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Tavi Costa: AI Is Creating a Massive Opportunity in Mining

VRIC Media Sep 18, 2026 40:49

Summary

Tavi Costa argues the Fed cannot afford to fight inflation, making policy accommodation and hard assets the likelier path.

With ten-year Treasury yields near 5% and CAPE ratios (cyclically adjusted price-to-earnings) at dot-com-era levels, bonds now compete seriously with expensive equities.

He sees AI's capital spending as a structural metals demand story, with mining a cheaper way to own the trend than technology stocks.

Silver miners averaging 40-50% free cash flow margins (profit after all spending) are his top pick; he favors gold miners over bullion.

If the AI trade unwinds, he expects miners to outperform rather than repeat 2008, because constrained mine supply and structural demand differ today.

Darrell Thomas's takeaways

  • Top takeaway Frames the September 2026 Fed meeting as market-implied, noting roughly 90% odds of a hike priced in the day before the decision, with bond yields rising and government debt getting more expensive.
  • Raises supply-driven inflation pressure: closed straits and Houthi disruption of Saudi oil shipments, diesel at all-time highs, and fertilizer and agricultural costs grinding higher and feeding into consumer prices.
  • Highlights tungsten's jurisdictional concentration in China, Russia and North Korea, and notes a government recently took a stake in a tungsten company.
  • Asks whether an AI bubble pop would take miners down with it or whether miners join the rally, citing Ray Dalio's warning of a government debt crisis in the next two to three years.
  • Questions whether the market is appreciating silver miners' annual free cash flow, pointing to charts that he says Bloomberg is now posting.

Tavi Costa's takeaways

  • Top takeaway Argues AI makes mining the better asymmetric bet: more AI means more energy, infrastructure and materials against a mine supply curve he says is constrained for the next 5-15 years with no pipeline of new mines — mining is about 1% of the global equity market and he expects it to reach double digits, multi-bagger potential in his view.
  • His base case is that policymakers cannot afford to fight inflation and may instead change how inflation is calculated, so real inflation keeps getting worse — he treats volatility in inflationary assets as a buying opportunity.
  • Says the 10-year Treasury yield, above 5% as of the September 2026 interview, is probably near a peak, but warns investors underestimate how far the government will go to cap yields, with purchases potentially far larger than the current Treasury buybacks.
  • Is not buying gold at these levels but is buying gold and silver miners, which he calls the best businesses in the market today — silver miners hold around 10% of market cap in cash and earn average free-cash-flow margins above 40%, and he expects cash-rich majors to acquire small-cap developers with strategic assets.
  • Says miners are more likely to join the tech rally and outperform than be dragged down by an AI bubble pop, would not sell his concentrated mining positions even in a 30-40% drawdown, and is launching a mining-focused fund in October 2026.

Ray Dalio's takeaways

  • Top takeaway Cited in the interview as warning of a government debt crisis within the next two to three years, raised by the host as part of the risk backdrop to the AI-bubble question.