Rick Rule & Jesse Felder – Silver, Uranium, Nickel and Gold Miners

Welcome to The KE Report Weekend Show! This Weekend’s Show is focused on resource sectors, one in a bull market and the others looking for catalysts. Uranium is in the bull market, silver is trading in a range while nickel and gold miners continue to slide lower.

Segment 1 and 2 – Extended Segment – Rick Rule, Founder of Rule Investment Media joins us to discuss why he thinks silver and nickel are in for a major run higher in price. On the uranium front we ask his thoughts on the sustainability of the explosion of price and how he views the uranium stocks. Rick has a couple conference upcoming that we discussed. Here are the details on each.
Prospect Generators Bootcamp (Virtual), Saturday, April 20th, 8am-4pm PST – Click here to sign up – https://rebrand.ly/pgenbootcamp

Rule Symposium on Natural Resource Investing (In-person & Livestreamed), July 7-11, Boca Raton, Florida – Click here to sign up -https://rebrand.ly/m7c610h

Segment 3 and 4 – Jesse Felder, Founder of The Felder Report wraps up the show with a focus on the major gold mining stock. Coined the BANG stocks (Barrick, Agnico, Newmont and Goldcorp) these major miners have continued to struggle on the share price front, while gold holds above $2,000 and earnings have been strong. This ties into Jesse’s breakdown of the 3 most hated assets; gold miners, oil producers and Chinese equities.

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Welcome to the Corin Economics Report a weekly look at financial and political topics relating to asset-based investing guests on this program pay no fees to appear and guests and hosts disclose any Equity interest in company’s profiled now the corand Economics Report hey everyone welcome in to the weekend

Edition of the K reports cor and Shad here your host for this weekend’s Edition also your host on our website ker report.com our podcast the K report and now also posting a number of our interviews on YouTube just search the K report on this weekend show we’re going

To start off by focusing on the resource sector and a commodity that is running as well as a couple that I think a lot of investors are wondering if they are going to rebound start some uptrends here we are chatting with Rick rule founder of rule investment media Rick

It’s always great having you on the show and always enjoyable to talk about a number of different sectors last time we had you on the show about a month ago we focused more on precious metals now we’re going to take a step aside and look at some other sectors starting with

Kind of the one bright light for resource investors recently that’s been uranium uranium is over $100 a pound on the spot Market it’s essentially gone vertical from August of last year but it really put in a floor back in let’s say 2016 2017 and has been moving higher it’s

This vertical nature recently though that has a lot of investors wondering is this too far too fast for Uranium where do we go from here so Rick big picture view on the uranium sector first and foremost please two parts to the big picture few with regards to Junior

Resource speculators the easy money has been made in the equities when a commodity goes from hated to tolerated uh to admired to loved the easy money has been made and if you are a near-term Trader uh at the very least take your money out of the market uh and uh

Maintain an interest that is already paid for with your profits I’ve done that I’ve sold enough of my basket of Duty that although I still have a lot of stock I have no cost no basis in the Juniors but I think there are structural changes around the uranium market and I

Think the need for power particularly electricity that doesn’t come with carbon or particulate pollution generation I think those two things mean that perhaps for careful investors while the easy money has been made the big money is ahead it is highly likely according to the world nuclear

Association that in the next 12 to 15 years the demand for Uranium basic uranium and uranium en Enrichment Services will double in the very near term which is to say the five to six year time frame uh we don’t have the ability to increase production that fast estimates of the current Supply deficit

Range from 30 million pounds to a high of 7 million pounds my own guess is somewhere in the middle of that and we have the ability through restarts at cako and Kazam prom to address uh within the 2 to threee time frame between 30 and 35 million pounds of that shortfall

The difficulty becomes in years three through seven how do you address the rest of the shortfall because although the uranium price at least in the spot Market is well North well above the incentive price needed to bring new mines into production you don’t bring new mines into production overnight it takes years

Sometimes decades to permit them to finance them and to build them meanwhile there are 68 large reactors under construction around the world and between 110 and 150 in various stages of uh permitting and financing so the demand for Uranium is continuing and it’s continuing inexorably there are going to be uh I

Think without a doubt supply shortages I don’t think the supply shortages occur in 2024 I think there’s Ample Ample above ground inventory to get us through 2024 doesn’t mean there won’t be a SP a price spike but there doesn’t need to be but for a few structural reasons

Investors in uranium equity who are willing to do the work can look forward to a very good decade well Rick it would be nice to have you uh weigh in on when we see people talking about the uranium sector they’re normally referencing the spot market price but really the action for

The mining companies happens with term Contracting and the longterm off-take agreements we hadn’t seen that in a long time we’ve been waiting for it it’s finally started could you speak to that nature of how companies are getting positioned in the term contracts and why we’re finally gaining some traction on

That front Cory that’s the Crux of the matter and I’m glad you framed it like that first of all three years ago most of the volume took place in the spot Market But the spot Market has dried up to the extent and this is an interesting

Quip there is often more volume in the sprot physical uranium trust a spot derivative than there is in the spot Market in fact I jokingly now say that the sprot market is more important than the spot market and that changes a lot of things investors look at the uranium

Market through through the prism of the spot price and the spot price is increasingly irrelevant to both buyers and sellers of uranium the action is taking place on the term Market the good news about the term Market is that both uh suppliers and consumers of uranium unlike any other commodity in the world

Can enter into contracts that give them some price and Supply stability for producers if you have a credit grade uh investment grade counterparty in a term contract it means that you have some certainty as to your minimum expected revenues and there’s visibility associated with that certainty if as a

Supplier you are willing to share it many suppliers aren’t for competitive reasons if you are a provider of capital let’s say debt Capital to build a uranium mine and you have certainty Revenue certainty with regards to the sales price price of a proportion of the product that you sell it makes it much

Easier to understand how your loan is going to be paid off and it can lower the cost of capital for uh companies similarly to the extent that companies are able to secure long-term flexible term Market contracts it it will make it much easier for Equity analysts to do forecasts around revenues

Margins free cash flows and will increase the certainty that investors feel with regards to uranium equities the downside of all this is that it’s fairly opaque which means that you have to do some work as an example when you’re looking at Cho’s quarter leaves you have to look at the pounds produced

The realized price per pound the realized cost per pound they aren’t sharing the details of their contracts my suspicion is that five years from now they will be sharing the data around these contracts because it’ll materially decrease their cost of living but intelligent uranium investors are going

To have to do some sleuthing work for the next three or four or five years to get a competitive advantage against other investors who are operating the same place mercifully for guys like me who are willing to do the work most investors technique has got a hunch

Better bunch in other words they pay attention to narrative rather than arithmetic which leaves I think a real competitive advant vage to people who understand the uranium market for what it is and who are willing to do the work so Rick diving into the companies then I

Want to talk jurisdiction are you or do you think investors should be more focused on us or North American Focus companies like those in Canada even in the Athabasca or even look to some other jurisdictions uh I think that the American us companies will have an advantage in terms of the cost of

Capital because us equities markets are the most developed Equity markets in terms of liquidity in the world and US Equity markets are underserved with regards to resource issuers in direct contrast to Canada the different the the difficulty with the US producers is materiality the amount of

Uranium that ueec and the other sort of mid-tier American Juniors can produce and the amount of gross revenues that they can generate gives them a materiality issue they will have access to very low cost of capital uh including gifts if that’s the right phrase from the US taxpayer and they will generate

Amazing trading liquidity as they already do on us exchanges and as a consequence enjoy a lower cost of capital the difficulty is that it’s very hard for me to see total uranium production in the US exceed 12 million pound pounds there are other individual mines in the world that will exceed that

Number so it really depends on what you want to do if you want to trade stocks that have liquidity uh and have built-in non-market advantages then the United States is your place there is a certain certainty to the United States uh if you are looking for more Quantum upside I

Think you have to look to the athabaska Basin in Canada you have to look for a look to a basin that can uh deliver extraordinarily high-grade deposits uh in what is and I mean Saskatchewan rather than Canada uh a better political jurisdiction than the United States I

Hope that distinction is clear to your viewers I’m not suggesting that Canada is a better investment jurisdiction in the United States I’m suggesting that Saskatchewan is the best uh resource investment destination uh in Canada and I really like Saskatchewan as a domicile for resource Investments well Rick this brings up an

Interesting point about the different stages of the uranium stocks the ones that have run really if you look back since 2020 the pandemic crashed low to present a lot of them were up 10x 20x uh and just in the last year some of them up 3x 4X but those are the more

Developed companies some that are near-term producers some going into production this year there’s a lot of explorers though and some that are just building resources that haven’t moved yet do you see an edge on those earlier stage companies now that some of the big boys have run uh I don’t for most of

Them I suspect there’s about 80 development stage companies and I suspect 11 or 12 are viable I think over the next two years you’re going to see a separation of the wheat from the chaff of course with the distribution of Paradigm and what passes for information

On social media there are probably a lot of $15 million market cap Pretenders that will become 100 million market cap Pretenders which is to say that the flatsome and Jetsam will rise with the real product speculators need to take note Corey you have an early memory of the last bull

Market in uranium in the last bull market in uranium we went from at the beginning of the cycle of having five Juniors two at the end of the cycle having 500 Juniors I’m not sure that we’re going to surp surpass that level of idiocy we probably aren’t but it’s important to

Note that of those 500 Juniors that polluted the investment atmosphere of that uranium bow Market uh at most there were 25 that were viable and investors should have known much of the hatred that the uranium space enjoys today is a consequence of ill-informed investors who bought uranium at the top at $145 a

Pound and rode it all the way down to 10 and by the way wrote it down to 10 in corporate rappers which is to say junior shells that didn’t have any uranium except as a heading on a share certificate oh we’ve seen that before in many different sectors especially when

We’re in markets like this here Rick where a lot of the other resource sectors are struggling everybody seems to follow price and that means lot of new uranium companies let’s use this as a time to switch over to other metal where I think we have already seen some

Companies bail on it and move into uranium that being silver silver very much stuck in a Range broadly above $20 an ounce Which is higher than prices really from 2014 through 2020 but it’s been boring for investors I know just how much our audience thinks that silver

Should be providing that torque to the upside it can really get running maybe when gold breaks out the problem is silver has been stuck in this range even putting in lower highs Rick what do you think about silver as an investment at these levels well let’s start with the

Phrase boring uh at age 71 I love boredom it’s an antidote to Terror so the fact that are Bor that people are bored by it implies at least one thing to me which is to say it’s out of favor much like uranium was in 2022 The Narrative around silver is such

That people have paid attention to its explosive upside as have I I’ve in fact experienced it and what happens is that when people get attracted to the silver narrative and they have the expectation of the explosive upside I’m talking about as an example the Reddit silver squeeze in

20121 the wrong class of Speculator gets involved for the wrong reason uh and when they get disappointed which is inevitable there is no hatred so fervent as the hatred of a jilted lover and so the silver market I would say perversely benefits from this level of abject hate

Which makes it perversely for me uh an ideal place to play their hatred doesn’t change the narrative their hatred doesn’t change the fact that three times in my career I’ve seen bull markets in silver that were absolutely Preposterous generators of wealth what it means is that uh until that moment

Repeats itself which I believe it will uh I don’t have much competition on the bid which I like let’s review a few of the facts around silver when people look at Silver and they say that the current price of silver doesn’t justify the cost of production they’re only right with

Regards to primary silver production that is to say silver produced from Silver Mines which is something less than 18% of total Supply most of the supply of silver comes from recycling or comes as a consequence of byproduct of copper lead zinc or gold mining which means that at least with regard to the

Byproduct production from other mins the price of copper is less important the price of silver pardon me is less important to the production numbers than the price and volumes of other material what you are seeing here with low silver prices is a reduction uh in recycling and recycling capacity because at 2 $5

Silver you can’t as an example recycle many solar panels which are the repository of a lot of already produced silver so you are beginning to see Supply decreases but not in a place where the silver bows if you will will see it will see it because they haven’t

Done the work you are seeing a strong surge in underlying fabrication demand for silver uh around solar and around biomedical silver is a fantastic germicide and and there’s an expectation this year that well over a billion ounces will be used in fabrication and therefore a substantial part will be off

The market even with the ultimate recycling that occurs in some Industries what’s important to understand I think is that and I Can’t Tell You Why for silver to move gold has to move first the precious metals narrative historically has been driven by gold when the narrative around

Precious metals uh begins to attract the generalist investor they come in the lowest stress names which is to say physical gold and then the established gold producer and it’s only after the momentum the price momentum the price verification has occurred in Gold that the silver narrative takes hold but in my

Experience once the silver narrative does take hold uh I think because the lower unit cost of silver as opposed to gold and the ability of more people around the world to participate uh in the silver market silver moves further and silver moves faster than gold after that’s been

Established when will this occur I don’t know why am I willing to wait if I don’t know because three times before in my career uh I’ve gone got truly quantum moves out of silver as a very young man in the 1970s I watched sadly without participating calain go from 10 cents to

$65 in the early part of the decade of the 90s I backed both silver standard and Pan-American silver and watched them go from 72 cents and. 50 respectively to $45 those moves Corey got my interest and and if I have to wait two or three

Years for a basket of stocks to give me returns that are somewhere between 300% and 1,000% I’m very willing to do that the time value of money involved in being three years early becomes inconsequential given the scope of the gain many people who compete with me or

Could compete with me don’t seem to have the financial or psychological wherewithal to wait or to suffer the V volatility in the interim which to be honest with you Corey Delights me well Rick you’ve often said you’ve stayed around for the pain now stay around for

The gains and you’ve also said that you uh love hate so with the silver market setting up that way it reminds me a lot of what we just talked about with uranium where there was a long waight uh people complained if you were early but then the payoff is there drilling down

In the Silver Company though as you mentioned a lot of poly metallic so some are zinc companies and Lead companies and copper companies with silver in drag how do you sus out which silver companies can have that upside torque when there’s so many other metals involved materiality works for me I

Think that you need to have at least an Inu recoverable reserve and resource Target in excess of 100 million ounces of silver I don’t care very much about small deposits uh even small highgrade deposits it’s true that you can make money on them but the probability of

Making enough money to overcome the time value of money and the risk is too low for me so I have a materiality threshold I look for deposits that I think will be in the best cash cost quartile among silver companies uh in other words I’m personally less interested in the

Leverage to the silver price than I used to be I used to look for higher cost deposits that would give me more leverage to the price upside but that’s a fairly common technique now so I’m looking perhaps to lower my ultimate expected return in return for giving up a whole bunch of

Risk by looking for companies that are in the lowest cash cortile that I see in the business I’m looking for companies that have the probability of delivering top quartile return on Capital employed but at rate Capital employed in excess of 25% at current silver prices I look too for management

Teams that are exploring in known silver districts I don’t think that you need to reinvent the wheel here I think that you need to use modern technology to look for deposits undercover in terrain that have already produced a lot of silver now for me principally that means uh Mexico Peru

Poland uh and were I allowed to Russia those are places that produce silver uh in the size and in the sort of quantum I talk about and I like to be involved with people who have been uh quite successful hopefully in silver before but at least uh in terms of epithermal

Or mesothermal silver deposits when you go through that whole exercise you are left with a universe of uh you know probably on the outside 15 companies and I’m not suggesting by the way that if we get a run in Silver from 22 or $23 to some number North of

50 that that Rising tide won’t float all boats I’m not suggesting either that there aren’t more extravagant gains to be made in the more marginal s companies what I’m saying is that for me by following a sober course of action I’m willing to trade some of my potential upside for eliminating most of

My probable downside I want higher quality names to that point then let’s talk about stages of projects then because recently look we all know how expensive it has been to actually build a mine even exploration costs are going higher so how do you decipher and what do you favor over

Mines that are built that we have at least some economics hard economics on in terms of costs those in construction or development and those simply still exploring the ones that are in production seem to have very little price built in for appreciation what you have to do is wrap your heads around

Political risk operating risk and Financial Risk so let’s look at a couple of them just for fun hos shields uh in Peru you have to look at some fairly disastrous operating in capital allocation decisions over the last 10 years uh if that is behind them uh as an example with uh investor sentiment

Around their Rare Earth spin-off they are veteran explorers in uh a spectacular silver jurisdiction and at present they enjoy a fairly good relationship with the government of Peru moving North to penoles I think you see a company that is roundly hated by the political establishment in that country uh and and

You see a country that has decided to declare war on Prosperity by looking at uh Banning open pit Mining and by stealing the nation’s lithium industry so the superb mineral endowment that you have and the wonderful labor pool that you have in Mexico the spectacular infrastructure that you have in Mexico

Is beginning to be leavened by the political idiocy uh that you see in Mexico you need to take all that into account moving uh on to other companies Pan-American silver is no longer really a p is no longer really a silver company about 42 43% of the revenue comes from

Silver I own panamic because it still has great leverage to Silver but what investors need really need to look at with at panamerican Silver is their ability to upgrade the portfolio that they bought from yam yamana focusing on a few good mines and selling off the rest to strengthen their balance sheet

Which by the way they’ve done and need to continue to do but it also uh has an awful lot to do with their ability to bring either Guatemala or Argentina into production paname is unique among purported silver companies that they have two deposits uh one in Guatemala

And one in Argentina probably with an excess of 500 million ounces of highquality reserves each in other words if they got political goahead to uh start the Argentina operation or restart the Guatemala operation either mine would double the company’s silver output so you know obviously that’s worth

Looking at if you have the courage to go down into the in Independent Producers if you believe uh as an example that first Majestic can solve the problems that they’re encountering at Jared Canyon you have a management team that has a lot of torque to silver and has a lot of access

To potential to potential silver but they have a real Challenge on their hands at Jared Canyon Keith newm and his team have had challenges at other big cash darve mines before and I’m not saying they can’t do it but I think when when you look at a company like first

Majestic you care less about the silver price in the near- term and you care more about their ability to fix the problems that they have at Jared Canyon with Silver Crest you have a very damaged franchise as a consequence of they’re bringing a mine in on time on budget but with very large

Discrepancies with regards to reserve and resources you have the same thing at Gatos both companies are producing well both companies are generating a lot of cash both companies are paying down debt now you need to reconcile the net present value of the deposits based on their resources with any belief that you

Might have in their ability to add back some of the ounces that they lost through better exploration mag would seem to be the outlier in terms of having no production problems and no resource shortfalls coming down uh into the Explorers which is what I’m beginning to do because there are so roundly hated

What really matters to me is materiality you know I really want companies with in sichu recoverable reserves and resources at current silver prices to be worth in excess of two or two and a half billion US dollar which is to say a 100 million recoverable reserves and resource ounces

Or better I really truly want materiality I’m willing myself to play very big conceptual targets with people who are prior successes in large-scale Exploration I’m not willing to talk about those because the probability of that is failure and while I’m willing to risk my Capital I’m

Not willing to risk my reputation on a show where people would buy it simply because Rick said to buy it I hope that covers the Waterfront reasonably well for you well Rick just one more followup on some of the silver Juniors uh you don’t have to name names here as they

Are smaller but you know there’s most of the wealth of Silvers in Mexico and South America as you pointed out but there are some North American zones in Nevada originally known for silver in the Silver Valley of Idaho and also in the Golden Triangle and also in Ontario

In the silver Cobalt camps where there are some Juniors that are defining bigger resources finally do any of those catch your interest or do you just stick to the Latin American countries I would be attracted to the Silver Valley if I saw something that indicated 100 million ounces of resource given the

Extraordinary infrastructure there uh and given the silver miners what you have to overcome there is the Legacy environmental problem they have been mining Silver Le zinc ores there and the tailings have been on Surface for a hundred years the precipitation interacts with sulfide tailings forms a dilute sulfuric acid which leeches lead

Into the soil in the river it’s a problem I I think the comstock’s best days are probably behind it uh although so I would love to see somebody tag a vean there that had 100 million ounces I am attracted to Dolly Varden silver up in the Golden Triangle uh I like those

People I like some of the grade I like the potential to tie together their deposits to see 100 million ounces but I can’t see 100 million ounces yet and I’ve seen nothing in Cobalt uh I I mean I’ve seen great grade but I’ve seen nothing in Cobalt to suggest that

Anybody has their hands on a deposit which could conceivably become a 100 million ounce deposit so I have real materiality concerns with everything I see in the United States and Canada okay thank you Rick moving on one more resource sector that we want to talk about is nickel you’ve been on

Record saying nickel is a contrary in play right now we’ve actually had a couple guests saying look the nickel sector well there is this whole green narrative around it and prices did move a lot higher it was about 2 years ago now unfortunately it’s uh pulled back

Quite a bit the nickel sector and the nickel price and a lot of the nickel companies continue to struggle what do you like about nickel here what I like about nickel is the fact that it is essential for the ascent of humankind it’s a critical component of stainless

Steel it’s a critical component of batteries it’s a critical component of electrical equipment so demand for nickel will continue to grow for my lifetime for the record I’m a healthy 71 year old what I really like about it is that it’s falling in price for very predictable

Reasons and the end of those predictable reasons is reasonably on in sight the reasons that it’s falling in price are really twofold the most acute has been the incredible increase in lateritic nickel production in Indonesia and the Philippines I very recently Flew Over the laterite nickel mines in southern

Sulu in the Philippines and saw firsthand the absolutely stupendous degree of environmental damage that’s taking place as a consequence of that production while I don’t expect a Hiatus in that production I don’t expect that production to grow for more than two years I I think that there will be

Literally a popular Revolt uh in Indonesia against those activities and I think that there’ll be uh an increasing backlash among the consumers of goods that require nickel when the truth of the environmental degradation associated with that lattic nickel production becomes as apparent as it was to me the second reason for decreasing nickel

Prices is the same that we experienced in 90 and 1990 and 1991 which is to say the Russians need money and when the Russians need money they sell everything that they have that has a bid much of the current weakness in the nickel price and the Platinum and Palladium price is

Due simply to the Russian dording when the Russian dording is empty which will occur when they run out of material they can sell the selling pressure involuntarily will be off and you’ll see the same sort of price increase that you saw in 1992 so I I think that the outlook for

The nickel industry will be very different two and a half years from now than it is today this will be the time when and the astute capitalists in the mining business begin to Warehouse sulfide nickel assets understanding that they won’t get paid for this strategy until 26 or 27

But then they’ll be paid extravagantly you are seeing as an example very deep pocketed miners Glen core as an example shuttering uh nickel production most recently in new calonia you’re seeing really truly the demise of the Western Australia Western Australian sulfide nickel production so the cuts now uh metaphorically have gone through the

Skin through the muscle and they’re going into the bone the industry is in the process of liquidation despite the fact that humankind needs the material this is the ideal setup for me is this a 2024 setup for most speculators no although if I could get good assets for me yes

Will 2025 be the right year probably not my suspicion is that 2026 will scream do many of your listeners have the ability to endure uh two years of volatility boredom and Terror probably not well Rick I think that’s a great point that you have to have a longer time Horizon

If you want some of these Mega Trends to play out but just dialing it down into the nickel stocks it’s really hard to say something is a nickel stocks because they often appear with platinum and Palladium or copper it’s often poly metallic how do you play the companies

The big poly metallic companies or some of the development stage companies you know platinum and padium I’m very bullish on too but but again I think the thesis takes a couple years to play out the platinum and platium prices are collapsing precisely because the Russians have to sell um they have to

They need the money you know in case you haven’t followed them there’s a guns and butter circumstance there they’re trying to improve the standard of living for their citizenry at the same time they make war we tried that in the United States in the 1960s it didn’t have a

Happy ending it’s called the 1970s and when the Russians run out of material to sell the price will begin to rebound but that’ll take a couple years to recover you the question that you ask again involves materiality I I don’t want a me too Platinum product I don’t

Want a me2 nickel product there will be groups of cap capitalists who buy the shuttered operations that are being shed by the major mining companies now and those are material operations there’s a great greenfields nickel opportunity being Advanced by the fredland family the kabanga uh nickel deposit which has been

Around for 30 years ironically discovered by Roman schlank out of Vancouver 30s something years ago that probably isn’t going to give us any joy in 2024 or 2025 I suspect it’ll give us major joy in 2026 similarly in the platinum and Palladium the senior member of the fredland family Robert fredland is

Proceeding with all due haste if you understand that joke with a platinum Palladium in nickel mine in South Africa called the plat Reef probably the most profound new source of platinum in a hundred years that stock ivanho will depend in the near term on his ability to Deb bottleneck his copper operations

In Congo but in the longer term uh you see a major nickel stock in the making so the truth of all that is that investment strategies around nickel platinum and plaum more speculative strategies around nickel Platinum plaum are fairly nuanced and will probably only be useful to investors who are

Willing to do the risk and who are willing to accept uncertainty of outcome and uncertainty of time in the Quest for Quantum returns if if there were peace in the world all an investor would need to know about nickel platinum and Palladium is norilsk the big Russian producer that

Would be all you would need to know the whole rest of the game would be an afterthought if you happen to have investors who have access to and the courage to own Russian stocks in Russia nuril is from a Global Perspective the whole game all right Rick look we’ve

Covered a lot of different sectors here I now want to just focus on a couple of events that you are hosting through rural investment media the first one coming Saturday April 20th it’s the prospect generators boot camp now this is a virtual event it happens all day

8:00 a.m. Pacific time it starts runs to 4:00 p.m. I will post a link to this event and another one that we will talk about but give us a little insights on this prospector generators boot camp that you’re hosting exploration is very out of favor Corey and I think that

We’re going to have a spectacular exploration Market in the next three or four years and the most efficient way for investors and speculators to participate in the exploration Market is through the prospect generators companies that understand that mineral exploration isn’t an asset-rich game but rather a knowledge game somewhat akin to

Technology Prospect generators use technical Acumen uh and perhaps commercial or political Acumen to develop large scale geological thesis stake the thesis and propose a methodology to test the thesis and then bring in third parties to do the financial heavy lifting the idea with a prospect generator is

Metaphorically that you buy a large bag of partial lottery tickets where the lottery ticket has been paid for by somebody else not putting all your eggs in one basket but rather by generating the ideas that build the basket statistically and I know statistics are boring but I’m boring I

Have participated in about 70 Prospect generators during my time as a Speculator and the consequence of that is that I participated in 22 economic discoveries in 35 years with the prospect generators which is to say I’ve had a success rate approaching 30% in an industry where the expectation of success is 1 in

3,000 it is it being prospect generators is simply statistically the most attractive way to participate as a Speculator in the exploration business Prospect generators because they attract capital from three from third parties have to dilute less because they have to dilute less they finance less L because they finance less they don’t get

Followed by brokerage firms because there’s no Commission in following them which means in addition to being statistically Superior Investments they’re underf followed with less competition our boot camps moving on to the information product are eight or eight and a half hour long virtual sessions they are really deep Dives they

Are not for tourists they’re for real speculators and we try to cover various topics we’ve done uranium silver royalty and streaming uh development stage companies we really try to give investors the background that they need to do Securities analysis themselves or to understand the methods by which other

People are doing Securities analysis for them our boot camps uh require between eight and eight and a half hours of attention but importantly the recordings of the boot camps are available to subscribers for a year because it’s impossible for you to absorb in eight hours all of the

Material that we’re going to force into you the charge to attend the boot camp is $99 and like every educational product offered up by rural investment media there is a 100% goldplated money back guarantee if you think for any reason that the material that you received is not not worth

$999 email me and we will give you a refund no questions asked well Rick let’s also talk about another event that you have coming up in July July 7th through 11th and that is the rule natural resource investing Symposium uh in boka ratan Florida this is an annual

Pilgrimage where you bring in a lot of great thinkers a lot of great companies talk to us about this event in bokeh in July when you say annual by the way it’s almost 30 years old if it isn’t 30 years old it’s happened for a very long time

Uh I humbly believe that the rural Symposium is the finest natural resource investment Symposium on the planet the very best uh it has stood the test of time first of all how has it stood the test of time well we assemble great big picture thinkers the Jim Rickards the

Doug Casey’s the Nomi prins the Grant Williams the Daniela D Martina booths people who talk to you about the world the way the world really is not the way that the the Joe Biden’s or the Justin Trudeau or the world economic Forum or the CBC would have you believe once that

Worldview has been well established and by the way it’s a very atypical worldview we bring together the finest analysts and portfolio managers in the natural resource space people who have been successful in resource investing for 30 years not parachuted in analysts that have failed in technology and failed in consumer products and probably

Failed in crypto too but people with two and three decades of success in natural resource investing importantly we have for 30 years introduced investors to what we call the Living Legends these are small groups of entrepreneurs who have each IND individually built public natural resource companies worth billions of dollars from a standing

Start these entrepreneurs tell you how they achieved what they achieved and their lessons uh have been invaluable to them as investors and can be invaluable to you too another feature of the conference that I think is unique to my conference is that any public company exhibitor at my conference has to be

Owned in an account owned or managed by me now sadly there’s no guarantee that because I buy a stock it’s going to go up in price the guarantee is that every exhibitor at my conference is vetted at every other conference I know of on the planet the qualification to be an

Exhibitor is a check that passes that’s it at my conference the attendees have told me that the exhibitors are content too so all of the exhibitors are vetted finally again and by the way you can attend this conference live which I would prefer uh in Boer Ron there’s a

Lot of non-verbal communication that you miss if you aren’t attending live but you can also attend from the comfort and convenience of your own home or your own office we have live streamed the conference in either circumstance St an the recordings of the conference will be available to live attendees or live

Stream uh attendees so that the information which is shared at the conference four days of information will be available to you to uh absorb uh over time which you’ll need to do again whether you uh attend in person which I would prefer or via live stream the

Tuition for the conference if you don’t think you got your money’s worth is 100% recoverable email me say Rick for whatever reason I don’t think I got my money’s worth and I’ll give you your money back now I need to tell you Corey I’ve been making this money back

Guarantee for 30 years around my educational products and I’ve had to I’ve had to refund about one quarter of 1% of the tuition charged nonetheless I am so comfortable so proud frankly of the content that we’re producing that I absolutely positively am able to confidently guarantee your money back if you aren’t

Delighted with the information products well I appreciate that very much Rick as I said I will be posting links to each of those conferences so everyone listening can sign up whether it is in person for the boa rone conference or virtual for either you can

Take part and you can as Rick said learn a lot at these conferences I’ve seen you at a number of them Rick so Rick thank you so much for taking time with us on this weekend show sure we’ll be chatting next month I hope you have a great rest

Of your weekend gentlemen I’m delighted to share this time with you thank you so Much Al corin’s firm ab corand and Associates Incorporated provides consulting services to public companies on matters of Regulatory Compliance to find out more follow the link from www.kp.com the corand Economics Report will be back after this brief Timeout all right welcome back continuing to listen to the weekend edition of the K report I hope everybody enjoyed that more extended interview with Rick rule we are going to continue to focus more on the resource sectors as we are now chatting with Jesse Felder founder and editor of the Felder report

Now Jesse usually we talk more macro data some economics as well as tied into the markets but I want to stick to more of the resource sector here and I want to start off with the gold mining stocks it was a couple years ago that you coined the term the bang stocks which

Referred to B baric anniko numont gold Corp as what could take over from the highflying tech stocks now the problem that we have seen unfortunately recently is that gold continues to hang right around $2,000 it has made a couple alltime weekly and monthly and quarterly closing highs however these bang stocks

The major miners they continue to struggle these Majors some are either at or near 52 we lows well I think a lot of other investors are looking at other sectors saying look at the markets the markets are doing well Jesse make sense of this why are the gold stocks in this

Higher gold price environment still broadly ignored it seems like well I think we have to to Really uh dial down into what what is working well and literally the only thing that’s working well right now are AI stocks the relative performance of everything else is pretty terrible I mean there’s been a

Lot of talk about look at the small caps right small cap perform relative performance has been horrendous but you know you could you you look at all of the cyclically sensitive stocks within the market and it’s and it’s the same thing essentially I think what what we’ve seen is the markets have fully

Come to we’ve had you know Magnificent Seven working well but mainly even within those it’s been Nvidia and Microsoft the ones that are AI focused that have done well things like you know Tesla has rolled over you know pretty hard apple has struggled alphabet disappointed um so even some of the

Magnificent 7 are starting to to struggle some but I think what we’ve done over the last really six to nine months in this in the stock market just markets generally is fully price in uh this soft Landing narrative where inflation comes down but to the fed’s Target without creating a recession

Right so we’re not we’re taking hard Landing off the table we’re not going to see a recession and we’re not not going to see persistent inflation this is what the kind of the markets have come to discount so if you believe that right how do you express that view as an

Investor you say okay great well I’m going to buy all these high-flying tech stocks because interest rates are going to come way down again and we’re going back to that pre-pandemic Paradigm where what works are the the fastest growing stocks in the market and the valuations

Continue to go to to the Moon because the discount rate is so low uh at the same time why do I need to own anything that acts typically as a hedge against higher inflation or a hedge against a hard Landing in the economy you know things like um you know

Precious metals you know or or any of these anything else for that matter um you know that that might do well under uh you know a non-soft landing so I really think that helps kind of explain what’s Driven driven the markets is we’ve now fully priced in a soft landing

And we you know with this CPI report this week we’re starting to see you know kind of some chinks in the armor of that that narrative well Jesse it is a great point that there really isn’t an impetus for people to jump into something like Precious Metals if they believe that the

FED can take a Victory lap that we’ve tamed inflation and that we have the soft Landing narrative also with the indexes the S&P the Dow and the NASDAQ shooting to all-time highs there’s just not a lot of reasons for people to jump into gold equities you made the point

Before this call though that the three most hated sectors are the precious metals the energy space and Chinese Equity so maybe tie that in too just that it’s it’s not only uh something that people aren’t paying attention to they almost just don’t even like these

Sectors at all right now yeah no I mean that’s one question I like to ask myself regularly is it’s almost kind of a snow white things mirror mirror on the wall who’s the most hated stock of them all you know and because you usually get uh some interesting opportunities when you

When you think about that I think for for me it’s a three-way tie between these these these three things it’s the precious metals mining uh mining stocks it’s uh oil and gas producers the uh you know Chinese Chinese equities all three of these have gotten to the point where

Investors consider them uninvestable you know and that’s usually a very good contrarian signal very bullish signal that everybody who’s wanted to sell these things has pretty much had the opportunity and now sold them and there’s not a lot of sellers left out there and so what does that mean means

Any types of you know changes you know in these narratives um that’s something a little bit less bearish a little bit something you know more bullish is going to change sentiment towards these things and and change the investor you know demand for them and people you know

Start start buying them and and that’s how you form a bottom in in in these these kinds of things so you know I think just from purely a sentiment standpoint you know they they look very attractive from a valuation standpoint you know you know I’m looking at stocks

That trade you know literally two and a half times Enterprise Value to iida in the energy space I mean incredibly cheap seven eight times free cash flow uh for some of the bigger bigger Majors which is ridiculous to get you know 12 133% you know free free cash flow yield

Amazing when the broad stock market is trading at a you know a Shiller Cape ratio of 30 plus so I I think there’s you know we we could be at an important in ction Point here where if we start to see more uh kind of like I said chinks

In the armor of this soft Landing narrative we start to see maybe more signs that inflation is persist more persistent than investors expect like like the recent CBI report or you know more evidence that we could be that hard Landing is is uh more likely than markets currently price you’ll see a

Shift in demand in these things right I mean you know the CPI report I thought was very very bullish for things like the energy space and precious metals space that if it turns out inflation is persistent and the fed you know hasn’t done enough investors are going to need

To own more things like energy and precious metals to to hedge against that risk let’s balance us out then Jesse because again precious metals prices at least the gold price is doing okay and the oil price it’s been flat kind of boring in a sense but it it’s still in

The 70s but it’s the underlying stocks that aren’t doing well and when you look at the gold miners is there anything these gold mining companies can do to change the perception because if we do see inflation tick back up it’s been one of the arguments we’ve heard over and

Over and over again is that inflation is hurting these gold miners because it’s causing their prices to rise so they’re not getting that margin expansion yeah well the what we’re likely to move towards and I think you know we had some talk about this when inflation really started to pick up you

Know a couple of years ago but I think that if we do see another wave of inflation and I think that’s a real possibility now with signs of a wage price spiral right we we saw this in the in the latest CBI report that the super core inflation is you know very strong

Which suggests that the rise in Goods inflation created this you know kind of uh need for employees to say I need a raise and now that raise Rising wages is creating kind of a you a positive feedback loop for inflation is going to create a situation where the

FED has to keep rates elevated much longer than people expect which raises the prospect of a hard Landing for the economy right if the FED has to keep rates at five and a half throughout this year and with the rising you know problems we’re seeing in commercial real

Estate in the banking sector and things and with as much debt needs to you know be be refinanced the prospect of a hard Landing just continues to grow but at the same token you know if if inflation proves more you know the opposite of transitory which is very persistent and

Stubborn and difficult to deal with and it looks like that you know the the FED is going to have to raise rates higher to deal with it there’s going to be a real problem because the the federal government can’t afford higher interest rates the federal government can’t even

Afford for rates to stay very much like a lot of these private sector you know borrowers can’t afford to refinance debt at current interest rates that we’re running into an area like this with the federal government as well and so we might be forced to into a situation where the inflation remains persistent

And the FED has reached its limits of its abilities to deal with it that is the ultimate bull case for precious metals that’s the type of thing that would when people start to get an inkling of this uh we’re going to see precious metals really take off to the

Upside so that’s what I talk about this soft Landing narrative we if once people start to really come around to the idea that inflation is is is more stubborn you know the gold price is has just a ton of potential upside in front of it and and and you know to

Think the the relative performance of the minor we talked about this last time you had me on a month ago the relative performance in the short run of the miners relative to the gold price I’m talking over weeks and and months not over multiple years but over the short

Run that relative performance is a very good sentiment signal in itself it really tracks very closely to uh the discount to the net net asset value of something like the Sprout physical gold and silver closed end fund which now trades a you know I think five and a

Half six% discount to its underlying assets which s is a very clear signal that sentiment in the precious metal space is about as bearish as it’s been at any point over the past 10 years so say to me that that explains the relative performance of the miners too

The miners relative to the metal are very very weak that’s a very strong sentiment signal that uh investors have gotten far too bearish and and as we if we move forward through this year and as I say it it show we find that inflation is not going to come down back to the

Fed’s Target as easily as people expect that’s going to be very bullish for the gold price yeah Jesse I think there are people in the industry that have said this is not just the worst sentiment that they’ve seen in the disconnect between the gold and the gold price but

Some of the craziest valuations when you look at what ounces in the ground are being valued at when you look at how producers are being valued when you look at development stage companies it’s a pretty big divorce since a lot of this seems to depend on if inflation will be

Sticky or not and how that will affect the soft Landing narrative and the FED policy let’s just quickly get your thoughts on where inflation is coming from and why it may be stickier because most people Jesse attribute to inflation to an increase in the money supply but

Then during the pandemic we heard all about Supply chain issues but there’s also all of the fiscal spending that was going on during the pandemic that was fueling that where they were sending people checks and sending businesses during the payment protection plan checks so all that money was finally

Circulating which we hadn’t seen in the prior decade as all the money printing was going on is it money printing is it supply chain issues is it something else going on that’s driving inflation is it wage growth what’s driving inflation and what may cause it to be stick here well

I think the most important factor driving inflation right now may be the de Trend towards globalization right this this idea that we don’t necessarily want to ship all of our jobs over to China any longer which is something we’ve done you know for 40 years now and

Especially really s in the last 20 years that Trend accelerated the offshoring of production that was probably the single greatest disinflationary uh factor for the economy of all of them I mean right people point to technology and you know technology prices come down consistently but I think it was really cutting labor

Costs that really allowed disinflation to persist in the way that it has over the last 20 years so when you start to say now okay now we don’t want to produce in China because there are geopolitical risks and all kinds of things and and frankly political risks

Here in the United States of of uh you know this the the grow growth towards populist politicians is is purely in reaction to Americans being unhappy with the fact that uh you know the middle class has been shrinking for for so long and it’s a big part of that trend is the

Offshoring of Labor so the trend towards deglobalization reshoring of production these types of things puts great strains on uh the the labor market and helps to boost wages at the same time that we have the baby boom generation retiring so you have this demographic side of it

Also so the labor force is shrinking relative to the overall size of the population at the same time as we want to ramp up production so all of this is puts a huge demand on uh wages and and the labor force and so I think that’s probably what we’re seeing in things

Like super core inflation which are showing you know a huge jump in essentially wages in service in the services sector of the economy so I think that’s probably the the biggest Factor that’s going on just demographics and deglobalization that’s a long-term Trend but it’s it’s really kind of

Making itself uh felt right now and that really makes this inflation a lot stickier than than just a gumming up of Supply chains kind of thing like we saw during the pandemic yeah very interesting Jesse we definitely have seen some of the baby boomer generation postco even during covid leave the

Workforce walk away and that’s what we were saying hey younger people needed to get some of the better jobs and well here we are now let’s talk a little bit more about China because look China’s probably one of the worst performing markets out there like you said some of

The worst performing sectors we can look at China broadly their Market they’re having housing market issue they’re their stock market is doing horribly their economic data is not doing well any chance China turns it around anytime soon you know I think that that uh that that also represents another inflation

Risk right I I think you know we maybe don’t appreciate enough how much the economic weakness and China has helped bring the FED bring inflation you know back down over the last um couple of years or last year especially that you know China’s weak economy means you know

Weak demand for uh you know Commodities and and uh you know lower price pressures around the world so if the Chinese economy does get its act together if if they start to turn that thing around and create more demand for for for Comm Commodities and price pressures you know I mean turn from

Outright deflation back to even just you know Flatline let alone even you know small amounts of inflation that could exacerbate these other inflation issues that we’re talking about so I think you know the the bearish sentiment towards China is more than expressed in its Equity prices you see singled digigit PE

Ratios right they’re big tech stocks you know even there you know which are very similar to the you know big tech stocks here in the United States are so popular with investors trade at you know the widest discount to their American peers in history like by far you know you have

A stock like Alibaba that trades I think you know eight times earnings or something you know when Amazon trades 80 times uh and so it’s a huge disconnect there and it’s a huge opportunity I think uh for investors who are willing to to be contrarian well let’s talk

About one more contrarian space and that is the energy sector Jesse we’ve we talked about the three hated sectors being gold Chinese equities and the energy space we’ve alluded to gold and China there but on the equity side of the oil and gas industry you mentioned the producers were not seeing very good

Valuations but we’ve also seen oil stuck in a rut for really a long time now it’s been range trading between let’s say the the mid-60s and the mid 80s for years there was that breakout in 2022 and it got up to 125 oil and that gas got up to

N9 almost $10 but since then not only has the energy prices corrected but the energy equities have corrected how do you see the setup for the balance of the year are there opportunities here or is it just going to be stuck in molasses I think you know it’s very interesting and

I don’t ever really kind of advocate for investors to kind of go copycat um you know the big successful players but I think it’s interesting to look at what Warren Buffett has been doing over the last year or two they’ve been selling down pretty much everything in the Berkshire hathway investment portfolio

Except for one thing they’ve been buying 20 to 30 million shares of ocidental petroleum every quarter for the last two years right that’s pretty much all Burkshire has been buying is energy so you have the most successful legendary investor alive right who’s clearly bullish on only one thing and that’s oil

And gas producers and then you have insiders at these companies who are continuing to buy shares I mean energy infrastructure stuff you could still buy with that has you know double- digigit dividend yield and some of the MLPs and things right you you get you know four

You know 4% on a 10-year treasur or you can get 11 12% in some of these MLPs it’s kind of uh mindboggling to me but even just in you know the oil and gas producers like I said some of the smaller players there’s one in particular um you know I look at high

Peak energy were uh you know CEO has been buying you know significant amounts of stock trades two and a half times Enterprise Value to Eva and they’ve been growing production they’ve been actually growing ebah over the last couple years even with the O price coming down so it

Just tells you how hated um this sector is when you have you know like a stock like high peak or oxy you know which which burkers burk’s been buying that literally trades seven and a half times free cash flow in in one of the most expensive stock markets we’ve seen so uh

You know I these are the types of opportunities I I look for things that are hated by the average investor hated you know clearly where bearish sentiment is just off the charts and you have super smart investors and insiders um you know continuing to kind of back up

The truck and and increase exposure to me um it’s it’s a you know very in indicative of interesting opportunities all right Jesse I want to bring this full circle just for a quick comment back on gold here you outlined a number of reasons as to why you think gold

There could be just more in investment interest in Gold here what’s a possible price target for gold how much higher could gold go well I’m looking back there’s there’s a a price analog if you just overlay the last bull market from 200 you know one two to 2011 just

Overlay that price chart over the bull market we’ve seen from 2016 or something it suggests that this for me the price analog has been eerily accurate right it’s it’s essentially the the the uh The Echoes In terms of when price should move and when price should consolidate it’s been just like what

We’ve saw in that previous bull market so you know we’re kind of in a another consolidation phase right now but it suggests that you know we’re we could be very close to another big boom Another uh interesting price analog I look at and we’ve talked about before is uh that

2018 to 2020 2021 time frame you just kind of match up you know where we are in the monetary cycle right last time the Fed was Raising interest rates J poell was Raising interest rates into 2018 um gold price bottomed in in Fall of 2018 and turned higher before the pal

Pivot in the late 18 early 19 and we’re kind of in a very similar time frame now we’re you know uh gold price bottomed five six months ago is uh and now we’re kind of we’ve seen that you know pal has said we’re pretty much done with rate

Hikes we’re just waiting on when it’s time to start cutting the FED started cutting in 19 or you know reversed QE in 19 in reaction to the repo Fiasco the longer they keep interest rates here at this 5 a half the closer we’re going to

Get to some type of uh episode like that which forces another major pivot in monetary policy so I think it’s very interesting to look back at that 2019 time frame as to what what is gold price going to do over the next next 12 to 24 months because it’s probably something

Like it did in 19 when we did run into problems with with uh interest rates being too high for too long all right Jesse thank you very much for your time it’s always interesting chatting with you and hey I appreciate our monthly calls so we will chat again next month

Everybody thanks for tuning in to this weekend’s edition of the K report just a reminder go back through the week on our website k report.com and podcast VK report to listen to all the daily editorials and Company updates we recorded throughout the week I hope you all have a great rest of your

Weekend for our upcoming appearance schedule visit kp.com the corand Economics Report we’ll be back in just a moment