➡ James McDonald, CEO of Kootenay Silver, discusses the potential impact of political changes in Canada and Mexico on his company. He expresses concern about the new Canadian prime minister’s policies and the influence of U.S. politics on Canadian elections. Despite these concerns, he remains optimistic about the value of precious metals, particularly silver, due to the ongoing devaluation of fiat currencies. He also notes an improved environment for mining in Mexico under the new administration, despite some remaining uncertainties.
➡ Kootenay Silver has reported promising drill results from their Columba project in Mexico, with high silver and lead-zinc content. The term “maiden resource” refers to the first resource report on a project, and Kootenay Silver is preparing to release theirs. The company believes that the silver price will steadily increase, which will benefit their project. The current high gold to silver ratio is expected to revert back to the mean, which will also favor silver.
➡ The speaker believes that the value of silver will increase due to the growing debt in major Western economies. They argue that unlike in the past, the debt is now too large to manage, which could lead to a financial shakeup. This could result in the ratio of gold to silver value remaining at 15 to 1 for a longer period than in the past 150 years. The speaker also suggests that investing in precious metals like silver and gold is a smart move to protect wealth, especially as they believe society is becoming poorer.
➡ They have a lot of silver and hope to give it to a miner who can make it valuable. They’re excited for their first resource estimate and plan to keep drilling to increase their findings. Their goal is to prove the economic worth of their project and have a miner take over and boost production. They’re grateful for the support and look forward to future progress.

Something fundamental will change. You’ve got this real potential for a pretty serious shakeup which means that you could have 15 ratio again and it could last for a long time. Let’s see what happens. Hey guys, Rav here from the Endgame investor and I’ve got James McDonald, CEO of Kootenay Silver on the line from Canada whose mind is in Mexico. So not to get confused, James, how are you doing today and what is going on? I wanted to ask you first about the situation in Canada. We just had elections and I know your, your minds are in Mexico but you know Canadian politics and Mexican politics will affect you.

Just tell you where I’m coming from. I saw the, the Canadian elections and I’m frankly pretty worried. I saw a tweet, the new central bank prime minister that you have, which is, you know, great, that’s great. He is, maybe he’s attempting to ban Twitter or try to threaten free speech companies like, like Kootenay, they are at the, the focal point of people like us who are very liberty centric and we believe in money. Is this how you got into the business at the first place? Were you a libertarian? Were you a liberty minded? Has that changed throughout the years seeing how tyranny has increased its pace and its conquering of all society? Where do you see yourself in Kootenay now given all that I just said, I know that’s a broad thing but you know, pretty, pretty, yeah, pretty broad there.

So yeah, we, I mean we’re value creators. We’re making discoveries as silver deposits in the ground. We’ve discovered an awful lot of silver in three discoveries already. Over 214 million ounces silver equivalent in a strong category M and I, I mean that, that’s just a measure of the confidence of what’s there when you say measured and indicated. M and I. So you know, we’re very much believers in the, in precious metals and the value of precious metals. Silver, particularly in silver and gold both, for all the reasons you’re alluding to with regards to the. All these central banks around the world cannot seem to wean themselves off the fiat currency and just creating more and more money.

Well, that’s just a debasement of the purchasing value of those dollars. And as long as that happens, the precious metal prices are going to continue to rise. And when you look at the, especially the, the gold chart, which is the leader in precious metals, when you look at it going back 25 years, it’s all one direction and steady and that’s, that’s because of all this Money creation that our Western economies especially, but not only the Western economies are addicted to. And so precious metals are, have become not only a store of wealth and value, a store of value that doesn’t change actually.

The value is increasing, the purchasing power seems to be increasing in those. So it’s a really great place to be in terms of just preserving and, and now perhaps even increasing the value, the value of your savings. And so we’re really strong believers in that. We’re, and we’re quite focused on the discovery and development of this silver deposits because of that. And you know, politically speaking there’s a, what you’re saying, what you’re mentioning alluding to here, there’s a lot of turmoil all over the place and we’re starting to see pendulum swing from these more what they call progressive left wing type policies starting to, to swing back to the middle.

And that I think in general that’s a, that’s a good thing. Canada here, we just had an election pretty interesting. It’s going, you know, we’re going to have to see now what the actions of the new prime minister are. And roughly half the population has a lot of concerns about his policy and the other half don’t. So and he seemed to have gotten in on a wave of, and I wouldn’t call it anti Trump, but this, these threats from Trump to basically annex Canada, make it the 51st state, which is just talk. And you know, he really likes to rile people up and he knows how to do it.

But that changed the election in Canada significantly because a lot of people were genuinely fearful of that event. And for some reason they considered the central banker Carney and the Liberal Party to be the ones who could protect us from that. I don’t know why, how they arrived at that conclusion, but that, that changed the election from what was going to be a, what looked to be a certain Conservative victory and into a minor strong minority government for the Liberals. So now we’re sitting here in Canada seeing what’s going to happen next and if you want to talk about the politics in Canada, well, there’s actually a lot of, in spite of this perceived threat from the US and the terrorists, I mean, are an issue or a threat to our economy.

And it’s kind of a wake up call for Canada, like let’s stand on our own two feet or the vast majority, like vast majority. Over 80% of our trade is with the US and the biggest export is oil and gas. And so not over 90% of our oil and gas is sold to The United States, we’re kind of trapped there because of our own policies within the country. We haven’t allowed ourselves over the last couple decades that there wasn’t the political wealth of will to actually put infrastructure into our east and west coast where we could deliver oil and gas to anywhere in the world.

So we’re stuck with selling it to the states. So they have a lot of leverage over us. So now when you’re talking about Canadian politics, the winning parties basically stole a lot of the platform from the party who was. Who were actually in the lead in the polls prior. And now they need to deliver. They said they put these big infrastructure corridors across the country, put ourselves in a stronger position to give ourselves leverage, open up our markets. Now the ball’s in their court. And so, you know, how does that impact us in Mexico? Well, it impacts us in that we’re, you know, we’re a Canadian company, we raise a lot of money in Canada, so we, you could view it as, as the healthy of the economy in Canada goes, so does the health of any of our industries.

And so we get impacted that way. But the politics in Mexico impact us a lot more. And with. With Schombaum coming in last year, the, the. The, let’s say environment and mood in. In Mexico for. Towards mining is much improved compared to what it was in the last administration. Really? It’s improved that, right? Yeah. My, my impression of her is that she scares me. Lady, you’re scaring us. I’m not so excited about her. I remember that I was, I was on Chris Marcus’s channel for a while and he had a, he had a sponsor Fortuna, and I’ve told you about this and they had serious problems with the regime there.

And you’re saying that Shinebaum, you know, even though she’s like hard left, it seems to me she might be a little bit easier on the mining industry. Is this what you. Is this your impression? She’s. As compared to the last administration? Yes. So she’s more practical and there’s been not just talk, but some positive action. And so we’re still waiting to see in a number of things going on there, but it definitely is an improvement. It’s not going back to like what it was 10 years ago. The environment there was really good from a mining investment aspect, but it is improved over the last administration.

All right, so it seems that like we have, we have a little bit of a threat from Carney, who is a central banker, the, the type of person who, you know, we, we look at a Scans. We’re not sure what he’s going to do. We’re a little bit nervous. We’ll see what he does. I don’t know. I’m, I, I have a hard time believing he’ll be worse than Trudeau. It’s. That, that, that, that would, that would take a lot. But let’s, let’s see what Shine Bound does. Even though I’m not a big fan of her politics, let’s see what she does with the, with, with the.

That. That Mexico is the biggest silver producer in the world, I think. Yes. And it’s, it’s been that way. I, I remember I was reading a Rothbard book once about banking and he was talking about the, the big price increases, I think, in the 17th or 18th. No, sorry, the 18th or 19th centuries in, in Europe and also in the Americas. And he was trying to argue that it wasn’t inflation, it was just a huge in influx of, of silver from Mexico into Europe. And it was, it was raising prices in silver terms because it was, it was just like such an increase in the, in the actual amount of physical money coming into the continent.

So, you know, God willing, it’ll be that way again. Not that we want rising prices and silver terms, but that we would like more money because we’re on a credit economy and this can’t sustain itself. So hopefully you’ll be part of that. And in that segue. And there’s a lot that I don’t understand about this because as much as I understand money, I don’t really understand that much about mining. So here it says, the latest news for Kootenay. Kootenay Silver reports drill results from Columba project, Chihuahua, Mexico. Highest is 7630 grams per ton silver and 30.57 combined lead, zinc.

What do these numbers mean? What did you find here? And, and what does it mean? It doesn’t mean that. That potentially a vague reminder could be interested because I remember that you saying that that was your business model, that you want to offload these, these projects to a bigger mining company. What is going on here? And also, just from my own understanding, you, you say the term maiden resource, meaning might want to start there. Like what does that mean? Maiden resource? What term? What is, what does that signify? What does that mean? Maiden resource? So Maiden resource is the first resource that you ever put out on a project? The very first one.

We made this discovery about four years ago. We’ve been drilling it fairly steady ever since and, and now own 100% of it. We have Today’s release has the last of the assays from our program. We finished up in the winter which was 20,000 meters of drilling. Almost 60 more holes. So now we have in total We’ve got over 200 holes in total. 50,000 meters done across different vein structures there. And we’ve got enough drilling and positive results here to put out a maiden resource. So our first resource calculation on the property. And we expect that resource will get bigger.

Whatever it comes out as it’s going to get bigger because all these zones are open to expansion. And so that. That when you say maiden resource it’s referring to just that it’s the first. It’s the first resource that you put out on any project. 7630 grams per ton silver and 30.57 combined lensing. So for 7630. Is that. Is that one area of the resource. I remember reading in the triple digits. And I remember I asked. I asked Grok on. On. On X. What is the average grams per ton of silver for a commercially productive silver mine.

I remember it was in the triple digits. Maybe two or three hundred. So what is. What is this 7,600 that sounds like really up there. Is that one area. Is that an average? What is that? That. That’s high within that interval. So the. The whole interval averaged over 650 grams per ton with which is about 20 ounces per ton over. Over a drill width of 16 meters. So really great results. To put it in perspective. Cutoff grade and the narrow veins in Mexico is generally around 180 grams. 150 grams for narrow veins. Like by that I mean 2 meters wide.

So in this particular hole we saw almost 6 meters of 650 grams per ton. So well above the cutoff. That’s what you want to see. So the wider the vein generally it’s a combination of grade and vein grade and width. The wider the width the better. And the higher the grade the better. And it improves your margins in a mining situation. So you really want to be seeing those numbers that are exceeding that 150 grams in general. Now we have another hole that we released today. 196A. Where the average is 123 grams. But that’s over 63 meters of true width.

It’s huge. Huge width when you’re that. Wait. So 63 meters means the. The width of the line where the silver is like the width of the vein is 63 meters. What does that mean? So veins are planar. Okay. Run like a big crack or fault in the ground like this. And so they’ll have dimensions. This dimension is called strike. That’s the lateral dimension. And then the dimension to depth is general, is generally referred to as the dip. And then you’re going to have a thickness across. And a lot of narrow veins in Mexico are kind of two meters wide, one and a half, three meters wide.

But we’re getting these fattened zones here. Like 63 meters is just incredible. Now the grade’s down at 123 grams. But when you’re at 63 meters of width, most likely you’re going to be mining all that because it’s going to be economic. Your cutoff is going to be. Comes way, way down when you’re dealing with wits like that. And those wits build a lot of ounces pretty quickly as well. Now the core of that of. Of that was about 16 meters of almost 245 grams per ton just on the silver. So that’s well above cut off even for a narrow vein.

So that, that’s why it’s important here we’re seeing these really good grades, widths and exceeding the cutoffs that you’d expect on. On veins that are that wide. So it’s a good harbinger for something that could be economic. What we need to work on now is getting the ounces up enough. Enough ounces to justify the capital cost to build a mine. And that’s what the first step of getting there is. Put your maiden resource out and then start so that we’re just on the cusp of being able to put out a maiden resource. What would be better for you? Would that be silver moving up really quickly or silver moving up slowly? Let’s say 30, 35, 40 over the next few months, years, and then, you know, giving you time to develop your resource.

What, what, what are you. What would be best for a kootenay? Yeah, be 50 bucks tomorrow. No, seriously, just from experience of markets and seeing a number of cycles now, it’s. So it’s always better when you have a steadier growth in the price. When you get quick spikes, typically you’ll get a quick spike in the opposite direction. And it doesn’t mean you’re on a sustained trend upward, but that more steady, slower appreciation, the silver price is more sustainable. And we’ve certainly seen that. We’ve had a few little spikes, but we’re really building a great momentum on the upside.

Started over a year ago and is continuing today. So we’re very strong believers in where that silver price is going to and we’re very strong believers that the famous gold to silver ratio will revert back to mean. And the, in the mean over the last 25 years or so is going to be down around 60, 65. If you take a longer term view, it’ll probably be getting closer to 45. And we see this in all these precious metal cycles. Gold takes off first the silver, gold to silver ratio gets stretched, then bang, like a slingshot, silver catches up and then goes past it in the other side.

And in the last cycle I think the ratio would have got down to the low 30s if I recall correctly. So if that were the case today, we’d be over $60 silver. Now we see silver breaking its old highs of around 50 on this cycle and then going beyond that somewhere. No, nobody really knows where that’ll be. But that, that’s our, our belief. And, and so when you study the history of the cycles of the, of the precious metals you get a lot of volatility, you’ll get these spikes. But when you see the trends change and you’ve got some momentum for some time and we’ve seen that, and that’s being really driven by these geopolitical things going on in the world today and our addiction to the fiant currencies.

As long as there’s more money being injected into the system then those precious metals will continue to increase in value. What is causing a hundred to one gold silver ratio now? What is going on? I don’t really know is the short answer. And because that’s near historic highs and, and what I do know is things tend to revert to the mean at a minimum and then overshoot that on the other direction. The interesting thing about silver is it’s a, it’s a monetary asset and a big industrial asset. And I noticed a few weeks ago during some of the tariff disturbances with the US and the tariffs going, being on and off again unsettled the markets a few weeks ago and you had quite a strong reaction in silver price.

For some reason I couldn’t really figure that out. But I believe it was because of the threat of recession and it was being traded down like based on this industrial demand. But when the, when the monetary demand kicks in on silver that really gives it this slingshot effect that passes gold in performance at the end of the day. And so it’s got two components. It’s a huge, huge industrial component. We’ve got a real squeeze on supply now and there’s a real thin edge on supply. We’ve been in deficits for a few years here. And that deficit being made up, I believe by recycled silver mostly.

And it takes a long time from a discovery to get it into production. So you can’t just turn on supply and meet those deficits. It doesn’t work that way. And so it’s a compounding effect here. At some point that ratio will flip. I don’t know when, where that’s going to be. But if we look at silver began its move about a year ago because lag gold and performance. But as time goes on, I, I think we’re, we’re getting closer to when that’s going, to when that ratio will flip. But at some point, believe it, do it will.

And, and exactly why it is where it is today? Well, don’t really know. You can think of all sorts of reasons, but at the end of the day, don’t, don’t really know. It doesn’t, it’s not quite logical and the market’s not always logical either. Just in terms of where I’m coming from, from investing in silver miners, if you go back to 1980 and also 1968 and even 1919, right. Gold, silver reached 15 to 1 very briefly, but that seems to be like the floor. That’s the historical monetary ratio. And one of the things that I reiterate on the end game investor on my, my subscriber service over and over again, is that the bell to the end game.

When do we know that the dollar isn’t working anymore, it’s going to be at a 15 to 1 ratio. And then people ask me, well then why, why did it survive 1980? Well, I say because the debt in 1980 was still manageable. They could, they raised interest rates like 20%, volcano raising rates to 20%. And it was still payable because the debt was relatively small, like 32, 34 debt to GDP, something like that this time. And the reason that, that I’m invested in silver miners, including Kootenay, is this time when it, when it approaches 15 to 1, I don’t think it’s going to slingshot back to let’s say 50, 60 very quickly.

I think it’s going to stay around 15 to 1, maybe edge up to 20, 30, 40 kind of slowly over months to maybe three, four years. I’m just, you know, random numbers that are coming up my head. I, I just don’t think it’s going to slingshot like it did in 1960, 1980. The reason is that the debt is not payable this time. They can’t, they can’t do it. So when the public wakes up and realizes that the debt can’t be paid, and since most of the dollar is actually just Federal Reserve debt and most other countries are just backed by the same dollars that are essentially federal, not Federal Reserve debt, but federal government debt that’s bought by the Fed and stuffed in their, in their, in their, their warehouse.

The reason that I’m so bullish on silver is that I think that the 15 to 1 ratio will stay where it is longer than it has in the last 150 years, which is why I’m primarily a silver stacker. I also stack gold because I don’t want to be completely beholden to the silver price, which I know can be very volatile. Where, where, where do you come out in that thought? Do you think we’re going to hit a 15 to 1 ratio? If so, how long do you think we’re going to stay there? Or what’s it going to be like as opposed to what it was in 1980 when we hit a 15 to 1 and then we just, and then the dollar recovered? Yeah, well, you’re pointing out things are a fair bit different now than they were in 1980, that’s for sure.

And in that case, because of the silver market at the time, the Hunt brothers almost cornered the silver market. Which is interesting because gives you some perspective about the, you know, the relative scarcity of the amount of silver to be able to do that, first of all, and the amount of money that’s out there that they, that they even had a thought that they could do it, which is that the fact that they even attempted it is amazing in itself. Yeah, it is, it is. And, and so you’ve got the, the, and that’s kind of a case of a real spike.

But this, you know, we’ve had building silver price here for a long time and it’s really tied to the, the fiat currencies. And yeah, we’re at risk of some, we really are at risk of some real financial dislocations in your, as you’re pointing out, a percent of debt to GDP is over 100% for all the, most of the major Western economies. And not sure what China’s like or, or India, but it, it’s, we’re not in that strong position to be able to react and solve this anymore. Back in 1980, as you pointed out, was much, much different.

The debt to GDP was much, much smaller than it is today. And so you, there’s going to be something that happens that breaks things potentially here. And if it Doesn’t, I don’t know how they’re going to work their way out of it rather than devaluing the dollar, which is essentially the same thing. So will it get to 15? Well, it, well could. I don’t know. And if it does it because of the, the debt has gotten so big it, you cannot easily address it anymore. There’s something fundamental will change. You’ve got this real potential for a pretty serious shake up, which means that you could have 15 ratio again and it could last for a long time.

Let’s see what happens. But you know, getting exposure to precious metals to protect at least some of the wealth is to us a smart move. And you just look at the last 25 years and if you put 10 grand into gold 25 years ago, well, it’s going to be worth a whole lot more than ten grand a day. I remember I was talking to David Morgan, Big, big silver. He’s known as a silver guru. He’s a big silver guy, been in the business a lot longer than I have in terms of precious metals prognostication and such.

And he was talking about the volatility of silver. And, and I told him, I remember this, this chapter from Kings 1 where Solomon is king and that was the richest, that the Israelites were, that was the richest society ever became. And at his time it says specifically in Kings 1 summer on chapter 7, 8, 9, something like that, maybe 6 says that silver was so cheap that if somebody dropped, anybody would pick it up, right? So because he, he imported so much gold into the kingdom that, that nobody even looked at silver. It was just like, you know, it was like pennies, like okay, fine, you have pennies in your pocket, but like if you drop them, it’s like you’re not going to bother to bend down and get it, whatever.

And then, and then he, he quoted, he quoted the Christian Bible to me. And there was this one incident where, where somebody on a poor neighborhood or something found like one tiny silver coin and like the whole block was like celebrating because it was so expensive and she could buy so much and she was like in poverty and she could buy so much food and, and wealth with this tiny silver coin that, that the entire block at a party. I’ve never read the Christian Bible, so I don’t know what he was talking about. But like, I assume that it’s a historical, you know, event.

So I mean, that’s the thing with silver. It can be so cheap. But at times when society is poor and things are desperate, it can be the Most important commodity ever. That, that’s really the excitement of it and it’s not really a question. But if you have anything to say on the, on that topic, go for it and then, you know, we’ll sign off. Well, yeah, so cheap. So would you consider it under $4 cheap? That’d be pretty darn cheap today and 25 years ago that’s about where it was. Yeah. And don’t see it going back there.

It’s certainly see it going higher. And you know that’s, that’s human nature. After all. You’re, you’re, you’re going back to the stories that are over 2000 years old now, some of them, and that the human nature doesn’t seem to change a lot. Yeah, yeah. So look, we’re, we’re in a situation where I think we’re getting poorer. I think that’s pretty obvious. Not every single individual, I mean the smart ones know, know where to hedge themselves. Nowhere to go. And I think that the gold and silver investors are going to be, you know, rich when other people are poor.

But I think generally society is getting poorer. I don’t think that’s deniable. I think that’s pretty established. And when, when societies, and especially western society which pretty much leads the world in, in advancement right now we’re not doing so well, but we, you know, the western side really brought the world to where it is now. We’re getting poorer and when we’re getting poorer, silver gets more expensive. And I, I think this is silver’s time. You know, I don’t know, that’s probably not why you ended up in the industry, but this is where you are, I think you are a critical part of, of the future of money.

Some part of it. I mean we’ll see where Kootenay goes and how it succeeds going into the future. And you know, as an investor, I hope, I hope you find a lot of silver. I hope you were able to get it to a miner who can really make it something real and special. And I wish you guys good luck. Oh, thank you, Rafi. I mean we, we certainly hope many of the same things you do. We’ve got this. The maiden resource will be a big milestone for us. And then going forward we’ll get back, continue drilling to grow whatever we come out with on that first resource estimate.

And yeah, the long term objectives, let’s keep proving this thing up, start to show the potential economic viability and, and the objective is let’s get a miner to come in here and, and take it over and. And. And revise the production of it, of the asset. All right, James, thanks so much for coming on and hope to see you again soon. Yeah, thank you, Rafi. Pleasure.
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