kind of got shortages, and you need a much bigger price signal to tell people, “Hey, forget the best projects. We need to bring on even more marginal projects to meet this continued demand.” We’re putting a nuke on the freaking moon, apparently. So we’ve got to send uranium up to—I don’t think there’s uranium on the moon—we’ve got to send uranium up to outer space. I just wanted to ask that question. Brian Laks No, I think you’re exactly right. That’s why I say, if we had to choose, yeah, the uranium price is going to go higher over time. But where we are today, you nailed it: Some of the high-quality projects can be made. Now it’s just a matter of timing, right? You look at some of these things, and they’re still waiting on permits, and then there’s a multiyear construction timeline. I think those will certainly go ahead, but you’re right: Will it be enough? Probably not, especially given this renewed interest in nuclear power and all the demand that comes from that. We probably will need a lot of marginal projects, but you’ve kind of seen that, right? I mean, 5 or 10 years ago, there were a dozen companies, maybe 2 dozen companies, in the space, and now I don’t even recognize some of these. Everyone’s changing their name to uranium. It’s really a classic cyclical mentality. Remember, in the last peak there were hundreds of companies. Everybody and their brother was putting “uranium” in their name and going to strike it rich. There are 2 ways to read that. One, you’re right: We’re going to need a lot of these projects. But then there’ll be a limiting factor, right? Because if you think all of a sudden uranium prices spike, people might take a step back and be like, “Well, wait a minute. Should we be burning more natural gas? Should we be burning more coal?” There’s a balance in all this stuff. On aggregate, yes, nuclear power is a great way to generate electricity, given all these different criteria that people have: cleanliness, scale, and 24/7 reliability. That was the reason we got interested in this 7 or 8 years ago. That’s still true today, and in fact, to your point, it’s probably even more bullish, just given all the news. The big tech companies and the whole AI data-center thing have really shined a spotlight on what we’ve been talking about the whole time: This is a great way to generate a lot of electricity in a very small footprint. The tech companies realize it, and they’re going to throw a bunch of money at it. I think it’s great for the world, too. We’re going to need a lot more electricity for a lot of things. It’s probably not going to be one or the other. I think you’re going to have the whole portfolio approach. You’re going to need more gas. You’ll probably still be burning coal. Maybe you put some carbon capture on it, but we’re going to need a lot of electricity. I think uranium is going to be a big part of that. We’re going to need all we can get. At a couple hundred dollars a pound, you can start doing some of the funky seawater stuff and all what the bears used to talk about. Great, we’ll need that, too, right? I think the next 5–10 years are going to be, “Hey, how do we generate as much electricity as possible?” We’re going to need to throw everything we can at it. Andrew Walker I look forward to that day. Okay, so maybe a nice way to transition from uranium to mining: You mentioned, when you were talking about how you build these, that you do uranium and then you have to weigh it against every other opportunity out there. There are lots of metals and lots of other things out there. There are lots of things that aren’t metals. Where is uranium, just in general—uranium stocks, whatever—grading out on your overall landscape versus gold miners, versus silver miners, versus directs? Brian Laks If you talked to us 5 years ago, it was by far our biggest metals-and-mining exposure, just because it was so asymmetric. A lot of these things, even if uranium ran at $50 a pound, they were trading at 10 or 20 cents on the dollar. We didn’t even need $70 or $80 or higher to really justify a very good multiyear return. Sure enough, it played out like that. I think now, if you look at our portfolio, it’s a lot more balanced. We still have uranium in there. The joke we used to make was, if you owned 1 uranium stock, you were overweight because I don’t think it’s in any index. I don’t know, maybe Cameco or something now. We still have a pretty substantial part of the portfolio in uranium, but it’s definitely broadened out. I think that’s been the real big shift that we’ve made over the last few years. Especially in 2022, you had all these commodities get washed out because of China demand concerns and the whole COVID-zero thing they did. Then the Fed was raising interest rates, and you saw a lot of these things just get puked. Especially right after early 2022, when the whole Russia-Ukraine thing happened and commodity prices were hitting multiyear highs, there was a complete 180 and all that got washed away. For us, with this multiyear time horizon, we were like, “Well, now wait a minute. The same fundamental setup that occurred in uranium, we see it in other places,” whether it’s copper, tin—we talked about that a couple of years ago—or a whole variety of metals. I think it’s really a bigger picture of how we’ve let China dominate the periodic table for the last 30 or 40 years. We’ve been happy to outsource to get the lower labor costs, let them deal with the environmental concerns, and just import it all back in. I think now you’re starting to see some problems arise with that. If we’re going to have these trade barriers, protectionism, tariffs, and all this stuff, we’re going to have export bans. We don’t want them to have AI chips. Well, they can retaliate just as well with some of these metals that we’re totally relying on. There have been efforts over the last 4 or 5 years to try to rebuild these supply chains in the West, but again, it’s slow. Do we even have the materials to do that? I don’t know. It varies case by case, but I think one of the big areas that we’ve really focused on after uranium—aside from tin, which is kind of niche, and we can talk about that, obviously, because that’s what we talked about last time—is copper. Copper is probably the biggest area that we’re in. Andrew Walker Can I pause you? So copper is your biggest focus right now? Brian Laks I’d have to double-check it. I’d probably say that’s an accurate statement, just because it’s a lot easier to invest in copper. There are a lot more options. With some of these niche metals, like tin, you’ve got maybe 2 producers you can buy. With some of these smaller metals, maybe there’s 1 or 2, and they’ve got hair on them. I think copper is probably the one where we said, “Look, this is a very similar setup.” Demand is growing from all these new technologies that are being rolled out. Supply is challenged across the board. They’re not making new discoveries. Existing mines are depleting, and costs are rising. It’s kind of a laundry-list, perfect storm of supply challenges right when demand is growing. Now, the bears over the last few years have said, “Well, the traditional uses of copper still dominate”—construction, that kind of thing. In China, you’ve got to watch their property market. But over time, you’ll see these new uses grow in importance. And I think, yeah, if the market is giving us the opportunity, when everyone's concerned about China demand, to build some long-term positions in high-quality copper producers and developers, we'll take it. That's great because that's exactly what I was talking about earlier: finding this long-term view that's positive and being able to build positions when short-term sentiment is negative or you've got some temporary headwinds. Yeah, maybe the next 3 to 6 months are bad, but let's look at the next 3 to 6 years. That sort of framework has let us identify some of these things, very similar to uranium. I mean, at the heart, these are very simple investment theses. It's just a supply-demand mismatch, whether it's today or forecast a couple of years out, and the supply is not that easily fixed. So, yeah, you can have a scenario where demand is temporarily depressed for cyclical reasons, but that's a great time to buy into a longer-term bull thesis. I want to come back to copper in a second, but if I just zoomed out at a high level at metals, right? I read your Q2 letter, or if I just flipped through it: gold approaching all-time highs, silver at all-time highs, copper not at all-time highs but not too far from the kind of 2021 highs. Most other metals, I would say, are brushing up against all-time highs. I just want to ask: when I look and see every metal across the board—a gold bug's dream coming true—I think gold has now outperformed the S&P 500 over the past 20 years or something. When I look and see metals across the board hitting highs, I guess I would have 2 questions for someone more knowledgeable than me. A: Why? And B: Why is this a good time to invest? The contrary me would kind of say, “Oh, 2015, when gold was near all-time lows.” You'd have to probably go back to when Jesus was alive or something to hit the all-time lows, but gold was just something no one liked. It was completely low, trading around $1,000; no one cared. Why is now the time to invest in all these? So, I threw 2 thoughts at you. Brian Laks Yeah, no, and I see where you're going with that. And look, gold—let's use gold as an example, because that's a great one. We've owned gold in our portfolios since I joined the firm almost 10 years ago. That's really been the cornerstone of our commodity exposure. There are a lot of reasons to like gold; it's kind of a hedge in the portfolio. Andrew Walker Yeah. My problem with gold has always been that it's hard to predict the demand, because a lot of the demand is subjective. What are central banks doing? Are they selling? Brian Laks Yeah. Andrew Walker A lot of investor psychology is involved. Unlike some of these other metals that are consumed, gold gets dug out. That's the joke, right? It gets moved from one hole into another hole, and then someone watches it. Brian Laks It's not gold. But my current favorite one is the argument for Bitcoin, where it's like, “Hey, Bitcoin's got a market cap of $2 trillion. Gold has a market cap of $20 trillion. Why shouldn't Bitcoin's market cap be gold's market cap?” And I love it because it's very similar to how you price gold, right? It's very vibes-based and demand-based. When somebody says something like that, it really makes me think every time. Sorry to interrupt, but it's my favorite basis. Brian Laks That's great, because that's really the thing we grapple with when it comes to gold: if someone says, “Where do you think the price should go?” my natural response is probably higher. But I don't know how much faith I want to put in some of these wonky relationships and formulas to try to estimate whether it should be $5,000, $10,000, or $20,000. I don't know. With a lot of the other commodities that are consumed, you can do that sort of marginal-cost analysis and say, “Here's the level of supply we need. Look at the cost curve. Who can produce up to that level? What should the price be?” That's a pretty simple analysis. With gold, what should the price be? We've owned it in the past, and one of the challenges with gold is that it's actually been one of our best performers this year. It was a standout performer in Q1. Its strength has continued through the last quarter and now into this quarter, but that's the real challenge: it's hard to predict a price. So, really, you kind of look at it the other way. Here's the price level. Who's making good money at this, and how are they valued compared to that? Remember, for the longest time, the gold miners underperformed the gold price because their costs were rising. They couldn't keep up production, and so they weren't capturing that rise in the gold price. There was a lot of frustration among the gold bugs, especially the ones that played it through the miners: Why aren't we making money here even though the price is going up? Over the last 12 months or so, maybe longer, the gold price has gone up so fast that even the guys who couldn't keep their costs under control are still making money because their costs aren't going up that fast. In 2015 and 2016, you couldn't give this stuff away, right? No one cared. No one wanted to hear it. But again, that's an interesting time if you have a bullish long-term view, because if there's a more subjective valuation framework, you think, on the margin, “Do I think governments are going to print more money or less money? Do I think the money supply is going to go up? What is actually driving the price of this thing? Is it uncertainty?” This year, it's been great, right? A lot of political uncertainty, the whole tariff thing, people looking for a safe haven. That should get bid up. Especially now, with the price level where it's at, a lot of these companies are making pretty good money. They look good just from, you know, stripping out the business: they're making great margins and free cash flow, and a lot of the things that people look for in any investment, let alone a mining company. But to be fair, we've dialed back some of our gold exposure on this enthusiasm. I don't know—maybe it's still a big part of our portfolio—but I guess that's one of the problems with being contrarian. When people start to like the stuff that you're in, you get a little bit worried. Everybody's talking about gold. You've got your uncle calling you, your grandma asking, “Should I be buying some gold coins?” There's a bit of a contrarian signal there. I think gold still has a long way to go, and we still own a lot of it. But because of all those issues, there are other things that we like where we can actually justify a price target based on how much is consumed, how much can be produced, what the projects look like, and what the cost curve looks like. We can get a lot more confidence than just being like, “Gold should be going up because the world's in chaos.” Andrew Walker So, that was gold. But if I even stepped away from gold, which I agree with you is different than the other metals: silver is at an all-time high, copper is touching pretty high levels, and I think platinum was hitting all-time highs the last I checked. You've just got a lot of metals hitting all-time highs. We've talked about the investing there, but I just want to ask: if you told me it was 2022, inflation was 10%, and these things were all going up, it would make sense. But it's 2025, and inflation isn't zero, but it's certainly not 10% anymore. Across the board, you're seeing all of them. What's driving that across the board? Brian Laks I think it's a combination of things. One, people are realizing that the focus has been on technology for so long. For 10 years, that's what's been driving the market and getting all the attention. You turn on CNBC, and it's Nvidia, Apple, all that stuff, data centers. Demand is certainly a big part of that: people realizing that the raw materials need to feed into that, and that there has been this meaningful increase in demand. Two, you've had the supply problems. It's getting more expensive to produce these things. Costs are going up, grades are going down, and there aren't as many discoveries. The people that do produce it are suddenly facing friction in the supply chains because of protectionist trade barriers. So, there are real reasons why metal prices are increasing. But to your question about all these things being at all-time highs—whether it's a good time to buy or not—I think you really have to go case by case, metal by metal, because each of them has its own unique supply-demand characteristics. You can make an argument that some of them are at all-time highs because of a price squeeze or temporary factors. Some of these niche metals may have had export bans out of China and gone up 5 or 10 times. That's different from something where demand is through the roof and continuing to grow, and there are real supply constraints—just the normal mining environment—but we're not producing enough. That's why you're seeing these price signals. Just because something is at an all-time high doesn't mean it can't go higher. That's why I think it's not enough to just look at the overall environment and say, “Hey, metals are finally working. It's time to move somewhere else.” It's okay to ask, well, how much should they work? How high should they go? I don't think you can make a blanket statement about all of them, and I think that's why we take this approach. The people we work with like that we're not just a basket of every metal. You can buy that easily, but you're going to get the good with the bad. Or you get some commodity manager who's like, “Hey, I just own commodities, rain or shine. I don't care what they look like.” We're here today because that's where we see value. Five years from now, if that changes, we're not going to continue to be here. We always tell people, look, the best thing that could happen is that 5 years from now, we own none of this stuff, because that means we did extremely well and there are other things that have a better go-forward risk-return. I can't speak to the whole environment. It's nice to finally see some of this stuff working, because if you go back a few years, no one wanted any of this stuff. We've been telling the same story and owning the same stuff. All that's changed is the environment, and as we viewed it, the market kind of came to us. We had this view that a lot of these technologies were going to drive increased demand for these metals, while supply was going to be challenged. It was a slow-motion train wreck. You needed higher prices, because we look at all the projects that are out there that can fill these supply gaps, and they need higher prices. So here it is. It's happening now. Then you ask yourself, okay, like the uranium thing: the price has adjusted. Is it enough? How much can be built now? What's the timeline for those things to get built? Do we still think that higher prices are going to be needed? All those questions get asked. I think you have to go metal by metal and say, “Hey, do I think that this is a great place to be?” Again, we're not playing the metal prices themselves. We're looking at the equities of the producers. It's not enough to say, “Hey, I think the price of commodity X is going higher.” What is the producer or project developer baking into its valuation, and how does that compare? There are times where you might say, “Hey, I think the uranium price is going higher, or another commodity is going higher, but I think the company has already priced that in, so I'd actually rather own something else.” That's the decision that we came to in 2021. I think now we're at a place with a lot of these different metals where we think that, even though the price has gone up a lot, copper is a great example, we still think you're probably going to need higher prices over the next few years, especially as all the supply gets gobbled up by these new demand centers. Andrew Walker I'm glad you mentioned copper, so I'd love to talk about your outlook for copper. When you look at demand, there's—well, I don't want to take the guest's job away from you. I'd love to talk about what you're seeing on the copper demand side and what you're seeing on the copper supply side. I saw your letter, so maybe we can talk about 1 or 2 of the copper plays in there. Brian Laks Copper is really one where, for a lot of generalists looking at the space, or advisors—we work with a lot of advisors now—gold is typically the first commodity they get involved with. Gold, or maybe oil, is the first thing they look at and say, “Okay, I can understand what it's used for.” It's a big market. Copper is usually the second one that gets their interest, because it's big, there are liquid instruments, you can buy Freeport-McMoRan or something, there are ETFs, and people follow the price. I think now people are realizing the importance of it because of electricity. It is the arteries of electricity around the world. People are realizing, especially with all this news about data centers, EVs, and renewable energy, that there is a lot of discussion about how we're going to generate and transmit enough electricity to satisfy the world. It's not going to be easy. Well, let me just get this plug right here. Our view has always been that you're going to need more copper. What are the projects that are out there that are going to be able to supply that? A lot of them need higher prices. We've done really well owning some of these companies that either have very high-grade deposits or are low-cost producers. It's kind of a combination of all that. I think that's really true across the board for all these commodities, not just copper. We're always looking for situations where a certain metal is going to be in high demand and supply is unable to catch up. Who's got the big source of it? Who's got the low-cost one? Some people can say, “I'm going to play these really high-cost torque plays, and then when the price squeezes, I'm going to make a ton of money, but I might go bankrupt.” We're looking at it from a holistic perspective and saying, “We need a lot of copper. Who's going to be the one to supply that? Who's got the projects and the current production?” That's really the way we look at it. It's not rocket science or anything. It's a simple supply-demand mismatch. Copper is an easy one for people to get their heads around because they can understand that we need more electricity, we need to generate it, we need to move it, and we need to use it. Copper is involved in all of that. It's easy to understand, and at the same time, you look at the trends in demand and the trends on the supply side, and it really is this widening deficit that's approaching. It's not that hard for us to get our heads around. When we talk to the different investors we interact with, they understand it. We're always going one step beyond, saying, “Here's the reason why we're here.” Then it's, “Okay, what is the best way to express this view that we have?” It all ties back to valuation. We have this view that, in a few years from now, if all these technologies and all this demand play out, we're going to need a high price to incentivize new mines and new supply. Who's going to be the one that benefits the most from that? It's not always just the low-cost supply, because valuation really comes into effect there. Talking about some of the different areas we're playing, we really like what the Lundin Group is doing in South America. That's been a big part of our portfolio ever since Filo had its big discovery several years ago. It got acquired, and so that whole complex— As we've talked about in a lot of our letters, it's not enough to have just a good asset. I think the mining industry is littered with charlatans and snake-oil salesmen—all these guys who have a pile of moose pasture and are trying to raise some money. If you can combine a great asset with a management team that has a track record of success, that's a pretty good formula. That's especially true if they have access to their own capital or a good network of investors, because that's really the difficult thing about the junior mining sector, or companies that are developing projects: access to capital. Who has it? How dilutive do they have to be when raising this money? If you have people who can write a check to fund the whole thing, or you have great partners, or you don't have to use these really draconian terms to attract money, you're going to be well above the rest of your peer set that's doing these really dilutive financings, offering warrants, and all that sort of stuff. Copper is one where it's easy to get your head around. It's a similar story to uranium, or any of these things, where it's just a supply-demand mismatch. Look at where supply is going over the next few years. Look at where demand is going. There's a problem. We need more. Then you look at the projects that can fill that gap. Most of them need higher prices or a long time to build. I don't think there's much more to it than that. Andrew Walker What prices would you say are needed? As you and I are talking, copper is at $10,000—I guess that's per ton. I don't know what this Bloomberg copper metric is—but what price is needed to spur new investment into supply? Brian Laks It's very similar to our conversation about uranium. Andrew Walker Oh, yeah. Absolutely. Brian Laks Right. Okay. Well, there are probably companies that can make a buck at $4 a pound or $5 a pound. Maybe some need $6. The real question is, what's your time frame? How long does it take to build these things? With all these things, I believe we'll be surprised to the upside because of the lag it takes to build. I don't know. It's really project by project, and then you pick your demand level at what point in time. But, yeah, I think there are some projects that are like, “Great, copper is now $4.50. We can start to build.” We have a great NPV. The problem is that it’s mining, right? These things always take longer than you expect. There are always cost overruns. So what might have looked good at $4.50 or $5, all of a sudden, you end up building it 3 years later and you’re like, “Oh, we’re losing money.” And so maybe now we need $6. That’s why you see some of these prognosticators come out and say, “Oh, copper’s $10,000 a ton. We need $15,000. We need $20,000 a ton. We need even higher.” I mean, especially if you’re looking out 5 years, 10 years, or 15 years. That’s really the trade-off there. Maybe this price is appropriate for today, but what point in the future are you trying to match supply and demand? It’s likely going to be a higher price, especially when you have this inflationary backdrop, all these supply constraints, trade barriers, and all that sort of thing. Andrew Walker Yeah, I actually had a different question, but I just want to pick up on something: trade tariffs. Unless you’ve had the news turned off for the past 5 months, you’ve seen tariffs left and right. I know a lot of people—I think you guys mentioned one particular company in your letter—but I know a lot of people who’ve been talking about companies, whether it’s metals or something elsewhere, not just on a supply-and-demand basis, but on a, “Hey, this is a local miner” basis. You think of something like MP Materials, which the government invested in to get rare earths in the United States. How are you guys generally thinking about, “Hey, we don’t just need to think about supply and demand here. We need to be thinking about locality”? You can imagine buying a copper mine in the United States and then having 15,000% tariffs slapped on everything coming in from outside the United States. You’re like, “Cool, I’ve got the real winner here.” How do you think about tariffs in your framework? Brian Laks Yeah, no, that’s a great question. There’s been a lot of volatility. Copper has been a great one, right? Especially when the idea of tariffs was floated a few months ago, you saw a big disconnect between the U.S. copper price and the world copper price, which people use the LME for—that’s the $10,000 figure. We don’t trade physical spreads like that. I’m sure there are people that do that sort of thing, but we’re just looking at which companies are going to benefit from a variety of environments. Even when there was the idea floated of 50% tariffs, you saw the U.S. copper price get 30% above the world price. I think people were discounting, first, what is the likelihood that this happens? Second, what is the magnitude if it does happen? You could see the market was pricing in something short of that 50% level, but still something. Obviously, when Trump came out and excluded raw copper from the tariffs and focused more on finished products or semifinished products, that spread collapsed. I’m sure people got carted out who were playing those different types of spreads. Andrew Walker Yep. Brian Laks We’ve always just focused on what the world price is and what is needed. Some of these different location fluctuations are a bit of a curiosity, but they may be relevant because they spur interest or highlight the strategic importance of location for these things. We have some things where we think they’ll benefit from that sort of strategic premium. But I don’t think you can bake that into your only investment case, because, like you say, you’ll get whipped around by something that you have no control over, which is some proclamation about what we want to do here. That’s why, if you can ground yourself in something that works, it’s kind of like the uranium: “Hey, if it works at $80, I’ll be happy when it’s at $200.” Same thing here. If your project works great at the world price and it’s in the U.S., that’s pretty nice. If you get this bonus on top of it with this extra premium, that’s all great, right? You don’t want to bake it into the core of your thesis, but at the same time, you say, “Hey, there is some real value here.” We actually thought the fact that they excluded raw copper from the tariffs was kind of an implicit admission that, “Hey, well, we don’t have enough to produce, right? It would take a long time.” We own a couple of these projects that are in the U.S. that we think should do well regardless of tariffs. I think the fact that the whole idea of tariffs shined a light on the importance of copper—for us, that was always the big thing. Whether they came through or didn’t come through, or whatever the level was, how high or how low, just the fact that the U.S. government is talking about how we need to address this industry because of its importance to national security, running the whole trade investigation under Section 232, that was enough for us. We thought, “Hey, guys, look, this stuff is important.” You want to slap whatever tariff on top of it? Okay, it’s worth even more than that, but it works without it. I think more generally, people are realizing that copper is a very interesting industry right now. China produces a lot of it. The West doesn’t have enough. It’s just a very tricky situation. A lot of that got lost. People didn’t care or didn’t look at it because so much of the investment community is just focused on technology stocks, large-cap tech, the FAANGs, and the Magnificent 7, whatever it is. There’s a lot of stuff going on outside of that. Most people don’t need to pay attention to it because they’re fine just buying the Qs and going to sleep. I think now you’re starting to see people realize that some of this other stuff is very important. You can tell from the price movements that maybe the market’s starting to wake up to that. Andrew Walker Let me ask one more question about government. You mentioned the government acknowledging this as supportive of national security. In your view, a lot of these prices are going higher, and the supply-and-demand picture doesn’t look great. Do you see governments stepping in and starting—not seizing, à la Argentina or Venezuela, the resources—but doing more like what the government did with MP Materials? They could say, “Hey, we’re desperately short of copper, we’ve got this huge buildout coming up, and we need to encourage production, probably domestic production, because if you got into a real geopolitical conflict and your copper got turned off, cool, now your economy basically can’t grow.” Do you think we start seeing the government get involved and say, “Hey, let’s write $100 million checks into these projects to lock up the supply and encourage production domestically”? Brian Laks I think we already have. I think you pointed out the MP Materials deal, and that’s a perfect example of it. It’s almost the opposite of a tariff. It’s a price floor that’s above the current price, and now they’re even taking equity stakes. Look, this has been ongoing for several years now. There have been these niche news articles about it, so most people probably missed them, but there have been real discussions about whether the government should start stockpiling these things. That’s going beyond taking equity stakes or trying to encourage production by fast-tracking permitting, which is also going on. The MP thing was a real game changer: “Hey, we need this material. You guys can produce it. Here’s a bunch of money. We’re taking an equity stake. Here are some contracts.” I think you’ll start seeing that more broadly. In fact, I think just yesterday there was an article in The Wall Street Journal about the United Nations talking about whether it should create a global minerals fund, and different countries in Europe talking about whether they should be stockpiling this stuff. We really put ourselves behind the 8-ball by outsourcing a lot of this in the era of globalization. China controls the entire periodic table now. If we’re not going to be very friendly with them, they have a lot of power, right? So it’s like, how do we get ourselves out of this bind? The crazy thing is that these governments are essentially using printed money to buy this stuff. You want to talk about a crazy price scenario? When you get all these different entities around the world starting to stockpile this stuff because they realize they can’t produce enough of it, that’s the real blue-sky scenario. But we don’t even need to see that. I think just on the margin, you should see these prices trend higher because there’s not enough supply where it’s needed. Either you’re going to see deployment of these technologies being slowed down or some sort of workaround for the West to get access to these materials. It’s not enough to say, “Hey, great, MP Materials or some other company, here’s $500 million. Go to town.” We still run into the same problem: we’ve got to build the mine. In MP Materials’ case, they have to build all the downstream refining. They can produce the rare earths, but then they were sending them to China for refining because China owned all the processing. That’s why I say we’re always looking a few years out, because we saw this a few years ago and thought, “You know, hey, there’s going to be a big issue here with a lot of these different metals. They’re going to have to solve it one way or the other.” You're going to see the price start to creep up as people realize it. But there's been so much tunnel vision, with people looking just at tech stocks and what Google and Apple are doing. No one's really paying attention. You've had to dig into some of these obscure news sources to see what's going on, but it's happening. There's a real big issue around where we're going to get all these critical minerals. I would just tell your viewers, Google “critical minerals” once a week and see what articles come up, because there's a lot of news about it. We were talking about it 4 or 5 years ago during our work on uranium because we were listening to these House Energy Committee hearings, and it was all about mining. Where 20 years ago—or 25 years ago—it was about how much oil we were getting from the Middle East, now you listen to Congress talk about energy and it's mining, permitting, cobalt, and all this niche stuff. This is what the energy system is transitioning to. If you really believe in this global energy transition, which is seeing trillions of dollars being spent on it, the real choke point is these materials. What's crazy is that the valuations on these things are some of the cheapest of any area of the market. We're generalists; we look across the market and see this, and we're like, “This is a very unique combination of an extremely strong fundamental outlook and a low, cheap valuation.” Usually, you have to pick one or the other. That's why it's such a big part of our portfolio today, because you get both. Andrew Walker That's great, Brian. I actually have multiple other questions I want to follow up with, but I also have—this is rare for me after a podcast—a hard stop, because my wife is out of town and the baby needs picking up at some point. Let me just ask you: I think we've done a nice job going through a couple of different sectors. We hit uranium, gold, and copper. Unfortunately, there are 100 other metals we can't cover, but I just want to ask you: Is there anything we didn't hit that we should have hit, or any last thoughts on your mind? I almost wanted to end with the last point you just made about low price-to-earnings and fundamentals accelerating, because that's such a great clip. Is there anything else you want to leave listeners with or that you're thinking about? Brian Laks I think we did a good job touching on the main metals. You can really take that same overall thesis and apply it to some of these other metals, and you get a really similar case: growing demand, supply that can't keep up, and a lot of dependence on these technologies. Maybe that's what I'll leave you with, because believe it or not, we're spending a lot of time now on areas outside of mining. I think we've really got a good understanding of which areas within metals and mining are going to have these supply constraints going forward. One of the things we're looking at now is that everyone's talking about AI and the proliferation of it. It's growing at breakneck speed. What are all these industries that are going to be disrupted by it? That's a big topic of conversation. Now we flip that. We think, “What are the areas that are going to be made stronger? What are the things that are more valuable now that AI is basically the brain?” The way we look at it is, all this work into AI is creating a brain in a box that's really great at thinking, and we're able to do all this stuff with it. But what are its limitations? What does it still need once it's running in everything? We come back to energy and materials. You still need to feed it, right? You need to run it with all this electricity. You're seeing it in real time with all these data centers being constructed. We're very interested in the question, “Okay, you have this brain that you've built, but you need to figure out a way for it to interact with the physical environment.” It's sensors and equipment. How do you interact with the world on the atomic scale? We're very excited to see when this technology gets applied to the hard sciences, pushing the forefront of technology—whether it's energy science or materials science. What equipment is going to be needed to basically serve as the eyes, ears, and hands of this brain? Those things are going to continue to be in high demand. Eventually, it all comes down to energy and materials. I really think those are the 2 areas that you can't escape. AI will just be used to say, “How can humans best use the physical environment around them?” And what are the tools that will enable AI to interact with the real world? That's where we're doing a lot of work now. Maybe a teaser for— Andrew Walker No, I was about to say the podcast host in me wants so badly to say, “What are the hands and tools?” But it'll just have to be continued, because we could do a whole podcast on the hands and tools. Brian Laks from Old West Management, this has been great. It's been great to catch up and get an overview of the sector. We'll talk to you about it further, but thank you so much. I'll include a link to the Old West website in the show notes if anybody wants to go check it out, and we'll go from there. Brian Laks All right. Thanks, Andrew. A quick disclaimer, nothing on this podcast should be considered investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial adviser. Thanks.