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Transcript
Futremoneytrends.com: Greetings, and thank you for joining us at futuremoneytrends.com. I’m here with Brien Lundin. He has a career spanning three decades in the investment markets and newsletter business helping investors find the right investments. He’s the CEO and president of Jefferson Financial under the Jefferson Financial umbrella, Brien publishes and edits Gold Newsletter, a cornerstone of precious metal advisories since 1971, wow. And everyone knows that’s a key date for gold, 1971. Brien, thank you so much for joining us.
Brien Lundin: Great to talk with you.
Futremoneytrends.com: Brien, a lot of people who are investing in inflation, or investing because they’re concerned about inflation in the economy, or supply and demand of resources, have gone into the junior resource sector and over the past few years it’s been kind of a bloodbath for investors, and I want to find out from you, with you looking at all the sectors for different resources and opportunities: is there anything out there that stands out that has an extreme value situation? Where obviously we’ve got gold down, silver down, uranium down, natural gas, but is there anything out there that might be a major opportunity for people right now?
Brien Lundin: Well, when you look at it you have to consider what’s happened to the broader market, and we had a tremendous bull run this century, really since 2000 in precious metals, and the junior mining stocks really leveraged those gains. And what was happening then, there were a number of factors. There was obviously the rise of the developing countries, rise of China and the strain that that was putting on the broader commodity sector and metals, but you also had a large scale monetary reflation. Across the world fiat currencies were being reduced at greater and greater rates, and debts were being piled up, particularly in the west, at greater and greater rates. And we reached kind of an inflection point and — actually kind of a stumbling block in 2008 with the credit crisis. That only exacerbated the long term trends. It made and makes the long going creation of fiat currencies even more necessary and more traumatic. Since 2008 what we’ve seen is that the juniors didn’t provide any leverage to underlying rise in metal prices and even the majors didn’t and the reason for that is people wanted to buy gold and silver as safe havens as protection against the monetary inflation, and the general economic environment, the general investing environment was very risk averse. Nobody wanted paper, they wanted the real thing, which was gold and silver. So the equities were actually greater due to lack of demands and lack of any buying pressure. In the current environment I think we’re at another crucial turning point. We’ve had about a two year correction in precious metals, and we’ve seen the gold and silver come up from late June bottoms, this supply situation is extremely tight, almost unprecedented levels, and the junior equities have started to respond to that. I do think the future for precious metals related junior resource stocks is very positive going forward. With that said though. there is going to be a lot of volatility, so if investors can look for markets where there are long term trends and/or special situations that create near term opportunities, those are particularly attractive these days. One of the areas that I’ve seen is uranium.
Futremoneytrends.com: You know I’ve seen a lot of people talk about uranium over the years you know Rick Role and people at Mara Catusa and David Morgan, and yourself. And it’s kinda like uranium has just been beaten down everyone kind of thought that the worst was over — at least in my opinion I kinda thought it was. And now it’s below 50, now we’re below 40. Is 2014 going to be the year for uranium to recover, since the Fukashima accident, and then is this even sustainable? Are companies going to start shutting down mines at these prices?
Brien Lundin: Well, I think 2014 will be the year for a number of reasons. The price of uranium — we had that first stage of uranium mania in the junior resource market, I guess it was about five years ago now, really closer to six years, in 2007. It reached 140 dollars a pound and any company that had any relation to uranium was trading for — juniors were trading for dollars a share, regardless of what they had. Whatever moose pasture or prospects they had. So there was a tremendous shake out in that area, and then we started — well the 2008 credit crisis devastated the sector and uranium prices as well, and nobody wanted these equities. Subsequent to that we started to have a rebound in uranium prices, then the Fukashima disaster put an end to that. Right now we’re just coming out of that Fukashima spawned correction in the uranium market. Japan itself is, with the new government in place there is actively seeking to restart their moth ball reactors. They realize that the nation is fully dependent on uranium, or nuclear energy, for lower energy prices. But what the critical factor that we’re facing right now is the expiration of a highly enriched uranium agreement with Russia, where the Russian atomic weapons were re-purposed and the uranium recovered and brought into or de-enriched into making them nuclear fuel. That contributes about 15% of global nuclear fuel and that agreement with Russia is expiring at the end of this year. The bottom line to this is that the removal of — the immediate removal at the end of this year of those supplies will actually throw the uranium market into a supply deficit. So we have two factors here: we have growing demand as China restarts it’s reactors and just as importantly — more importantly — China really focuses on growing its nuclear energy resources, and then we have a dramatic and immediate drop in supplies. So I don’t know precisely when, but I know that these factors will have a massive effect on uranium prices at some point in the near future.
Futremoneytrends.com: One of the companies that we’ve all looked at closely in the uranium sector is Uranium Energy Corp, UEC, I followed for several years now. We’ve come to have a good relationship with Amir Nati and have come to admire him greatly. So what are your thoughts on UEC, because there’s not that many producers. Isn’t there only like eleven? So it’s not like if you’re going to pick a uranium producer there are a hundred of them, or a thousand, like oil companies. With uranium companies there’s only eleven or twelve. What are your thoughts on UEC.
Brien Lundin: Right. That harkens back to that great shake out of the uranium market that I mentioned. Since 2007, so many of those juniors just went away. They were either they faded away or changed their business plans to other metals or what the hot story of the day was, but a precious few of them just kept working away and some by sheer force of will, UEC among them. Because if anything, Amir sure has a lot of force of will. He’s just an incredible manager and absolutely relentless and while everyone was looking away and ignoring the junior uranium market, a few of these companies actually went to production and into production, and UEC is one of those ones that got into production, and at a profitable level. It’s cost of production is only about 21 dollars per pound. so it’s still profitable even at these depressed uranium prices right now. And it’s got a tremendous growth curve, it brings it’s first mine and it’s first few production areas of that first mine on string. But it gives immediately and very positively positioned for the upcoming rise in uranium prices that I see.
Futremoneytrends.com: Brien, what can people expect at the investment conference, your New Orleans Investment Conference.
Brien Lundin: Well, it’s the granddaddy of investment events; kind of like the Gold Newsletter was the first real precious metals advisory out there, New Orleans Conference was the first gold oriented conference out there. Started in 1974 by my mentor and the founder of our company, James U. Blanchard III, and it was really about teaching investors how to buy gold and how to invest in gold when gold was legalized in 1974. And through those years its matured and had an underlying theme of free markets, and personal liberty and sound money, and its perfectly positioned for the situation we find ourselves in today. This year’s conference is being held November tenth to thirteenth, and we’ve got this all star cast coming. We’ve got Dr. Ron Paul who will be our keynote presentation and serving on our panel. We have Dr. Charles Krauthammer and with him on a couple panels and delivering another one of his dramatic presentations. We’ve got Peter Schiff, we’ve got Dr. Martin Weiss, we’ve got Dennis Gartman, we’ve got Dr. Benjamin Carson, who I think has a good chance at being the next republican candidate for president in the next cycle. We’ve got Rick Rule, and really every one of these are most of the major precious metals and resource stock analysts out there coming. So it’s really a one stop shop for investors seeking the best ways to capitalize on the geopolitical economic investing environment that we find ourselves in today.
Futremoneytrends.com: It sounds like a great time. I’m going to do everything I can to convince my wife to let me go.
Brien Lundin: You’ve got to make it sound like it’s like nothing else out there. Everybody has a wonderful time in new orleans. The food, the music, the companionship. It’s not a free conference like you see a lot of these conferences. It’s not expensive, but there is a paid admittance, and because of that attendees don’t get commercial presentations from the main stage. It’s an intellectual bazaar of information and strategies. Many, if not most, of our speakers save their best of the year just to put out on our stage. It’s kind of a tradition. These come away really with an experience that you’ll find nowhere else.
Futremoneytrends.com: Well Brien, thank you so much for your time, I appreciate you talking so much about precious metals and uranium. Just for fun, if you had to buy just one of the junior uranium companies or one of the junior gold junior mining companies? Because I know you’re bullish on both if you had to only pick one which one would you pick
Brien Lundin: Wow that’s a tough one, because there are so many bargains out there right now. I do think UEC is one of the best positioned uranium juniors out there, because it is in production you will immediately see the benefits of higher uranium prices.
Futremoneytrends.com: Well Brien, thank you so much and for investors who are looking to go to the New Orleans Investment conference or subscribe to your newsletter where should they go?
Brien Lundin: They should simply go to neworleansconference.com and they can find all of their information.
Futremoneytrends.com: Thanks Brien, you have a great day.
Brien Lundin: Thank you.
