Is Global Trade About To Collapse? (Uncut) 04-16-2025

Is Global Trade About To Collapse? What’s Next For Critical Assets | Tim Warman

More marginal mines are generating incredible cash flows. We sold back in 2022. It was a reasonably profitable mine at the time at sort of $1,700, $1,800 gold, but now at $3,000 gold, even a small, low-grade mine like that is going to be making a ton of cash flows.

With the trade war expediting, now the question is whether or not global trade will be cut off to maybe only a fraction of the volume it was before. That means bad news for industrial metals, but maybe we’re on a rebound. We’ll find out.

Tim Worman joins us today. He is a CEO and director of Forte Metals. That’s FMT on the TSX-V.

We’ll be talking about copper, gold, and the global economy today. Welcome back, or welcome to the show, rather. Welcome to the show, Tim.

Thanks, Steven. Thanks for having me. Let’s talk about what’s been going on right now with industrial metals and commodities, particularly with the hard metals.

As you know, copper has had a huge decline, and I’ll put a chart on the screen for the audience, a huge decline in the last week or so in light of escalating trade war tensions. Do you think this is the beginning of an industrial metals complex collapse? No, I don’t think so. I think fundamentally, it doesn’t do anything to impact the supply side of the equation, and I think that’s a lot of what’s driving it.

We’ve got lower grades, less discoveries, and things like that going forward. I think this is more of a short-term blip as this whole tariff thing works its way through, and hopefully, touch wood, it’ll get resolved in the next few months. Then I think we’ll see the recovery of the base metal prices back up to much more realistic levels.

What is a realistic level for you? Let’s just take copper, for example. If you take a look at my screen, copper is currently trading at $4.2 a pound. Yeah, here we go.

It’s been down about 20% in just a week and a half. Yeah. If you look at it, it’s back to where it was in February of this year.

We had a brief run-up and then a quick drop. I think longer-term prices in the $5 a pound area are probably where we’re headed. I think that’s probably the decision price for a lot of new copper projects, given that the capex of some of these big new copper projects is in the several billions of dollars.

From our point of view, our projects are early stage enough and we sit right in the middle of an established, fairly well-advanced copper-to-copper project that’s owned by a major. I think we’re not too concerned about short-term fluctuations in the copper price right now. When you said earlier that there are more fundamental supply issues that are still more prominent, what does that mean? Yeah.

I think if you look at the rate of discovery of new copper deposits, I think if you look at the grade of existing copper deposits and the grade of new copper deposits, you’re seeing a pretty pronounced decline over the last 20 or 30 years. The really big, easy-to-find copper deposits have all been found. There’s very few exemptions.

The ones that are being found tend to be lower grade. I remember in the 90s when I was starting my career, I was working in Zambia in the copper belts and we looked at some of the old reports where they talked about low-grade ore being anything less than 10% copper. I mean, I don’t think there’s a deposit left in the world that has 10% copper in it.

It’s an overall declining trend that’s been going on for a long time. That means that it’s basically impacting supply. As you chew through the existing copper inventories that are in the ground, your next projects are going to be lower grade and therefore more expensive to mine.

Is there an economic incentive for new projects to come online? In other words, is there a real growing demand here that needs to be met such that projects need to be put online? Yeah. I mean, I think, again, I’m hopeful that all of these trade war and tariff noises is temporary and that things will work their way through to a more saner outcome in the next six months or so. But again, it’s hard to predict anything these days with real certainty.

But yeah, I think overall the demand for copper is in particular is going to grow as we get through electrification. I mean, I don’t really need to get into that whole electrification argument. I think everybody understands it quite well.

But I think overall, yeah, long-term copper demand is going to keep rising. Do you think China will still be the dominant driver of copper demand as it was in the 2000s, for example? Yeah, I mean, I think so. That’s where the bulk of the smelters are.

And so, you know, that tends to be what drives the demand for the concentrate, which is where, you know, most of the metal comes from. So yeah, I would expect so. Okay.

And what is the copper industry doing exactly to fill this demand supply gap? Yeah, I mean, I think what they’ve been waiting on is, you know, there are a few projects, you know, like the one that we sit in the middle of that are owned by the majors. You know, we sit surrounded by a joint venture between Tech and Newmont. It’s a large deposit, has 20 billion pounds of copper, as well as 10 million ounces of gold in reserves.

But they’re going to wait until probably they see copper prices in that kind of $5 a pound range before, you know, making a decision to commit the kind of multi-billion dollar capital. It’s going to be hard to build a project like that. So I think generally, people are pushing the projects along to the point where they can make that decision.

But they won’t make that decision until they see the, you know, the price that they need to make those capital decisions. Do you think there’s going to be more M&A activity now at current copper prices at $4.2 an ounce, or pound rather, simply because you’re buying an exploration company for cheaper? Doesn’t that make more sense? Yeah, it’s possible. I mean, you know, we saw some M&A not that long ago with BHP and Lundin teaming up to buy Philo Mining.

It’s a very big deposit, not that far from us. You know, we’re seeing investments in Copper Explorer Co’s. A perfect example is one of our neighbors, Atex, which is also a group where Pierre Lassonde and Trinity Capital are large shareholders.

Agnico just invested something like $40 million into them, you know, just within the last few months. And so, yeah, I think advanced projects like Philo, but also wanting to get a toehold into, you know, earlier stage explorers with good potential projects. Okay, before we talk about Fortin Metals in more detail, let’s talk about gold.

Gold is rebounding on Tuesday, April 8th, as we’re speaking. And it’s rebounding alongside equities. And gold’s trading pretty much in tandem with risk assets over the last couple of days as Trump announced reciprocal tariffs, equities sold off, and gold did as well.

It’s now back above $3,000. What do you think is the sentiment driving the gold price right now? Yeah, it’s funny. You know, trying to predict the gold price is almost like trying to, you know, predict the weather a year from now.

It’s interesting. I mean, obviously, it’s a hedge against inflation. It’s a hedge against risk.

It’s a, you know, sort of safe haven asset, I guess, as it’s always been. And it’s kind of showing that it continues to, you know, to have that function. You know, I think the little drop off you saw in the gold price over the last few days has really just been a kind of broad rush for liquidity, you know, sort of sell everything kind of, you know, mentality.

And I think you’ll see the, you know, gold seems to be holding some support nicely around $3,000 an ounce today. And I think, you know, longer term, the trend for gold prices is pretty good. You know, and particularly at these prices, you know, gold producers are making, you know, tremendous margins.

I mean, you know, the kind of margins we haven’t seen in probably 20 years, you know, on the gold price. So does this surprise you that gold has not rallied even more, basically diverged from equities prices in light of escalating trade wars and geopolitical tensions? One would think that a safe haven asset would move in the opposite direction when stocks go down. Yeah, I think when those stocks came down like they did, I think it was like I said, it was just a rush for liquidity, like sell everything.

You know, it didn’t matter what it was. So yeah, I think that’s a short term correction. And I think you’ll see gold prices continue their strength over the next, you know, sort of few months to years.

So you mentioned that $5 a pound makes sense for copper. What makes sense for gold deposits and even producers? Yeah, I think, well, I mean, producers are loving these prices, you know, $3,000 an ounce. They’re making, you know, sort of record free cash flows.

And you’re seeing that right across the space. I mean, even the sort of more marginal minds are generating incredible cash flows. You know, I was the CEO of a company called Fiori Gold, and we sold that, I was a producer, we sold back in 2022.

And, you know, I look at that mine, it was a, it was a reasonably, you know, profitable mine at the time at sort of $1,700, $1,800 gold. But, you know, now at $3,000 gold, even a small, you know, low grade mine like that is going to be making a ton of cash flow. So yeah, I think these prices are excellent for producers.

I’m curious, because you’ve been a geologist, you’ve been working in the space for decades, the all-in sustaining cost over time has gone up, as you know, and, you know, that’s no surprise, that’s just part of inflation. But which aspect of the, of the all-in sustaining cost, which component do you think moved the most in the last couple of years and was the biggest driver of this higher cost overall? Yeah, it kind of depends on the type of mine, you know, you know, for some mines, it’s been fuel, so diesel prices primarily, particularly if those mines have to generate their own power on site, you know, and aren’t connected to a national grid. But really, it’s been labor.

You know, labor is almost always the biggest component of cost for, you know, any mine, and really just labor costs have been driving it up. So let’s talk about Forte Metals now. You are a company with projects based in South America.

Tell us a little bit about, just an overview of the deposits you have, the grade of the deposits, the types of metals you’re involved with. Yeah, it’s an interesting company. So we have two main projects.

One is a copper project in Chile. It’s called Placeton and Caballo Muerto. It’s a big copper porphyry target.

You know, I would love to tell you about grades and things like that, but it has never been drilled. It’s a very early stage project. And the really interesting thing about it is that it’s completely surrounded by a large, well-advanced copper porphyry project called Nueva Unión.

And Nueva Unión is a joint venture between TEC and Newmont that’s currently going through a revised feasibility study. It’s got reserves established. It’s got 20 billion pounds of copper and 10 million ounces of gold in reserves.

And we sit literally right in between the two parts of that deposit. And so the thing we’re focused on in Chile is really talking to our neighbors. You know, we have a major investor in the company currently, which is Agnico Eagle, and Agnico Eagle has just made a major investment into one of our sister companies just down the road from us, a copper explorer, early stage copper explorer.

So we’re talking to them. We’re talking to Newmont. We’re talking to TEC, who are the two JV partners on the Nueva Unión grounds surrounding us.

Really what we want to do there is partner with a larger company to explore those properties, to put the first drill holes into them. You know, we’ve done the surface work. We’ve defined these really great targets based on surface geochemistry and geophysics and all the key indicators that you’ve got a copper deposit there, but now we have to get onto the stage of drilling them.

And that’s expensive. We’re up at 3,500 meters in the Andes and it’s an expensive kind of target to drill. So we’re looking to partner with a larger partner with more resources and move that project ahead.

So that’s our Chilean project, you know, copper focused. And then in Mexico, in the state of Chihuahua, we’ve got what’s primarily a precious metals project called Cristina. And Cristina is much more advanced than our Chilean project, where Cristina, we’re working on that on our own.

It’s 100% own project. We currently have a resource of about three quarters of a million ounces of indicated and three quarters of a million ounces of inferred. So at both at about 1.3 grams per ton gold equivalent and they’re polymetallic deposits.

So they have gold, they have silver, they have some zinc and even a little bit of lead and copper in them. And all of that adds together, you know, to make up a pretty decent grade combined metal deposit. What we’re doing on that project right now is a major drill campaign.

We’re doing about 20,000 meters of diamond drilling on it. And we’re looking to grow the resource, but also we’re looking to increase the grade of the resource. We think that deposit is going to be a high grade underground mine going forward.

We’re seeing lots of drill intercepts with grades of, you know, 7, 8, 9, 10 gram per ton gold equivalent over some pretty substantial thicknesses. And you can go to our disclosure on our website and have a look at some of those in more detail. But it looks like it’s going to be a really nice multimillion ounce, you know, underground mine in an established mining area in Mexico, surrounded by a number of other similar kind of, you know, higher grade underground gold and silver mines.

Well, Tim, the jurisdiction of South America is rich in veins and ores. Tell us about the geological advantages of operating there. I mean, you know, if you look at Chile, obviously that’s copper country.

You know, it’s one of the and we’re surrounded by, you know, major copper deposits there. And, you know, Chile, obviously, an established mining jurisdiction, there’s good sets of regulations. The regulators and the politicians and the locals understand mining.

You don’t have to explain to them what a mine is or anything like that. So it’s really just a perfect setup for, you know, wanting to operate in. In Mexico, again, similar situation.

It’s a mining country, well-established mining country. You know, it’s politically stable. We’ve got good infrastructure in the area.

We’ve got good access to water. We’ve got, you know, access to power. We’ve got good relations with the local communities and agreements in place for those.

And again, a mining culture, you know, lots of existing mines around us. You don’t have to explain to anybody what a mine is when you’re working there. And with the new government, a lot more support for mining, you know, than we might have seen with the previous administration in Mexico.

And, you know, beyond those two jurisdictions, we’re also looking to expand the company, you know, as well. We’re always looking for new projects and, you know, being fairly aggressive with that search. What are some of the geopolitical risks that you have to navigate operating in South America? Honestly, they’re no different than anywhere else.

You know, in Chile, you know, there isn’t really a lot of risk there. It’s a well-established mining jurisdiction. We’ve seen some changes to the mining regulations.

We’ve seen a little bit of increased cost in terms of what it costs to hold on to, you know, a mining concession there, you know, sort of annual taxes and things like that. There’s been some discussion about increasing in state royalties on those projects. But again, that hasn’t really been firmed up yet.

So, yeah, I mean, you know, Mexico, or sorry, in Chile rather, you know, it’s about as good a jurisdiction as you’d want to be in. In Mexico, obviously, you have to be conscious of the security situation down there. You know, you probably see on the news the Qatar activity in Mexico.

And, you know, we’re certainly aware of that in general. You know, we sort of keep our heads down and don’t get involved. And people generally leave us alone.

We’re not in the cities. We’re out in a fairly rural area where there aren’t a lot of people around. And, you know, overall, it’s been pretty reasonable.

We sort of get left alone to do our thing and haven’t really seen any major issues so far. Well, this just came in from Chile. Chile’s Codelco state owned copper producers boosting production or boosted production in the first three months of 2025, was still bullish about long term prospects for global demand, despite an escalating trade war between the US and China.

Now, yeah, let’s talk about how tariffs specifically will impact mining production and whether or not operations would change in light of more tariffs that would presumably impede the export of trade, the export of metals across the borders. Yeah, I mean, obviously, you know, you’re not going to be, you know, US tariffs don’t really have much impact on, you know, Chilean copper producers selling concentrate to Chinese smelters. So that’s not really an issue, you know, directly, obviously, you know, once you’re importing Finnish copper into the US, you know, tariffs are going to have an issue there.

There is, you know, some copper production in the United States. But, you know, I don’t believe that the US is self-sufficient in copper production. So they’re always going to have to import some copper from there, you know, and they import copper from Canada as well.

So, you know, it’s obviously, you know, tariffs are obviously an impediment to trade in that regard. But as you see, Cadelco is trying to improve or increase production. So, you know, I’m still confident, again, this is a short term blip on a much longer term trend.

Well, do you think even in the short term, producers will be incentivized to start exporting to other countries that are not the US, basically reduce trade to the US, which could actually create a longer term problem for the US if these new trade dynamics are not reversed in due course, right? Because then you’re just exacerbating the supply chain issue or supply crunch issue in the US. Yeah, yeah, it’s entirely possible. You know, it’s, you know, it’s definitely going to, you know, be a short term impediment.

But again, whether it has longer term impacts, I think that remains to be seen. But, you know, I would certainly hope not. Okay, so what’s the next milestone for Fortin Metals that we need to be looking at? Yeah, so the next milestone is, you know, one of the things that, one of the reasons we put this company together in the format that it’s in now is because it, you know, it takes a management team that’s had a bunch of successes in the past.

You know, I think I’ve sold three companies now, you know, where we’ve done very well with our shareholders and really married that management team, myself and my partner, Charlie Roncos, who’s an ex-GoldCorp major gold producer. We’ve married that with some really, really strong financial backers, specifically a guy named Pierre Lassonde, for those of you who know the mining industry, Pierre’s a billionaire mining investor and founder of a number of companies, and as well as Agnico Eagle, a major producer, that’s one of our major shareholders. And, you know, we’re putting that financial backing together with a management team that’s been successful in the past and really looking to grow the company and add new projects, add bigger projects, add more advanced projects, hopefully move towards a producer status where we can start benefiting from those high metal prices and particularly high gold prices.

So that’s really the goal right now is, you know, as we work on our existing projects, there’ll be news flow coming out of those, but going forward, we’re really looking to grow this in a much more substantial way. Okay, well, excellent. Tell us a little bit more about the management team, starting with yourself, Tim.

I mentioned earlier in the interview that you are a geologist by background and you’ve been in the field for a number of decades now, so walk us through your background. Yeah, I mean, I’m a geologist. I’ve worked all over the world in Latin America and Africa and Europe, and I’ve been involved, I’ve been really fortunate in my career to be involved with, you know, several really, really interesting and successful companies.

The first one that people might have heard of, if they know the mining industry, it was called Aurelian Resources. It went from a $0.67 stock to selling the company for $1.2 billion back in 2008. We made a very large discovery in Ecuador, a large gold discovery that’s now one of the most profitable gold mines in the world.

It’s run by Lundin Gold. And then I was involved with another company on the board called Continental Gold. Continental Gold, again, a large gold discovery and eventually a producing mine in Colombia that was sold to a Chinese producer.

And then, you know, Delradian Resources, another company with a large gold project and of all places, Northern Ireland. It’s not typically thought of as a mining jurisdiction, but it was taken private several years ago by Orion. And then most recently, a company called Fiori Gold, as I said, we’re a producing operator in Nevada.

We bought an old bankrupt mine for $5 million in 2017. And five years later, we sold the company for $170 million after turning the operation around and producing free cashflow. And so it’s been, you know, I’ve been quite fortunate to be involved with a lot of really exciting projects that have made money for investors, which is kind of the name of the game.

And then my partner, Charlie Roncos, he’s again, a very experienced geologist. He was the executive vice president of exploration for Goldcore, one of the largest gold companies in the world, eventually acquired by Newmont. But again, an extremely experienced geologist.

And really, that’s the company. The two of us are, you know, small management team, low overheads, and focused on adding value. Excellent.

Well, Tim, congratulations on your success so far. And we’ll look forward to the next update. Where can we follow you and your company for now? Yeah, so our website, ForteMetals.com. I’m on Twitter, for those of you who are still on Twitter.

And yeah, we try to, you know, put news out fairly regularly on the company, on our exploration results and other developments. So yeah, but ForteMetals.com is a good place to start. Okay.

And actually, before we go, can you name maybe a few other major shareholders, institutional or otherwise? Yeah, I mean, we’ve got, you know, we’ve got, if you’re in the mining industry, you might know some of the names, Merck and Ixios and Delbruck. And, you know, Trinity Capital is obviously a major shareholder. But, you know, it’s a fairly tightly held company.

We only have 60 million shares, outstanding. And so, you know, we have sort of a few but very supportive shareholders. What percentage of the float roughly would be available for retail? There’s probably less than 20% of the float out there currently right now.

Excellent. Thank you very much, Tim. We’ll follow up next time.

All right. Thanks, David.