Brien Lundin & Dan Steffens - Gold & Oil Stocks: Spin Outs, Near Term Producers, Growth Companies

The KE Report Oct 3, 2026 54:29

Summary

Lundin calls precious metals a full bull market, arguing the fundamental drivers are the most solid he has seen since the 1970s.

Gold's September pullback tracks rising bond yields, not broken fundamentals — algo traders reverted to the old 'higher yields, sell gold' reflex.

Beaver Creek chatter centered on spin-outs, 9.9% strategic stakes, and toll milling — renting mill capacity rather than building it.

Lundin wants each spun-out asset valued individually, and reads a strategic's stake as validation only if they fund the next raise.

Steffens says oil equities trade as if crude is $60 while it fetches $90; refinery outages, not crude scarcity, squeeze diesel and jet fuel.

Lundin uses Scorpio Gold as a toll-milling case study that can work in both directions: it sold the mill on its project to a mining consortium and raised cash in the process.
He adds that Scorpio looks very likely to supply that mill's first feed, since the buyers want ore from the project the mill sits next to.

Lundin says K2 Gold is drilling straight down the Dragonfly trend and continues to deliver what he calls extraordinary drill results.
His bigger point is that the market is overlooking K2's outlying targets, which may get holes punched into them in this program or the very next one.
He notes the company is more excited about those other property targets than about the trend that currently dominates the discussion.

Top takeaway Steffens says Chris Wright, described in the interview as the Energy Secretary, is talking to individual refineries and downstream companies.
He says Wright is asking them to voluntarily export less and keep more product in the US market, since US diesel output already exceeds domestic use but high export prices keep pulling product out.

Top takeaway Steffens argues the NYMEX futures market is a poor forecast of physical reality: oil equities are being valued as if crude is $60 to $70 while crude sits near $90, so producers should report much better results than the tape implies.
He says Wall Street analysts stress-test producers against a strip showing $60 to $70 oil even though the companies stay profitable at $90, which he blames on fear and miscommunication rather than the fundamentals.
He prefers large caps with strong marketing groups that can guarantee refinery deliveries and realise higher prices on physical barrels, and notes several trade at a discount to first-call targets.
For bigger upside he points to his small-cap growth portfolio, saying he is very bullish on that group and expects several of the names to double this year.
On natural gas he says North America still has plenty for now, but six consecutive storage builds came in well below the five-year average and LNG exports are set to rise by about 4 billion cubic feet per day, so he sees a good chance of $4 gas before Christmas and uses $3.50 for next year.

Top takeaway Lundin credits Eric Sprott with almost single-handedly rescuing the junior mining market through the long years it was bottoming or remained in a bear market.
He says Sprott being a shareholder came up in roughly 80% of his Beaver Creek meetings.
He agrees with Sprott's preference for big discovery plays and large gold and silver resources, calling him the ultimate gold and silver bug.
He cautions that because Sprott owns so many of these companies, his endorsement now carries much less information than it did at the start of the buying spree.

Top takeaway Lundin calls precious metals a bull market in full, saying the fundamental drivers are more solid than at any point since the 1970s and will not disappear soon, so his strategy is to buy the dips and skim the froth.
He attributes the recent gold weakness to algo and hot-money traders reverting to the old view that higher real rates mean selling gold, not to any change in fundamentals, and thinks the latest dip had bottomed as of the as-of date.
On spin-outs and strategic stakes he argues case by case: a 9.9% strategic holding is validation but not sufficient on its own, he prefers to see two strategics creating competitive tension, and he treats a strategic declining to exercise its top-off right as a sign it may be looking to sell.
On toll milling he says spare Nevada mill capacity can meaningfully improve a junior's economics, but investors need to check excess capacity, existing interest, distance and whether truckable roads actually connect the mine to the mill.
He notes junior news flow has become unmanageable, with his own newsletter running 42 pages this month, and argues the sector would now need a book to cover.