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While the Gold Miners Index (GDX) started the year sharply in positive territory and raced ahead of the S&P-500 (SPY) despite its rebound to start 2023, the index has retreated all the way into negative territory as of mid-February, giving up considerable gains.
This has led to considerable underperformance vs. the S&P-500 (SPY), and this isn’t overly surprising given that sentiment was becoming overheated short-term in the miners heading into late January.
However, with the index down more than 15% from its highs, it’s time to start building watchlists for potential buying opportunities.
In this update, we’ll look at two small-cap names with world-class deposits aiming to become 250,000 ounce per annum producers post-2025.
Osisko Mining (OBNNF)
Osisko Mining (OBNNF) is a ~$1.0 billion gold developer based on an estimated ~465 million fully diluted shares, and it’s well known for being the proud owner of one of the highest-grade gold projects globally in Northern Quebec, Canada.

This project, known as Windfall, hosts more than 7.0 million ounces of gold at an average grade of 12.0+ grams per tonne gold, and would be one of North America’s highest-grade mines if it were in production today.
Once in production (2026 estimate), the mine is expected to produce upwards of 270,000 ounces of gold per annum at sub $725/oz all-in-sustaining costs, translating to ~61% margins at an $1,875/oz gold price assumption.
(Source: Company Filings, Author’s Chart)
Looking at the chart above to compare Windfall with other undeveloped gold projects, we can see that the project has a much larger production profile than 90% of other undeveloped projects, but its estimated construction costs (~$550 million) are actually well below the average for projects of this size.
Plus, with Osisko sporting a $1.0 billion valuation with over $140 million in cash, the company should have no issue funding this project with a mix of debt and cash on hand.
Today, given that the project is not yet in production nor fully-financed or permitted, the stock trades at a deep discount to fair value, with an estimated NPV (5%) of $1.69 billion when accounting for exploration upside.
However, once in production, mines of this calibre can command valuations of 1.20x P/NAV or greater.
Unfortunately, following a recent financing that the market didn’t expect which led to nearly 10% share dilution, the stock has found itself more than 30% from its recent highs at a share price of US$2.13.
However, based on an NPV (5%) of $1.69 billion and a 1.20x P/NPV multiple, this stock could easily command a valuation of ~$2.03 billion in H2 2025 once it nears its first gold pour, translating to a fair value for the stock of US$4.35 per share (103% upside from current levels).
So, for patient investors interested in more speculative names, I would view any weakness below US$2.05 on Osisko as a buying opportunity.
i-80 Gold (IAUX)
i-80 Gold (IAUX) is a $590 million market cap gold producer that’s focused in Nevada, and it is a spin-out of Premier Gold which was acquired by Equinox Gold in Q4 2021.
Unlike many other gold producers that are sitting within 20% of their September lows after this recent correction, i-80 Gold was one of the few producers to come within a hair of making new all-time highs in Q4 2022, and remains well above its September lows when the GDX bottomed.
This can be attributed to two new discoveries made by the company at two of its four Nevada projects (Granite Creek and Ruby Hill), with the latter being in one of the highest-grade historic polymetallic mining districts near the town of Eureka, Nevada.
So, what is it that makes i-80 Gold so special?
Unlike many gold producers that will struggle to grow production by 25%+ this decade, i-80 Gold has an industry-leading growth profile, set to grow its annual gold-equivalent ounce [GEO] production from ~40,000 ounces in FY2023 to 250,000+ GEOs in FY2026, representing a compound annual growth rate of 84%.
This growth rate dwarfs the low single-digit industry average compound annual growth rate among its peer group (junior and mid-tier producers), and this is just the first phase of growth.
In fact, i-80 Gold has a development pipeline capable of producing 550,000+ GEOs per annum by the end of the decade, and this still doesn’t even include its lower-grade Mineral Point deposit at its Ruby Hill Project.
Historically, the best-performing producers have been those that have steadily grown production at 30%+ per annum given that they have enjoyed consistent cash flow per share growth regardless of whether the gold price cooperated or not.
Some examples include Kirkland Lake Gold (2016-2019) and American Barrick (late 1980s through 1990s), which both enjoyed 500% plus returns in a less than five-year span during the height of their exploration success and production growth (KL actually increased more than 1000% in value).
That does not mean that i-80 Gold has to enjoy similar share-price performance, it certainly helps that it has the same model and that it’s unrivalled among its peer group, meaning that it is the premier pick for those investors looking for growth.
However, while I was previously bullish on the stock based on its new South Pacific Zone discovery at Granite Creek and its polymetallic potential at Ruby Hill, the new Hilltop Zone has proven higher-grade than I expected, and it looks like there could be additional polymetallic zones in the Hilltop corridor.
For those unfamiliar, this 1.5 kilometer corridor (shown below) that extends from the recent discovery to the project boundary received limited exploration testing by previous operators due to it being under alluvial cover (unlike other bonanza-grade polymetallic mines that were operated in the 1870s through 1940s that were under limited cover and uncovered by the old-timers).

(Source: Hilltop Corridor, Ruby Hill Project, i-80 Gold Presentation)
Given the potential for new discoveries and building on existing ones, i-80 has a path to growing net asset value per share, resources per share, and cash flow per share even in a declining gold price environment, which is the holy grail for sector outperformance.
Based on an estimated net asset value of $1.58 billion, a 1.1x P/NAV multiple (high-grade deposits in a top mining jurisdiction) and 316 million fully diluted shares, I see a 2-year target price for i-80 Gold of US$5.00, representing 108% upside from current levels.
Hence, I see the stock as a Strong Buy at US$2.40 after its recent correction, and I plan to accumulate more shares if the stock heads below US$2.20.
Disclosure: I am long IAUX, OBNNF, SPY
Taylor DartINO.com Contributor
Disclaimer: This article is the opinion of the contributor themselves. Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information in this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying small-cap precious metals stocks, position sizes should be limited to 5% or less of one’s portfolio.

A recent publication from the Kellogg School of Management at Northwestern University discussed the benefits of the post-war reconstruction as a good investment. They use post-World War II as an example of how much money should be spent and how it benefits the war-torn country very quickly.
The paper pointed to specifically The Marshall Plan following World War II. The Marshall Plan had two goals; European economic recovery and the containment of the Soviet Union. Stabilizing Europe’s economies were vital to promoting income growth around the world and entrenching democracies in Europe.
Whenever the Ukraine War is over, I think the Marshall Plan should be adopted identically from what happened 80 years ago since we will essentially be trying to do the same thing in Ukraine as we did all over Europe back then.
However, it will be much more expensive this time around. Post World War II, American leaders sent roughly $130 billion (In 2010 dollars) to help with the European reconstruction of railways, utilities, roads, and airports, the same type of facilities that will need to be rebuilt in Ukraine.

However, economists estimate that restoring the lost infrastructure in Ukraine will cost at least $200 billion, and that figure will climb the longer the war continues. And remember, $200 billion is to rebuild Ukraine.
After World War II, the Marshall Plan not only gave funds to countries that had been friendly to the US during the war but also to Germany and Italy.
The belief back then and now is that not helping to rejuvenate all parties involved after the war ended would only cause more issues later down the road. That has some people thinking that Russia and even Belarus could see new investments from outsiders when the war ends, perhaps not in a straightforward financial manner but in other ways, such as new business opportunities and deals.
At this time, no money has started flowing back into Ukraine to help rebuild the country or increase business and the economy.
But, a deal has already been made between Ukrainian President Volodymr Zelenskyy and BlackRock’s (BLK) CEO Larry Fink that has BlackRock coordinating the investments to help rebuild Ukraine when the war is over.
This means that BlackRock will have a front seat to the show regarding rebuilding Ukraine. We can assume BlackRock will know when, where, and how much money is being spent on different things all throughout Ukraine.
From an investment standpoint, this will possibly give BlackRock a little investment edge. So you could buy either BlackRock stock directly or through a few different Exchange Traded Funds, which helps reduce single-stock exposure risk.
Three ETFs that have the most significant percentage of their assets in BlackRock are the Schwab U.S. Dividend Equity ETF (SCHD), the R3 Global Dividend Growth ETF (GDVD), and the SmartETFs Dividend Builder ETF (DIVS).
Another way you could play the end of the war would be with an ETF that has a decent amount of its assets directly invested in Ukraine.
The FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (TLTE) has most of its assets invested in Ukraine, but it is small at just 0.11%.
The next three ETFs with the most significant amount of their assets invested in Ukraine are the Vanguard FTSE All-World ex-US Small Cap ETF (VSS), the Schwab International Small-Cap Equity ETF (SCHC), and the Vanguard FTSE Europe ETF (VGK). The Ukraine weighting for each of the above funds is 0.03%, 0.03%, and 0.01%.

So you can see that investing directly in ETFs with Ukraine exposure, unfortunately, is currently very difficult since no ETFs now exist that offer direct 100% Ukraine exposure.
However, you could start investing today in Ukraine through any of the options mentioned above or watch and wait for someone to offer a more direct Ukraine ETF in the future.
P.S. Check this page regularly, as I will post in the comments if a Ukraine Focused ETF does emerge. And remember, any reader can always do the same or leave comments about anything mentioned in the article.
Matt ThalmanINO.com ContributorFollow me on Twitter @mthalman5513
Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Schools, colleges, corporate boardrooms, and even family dinners are all abuzz with the common topic of conversation: ChatGPT. It would still be an understatement to say that it has taken the world by storm.
The easily accessible chatbot signed up 1 million users in five days and amassed 100 million monthly active users only two months into its launch.
To put this in context, TikTok, the erstwhile fastest-growing app, took nine months to reach 100 million users.
Source: www.cnbc.com
Many users feel that ChatGPT may eventually have the power to disrupt how humans interact with computers and change how information is retrieved. To make things more interesting, its creator, which has launched the chatbot to demonstrate what it is capable of, is just getting started.

We delve deeper to find out what the hype is all about and how investors and traders may stand to benefit from it.
What Is ChatGPT?
In its own description, ChatGPT is “an AI-powered chatbot developed by OpenAI, based on the GPT (Generative Pretrained Transformer) language model. It uses deep learning techniques to generate human-like responses to text inputs in a conversational manner.”
As evident from its own introduction, ChatGPT is a long-form question-answering tool that can produce (surprisingly) human-like responses to user requests. It was developed by San Francisco-based startup OpenAI, which was co-founded in 2015 by Elon Musk and Sam Altman. The startup is well-funded by major investors (more on that later).
What does ChatGPT do?
The chatbot has been programmed to understand human language, curate relevant content from the library of information on which it has been trained, and generate (mostly) appropriate responses to valid questions asked by its user.
As a result, its uses (and abuses) are vast and diverse. The content it can create ranges from poems composed to mirror the style of a poet, written instructions on how to perform a specific task, e-mails, quizzes, listicles, and the list goes on.
ChatGPT has even been used to write reports on popular books and other essay-style assignments for high school and college students.
In one instance, the chatbot has even passed an MBA exam given by a Wharton professor.
As students in classrooms have used ChatGPT to generate entire essays and hackers have begun testing it to create malware, concerns regarding its potential misuse and ethical boundaries have been gathering momentum.
Why is the technology behind ChatGPT important?
ChatGPT is one of the several use cases of generative AI, the subset of algorithms that creates and returns content, such as human-like text, images, and videos, based on the user’s written instructions (prompts).
Prior examples include Dall-E, a text-to-image program from OpenAI that gained recognition for its ability to come up with realistic, often absurd, pictures that match text descriptions provided to it.
ChatGPT is powered by a large language model or LLM. This gives the application the ability to understand human language and provide responses based on the large body of information on which the model has been trained.
Of late, LLMs have been used in autocomplete kind of applications to predict the next word in a series of words in a sentence. However, GPT-3.5, the LLM behind ChatGPT, enables it to take the quantum leap by predicting the next sentence. This allows the program to write paragraphs and entire pages of content.
GPT-3.5 is an upgrade of OpenAI’s GPT-3 language model, which has 175 billion parameters and was trained on 570 gigabytes of text, more than 100 times the 1.5 billion parameters that were used to train its predecessor, GPT-2.
This gargantuan upscaling of input has completely revolutionized its behavior. GPT-3 is able to perform tasks on which it has received little to no explicit training, at times even better than its specifically-trained counterparts.
Moreover, its transformer-based architecture allows it to process large amounts of data in parallel. This differentiates ChatGPT by giving it the ability to draw upon users’ earlier message in the thread and use it in a different context to form responses later in the conversation.
As lines between human and artificial intellectual capacities blur with the upcoming iterations of GPT and humankind’s pursuit of Artificial General Intelligence, in the foreseeable future (if it’s not already here), it might be impossible to discern whether such an article was composed with or without human intervention.
What is AI investing?
Artificial Intelligence (AI) is an umbrella term used to denote a series of programs and algorithms designed to mimic human intelligence and perform cognitive tasks efficiently with little-to-no human intervention.
Reinforcement through Machine Learning (ML) changes the game by enabling the models and algorithms to keep evolving to improve based on outcomes.
Unlike bubbles that usually tend to mushroom around obscure delusions, such as tulips and crypto, AI is a general-purpose technology that has already touched and improved all facets of our life.
With the potential to be as revolutionary as the steam engine and electricity, AI already influences how we shop, drive, date, entertain ourselves, manage our finances, take care of our health, and much more.
Given its massive importance, it’s hardly surprising that Zion Market Research forecasts the global AI industry to grow to $422.37 billion by 2028. Hence, this field has understandably garnered massive attention from investors who are reluctant to miss the bus on such a watershed development in the history of humankind.
Although OpenAI, the creator of ChatGPT, is not a publicly listed company, Microsoft Corporation (MSFT) is betting big on the company with the announcement of a multiyear, multibillion-dollar investment deal.
At the World Economic Forum held in Davos this year, CEO Satya Nadella discussed how the underlying technology would eventually be ubiquitous across MSFT’s products. The process has already begun with updates to its Bing search engine.

MSFT’s rival, Alphabet Inc. (GOOGL), is in hot pursuit. With AI-enabled technology ubiquitous across its platforms, the company has unveiled its own response to ChatGPT, called BardAI, with which the company is eager to reclaim its reputation as an early bird in the domain of conversational AI.
Chinese tech giant Baidu, Inc. (BIDU) has also followed suit with Ernie Bot.
Amazon.com, Inc. (AMZN) and Meta Platforms, Inc. (META) are also among the notable players in this dynamic domain.
What’s Next for AI investing?
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If you believe what the inverted Treasury yield curve is saying, you must believe that, eventually — but probably sooner rather than later — the Federal Reserve will start lowering interest rates in response to the economic recession it will have caused by raising rates by more than 400 basis points in the past year.
But based on the strength of the economy despite those higher rates, it’s looking more like rates well above 4% – and possibly 5% — are going to be around for a long time to come.
But that’s not necessarily such a bad thing. For all those younger than 40, 4-5% long-term interest rates had been the norm for decades.
It’s only in this century that we’ve become accustomed to super-low interest rates, engineered by an activist Fed to insulate consumers and the financial markets from seemingly one financial crisis after another.

But that era looks to be over. And it looks like we’re managing.
Even though inflation appears to have peaked and is moving steadily downward, the Fed is likely to keep rates fairly high for quite a while, certainly the rest of this year and probably 2024 and beyond, absent yet another global financial crisis, to make sure the inflationary beast is truly slayed.
Even on the unlikely chance that the federal government defaults on its debt later this year if Congress can’t agree to raise the debt ceiling, the Fed isn’t likely to start lowering rates for a long time, despite what many investors hope and the inverted yield curve would indicate.
As we know, an inverted yield curve is when short-term rates are higher than long-term rates, which is the exact opposite of the natural order of things.
Long-term debt usually carries higher rates because a lot more can go wrong over, say, 10 or 20 years, than it can over just a couple of years or less. But that’s not what we have now.  
Long-term rates are lower than short-term because bond traders and investors believe that the Fed will throw the economy into recession, and then have to backtrack and start lowering rates, maybe in a year or two.
So better grab those high rates on short-term bonds now because you’re not going to be able to enjoy them for long.
But the economy doesn’t appear to be cooperating. January’s jobs market report was very strong. Employers outside the big tech companies are still in hiring mode.
Economic prospects might not be as vibrant as they were maybe a year or so ago, when we were pulling out of the pandemic lockdown, but they’re still pretty robust. Which means that the Fed is likely to keep rates high for a lot longer than investors believe.
Right now, the economy seems to be surviving. Despite fears that millennials and younger, less experienced, corporate chieftains wouldn’t know how to cope with interest rates that were higher than zero, that doesn’t seem to be the case. Corporate earnings are still pretty strong. Bond defaults are minimal.
So there’s little pressure on the Fed to start lowering interest rates, even as a humanitarian gesture.
Except maybe from the fiscal side of the government.
It hasn’t happened yet, but look for Congress and the White House — despite their avowed reverence for Fed independence — to start ratcheting up the pressure on Fed Chair Jerome Powell to lower rates in order to help manage the ever-burgeoning federal debt load, which is only getting worse the higher and longer interest rates stay elevated, on top of all the other spending lawmakers are enacting.
For the past 20 years or so, Washington has been able to put Modern Monetary Theory — basically, the idea that government deficits and spending don’t matter — into practice because zero percent interest rates engineered by the Fed have enabled it.
But that’s not the case anymore — quite the opposite, in fact.
Higher rates paid by the U.S. Treasury on its debt are only making the deficit even worse. And sorry, folks, extending the debt ceiling isn’t going to much matter, except to once again kick the proverbial can down the road.

We’ll simply have more and more government debt incurring a higher price, which will only balloon the federal debt load at an even faster pace, even without any new spending.
As we already know, most of the federal budget—meaning Social Security, Medicare and the military establishment—have been declared off-limits from spending cuts, which doesn’t leave much else for pruning.
If Powell thought the past five years of his tenure have been pressure-packed, he hasn’t seen nothing yet.
The only way he lowers rates is with a monumental cave-in to both Washington and Wall Street, and right now he doesn’t seem likely to accommodate them.
George YacikINO.com Contributor
Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.