Is ‘Big Bubble’ Set To Burst? (Uncut) 03-24-2025

‘Blood In The Streets’: Is ‘Big Bubble’ Set To Burst? | Shane Williams

Continuing our coverage at the Vancouver Resource Investment Conferences in 2025 is Shane William, CEO of REST Wetlink Gold. They’ll be transitioning from an explorer to a producer. We’ll be talking about the broader markets and the industry trends for the money sector that investors need to be watching this year.

Shane, always a pleasure to host you. Welcome back to the show. Great to be on again, Dan.

Happy New Year. We spoke to your VP of Communications, Gwen Preston, last week, a couple of weeks ago. People should check out that interview.

We talked about your pre-feasibility study, so people should watch that interview for an update. But I want to get your larger timeline for your company. Now, you told me offline that the markets are peaking in the U.S. And this is a common question I get at this conference, is why should I be investing in the resource sector if there’s a boom going on in the tech sector, if there’s Trump meme coin going up 1,000 X in one week or whatever it is now, or Bitcoin is reaching new all-time highest? What’s the appeal for this sector? Sure, it’s not just my opinion.

People like Rick Rule, who you interview quite a lot, the resource industry is about contrarian investment. The resource industry tends to follow the underlying commodity. So you get a contrarian investment.

You invest when there’s, we call it blood in the streets. That’s the best time to invest in resource industry, when it’s a hated industry and nobody likes it. Is there blood in the streets right now for resources? There is, yeah.

In the junior mining sector, for sure. The value of the commodity gold is at an all-time high or close to all-time high, but the value has not come into the equities. It’s particularly in the development sector.

I wanna come back to that because this is important. But why are the markets peaking in the U.S. right now? Is there a bubble right now, you think? So there’s a big bubble, I believe, in the U.S. market. We’ve had tech stock.

When you have one company like NVIDIA, et cetera, way bigger than countries’ valuation. That shows there’s definitely a bubble in there. And you have four or five key stocks driving the U.S. market.

The big seven of the tech industry, they’re driving the market, effectively. So that’s a bubble. When it gets very concentrated, it gets very peaky and very fraudy, that’s the sign of a bubble within the U.S. market.

This week is Trump’s inauguration. What does Trump’s policies mean for gold? So I believe that Trump will be good for gold. I believe that Trump will be very good for gold.

Trump will create, Trump will want to do a lot of stuff about bringing back to America. He’s very focused on America, focused back on America. He’ll also create a lot of political uncertainty in the world because the U.S. was reached out around the world, was a lot of involved in a lot of stuff.

Trump will bring that back home. That will spark, in my view, a number of conflicts around the world, because there was no protection there. You know, we’ve seen that in Gaza, we’ve seen that in areas, we’ve seen that with ongoing issues in Ukraine and Russia.

So these are conflicts that are going on, makes the world very uncertain. In parallel, you have banks, central banks, buying lots of gold. And I suspect that Trump will want a weak dollar.

You know, he will want to be able to export a lot of his products out of the U.S., and a strong dollar is bad for that. So he’ll want a weaker dollar. Yeah, that is what he wants.

He wants a weaker dollar, and a weaker dollar is very good for gold, because gold is priced in U.S. dollars. Gold’s already up 30% year to date, not year to date, over the last 12 months, though. Yep.

What’s the upside from here? I believe that the upside, we’ve talked about this before, I believe that gold is heading towards $3,000. We’re at $2,700, we moved it, heading towards $3,000. Okay.

Based on, I believe that Trump is doing a lot of talks. Most of your viewers are aware, he wants to come into Canada, he wants to take over Greenland. That creates uncertainty, that creates a bit of political uncertainty.

So there’s one thing about his views, whether he wants to do it, and how he can do it. I think people will change. We’ve just seen gold was in a consolidation phase recently.

We had bad numbers on inflation increasing, et cetera. Now it’s beginning to kick again. The back end of last week, it went towards, again, over $2,700 gold.

It’s a good time to be in the gold industry. So right now, what is the gold market doing? Consolidating, pulling back, waiting for something? I believe there’s been a consolidation phase, and I believe we will see now another jump in the gold. Okay.

So what does $3,000 mean for the mining industry? Yeah. So average AISCs around the industry are around that $1,400, $1,500 mark. We’ve seen over the last, all the Q1 numbers are beginning to come out now of all the big major gold mining companies.

So they’re producing gold all in sustaining costs, which is the cost of sustaining the mines, running the mines, et cetera. That’s coming in around $1,400, $1,500 AISC. Gold now is at over nearly $1,700, $2,700 gold.

That’s a big margin. That’s $1,000 an ounce margin. Some of these big producers are producing a million ounces, two million ounces.

That’s a lot of margin. Okay. And more so as a Canadian producer, you’ve also had a weakening currency in Canada versus the U.S. So it’s nearly $4,000 gold in Canada, in Canadian dollars terms.

So for us as a producer in Canada, we’re producing gold for $1,200 sort of AISC, $1,400 AISC, and you have that margin on most of our costs are in Canadian dollars. So let’s say I’m an investor. Yep.

And I said, you’re saying, well, that sounds fine, but the gold price has been going up all year, like we just talked about, and yet junior mining companies haven’t done very well. Not even junior mining companies, Barrick, their stock is down relative to gold, right? Like even the biggest stocks are down relative to gold. So why should I care about 3,000 or 3,500 or $4,000 gold? You know, the industry needs to do something to change so that they start outperforming.

What is that something? I believe you will start to see, we’ve seen start of some M&A. We’ve seen some consolidation. The market needs to consolidate.

There’s a lot of junior gold mining companies. There’s a lot of developers. We’re all competing for the same money.

So you think it’s just like a saturation in the market right now? It’s a bit of a saturation. Quality stocks are moving. And Nico Igles had a big run.

You know, Newmont has had a good run. These are key stocks. They’re not everybody.

Tends to, you know, a rising boat lifts all tide. So that’s sort of, you’re going to get that, but quality. So you need to look for quality.

And I think quality will do very well. Why do you want to start producing? You’ve got a good deposit. You know, you’ve got something going on in the ground.

Just keep it, waiting for someone to acquire you. Producing is expensive, you know, it’s risky. Yeah, but I do believe that investors value cashflow now.

I don’t believe that investors in the old markets, the big bull runs, it was gold in the ground was valuable. I believe now that investors becoming more sophisticated, they’re waiting for cashflow. Cashflow is king.

So the quicker you can get the cashflow, you get that upside. A lot of these companies have gold in the ground. They might get bought out.

They might not get bought out or take them out. It’s 10 years to build a gold mine today. So they might miss the next, this boom.

They might miss the next boom. So moving the cashflow in a rising gold market is the key to leverage of a company. I think the critical question of today’s interview is how, how are you going to do what you’re about to do? So let’s start with talking about the Matson mine in Ontario.

Give us a bit of a history of this mine and why you think it has potential to actually produce the minerals. So this, this mine has been, was originally in operation in the thirties to the seventies. It produced 2 million ounces of gold at nine grams.

Very, very profitable mine. The seventies you said? In the seventies. Yeah, okay.

Thirties to the seventies. So it operated for 25 years, 30 years, producing nine gram per ounce of gold. Very steady, very consistent.

So then, then in go, in the seventies, gold went to $200 an ounce, very low. So it shut down. Another group came in later on and reinvigorated that mine.

They put lots of money into the project. They spent 350 million Canadian dollars. They put infrastructure in place.

They got, more importantly, they got a permit. They went back into production. They had a few challenges.

They didn’t understand the technical aspects of the ore body. They didn’t understand the requirements. They weren’t mine builders and understand that.

And so that caused it to go into bankruptcy. We bought that project out of bankruptcy and allowing us to move quickly into production. You know, rather than a 10 year wait for a mine, we have a year, two year wait for a mine in production.

Okay. Because we have all our permits. We have all that infrastructure to leverage upon.

And that allows us to move quickly into production when gold prices rising. And this was always your vision when you started at the company? A CEO? Yeah, the vision, my background is mine building. Company building, mine building.

I’ve been building mines all over the world. I’m not an exploration, gold in the ground kind of guy. Okay.

And we looked for, to step back a little bit, when we looked at the strategy, Frank Jooster was involved. We looked at the strategy. The strategy was to build a gold mining company over the next number of years.

Frank is a big believer in gold. People hear him talk all the time. He believes gold is going much higher.

And the best way to build a gold mining company is in that period. But you need a production asset that’s close to production. So you can scale, get production, get in the cash flow, and then scale again.

That’s the long-term vision of West Red Lake, to build a mid-tier gold mining producer. Walk us through, let’s talk about the operational changes, and then we’ll talk about the financial changes. So did you have to assemble a new team for the next phase of your company? I mean, you’ve been drilling up until now, but presumably you need a completely different team for actually producing this mine, right? Yeah, well, actually, strategically, we set that up very at the start.

We always knew we were going back into production, so we didn’t hire an exploration-focused team. A lot of these groups are very, we hired, we assembled a team that has mine-building capabilities, that has built big companies. That started with our backer.

Frank Jooster has done a lot of build big companies in his history. Our board, we put a very technical board together. Some of your viewers might remember Tony McCooch, who built Kirkland Lake, which was very successful.

We have Duncan Middlemass, who built Weston Mining. So these are people who’ve built mines before. So that’s our board, and then our management team, myself, and some of our management team have all built and operated mines.

So we built that from the very start. Our vision was to get into production. The infrastructure for the mine, is that set up? Infrastructure is set up.

Mill is back in working, commissioning underground. We bought a camp, we bought a crusher, we bought a lot of infrastructure in the last 12 months. So all that’s, I was just back from site.

I was outside last week. All that’s beginning to come together. Yeah.

An investor might be saying, well, Shane, I’m concerned because why not just partner with another producing company, we’re going to a JV or something. Why dilute equity by raising capital to finance this yourself? Why would you respond to that? Yeah, so I believe that the majors and the companies coming in, they have to be, you know, why just wait and hope that they will come in? You know, that’s not going to get them interested. A lot of companies just wait and hope and you can go on and on and on.

We have the capabilities to put this into production. So our view is, if we move closer to production, we’ll get the interest of the majors. They want producing assets today, or close to producing.

The days of the big companies going out and doing exploration is very long gone. There’s very few companies, all the big deals that we’ve seen this year, are all mines close to production. You know, you saw Windfall, the Cisco mining.

You saw Goldfields come in and buy that. They’re just getting close to production, de-risked assets. And that’s where I think the market will be.

So for us, we need to move that forward. Potentially then somebody will come in. How much cash is on the balance sheet now and is that enough for the next phase? So at the moment on the balance sheet, we have $25 million Canadian.

We also recently signed a deal with a debt provider for another $50 million. So we have a lot of runway. That will be enough capital to get us back into production.

How were you able to secure debt financing when you haven’t produced yet, there’s no cash flow yet? So basically the company came in. They did a lot of due diligence on our asset, on our plan. They brought in a lot of technical experts to look under the cover on that.

They believed in the plan. They saw how quick we were at a cash flow. And then we were able to do a deal with them pre-cash flow.

Are you planning to issue additional equity? At this stage, no. We have all the capital we require to get back into production. So what’s the timeline to production? So we’re doing a test mining program at the moment, which we’re mining today.

The plan will be, we will process that in March. And then once we process that, we’ll get the results of all that. We’re gonna publish them.

And then we move straight into production. So the back half of 2025. Okay, good.

Do you see any changes to that timeline or anything that could move that timeline either forwards or backwards? No, I’ve been outside last week. Progress is very good. The teams are working towards that.

They’re getting ready. I was at, the mill is getting ready. The commissioning, the underground teams are doing well.

They’re actually breaking rock on the ground and moving stope. So no, I see us very much on track for that time. What’s your long-term plan to minimize all in sustaining cost? So the one advantage that we have is that we’re actually operating at the moment.

We’re underground developing, we’re underground. So the study we put together is based on real numbers. So knowing those real numbers, we can use them as a benchmark to optimize capital.

We can optimize capital, we can look at operating costs, how we can reduce those, reduce capital costs. That’s really their focus. And I guess the cost structure would change a little bit going forward.

It would be primarily your biggest cost would be producing, not drilling, not exploration. No, exactly. So we’ll have more or less pretty steady free cash flow.

The mine generates some between 50 or 30 to $50 million cash flow, depending on the year, depending on the mine. A free cash flow over the life of mine. And in the back half of the year, in the mine life, when we mine the higher grade, that cash flow gets towards 100 million.

Have analysts calculated a net present value for this project? Yeah, they have. A lot of them are, well, they translate it into share price, effectively. So we’re today trading at 70 cents, 65, 70 cents.

We have a couple of analysts out there with prices around 140, $150 Canadian. So that’s an easy double from now, as we move into production. All right, so when do you expect that to actually be reflected in the shareholder value? So I do, you know, this is a watch and see story.

During the history of the mine, I do see we getting de-risked that. But I do see we’ll have to get into production this year, well into next year and maintain that production. So I would say that’s a mid 26, early 26, mid 26 sort of in that timeline.

Any regulatory or, you know, environmental policies you had to work around to get this mine into production? No, most of the permits were already in place. So that’s the advantage we have. We have all our permits.

We don’t need any more permits. So that allows us to move quickly. How were you able to get permitting so quickly? I mean, you… The mine had existing permits.

So we bought the project with existing permits. Again, this strategy to get into production only works if you can get into production. Because, yeah, normally it would take, what, 16 years to get a permit or something like that? Yeah, the gold mining industry is notorious.

Mining is very difficult to get permits. It takes a long, long time. So when we, go back to my strategy of building a company, we couldn’t just get a mine that could take 16 years.

You’ll miss the window of opportunity with the gold price. So if gold is gonna move in the next four to five years, you need to be moving to production. So you need to find a project with infrastructure and permits.

You have those two together, you can move quickly into production, and then you can scale. That’s the strategy of the company. Yeah, what is your objective, or not objective, but your strategy for scaling? So it’s M&A.

Our scale is to buy M&A producing assets. Okay. We need to scale its production.

Because as you grow, produce more gold, get more cash flow, you become more relevant to the institutions. Is your longer term plan to be the next gold core before they got acquired? I would like to be as a mid-tier, 600, 700,000 ounce a year producer. Okay.

That’s what I see in the next three to five years. And would you stay in North America, or would you consider projects abroad? I would stay in North America, or tier one jurisdictions. I think there’s a lot of issues going on with political uncertainty, so it’s really tier one jurisdictions.

So that’s Australia, Canada, North America, Europe, they’re the focus. Why wouldn’t you go to South America, for example? We would go to certain countries in South America, but South America is changing. Mexico has a new president who’s anti-open pits.

Here you have Chile, some stuff. Had lots of stuff, so even South America is becoming politically unstable. You have some issues in Africa now, in Mali with Barrack in Mali.

A lot of stuff going on, so stable jurisdictions are the key. Are you, as a CEO, looking at political developments in the U.S. with the new Trump inauguration, and the inauguration week is this week? Policies regarding trade, policies regarding tariffs, is that part of your calculation at all? Yeah, it is. I actually think that Trump will be good from the mining, because he will fast track permitting.

I think he’ll come around and help permitting get better in the U.S., so that unlocks a lot of projects, which up to now have been kind of stuck in permitting, so he might come in and fast track them permitting, which will help move mines quicker into production. What about in Canada? Trudeau recently resigned. It’s unclear who’s gonna take his place.

It’s unclear as to whether or not the Liberals can win the next election. Any changes we are expecting? Yeah, I actually believe that the Conservatives will win the next election, and they’re very pro-resource development, they’re pro-mining, pro-resource development, and during the Liberal era, we’ve had a different view of resource development. We’ve had slowdown of projects, we’ve had fast-tracking projects, and I believe that Pierre wants to change all that.

Potentially, if the Conservatives get in, then that leaves an opportunity to move them forward. What do you think needs to change for investor sentiment? We talk about the mining companies a lot, but investor sentiment, I’ll give you an example, right? The Australian gold mining companies, a lot of them have kept up with gold. The North American ones haven’t, why is that? I do believe it comes back to a lot of, if you remember the last boom, a lot of the gold mining companies are in the panty box.

The last big boom, the gold equities went very high, and they bought a lot of, they did a lot of M&A, they did a lot of that, and that was kind of foolish. A lot of them, over the next 10 years, there was a lot of write-downs, as you remember, and that kind of pushed investors away from it. Also, as well, like the oil industry, back, go back 20 years, there was loads and loads of oil industry companies, there’s been a huge consolidation over the last 10, 15 years, even in Canada here.

So I think that will happen in the gold mining, it’ll have to happen, there’s too many junior gold mining companies, too many of them, competing for such a small, as you said, the young people of today, they have Bitcoin, they have the tech stocks, and mining. In the other day, they had just mining. So I think there needs to be more relevant companies in the industry.

And when you say there needs to be more consolidation, are you expecting that to happen at the tier one level, or other tier? No, I would say the junior level, much lower down. The tier one level, there has been some consolidation, there’s even talks of mining companies. They’re talking about Glen, there’s been rumors around Glencore and Rio, even the big guys are beginning to think about consolidation.

I believe that once you start to see that, investors will come back into the market. There’s a lot of mining companies on exhibit here, right? There’s a common question that gets asked to me is, how do I know if something has a legitimate project? If somebody is a retail investor, and he wants to know, not just about your company, but any company in general, what are some of the questions that that person needs to ask these guys at Booth to evaluate whether or not this has any potential? So one of the keys is the people involved. You’ve got to be with people who’ve done it before, and also done what the project says it’s doing.

So exploration projects need to have people who have had success with exploration. We’re in development, you need to be with people who’ve had development. So it’s very important, not just the right people, but people focused on the task at hand.

So if the company’s an explorer, which a lot of them are, you need good people who’ve explored, made money for investors, got to find a good deposit. It’s very important, because they need to understand that. For developers, you need to have people who have developed projects, been successful.

That’s key. You also got to look at timelines. In mining, as I said, timing is very important.

So you’ve got to look at that project, how far away it is. You know, you have studies to do, engineering to do, permits to do. It can take 10 years to get a mine into production.

You’ve got to understand where you are in the market. If you’re looking for a junior stock that wants to run, and with good exploration results, that’s a different story of a long-term mine you want to get into production. So there’s different stories.

You need to look at the company, the people behind it, and the focus of the company. And what’s your background, professionally? So my background is an engineer. I’ve been in the mining industry for 20 years.

I’m primarily on building mines, building and operating mines. You know, I’ve built mines for a company called El Dorado Gold. I’ve built mines in Greece, Turkey, Quebec.

You know, so that’s a skill set that I have. That’s why our project, when we were putting together the project to put a new company in place, you want people who can build and operate mines. So that’s task at hand, and that’s my background, and our team’s background.

And in your experience, how do these other jurisdictions, Greece, Quebec, compare to Ontario? So Ontario’s a better place to do mining. Ontario’s very pro-mining. I have good relationships with the First Nations in Ontario.

The Minister of Mining there is very, very supportive of mining. So Ontario’s a better place to do mining. We have a lot of big gold mines in Ontario.

You know, big, world-class producers. So Ontario’s a great place to do mining. Do you think that because it’s a better jurisdiction overall, that there’s a premium built into the stock price of every company operating in these better jurisdictions? I believe when they’re operating, yes.

When you’re in operation, you’re in production, you have some big gold mining companies. Alamos Gold is a good one, very, very big producer. Agnique Weigel has a lot of Canada.

I believe you’re beginning to get a premium for First World countries. It must be more expensive, though, to operate right now? So it is more expensive, for sure. But it’s more expensive, but your certainty, your political certainty.

Some of these jurisdictions, Barrick Gold is going through that at the moment in Mali. It’s cheaper to do production, they’re doing a lot, but now they’re in trouble with the government on taxes and gold. So that’s a risk-reward you gotta balance out.

So finally, we talked about M&A, but what about just talking to other peers in your group, other CEOs and industry leaders here at the conference, what are people doing this year that may be different than in previous years? What are some new trends we should be following? So it’s interesting that I’ve got a lot more interest in consolidation. Before this, everybody wanted to do their own thing, raise money and do that. Now they’ve seen the market, they’ve seen it’s tough at the moment in the equity market, so there’s been a lot of talk around consolidation, open to ideas, open to new ideas to do things.

I found that very interesting as a different, been in the industry a long time. I’ve never really seen that before, just because how difficult it is for money, raise equity, et cetera. Now that you’re on the cusp of production, is that something you’re looking forward to? Something you’re open to at least? Definitely something I’d be open to.

Like I said, more producing assets, but definitely something we would be open to. Okay, great. So what’s the next piece of news we should be following? So the next piece of news would be our bulk sampling program that we’re doing at the moment.

Those early results should be out in early February, and then we’ll be processing that material in March. So they’re the two big milestones that we have. Okay, great.

Hey, great talk. Thank you very much. Thank you very much.

We’ll put the link down below to follow Shane and West Red Lake Gold. We’ll have more for you at the VRIC. Take care.