Bitcoin is digital and that's its fundamental weakness, said Royalty Gold CEO David Garofalo in a conversation with Kitco on Tuesday. Garofalo said gold is physical, which makes it more secure while cryptocurrencies will inevitably succumb to market forces. "It's inevitable that we'll see new entrants on the cryptocurrency side, and that really undermines the whole scarcity concept that Bitcoin is trying to espouse. It's just zeros and ones at the end of the day," said Garofalo.
Or head of gold Corp currency of gold royalty and pending PI throw victim. It is David . David. Welcome to Kinko. It's nice to be on. Now I believe gold royalty came together on some of the assets accumulated by a mirrored nineties, gold mining. Maybe you can thumbnail the company for us. And what's the opportunity you see in the sector.
Yeah, no, it's an interesting story because the mirrored nanny founded gold mining Inc about 10 years ago or so, and had been assembling assets at the bottom of the market effectively paid about 10 cents on the dollar. And it accumulated across a dozen different development stage projects about 26 million ounces of gold reserve and resource, and about 31 million ounces in a gold equivalent basis.
When you consider the substantial amounts of copper silver bar product and some of those projects, and really coming out of the bottom of the cycle, we struck up a conversation about a year and a half ago about how to daylight value. In gold mining's assets. And one of the things that we looked at in addition to pivoting gold mining, to more of a development footing and bringing in project teams was to write world is in each of those development stage assets and create a separate royalty vehicle.
And that's a tried and tested, uh, strategy. Um, you know, that's how Wheaton precious metals was founded 15 years ago. By my former company, Goldcorp in writing world these on some of Goldcorp's existing assets and then creating a standalone royalty vehicle in its own. Right? So, uh, to, to do that, we IPO, uh, the company about a month ago and raised $90 million us.
So we have a, a substantial treasury. Um, we have about a $200 million post-money valuation. So we have currency and that affords us an opportunity to start to diversify away from gold mining's assets, into other royalty opportunities. Can you talk about the assets that are currently under a gold, um, gold royalty.
Yeah. So we have, um, as I said about 18 royalties in total, on the dozen projects that go Moni brings to the table. In addition, we bought a royalty on quartz mountain, which is an Alamos operated project in Oregon. So we've already started the diversification process. Uh, each of these projects are quite sizeable in terms of the underlying resource.
And gold mining, as I said, is, is just started to pivot more towards a development footing, which will de-risk those assets and result in a rerate to, to fact that we hired Alister still as the CEO of gold mining Allister worked with me at gold Corp in a variety of roles. He was a senior operating manager in the Timmins porcupine district, and then built the serenade mine.
In Argentina for us as project director, before he came back to Vancouver to run our Canadian M and a practice at gold Corp. So I was able to recruit him out of Newmont, post the merger. And he brings a wealth of experience, both in operations and in project development that will serve gold money. Well, as it starts to deploy capital and these projects and de-risk, and bring them through a stage getting process, uh, start to attract some outside capital from the established producers.
Many of whom are quite project starved and in the form of joint ventures and earnings, you know, it's, it's not an accident that reserves are down 40% across the industry over the last six or seven years is simply because. My constructions become a lost art. Expiration's become a lost art, but clearly the operators are going to have to refine that skill set to reverse that downward trajectory and reserves and start to STEM the bleeding they're going to have in their production profiles in the short to medium term.
You brought up, uh, the financing piece, of course, it's in the streaming and royalty business. Uh, and, uh, you know, these things always ebb and flow depending upon what the environment is. I mean, it does look like a good environment for juniors to kind of go out and raise money right now. So that could mean that there would be less reliance on the streamers and royalties.
Can you describe that right now or what it is, where the deals are, what the opportunities are. There's a few dimensions and I would say, yes, the market is more open to juniors to raise capital, but I think it's still quite selective. Not all of them can raise money. So I think the streamers and royalty companies have a role to play in cultivating expiration, grassroots expiration.
I also think there's royalty opportunities that come out of base metal companies, and we're starting to see base metals. Respond, very favorably to the resurgence in our macro economic environment. So I think you're going to see base metal companies look at strainers, um, to sell some of their byproduct credits.
In fact, that's how I ended up building the Constancia mine. When I was running high Bay, we sold a center and $50 million stream. I'm on our small precious metal component. It was 5% of our overall revenue on a large scale copper project. So that's another opportunity for us to pick up streams and royalties.
I also think there's been a proliferation of sub $1 billion. Market cap royalty players of the last couple of years, as they prepare for the onslaught of capital and the mind development, the market's open for them. Uh, but we've created probably too many entrants in the space. So I think there's going to be around a rationalization consolidation among the streamers and royalty companies simply to create critical mass and drive down the cost of capital for those companies.
So they still can get access to capital, to deploy back into developers and explorers. I'd be interested in hearing about that more, how you would see that sector playing out. Um, there are, of course the giants that we have in right now. So we have here Franklin Nevada's you have your Wheaton precious metals.
So what would you see as being the opportunity for gold royalty? Look, I, I think it's an, that sub $1 billion subset. Uh, of the royalty space. I think there's a lot of players there and they're all struggling to achieve relevance to investors because they don't have the liquidity and critical mass of investors.
And particularly generalists investors are looking for not unlike the struggle we see for the emerging producers in the gold space or mid tier producers that don't have that kind of North of $1 billion market cap. And therefore cannot rise to certain indices can attract that generalist investor to looking for liquidity in and out of the, uh, the opportunity.
Let's talk precious metals after dip gold and the inflation narrative looks like it's taking hold again. Yeah. No, absolutely. And there's no reason it wouldn't given the vast amount of quantitative. Yes. That's happening in a global coordinated basis across all the central banks in the world. And you know, for the first time we saw that 10 years ago during, or almost 12 years ago now in the credit crisis where we saw that kind of coordination across the industrialized world to introduce massive amounts of stimulus into the economy.
So it's become a methodology that has been widely adopted now. And adopted across the global economies. And I see no end in sight. Um, the amount of sovereign debt has been strapped on, uh, particularly over the pandemic crisis is really unsustainable. And I don't think it's going to be repaid. I think these governments tend to inflate themselves out of debt and gold has always been an accurate barometer of those kinds of inflationary pressures.
Um, and that's what we're seeing in gold. Now. Now it's had a bit of a rest and it's been range-bound of recent times, but. We're still a long way away from peak gold highs. In real dollar terms, we have to go back to 1981. When gold was either $50 an ounce in 2020 $1, that's approaching $3,000 an ounce. So we're not even at cyclical highs.
And I would argue the amount of quantitative easing that we're experiencing now far exceeds what we saw during the hyper hyper inflationary cycle we saw in the seventies and early eighties. Is Bitcoin stealing gold slender. I think it is a little bit, uh, to be honest. And I think it's because there's a desire for protection against, uh, the undermining of fee occurrence season.
And for whatever reason, there's a class of investors that are looking at Bitcoin and say, well, you know, it's finite quantity and it's reserve currencies. I'm trying to protect my capital in an environment where. Real interest rates on sovereign debt are negative and sometimes on a nominal basis are negative as well.
And they're likely to stay negative for the foreseeable future. Even as nominal rates go up because inflation will, will rear its ugly head and drive real interest rates, uh, down further. Um, so I understand the sentiment. What I don't understand is Bitcoin as an investment class, because I really see no barriers, entry of other cryptocurrencies at the capture.
The market share that Bitcoin is, is really monopolizing at this point. It's inevitable that we'll be new entrance on the cryptocurrency side, and that really undermines the whole scarcity concept that Bitcoin is trying to espouse. I just don't believe it. It's zeros and ones at the end of the day.
There's no physical backing. Uh, for, for the currency. And so it can disappear the ether and it has, has there been a number of scandals around Bitcoin where people have absconded, you know, with, with these flash drives and nobody knows the passwords? Well, what's the value in that if the currency can disappear at the stroke of a pen or whatever it said, it really causes me to question the really underlying intrinsic value of that currency.
Lastly, why did you volunteer again to take a pie in the face? David? That is the benefit DC children's hospital. Um, and, um, it's a good cause. Did it back in 2018 against Randy Smallwood? I actually, I have to say I beat Randy back in 2018. Bahrainian are such close friends. I said, let's just pay each other cause it's fun.
And, uh, and Keith Neumeyer who I'm competing against this time and keeps probably going to kick my butt this time. Cause he's done a great job of fundraising, which is great for the hospital. We've already agreed. We're going to pay each other 80 ways, at least virtually. Okay. Given the current environment.
I remember, uh, seeing that event years ago, uh, that was down at the Vancouver art gallery. I think you and Randy were both wearing a, um, uh, you were wearing a gold, um, gold sports jacket. So, um, it was a good cause. Uh, I do a welcome people to reach out. You can see, uh, David Gruffalo on his, um, uh, LinkedIn and there's other sources, uh, to a BC mining week.
This is a terrific cause. And uh, thank you very much, David, for participating. Well, thanks for matching it. It's it's I'm really excited about it, David. Thanks for speaking with Kitco. Thank you for having me on. I've been speaking with the chair and CEO of gold royalty. That's David Groff. Hello, my name is Michael McCray and you're watching Kitco mining.