Eric Sprott Returns to Break Down All the Gold and Silver News You Need - Eric's Weekly Wrap Up

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Craig: Happy Friday from Sprott Money News at sprottmoney.com. It's Friday, June the 18th, and it's time for your "Weekly Wrap Up." I'm your host, Craig Hemke, and joining us this week as a special guest is Eric Sprott himself. How about that? Eric, thank you for sitting in as a guest this week.

Eric: Hey, Craig. It's good to be back. You know, I've been sort of tied up here with health issues and various other things. I don't really feel like I'm 100% up to speed with all of the things going on with economies and gold markets and things like that. But, the reason I wanted to chat with your listeners today is, I mentioned something about vaccines, which I think is very, very important and I'm not a doctor or a specialist or anything, but I'll make reference to where some information's available. And of course the whole Fed thing, the joke that the Fed thing is, and its effect on the gold market bothers me deeply, and we'll talk about that. And of course, I think Bob Thompson was suggesting that I'm very much involved in the Newfoundland gold plan. If we have time, we'll spend a little...a few moments on that as well.

Craig: I was talking to Keith Neumeyer yesterday. He said, we might just rename Newfoundland, Newsprottland. Just buy the whole island, right?

Eric: Well, I got about 20% of most of the companies there, so I'm well entrenched. And of course I do look up on it like an opportunity of a lifetime, much like Fosterville was through its involvement with Kirkland Lake Gold. So hopefully it plays out as I see it. I will chat about that towards the end of the interview.

Craig: All righty. And hey, just a reminder. Again, it is Sprott Money who brings all this great information to you, whether it's the "Weekly Wrap Up," the monthly precious metals projections, the "Ask The Expert" segment, which I just recorded yesterday with James Turk. That's something that will get posted prompt...

Erick: Oh, nice.

Craig: Yeah, and he is such a great guy, Eric, and a very informative segment yesterday though I'm sure they will probably put that up later today or this weekend. So look for that at sprottmoney.com as well. And of course right now until June 28th, Sprott Money has their spring into summer sale. That includes a bonus discount on select products when you store your metals at one of Sprott Money's Canadian storage facilities.

Now this is a call-in offer only. You can't do this one online. So if you have any questions about the sale or the storage program or just to place an order, of course, give us a call at (888) 861-0775. All right, my old friend, you were all over. I remember we were doing these things weekly for the last several years, but about this time last year, I guess earlier than this last year, you were all over COVID giving us updates every week about the seriousness of the situation. I know you've been following it in the time since. What are your thoughts?

Eric: Well, I don't specifically want to talk about COVID, but I want to talk about vaccines. And again there is a caveat that I'm not a medical expert, but I want to direct people to a couple of podcasts that I've listened to recently. And I'll give you the essence of the podcast. And the first one that I listened to, it's on something called the Citizens Free Press, and it's this top immunologist and pro-vaccine doctor, Byram Bridle, issues warning on what's the negative impact of vaccines. And the second one I'll reference is an interview that Greg Hunter had on "USAWatchdog" with Cliff Pie. And people will be...it's very easy to find that on the net, but let me just start off with the Citizens Free Press interview and what this doctor...who's a Canadian doctor by the way, he's a professor of immunology, I think, at Guelph University.

And he said, the evidence is in. There was a study of 13 healthcare workers who got 2 doses early, and what you receive when you get the vaccine is what's called a spike protein, which theoretically is the disease, and of course you're receiving a dose of this so your immune system can react. And the expectation was that the spike protein would stay in your shoulder. And what the study showed is no, the spike protein doesn't stay in your shoulder. It can go to your organs and it can go to your blood. And it is a toxin and it can have very bad effects. Those bad effects are particularly outlined in the interview of Cliff Pie, which I certainly would suggest people listen to that. And what Cliff did is he went through this exact same discussion. And Cliff, as you know, he's a guy whose business is watching things going on in the internet and sensing something early, and Cliff was great on COVID-19 early, early, early, and I'm sure he's going to be early on this issue with the vaccines. And if you listen to Cliff's interview...

And by the way, I'm speaking as a person who now has both vaccines and has received two doses. So I'm not feeling as comfortable as I might have, but if you listen to Cliff's interview, he suggests that some very negative repercussions may happen. And so I'm just...you know, leave it at, please listen to that, and make your own judgments and deal with whatever the situation is that you choose to believe in. And I can tell you that...I mean I have a very high regard for Cliff. I've seen many, many of his podcasts and he is very, very much in the forefront of a lot of things.

PS, he also suggested that silver would go to $600 and actually throughout the number of a thousand dollars in that same interview. So for us precious metals folks, there's two things to learn in that. So the concern I have, and you know, you're not going to hear about this, and if there's a problem with the vaccine, you're not going to hear about it. It's verboten, right? They won't let you talk about those things. So I encourage people to make up their own minds, whether they want to believe what's going on there or not. So if they would listen to those podcasts, I think they'll be way better informed.

Craig: We're all basically living in a giant phase one or phase two trial, and that people need to be aware of that. You know, it doesn't mean it doesn't work, but there are definitely things that get worked out during those phase trials that we're kind of all in the middle of.

Eric: Yeah. I mean it's sort of almost irresponsible to think that you could come up with a vaccine that fast that's been that well-tested, okay? I mean, it's just almost impossible. It's never done, except this seems so extreme that we're going to approve it. And of course the approval was that the rewards outweigh the risks. And of course, we start hearing about some of those risks now. And we hear about risks that we didn't even know about before, nobody knew about because it's in the system. So we all should go in with our eyes wide open.

Craig: That's right. You know, what's interesting about this, as well is here we are talking about trying to get out of this pandemic by vaccine and natural immunity and the variants and the mutations and everything else. And Eric, nobody even heard of COVID 18 months ago. I mean we were sailing along at the end of 2019. Everything was, you know, in its proper place, but yet now this week, we're supposed to believe that gold and silver have been utterly destroyed along all the rest of the commodities because all of a sudden the Fed is thinking about a rate hike in 18 months instead of 21. I mean, again, nobody even heard of COVID 18 months ago, but we're supposed to believe everything the Fed says about a rate hike 18 months from now.

Eric: Yeah. No, it's funny. I shake my head at the whole thing. In fact, they don't really even say that. Okay? It's a stupid dot plot thing where a couple of guys, a couple of governors said, "Yeah, well, there might be 2 in 23." It's all orchestrated. Who's kidding you. I think the one thing that we all know and I'm sure the listeners know it, and so I'm not really passing on any information they don't know, the inflation rate is ridiculous, and I suspect it's not going to get any better here. It's so far beyond this 2% and 4% stuff they talk about. Anybody who shops or buys knows this, okay? It's just ludicrous that we would think it's transitory. I mean, we're allowed to do our own thinking, thank goodness, and of course the Fed realizes they still have this economic dilemma.

By the way, even as recently as this morning, I was looking up the fraud that's going on in the unemployment insurance claims and there's many, many articles about it. And it's estimated there might've been $400 billion of fraud. Yeah, $400 billion because...and by organized crime by the way, because when you applied in a state, you didn't have to prove you lived in the state. And of course they already had the information...everyone's information because of the various acts that have gone on overtime and that, of course, people offer up that information on the internet for some sort of fee.

And so all these organized crime were applying for these things under various names and various states, just...and I can't believe it. Whenever I see a number where they say...they used to say they were a million new and...sorry, initial unemployment insurance claims this week, okay? Then the next week could be another million, and the next week another million. Excuse me, you're telling me we're an annualized rate of 52 million people here with initial claims? Are you serious? And even the last one, which I think was around 400,000, I mean, 400,000 people with their first claim? Are you kidding me? Like, they got the first claim, the guy's got to have been fired that week or lost his job that week. Like, I don't believe it. Okay? So maybe...

Craig: Yeah. I watched "The Sopranos," right? You just said Paulie Walnuts and Christopher down there.

Eric: Yeah. And what if 200,000 of those initial claims are fraudulent? Or maybe when they get a million, 500,000 were fraudulent because they mentioned potentially half of them. Well, maybe now most people are at least getting their job back, theoretically. Now they're just fraudulent.

Craig: So, Eric, what do we watch next? Because this was just so deliberate. I mean, we watched silver be capped at $28 for a month. I saw open interest in COMEX silver rise 14,000 contracts over 3 days last week. That's 70 million ounces created from nothing. The banks took the short side, sold it to the specs, capped the price of $28. And now yesterday, all of that open interest comes back out as the banks cover those shorts as the specs dump, and the banks make a couple dollars on 14,000 contracts. That's good work if you can get it. What's next? I mean, are we now strung along by the Fed watching for the dollar to roll over again, you know? And then we got Jackson Hole in August and a Fed meeting in September. I mean, I'm having a hard time coming up with a rationale to see a spark now to drive us back to $2000.

Eric: Well, you know, they have to cover these things sooner or later. And of course the funny things that go on in the commodity markets, particularly silver is where, you know, I think 2 days ago we had something like 400,000 contracts of silver in 4 hours, which is like 2 billion ounces, right? Are you kidding me? That is just totally preposterous. And even the average daily volume, when you look at the average daily volume versus the actual silver that might ever be delivered, it's such a joke that this is not a commodity market. This is just some place where guys can affect pricing. And of course, I think they affect pricing, because you're playing in the paper markets of SLV and PSLV and of course all the options and all the mining stocks. I mean, it's just one big arena where it's wash, rinse and repeat.

So what can we do about it? Well, first of all, I know you do this and I know I do it, I look at the daily trading on the CME. And of course, I like to see how many contracts were put up for delivery, and also for example, yesterday...yeah, yesterday, the EFPs, which I don't think anyone's ever really understood, okay, but we had something like 30 million ounces of silver EFP'd yesterday, and we had a million ounces of gold EFP'd. Like they just went off the exchange into, you know, some cloud somewhere and somehow settled, right? So I like watching that and realize, okay, fine. As long as people continue to buy physical, and I think every day this month, the gold contract has increased its demands for physical gold every trading day. So people are still in there.

And I think in the case of silver every day, but one and the one was yesterday, but it wasn't material. The day before it was very large, the amount of silver called for delivery. I think it was like 10 million ounces...no, probably a million [inaudible 00:14:43] ounces on Wednesday. So, as long as that data holds together, we had the Reddit walls silver squeeze, that I think is very, very active. God bless them. I think they have it figured out that there's a shortage, and if you just keep buying, someday these guys have to come into the commodity markets and close or open, and just really suffer egregious losses. So, we'll keep our fingers crossed and that I think ultimately it won't happen.

Craig: How about this, are you paying much attention or have you heard much about these changes from Basel III that are coming into effect during this month?

Eric: Yeah. I read about them all the time. And first of all, I have a very difficult time imagining the BIS would be doing anything to negatively affect the commercial banks. I mean, where did this come from? And quite frankly, the only logical explanation I ever saw for it was Hugo Salinas Price wrote an article saying that the Russians and the Chinese forced the BIS to do it because if they didn't do it, they were going to create a new gold backed currency. Now that was a very interesting theory. And of course those are powerful, powerful countries, you know? Like they're not economically unimportant countries. In fact, China is the most important economically, quite frankly. So who knows? I don't know. And I've read many articles saying it's gonna be gold positive. Maybe it is, and maybe that's why the raids are going on right now so that they can cover up a little bit of their position. We'll see.

Craig: Yeah. We've talked about that being...you know, for all eternity, it seems about just the future's tail wagging the spot dog. Right? So if you could drive the future's paper market lower, you can get spot price down and maybe you can get yourself out from under some of those unallocated positions.

Eric: Totally. And some of it I'm sure, Craig, is just running the stops, you know? Lots of people have short stops in these things. Right?

Craig: Yep.

Eric: So like when you have a big day, like yesterday, imagine how many people had stopped us [inaudible 00:16:53] they just got pushed right through. We've seen a lot of these very sharp selloffs that were more shallow than this. Okay? And then they rally right back again. That's why I think they just ran the stops, try to cover some shorts, move on.

Craig: Let me just give you with this...I'm gonna hit you with one little fun point that I think the listeners will enjoy, and then we'll get to Newfoundland. There have now been four massive red candles since last August. There was one drop of $78.20 on January the 8th, there was yesterday $86.60. A couple of days after the election, $97.30, and then right after the top, last August, $91.40. You take all of those and you get something like $350 in just those 4 days. You take those four days out and we're actually up since August.

Eric: No, it's just...it's the trading methodology, right? It's there to disadvantage investors. To me, that's just the bottom line. It's there to disadvantage investors and we should all be embarrassed by it, particularly the CME.

Craig: To profit the banks and embarrass the investors. All right, let's wrap up, my friend, by talking about Newsprottland. I know a lot of guys like you have private islands. So I think that's pretty cool that you have one up there. It's a little chilly most of the year, but I think that it's beautiful.

Eric: It's a big island, but it's got a lot of gold on it, Craig.

Craig: Yeah. Apparently.

Eric: So let's talk about it. I'll tell you what took me there. Well, first of all, I guess I should start with Denis Laviolette, who's the president of New Found and the president of a company...or CEO of a company called Goldspot. Goldspot does artificial intelligence to find mines. So Denis is a very, very smart guy. He's got 45 PhDs working for him, doing analysis on properties all around the world. And he actually showed me a core that he had back in 2019. It was a private company then. And I was, "Wow. Look at that thing." It was glittering, and I decided that I should invest in the private company at the time and so...because I was in and I watch events and that he was starting to put some pretty significant drill holes out.

And then I started to read more and more about Newfoundland and its endowment. And I came upon a professor, Rich Goldfarb, who's apparently known as Mr. Orogenic Gold. And I had a long chat with him about the endowment of Central Newfoundland, and he convinced me that it was very analogous to other large gold fields, like the Victorian goldfields in Australia. Then I read a report by Professor Ian Honsberger who wrote for the Geologic Society of Canada, where he was comparing the possible endowment of Newfoundland with what we call the Abitibi belt, which just goes from Kirkland Lake all the way over to Huron around. It's 100 kilometers long. And the belt in Newfoundland is about 100 kilometers from the sort of northeast to southwest. Then I had a long chat with Sean who was an explorer who first got into the Yukon and came up with a theory that there was quite an endowment there.

He subsequently in, I think 2015, started to focus on Newfoundland and he staked almost all of the land there. And he basically said, "Look, when you can have a soil anomaly there, a till sample, and it's got gold in it, the likelihood of you finding gold below it is very, very high, okay, and right below it." Then we had Quentin Hanning, my old friend Quentin Hanning who, of course, went down to visit Fosterville on my behalf and came back and said, "Oh my God, Eric, you're not going to believe this." And then he and others just like Denis, Denis Laviolette, are comparing what New Found has so far to Fosterville. And I can tell you then, in terms of grade, New Found came up with a hole...there was 146 grams over 25 meters. And I went back and compared my notes on Fosterville and that hole had more gran meters than any hole at Fosterville.

So that was a little telling. Okay? And of course, if you listen to some of these presentations, take Quentin's and Denis' they both suggest that New Found is not looking for a deposit. They're looking for many deposits and they already have indications 2 kilometers north of Schitts, which is where the primary discovery was that they've had some very high-grade intersections already. And of course by studying the property they have...which is quite extensive by the way, it's about 70 kilometers long. So it's like owning 70 kilometers of 100 kilometer Abitibi belt, but it's 2021. And some people said Newfoundland today is like Timmins in 1918, when they first started finding things, and I tend to believe that.

And I can believe it because I see what many companies are doing there. Sokoman, which is a company I had been involved with for quite a while ever since '18, I think their first hole was released in '18, they've had some tremendous hits. Their best hit was 11 meters at 44. They got another one, 5 meters at 124 grams. I mean, these are crazy, crazy good. A company just north of New Found, called Labrador Mines, [inaudible 00:22:57] on with 3.6 meters at 20 grams. So they got their first sniff of it. These guys are all on the Appleton Fault. Okay? And then over to the west, there's the Valentine Lake deformation zone where around Valentine Lake you have Marathon that already has a deposit that's around 5 million ounces. The Sokoman's on that same belt. And it's these sutures that were caused by the European plate bumping into the North American plate and things breaking up 400 million years ago that have caused this endowment in Newfoundland.

And you got about six major structures, all going northeast, southwest, and off of those structures, you have these indications of gold and diamond, which not much drilling has been done. So it's really early days. And it's almost like in Australia where, you know, everyone wanted an open pit mine. And so it wasn't until Fosterville found this deposit underneath the open pit, "Oh, well maybe we should be looking underneath these things." And now guys are finding things. And it's funny because the mining in these countries started in the 1850s and '60s and '90s, well, how come we're just getting to it now? But that's what's happening. We're just getting into it now.

Craig: I can tell you're excited about it.

Eric: How can you tell?

Craig: I can sense the twinkle in your eye just through listening to your voice.

Eric: Well, it's been fun and I own lots of companies there. I own C2C, Canstar, Exploits, Orex, Sassy, Gossan, Apalica, K9 and many others. So I find it intriguing and I hope each of them find something because I think that's the kind of endowment that we're looking at, that anybody on these structures has a very, very good chance of finding high-grade gold.

Craig: Yeah. Yeah. I've had people on my site, Eric, post like websites where your holdings are posted. Are you familiar with some of those?

Eric: Well, I know some people do keep those holdings updated. Yes. I don't know specifically which site it is.

Craig: I can't remember where they are but I know that people, if you're resourceful enough, you can find that on the internet. And you know, the other thing that comes to mind, Eric, is something you've taught me over the four or five years that we did these calls, was that, yeah, you cast a wide net and a lot of people do that, and you're hoping to get 1 out of 10 or whatever, you use to talk about your batting average bank, but then the key was you get one right, you don't just like, take your seed money out and let it ride. What your strategy has always been, you get one right, you start pressing your bets.

Eric: Press the bets, that's what I... At New Found, I'm just under 20% now. I bought it within the last two weeks even up at...I think $12.85 might've been my highest price, having started buying it at $0.75. So if things look like they're coming together, don't be selling. And I'm not a believer in, you know, taking a profit for profit's sake. I'm a believer in analyze it, try to imagine how big it could be versus where it is, and if there's lots of upside, just press it.

Craig: Just press it. My friend, it's always so...it's so fun to hear from you. And I'm glad that the situation is such that you're able to check in. I'm not sure how frequently we could ever do this going forward, but this has been a treat. And at this point I wanna wish you a fine weekend. And again, I hope we can talk again sometime soon.

Eric: Sure. Okay, great. Good to be back and happy to say hello to all your listeners. And let's hope we can all prosper.

Craig: Let's hope we can. Let's hope we get some sanity back in these markets too. And again, just one last thing on your way out, please throw some thanks toward Sprott Money. They are the ones that put all this information out there for you. Either visit Sprott Money the next time you're in the market for physical, or at the least, if anything, give us a like, a share, maybe subscribe to whichever platform you listen to this content on. That'll help us get the word out. Again, we've been speaking with our old friend, Eric Sprott, and great to get caught up with him. Time to wrap up though and send everybody on their way. Thank you for listening, everyone and we hope you have a great weekend. And we'll have another "Weekly Wrap Up" for you next Friday.