The Debt Crisis Is Turning Gold Into Money | Shawn Khunkhun - Contango Silver and Gold

The Deep Dive Oct 1, 2026 19:17

Summary

Guest Shawn Khunkhun expects silver's correction to run into 2027 before a breakout to new all-time highs.

With US interest costs said to consume 30% of tax receipts, he argues gold and silver remain inexpensive versus other assets.

He frames the precious metals space as tiny relative to incoming capital, so the rotation could arrive violently and quickly.

Contango (NYSE: CTGO) spans four districts: Kitsault Valley, Johnson Tract, Lucky Shot, and the cash-flowing Manh Choh joint venture.

A refreshed resource estimate nearly doubled indicated silver at Kitsault Valley, while projected Manh Choh cash flow funds company growth.

The guest explains Manh Choh is a joint venture with Kinross Gold, which operates the project and processes the ore through its Fort Knox facility.
He says Kinross is guiding cash costs of $1,200-$1,300 per ounce for next year's planned 75,000-80,000 ounces from Manh Choh.

Manh Choh distributed about $102 million last year, and the guest projects roughly $170 million of free cash flow next year at a $3,700 gold budget - about $200 million at spot - complementing around $90 million of cash on hand.
A new Kitsault Valley resource estimate released in September, built on 1,877 drill holes and 433,000 meters of drilling, holds 83 million ounces of silver and 1 million ounces of gold, with the indicated category up almost 100% and billed as Canada's largest silver resource.
Johnson Tract - about 1 million ounces at roughly 10 g/t gold with critical-mineral byproducts - is on the FAST-41 dashboard with final federal permits expected by spring 2028, after a 5 km access road and two bridges were completed this year.
At Lucky Shot, a 20,000-meter drill program is meant to outline a 500,000-ounce resource for a feasibility study and a return to about 50,000 ounces per year of underground production, with the new KM vein running multiple ounces per ton.
The guest values the company at $600-650 million and argues each of its four districts is worth about that much, targeting 200,000 ounces per year of gold plus 5 million ounces of silver from Kitsault Valley and Johnson Tract.

Top takeaway Host Steve Hyland argues the US is at a fiscal inflection point where government action will be forced within about a year, noting roughly 30% of tax receipts would go to interest alone if treasuries rolled over at about 5%.
He reads mainstream outlets like PBS now covering the bond market as a sign of a collective realization that something is wrong.
He argues mining investors have become far more sophisticated over the past year, using AI tools to pressure-test whether a project is actually a good investment.

Top takeaway The guest cites Rick Rule's picture of the coming influx as 'pouring a bottle of Scotch into a shot glass' - far more capital than the small precious metals space can absorb, in bullion or equities.

Top takeaway Shawn Khunkhun expects a breakout to new all-time highs in silver at some point in 2027, seeing the nine-month correction - with silver above $60/oz at the interview - as typical of bull-market pullbacks over the past 50 years.
He argues the US is past the point of no return on its debt, with unfunded liabilities already at $120 trillion in present-value terms, and sees gold emerging as a currency as global Treasury reserves fall 15-20%.
He holds that gold and silver remain inexpensive relative to every other asset class, though less undervalued than a few years ago, with physical buying in China and the East driving real price discovery.
He cautions these trends could take 15-20 years to play out, so investors need protection before confidence breaks - and when the masses move, it will be fast and furious.
He warns some valuations have turned absurd after the GDXJ's 200% gain in 2025, making it a dangerous time, yet depressed companies can still be bought at about $20 per in-ground ounce.