Metals & Mining: Providing Protection & Growth Investment Opportunities

Providing Protection & Growth Investment Opportunities

Mark Schoeffel / 19 November 2025

I was fortunate to have been invited to a presentation this past Monday, November 17, 2025, hosted by Ninepoint Partners and featured Nawojka Wachowiak, a Senior Portfolio Manager and bio-geologist with 25 years of experience in capital markets, including 10 years at Dynamic Funds.  She was introduced by Arie Dendekker (Vice-Present, Product Specialist), who provided an overview of Ninepoint's offerings, including the Gold and Precious Minerals Fund (primarily gold equities with some physical gold), the Silver Equities Fund (primarily silver equities), and a Resource Fund managed by Nawojka, which has shown exceptional performance.

The audience included a dozen or so other advisors and the session was interactive, with questions from a number of people. The talk focused on gold market cycles, drivers of the current bull market, investment strategies in precious metals and mining, and details on two funds: the Ninepoint Gold and Precious Minerals Fund and the Ninepoint Mining Evolution Fund (formerly the Dynamic Resource Fund). 

Key themes included commodity leverage, central bank buying, geopolitical risks, free cash flow generation, and opportunities in critical minerals driven by trends like de-dollarization, national security, technology (including AI), and environmental shifts.

 

Overview of Gold Cycles and the Current Rally 

Nawojka began by reflecting on her career, noting this is her fourth gold cycle. She presented a graphical representation of the last 25 years, emphasizing that gold cycles are multi-year events where equities typically provide 1.5x to 2.5x leverage over the commodity. In past cycles (e.g., the 2000s), indices like the HUI rose over 1,000%. 

 

She pinpointed the current rally's start as February 24, 2022—the date of Russia's invasion of Ukraine—which triggered a pivotal shift, though it wasn't immediately apparent. Gold equities (tracked via GDX and GDXJ) have underperformed so far, showing only modest gains compared to historical leverage, indicating the rally is still early. In 2022-2023, little happened; gold rose modestly in 2024, but equities lagged until August 2025, driven by Fed rate cuts and industry free cash flow recognition. The sector remains under-owned and unloved, with recent corrections (e.g., gold pulling back from $4,300 to around $4,000) seen as buying opportunities, consistent with historical 8-9% corrections in rallies. She expects stabilization around $4,000, similar to earlier consolidation at $3,000.

 

Drivers of the Gold Bull Market 

The invasion of Ukraine led to G7/EU freezing $300 billion in Russian assets, prompting global central banks to diversify into gold for control and safety. Central banks have bought ~1,000 tons annually since 2022 (20% of global production, up from post-GFC levels), a price-insensitive demand stream. Holdings have risen from 13% to 24% gold, with surveys (e.g., World Gold Council) showing 95% plan to continue, aiming for 40-60% like in the 1970s-1980s, while selling US dollars due to debt, weaponization risks, and de-dollarization. 

This drove the 2022-2024 rally, with Western investors joining in 2025 for similar reasons: economic uncertainty, trade wars, US debt, geopolitics, monetary policy easing, and de-dollarization. ETF flows (e.g., physical gold ETFs turned positive in 2025 but remain below COVID peaks) indicate Western investors are still underweight. The sector is tiny (0.5% of MSCI World Index, 12% of TSX but only 4-5% average Canadian allocation), amplifying moves when inflows occur.

 

Industry Fundamentals and Valuation

Gold producers are generating massive free cash flow due to $2,000+ margins (up from $200 in mid-2024), far exceeding budgeted prices (~$2,700). Costs have risen 3-5% at the asset level (e.g., due to oil/gas), plus royalty/tax inflation, but margins expand faster. The industry trades at 0.9x NAV (below 5-year average of 0.94x) and 6x EBITDA at $4,000/oz (9x at $3,500/oz), undervalued despite clean balance sheets. Companies are returning capital via buybacks (e.g., $100M+ programs, up from 2024) and dividends, signaling confidence amid valuation disconnects. Hedging is minimal (only for financed projects like Northern Star); the industry is unhedged to attract investors.

 

Investment Approach and Fund Details: Ninepoint Gold and Precious Minerals Fund 

The fund is mostly gold (with some silver), 65% Canada-listed but globally focused (e.g., significant Australia exposure via Perth market). It's 47-48% producers (for cash flow), with incremental capital into explorers/developers (30% juniors) for alpha, as juniors outperform in later cycles. Liquidity is high (~$2B AUM, 60% >$2B market cap). Using the Lassonde Curve (mining company lifecycle), Nawojka targets discoveries (400%+ upside), avoids the "valley of death" by focusing on quality/financeable assets, and holds through to production. Quality means strong management, good assets, and low geopolitical risk (65% producers in Canada/Australia/US; higher risk tolerated in juniors, e.g., Africa for rocks). The fund has a $195M capital tax loss carryforward, making it tax-efficient. It's ~100% equities but can hold up to 10% bullion for protection. 

 

Ninepoint Mining Evolution Fund 

Nawojka transitioned to this fund, restructured from a 50/50 oil-gas/mining product to mining-only (global, any commodity). It's gold-dominant (~68% YTD return) with uranium (18%), copper, niobium, rare earths, and minimal LNG (for AI/data center power). Drivers have shifted from GDP+ to geopolitics, national security, technology (e.g., AI needing copper/power grids, uranium/nuclear), and environment—all metal-intensive with unprecedented growth profiles. Governments (e.g., Trump on critical minerals) prioritize mining. Positioning mirrors the gold fund: global (Canada/Australia focus), producers for stability, juniors for alpha. 

 

Closing Remarks 

Nawojka concluded gold is "new again" as a strategic asset, with positive momentum from central banks and Western investors. Equities offer compelling free cash flow and valuations; mining is a 10+ year growth story due to unsolved supply issues. 

 

Questions and Answers 

• (on central bank buying): Clarified if 20% is of new annual production. Nawojka confirmed yes (~1,000 tons = 20% of ~1,900 tons global production).
• (on hedging): Asked if producers hedge. Nawojka said no, it's unhedged except for bank-forced cases (e.g., Northern Star for capex); hedging sends the wrong message.
• (on costs/royalties): Inquired about rising costs. Nawojka explained asset-level costs up 3-5%, royalties (revenue-based) inflate per-ounce costs more, but margins expand faster.
• (on rally stage): Asked percentage through the bull market. Nawojka said theoretically year 4, but early due to recent equity uptick; constructive for 2+ years amid geopolitics/de-dollarization.
• (on quality criteria): Asked beyond geopolitics. Nawojka emphasized good management (no "stupid stuff"), quality assets, and case-by-case evaluation (e.g., high-grade forgiving on costs, economic at $3,000/oz).
• (on explorers turnover): Asked about holding juniors through Lassonde Curve. Nawojka said daily review; sell on negative news/geology shifts, but hold believers unless story changes; no short-term trading, aim for meaningful positions.
• (on junior allocation): Asked percentage in juniors. Nawojka said ~30% small-caps (pre-technical/feasibility), 18% new miners (mine plans/acquisition targets), 48% producers.
• (on valuation/price entry): Asked if price matters for quality companies. Nawojka said yes, model DCF/NAV; pay premium for quality but seek opportunism; avoid cheap "crappy" companies.
• (on free cash flow forecasting): Asked if they forecast it. Nawojka confirmed yes, build asset-by-asset models to assess generation/risks/upside.
• (on rare earths): Asked about biggest position. Nawojka said Lynas (Australian, largest non-Chinese producer); mature, low-cost, expanding to US.
• (on rare earths in Canada): Asked if any. Nawojka said some, but next generation likely Brazil (ionic clays, metallurgically simpler); Canada strong in uranium/lithium/base metals.
• (on dividends vs. buybacks): Asked if doing both. Nawojka said yes, but prefer buybacks due to valuation disconnect; dividends cautious (avoid cuts), specials in bull markets; buybacks meaningful (10%+ float).
• (on metrics for bullion/equities): Asked about both. Nawojka said never ignore equities for 1.5-2.5x leverage; bullion outperformed in 2024, but equities now catching up.
• (on timing gold market): Asked how. Nawojka said hard to time; buy for long-term belief/hedge (5-10% portfolio); >5% aids diversification/volatility reduction.
• (on NGP vs. GLD): Asked why buy NGP. Speaker 1 said NGP is 100% physical gold (institutional pricing, insured/numbered/storage, commentary); not managing bullion like index.
• (on more silver): Asked about less gold/more silver. Nawojka said loves silver, working on adding; tougher due to consolidation/early-stage opportunities; prefers quality gold when choices limited; silver in structural deficit but stocks tricky (polymetallic, need modeling).
• (on uranium): Asked about producers/discoveries similar to gold. Nawojka said yes, Canada has best geology; many small developers/explorers; focus on geology/value; Cameco buyable, but alpha in juniors.

 

Additional Breakdown Summary of the Ninepoint Mining Evolution Fund 

The Ninepoint Mining Evolution Fund (formerly Dynamic Resource Fund) is a restructured mining-only product (no oil/gas mandate, unlike typical Canadian 50/50 resource funds). It's global, any commodity, with ~$250M AUM (agile/small). Composition: gold-dominant for stability/cash flow, plus 18% uranium, copper, niobium, rare earths, and minimal LNG. ~48% producers (quality, low-risk jurisdictions like Canada/Australia/US), 30% juniors/explorers (for alpha via discoveries), liquid/balanced. Strategy uses Lassonde Curve: target early discoveries (400%+ upside), financeable developers, hold to production; geological expertise identifies winners. Geopolitical risk managed (vanilla for producers, higher for juniors). ~68% YTD return (as of Nov 2025). 

Nawojka is highly optimistic, viewing it as resonating well for underweight investors seeking diversified mining exposure. It benefits from trends like:

• Geopolitics/National Security: Politicized mining (e.g., Trump on critical minerals); aligns with government priorities for supply chain security.
• De-Dollarization/Economic Uncertainty: Ties to gold/uranium as safe havens/hedges.
• Environment: Metal-intensive green transitions (e.g., EVs, renewables needing copper/rare earths).
• Technology, Including AI: AI success requires critical metals (e.g., copper for power grids, uranium/nuclear for data center energy; LNG as backup). Many metals unavailable in West, creating opportunities; unprecedented growth profiles (not GDP-tied) make it a 10+ year story. Fund positions in uranium/copper/rare earths (e.g., Lynas) capitalize on AI-driven demand for power/infrastructure.

  

Important Disclosure: This is Not Investment Advice 

The information provided on this blog, including any summaries, analyses, or discussions of investment topics such as precious metals, mining funds, market cycles, or related economic trends, is for general informational and educational purposes only. It is derived from publicly available sources, including transcripts of presentations by third parties like Ninepoint Partners, and does not constitute personalized financial, investment, tax, legal, or accounting advice. The views expressed are those of the blog author or the original speakers and may not reflect current market conditions or future performance.

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