Jay Martin on gold stocks and US investment in the mining sector

Key Concepts

Gold Bull Market: A period of sustained price increases in the gold market, often characterized by emotional investor sentiment.
Technical Analysis: A trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume.
Digital Twin/Digital Mine: A virtual replica of a physical mining operation, used for simulation, analysis, and optimization.
Critical Minerals: Minerals essential for national defense, economic security, and technological advancement.
AI (Artificial Intelligence): The simulation of human intelligence processes by machines, especially computer systems, including learning, reasoning, and self-correction.
De-risking: A strategy of reducing exposure to risk in an investment portfolio, often by taking profits.
State Capitalism: An economic system where the state plays a significant role in directing and controlling economic activity, often through state-owned enterprises or strategic investments.
Commodity University: An online educational platform for commodity investors.

Gold Market Dynamics and Investor Sentiment

The transcript opens with a discussion of gold approaching $4,000, highlighting the "no bull market like a gold bull market" adage and the emotional nature of this sector. The price of gold futures reached $3,998.20, with a brief mention of the significance of "even numbers" in technical analysis. The current gold rally is attributed to expectations of US rate cuts, sustained central bank purchases, resilient safe-haven demand, and broad dollar weakness. The speaker also suggests that the market is experiencing "gold fever," drawing a parallel to Humphrey Bogart's character in "The Treasure of the Sierra Madre."

Performance of Gold Stocks vs. AI/Semiconductors

A striking comparison is made between the performance of gold stocks and the AI/semiconductor rally. Gold stocks have reportedly trounced the AI chip rally with a 135% gain in 2025, while major global semiconductor firms were up 40%. Year-to-date, the VanEck Gold Miners ETF (GDX) is up 131%, and the VanEck Junior Gold Miners ETF (GDXJ) is up 140%. This performance underscores the significant investor interest and returns in the gold mining sector.

Jay Martin's Investment Strategy and Advice

Jay Martin, President and CEO of VRIC and VR Media, offers sage advice for investors in the gold sector. He strongly advocates for taking some profits off the table if investors have been in the market for a couple of years, emphasizing that "selling is by far the harder part of the trade." Martin suggests that while the gold equity market is not necessarily overextended, it is a volatile business. He advises investors to "de-risk" by taking some cash off the table, not necessarily selling their entire position, but to make gains "real."

For new investors looking to participate in the gold rally, Martin recommends starting with "FANG stocks of the commodity sector," naming Newmont, Agnico Eagle, Franco-Nevada, and Wheaton Precious Metals as examples. These companies are characterized by strong management, healthy balance sheets, and diversified jurisdictional assets, making them a good entry point. He also suggests that more experienced investors can use these more stable bets to park capital from higher-risk positions.

Martin's core thesis on gold is that it is the asset to own "when you don't know what's around the corner." He points to central banks piling into physical gold at rates not seen in 50 years as evidence of global uncertainty. He further elaborates on the complexities of global macroeconomics and trade agreements, suggesting that much of it involves "smoke and confusion," leading to money printing, devaluation, and uncertainty, which in turn drives investors to gold.

Technological Advancements in Mining: Becker Mining Systems

Albert Bower, CEO of Becker Mining Systems Canada, discusses the company's focus on technological developments in the mining industry, particularly in advanced communication and the concept of "digital mines" or "digital twins." Becker Mining Systems, a family-owned company founded in 1964, prioritizes safety and communication in its product development.

Bower highlights that the perception of mining as a slow-moving industry is changing. The primary driver for advanced communication technology in mining is knowledge management, specifically the ability to store and utilize data captured from underground and surface applications in a unified platform for real-time understanding.

Practical applications of advanced communications include:

Reliable underground communication: Enabling workers to connect with colleagues on the same level, surface, or globally.
Data transmission from equipment: Monitoring service intervals on vehicles, detecting atmospheric contaminants, and identifying potential issues with conveyor belts (e.g., increased current consumption).

Bower clarifies that while some clients are hesitant about cloud-based connectivity, Becker Mining Systems offers both on-premises and cloud solutions. They integrate sensors (their own or third-party) into their software for a global operational overview.

Underground communication is significantly more complex than surface communication due to vast tunnel distances and the need for robust infrastructure. Becker Mining Systems primarily utilizes radiating cable infrastructure as it has proven to be the most resilient for tunneling applications, especially against interference from steel and rock. They advocate for hybrid solutions, often combining cable infrastructure with antennas in remote areas where cable deployment is not feasible.

AI in Mining

Bower acknowledges that AI is a buzzword, but Becker Mining Systems is implementing it in a sustainable way. Their AI applications include:

Vision AI: Analyzing video and sensor data to identify issues, such as conveyor belt blockages.
Software-based AI: Analyzing data within the digital twin to predict potential restrictions or pitfalls in production processes. AI also enables more dynamic report generation, allowing users to query data contextually rather than relying on pre-written reports.

Bower believes AI is not yet intuitive enough for self-sufficient systems but excels at automating monotonous visual inspections, flagging minute differences that humans might miss. He views AI as a tool to aid people and increase productivity, rather than replace them.

Digitization in Mining Operations

Becker's Endus power distribution range is an example of digitization, allowing remote monitoring and safe disconnection of electrical apparatus. Automation enables a single product to be customized remotely for various applications.

Bower emphasizes that Becker Mining Systems' products are custom-designed from the ground up for mining environments, with a staff largely comprised of ex-mining professionals.

Global Critical Minerals Landscape and US Strategy

The transcript details a significant global push for critical minerals, with the US actively seeking to reduce its dependency on China.

US Domestic Potential and Challenges

Research from the Colorado School of Mines suggests that the US possesses all the critical minerals it needs domestically, including lithium. However, the challenge lies in processing and cost-competitiveness. China has a significant head start and a large engineering workforce in this area.

International Deals and Investments

Pakistan: A $500 million deal with US Strategic Metals for mineral processing facilities, including antimony, copper concentrate, and rare earth elements like neodymium and praseodymium. Concerns have been raised about the secrecy of these deals.
Rwanda: The first shipment of tungsten concentrate from Trinity Metals' Yakabingo mine arrived in the US for processing into high-quality tungsten and tungsten carbide powders.
Trilogy Metals (Alaska): The US government is taking a 10% stake in this Canadian company and approving the Ambler Road project, which will open remote areas for mining. This project is expected to yield copper, cobalt, gallium, and germanium.
Greenland: The UK is pursuing critical minerals deals with Greenland, where UK firms hold a third of mining licenses. The US government was reportedly in talks to take a stake in Critical Metals Corporation, though a White House official later downplayed this.
Australia: The US government has offered to buy equity in Australian critical minerals companies to expand supply and reduce reliance on China.
Malaysia: China and Malaysia are in talks for a rare earth refinery project, with China potentially sharing processing technology in exchange for access to Malaysia's reserves.
Turkey: Turkey is discussing developing rare earth reserves with the US, shifting focus from previous talks with China and Russia.
Nova Minerals (Alaska): Awarded $43 million by the US Department of War to build an antimony hub.

China's Dominance and European Concerns

China's control over rare earth processing and refining is a major concern. China's rare earth export controls are impacting European rearmament. The nickel market is also highlighted, with Indonesia, heavily supported by Chinese investment, controlling a significant portion of refined nickel production due to lower labor costs and less stringent environmental regulations.

Other Metal Market Developments

Silver: Approaching a "double top" near the $50 mark, with CNBC silver futures trading at $47.90. A TD analyst suggests the "silver squeeze nears endgame."
Copper: Driven by demand from AI data centers, with Bank of America recommending resource stocks to bet on AI. Caterpillar is seen as an unlikely AI winner due to demand for its power generation turbines and mining equipment.
Tungsten: First shipment from Rwanda to the US.
Cobalt: The Democratic Republic of Congo plans to permanently ban cobalt exporters who breach quotas to curb fraud and stabilize prices.
Uranium: US nuclear plants face a widening supply gap, with the EIA warning of potential shortages. Uranco USA received approval to produce higher-enriched uranium fuel (LEU plus), potentially addressing supply concerns.
Nickel: Trading above $7 per pound, showing some strength.
Tin: Significantly higher, trading at $16.99 per pound.
Iron Ore: Showing some strength at $104 per metric ton, though it was down $18 last week.

Geopolitical and Economic Factors

The transcript touches upon several geopolitical and economic factors influencing the metals markets:

US Administration's Strategic Investments: The US government's direct investment in mining companies is viewed as a strategic move to build competitive advantages, despite concerns about state creep. This is seen as a necessary response to China's state-led industrial policies.
Deglobalization and Friend-shoring: The fracturing of the global economy and the trend towards friend-shoring are contributing to increased uncertainty and a renewed focus on domestic and allied supply chains.
Election Cycles and Political Will: The difficulty for democracies to maintain long-term political will for strategic industrial policies compared to authoritarian regimes like China is highlighted.
Environmental Standards: The disparity in environmental regulations, particularly in the nickel market, allows for cheaper production in some regions, impacting global competitiveness.

Interview with Jay Martin: Deeper Dive into Investment Strategies

Jay Martin reiterates his advice on de-risking and taking profits, emphasizing the danger of the "round trip" where investors give back significant paper gains. He stresses the importance of having a clear time horizon for investments and sticking to the original thesis.

Silver Market Approach

Martin approaches the silver market with more specific equity selection, embracing its increased volatility. He parks conservative capital in major gold producers but for silver, he looks at funded development stage companies and potentially unfunded developers, rather than pure-play explorers.

Other Metals of Interest

Nickel: Martin is looking at companies like Centaurus Metals and Talon, viewing them as long-term plays with attractive pricing, though Talon involves political risk in Brazil.
Copper: He is "very easily incredibly bullish" on copper over a 10-year horizon due to a widening supply-demand gap. However, he is more cautious in the short term due to global economic uncertainty. He advises investors to be clear on their time horizon to withstand short-term volatility.
Lithium: Mentioned as a metal of interest.

The Importance of Diligence and Written Worksheets

Martin strongly advocates for old-school diligence, recommending that investors create a one-page worksheet for every position they own. This worksheet should include:

Reasons for buying the stock.
Reasons for believing the share price might go up.
Reasons for selling if something goes wrong.
The time horizon for the investment.

This practice, learned from mentors like Rick Rule and Brent Cook, helps investors revisit their thesis when market conditions change and determine if they are "wrong or just early." He likens this to an online school for commodity investors, "Commodity University," where this diligence is a fundamental requirement.

Conclusion and Takeaways

The transcript presents a dynamic and complex picture of the global metals and mining sector. Key takeaways include:

Gold's continued strength driven by global uncertainty and central bank demand.
The significant outperformance of gold stocks compared to tech sectors.
The critical importance of investor discipline, particularly in taking profits and de-risking, as advised by Jay Martin.
The transformative role of technology, especially AI and digital twins, in modernizing mining operations, as exemplified by Becker Mining Systems.
The US government's strategic shift towards securing critical minerals through domestic development and international partnerships, driven by a desire to counter China's dominance.
The challenges and opportunities in processing and refining critical minerals, where China currently holds a significant advantage.
The long-term bullish outlook for copper and the potential for nickel, despite short-term market fluctuations.
The enduring value of thorough due diligence and written investment theses for navigating market volatility and emotional decision-making.