Why Durrett Ranks Producing Gold Silver Stocks Above Explorers

Most investors assume the fattest returns in a precious metals bull market sit with tiny explorers chasing the next big discovery. Don Durrett argues the opposite, and he attaches numbers to the claim: in a sustained rally, gold silver stocks that already produce could return 10x or more, while developers heading towards construction could deliver 20x or more.

That ranking comes from a Beaver Creek conference discussion with Jay Taylor, with figures reflecting October 2026 prices. Durrett frames it as the right setup after roughly 15 years of bear conditions in the sector.

His approach is a rules-based filter, not a tip sheet. It also rests on gold price assumptions far above mainstream forecasts, which is exactly why it deserves scrutiny alongside attention.

This piece sets out the thresholds, the checklist and the valuation maths, then shows you where the method can lead you astray.

Why does Durrett rank producers and developers above explorers?

The logic starts with leverage. A producer already pulls metal out of the ground, so every dollar added to the gold price flows towards its margin. A developer expected to be in construction within about three years carries even more leverage, because the market has not yet priced the cash flow its mine could generate.

Explorers face a different problem. According to Durrett, they must raise capital again and again, take several seasons to advance, and rarely deliver 10-baggers (stocks that rise tenfold).

Yet explorers are not dismissed entirely. Durrett points to Snowline, Goliath, Collective and Omai as discoveries that worked regardless of metal prices, which is why explorers can outperform in markets that are not running hot.

At the producer end, he expects Wall Street to favour Hecla and Coeur as the only North American silver miners with liquidity and low location risk. Institutional perspective, as summarised in the research, treats producers as core holdings, developers as higher-beta plays and explorers as options on discovery.

The framework is built to reduce how often you need to be right about a discovery. That makes your first decision which tier suits your tolerance for risk.

What are Durrett’s two rules for buying explorers?

If explorers are the exception, Durrett treats them with exceptions’ rules. He buys only those with strong optionality, meaning a sizable deposit valued very cheaply per ounce in the ground, and only early on the Lane curve, the typical rise, fall and re-rating path a junior follows from discovery to production.

The entry window is narrow. Applied in order, the screen looks like this:

1. Size check: a deposit of at least about 1 million ounces of gold or 20 million ounces of silver, ideally double.
2. Price check: the market should value those ounces at 5-10% of spot.
3. Discovery hole check: a hole of at least 200 gram-metres (grade in grams per tonne multiplied by intercept length in metres).
4. Follow-up deadline: if no follow-up hit arrives after roughly 25-50 holes, sell.

Durrett’s per-ounce target Buy at $20-$40 per ounce in the ground when gold sits at $4,000.

He expects good-location exploration gold to eventually fetch $100-$200 per ounce and poorly located ounces $75-$100. Snowline was valued around $30-35 million when its first hole of roughly 500 gram-metres landed. Durrett bought Vanyan at $8 per ounce and watched it reach about $80, while Free Gold Ventures sits near $10, possibly reflecting market distrust over its pre-feasibility work and heavy drilling.

A scarcity premium is emerging in acquisitions as discovery rates fall and development timelines lengthen, which is one reason well-located ounces can command far more than the cheap per-ounce prices explorers trade at.

The exit rule matters as much as the entry. He is now selling most explorers, keeping Southern Silver as a takeover candidate.

Under this framework, buying a cheap explorer before a discovery hole is speculation, not a position.

How does the producer checklist screen for quality?

Durrett’s 10-point producer checklist comes from a book he wrote around 2010-2012. Its thinking is simple: a durable miner combines a good asset, people who can build and run it, and enough cash to survive bad years.

Property economics

• Low all-in sustaining cost (AISC), the full cost of producing an ounce including ongoing capital
• Long mine life and reasonable capital expenditure
• Good location
• Metallurgical recovery of 80% or more, meaning the share of metal the plant actually extracts
• A second asset or development pipeline

Low cost is not mandatory, in Durrett’s view. Growth and undervaluation carry more weight, as with Mineros, expected to grow from 240,000 to 750,000 ounces, and Heliostar Metals, targeting about 5x from 60,000 ounces.

Management and balance sheet

• Engineers with execution records and shareholder-friendly histories, rather than accountants or geologists
• No debt, and cash of $100 million or more
• A free cash flow multiple of 10 or less

The endpoint is capital returns. Once cash approaches about $1 billion, Durrett favours returning 50-100% of free cash flow through dividends, buybacks and specials. Kirkland Lake, with about $850 million in cash, is his model, and he names Lundin as the only current example.

Costs give this checklist added bite. The World Gold Council reports record industry AISC of US$1,785/oz in Q1 2026, up 16% year on year, though margins remain healthy because prices have risen faster. Durrett himself puts current costs higher, around $1,900-2,000.

Margin compression is already visible as spot gold retreats from its Q1 record while industry costs hold firm, which is why balance sheet strength and cost position matter so much for which producers keep their profits.

With costs at records, you should treat balance sheet strength and cost position as the buffer that decides which producers keep their margins.

How does the three-year market-cap valuation method work?

The checklist tells you what to own. The valuation method tells you whether the price is right, and it starts by ignoring the next 12 months as noise.

1. Estimate production three years out.
2. Multiply by the margin (metal price minus all-in cost) to approximate free cash flow.
3. Apply a multiple to reach a future market value.
4. Compare that with today’s fully diluted market capitalisation, which counts all options and warrants.

Durrett then rates each stock on upside, downside and quality, flagging anything with upside of 2.5 or less as marginal. His portfolio target is returns above 500%.

Here is where the weight sits. Durrett’s inputs assume $7,000 gold and $200 silver, possibly lifting to $8,000 gold in January, with silver at 2-3% of the gold price. His forecast path runs to $7,000-8,000 within 36 months, $8,000-10,000 by decade’s end and about $15,000 by 2032.

A stock’s “6-7x” depends on a gold price you have to believe. Rerun the maths at a price you personally find credible.

Past performance does not guarantee future results. Price forecasts are speculative and subject to change with market conditions.

Where does the framework break, and what did the Artemis and Vista deal show?

The method’s confidence is also its exposure. Every stage leans on assumptions that can fail quietly.

Risks in the method

• Ounce-in-ground blind spots: per-ounce pricing ignores metallurgy, permitting, capex, jurisdiction and timing
• Dilution: juniors reliant on serial equity raises can erode per-share upside
• Projection sensitivity: multi-year multiples assume sustained prices, disciplined costs and no political shocks
• Price-deck gap: mainstream bank forecasts have reportedly clustered around US$2,000-3,000 (not independently verified), against Durrett’s $7,000-$15,000

Even his $4,000 reference price already sits above that mainstream range. Lahontan Gold shows how sentiment can diverge from ounces: about 1.5 million ounces, yet its market cap fell from $18-20 million to $8 million.

Junior mining valuations can diverge sharply from ounces in the ground, as Lahontan’s falling market cap shows, so risk assessment has to look beyond the headline resource figure.

What the Vista deal showed

Last month, on 20 September 2026, Artemis Gold agreed to buy Vista Gold in an all-stock deal at 0.0966 Artemis shares per Vista share. That implied about US$2.83 per share and roughly US$427 million in total, a 29% premium on 20-day volume-weighted prices (Durrett recalled about 20%). Vista holders would own about 5% of the combined company, with closing targeted for early Q1 2027.

“The low premium cost Vista holders a potential 25-bagger,” according to Durrett’s assessment, had Vista built its mine itself.

The buyer’s logic runs the other way: acquirers favour derisked projects and pay before the full re-rating arrives. Current operating data for Hecla, Coeur and Silver Tiger was not available, so those calls remain untested here.

A developer thesis can be cut short by a buyer. Decide in advance whether you can accept a takeover at a modest premium.

Using the framework without adopting the price deck

The durable parts of Durrett’s method are the tiering, the explorer discipline, the producer checklist and the habit of ignoring 12-month noise. The contestable part is the price forecast that drives the upside multiples.

A practical test is to run the screens at a more conservative gold price and see which names still clear the required multiples. Those that do are less dependent on one bold call being right.

Position sizing then follows the tiers: larger weights where cash flow already exists, smaller ones where a discovery or a buyer’s patience decides the outcome.

For readers wanting to turn the tiering into weights, our dedicated guide to building a mining portfolio sets out allocation ranges for producers, developers and explorers, including per-name caps for speculative positions.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.