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You're listening to Strictly Business
Podcast with Lindsay Williams.

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When the America's Mining Forum 2024 was
held, the gold price, I suppose,

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was mucking around about $2,650 to $2,700
per ounce.

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It's recently concluded, the 2025 version,
of course, and the gold price has been

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above

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$3,800 per ounce, albeit rather briefly.

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With me now is somebody who has attended
both events, and that's George Cheveley,

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Portfolio Manager Resources at 91 in
London. George,

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the name's changed because it used to be
the Denver Gold Forum.

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I think it did anyway.

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And the mood must have changed over the
last few years because you've been an

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attendee on several occasions.

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No, I've been going for a number of years,
and certainly this was the best mood we've

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seen for a number of years.

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And not surprisingly, because of the move
in price and earnings for Gold Company.

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Yes, well, let's start with the moving
price in US dollar terms.

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First of all, why?

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I hear so many reasons, but you've got to
rank them, haven't you?

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So number one reason, please.

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I think people are worried about the US
dollar and fiat currencies in general.

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And that's not just individuals, that's
governments as well.

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And we've seen a major shift in the view
of gold and it's seen as a safe haven and

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a hard asset that

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people can rely on.

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when fiscal policies around the world have
certainly been more risky and we've seen

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governments spending too much money.

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The dollar bear market, so-called, some
people say it's too early to call a dollar

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bear market.

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Other people say, well, we're in the first
stages of a full-blown structural dollar

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bear market.

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If it continues, has gold already
anticipated it or will gold continue to

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follow?

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Always very hard to say, but it certainly
doesn't feel that the

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Current move in gold prices is about to
end.

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I mean, clearly, we will have cycles
within it, we'll have, you know, some

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sell-offs at some point.

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But certainly, when you talk to a lot of
people, and when you see the buying

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behaviour of people,

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there still seem to be a number of people
willing to buy at this price.

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And in fact, if anything, we've seen a lot
of people, you know, who haven't

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participated yet.

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Yes, well, let's talk about the people
that have participated.

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A lot of talk of central banks buying
gold, loading up.

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Are they the number one buyers?

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Since 22, they've been one of the major
buyers.

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And we've had record central bank buying
in 22, 3 and 4,

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and roughly double what we've ever seen
since the 1950s. So they've bought over

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1,000 tonnes each year.

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This year is actually, year to date,
slightly lower.

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partly, I think, because of the price
moves.

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But we certainly still see them
participating.

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What's interesting this year is we've also
now seen the number of ounces in ETFs,

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that's the gold ETFs, have started to
increase substantially.

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So a year ago, there were 80 million
ounces or so.

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Now we're up to 95 and rising.

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Yeah, well, you've got two different types
of buyers there.

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You've got the speculative buyers for the
ETFs, and they can turn tail quite

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quickly,

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I believe.

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Whereas the central banks tend to be
strong holders.

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I mean, they're not going to see it at,
say, 4,200 and say, I bought it at 3,200.

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Let's ship this out and take a quick
profit, are they?

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No.

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And if you look at the history, central
banks, if you go back 20 years or more,

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were sellers.

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You know, in the

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90s, they've been net buyers for the last
15 or more years now and look set to

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continue.

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Once they've decided, they tend to be very
strong holders.

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Good.

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Where else are we seeing demand?

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Jewelry, not so much, I would imagine.

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The last time we spoke this year,

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you talked about platinum group metals
with me and you talked about the number of

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jewellery

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manufacturers that are switching to
platinum.

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So maybe that's to the detriment of the
gold jewellery sector, that is.

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No, no.

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And definitely there are price sensitive
sectors of which jewellery is definitely

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one of them.

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And obviously we've seen demand slower in
that area.

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But I mean, frankly, ETF buying and
central bank buying are very important.

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So, I mean, you know, central banks are
buying roughly today a third of annual

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mine production.

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So, I mean, these are quite influential.

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And on that note, that's a neat segue to
production and to supply.

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We've spoken about demand.

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Mine production, is mine production
keeping up?

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Is it increasing?

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Or is that not the case with gold?

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It's just more or less a constant.

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Mine supply, if you look over the last,
you know, 10, 20 years, it averages around

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1% growth per year.

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So it is growing.

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And definitely we are seeing companies now
keen to grow.

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We'll maybe see that accelerate a bit.

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But it's very hard to grow it fast.

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Permitting, you know, the cost of doing
these projects, getting skilled people.

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And you've got to remember gold mines
generally, they're not as long life as

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copper or iron ore mines.

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And so you're having to replace.

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reserves and new mines all the time okay
so one percent a year it may increase

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given the price

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sensitivity of production to a certain
extent but what about hedging i mean some

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of these mines are making

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enormous margins at the moment there must
be someone in the treasury department of

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some of the mines that says

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come on chaps we've got to lock in another
10 percent at these levels yeah we

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definitely that's the sort of discussion
what's

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interesting um You know, hedging companies
used to hedge a huge amount 20 years ago,

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and they got caught out when prices rose
in the early

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2000s, where the hedges actually ended up
below the cost of production.

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So since then, they've been much more wary
and only hedge tactically.

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What we've actually seen the last few
years is companies hedging through what

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are called zero premium

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collars.

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So they...

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They sell a call at a higher price to buy
a put at a lower price.

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And if the price stays in that range, it
costs them nothing.

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Obviously, if it goes through the top,
they lose the upside.

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But it costs them nothing to put on the
position.

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What we're actually talking to companies
this year is because their cash flows are

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so much stronger,

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more companies can now essentially afford
to buy put options.

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And that's straight away, you're just
buying insurance.

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So you're saying.

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I'm buying protection.

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If the price goes down 10%, I get that
basic price.

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I don't lose any more.

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It obviously costs you money.

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If the price doesn't go there, you spend
the premium.

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But with cash flows as they are, they can
afford that.

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So it's really just straight buying
insurance against lower prices.

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And we are seeing a number, particularly
mid-cap companies, those with higher cost

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operations,

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doing that because it makes sense at this
stage.

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I'm looking at the gold price graph now.

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If you go back 10 years, a little bit more
than 10 years, George, it's essentially

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quadrupled.

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So if you were long of it, if you're lucky
to have been a long-term holder of gold,

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you're one of those gold bugs that can't
bear to sell anything like Goldfinger in a

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James Bond film.

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He just wants to accumulate all the time.

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But you see this, you must be tempted at
some stage.

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This giddy-making graph that I'm looking
at now must take some sort of breather?

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No, no, clearly it does have to at some
point.

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It's very hard to say when.

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And in a sense, myself as a gold fund
manager, that's not my decision, really.

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My job is to outperform my index by
investing in gold equities.

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My investors, obviously, they have to
decide whether they want to be allocated

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to gold or other asset classes.

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So frankly, that is not my issue, I would
say.

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My issue is to make sure I find the best
companies to express that investment.

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Let's talk about the best companies.

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I spoke to one of your colleagues earlier
this year, and he had bought South African

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gold mines,

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and they had run very nicely.

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But he put forward the argument that the
international, as he called them, because

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they're outside of South Africa,

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the international gold miners hadn't run
as hard and were just getting started.

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Would you agree with that?

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Yeah, I mean, look, we've seen it.

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We've had a very strong two months now.

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And certainly we've seen some catch up.

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I think when I last spoke to you, even
though miners had run hard this year, my

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point was they were up 50%

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and their margins have more than doubled.

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Now, obviously, your average, you know,
the index is now more than doubled this

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year.

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But actually, if you look at current
prices, their margins on average are

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probably three times what they were a year
ago.

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So you could still make an argument that
there's still more to go if prices hold.

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And, you know, that's the way we look at
it.

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So, you know, yeah, we've seen mining
companies basically do three times the

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gold price this year,

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displaying that leverage they have via
margins.

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But, you know, arguably, if prices stay up
here, not go higher, just stay here,

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you can argue there's still more upside in
these companies.

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Yes.

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And on that note, how are you positioned?

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What is your strategy at the moment at 91
in London?

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Well, obviously running a gold fund, I'm
exposed to those miners.

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And we have added some juniors where we
see more growth because a lot of the

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seniors don't have much growth.

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They are reducing costs, but they don't
have a lot of growth.

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So we've increased the number of holdings
we've had and added some smaller ones.

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In our more general resources fund, we
remain overweight precious metals.

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And I say precious metals because that's
overweight gold, platinum.

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and silver within the fund.

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Though, you know, that has been, we've
moderated that slightly this month after a

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very strong run.

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Okay, so everything set fair for gold,
seemingly.

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And copper, I just quickly want to talk
about copper because of where you've

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recently been for that gathering.

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And it's had a nice few weeks, actually.

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It's gone from the sort of 4.4...

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$4.4 per pound level up to around about
close to $4.80

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per pound.

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So a nice steady move and everyone's quite
excited about it.

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Are you as excited as they are?

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Yeah, we've been excited actually for two
or three months on copper.

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And in fact, there was very big news
yesterday because Freeport, who have a

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large mine, the second largest copper
mine,

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it's in Indonesia called Grasberg.

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Yes.

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They've had a major incident.

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They had a major flow of mud, basically,
into one of their mines.

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Sadly, two people died, five are still
missing.

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But that happened two weeks ago, but they
came out yesterday and they've reduced

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their production for this year by

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250,000 tonnes, roughly, and next year as
well,

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because it's going to take a long time to
sort this out.

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And that's a major...

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Supply disruption on top of several we've
already had this year with problems in

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Congo, problems in Chile and several
mines.

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So that's why we've seen copper jump in
the last day.

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Frankly, I think it hasn't done enough.

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I think, you know, we have a very tight
supply demand balance now,

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particularly over the next six months when
that mine will produce very little.

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And stocks of copper outside of the US are
quite low because most of the copper was

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moved to

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the US.

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in anticipation of tariffs, which didn't
arrive.

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Given the fundamentals that you've just
sketched out and also the potential for a

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dollar bear market to

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continue, could copper be the new gold in
the future, in future years?

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I think particularly in the short term,
copper looks, you know, very exciting.

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We always, we felt the market was
tightening and we felt that we needed an

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overweight,

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not that we knew it was going up.

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but the risks were much higher.

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It could end up higher than lower.

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Clearly, the news yesterday is encouraging
that.

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And I think over the next few months, if
demand holds up, and that is an if,

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I think we can see copper push higher from
here.

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George, thank you very much for your time.

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George Cheeverly is a portfolio manager,
resources at 91 in London.

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The views and opinions expressed in these
podcasts are those of Lindsay Williams and

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various contributors.

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and do not reflect the policy, position,
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Assumptions made on the analyses are not
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And since we are critically thinking human
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