Old West's Brian Laks dives into metals, mining, and uranium

Episode Summary

Executive Summary: Andrew Walker and Brian Lotts of Old West Management discuss a broad bullish case for metals and mining, centered on uranium, copper, and gold. Brian argues that long lead times, underinvestment, inflation, geopolitics, and AI/data-center electricity demand are tightening supply-demand balances, while government intervention and strategic stockpiling may amplify price signals. The firm remains selective, preferring equities with strong assets and valuation support.

Main Topics: Uranium outlook and supply-demand imbalance (Priority: 5/5): Brian revisits Old West’s early uranium thesis, noting that the market has moved from apathy to enthusiasm, but supply remains constrained by long permitting and construction timelines. He believes higher prices are still likely given nuclear’s expanding role in power generation and the lagged supply response. Portfolio rotation and valuation discipline (Priority: 5/5): Old West scaled back uranium after the 2021 run-up when valuations became stretched, then increased exposure again when sentiment collapsed in 2024-2025. The firm emphasizes buying and trimming based on valuation, sentiment extremes, and one-to-three-year return horizons rather than staying fully exposed through the entire cycle. Copper as the next major core theme (Priority: 5/5): Copper is presented as a major focus because it sits at the center of electrification, AI data centers, EVs, and grid buildout. Brian sees a widening deficit driven by rising demand, few new discoveries, depleting mines, and rising costs, with many projects still requiring higher prices to proceed. Gold and broader precious metals (Priority: 4/5): Gold remains a core hedge, but Brian says its demand is harder to model because it is more psychological and monetary-policy driven than consumed-use driven. Gold and some miners have performed well recently, but the firm has trimmed exposure as sentiment improved and the crowd started to warm up to the trade. Metals at or near highs across the board (Priority: 4/5): The discussion broadens to gold, silver, copper, platinum, and other metals approaching highs. Brian attributes this to structural demand growth from technology and electrification, plus supply-side constraints from inflation, declining grades, and geopolitical friction, but stresses that each metal must be judged individually. Government intervention and critical minerals policy (Priority: 4/5): Brian argues governments are increasingly treating metals as national-security assets, citing tariffs, stockpiling discussions, fast-tracked permits, and direct investment such as MP Materials. He sees policy support as another factor tightening supply and raising strategic value for domestic projects. AI as a driver of energy and materials demand (Priority: 3/5): At the end, Brian expands beyond mining to argue that AI will increase demand for electricity, sensors, equipment, and industrial materials. He views energy and materials as unavoidable bottlenecks for the AI buildout and a new source of long-term demand for commodities.

Key Arguments: Old West’s edge comes from identifying structural supply-demand mismatches years before the market recognizes them, then adjusting exposure as valuations and sentiment change. Uranium remains bullish even after the rally because long-term prices, inflation-adjusted project costs, and the slow pace of mine development imply that current prices may still be insufficient to meet future demand. The uranium sector is still underbuilt relative to future electricity needs from nuclear life extensions, SMRs, and AI/data centers. Copper is one of the best expressions of the electrification and energy-transition thesis because it is essential for generation, transmission, and end use of electricity. Many copper projects need higher prices and significant time to come online, so today’s price may not be enough to solve the projected deficit several years ahead. Gold is useful as a portfolio hedge, but unlike industrial metals its valuation is more subjective and tied to monetary conditions and investor psychology. Government support for critical minerals is no longer theoretical; equity stakes, stockpiling, tariffs, and permitting reforms are already influencing the sector. The best opportunities are not necessarily the highest-torque, highest-cost projects; Old West prefers quality assets, good management, and valuation support. AI does not eliminate commodity demand; instead it increases demand for power, physical infrastructure, and materials needed to make AI useful in the real world.

Data Points: Uranium exposure timing: Built positions in 2017-2019 - Old West says it was early to the uranium trade and accumulated before the broad market recognized the thesis. Uranium spot price move: From about $20 to $50 in 2021 - Brian says the uranium price jumped sharply during the 2021 rally, lifting many stocks much faster than expected. Uranium spot price range mentioned: Around $70 today - Used as the current spot-price reference during the interview. Long-term uranium contracting price: Around $80 today - Brian distinguishes spot from the contract price where utilities actually sign deals. Past uranium peak: Maybe $130 per pound - Brian says a prior high around this level is not impossible again, given current conditions. Recent uranium price pullback: From $100 to $60 over 12 months - He cites this as the sentiment washout that created opportunity to add exposure again earlier in 2025. Potential copper project threshold: $4 to $6 per pound - Brian says some copper projects may work in this range, but many need higher prices once delays and overruns are considered. Copper benchmark price referenced: $10,000 per ton - Andrew references the then-current copper price during the discussion of supply response. Copper tariff shock example: U.S. copper price 30% above world price - Brian notes the market briefly priced in tariff risk after tariff headlines. Hypothetical tariff level discussed: 50% - A floated tariff level that caused market repricing before raw copper was later excluded. U.S. tariff exclusion: Raw copper excluded - Brian says the eventual policy excluded raw copper and focused on finished and semi-finished products, collapsing the spread. Investment horizon used by Old West: 1 to 3 years - Brian describes this as the firm’s preferred horizon for balancing upside and opportunity cost. Portfolio trend: Uranium was the biggest exposure five years ago; portfolio is now more balanced - Shows the firm rotating from a uranium-heavy stance toward a broader metals basket. Gold performance period: Best performer in Q1 and strong into the next quarter - Brian notes gold had recently become a standout performer for the portfolio.

Pivotal Quotes: "Early is wrong, but I guess in that case, it wasn’t." — Brian Lotts: On being early to the uranium thesis and the payoff from buying before consensus arrived. "What are the hands and tools, but it'll just have to be a to be continued because we can just go to the podcast and talk things until Brian West from Brian Locks from Old West Management." — Andrew Walker: Closing remark referring to Brian’s framing of AI needing physical-world infrastructure and materials. "The real choke point are these materials." — Brian Lotts: On the energy transition and AI buildout, arguing that metals and minerals are the bottleneck.

Implications: Listeners should come away with a cyclical-but-structural bullish view on strategic metals, especially uranium and copper, but with a valuation-sensitive approach. The sector’s winners may be chosen by supply lag, policy support, and AI-driven electricity growth rather than simple commodity beta.