Gerardo Del Real of Resource Stock Digest sat down with Stefan Gleason, president of Money Metals Exchange and a longtime advocate for sound money stewardship and smart precious metals ownership.
The interview dug into why Money Metals is one of the most trusted firms in the sector and how they’re helping investors protect and grow their wealth. Not only does he help clients buy and sell gold, silver, copper, palladium, platinum, and rhodium, he also helps them invest through IRAs, borrow against their metals, or store them in North America’s largest private vault.
They discuss Empress Royalty (TSX-V: EMPR)(OTC: EMPYF) and why Stefan sees the small-cap as a standout in the royalty and streaming space thanks to its profitability, disciplined strategy, and world-class backing.
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is a gentleman that, frankly, does not need an introduction — but I will provide a brief one anyway. He's the president of the Money Metals Exchange and a director of the Sound Money Defense League — Mr. Stefan Gleason. Stefan, it's so great to have you on. How are you, sir?
Stefan Gleason: Great, thanks, Gerardo. I've been watching you for years, so it's great to finally meet you.
Gerardo Del Real: I appreciate the kind words. I mentioned off-air that I feel like I know you because I see so much of your work and your interviews — and so the sentiment is equal. Thank you for taking the time.
I have been incredibly fortunate in my career to have people be really kind with their time and their knowledge. And the past month has been a really great example of that. I had the pleasure of interviewing David Rhodes, who I know you're familiar with. And just last week I had the pleasure of meeting and interviewing — I should say — Mr. Rick Rule. And now I get to interview you.
I was sitting here thinking earlier, 'These three have a lot in common as far as philosophy goes.' You're all three Sound Money advocates. You all three like the royalty streaming model.
And it kind of hit me the other day — I was talking to a friend and mentor of mine — that all three of you are substantial shareholders of this small company, royalty and streaming company, of course, called Empress Royalty Corp. (TSX-V: EMPR)(OTC: EMPYF).
I want to talk Money Metals Exchange, and I want to get your thoughts on the best way to own precious metals in this turbulent — but what I think is going to be a very profitable — time for those that position correctly.
But I have to get your thoughts. It's a heck of a coincidence that all three of you are involved with the company. I'm familiar with the team — it's a phenomenal team — but I want to get your take as to how you got involved and why you got involved in such a pronounced way.
Stefan Gleason: Sure. In the case of Empress — I've always been a huge fan of royalty companies because of the benefits of getting exposure to the best part of the mining industry without the downsides.
You're not taking on that other risk that comes with most mining companies — you know, the government risk, the operational risk, the exploration capital costs and everything. And it's basically just taking a percentage right off the top, and you don't have to put in any extra money other than the initial investment.
I've always favored royalty companies because of that superior model. It's really geared to harness the best aspects of mining and eliminate the worst.
In fact, inflation is your friend. Even if a project is delayed, that can be not necessarily bad — because the prices are higher in the future, and you're getting a percentage of that right off the top.
I've always liked royalty companies for a variety of reasons. I think it's the best way to invest in that sector because it's such a difficult area — the mining industry in general. So that's, for me, the best way.
And I like the smaller royalty companies in particular, because I don't think the market really recognizes the smaller ones — because they haven't reached critical mass. They haven't been discovered by most investors, and so they're trading usually at a discount.
As they mature and add projects — and have cash flow expand more rapidly — you get the margin expansion, and that causes some torque as they mature.
I think on the smaller side is really where I like to focus — and the royalties. Empress Royalty met those conditions. There's a couple others I'm involved in on the smaller side as well, but in terms of precious metals, Empress is really the number one for me.
Gerardo Del Real: How often... because, I mean, they've been on fire. They just reached profitability, and they're expected to double revenue here over the next several years.
How rare is it for a company with such a tiny market cap — and by the way, I don't think that's going to hold up for very much longer — how rare is it for a company to be at profitability with the kind of team that they have?
Stefan Gleason: That's a really good point, and I think it's a direct result of their strategy and the wisdom that they brought to the model.
They focused on bringing in — and starting with — assets that were either in production or very close to production, instead of long-dated call options on the exploration side.
I think they recognized that, especially in a more difficult market — which the mining sector has had the last few years — if they could make sure they front-load the cash flow and keep their overhead low at the same time, which they've done, and then they’d get to profitability very quickly. And the market has rewarded them already.
We're just starting to really see the fruits of that, particularly as one of their assets recently really got sorted out.
They had a mine that they came in on really late in the process. It had problems for years and years, and it's gotten everything straightened out in the last two years or so — the Tahuehueto project. And that's silver. Silver has that torque, and they got in when silver was at $20 an ounce — and now it's $37 per ounce.
Some of these things have sort of blossomed at the same time as the company has become better positioned and diversified with more assets.
Again, that was a deliberate strategy on their part. And now, I think they're looking at layering in more longer-term assets, now that they’ve taken care of the front-loaded cash flow — and the market is starting to really reward them for that.
Gerardo Del Real: When I was digging through their shareholder registry, it's one of the more impressive ones in the business — especially for such a young company.
Stefan Gleason: Yes
Gerardo Del Real: I noticed — and correct me if I'm mistaken — but I noticed that most, if not all, of the shares that you've owned — and it's quite a bit; it's a substantial stake — you bought in the open market.
Stefan Gleason: Yes, well, it’s probably about two-thirds of them, and most of that was two years ago and last year. But yes, I definitely have a nice position in the company, and I’ve gotten to know the team really well. I really like their thoughtful approach — they really spend a lot of time analyzing.
They have that Endeavour Financial relationship, where they have access to a very high-end team without much of the cost. It’s available to them, and they’re seeing great deal flow.
The other thing I like about Empress is that they focus on originating royalties, as opposed to chasing pieces of paper that are already out there. They’re going in and directly underwriting projects. They’re bringing in that team of expertise to do so, and they’re able to get direct access to the mines themselves and the producers, understand the management team, and decide whether to invest.
They see a lot of different opportunities, so they can be selective. And they’ve focused — at least in the past — a bit more on tougher jurisdictions where they have expertise and therefore not much competition.
On the other hand, they’re also not going after the really big ticket sizes, so again, not much competition. Most royalty companies are just going out and buying portfolios. Very few — especially on the smaller side — are originating royalties themselves. And so that’s one of their competitive advantages. I just like it.
Gerardo Del Real: Yes. No, I love that. How important do you think — and obviously it’s a question I know the answer to, but I want to get your take — how important do you think that Endeavour Financial background that Alex and David Rhodes and the team have is? They’ve raised tens of billions of dollars in capital. And again, you typically don’t get that kind of expertise in a company this small.
Stefan Gleason: Yes, I think it’s important in the sense that we’re already seeing that the investments they’ve made have been good ones. And I think that’s because of the skill of the team and the deal flow they have access to.
They can be selective. And again, because they’re originating royalties as opposed to buying ones that already exist, they’re really able to go deep — do a deep dive on the company itself — and underwrite it like a bank would.
They really have an understanding, and they also have ongoing communication and commitments for reports and so forth directly from the operator. Especially for a company that’s small, they’re outclassing a lot of the other small royalty companies in terms of expertise.
Gerardo Del Real: Yes. I think their timing is excellent. I think your positioning, obviously, was excellent.
I pride myself on being a simple guy with simple ideas at my core. And when people ask me about the Money Metals Exchange, I tell them, 'Well, Stefan’s got his own Fort Knox!'
But it’s much more complicated than that. Can you speak to Money Metals and what you do and how you do it?
I think the timing for gold and silver — and just where we’re at geopolitically, with the bond market screaming caution — it’s an important time to know how to own gold and silver in the right way, how to look out for the scams, what the wrong way to do that is, and how you can help with that.
Stefan Gleason: Yes, we’re one of the largest online dealers in the US. We do some business in Canada as well. We buy and sell — we’re a retailer, we’re a wholesaler. We’re also a depository. And we built the largest depository in the western United States.
It’s twice the size of Fort Knox in terms of vault size. Fort Knox has higher ceilings, but we have more square footage.
Gerardo Del Real: I undersold you — I apologize!
Stefan Gleason: We don’t have as much gold and silver in our vault as Fort Knox claims to have.
Gerardo Del Real: You know how much you have though, correct?
Stefan Gleason: We’re audited. There are dual controls, tons of audits — internal, external — everything is carefully scrutinized. Everything that goes in is fully accounted for. It’s insured — all that.
That’s not the core part of our business, though. The core is the dealer aspect — the buying and selling. We also lend against gold and silver, which is very unusual unless you’re talking about a pawn shop... and of course, that comes with very ripoff-level interest rates.
But in the case of Money Metals, we’re able to offer people a line of credit that’s very competitive — similar to a home equity line — secured by their gold and silver, as long as it’s stored in our depository. So that’s another accommodation we offer our customers.
It’s a pretty big industry — though nowhere near the size I think it will be once the public becomes more aware of the role gold and silver can and should play. We’re seeing that recognition grow worldwide. But here in the US, demand still isn’t anywhere near what it is in other parts of the world — especially Asia.
And US demand is not what’s driving the price action we’re seeing in gold and silver — particularly gold.
So you see gold and silver advertised — especially on television. People probably can’t escape it. It’s all over the cable news channels.
And I’m sad to say there’s a part of our industry — mostly those advertising on TV with celebrity spokespeople, offering 'free investor kits' — that are doing a real disservice to investors. In many cases, it’s a classic bait and switch.
The right way to own gold and silver is as actual bullion ounces — bars, coins, or rounds that are valued purely for their metal content. Not for collectible value, not for some story.
That’s not to say there aren’t real rarities and valuable coins out there. If you’re an expert — a true expert — there’s value. But most of what’s marketed as 'rare' or 'collectible' is just ordinary bullion dressed up in a fancy plastic slab, with a story attached.
Unfortunately, most of the people advertising on TV… with high-pressure sales teams behind them and celebrity endorsers… and not to point at any particular company, but there is definitely a business model that leads to people being, I should say, upsold into collectible coins that have very high premiums or proof coins or things that are not... you're not going to recover more than the metal value when you go to sell.
And so unfortunately, there's a lot of that. People are paying way too much. And some of these companies have gotten into big trouble and they've brought discredit, unfortunately, to our industry and made customers suspicious.
The bottom line is, when you're buying gold and silver, the first thing you want to understand is: what is the melt value of the metal that you're buying? And also, what would you be paid that day if you were to sell that very thing back to the dealer?
You need to understand what the bid-ask spread is, and it should be very narrow — particularly in gold, 3%, 4%, or 5% at most for the physical gold bar or a coin. Silver has a bit of a higher spread, but it's not going to be extreme. You're not talking 30%, 50%, 100% type of thing — hopefully 5%, 6%, 7% on the bid and the ask if you were to sell it back.
You need to understand: what is the melt value of what I'm buying, and what can I get if I were to sell it back? And so as long as you're focusing on things that are priced based on the bullion value that's transparent 24 hours a day, five days a week, around the clock, around the world — and you're not paying much more than that — then you're probably going to be fine.
Obviously, you still need to vet the dealer. You need to understand how they operate. Check their BBB complaints or reviews. Some of these other review sites, frankly, don't trust them. Even those are not reliable. And I won't get into too much more on that, but the bottom line is BBB is the only credible source for reviews, in my opinion.
And of course, you're always going to have the complainers, and people understand that. When you do... in our business, we do tens of thousands of transactions a month, so we do extremely well. But there's going to be a complainer out there — there always will be. And people, I think, understand that when they look at reviews. But you should look in particular for evidence of delivery delays.
All of the big blow-ups in our industry — virtually all of them — you could see coming if you were paying attention, either to what happened in your transaction and took a lesson from that and don't come back... or go to BBB and find out, oh my gosh, it's taking them four weeks, six weeks, eight weeks to deliver packages, and you can just see it.
You see these complaints pile up, and it's like they said it was going to be next week, and it turned out to be two months later.
When you see that, you have a big problem. And there are instances where there can be delivery delays — where it actually does happen. Right now is definitely not the case, and it hasn't been for several years. There were some incidents back during COVID where there were periods of time where even well-capitalized dealers may have had delays in shipping.
But right now, in any time recently, absolutely no excuse. All the inventory should be live. It should be available to ship as soon as you deliver a good payment to them. People will have a payment delay on a check or an ACH because there's a fraud risk. So you might have a little bit of a delay before that kind of order is shipped, if it's paid that way.
But the bottom line is: do your due diligence, watch for commitments that are made and not kept. And I'm not saying that you can avoid all problems, but that's probably a good start.
Don't buy from the people who are advertising on TV. I can almost say that without exception. That's the key thing. Just like any industry where there's money, there's bad actors. But in the case of Money Metals, you can ask for a copy of our depository audit, for example.
You can do a personal inspection of it at our site. You can also do it via video. If you are storing in our depository, we can bring it out and show it to you on a camera, remotely, that kind of thing.
Gerardo Del Real: That's incredible.
Stefan Gleason: Yes, there's different things, but the bottom line is just know who you're dealing with and do your due diligence.
Gerardo Del Real: I have to say, if you did half the due diligence that you do for your business for Empress, Empress shareholders are probably going to have a good couple of years. This has been absolutely fascinating.
Where can people find you? If I decide that I want to buy or store some gold and I want it from a reputable source, where do I go?
Stefan Gleason: Yes, go to MoneyMetals.com. That's our main website. You can learn about the depository there. You can buy, you can sell, you can sign up for a loan if that's what you want to do — that's not a big part of our program. But yes, we deal in Canada and the US. We're one of the largest online dealers. We've been in business since 2010. So MoneyMetals.com is the best way to start.
Gerardo Del Real: I think you're about to be a lot busier. Stefan, it's been an absolute pleasure. Thank you so much for your time.
Stefan Gleason: Thank you.
Gerardo Del Real: Let's do this again. Let's follow up. I think we're at the early stage of a historic precious metals market. I think it's going to be turbulent, but exciting at the same time.
I would love to have you back on, Stefan, and get some more of your thoughts — just where we are in the cycle, what history tells you, what it tells you and informs about the future. I think it would be a fascinating discussion to hear your take on that.
Stefan Gleason: Thanks, Gerardo.
Gerardo Del Real: An absolute pleasure.
Originally Published on Resource Stock Digest.
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