David Garofalo: Gold Has What Bitcoin Does Not

Tom welcomes a new guest David Garofalo CEO and President of Gold Royalty Corp., to the show.

David discusses how mine reserves have declined for the past decade, and little capital expenditure has occurred. The industry has been focused on deleveraging and on delivering returns to investors while improving their balance sheets. Now the industry needs to reinvest in new mine development. Mines have done almost too good a job of cutting costs but the majors will need to acquire mid-tier junior to gain resources. We're going to see rapid cost inflation in the industry.

We're in a sustained period of lower interest rates. Even if rates rise, it is unlikely to change the bullish outlook for gold especially given the amount of money being printed. The reality today is that sovereign debt has no yield, so in contrast, gold looks very good. It's important to understand that gold has been recognized as money for millennia and all the ingredients are in place to see gold rise much higher from here.

He believes silver has even greater potential and will likely outperform gold.

David outlines the copper potential within Gold Royalty's portfolio of gold properties. These properties are going to become extremely attractive. Copper demand is predicted to see unprecedented growth as electrification and urbanization continue globally. There is inherent optionality with gold, but there are few mid-tier producers with copper juniors. Copper assets tend to be more scarce and much more capital intensive to develop.

A new generation is looking for ways to protect capital, and they see bitcoin as a preserver of capital. He argues that gold is finite, unlike the ability of tech developers to create numerous new cryptocurrencies. Money is almost free right now and chasing a limited number of tangible assets. He believes royalty companies are an excellent way to gain exposure to the gold space.

Time Stamp References0:00 - Introduction0:33 - Resource Development3:32 - Takeovers/M&A5:28 - Scale & Diversification6:17 - Past Lessons7:34 - Juniors Raising Capital8:30 - Royalty & Juniors11:43 - Gold Minings Portfolio15:12 - Sustainable Business16:12 - Majors & Acquisitions16:54 - Gold Fundamentals18:25 - Gold, Price, and Yield20:07 - Silver Opportunity20:44 - Copper Plays23:35 - Bitcoin Vs. Gold26:04 - Gold Outlook27:05 - Royalty Opportunity28:11 - Wrap Up

Talking Points From This Episode

Mining Sector Balance SheetsDepleting resource bases of large companies.Gold and silvers expected performanceGold Royalty's properties and plans.

Guest Links:Website: https://goldroyalty.com/LinkedIn: https://www.linkedin.com/in/david-garofalo-fcpa-fca-icd-d-478127b6/

David Garofalo has served as Chief Executive Officer, President, and Chairman of the board of directors of the Gold Royalty Corp. since August 2020. Mr. Garofalo has worked in various leadership capacities in the natural resources sector over the last 30 years. Before joining the company, he served as President, Chief Executive Officer, and Goldcorp Inc., a gold production company headquartered in Vancouver, until its sale to Newmont Corporation in April 2019.

David served as President, Chief Executive Officer, and director of Hudbay Minerals Inc. from 2010 to 2015, where he presided over that company's emergence as a leading metals producer. Previously, he held various senior executive positions with mining companies, including Senior Vice President, Finance and Chief Financial Officer, and Agnico-Eagle Limited, from 1998 to 2010 and as treasurer and other various finance roles with Inmet Mining Corporation from 1990 to 1998.

David was named Mining Person of the Year by The Northern Miner in 2012 and Canada's Chief Financial Officer of the Year by Financial Executives International Canada in 2009. He holds a Bachelor of Commerce from the University of Toronto.

David is a Fellow of the Chartered Professional Accountants in Canada and a Certified Director of the Instit...