Silver may be Thomas Kaplan’s first love as he sees the potential for the precious metal to eventually push to $100; however, he is also not giving up on gold as he sees the yellow metal in the third-wave of a secular bull market that will take it “way past new highs.”
Many investors turned bullish on gold in mid-2020 as central banks and governments flooded financial markets with massive liquidity to support the besieged global economy, devastated by the COVID-19 pandemic; however, Kaplan noted that gold was already in a bull market long before the pandemic hit.
“All the pandemic has served to do is to make people now understand that the question of money and what is money when clearly it can be printed at will, he said. “The debasement of currencies is obviously very, very bullish for gold.”
Not only is gold backed by solid fundamentals as a monetary metal, but Kaplan noted that gold looks good from a supply and demand outlook. He said that he sees the industry struggling to replace the ounces of gold that it has produced.
“If Barrick is right, and [gold] production is declining by about 5% a year, for a number of years forward, we really are reaching a perfect storm,” he said.
With the gold industry suffering from new discoveries, Kaplan said that it is essential to move forward with projects like NOVAGOLD Resources’ (TSX: NG) Donlin property. The Alaskan-based project has 39,000,000 ounces of gold in measured and indicated mineral resources. The company just finished its biggest drill program in 12 years.
The Donlin project is a 50-50 joint venture between NOVAGOLD and Barrick Gold (NYSE: GOLD).
Kaplan said that is no rush to bring the project, which he describes as a “category killer,” to production. He added that it is more important that they fully understand the property’s geological potential.
“Our attitude is that this thing is going to be around for 50 years, maybe 100 years, maybe more, the exploration potential there is probably better than almost any other mining project in the world,” he said. “I think we can look forward to a huge mine life; what we really want to make sure is that it’s built properly from the front end. We’re extremely excited because things seem to be working out exactly as we’d hoped that they would, in terms of the drill program.”
Kaplan described the Donlin project as the “Holy Grail” in the mining industry not only because of its resource but also because of its location.
“Alaska is the second-largest gold producer in a country,” he said. “We’re located in a jurisdiction where, when I go to sleep at night, I know that what I thought I own the night before, I still own. As someone who made their bones in Bolivia, Zimbabwe, South Africa, Congo, I could go on, I believe that that era is over.”
