RSD at Beaver Creek Interview Series: Oreninc CEO Kai Hoffmann

September 25, 2019

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Oreninc, Mr Kai Hoffmann.

Kai Hoffmann: Gerardo, thanks for having me man.

Gerardo Del Real: Hi, how are ya?

Kai Hoffmann: Doing great. It's wonderful out here. Just look behind us. It's fantastic.

Gerardo Del Real: Absolutely gorgeous. We're here at the 2019 Beaver Creek Precious Metals Summit. Tell me a little bit about your impressions this year. We were here together last year. We were busy last year as well, but it seems a little bit different temperament this year.

Kai Hoffmann: I think activity has picked up, obviously gold price to blame for that I think. They added a third day here at the conference and people are making use of it, so a full meeting schedule. It's three days full of meetings. It used to be two, two and a half. There's interest, people do have full schedules. Companies, everybody.

Gerardo Del Real: That was my question. You're seeing interest.

Kai Hoffmann: Yeah.

Gerardo Del Real: People are busy.

Kai Hoffmann: Oh yeah. There's a lot of corporates around here as well looking at junior companies. Some companies have full schedules just with corporates as well. The big names are out here. The B2 Golds, the Aussies.

Gerardo Del Real: Sure.

Kai Hoffmann: They're here.

Gerardo Del Real: Sure. Let me ask you this. I introduced you as the CEO of Oreninc, but you wear a lot of hats.

Kai Hoffmann: I do.

Gerardo Del Real: For those not familiar with you, can you give us a little bit about your background and the many things that you're doing in the space?

Kai Hoffmann: Yeah. Oreninc is part of the Soar Financial Group. It's a conglomerate of three companies. I started out in the industry doing investor relations, corporate communications. We still do that.

We also run a couple of newsletters out of Europe and a blog. And then Oreninc, as you mentioned, the data company out of Vancouver where we track financings and trying to make sense of the whole mess here.

Gerardo Del Real: Let's talk financings. We have a better precious metal sector. We have a tough base metal sector, which is different than the last time we spoke here last year, because it was the complete opposite. The precious metals were struggling. The base metals were catching a bid. Copper seemed like it was ready to break out.

Kai Hoffmann: Yeah.

Gerardo Del Real: And then of course we know the trade war happened and then is ongoing, right?

Kai Hoffmann: Exactly.

Gerardo Del Real: Let's start with precious metals. Have you seen an uptake here in the past six months, specifically in financings?

Kai Hoffmann: We've seen a fantastic summer actually. Looking back in May I gave a presentation as well that was quite pessimistic about looking forward.

Gerardo Del Real: I recall.

Kai Hoffmann: Especially the summer months, I expected very low lows in our index and I was predicting almost all-time lows, but the sentiment changed, gold started to run $250. We are trading close to $1,500 today. When we last spoke in May, I think we were trading $1,180, $1,200 gold. Right?

Gerardo Del Real: Right.

Kai Hoffmann: Things weren't too bad, but there was no interest.

Gerardo Del Real: Right.

Kai Hoffmann: Right. All of a sudden with $1,500 gold, people are looking at it. We're still missing the generalists, but we've seen financings happen. It's still taking a long time to fill the good financings. New Gold took forever to fill. It was $150 million bought deal.

Gerardo Del Real: Sure.

Kai Hoffmann: And others, like grassroot explorers, they still have a hard time finding dollars on the street.

Gerardo Del Real: Let's talk about the quality of those financings. Are companies still having to give away those three- and five-year warrants?

Kai Hoffmann: They still do, but I've seen more and more of the financings without warrants. Companies are trying to push for that, obviously. That shows strength and good quality of projects usually.

Gerardo Del Real: Excellent. We're in the middle of what I think as a pullback in the gold price. It ran up too high, too fast, I think. Right?

Kai Hoffmann: It did, yeah. A lot of generalists missed it and a lot of people still don't trust it. That's why we still have a hard time closing financings quickly.

Gerardo Del Real: Sure.

Kai Hoffmann: They're open too long. Sometimes deals have to be repriced. Haven't seen it too often, fortunately. But as I mentioned, that New Gold financing, that bought deal was open too long, in my opinion.

Gerardo Del Real: Yeah. Okay, let's talk base metals. Obviously, completely opposite of the precious metals space. Last year, financings were everywhere. Everybody was attaching copper to their name. Bad timing, right?

Kai Hoffmann: Oh yeah. But we've been joking with companies here at the conference as well. They should just rebrand and just take that out of the name again and once it becomes fashionable again just go back to it. But it's just not in fashion right now. Trade wars are partially to blame for that.

Gerardo Del Real: Sure.

Kai Hoffmann: It's just no interest. People don't know where zinc, copper are heading. Yes, there's demand. The battery space is sort of slowed down as well. The demand from there, it's tough to forecast. Everybody sees it coming.

Gerardo Del Real: Sure.

Kai Hoffmann: But we haven't seen it breakthrough yet.

Gerardo Del Real: Let's talk about companies you like. We talked about the fact that you wear many hats. Any companies that stick out to you that you're following, that you cover, that are maybe clients of yours?

Kai Hoffmann: Yeah, we had a couple of good meetings here as well and I'm here to meet a lot of new deals just to get a good overview and not just for the IR side.

Gerardo Del Real: Sure.

Kai Hoffmann: That's secondary to me here.

Gerardo Del Real: Sure.

Kai Hoffmann: I also represent a fund out of Germany, so we're looking for opportunities and ideas. Obviously I'm biased cause some of my clients I actually do quite like.

Gerardo Del Real: Sure.

Kai Hoffmann: As I should.

Gerardo Del Real: Absolutely.

Kai Hoffmann: And I hope others agree with that as well. But Cartier Resources (TSX-V: ECR) is one of the clients that I like a lot.

But another company I like is Integra (TSX-V: ITR). They're not a client or anything. So I can own shares. So full disclosure.

Gerardo Del Real: Excellent, recent PEA.

Kai Hoffmann: Yeah, PEA looked fantastic. I think that company has a lot of room to grow, developing the project out in Idaho. I think you follow Idaho companies quite closely. So I'm a big fan of the management team. I've known them for quite a while.

Gerardo Del Real: Absolutely.

Kai Hoffmann: Those are two of my top picks, I'd say, in this space right now.

Gerardo Del Real: Excellent. As far as sectors go, are you biased right now? Obviously there's a precious metals bias. Are you being cautious in that sense or are you completely staying away from the base metals or are you dibbling and dabbling?

Kai Hoffmann: Right now I don't see a sense to go into base metals. The problem is when you do financings – and I try to do quite a few because you get sometimes better terms, you get a warrant attached to the financing. It makes sense. But we don't have a base metals market as you said.

Gerardo Del Real: Right.

Kai Hoffmann: Like why wait for months and you're stuck in the stories. Right?

That's one of the downsides. And I've been having conversations with people like, “Oh they don't do private placements in general anymore because you're stuck to the term,” the four-month hold terms and everything.

Gerardo Del Real: Right.

Kai Hoffmann: But my problem with that is how do you advance the company then if you just buy in the market.

Gerardo Del Real: Sure.

Kai Hoffmann: You need both.

Gerardo Del Real: Sure.

Kai Hoffmann: Right. So my personal focus, I've been doing quite a few financings in the gold space.

Gerardo Del Real: Perfect. Where can people find you, Kai?

Kai Hoffmann: Oreninc.com or soarfinancial.com.

Gerardo Del Real: Fantastic, Kai. A pleasure as always.

Kai Hoffmann: Appreciate it.

Gerardo Del Real: Thank you

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