Rick Mills, Editor/ Publisher, Ahead of the Herd: 

It’s good to be talking to you again Quinton. We had an exceptional year in 2025 and I’m looking for a repeat for my readers in ‘26. We’ve got a hell of a market for commodities and precious metals and metals.

The Bloomberg Commodity Total Return Index is heading for its strongest monthly gain in decades. Bloomberg’s index is up a whopping 15%, that blows past some of the China-centric bull market super-cycle months that started back in ‘02.

I think this bull has got some legs to it. What are your feelings on the overall market condition and its health?

Quinton Hennigh, CEO, San Cristobal Mining:

Look, it is an interesting market. I would say the behavior of gold and silver prices in particular is truly anomalous. If you look at the history of silver, for example, it has a history of spiking and then coming off pretty hard. Look at January 1980, and then again May of 2011.

In both cases, silver went slightly above $50 and then it pulled back sharply within a week or two. In other words, it ran up the flagpole and straight back down. Everybody’s telling us the same thing right now, they’re saying, “Oh, it’s spiked and it’s going to come off.” Well, look at it. It spiked in October.

People said it’s going to come off. Well, it didn’t. It kind of pulled back a bit, settled, and then built a new floor.

Did it again around end of November, early December, went up to 65 or something, pulled back a wee bit, it stabilized and then it took off. Even Christmas, I think it was Boxing Day, silver went up to $80-82 or something. And then everybody said, “Oh, that’s it. That’s all she wrote. Pulled back and it’s going to crash.” Well, it pulled back a little bit, stabilized and went right back up.

Here we are. I’m looking at my phone right now; it’s $115 an ounce. And the darn thing if anything is looking relatively stable. Might it pull back? Sure. Who knows? Will it go down 35%? I don’t know. But it hasn’t the past three or four times in the past few months. So, this thing seems to have some legs to it.

RM: So, what’s driving gold, silver and copper to new highs all at the same time?

QH: What’s driving it? Is it the short squeeze? Is it international competition for silver metal? Like industrial needs? China versus the rest of the world? Don’t know.

But there’s something fundamentally different driving things this time. Gold too. We all know there’s a big push in buying gold by central banks. Central banks have more gold now than US debt. It’s the first time in a long time.

That’s great. But you’ve got to ask yourself, what’s driving it this time? Is there some fundamental shift in thinking that’s driving things? Same phenomena. Everybody says every time gold jumps up a few hundred dollars they say, “Oh, it’s peaked. It’s going to come off hard.” Well, it’s done it about five times now in the past year, year and a half. And here we are, $5,300.

So, I’m not going to bet against anything here. Does it have to peak? At some point it’s going to find a happy place. Does that mean it comes off? Well, maybe not. Maybe it’s going to stabilize at a higher level. Don’t know. Let’s put it this way. My gut says we’re not going to see $2,000 in gold again in our lifetime. My gut says we’re not going to see $40 silver again in our lifetime. I think that day is gone.

Even if gold did come back 25%, silver came back 20%. Those are phenomenal prices. Mining companies, they’ll do great.

RM: There is a lot of talk about miners not keeping up to metal prices.

QH: Quite frankly, mining companies are lagging behind the precious metal prices. If you look at the margins that these companies should see here in the not-too-distant future, are they trading at those valuations? No, not even close. I was at a conference the other day. Rick Rule spoke. He said he sold his silver holdings. Really interesting.

But guess what? He’s not abandoning mining, abandoning commodities. He’s simply rotating a lot of that money, it sounds like, into the equities, because he thinks that equities, silver equities in particular, companies that produce silver, are undervalued.

I tend to agree. I had a large amount of call options on SLV here recently, and I sold the call options about a week ago, and I piled into SILJ and SIL call options. So, I’m right with him.

RM: I think what’s going on is we have all the old reasons, we see structural supply deficits in silver, gold, and copper. Mine supply no longer meets yearly demand. And when you take a look at overall exploration budgets for the past so many years, there really hasn’t been a lot of money spent towards Greenfields exploration.

Look at copper, from 1985 to 2012 there were 86 discoveries totaling 1.05 billion tons, from 2012 to 2025 there were 31 discoveries totaling 132mt Cu.

There’s been few large new copper mines found in the last decade, and it can take +20 years to go from discovery to mining. And so, you take that, and you look at all the problems in the copper market, and those troubles directly transfer to the silver market because 30% of silver supply comes from copper mines. If copper supply is in trouble so is the silver supply.

So, I think there’s a lot of missing information out there. Which stock would you like to talk about first?

QH: Well, look, I’m kind of commodity-agnostic. I mean, obviously silver and gold are the flavor at the moment, and I think it will be for some time.

But I’m looking at a number of things. In the gold space I am still a very fond shareholder of Sitka Gold (TSXV:SIG). I think that their Clear Creek project is probably one of the best reduced intrusive stories up in the Yukon. It’s got easy road access. It’s close to infrastructure. It’s also large scale.

You look at the number of discoveries they have now, sizeable discoveries, including the new Rhosgobel discovery. This thing should be a very large endowment. It’s certainly 5 million ounces, but probably 10 million ounces is achievable.

It’s a relatively early stage exploration company, certainly on some of the new targets. I think they have a lot of upside. They have enough drill holes in Rhosgobel now to see that it’s a very large system. And I think they plan to put a resource out, but it’s wide open. If you look at the drilling, I’ve looked at it on the computer, it’s incredible. It’s open along strike, it’s open at depth, it’s open at width. This thing is going to grow and grow.

And so, I’m very optimistic about Sika.

I have a number of other gold stories I’m watching that are a little bit earlier stage. Some of them are interesting, like Norsemont Mining (CSE:NOM) down in Chile.

I spoke with their geologic team, and I took an investment based on my discussions. I think Norsemont has a very clear plan around drilling a bit deeper and looking at the higher-grade brecccia feeder zones for this.

Obviously, there’s potentially a porphyry at depth, but I think that they have a very good shot of providing a pretty high-grade gold system that quite frankly has been sitting there in plain sight for many years now. It’s only partially mined, so Norsemont is a big favorite of mine.

The silver space, I was at VRIC for a day, I was there long enough to actually see a few companies, hear a few stories.

A couple ones that really stuck out with me, Argenta Silver (TSXV:AGAG) sounds quite interesting. I look at the geology of that system in Argentina, quite frankly the geology is strikingly similar to something that I’m working on in a private company. I’ve got San Cristobal up in Bolivia and the belt of silver-rich deposits that follows the Andean arc continues into Argentina.

Quite frankly, the geology that they’re seeing there at Argenta’s project looks very similar to what we’re seeing — very high grades, very similar near-surface regime of epithermal. I think that one looked fantastic. I haven’t talked about it at all, but I saw it, I said this looks pretty good, so I bought some shares the other day.

I’m a little bit fussy about silver because there’s a lot of fluffy silver stories that just, in my view they’ve been around the block or there’s something wrong with them. So, I’m not a big fan of most of them.

It’s pretty hard to get past them, but I am pretty keen on Silver47 (TSXV:AGA) as well. I know Red Mountain quite well. It’s a super-rich VMS system up in Alaska.

It’s basically a very well-endowed VMS system that could be multiples larger than it currently is on the books and the resource is robust, but it could be much bigger. And they have a number of targets that they’ve either identified this season or are following up with some drilling here. I think over the next year or two, this could be a really good drill story. So Silver47 just on Red Mountain looks quite interesting.

The other one that I like, the other project they have is Mogollon, which is down in New Mexico. And Mogollon, I did some work. I spent the better part of three or four months working there when I was at Newmont (NYSE:NEM). And I feel that Mogollon is perhaps one of the biggest epithermal high-grade silver gold systems left in the United States. It’s a district that just has escaped any modern exploration until recently.

I think the company’s starting to drill there again now. They’re really sorting out some basic understanding of the district. They’ve identified major extensions of the vein system to the north.

I think Mogollon looks like an absolute winner. So those are my two silver stories. And then I’ve got copper.

Mogotes Metals (TSX-V:MOG) is certainly a very high priority for me. I own quite a bit of that. Mogotes straddles the Chilean and Argentinian border, it’s immediately south of Filo. So, we already know there’s a large-scale porphyry copper-gold potential in this area. And quite frankly, the geology seamlessly continues from Filo down into the Mogotes ground.

I think the targets they have are phenomenal. I think the drilling that they’re doing right now is going to tell us whether they might have a discovery or two. So, I’m very interested to see how Mogotes plays out over the next few months as they drill some of these targets.

And then the other one is BCM Resources (TSX-V:B). BCM is in southwest Utah. I see BCM as a discovery already. Back in 2023, they drilled a hole that encountered something around 155 meters of about 0.6-odd percent copper, but it also had about 0.2 grams gold in it. And that hole has not been followed up yet. I am actually working with Sergei Diakov. Sergei is the CEO there. Very sharp guy. He’s the guy that found Oyu Tolgoi a couple of decades ago.

Sergei knows what he’s doing. This is probably one of the highest conviction discoveries I see out there in the copper space. I’ve taken a very large position in BCM and I’m trying to help Sergei right now to circle the funding and the drill contract and so forth that he needs so he can start drilling at Thompson Knolls again within the next month or two.

We’ve got a lot of exciting things. So, there’s two gold, two silver, and two copper. How does that suit you?

RM: I’ve followed Sitka Gold since early last year. I just don’t understand why Sitka hasn’t caught the market’s attention more than it has.

It’s trading for roughly a dollar a share, which gives it a market cap of $300 million. And with everything it’s got, you’d think that thing would be getting driven up quite handily. I mean, it’s funny that it just hasn’t caught on.

So, I think you’re right. I think it’s a bit of a sleeper there.

QH: I think the answer is quite simple. If you look at Sitka, it does have a fairly long history, a shareholder base that goes back quite some time. And whenever you have a company like that, where there’s shareholders that were in, five, 10 years ago, and we’ll call them fatigued, okay? They tend to weigh on the stock at least to a point until they’re cleaned up. And I think you’re simply seeing some of those early shareholders saying, “Okay, I’ve made some money now, I can exit.”

You’re kind of seeing this perpetual paper come out. But quite frankly, I see it as an opportunity. I’ve been buying stock pretty routinely now since about early, mid-December, when their warrants expired and the price didn’t move up.

I said, “Well, this looks like a great opportunity to me.” So, I’ve just been nibbling away at it for a long time now.

RM: I’m going to put in a couple of stocks here. I like Marc Blythe’s Au Gold (TSX-V:AUGC). I’m also going to pop in David Hottman’s Orestone Mining (TSX-V:ORS).

QH: I know Marc, I talked to him two days ago, I was in Vancouver. So, I got to talk with him for a bit.

RM: Perfect.

QH: Mark’s been involved with a number of stories. He’s a pretty savvy explorer. And he’s really found a good project in Victoria, Australia.

We’re talking a gold antimony system. It’s an epizonal system. It’s relatively early stage, but in terms of exploration, it hasn’t seen the degree that say, Southern Cross or Fosterville has seen.

But it’s got all the hallmarks of a classic epizonal orogenic system. Marc and his team I think have a good shot of finding another high-grade discovery. So, it’s very interesting at a high level.

I’ll plow into it a bit more. I haven’t bought any stock yet, but I’m going to look at it a bit harder over the next couple of weeks and see if I can establish a position. And I think it’s warranted.

As far as Orestone goes, I’ve been involved with that one for a while. Let’s see, I think probably at least six months, maybe it’s close to a year now. And I really like what they’re doing in Argentina.

It seems to be part of a larger porphyry system. They clearly have worked hard to consolidate their land position, which is good. That’s always a good sign when I see a company diligently bolt together land, and what they see is a high-conviction story, I think that’s a good move. And these guys have done a good job.

What is it? Well, they have this blatantly obvious oxide gold system.

It’s a near-surface expression system that’s sticking out of the ground, of a probable porphyry origin. The porphyry might be a bit deeper, obviously, but it’s a pretty broad argillic zone with, in places, high-grade gold; we’re talking multigram. It’s not just like point X gram or one gram or something.

It’s basically multigram. It really hasn’t seen any modern exploration. There was drilling, I think, way back in the Mansfield days.

So, we’re talking like 20 years ago, maybe, at least. I know that those guys were quite smart. They had other projects in the area that I think distracted them, but there were some pretty good results in that time period.

I think this is the first time that this target has been followed up since then. But in my book, it’s, I’m not going to say a no brainer, nothing’s a slam dunk, but it is a pretty straightforward target. And these guys are going to give it a drill test here in two, three months.

I spoke with them in Vancouver, and it sounds like they should be in a position to drill within a couple of months.

RM: It’s a great story, really intriguing.

QH: It is, I think they have enough metallurgical data to show that it’s non-refractory. This is basically an oxide system. I think it looks good on that front, for sure.

RM: Do you think our gold mining industry is healthy here in the West?

QH: Oh boy, that’s a big question. Look, the mining industry in general is struggling. I’m going to be very blunt in that it’s struggling because it doesn’t have a lot of vision driving it.

There are very few younger people coming into the space. It’s been a problem for many years now. It’s one that I think I’ve talked to you about in the past.

I’ve waved my arms, yelled and screamed at conferences, even in Vancouver the past couple of days, I had a couple of opportunities to bring up the subject in my talks that I gave. The mining industry’s in a world of hurt. It’s been undercapitalized.

It’s understaffed. We don’t have mining professionals like we need. We need geologists, we need engineers.

We need a lot of technical people that not only work at these mining companies, the big ones and the small ones alike, but the ones that have the vision to actually run a mining company. And I’ll give you an example. If you look last year, we had a number of CEOs announce they were stepping aside or flat-out left the major mining companies.

Gold and multi-commodity companies alike. Rio Tinto, BHP, Barrick, the list goes on and on. There were probably eight or 10 notable CEOs step aside from their respective companies in the past 12 months.

Well, I happen to be in the ICMM Council, and I walked into the room in October, and I looked around and I thought, “Who on earth are all these people?” It was strange. I’m used to seeing a lot of the CEOs there and they were interim CEOs or people that I had not recognized.

And I think, “Wow, this says something about the state of the mining industry.” Where’s the leaders? Where are the generals? it’s very strange right now, Rick. I don’t know what to tell you, but we’re going to have to see a complete redo of the mining industry to get it back on its feet.

And I think really to instill that vision, you need vision to pursue acquisitions. Who’s there to make decisions like that?

RM: That’s the big problem I’ve got. I mean, we all know that the junior positions and the geos and the workers, there’s a shortage of those not going to school and graduating.

And I know you’re a huge part in trying to remedy that, but how do you remedy the fact that for a decade now, the heads of mining companies have had zero vision because they basically can’t see past their dashboard because they were so concerned with austerity and trying to survive in the environment we had. And now all of a sudden, you’ve got this great opportunity in front of them, and they don’t have the vision. They don’t have the M&A experience.

They don’t know how to run mining companies that need to actually do something besides survive. And I think that a lot of this changing of the old guard at the top has got something to do with that because we need new leaders. We need new leaders with vision and in our mining industry, and I’m just scared it’s not there.

So, I’m 100% with you on that one.

QH: Well, it’s going to take time. I don’t have an easy answer for you.

You cannot just magically snap your fingers and create mining entrepreneurs. You certainly can’t find talented technical people that understand mining enough to really drive that vision. And when I see a lot of, nothing against accountants and lawyers, but when I see a lot of accountants and lawyers take the roles at the helm of these companies, whether it’s the management or the board of directors, it’s a worry.

That’s usually the beginning of the end for a mining company.

RM: Well, it is because they don’t have the freedom of thought, the vision, they’re numbers people.

Overall, the mining industry might be under some strain, but they’ve certainly got a market in which we can benefit from owning juniors because we have that kind of leadership in our juniors that we need. Do you agree with that?

QH: It’s certainly true for some of the juniors — the ones that do have that leadership and especially technical ability that I like. I get a bit worried about some junior companies that especially when the market gets hot like this, that don’t really have that leadership. We’ll call them lifestyle companies or something like this. Those are the ones I worry about.

But look, I would say most of the talent right now in the mining industry and the exploration side of the business is in the junior space. And you know which companies have good, solid, savvy explorers; those are the ones you’re going to focus on.

RM: I think the eight that we mentioned today can be used as a good example of management working with shareholders for shareholders and working for discovery and development. So, I think maybe if people look at the management teams that we’ve presented here, they might start getting an idea of what it takes to be successful junior.

QH: I agree. Again, focus on the companies that have strong technical team and know how to make discovery for sure.

RM: Just a little off where we are. I see Tavi Costa was a long-time member of Crescat Capital and he posted not too long ago that he was leaving Crescat and forming his own fund.

You are also a very busy guy, tell us what you are occupying your time with.

QH: I’m a good friend of Tavi’s and I wish him well. I think he’ll do great. Tavi, he’s a young guy who has a lot of aspirations.

He certainly holds a lot of the macro themes that I hold dear, like mining, commodity-related stuff.

I am CEO of San Cristobal Mining, which is a private company. I’m quite busy with San Cristobal and I’m doing a lot of fun exploration and so that’s my day job. That is 110% of my effort.

And as far as helping direct investments and stuff, for Crescat, sure, I’m still helping Kevin out there.

I love to see money coming into the mining space through multiple funds.

RM: Well, that’s what it’s all about. Funding great explorers, isn’t it? The juniors?

QH: Correct. Yes, exactly.

RM: Do you want to have a closing here, Quinton? Anything you just want to say that maybe we missed or maybe expound on a little bit?

QH: Going back to where we started talking about commodity prices, it does seem like an anomalous time.

In my view, I’ve lived through multiple gold cycles, even back in the late 1970s up until January of 1980 when gold and silver prices peaked. And this cycle is different, guys. I don’t know what it is.

Yes, they’ve gone asymptotic and currently they’re trying to figure out where they want to be; it’s price discovery phase right now. But it does feel genuinely different.

Even if commodity prices came off, if silver and gold came off 20, 30%, the margins that mining companies are going to see here, even with a pullback like that, are going to be jaw-dropping. So, in my book, it’s all systems go. I view it as like a series of train cars.

The first car is the commodity price. They’ve taken off. They’ve done really well.

As you make money on those, you can rotate it into the next car, which is the producers, right? You can put some money into there and then the next car after that is the explorers. You’re seeing that cascade of money coming down. I see the money showing up in the explorers, but I don’t see it at a whirlwind pace yet.

Okay, it’s still got some room. So, I’m more looking at investing in the exploration realm. And I think that’s where we’re going to see the next big uplift.

RM: That’s a good point because when you look at the surge of M&A in the big miners, I mean, we saw Anglo Teck, we’re seeing Glencore, Rio, we’ve seen so many companies merge and bought. The problem with this is that of course it’s not increasing global mining reserves at all. What it’s doing is just consolidating mining reserves basically under a few roofs.

And sooner or later, these major mining companies are going to wake up and are going to realize that “We’ve eaten each other. Where are we going to get our future mining reserves to replace what we keep mining?” It’s pretty obvious who owns the world’s future mines, and that’s our junior resource companies with their in-situ resources.

Sooner or later, the majors are going to wake up and go, “We can’t do exploration on our own. We’ve done all the brownfield we can. We’ve acquired and eaten all our peers and runts. Now we have to start moving down the food chain.” It’s been kind of hit and miss and spotty, and I don’t think it’s going to be a sudden or even a slow increase. I think it’s going to be waking up one day and finding that one of the majors has this incredible thirst for junior’s resources.

But in the meantime, I think people are going to realize that juniors do own the world’s future mines. And maybe they should be looking at investing in good management.

It could be as simple as that.

QH: It could. It goes right back to what we were talking about. We’ve got a dearth of visionaries out there, but time will take care of these things.

Can’t worry about what needs to happen over the next five years. You’ve got to look at the here and now. And I would agree that there’s only so much rearranging of the deck chairs that one can pursue.

I mean, basically what you said is, the major miners have bought and consolidated basically everything we know about, right? We have shifted the chairs around. Well, you’ve still got the same number of chairs. We’ve got to see more chairs come in.

These acquisitions of the junior companies, these junior assets is the next part of the cycle. And that’s going to probably unfold over the next five to eight years is my bet.

RM: I see such a bright future for our juniors, we’re going to have much more than our 15 minutes of fame. I want to thank you for doing this again. It’s a great way to start off the new year.

QH: Thank you, Rick.

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Richard owns shares of Orestone Mining (TSX-V:ORS) and Au Gold (TSX-V:AUGC).

ORS and AUGC are paid advertisers on his site aheadoftheherd.com

This article is issued on behalf of ORS and AUGC.

Quinton Hennigh owns shares of Sitka Gold (TSX-V:SIG), Norsemont Mining (CSE:NOM), Argenta Silver (TSX-V:AGAG), Silver47 (TSX-V:AGA), Mogotes Metals (TSX-V:MOG), BCM Resources (TSX-V:B) and Orestone Mining (TSX-V:ORS).

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