The Bull Market in Gold, Silver and Miners

Ed Coyne: As more people think about the mining space and re-engage in the mining space, that's just starting. Yes, mining stocks have risen significantly this year, but when examining the return patterns of mining stocks over time, they tend to move in large chunks, such as 300%, 400%, or 500%. This is the early days of what we think is a relatively opportunistic area in the mining space.

James Connor: Ed, thank you for joining us today. You are the head of global sales at Sprott Inc. A significant part of your job involves traveling on the road, meeting with financial advisors, and determining their objectives.

Ed Coyne: That's right.

James Connor: I'm curious about the move that we've seen in gold and silver in 2025. What feedback are you getting from financial advisors?

Ed Coyne: I think the first one is shock and awe. They can't believe how much gold and silver have moved in the last two years. Everyone talks about this year, but it's been the last two years that you've seen this gradual and then very expedited move in both assets.

What's been interesting is that investors understand the value of gold from a diversification standpoint. Still, they are just now starting to wake up to the opportunity in the mining stocks as well, so we're excited about that.

In silver, we're seeing the same thing happen. Silver has long lived in the shadow of gold, but it is now emerging as a more critical material. There are many things for us to discuss with our advisors now. As this move continues, it has reawakened people's interest in this space.

James Connor: I speak to a lot of buy-side people. I'm shocked by how many people I talk to who don't realize what's happening with gold and silver. They're so caught up in AI, ChatGPT, NVIDIA and AMD, and they're very oblivious to what's happening. Do you think that's changing? Are you getting that sense? I suppose what I'm asking is, is there still more to come on the upside for both gold and silver?

Ed Coyne: Yes, I think there is a lot more to come. Not just from a performance pattern standpoint, but I think from an interest standpoint. You're right. I speak at many events, and people often ask about gold for the first time. It's been interesting to see people's genuine interest start to spike.

We had an event two weeks ago, and typically, I joke with my team that five, six years ago, I would have an investor roundtable, and sometimes there'd be more of us than them, meaning there'd be myself and my colleague, and there'd be maybe one person expressing interest.

Two weeks ago, we were in Orlando, Florida. We had over 30 people sitting at our roundtable. We had three deep rows of people. The interest is definitely there. What is surprising is that everyone knows what gold is, but few people focus on what gold has been able to do for the last 25 years. They're surprised to learn that it's been a wonderful diversifier in a portfolio.

Then, that whole education process of what the miners can do and what they look like today. Yes, people are aware of it, but they haven't paid much attention to it. This significant move in the market, I think, has once again captured people's attention.

James Connor: I think another point that people are waking up to is inflation. Everybody knows what inflation is, but they often don't understand its causes. As of January 2020, the money supply, as measured by M2, stood at $15.4 trillion. Here we are, five years later; it's at $22 trillion. That's a growth of over 40%. Are advisors aware that the purchasing power of their dollar is being eroded due to the increase in the money supply?

Ed Coyne: I think they are aware of the purchasing power. The money supply, or M2, is a statistic that is often overlooked. I had a professor on our Sprott Radio podcast about six months ago, and all he discussed was the money supply and its importance, as well as what it actually means in the market.

I think it's gaining momentum again. I think you will start seeing people discuss money supply in a way they may not have in the past. Not to pick on McDonald's. I travel on the road. I'm guilty of eating McDonald's myself. However, the price of a bag of medium French fries at McDonald's has increased by 147% over the last five years. The Big Mac has risen by 87% over the past five years. That's the real-life experience of what people are going through due to the erosion of their purchasing power. Advisors do see that this is happening, but M2, the money supply statistic or narrative, is just starting to gain traction again.

People are saying, "Hey, we have a problem here. We need to rectify this."

We need to fix this. What are some of the solutions? Gold is stepping up as one of those solutions from a central bank standpoint, all the way down to individual balance sheets.

James Connor: I guess another aspect of this conversation has to do with the alternative investments, and that's what gold and silver are. The 60/40 portfolio is largely a thing of the past.

Ed Coyne: That's right.

James Connor: Now you need these alternative investments to help offset this increase in inflation. Is that also a big part of your conversation when you speak with these advisors?

Ed Coyne: It is. The world of alternative assets is a fascinating one. Jamie Dimon did us a great service by saying that the 60/40 model is probably more accurately a 60/20/20 model, with 20% allocated to alternatives. Of that, a big chunk should probably be in precious metals.

When I first started at Sprott about 10 years ago, I wasn't a particularly experienced gold investor. I wasn't particularly familiar with that part of the market. I had a lot to learn very quickly. As I examined the space, I analyzed the performance patterns of gold and considered alternative investments. I had this awakening. I was like, "Gold is the original alternative investment."

This is especially true when considering gold’s performance over multiple market cycles, its consistent performance pattern, and its ability to perform differently from the rest of your portfolio. I was fascinated by that and took to it. At Sprott, we view gold as the original alternative investment, and that perspective has started to permeate externally. As more investors and advisors seek alternative strategies within their portfolios, gold is receiving increasing attention and scrutiny. We're very enthusiastic about the fact that the world is waking up to this reality.

James Connor: I think another factor helping the sector is that Bitcoin is down for the year. Last year, 2024, it was up, I believe, over 100%. Gold was up 25%. However, this year, it seems as though the two assets have reversed. Do you have many advisors asking about Bitcoin at all?

Ed Coyne: Again, looking back at my record here at Sprott, when I first joined, Bitcoin was expected to be the new gold. There was a great ad. I love the ad. It was very funny. It showed people carrying large bars of gold and shopping carts of silver, trying to purchase items. They said that Bitcoin was the new gold, and Ethereum, I think they said, was the new silver. What I think they were trying to do and what actually happened were two very different things. The cryptocurrency market in general reminded people of the value of having a portion of their assets outside the traditional market. I would argue that cryptocurrency has actually reengaged investors in the precious metals allocation.

In fact, in many cases, people are either allocating to both gold and cryptocurrencies in the same portfolio, thereby diversifying, or they're using cryptocurrencies as a risk-on allocation and using gold as a risk-off allocation. The idea that one would replace the other, I think, has become a lost or archaic concept. The reality is that they're working together and serving different roles within a portfolio. I'm actually thankful for cryptocurrencies because they helped continue to build the narrative for why you want to have a portion of your capital outside the markets. Gold certainly fills that role.

James Connor: Ed, you mentioned you're also starting to see some interest in equities. Perhaps you could address that and explain why people are more interested in equities now, as this is something we haven't seen in many years.

Ed Coyne: That's right. If you examine the return patterns of the physical market versus the mining stocks and the equity market, a significant disparity is evident between the two. Gold continued to perform well, while the miners were left largely ignored.

I think there were a couple of things that were happening. One was that there were other risks and opportunities out there, such as cryptocurrencies and other alternative strategies, to which people would look for an alternative return pattern in the past. Now that gold has continued to perform as it has, the margins on these mining stocks are spectacular. The return on invested capital, the return on assets, and the return on all these different metrics look very attractive. Their debt-to-equity ratio is very attractive. Their dividend yields are actually higher than the S&P 500.

Institutions are starting to take notice and say, "Hey, something is going on here." We believe that as more people consider the mining space and re-engage with it, that's just the beginning. Yes, mining stocks have risen significantly this year, but when you examine the return patterns of mining stocks over time, they tend to move in large chunks, such as 300%, 400%, or 500%.

Ed Coyne: This is the early days of what we think is pretty opportunistic in the mining space. Advisors are thinking about it again. What I always say is think about the physical market first, and that's a risk-off allocation. Then, the mining stocks are a risk-on allocation. It is an opportunistic allocation.

They are very different pieces of your portfolio. However, people are becoming more engaged in that space right now, and we're very enthusiastic about it. We're spending a lot of time educating people on what this looks like and how it can perform, and what impact it can have on your portfolio.

James Connor: Something else that I find quite interesting is that we have a new non-traditional buyer in the gold market, and that's Tether, the world's largest stablecoin provider. I've read in the press that they own somewhere between 80 and 100 tons of gold, and they continue to buy it. They're also buying up several royalty companies. Are you hearing any advisors talk about this? Or is anybody asking you who Tether is and why they're buying gold?

Ed Coyne: Not yet. But I think after this interview, they probably will. It definitely got our attention, probably about six months ago or so. We spent a considerable amount of time examining the actions of central banks. Tether has actually surpassed the acquisition of physical gold, exceeding what central banks are acquiring, which has piqued our interest. We don't know if that's the tip of the spear of other companies starting to look at those opportunities as well. What they're doing is using that to back their crypto. Whatever is happening, we're not completely sure, but we know that more large investors are allocating capital to this space.

More people, investors and advisors are starting to think the way central banks and Tether do. Use a physical asset to back a non-traditional asset like a crypto asset or use a physical asset to offset an asset like a stock that pays dividends, and so forth, and make that be a bigger part of your equation.

Ed Coyne: Returning to Jamie Dimon's 60-20-20 concept, there are various ways people are adopting it, but we're seeing an increasing number of individuals adopt it. That, I think, is the most exciting part of this. It's got a bigger seat at the table today than it's ever had.

James Connor: Elliott Investment Management is a large fund based in New York. They run about $70 billion. They have a large position in Triple Flag Precious Metals. They recently acquired a stake in OR Royalties, and they've become an activist on Barrick Gold. This is also generating numerous headlines in the press. Do you think this will attract more generalists to the space?

Ed Coyne: No question about it. It's now okay to talk about gold. I think that's the biggest thing, gold mining stocks and so forth. Wasn't that long ago that you were a gold bug? You heard that term? That's a negative term in my mind. If you're a gold bug, you don't think anything else has value in some cases. Some people view it that way. Or you would talk about it at a cocktail party. That's the weird gold guy in the corner. He's the gold guy. Don't engage with him. That narrative has changed drastically. People want to stay informed about what's happening in the space. I do think it's, I'm not sure if I want to use the word “cool” again, but it's certainly acceptable to discuss in different types of investment circles today that it wasn't, perhaps even 10 years ago.

I think that goes a long way, not just on the physical side, because the physical side has always had a place. However, people want to be educated on the various ways to participate in this space, including mining stocks, royalties and streaming. That's one of the things we try to do as a firm, which is educate people on how to think about the mining space.

Ed Coyne: We're not  here selling products and selling funds and ETFs. We are, but we're really not. What we're trying to do is educate people on why they should consider this in the first place.

James Connor: Most of this discussion has been focused on gold and silver. What other products are advisors asking you about?

Ed Coyne: One of the things that we've done in the last five years is start to look around the room and see what else is happening out there. We saw this whole movement for an energy transition, or I would even say an "energy addition".

We're likely to have oil and gas for our lifetime, probably. That's not going away anytime soon. However, we recognize that we need alternative methods to generate, store, and transfer energy. This whole critical narrative, a critical material narrative, is starting to take shape. What's also interesting is that silver has also entered the conversation.

Silver has always been in the shadow of gold in a lot of ways. If gold goes up, there's this gold-to-silver ratio, and people paid a lot of attention to that. Silver has stepped out of that. It's gotten away from big brother of gold and has become its own precious metal and critical material. That got us thinking, what other critical materials are out there that we can participate in from an investor standpoint? Most investors have participated in this critical material movement as consumers.

Someone has bought an electric car, they've generated electricity from a solar panel, but they haven't profited from it. What we did was explore ways to answer the question, "How can you actually participate as an investor in this movement?"

We love uranium. If you look at what's going on in the tech sector and talking about data centers and AI and what they're doing, financing these small modular reactors from a build-out standpoint, buying real estate around large reactors, new reactors coming online, existing reactors having their operating licenses extended. All these things that are happening.

That's woken the world up also to, "How do I participate in that?" Uranium is a very direct way to do that, the way you would do gold and gold equities. Physical uranium and uranium mining stocks are a way to participate in that movement. We're very excited about the developments in the uranium market, which produces clean, sustainable energy 24/7. Wind, solar and hydro are all viable solutions as well, but hydro is particularly sensitive to geography. Wind and solar are not 24/7. There's no baseload there. Nuclear is a baseload energy source. We love the uranium story.

Then, copper, nothing can happen without copper. This video couldn't occur without copper. You can't move electricity from point A to point B without copper. The revitalization of the U.S. and Canadian markets is one aspect of rebuilding, renovating, and expanding the electric grid here in Canada and in the United States, as well as the electrification of the globe—areas like China and India, which are gaining access to more electricity. We need so much more copper than we currently have. Even though copper is one of the best recyclable metals out there, there's not enough of it.

Uranium and copper are two metals we're very enthusiastic about, and we're discussing them with advisors. They are asking questions on, "How do I participate in this from an investment standpoint? How do I think about this in my portfolio from a diversification standpoint?" We're on the front lines, trying to educate advisors on how to think about the critical material narrative that's just started.

James Connor: Ed, this has been a great discussion, and I want to thank you very much for sharing your thoughts with us today. You mentioned the importance of education a couple of times, and your firm does an excellent job in that area. If somebody wants to learn more about gold, silver and uranium, where can they go?

Ed Coyne: Start with our website, sprott.com. We do a tremendous job, and it's self-serving. I'm selling our book on this, but our team does an incredible job with research papers, market intelligence and third-party articles.

We spend all our time trying to educate people about the universe we live in, the opportunities we're seeing, and how to invest in those opportunities. You can talk to our sales team or call me. There are many ways to learn more about what we do and how we do it, but starting at sprott.com is a great place to begin.

James Connor: Ed, you also have a podcast?

Ed Coyne: I do, yes. It began as a passion project during the COVID-19 pandemic. It's funny. I was talking to one of my colleagues who actually helps me produce the podcast. The first podcast was 8 minutes long and featured just me, with no guests, discussing gold and how to make it a productive asset.

It's morphed into something so much more than that. We don't discuss Sprott; we don't discuss the product. We have access to industry experts, whether it's on the nuclear side, the uranium side, the copper side, or on the gold or silver side. We bring in industry experts to discuss what's happening in that space and how to approach it. I've had professors on. I have a diverse range of guests on the podcast. It started as something to do for fun during COVID, and it's turned into a nice education piece that advisors use with their clients on, "Here's why we're thinking about these spaces." We created these podcasts to help educate people on these investments.

James Connor: If somebody wants to follow it or listen to you, what's the name of the podcast?

Ed Coyne: Sprott Radio. We could put a vote out there to see if we should consider a more creative name, but that's the name we've been using for the last five years, and it seems to be serving us quite well.

James Connor: I'm a follower, by the way. You do a great job.

Ed Coyne: Thank you.

James Connor: Ed, I would like to thank you very much for taking the time to speak with us today.

Ed Coyne: Thanks for having me. This was fun.