Why Gold Producers Are Still Undervalued: Greg Orrell on This Cycle’s Missing Retail Money
Summary
Gold decoupled from real yields after 2022 Russia sanctions triggered central bank reserve diversification — a structural shift Orrell expects to persist.
Producers still trade below historical NAV multiples because investors haven't priced in $4,500-$5,500 gold; Orrell expects multiples to expand as skepticism fades.
OCM Gold Fund holds ~20-23% senior producers, 10-13% exploration/development, ~5% royalties, 5-7% silver — trims losers and lets winners compound.
Agnico Eagle leads capital allocation discipline; B2Gold holds junior stakes like Snowline Gold but hasn't executed buyouts, a stark contrast to past reckless exploration.
With cash below 1% while retail liquidates, Orrell sees further upside — counter-cyclical positioning in a cycle still missing wider participation.
Key points on Agnico Eagle Mines
- The guest calls Agnico Eagle the biggest capital allocator among public gold producers, having taken positions in many junior miners
- Agnico is also named as a likely buyer of advanced juniors like Snowline once permitting is far enough along
Key points on B2Gold
- The guest highlights B2Gold as a major taking positions in juniors like Snowline and in South America, though it has not yet executed a buyout of those positions
- B2Gold is also named as a potential acquirer of advanced projects such as Snowline
Key points on G Mining Ventures
- The guest cites G Mining Ventures as a successful Guyana jurisdiction story North American investors should pay more attention to
Key points on Aya Gold & Silver
- The fund bought Aya Gold & Silver at a couple of dollars and it later traded at $40, with the fund harvesting multiples of its cost this year
- Orrell uses Aya as a concrete example of trimming positions when valuations become extreme
Key points on Montage Gold
- The guest cites Montage Gold as a position that went up about 20 times for the fund, exemplifying the discovery-driven wins that drive outperformance versus GDX and GDXJ
Key points on RTG Mining
- Held by the fund as a small early-stage position; Orrell notes it does not yet have a mineable deposit but is being watched for the team's ability to advance the project
Key points on Snowline Gold Corp
- Orrell questions whether Snowline at its current market cap can self-build or will be taken out, naming B2Gold and Agnico Eagle as potential acquirers given its permitting progress
- B2Gold has already taken a position in Snowline
Bill Powers's takeaways
- Top takeaway Powers frames the discussion around missing retail participation this cycle and the contrast-cyclical relationship between gold and a NASDAQ roll-over
- He notes Canadian permitting has lengthened to US-like timelines, making the time value of money difficult for investors riding through 20-year permit cycles
Greg Orrell's takeaways
- Top takeaway Orrell sees more upside in gold producers because retail money has not returned to gold mutual funds this cycle, in contrast to 2008 to 2012, leaving NAV and gold-in-the-ground multiples still underappreciated
- He argues the gold market changed structurally after Russia invaded Ukraine, with central banks now favoring gold over treasuries because of FX-reserve risk and decoupling gold from rising yields
- His fund's allocation framework is 20 to 23 percent senior producers, 5 to 7 percent silver, around 5 percent royalties, and 10 to 13 percent exploration and development, with cash below 1 percent signaling a bullish stance
- He exits when management chases a different commodity or strategy, when valuations become extreme with Aya cited as a recent example, and trims losers on roughly a 12-month review
- He expects the next leg to come from majors acquiring advanced juniors like Snowline, since majors now rely on juniors for exploration after cutting their own programs