Categories: Precious Metals
Topics: General Precious Metals / Gold Stocks

Kaiser Research Founder John Kaiser on Headwater Gold’s $65M OceanaGold Deal & Why the Junior Exploration Market is Finally Waking Up

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the quarterback over at Kaiser Research — Mr. John Kaiser. John, twice in a month… it’s great to have you back on. How are you today?

John Kaiser: Gerardo, it's great to be back on the show with you.

Gerardo Del Real: We joked a bit off-air that being a resource speculator is smart again, at least for the time being. Gold appears ready to break to new record highs. The copper futures price broke a new all-time high today and seems poised to go higher.

We also chatted off-air about some of our favorite names, and a lot of those are up 30%, 40%, even 50% in just the last couple of weeks. There seems to be momentum across the space so I want to get your thoughts on companies you like and a few that have had recent news.

But first, I’ve got to get your take on the overall markets. We've been waiting for this kind of market for quite some time, and it seems like it's finally happening — and happening in unison.

John Kaiser: Yes, it's a very strange market. We have a situation where US debt is going to keep rising without really doing much that's productive for the country.

Then we have "Liberation Day" resuming on August 1st with high tariffs and this bizarre idea of a 50% import tax on copper. What you mentioned earlier about copper futures — those are COMEX futures, which is what American manufacturers will have to pay. Meanwhile, everybody else in the world will still be paying something like $4.40 per pound — the cost to get it delivered from Shanghai or LME warehouses.

I don’t see how punishing efforts to reshore manufacturing to America with a copper tariff makes any sense. Even if we found a resolution and suspended all permitting requirements, you’re still looking at seven to ten years before seeing new production.

But one thing I am starting to notice is that permitting agencies, which historically have been under the thumb of the “not-in-my-backyard” anti-mining lobby, are finally getting the freedom to do what they’re supposed to do. They’re starting to approve exploration permits, and that’s a big deal. That’s what’s needed for the United States.

As far as gold is concerned, I think we’re getting closer to the point where the market stops fearing that gold will drop back below $2,000/oz and stops seeing this as just another price bubble like what we’ve seen over the past decade with palladium, cobalt, lithium, and even gold itself.

Frankly, we don’t need gold to go much higher. It just needs to stay stable and convince the market that it’s undergone a fundamental repricing and one that reflects a new reality where America is increasingly isolated from the rest of the world: the Global West, the Global East, and the Global South.

All of that is creating a really good environment for gold juniors. The push to source production from within the US — or at least from friendly neighbors — is lighting a fire under the space. And the juniors are just starting to wake up to that.

Gerardo Del Real: Let’s talk about one of those juniors that had news this week — and it’s a great segue because I just had the pleasure of interviewing the CEO, Caleb Stroup.

I’m talking, of course, about Headwater Gold Inc. (CSE: HWG)(OTC: HWAUF). Headwater made a really, really smart move — not a pivot, exactly, but a strategy that was ahead of its time. Years ago, they decided to focus on acquiring quality projects in top-tier jurisdictions in the western United States. They’ve done an excellent job of bringing in a strong pipeline of projects.

I interviewed Brent Cook a couple of weeks ago and asked why he joined their advisory board, which is something he doesn’t do very often. He spoke about how technically astute the team was. On a site visit, he said he was struck by the quality of the work they were doing from delineating targets to advancing projects to the drill stage.

So I wasn’t surprised this morning when I saw a news release announcing that Headwater Gold (CSE: HWG)(OTC: HWAUF) and OceanaGold (TSX: OGC) (OTC: OCANF) have signed a letter of intent to explore three projects in Nevada. That was expected — because I know how good they are at advancing projects and getting them drill-ready.

What did surprise me was the scale: staged exploration expenditures totaling up to $65 million. When we talk about juniors and upside potential, Headwater’s market cap is nowhere near that. And don’t forget, they’ve got other deals with other majors.

Can you speak to Headwater in terms of your take on the deal and where you think we are in the ballgame, if we want to use baseball terms, when it comes to juniors and their price appreciation?

John Kaiser: Headwater Gold has an excellent team led by Caleb Stroup, and they’ve been part of my Bottom-Fish collection. The reason I haven’t moved them up into the Favorites collection is because today’s news release filled a key missing piece.

The company has focused on the western United States, with an emphasis on Nevada and epithermal gold-silver systems — as opposed to the more complex Carlin-type systems, most of which are now tied up by the Barrick-Newmont joint venture. Several years ago, they struck a fantastic deal with Newcrest — similar in structure to this one with OceanaGold.

Newcrest, of course, is the Australian company that developed a strong interest in epithermal gold-silver systems. Caleb’s team had been scouting old centers and systems where there wasn’t much at surface — areas that had been poked at with shallow holes — and applying updated models to understand how these systems actually work.

Their strategy hasn’t been to just stake something and pitch it to majors. They’ve actually drilled scout holes to firm up their targets. Sure, they hope to get lucky early on, but the real value is in building geological context — the basis for a more extensive vectoring program. And Newcrest was into that.

But when Newcrest was absorbed by Newmont, that was a setback. Newmont targets much larger deposits and kept only the Spring Peak/Lodestar project, adjacent to the historic Aurora system. Caleb’s team has an interesting theory that all of that historic production — including from places like Bodie in western California — could actually be secondary to a larger, undercover system. That theory seems to have caught Newmont’s interest.

Still, Newmont’s treasury isn’t strong, and they ended up dropping the other projects. One of them — Midas North — had to go into the Barrick-Newmont joint venture area, so they had no choice.

This left Headwater in a bit of a bind. Without a big treasury, they couldn’t keep drilling scout holes indefinitely. They needed a new major partner. That’s what makes today’s OceanaGold LOI so important.

Now, most of the $65 million in potential expenditures is farther down the road. What really matters is the initial $2.5 million OceanaGold is expected to spend over the next year on the three Nevada projects. That will help validate the targets Headwater has already outlined and could set the stage for much more aggressive drilling.

This deal exposes Headwater to multiple shots on goal — early drill success from OceanaGold on any of these projects could light up the stock. I’m hoping to see the share price move up into the $0.50 range — that would mark a 200% gain for my Bottom-Fish club. At that point, given the broader market we discussed earlier, I could see Headwater evolving into a $1 to $2 stock.

They’re focused on Nevada, in a much-improved permitting environment, which is key. Of course, this is a non-binding LOI, but it looks like so many details have already been worked out that only some strange legal issue could derail it now.

Gerardo Del Real: Agreed. And Headwater has a portfolio of excellent properties. I suspect Caleb and the team will continue doing deals like this — deals that preserve upside for shareholders while mitigating dilution over several years.

Before I let you go, John, tell us where people can find your Substack. Of course, there’s KaiserResearch.com — but your Substack has some truly fascinating content. I really appreciate the big-picture thinking and how you break things down for your readers.

John Kaiser: Yes, it's kaiserresearch.substack.com — it runs parallel to my $450-per-year research service where we incubate the Bottom-Fish collection.

The Substack has two parts: general interest articles that are always free and then paid content that covers the Favorites; the Bottom-Fish that finally get upgraded as the story comes together. I send out enough of a preview to free subscribers so they can get a sense of what's happening.

The subscription is just $10 a month or $100 a year. It’s really a way to reach a younger audience — millennials, Gen Z — who’ve never really been exposed to the junior resource sector. Boomers like me are aging out, and this space badly needs a new wave of education and engagement.

I recommend everyone sign up for the free version and watch this evolving bull market unfold. I don’t think the real mania — the “pigs and turkeys flying” stage — will happen until 2027 or 2028. But that means the rest of this year and next year are the sweet spot for serious investors — a time to focus on quality companies like Headwater, the real value creators. 

Not everything will move at once, but it’s starting. This could be the best window we’ve had in over a decade to look seriously at the junior resource sector.

Gerardo Del Real: I couldn’t agree more. We wait years for markets like this… and this one feels truly unique in my 17 years in the space. I’m positioned for it, and I know you are too. John, always a pleasure. Looking forward to the next one.

John Kaiser: Gerardo, thank you. I look forward to it as well.

Gerardo Del Real: Cheers.

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