Skip to main content

“We’re Selling Oil Stocks Now” says Resource Fund Manager Adrian Day

MiningStockEducation.com Mar 10, 2026

Summary

Adrian Day argues the U.S. is drifting into 1970s-style stagflation, with understated unemployment, maxed-out credit cards, and stubborn inflation eroding real wages.

Gold typically rallies ahead of a geopolitical event and sells off as profits are taken; Day remains extremely bullish on gold for the next 6-12 months.

Oil stocks have rerated on buybacks and dividends and are no longer cheap relative to oil, so Day has been selling them rather than buying.

Gross underinvestment has left most commodities without supply cushion; even permitted copper projects need about five years before first production, so prices must ration demand.

Day favors large-cap gold producers like Agnico Eagle on price-to-free-cash-flow value, sees some juniors as phenomenally undervalued, and holds 19.9% of Lara Exploration.

Key points on Agnico Eagle Mines

  • Day argues Agnico Eagle remains undervalued: its price-to-free-cash-flow is higher than a year ago but lower than in each of the five years before that, and he calls it 'very, very inexpensive' if gold holds near current levels.
  • He cites Agnico's margin expansion, saying all-in sustaining costs are around $1,700-$1,800/oz while the stock has risen roughly 50% in six months and from about $45 two years ago to about $220 as of the interview.
  • Day notes Agnico now produces the second-largest amount of gold of any mining company, and that its debt paydown has improved its free cash flow multiple.
  • He says he would still allocate new money to Agnico but at smaller weights than in the past — roughly 4% today versus 10% he would have put in years ago — because of where prices stand.
  • He expects generalist retail investors moving into gold to buy the big caps like Agnico first, so he sees further to go in these names as long as the gold price keeps rising.

Key points on Franco-Nevada Corp

  • Day says some clients now hold 20% of their account in Franco-Nevada, so despite his reluctance he is trimming the position to right-size it.
  • For a new account today he would allocate roughly 5% to Franco-Nevada versus about 10% he would have given it in earlier cycles, though he would still buy it.

Key points on Wheaton Precious Metals

  • Day says Wheaton Precious Metals remains a big-cap holding he would still buy in a new account, but at a reduced allocation (around 4-5% versus 8% in earlier cycles) given how far the price has moved.

Key points on Lara Exploration Ltd

  • Day discloses that Adrian Day Asset Management owns 19.9% of Lara Exploration — the largest stake it wants, to avoid the 20% level where buying and selling restrictions apply.
  • He praises the team as experienced and ethical, noting they ran the company on minimal cash for years while holding pieces of or royalties on multiple projects, some already generating revenue.
  • The core of his thesis is the Pilar (referred to in the transcript as 'Pinalto') copper discovery in Brazil, which he calls one of the largest copper discoveries of the last decade, made by the same team behind the Timok copper discovery in Serbia that was later sold to Zijin.
  • He argues the deposit will get built because of the copper shortage and its location in a mining-friendly jurisdiction with flat farmland, no indigenous people issues and no environmental objections.
  • Day expects Lara to add ore through exploration on newly acquired adjacent land (the 'Atlantica' acquisition) and predicts that either before or after the first preliminary economic assessment — expected within a year — someone will buy the deposit, if not the company.

Adrian Day's takeaways

  • Top takeaway Day argues the US is sliding into stagflation — employment and retail sales are weakening while inflation stays stubborn — and expects commodities, which he says move on investment cycles rather than the economy, to perform as they did in the late 1970s.
  • He is 'extremely bullish' on gold for the next 6-12 months as of the interview, explaining that gold's failure to rally on the Iran war is the normal pattern of pricing-in ahead of an event followed by profit-taking.
  • On oil, he says the commodity itself remains undervalued but the stocks have rerated on buybacks and dividends and are no longer cheap, so in the week before the interview his fund was selling oil stocks rather than buying.
  • He sees a structural copper shortage: supply five years out is already known, and even with EV and data-center demand cut in half there is not enough copper at today's price, so the price must rise to ration demand.
  • He describes his gold-stock strategy as right-sizing positions — trimming outsized holdings like Franco-Nevada while still buying the big caps at reduced weights, and favoring juniors with revenue, strong balance sheets or supportive major shareholders who can fund them non-dilutively.

Bill Powers's takeaways

  • Top takeaway Host Bill Powers frames the demand debate by noting EVs use about four times the copper of an ICE car and that data centers need copper for wiring and cooling, asking Day how he balances that against supply constraints.
  • He challenges Day on recycling, citing copper being stripped from Detroit houses during the 2000s, and draws out Day's view that higher prices eventually bring recycling and substitution.