THESE Mining Stocks to Profit in Coming Crisis 'Worse Than Great Recession': Mining Stock Monkey

Key Concepts

• Downside Protection: An investment strategy prioritizing the preservation of capital to avoid large losses, which require disproportionately high gains to recover.
• Loan-to-Value (LTV) Ratio: A financial metric comparing the amount of a loan to the value of the asset purchased; high LTV ratios (e.g., 130%) increase default risk.
• Royalty and Streaming Companies: Firms that provide upfront capital to miners in exchange for a percentage of future production or revenue, offering lower operational risk than traditional miners.
• All-In Sustaining Cost (AISC): A comprehensive metric used in the mining industry to represent the total cost of producing an ounce of gold or pound of copper.
• Free Carried Interest: An arrangement where a government or partner holds an equity stake in a mine without being required to contribute to capital expenditures.
• Macro Tailwinds: Economic factors (e.g., sovereign debt, dollar weaponization) that support the long-term appreciation of an asset class like gold.

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1. Economic Outlook and Recession Indicators

Jordan argues that the U.S. economy is showing significant signs of stress, suggesting a high probability of a recession. Key indicators include:

• Consumer Debt: Record levels of credit card debt, with a bifurcation where the bottom 60% of earners are struggling.
• Buy Now, Pay Later (BNPL): The rapid growth of BNPL services—often used for daily necessities like groceries—is creating a "hidden" debt burden that is not fully captured by traditional credit reporting agencies.
• Subprime Auto Loans: Delinquency rates are at a 30-year high. Many consumers are "rolling over" negative equity from old vehicles into new loans, resulting in LTV ratios of 120%–130%. This creates a balance sheet risk for banks, as repossession at auction (typically recovering only 70% of value) results in massive losses.
• Student Loans: Delinquency rates have jumped from 1% to 16%. Upcoming payment increases in July 2026 are expected to further contract consumer spending.
• Consumer Sentiment: Currently at record lows, which historically precedes a decline in economic spending and GDP growth.

2. The Gold Bull Market

The current gold bull market has lasted 124 months, nearing the historical record of 125 months.

• The Dilemma: While macro factors like sovereign debt and the weaponization of the U.S. dollar support gold, the cycle is "entering overtime."
• Strategy Shift: Jordan emphasizes that as a bull market matures, the risk-reward profile for producers deteriorates. A 30% drop in gold prices can lead to a 60% collapse in margins for producers, whereas royalty/streaming companies maintain stable margins (often ~90%) regardless of price fluctuations.

3. Royalty and Streaming Analysis

Jordan compares the "Big Three" royalty companies:

• Franco-Nevada: Possesses the largest "war chest" of cash and credit but has the lowest organic growth profile (~14%).
• Wheaton Precious Metals: Offers the most significant near-term growth (nearly 50% over the next few years) based on existing contracts.
• Royal Gold: Positioned for strong growth over a 6-year horizon, potentially rivaling Franco-Nevada in size. Jordan dismisses concerns regarding their 30% equity stake in the Högland (Hod Modern) project, noting that the project’s AISC (under $600/oz gold) makes it highly profitable and manageable via cash flow.

4. Risk Management and Exit Strategies

Jordan’s investment philosophy is built on "protecting the downside."

• Exit Strategy: He recently sold Endeavor Mining due to rising geopolitical risks in West Africa (Burkina Faso, Mali), where governments are effectively "stealing future value" by increasing royalty rates and demanding higher free-carried interest.
• FOMO Control: Jordan avoids "10-bagger" chasing, preferring consistent 2x–3x returns. He views investing like baseball: "There are no called strikes." If an opportunity doesn't meet his strict criteria for downside protection, he passes, even if the stock later performs well.
• Mathematical Discipline: He notes that a 90% loss requires a 900% gain to break even, making capital preservation the primary driver of long-term wealth.

5. Notable Quotes

• "If you can avoid losing money where the winners take care of themselves, you can build wealth very fast."
• "I don't know if this bull market is going to go on longer than previous ones... because I don't know, this makes me want to shift some of my investments."
• "[Regarding the West African mining environment] They aren't outright appropriating the mines, but they are stealing the future value of the mine."

Synthesis

The core takeaway is a cautious, defensive posture. Jordan suggests that investors should prepare for a potential recession by favoring high-quality, low-risk assets like royalty and streaming companies over traditional miners. By focusing on companies with strong balance sheets and avoiding the "gambler's mindset" of chasing high-risk, high-reward stocks, investors can preserve capital and position themselves to capitalize on market corrections when they occur.