‘World Disorder’ Is Fueling Gold – $5,000 Next? (Uncut) 03-07-2025

‘World Disorder’ Is Fueling Gold – $5,000 Next? The Arctic’s Role in a New Era | Sean Boyd

Welcome back to Kitco News. I’m Jeremy Safran. Coming to you from the PDAC 2025 conference here in Toronto today, certainly a lot of buzz around us.

The global race for critical minerals is in full swing and Canada’s Arctic is emerging as a key battleground. Nations are scrambling to secure resources essential for energy, defense and technology. And Agnico Eagle, now one of the world’s largest gold miners after overtaking the UMAD, finds itself at the center of the action.

Mining veteran and Agnico chairman of the board, Sean Boyd, who built Agnico into a global powerhouse, is now influencing policy at the highest levels. He’s advocating for a strategic Arctic development plan to secure Canada’s mineral future. Now with sovereigns moving aggressively to control supply chains, can Canada keep up? Well, let’s break it down.

Sean, welcome back to Kitco News. Great to see you. Great to be here.

We last chatted in Boca Raton, Florida. It was an interesting time because it was just prior to the Trump presidency. We were talking about what the strategy was, and it seems that critical minerals and the North are still part of the plan.

Before I get into that, I want to start with what a year and two it’s been for gold with these prices and Agnico Metal. Your stock’s up over 116%. You enjoying the ride? Yeah, it’s well, as you know, I’ve been doing this for 40 years, and this is a really unique time because it’s a time when gold is strong, while the stock market’s setting record levels, while the U.S. dollar is strong.

That’s not supposed to happen. And then when you layer on the fact that the Canadian dollar, when gold’s strong, is supposed to be stronger, it’s weaker. So that’s a huge benefit for us.

So this is the first time in decades where we’ve been able to pile up substantial amounts of cash. It’s a good thing. There’s no shortage of opportunities within the portfolio to spend it on.

So it’s a good time. Yeah. I mean, break this open.

You guys are north of $2 billion in cash flow. I mean, you’re all in sustaining costs. It’s $1,200.

I mean, just above. I mean, your margins are over 50%. You’ve edged out Newmont on the market cap.

How wild is this ride? Did you set out to build Agnico like this? No, we just set out to, as we would say, in the early years, we just happened to be gold miners. So let’s just build a high quality business that happens to mine for gold. So that was the objective.

But the objective was also, our mission statement is to create above average returns for our shareholders, do it in a way where we create a great place to work for our employees, and also to make meaningful contributions to our communities. So we look at the last several decades, and we hit all of those three. If one of those areas we didn’t do what we were hoping to do, then we wouldn’t be able to call it a success.

It’s been a big success. It’s been a big success. I know we’ve been talking about the Arctic and the strategy in terms of minerals.

Countries looking, I mean, obviously America looking hard right now. Talk a little bit about the background. I know you’re passionate about it.

What’s the opportunity there? Well, it’s a region that’s largely unexplored. It’s a region where the indigenous communities, the indigenous leaders are supportive of responsible resource development. So you’ve got geology.

You’ve got communities that want mining. You’ve got a country now that needs mining. We’ve always needed mining.

This country was built on mining. But now there’s an extra impetus now to take advantage of the opportunities that exist in the north. Not just for mining, but in terms of the potential of the people.

So that’s coming together now. We could see it the last couple of years where people were reflecting and say, yeah, mining does a lot of good. So now there’s a focus on the north, geopolitical focus on the north.

We have it. We have a responsibility to develop it for the communities up there, but also for the 40 million Canadians that will benefit for multi-decades if we get this right. But now’s the time to move.

The stigmatism that you’re talking about, it seems like it’s weighing quite a bit, particularly as Trump comes into the White House and there’s this new rush for national security, its own sovereignty when it comes to the critical mineral strategy. I know Canada and the U.S. work really, really closely on that. Can you give any insights? Who’s ahead of this race? Well, I think when we look at the north, it’s vast.

It requires a lot of capital to do it properly. There’s certainly going to need to be cooperation given we have our U.S. partners there in Alaska going all the way to Denmark and Greenland. That opens up tremendous opportunities in the north as we think about investments in strategic infrastructure.

We think about investments in social infrastructure in the communities. This is about presence. Presence is sovereignty.

There’s also responsibility for Canada to protect the northern flank. The best way to do it is to build strong communities around a strong economy and the resource base is the foundation. So really it’s now the opportunity for governments to work closely together.

I think we know as a mining industry, given how costly it is to operate in the north, the government has no alternative but to invest in alongside industry and communities to help to maximize that opportunity. So who’s ahead? Who’s behind? I think what we’ve learned in meetings in Washington is that this is a strategic imperative for the west to narrow the gap in critical metals and critical metals processing with China. And Canada can play a leading role there, but we’ve got to work together.

We’ve got to work smarter up there and we’ve got to start now. We don’t need any more policy papers. And so we see the Hope Bay project, even though we haven’t made a formal announcement, this could be the start of a bunch of announcements in the north about meaningful investment that are going to set up regions for multi-decade growth in economies.

Has Canada changed? I mean obviously the stance has changed, but how far did we put ourselves behind in those years where we weren’t actually encouraged to go out and have this sovereign wealth in terms of what we have in resources? I mean, I think about it, you can’t even get oil to New Brunswick in Canada, right? There’s no pipeline from coast to coast. Is it opening up? Are we going to become more of a drill baby drill like Trump’s done in this state? Well, I think what we realize is that what we expected to be the path forward has changed now. And that’s okay, because I think we’ll look back on this period and say, boy, that was a nice kick in the rear end that we actually needed to understand what the opportunity set was.

It’s risky, mining’s a risk business, but there’s a tremendous opportunity and we have willing partners in the north that are willing to work with the right partners to do this properly. So we’re behind, but we can catch up. But if we don’t start now, then we’re going to fall further behind.

So I think there’s an acknowledgement that that has to be done. The question is how to do it. And it’s going to be industry with experience, working with willing communities, but also working with governments at all levels to provide critical investment in critical infrastructure and in social infrastructure to help kickstart the next phase of investment up there.

We talked about that north of $2 billion in free cash flow. We’ve seen some acquisitions take place in this sector this year. Is that a growth strategy going forward? I mean, just going and acquiring property as opposed to starting fresh? I think that’s always part of the equation.

I think, even though we’ve generated lots of wealth through the drill bit, we have been, we have acquired situations and opportunities. We can go back to 2005, when we sort of stepped out of our comfort zone and went to northern Finland, north of the Arctic Circle. So there was a series of smaller acquisitions that sort of put the right geology in our hands, with an understanding of the upside and potential.

We’re always on the lookout for that. But we built it carefully. We didn’t want to be everywhere, because then it becomes unmanageable.

Mining is tough enough. So when you start going into parts of the world, which are difficult to operate in, when you start introducing too much complexity in your business, it becomes unmanageable. Why have we been successful? We’ve added smart pieces along the way, at reasonable and fair prices, with a view on geological upside.

And that assessment of geological upside was made through the lens of a mine builder. We build our own mines. So when we see drill results, our team has the ability to say, this is what that can project into.

And then we move in and we move in quickly. And so that’s a formula we’ll continue to use. But we have a good strong pipeline.

So we can be choosy, we can be picky, and we’ll continue to do that. And with these costs and these margins, I mean, where have you saved on the cost? The other miners still seem to have some supply chain issues where they’ve had some, you know, some in heightened costs there. Where’s the margin? I mean, is it people? Yeah, it’s a bunch of things.

Some of it’s regional focus. So we’ve got operations that are close to each other. So we get advantage of cost savings there and synergies there.

But it’s also the ability to move knowledge and skill around the company. And we’ve actually paid attention and focused on that. I think where companies get in trouble, the big companies, they don’t have their arms fully wrapped around their assets, and they get surprised.

We’ve been a company that we’ve grown, and we’ve grown dramatically over the last 25 years, but we’ve done it at a pace that we’re comfortable with in terms of managing. So I think that’s a huge advantage. And we’ve been able to deliver the margin, keep our costs below the major peers because of that regional strategy.

And it’s also about grade. It’s delivering the ounces. Unit costs are delivering the ounces.

That’s a big part about that. You forget about that. We’re all facing the same price pressures.

But we’ve been able to manage that by hitting targets, delivering on the ounces. And that keeps the unit costs down. I saw you do an interview before you were talking, you said gold could get up to that $5,000 mark.

I mean, we’ve seen the resilience of it in this past two years with new record highs. You’ve been in this industry a long time. Has it surprised you to see how quickly this run has ran? I think yes, in a way.

But we always knew it was possible. We thought it would play out over a little bit of a longer period of time. But I think what we got too used to, and that’s just all investors, is a period of very low interest rates, no inflation, relative stock market stability.

But we had world order. Now we have world disorder. And when is the world disorder going to calm down and settle down? Nobody can tell you now.

And when you have the big players wanting gold, the central banks wanting physical gold, wanting it close to home, it tells you likely that there’s going to be continued uncertainty in the world because they want that physical asset. So gold’s really done what we all thought it was going to do, is preserve wealth, store a value. It’s delivering that in spades right now versus record high stock markets.

That’s likely going to continue as we go forward. And again, it didn’t surprise us it’s at $3,000. Maybe it got towards that level faster than we thought.

It won’t surprise us if it’s $5,000. Does anything surprise you about the repatriation? Seeing all this gold move from Europe over to the U.S. in terms of physical gold? No. And I think we saw a bit of that.

I’m not sure exactly. I think it was 10 years ago where Germany said, you know, we want half of our gold back that’s currently stored in the U.S. So I think that’s a good sign is that that demonstrates that the owners of gold feel uncertainty is coming and they don’t want it somewhere else. They want it close to home.

And that just demonstrates the power of gold and its store of value proposition. Interesting. Okay, well, I got to leave you with this.

I got to ask you about this whole energy transition, because it almost feels like Agnico is really, really set up to kind of lead the charts here in the Canadian side. You guys have mostly focused on gold. Obviously, there’s copper, there is a byproduct.

Any diversification in terms of that? Or you’re going to focus on this, you know, we got $3,000 gold. Yeah, that’s our core business. That’s what we do well.

That’s what our shareholders want us to do. But we’re also in the business of mining. And we’re in the business of generating superior returns for our shareholders.

So at one point in our history, our revenue mix was 50% zinc, 50% gold with La Ronde. So we’ve been there before. We’re not going to that extreme.

But there’s an opportunity to add good deposits in the right regions where we have a demonstrated expertise and get some diversification. We see that in our San Nicolas project with TEC 5050. It’s in a region of Mexico, where we can do business, we have good relationships, we have a great team down there, we’re getting some good exploration results there.

So that’s the type of situation that we would be open to if we could find it. So no plan again, when we started out, you know, late 90s, thinking about how to build the business, we didn’t set out to build one this big. We’re not setting out here to say we need to diversify away from gold.

But if we see the right geology, right deposit, high quality in jurisdictions we understand, we have to be interested. Interesting. Okay, well, before I let you go, I need to ask about Washington as well.

I mean, I know that you’re actively down there, you know, you’re always talking to stakeholders in the government in terms of that. I’m curious, you know, where you think we’re going to go this next year in terms of tariff talks? Is it just going to be continue to be volatile for the next five, six months and with all the rhetoric going on? Or do you think that we’re going to get to some runway here? I think it’s hard to say, you know, we have supposedly tariffs coming tomorrow. We don’t know how much supposedly it’s less than 25.

I think that just speaks to the unpredictability of it all. And so we have to wait and see. So I think tariffs, the objective seem to be multiple there.

So I think we have to sort of put that noise aside, although it could be painful, and just focus on how do we run our business. And fortunately, we have a product we can sell anywhere. Maybe it impacts a little bit on the cost side, but that’s not going to deter.

If we get Canada gets hit with tariffs, we’re still building mines, we’re still building Hope Bay, we’re still doing what we need to do. And I think as a country, that’s the way we’ve got to look at it. It may be tough for some industries, but we have to still keep our head down and keep working hard and keep investing in this country.

Yeah, well said. All right, Sean Boyd, Chairman of the Board of UnicoEagle. Thanks, my friend.

Appreciate your time. Great to be here. I’m Gerry Sabin for all of us here at Kitco News.

We are at PDAC. It’s our 15th year of covering this wonderful event in downtown Toronto. Stay with us.

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