John Kaiser Talks Historic Gold Bull Market, Quartz Mountain & Almadex Minerals Drilling

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the founder of Kaiser Research, Mr. John Kaiser. John, it has been a while since we chatted publicly. How are you doing, sir?

John Kaiser: Gerardo, it's great to be on your show. I've been relaunching during what, I think, we're going to be emerging from this 12 year bear market that began in late 2011, 2012. I think we're on the cusp of a major revival for market interest in the resource juniors. 

In fact, I call them the Salvation Warriors that are going to bail the global West out of their dependency on raw material supply from global East countries and global South countries who are increasingly throwing their lot in with the global East, especially as America withdraws its relationship with most of the countries in the world and pushes this America first agenda against everybody else policy.

Gerardo Del Real: You're one of the most insightful big picture thinkers I think that I've ever met. And so a part of why I'm so excited to have you on today is because since the last time you and I chatted publicly, the world has changed drastically. 

We have gold near $3,300. We have copper that recently touched record highs and looks poised to continue to do so. And a large reason for that is the geopolitical instability coupled with a bond market that seemingly doesn't want to cooperate. With the current policy of this particular administration, how are you positioning for this cycle that you call potentially a historic bull cycle here in the junior resource space?

John Kaiser: Well, for the past five, six, seven years, I have been focused on two narratives. One is the energy transition as the world adapts to a heating climate, a heating world, trying to limit the gain to one and a half degrees Celsius by 2050 and coming up with all these new technologies like electric vehicles, wind, power, solar and all that, which require a demand for metals like copper. 

I mean, they've predicted that, just to have what we need for EVs to be in production or on the road by 2030, we need a 50% expansion of copper supply above and beyond what the macroeconomic needs of the world are. And, of course, there's lithium, and we've never ever seen anything like the demand growth thanks to new technology.

And the other talking point, which is even older, going back to the China super-cycle and I started to say, ‘Uh-oh, China is eventually going to catch up with the United States and that may prove a problem.’ Now, the whole concept of globalization dismissed that because it said China would become just like us. But when Xi Jinping came to power in 2013, he said, ‘No, we're going to be like we always were and we're going to own the world.’ And that created my security of supply narrative, and we've since seen China throw its lot in with Russia; basically autocracy versus democracy.

And I plot all the numbers that the USGS has published since 1930 about where metals all come from, and it's horrifying when you do a chart showing what percent of each metal comes from the United States, the biggest economy in the world, and how much comes from combined Russia and China. 

This is a staggering vulnerability, and I see the future for the juniors is Canada, the United States, Europe, all these places that have shunned exploration and development in their backyards because they're so full of themselves, they need to start looking hard for metals in their backyard and develop it because basically China and Russia, they have America and Europe and all the democracies by the balls, to be rude.

Gerardo Del Real: I couldn't agree with you more. I've written about it, I think, since at least 2016 publicly. You clearly are one of the first people that I started following way back in 2008, 2009. You were talking about this back then, so I take your point. 

I think it's valid. I think it's going to affect the way capital is allocated here for the next decade or so before we get some clarity there to see what governments are going to do and what they're not going to do, which is very different from what they say they're going to do as we know. 

Let's talk specific names. There's no way I can have you on here without getting into a couple of ways that you're playing this. Clearly, you have a preference and a bias towards the West. Clearly you want jurisdictions that are favorable and stable. Can you share a couple of names and companies that you like that are positioned well for this cycle?

John Kaiser: Well, I've got this concept that I've launched in the past few years is that of the Favorites Collection, which are companies where all the missing pieces have finally fallen into place. And these companies come from what I call the Bottom Fish collection, of which I've currently got 110. 

These are stocks where it has good management, interesting stories. Some of them have money and their story isn't well enough known. Others are simply in the early stages of getting their act together. There's 110 of these, and I've never seen such a fantastic collection of cheap stocks.

And the Favorites, each year I refresh it. There's 24 in it. Now, these are companies that are not so hard to explain to the public in terms of what is the missing piece. The public doesn't want something complicated. This thing's going sideways… but you say it's going to go up 500% or more once the missing piece falls into place. 

So there are two companies that I have to illustrate it, and both of them started off the year in the Bottom Fish collection. One is Quartz Mountain Resources (TSX-V: QZM) (OTC: QZMRF) and the other is Almadex Minerals (TSX-V: DEX)(OTC: AAMMF). 

Now, Quartz Mountain, I promoted from the Bottom Fish to the Favorites Collection earlier this year. Almadex is still in the Bottom Fish collection, but I think it's on the threshold of finally escaping from that Bottom Fish status.

Gerardo Del Real: Let's start with Quartz Mountain. I know the company, I know the management team. I know a lot of the bigger shareholders and I know drills are turning on what's a very, very exciting discovery there, that had a phenomenal set of results last year. Can you touch on Quartz Mountain, please?

John Kaiser: Okay, so for Quartz Mountain, I first put in the Bottom Fish collection at the end of 2022 for 2023, repeated it for 2024, and that was when it was around C$0.20 per share. And then it woke up when they went in there and drilled the Maestro Project. Now the story behind Maestro is interesting. 

This is an old mining district where a molybdenum deposit was outlined in the past, but there was also this gold-silver mineralization peripheral to it that has been poked at before. And when Bob Dickinson, who's the key person behind Quartz Mountain, looked at this, he said, ‘They haven't really understood what's going on.’ So he was able in 2023 to acquire this project, to solidify it, so they own 100% consolidated. He finally got that molybdenum deposit, which the lease lasts, and he was able to get hold of that.

So he now owns 100% of this project, and last year the stock jumped from C$0.20 to C$0.50 because they drilled a couple of scissor holes on the Prodigy zone and one of the holes was not so great, but the other one was really great. 

But it wasn't the grades that were exciting, it was the fact that when they looked at this, they finally understood the direction of the structural controls of this system and said, ‘All these other holes in the past, they've been vertical holes and this thing is angled and it's in this north-northeast direction.’ 

And so they would just get snippets of the mineralized structures. So I repeated it as a Bottom Fish because they'd spent much of their money and they didn't have a lot of money at the beginning of this year. And about February, March, they raised C$4.2 million at 42 cents, and that was the key missing piece.

Now, they have the story, they have the permits. They started drilling in April, and we should start getting assays in June. And what Bob has packaged up, and you can look at the presentation and see it all and that they've done a wonderful job presenting the story. 

There's either a series of high-grade underground minable gold-silver structures there that could be who knows how many million ounces. But there's also the bulk tonnage scenario and the analog is Blackwater. Blackwater was an old ratty system that, in 2010-11, Richfield started to explore again, started to stitch together, that was acquired for a valuation of C$644 million by New Gold, and it was distracted by its other projects. And then it sold several years ago to Artemis Gold, basically a shell company.

They just put this project into production and they have a C$5B valuation. So this is what Bob Dickinson hopes to accomplish with this drill program. And so we have two outcomes. We have either like, ‘Okay, we're going to delineate this high-grade underground mineable system or we're going to see the beginnings of a bulk tonnage scenario come into view and then we can start doing numbers with regard to the outcome visualization.’ 

You start with what are the dimensions of this ore body? What's the grade going to be? We steal the numbers from Artemis Gold on what it costs to put the Blackwater into production, and then we can start seeing the trajectory. So I've got something called the implied IPV charts, which show how the fair value channels for a project from grassroots to eventual production. 

And right now, Quartz Mountain, the Maestro Project, has a valuation of C$57 million and it's still at the target testing stage because we really haven't got full confirmation that we have a discovery.

Once we have discovery, we go into something called the S-Curve, which is also called the Lassonde Curve, which is the market phenomenon that when something new and good is emerging, the market tends to overprice the story, often pricing it at a level that ends up what it's being worth at the end of the day. 

That’s why this space with these discovery exploration juniors is so significant. And you can see in this IPV chart where the Blackwater project was priced at C$664 million after it had produced the initial resource estimate, and now, after being put into production, it's worth almost C$5.3B. 

So you could see Quartz Mountain go from its C$0.70 to C$0.80 level to a C$3 to C$5 per share valuation frenzy during this S-curve that erupts when a discovery starts to come into view.

Gerardo Del Real: Well, the upside is, I would say, imminent, for the simple fact that we're expecting assays here in June. They have a good hold on the structure. Clearly, that's something that took a bit for the company to get to. We're going to see exactly what could be there here in the next, I would say, four to eight weeks. Is that accurate?

John Kaiser: Yes, I've heard they should start getting assays back from the lab. There's eight holes. If they've done what they said they were going to do, they were going to drill four sets of two holes, basically angled in a northwest direction to trace about a 500-meter segment of this inferred Prodigy zone. 

And, obviously, the first one drilled will be the first one we get assays for. So we'll start seeing, with the first couple assays, what are the kinds of grades, what's the distribution. Because the first hole, like one of the two scissor holes last year, by itself, had some good numbers in it, but you need to start seeing it in three dimensions. 

And this is what the market is waiting for. And the pricing that it has right now, it is fair value for a C$2 billion eventual outcome. And if it starts looking like the Blackwater system of Artemis, the market will connect the dots and start saying, ‘Wow, okay!’ And then, they'll really start paying attention.

So right now it's in that quiet mode. The results could be terrible, very disappointing, the hypothesis shot to pieces by the truth machine, and that's why the stock is quiet and just hanging in here. But from a speculative point of view, all the pieces are in place and all we need is a few drill holes in the right locations to show this story is coming together for a discovery delineation frenzy to kick in. 

And we haven't seen that sort of stuff on a wide scale in this market for a long time. And I see Quartz Mountain as perhaps being a symbol of the revival of the resource juniors because you could see all this happening in slow motion. You had a chance to buy the stock. It's not like we're in a raging bull market where everything is overpriced and you're really just betting on which one is relatively underpriced compared to the others.

Gerardo Del Real: Well said, excited for those assays. Obviously, eyes open and eyes on it. You mentioned another company earlier, Almadex Minerals. It's a company I'm very, very familiar with. I love that management team. They're technically astute. They have a track record of discoveries. 

They unfortunately were in a jurisdiction that, being in Mexico, at a time where it didn't pay to be in that jurisdiction. They made several discoveries but weren't able to monetize those. But now, they’ve pivoted that model to the southwestern United States, which, obviously, in 2025, should command a premium if discoveries are made as they've been in the past. Can you talk to me about Almadex Minerals and why this one is on your radar?

John Kaiser: Almadex Minerals is the second spin-out from Almaden, which Duane Poliquin started and now his son Morgan is pretty much in charge of. And Almaden was the quintessential prospect generator farm-out junior. Rick Rule and all that crowd loved that story and they did a fantastic job. 

They moved into Mexico and got lots of projects going during the 2000s. But in the 2010s, that's when they did something different. They broke the dogma. They started drilling some of their targets with their own dime on a 100% basis. The first one was Ixtaca, which turned into a major discovery. 

Then they spun out the first version of Almadex, which discovered the El Cobre copper-gold deposit. Then they spun out, changed the name to Azucar and put all the royalties and the rest of the assets into this new company, which is the current Almadex Minerals.

Now here's this junior — it's finally got these discoveries, it's on a roll, but Mexico turns into this administration that’s hostile to mining. A bunch of NGO-type predators come in there and mess up the title. They basically lost title, and both Azucar and Almaden are trying to sue to get at least compensation for the expropriation of their projects. Almadex went into a slump after that. They got lucky several years ago and were able to sell the Elk royalty for US$10 million, which really cashed them up nicely.

But what's really interesting is Morgan Poliquin, during the 2000s, when he did his master's and PhD, he published in 2009, looking at eastern Mexico where they made their El Cobre and Ixtaca discoveries, asking, ‘What makes these intermediate to high  sulfidation epithermal systems related to porphyry systems tick in this area?"

His thesis involved reconstructing the tectonic history — how parts of Mexico were assembled, the subduction zones, intrusion events — and developed a method to figure out where intrusions that spawn porphyry systems and related epithermal systems should be located. 

They started applying that in 2007-09 to the United States but the success in Mexico distracted them. Since 2023, realizing Mexico is a no-go zone unless something dramatically changes at the top of government — unlikely under Claudia Sheinbaum — Morgan pivoted back to the U.S. and spent the last couple years quietly doing homework, using this reconstruction, going into weird areas where nobody has really pounded the rocks because nothing stuck out on the surface. He calls this the lithocap theory and strategy.

What this means is all these systems have big alteration zones — often barren and bleached — but you can assess the chemistry of the rock, and certain chemistries are associated with these systems.

So he's rolled up his sleeves and put his boots to the ground and has checked out all of these locations. And they've accumulated 14 of these prospects in western United States. And so these could be ordinary porphyry gold systems, for example, what the GAB system is to the north of the Paradise Project, which is their flagship for the moment. Or they could actually be fantastically rich deposits, maybe a Bingham Canyon that's hidden beneath the surface.

Now, this is not undercover where there's like a basalt that's flowed all over it, such as the Hercules discovery in Idaho where we're younger post-mineral rocks covered, or where everything's covered by thick overburden. This is more where the deposits are deeper. You've got to go deeper but you use this peripheral evidence to home in. 

And these are high risk but also high reward projects, and they own six portable drill rigs up that they can go in there. And the next generation of exploration is to drill scout holes to see if there's low-hanging fruit. And the very minimum, whatever you get, you get the geology, you get more geochemistry, and you start doing the vectoring.

And this is what they did last year with the Paradise Project. They drilled a couple holes in there and they got what they call the shoulder or edge of a porphyry system. And yeah, no cigar for that. The stock did nothing. But this year, now as they do more geophysics and that, they start stitching it all together. 

This is the new type of exploration where you use a lot of digital technology to spin the data together and come up with targets that have high potential at a minimum to make where deposits are actually located clear but perhaps score it early on. And that's the story that's happening now.

But the stock was in the Bottom Fish collection because Morgan was paranoid and didn't want other smart geologists to understand what he was doing. They haven't published the location of more than half of these projects, and the market says, ‘Well, what are you doing? We don't care. You're some semi-private company. You're trading for cash breakup. Somebody will come along and steal the company, get control of it and steal the money.’

But that's starting to change. The stock has popped up above C$0.30. He's becoming more open about the story. And so I think this stock, if it gets to C$0.50, is a no-brainer to become part of the Favorites Collection, and that's what I'm waiting for right now.

My main subscription costs $450 for the rest of this year and gives you access to everything in Kaiser Research. I also have Kaiser Watch Substack, where I publish the Favorites Collection and talk about that. And that's only $10 a month.

I'm trying to introduce this whole idea of resource junior speculation to the Gen-Zs, to the Millennials, and even to some of the Gen-Xers who really missed the boat because this group has no idea how this sector works. And this sector, it's event-driven. You have to wait for events, like right now with Quartz Mountain, we're waiting for the Maestro results. So we're like, ‘Oh, this is boring.’ 

But getting your head around the story path, the stages and the milestones, the timing and all that, it's a form of entertainment that allows you to, staring at it at your ticker screen, watching the ticker day by day or minute by minute movement, you place your bets, you understand the story, you see what the upside potential is, you know what it is you hope to see when the results come out, and you can add more when that starts happening because the rest of the market will have no clue.

So I think we're at the threshold of a big boom in resource juniors with the younger people coming into this sector and getting their heads around and understanding that there is a mathematical quantitative aspect to it where they can intelligently bet. 

Whereas their fathers, their mothers, the boomer generation, they never really put their heads around the math. It was all just gut instinct and listening to the brokers. Well, there are no brokers left anymore. There are only commentators like you and I out there, and the information the companies put out that the investor has to, on his or her own, make use of.

Gerardo Del Real: Listen, John, you met me when I first came into this business. I had more than a couple of nickels but it wasn't a ton of nickels. And the business has been very, very kind to me, largely, in part, because of how generous people have been, including yourself, with their knowledge, with their strategy, with how to evaluate risk and reward. 

It has absolutely and literally paid off for myself, for family, for friends, and subscribers. On my end, I absolutely recommend that everybody go check out John's material. Again, he's one of the most insightful big thinkers in our space. Once again, John, thank you for coming on. Can you please repeat where people can find your work?

John Kaiser: You can go to kaiserresearch.com. That's my primary website, which is an information platform for do-it-yourselfers and covers all of the companies listed in Canada and the United States. And from there, you can hop to the Kaiser Watch Substack and follow that for free. 

I usually have, every week, an article that's completely unrestricted. You'll get it in your inbox. And then, when I write about, say, Quartz Mountain, the first time when I introduce a company from the Bottom Fish to the Favorites Collection, the entire thing is unrestricted. 

So if Almadex ends up in the Favorites Collection, you'll be able to see the entire background and story through the Kaiser Watch Substack. And then subsequent ones, when I comment on, for example, what do the Maestro results mean? Well, then you should have the $10 a month subscription so that you can see more than just the first paragraph introducing the latest update.

Gerardo Del Real: It's going to be an exciting cycle… it's going to be a very profitable one. I hope everybody positions accordingly. Mr. Kaiser, thank you, as always, for your time. I appreciate it.

John Kaiser: Gerardo, I really appreciate you doing this interview.

Gerardo Del Real: I’m looking forward to having you back on once we get some assays; lots of drilling this year. It's one of the most exciting years in the space in quite some time with companies capitalized and willing to drill within a macro backdrop of record-high gold and copper prices. Thanks again, John.

John Kaiser: Thank you, Gerardo.