Miners Are Failing At Effectively Using Digital Marketing - Trump Just Showed Them The Gold Standard Of Digital Marketing With His Landslide Victory

Gold is in the earliest days of a magnificent bull market that is still in stealth mode. While gold stocks fly under the radar screen of generalist investors.

When I look at a mining company it always starts with the project. But, these days I’m also very focused on promotion. Marketing is so crucial that although I would never put it above the quality of a project, it is certainly running a close second. A key reason that I am putting such a high priority on promotion is because as a whole, the mining sector is dropping the ball when it comes to marketing in the digital world.

To those that are, I recommend they consider what gave Trump a landslide victory in the recent election. He pretty much abandoned traditional media marketing (because it is dead) and instead focused on getting his story out on podcasts, in videos and on X.com. If it worked to get him such a resounding win, I suggest that those same tools can help the mining sector reach generalist investors in a remarkable way.

One key topic that I don’t think the industry is doing a very good job at promoting is how important mining is to everything in the modern world. Without mining, the world goes back to the Stone Age. Everybody wants all the wonderful products that come from mining, but they don’t want the mines in their backyard and certainly aren’t interested in financing the mining sector from mining to exploration. This is unsustainable if the world wants all the products we all love to use, and new stuff that crops up, which all crucially need the metals from mining.

Every mine starts as a discovery through exploration and then when it becomes a mine it depletes the deposit. Mining doesn’t happen without exploration and for decades exploration has been underfunded. Which is why there are not enough new mines in development, major miners are struggling to increase production and replace their old mines with new mines. I focus on gold, silver and copper due to powerful demand and broken supply chains that will drive the price of those metals multiples higher from their current prices.

Just like exploration is crucial to mining, mining is crucial to make all the products we enjoy, and to make them work. The mining sector needs to do a much better job in telling its story. Not only telling it where investors are on social media websites, but telling it relentlessly using digital marketing tools.

I doubt many executives in the mining sector, which is stuck in the marketing mentality of the Fax Machine Era, will recognize the crucial role that podcasts, video content and X.com played in giving Trump a landslide victory in the recent election. But, it certainly should.

Some will and they are the ones that will benefit the most. If I see two projects that are pretty much equal in quality, with one company having a serious focus on promotion using digital marketing tools, I will focus on the one that is better at promotion in the modern world.

A perfect example of how the mining sector is dropping the ball on promotion is in the major gold miners. Gold is in the midst of a powerful bull market. Major gold miners are making money hand over fist because they are producing gold on average for more than $1000 above the cost of producing each ounce of gold.

Miners are seeing their free cash flow grow rapidly and are quickly becoming one of the best industries of all industries for making money. The gold stocks should be in a stellar bull market, but they are trading more like value plays than high growth stocks.

Gold remains in a stealth bull market and the gold stocks are under the radar screen for generalist investors. The blame for that rests solely on the gold miners, it has nothing to do with the conspiracy theories that many gold bulls like to use as the cause, it is mostly on the shoulders of the gold miners. If they don’t bang the drum where investors are then generalist investors won’t hear the music or sing the song.

They are doing a horrible job as an industry getting the story out on podcasts, video content and on the leading social media site X.com where massive amounts of investors spend their days. While they dither stuck in the past, they are being underloved by generalist investors and even long-term gold bulls. It is inexcusable.

A key reason that gold is performing so well is that the world is in a Death Spiral of Debt, led by America. This debt fiasco, causes the devaluation of the purchasing power of the US dollar (USD) and every fiat currency. 

Gold is trading at record highs against every fiat currency including the not so kingly dollar, which used to be called King Dollar. Not any more because the emperor has no clothes, despite what USD bulls promote as being the least dirty shirt in a pile of dirty shirts. There is absolutely no reason to buy dirty shirts, even the least dirty one when the soundest money is gold. 

Thankfully, plenty of central bankers, especially those in the BRICS nations, are increasing their reserves of gold. To the point that gold has surpassed the Euro in global central bankers reserves and has the USD in its crosshairs. They get gold. As do the Chinese and Indian investors and in a growing way retail investors in the West.

A world awash in debt, that has seen decades of devastation to the purchasing power of fiat currencies, is one that is on its way to a modern Gold Standard. Investors that put themselves on their own Gold Standard are making smart money moves.

The key reason this tremendously bullish story for gold and gold stocks is not well understood is because the gold miners are dropping the ball when it comes to marketing the story. 

Part of the reason that the gold miners are challenged to tell this story has to do with what they do with their own money. They sell gold as fast as they can to convert it into fiat currencies. They don’t sit on any of their gold production.

I have enough grey hairs from working in the mining sector for decades to remember the bad old days when gold miners loved to hedge their production by forward selling it. Back in the 1990s and even well into the 2001 to 2011 gold bull market, almost all the major gold miners hedged their production.

Every time gold ran up, they would enter into hedging contracts that locked in the price and knee capped every rally. It wasn’t some cabal of conspiratorial actors keeping gold down, it was the gold miners hedging their production.

To add insult to injury, when gold pulled back, they would promote the brilliance of their hedging. The biggest offender was Barrick and many gold stock bulls have never forgiven them which is a key reason they have been a chronic underperformer for decades, even during the last great gold bull market.

Major gold miners are challenged to go out and sell the strategy that gold is the soundest money and the best way to combat the devastating destruction of purchasing power of every fiat currency. When they don’t eat their own cooking.

Instead of holding gold in their war chests, they sell all their gold to sit on fiat currencies. It is somewhat astonishing that nobody at Barrick has realized that a key reason they are a chronic underperformer is because of the stain of their hedging past. They could easily flip the script by doing the exact opposite of hedging and instead hold some gold in their bank account.

The defenders of Barrick and all the other major gold miners not sitting on gold will point out that they need cash to operate their companies, invest in future mines, buy back stock and pay dividends. Okay, I will concede that is true, to a degree. But I will counter by saying that what has buying back stock and paying dividends done for them?

While doing those things, they were in a bear market until earlier this year when they finally started coming off the mat. But, they continue to be under the radar screen of generalist investors and have valuations that are not where they should be considering the impressive growth of their free cash flow. 

I would also concede that they need cash to run their businesses and to pay for investing into replacing the production from their old mines and to build new mines. But, I would add that due to the remarkable margin between what it costs them to mine gold and what they are selling it for, they are free cash flow machines. And the stockpile of cash they are sitting on is well above what they need to operate their businesses, buy back stock, pay dividends and invest in future production.

There is absolutely no reason that they can’t sit on at least some of their production. For no other reason than they would be able to promote with a straight face that gold is the soundest money and the best way to store wealth and protect against purchasing power destruction of fiat currencies. The added benefit is that the price of the gold they produce would go up even more as it would take even more physical supply off the market while demand for physical gold is spectacular.

The gold miners aren’t the only ones that are dropping the ball when it comes to marketing as many gold mine developers are doing an equally poor job. Recently, I listened to a presentation by a panel of gold mine developers. I was shocked to hear them all concede that they are in the boring phase, in a joking fashion. I can guarantee them that their shareholders don’t think it is a laughing matter.

What they mean when they call it the boring phase is in reference to the Lassonde Curve. Which depicts the life cycle of when a project goes from discovery through development and then becomes a mine. In the Lassonde Curve, there is a tremendous run when a discovery is made and when it goes into production, with a trough in between those too runs. The trough is called the development discount window, or sometimes the orphan phase or the boring phase.

When a company is in the development discount window, based on the current state of affairs in the gold supply pipeline, it is far from boring. Gold is in a tremendous gold bull market, for the reasons above and the reality that the supply chain from exploration to mining is broken.

You can see it in several of the major gold miners that are struggling to increase production while gold is at record highs. They would like to, but they can’t. Equally as troublesome for them is that they are challenged to replace their old mines with new mines. Guess where they fix that problem. Through mergers and acquisitions of smaller miners and new mine developers. There has been a significant amount of M&A activity of late and there will be more of it as gold continues in its powerful path toward the revival of the Gold Standard.

I would suggest that it is a much more powerful way to promote their companies to talk about the gold bull market, and the fact that there are drastically too few gold mine developers, plus the important role they play in the gold supply chain and that M&A activity happening at substantial premiums. That is a much more compelling story to tell their shareholders and generalist investors than conceding you are in the boring phase.

Rounding out the story of how gold stocks are dropping the ball when it comes to promotion are the explorers. Sadly, several of them have great projects, but are not aggressively using digital marketing tools to market their stories. These days, I am careful about featuring companies in my reports as picks or inviting them to be sponsors if they aren’t committed to marketing.

Instead of getting out there on podcasts, video interviews, making video content and participating on X.com, in an aggressive way. Many of them sit at their desks and think the marketing genie will magically appear. Many put out the odd news release and share it on X.com and think they are effectively using digital marketing tools for promotion.

Even to this day, email is still a wonderful tool to get the word out. I’m on several email lists and I see periodic emails of their news, and very little else. That is no way to engage with their audience that has gone to their website and signed up for their emails. Showing that they are interested in their story and want to hear from them.

Exploration is tremendously exciting because it is pure treasure hunting using a drill rig to search for buried treasures. When was the last time you heard an explorer explain exploration that way? I know the answer, not very often.

Their news releases are a wonderful way to bring their shareholders and potential shareholders into the process of treasure hunting. But, far too few use them that way. I have been an avid reader of news releases for decades. What I see much too often are news releases written by geologists that I swear are only trying to impress other geologists. 

They either don’t seem to understand, or don’t care, that their audience includes geologists and investors with far more investors reading their news releases than geologists. Instead they should be writing for investors in a way that takes technical information and breaks it down so that the average investor can understand what they are talking about. Thus bringing them into the process of drilling for buried treasures.

Sometimes, actually too often, I am led to think that exploration company executives have a bunker mentality.

An example of what I mean is in a company that I follow, that started drilling a great project and didn’t even bother to put out a news release to tell their shareholders and potential shareholders that drilling is underway.

I also see juniors drop the ball when it comes to their drilling plans. They will focus on where they are confident they will hit something. Pounding away with drill holes in close proximity to where past drilling or historical mining has shown there is mineralization. And not going after the guts of the system. 

Metals come from deep in the earth, going after the guts of the system at depth is a lot more exciting than poking away at the periphery of the system. So they can produce an inferred resource full of arm waving that takes years to wrap economics around it. I have seen way too often these arm wavey resource estimates that then collect dust for many years or decades because the company doesn’t have the confidence that they can pass the economic tests. 

Deep down management knows that they went with a loose resource estimate to show a bunch of ounces but that it doesn’t hang together and can’t pass the test of wrapping economics around it. Instead it is only meant for stock promotion purposes, not to show they have mineable ounces.

There is a high-profile company that has a project which had a resource of close to two million ounces with a high average grade done many years ago. New management came in and wanted to figure out what they had. So they did additional drilling to test the continuity of the high-grade gold mineralization in the resource to then see if they could do a preliminary economic assessment.

When they did that advanced drilling, they found that the high-grade gold mineralization doesn’t hang together. The infill drilling resulted in the resource dropping dramatically and showing exactly why economics were never wrapped around it. 

That kind of stuff is what gives exploration a bad name. In this day and age, where people have access to incredible amounts of exploration information and an easy ability to talk about it on social media with other investors. It fools nobody and should be left in the dustbin of exploration history. 

I’m always trying to determine if explorers are trying to fool themselves because they are in love with the geology of their project. Plus, I want to figure out if they are trying to mine the public or find a mine. Investors should as well.

Sitting at their desks pretending they are marketing, while complaining about how tough the market is (it is always challenging for explorers, even in a bull market) won’t do it. Thinking they can time the market while focusing their drilling on “low hanging fruit” instead of going for the guts of their systems.

Instead, they would be doing a much better service to their shareholders by telling their story in news releases that focus on explaining technical information in a way that investors understand. Also, by drilling for the guts of their systems. Then, using digital marketing tools, relentlessly, to talk about the metals they are looking for, the importance of exploration to mining, and bring their audience of investors and potential investors into the exciting process of treasure hunting for buried treasures using the drill rig.

In Closing

I hope I didn’t make a short story long. But, I was trying to make the point that the key things investors should focus on are high-quality projects in mining, crucially needed mine development projects and explorers with important discoveries.

Equally as important is to make sure that their companies are committed to promoting their story in the most effective ways possible using social media sites, podcasts and video content. We are in the era of digital marketing, there are amazing tools, it just takes effort to use them.

The wonderful thing about these digital marketing tools is that they also provide detailed statistics in the backend. I have been producing content for many years, and have been watching these stats like a hawk and studying them for a long time. 

I can guarantee that these stats can be gamed by buying views from bot farms and are constantly being gamed by “content creators.” The real engagement stats that are important are available, if mining company executives want to learn more about them, I am easy to reach by phone or email and would be glad to give insights into what I have seen from doing hundreds of videos and written reports.

I’ve heard it said many times by commentators and investors in mining that people are important, they are. Every company markets that they have a great team. The best way to assess their team, projects, and what they are doing with them can be understood from their commitment to marketing and what they say when they do it, if they bother to do it. 

First and foremost, I have always been focused on projects, whether looking at miners, mine developers or explorers. These days, promotion runs a close second because investors these days are pulled in many directions, to stay top of mind with them requires content that tells their story on a consistent basis. 

The quality of the projects and commitment to promotion, tells you a lot about the people. Those are the three Ps I am most focused on in that specific order. Investors should be as well.

All the best,

Allan Barry Laboucan