Rick Rule: My Process and Evaluating Opportunities in Precious Metals, Copper and Uranium Markets

Rick Rule: My Process and Evaluating Opportunities in Precious Metals, Copper and Uranium Markets

number one uh ranks a number one rank is a company that I believe is selling at half of liquidation value where I believe that there’s a probability not a possibility that they will double net asset value in 18 months and where I believe that they have the opportunity to go to 10 for one in five years that’s a very very very rare setup um uh tier twos or two ranks are also very rare I believe I’ve awarded 60 or 70 twos in that time frame uh threes uh a three is a solid buy and I need to say that a five uh a neutral uh for me is okay to hold if there’s some optionality to Commodities and if that commodity is out of favor [Music] hey guys this is Andy I’m going to be at the rule Symposium in July in boa ratton if you’re already going please stop by and say hello if you haven’t bought your tickets yet please use the link in the show notes below I’ll see you [Music] there what’s going on Rick how you doing life is great Andy all kinds of news the world seems to be unfolding at least my world the way it should so uh life is Pleasant I I hope it is for you and your listeners yeah it’s been really good um in fact I wanted to mention our last talk did exceptionally well and so I want to kind of lead with the same format let’s talk about the macro then we’ll go into um how you evaluate some of the different companies and some of the different medals so what’s your macro point of view and set this up it seems like the fed and we don’t know what the fed’s going to do per se but they’ve come out recently as dovish I would take that and it seems to me like they’re trying to support stock market as well as we’re going into a very important election uh I think in our last interview we talked a bit about the FED uh because I’m part of starting a new bank uh I’ve sort of cultivated contacts at the lower levels at the FED uh whom I spend some time with and by the way they’re uh uniformly high quality people which surprises me from a big organization but we’ll leave that aside uh and I would say that the institutional bias within the FED is not to cut interest rates the FED believes that they’re the only responsible arm of the US government that Congress and the president would spend us into Oblivion they’re probably right that notwithstanding it would look as though the political pressures on them in an election year are overwhelming uh so I suspect despite the institutional bias of the FED that they may be forced to reduce the interest rate uh I’m personally surprised by at least the statistical strength of the US economy that’s not to suggest that all Americans are benefiting equally I know that many many many people are suffering but the economy itself has held up much better than I thought it would with a doubling of the nominal interest rates um the suspicion that the FED is going to have to Pivot like they did at the end of 1975 I think is responsible for a lot of the strength in the gold price if they lower uh nominal uh interest rates uh it signals that politics is more important to them than the deterioration of the US dollar and if that happens the value proposition to around the US dollar or the deteriorating value proposition around the US dollar and around us debt Securities I think will force a lot of people into gold and I think I think the strength that you’re seeing in Precious Metals markets has to do with that by the way uh if you hold gold in non US dollar terms you’ve been in a bull market for five or six years uh the US dollar as Doug Casey famously says is absolutely the worst currency in the world with the sole exception of every other currency the fact that gold is doing well in US dollar terms while the US dollar does well against everybody else means that outside the US dollar we’ve been in a bull market in Precious Metals for a while so it’s interesting that you say that and I would agree with you too that this is the strengthen gold ends and now silver really is really foreseeing a a Fed rate cut if you would would you also say that that is um due to a lot of Central Bank buying well certainly the strength that we’ve seen in Gold so far hasn’t had very much to do with Western World retail the strength that we I mean in fact the ETFs the the data would show us that until two and a half weeks ago uh retail in the United States and most of the western world were sellers uh selling the bullion oriented ETFs and all of the strength on the buy side uh would appear to have been from foreign central banks or to a lesser degree Chinese uh and Indian citizenry it’s important to note that the move that we’ve seen in Gold thus far has more to do with the weaponization of the US dollar and the US dollar inadvertently perhaps forcing foreign governments to sell US Treasury Securities and transact outside the US dollar and look for a medium of exchange that was simil ously a store of value which is to say gold the very recent popularity in Gold I think has to do with the view that institutional holders have that this Central Bank buying will likely now be joined by retail and family office buying in the west if you overlay the traditional gold buyer on top of this new Gold Buyer you set the stage for what could be uh or really surprisingly strong gold and then later silver bull market so what’s interesting to me then is the strength in in the physical product if you would but then there’s just uh there was a a softness until recently well I shouldn’t even say softness it was a bare Market in the equities so what I’m interested in what many of my viewers are interested in is obviously playing that Arbitrage for lack of a better word and there seems to me their potential great opportunity in the Mining share specifically the Junior shares when I last had you on you talked about we talked about your evaluation process and what leads to a tier one level investment if you would if you could walk us through or walk me through what makes a tier two to five or tier two to six level investment for you since that’s where the vast majority it seems like of companies that you’re interested in that’s where they lay well I should clear up the nomenclature when I say tier one I’m usually referring to a deposit yeah pardos to an investment and a tier one deposit is defined many ways I Define it as a deposit that has incu recoverable reserves and resources at current commodity prices in excess of 10 billion US that will be in the uh top quartile in terms of return on Capital employed and the bottom cortile in terms of all and sustaining costs but a return return on Capital employed at any rate that exceeds 25% my ranking system is 1 through 10 one being best 10 being worst I need to say in in 30 years of using that ranking system actually 30 plus years uh if my memory serves me well I’ve only had nine or 10 uh number one uh ranks a number one rank is a company that I believe is selling at half of liquidation value where I believe that there’s a probability not a possibility that they will double net asset value in 18 months and where I believe that they have the opportunity to go to 10 for one in five years that’s a very very very rare setup um uh tier twos uh or two ranks are also very rare uh I believe I’ve awarded 60 or 70 twos in that time frame uh threes uh a three is a solid buy and I need to say that a five uh a neutral uh for me is okay to hold if there’s some optionality to Commodities and if that commodity is out of favor you know companies that in a normal circumstance I wouldn’t have afforded a five were they in the uranium business at $20 a pound uranium uh I would have said well I think the price of uranium is going to fit 50 or 60 and I would have awarded that kind of company of five so the rankings are nuanced and I need to say that there isn’t a one-size fits all I will sometimes award a fairly speculative company a three and that company might be suitable for a dividend style investor similarly I might award a very large company a BHP or an Exxon a three or a four while that company probably isn’t uh as appropriate to a Speculator uh as some other name so it’s important to know that the rankings really have to do with risk adjusted internal rates of return uh and my rankings reflect my own values and my own needs and the needs of the 80,000 person community at rural investment media uh one who looks at my ranking has to sort of take into consideration uh what it is I’m trying to do with the whole rankings thing and personalize it for their own goals their you know their own means their own time frames sure okay then let’s talk about you specifically then let’s eliminate a two because you just said that’s probably given out 60 of those it seems to me like the ballpark of your rankings would be anywhere from a three to a sixish is would that be correct yeah let’s give you well no there’s lots of sevens and Eights uh if you look if you look at the at the Juniors if I actually evaluated if I had time and I had the staff to evaluate the junior company Universe the 3,000 Junior company Universe uh probably 2500 of them would uh inhabit uh six S 8 nine and 10 I have fewer sevens because I don’t follow them right um you know I look at them and there isn’t enough uh demand from my database that I follow them and I see no reason to follow them because I see them as a waste of money uh if I actually distributed my rankings across the length and breadth of the mining and oil and gas industry the vast preponderance of grades would be 7 through 10 or 6 through 10 but I try not to follow those unless there’s a really large amount of demand for information surrounding them got it okay my coverage universe is about 800 uh and that 800 is predominantly concentrated in the 4 through six range okay got it so let’s how do we eliminate I guess that’s what I’m trying to look at U I want to eliminate 2500 of these Juniors what is there anything red flag glaring red flag that I need to look out for yeah um luck favor is the trained Observer so is the CEO uh and or the board comprised of serly successful people uh or is this their maiden voyage it doesn’t mean that they’re doomed to fail on their maiden voyage it just means statistically that you have no business backing other people’s maiden voyage let them learn the trade on their ants and uncle’s money not your money right and and is the success that they’ve enjoyed um related to the task at hand if somebody says to you Andy I’ve been a success in gold mining and that success has to do with the fact that they have operated uh a producing gold mine in two billion year old Aran Terrain in french-speaking Quebec but the task at hand is exploring rather than operating for copper gold pories in 15 million year old accreted Terrain in Peru while they may have been a success the success is completely unrelated to the task at hand uh it’s like a proctologist uh approaching a dental problem uh they may have been a success but that success would lead to a bad taste in your mouth couldn’t resist guess start with that just go to the LinkedIn page I guess that would be a place to start I I think the company’s website is the place to start okay and viewing with them the second thing is scale um what I’ve learned in my life is that many entrepreneurs and many speculators sucker for the story that says you’re going to look for a small mine and you’re going to use the cash flow from the small mine to grow without delusion and you’re going to bootstrap BHP that’s a wonderful story it doesn’t work I’ve watched it work three times in 50 years if you’re going to take big risks you have to take big risks uh in search of big rewards specifically there has to be a legitimate Target that could uh encounter and you think probably will encounter a deposit with2 A5 billion US doar in recoverable reserves and resources at today’s commodity prices small mines have big risks and make you small money why would you do that the third is the plan um exploration company building involves answering a series of unanswered questions when I ask company CEOs to Define for me their value creation thesis how they came up with the thesis what facts on the ground support the thesis and the proposal to test the thesis when I ask them what’s the most important unanswered question uh that you’re trying to answer with this exploration program fully 80% of the companies I asked that to don’t have an answer in other words they don’t have a plan it’s though as though they were proposing to walk from say Los Angeles to San Francisco they had proper hiking boots they had a nice backpack they had water but they were headed east um you can’t get somewhere without a plan most of these people I mean the real unanswered question to them is will they still be able to draw a salary 18 months from now and while I understand the relevance of that question to them it means nothing to me whatsoever so the process of answering unanswered questions the size of the prize and The credibility of the people answering the question is important well if you would let’s get to some companies here and let’s start with some of the gold companies um Gold’s been on a tier and um just wanted to give you uh just give some commentary and a your your ranking if you would to some of these names um West Red Lake and just as a caveat I’m also an investor in West Red Lake what are your thoughts and how would you rank them I’m a shareholder of West Red Lake I’m uh delighted to say that I’m a shareholder by now a substantially lower price uh West Red Lake is trying to consolidate uh mining properties in the legendary Red Lake gold district uh of Ontario they’re doing this behind a friend of mine Frank dustra who has successfully done it before they bought an asset a failed asset the Madson mine which destroyed a lot of capital by going into production too quickly West Red Lake correctly understands that what this is is a very Advanced exploration project and what they’re going to do now is step back and answer the unanswered question is the Madson property really a contiguous continuous high-grade gold project they’re going to drill it off on very tight centers so that they can compile a mine plan the last management team who are also friends of mine employed the strategy got a bunch bet a hunch you know got a hunch bet a bunch pardon me they uh pursued mining uh much like Rubicon did uh also in that area before they had enough data to do it West Red Lake is doing it in a much more comprehensive much more intelligent fashion will this work I don’t know but they’ve asked themselves the relevant question and they have proposed a way to test the thesis that is I think very efficient so I’m a holder got it how about uh Equinox yes I mean disclosing conflicts uh I’ve known Ross Bey and been successful with Ross Bey for in excess of 40 years I’ve invested in 14 Ross spey companies 12 of them have given me 10 to one returns so anything that has Ross Bey attached to it is automatically attractive to me um Ross has a stated goal of building uh Equinox to a million ounce producer which I think he’s going to do the stock has been clobbered uh although it’s done well in the last three months but clobber uh as a consequence both of uh some problems with existing producers I would suggest frankly due to underinvestment in sustaining Capital but more importantly uh due to their construction efforts in Ontario where the industry had bet that they wouldn’t be able to do ontime on budget completion they’re now very close to have having accomplished on time on budget completion the next test will be name plate capacity meaning after you build the thing after you pour gold how long does it take to shake it out before it’s producing at capacity very recently uh I guess as a measure of confidence in ontime on budget completion the company has uh gone into an arrangement to acquire that portion of the mine uh from a from a uh a ran mine finance that they didn’t own uh almost a billion doll expenditure I think what’s ahead of us now in uh Equinox gold is having achieved uh on time on uh budget completion uh doing so taking a lot of debt uh o onto the books and also uh issuing a reasonable amount of equity for this new acquisition uh what does name plate capacity look like if they can within six months uh achieve the financial parameters that were outlined in the bankable feasibility study particularly at 23 or 24400 gold rather than the $1,800 gold used in the study this stock is going to rock It’s going to absolutely Rock now I need to tell people who listen to the first part of this answer that in my 12 prior 10 Baggers with Ross Bey the median elapse time is five and a half or six years and in every single case I was exposed to a 50% share price decline during some part of the time that I owned the stock uh company building uh is not stair steps to heaven and people who own Equinox need to be prepared uh to have time on their side and they need to be prepared to stomach volatility uh if you are willing to do this and if you have speculative Capital which is to say Capital that you’re prepared to lose some of if I’m wrong this is a wonderful stock uh but otherwise uh if you aren’t patient if you aren’t tenacious and if you aren’t risk-oriented don’t buy this stock got it uh last one uh aino silver aino yes aino I’m not a shareholder of uh I’ve known the company for a very very very long time they have done a reasonably good job eing free cash flow out of an old mine for a very long time but until they do more exploration work this one doesn’t fit into the potentially big mind scale there isn’t enough data in hand to tell me that the target uh approaches my target size got it um recently and I had the um the CEO on about a week ago before they were bought out aventus mining was bought out by silver Corp one your thoughts on Silver Corp love your thoughts on the management team and love your thoughts on the buyout on the play uh I was an advent shareholder going back a very long time that company was started by my friends um Brian Dalton um uh so the Providence there is superb uh and the assets are superb and I think the transaction is good too uh people’s problem I think with silver Corp has to do with the primary the fact that the primary producing asset is in China and that the company’s disclosure with regards to reserves and resources has sometimes been somewhat opaque uh I suspect that that opaqueness has had to do with dealing with Chinese authorities but it’s important to note uh that silver Corp has successfully operated in China for 13 years and has successfully repatriated capital from China uh I’m prejudiced here because I was the lead order in taking silver court public many years ago at 35 cents uh now I enjoy annual dividends that exceed 35 cents uh so that sort of track record brings a smile to my face I’ve known R Fang the CEO of silver Corp since for silver Corp I’ve known him for a very very long time and know him to be a competent human being Roy is uh at once a successful financier a successful explorationist and a successful Mind Builder I think that Adventist could not have found better hands to be in uh than silver Corp got it and I I was a shareholder of Adventist as well um here pivot a little bit let’s talk about copper here what’s interesting to me about copper well I was a uh a longer term Bol if you would starting at the beginning of the year I just didn’t see copper going much cheaper and now you’ve had all of this drama recently uh in Panama uh for lack of a better word I would say um what are your thoughts here moving forward with copper the copper play is it still are we still a little bit too early whereas these uh mind shutdowns are they going to have a dramatic impact on the price and then let’s talk about some companies what are your thoughts it wouldn’t surprise me if Copper’s gone too far too fast uh copper went from being a boring topic to being red hot and normally when things get red hot they need a pause I’m not saying it’s going to have a pause I don’t think that there’s any doubt that we’re going to have Supply shortfalls in Copper in the fiveyear time frame if we have Supply shortfalls uh concurrent with a global worldwide recession we might not get higher copper prices you can limit copper Supply if you limit copper demand and not have a move in price so the thesis will really depend on your listeners um thoughts about the economy the broad economy and I think their thoughts are probably as good as mine I I don’t want to burden them with my macro Outlook around the economy but I do want to burden them with the fact that we have underinvested in Copper exploration and underinvested in coer development for three decades uh I want to tell people too the increasing social rents taxes fees off-site expenses regulation in important copper producing company countries including the United States uh and more importantly Chile uh are constraining copper development at the same time that we need more copper uh this was brought to a head by the annulment by the government of Panama of of the right to operate the Sero Colorado mine first Quantum had um in Panama that had a dramatic impact on the share price uh and market capitalization of both first Quantum uh and Franco Nevada this is an interesting circumstance this mine uh which by the way was licensed subject to International arbitration so the panamanians are are going to be taken to court about this and not in Panama City uh uh provided uh about 10% uh of the foreign exchange receipts uh enjoyed by the government of Panama and was a very important source of revenue for the government of Panama the ACT to shut it down uh had nothing at all to do with economics or anything at all to do with the existing fiscal Arrangements between first Quantum and the government of Panama it all it had all to do with domestic Panamanian politics uh first quantum is pursuing Panama in international arbitration for10 billion unpleasant for Panama because they don’t have1 billion dollar uh what this means for the copper business is that an important Source one and a half percent uh of slated Glo Global copper production uh in 2025 has now gone to production heaven but this isn’t the only Supply shock that the copper business is seeing uh one example uh while we’re talking about political risk in Panama is political risk in another third world Banana Republic called the United States there’s a copper deposit called resolution that’s a billion and a half tons at 1 and a half% copper for reference that’s between three and four times the average grade of copper deposits worldwide this wonderful Discovery was made 30-some years ago when I was a relatively young man and has now been in excess of 25 years in permitting in Arizona so when you talk about political risk you don’t have to confine the topic to Congo and Panama and Indonesia you can think of the political risk inherent in other places like California and Arizona which are equally pernicious uh and that stands between us and having adequate supplies of copper 5 years out what that means is that existing copper assets that can be ramped up or built reasonably uh I think will be extraordinarily valuable things over the next 5 years it’s funny you bring that up again because I asked you last time I had you on is either the last time or the previous time for that uh about what jurisdictions went you touch in California and I had another uh another investor and analyst on and he said the same thing I would not touch California well there are others you know I I I’m very loathed to invest in British Colombia uh absent being in Talan territory uh if I’m going to invest in British Columbia uh I want to invest in traditional third world lands where the local third Pardon Me First Nations land where the local jurisdiction at least are uh Native bands who I’ve done business with in the past so you know uh Nishka Talan uh responsible local Partners I’d much rather be regulated in BC and Telegraph Creek than I would in Victoria so I consider BC to be a risky jurisdiction too interesting uh you already talked about first Quantum so no no need to talk more about them but talk to me about Maduro um yeah what are your thoughts on them Maduro is that the Maduro yeah pardon me pardon me I’ve got a lot of time for that woman Teo deev is a true super star uh she practices the prospect generator business model where she uses her and her teams technical Acumen uh and specific geographical Focus to generate exploration ideas which other people fund and in her case the other people are people like Rio BHP which is to say large well-funded intelligent companies she’s exploring mostly for copper gold pories very large deposits she’s exploring in the western part of Tean metallogenic belt uh which I think is the best unexplored copper belt in the world and she’s also exploring in the laramide in Southern Arizona what’s unique about teao is despite the fact that she doesn’t have any revenues from mines she is cash flow positive from exploration fees which means that because uh she brings in joint venture partners for the heavy lifting uh she hasn’t had to uh issue Equity to keep the company alive and is in fact generating Surplus cash from exploration she’s done a superb job of keeping the uh delution nil or negative while at the same time building up the net asset value of the company I wouldn’t describe this as a copper company so much as an intellectual Capital company a research and development company if you will around Copper exploration disclosure of conflicts of interest I’m a a large shareholder here and a personal fan uh of this wonderful young technologist excellent I will probably be a shareholder myself very soon um last one Riverside talk to me about Riverson uh again uh this is a people story in one sense I’ve known Jean Mark stouty uh since uh he was involved in worldwide exploration first for BHP and then for Tech in other words I’ve known him long before his Junior Incarnation uh he also practices the prospect generator business model he’s particularly useful because he looks at it from the point of view of the customer which is to say although he’s an explorationist he consumed the ideas generated by Prospect generators when he worked for BHP and when he worked for Tech he knows what the majors are looking for because he used to look for it for them he has not yet enjoyed his exploration success but again he hasn’t had to delute he’s made the company succeed without having to issue more shares simp because he used other people’s money and his reputation as an explorationist is so good that he is always able to find major companies who are willing to do the heavy lifting for him at the same time that he’s been uh very competent in Bull markets to take projects that weren’t suitable for the majors and package them into Vancouver Stock Exchange uh Ventures uh more in a sort of uh Merchant banking role uh building Riverside in some senses the same way that Dave Cole built emx royalty through a a combination of prospect generation and Merchant banking very very very successful young guy another one where I’m a shareholder another one where there’ll be an exhibitor at our upcoming natural resources investment Symposium got got it uh let’s close with this let’s talk about uranium the last time we’d spoken you had sold I don’t know how much but you you mentioned that you sold um a portion of your uranium Investments this was really at the I don’t know if that was dumb look and I say this with all due respect were just your uh your skill at timing the top of the market but then uranium after it settled it seems to be on the tear again what are your thoughts here coming into uranium and U what are you looking at well two them there uh the first is that I’m a contrarian and I built a large position in uranium juniors in 2022 when people hated them there nothing there’s nothing I love more than hate right uh when the commodity and when the stocks became unated when they were uniformly up 3 or 400% I sold enough to take my risk Capital off the table uh so now my Uranian portfolio stands me at risk nothing and it’s a large portfolio which is a very good price for a large portfolio uh what is really appealing to me about the uranium business is that the structure of the uranium business is changing and investors don’t understand this yet the part that’s changing is that unlike any other uh mineral commodity the structure of the uranium Market is going to a term rather than a spot Market in every other commodity that we operate in mostly the buying and selling takes place second by second so there’s no real way of forecasting price accurately in uranium because the market is so constrained increasingly what you see is contractual relationships between buyers and sellers that last for 15 years uh up to 15 years they can be five they can be 10 but up to 15 years which means that from the seller’s point of view you get some certainty both both with regards the amount of material you’ll be able to sell but more importantly what you’ll be able to sell it for and so doing forecasts around Topline sales and even around margin uh becomes easier in the uranium business than in any other mineral commodity in the world what that means is that if you’re a junior going to build a uranium mine uh without having recourse to a big Stout major company balance sheet three years ago when uranium was priced in the spot Market you couldn’t do it but now as as that UR ranium Jr if you can lock in a fixed price for 15 years for 60 or 70% of your production so that the bank can see that you can amortize your loan with sales to uh an investment grade quality credit a Tokyo Electric Power a China General nuclear a Southern Company an Ontario power um you can Finance these things and you can Finance them at a lower cost of capital than other people can do similarly if you’re a security analysis if you’re an old fat bald uh green ey shade lone shark like Rick rule trying to figure out what the company’s worth when you have some certainty uh as to uh how much product you can sell and what price you can sell it for rather than relying on unreliable forecasts of future pricing it makes understanding the value proposition much much much much easier the consequence of that is that in the uranium business while the easy money has been made when you go from unha from you know completely hated to tolerated uh and then liked uh and when you take the commodity price from 20 bucks a pound to $100 a pound okay the easy money has been made what’s unique about the Uranian business is that the sure money is in front of us now there are probably 85 companies that purport to be in the uranium space most of them are populated by the lame the Halt and the blind the only uranium they have is on the heading of a share certificate uh but there are 12 or 13 or 14 companies for whom this transition from spot to term becomes incredibly important and I think that’s really the theme in front of us stock picking in the uranium business and paying really uh strict attention to whatever information you can glean uh despite the fact that it’s opaque information uh around uh these term contracts is the key to making really delightful amounts of money in the uranium space over the next five years on that note what do you think of the royalty companies well the royalty business is the best business around mining that exists a royalty for those of your listeners who don’t know uh is an interest uh in the revenue stream from a project without having an interest in the capital cost or the operating expense which is say your gross as your net uh this is a very good business it gives you access to commodity price upside it gives you access to uh uh positive reconciliation with regards to reserve and resource but it doesn’t expose you uh to operating cost surprises or capital cost liabilities um I absolutely love the royalty business I would argue I wouldn’t argue uh I would suggest and I have employed back when I was uh responsible for other people’s Financial Futures uh I have constructed natural resource portfolios that were entirely composed of royalty and streaming companies for those customers who wanted upside associated with the res resource thesis but didn’t want to take operating risk and I think a case can be made for many investors who want to be a little more passive that they overemphasize royalty and streaming companies in their portfolio so I’m an investor royalty company as I’m actually getting my my dear old mother in in as an investor in royalty companies because she wants exposure to the Commodities and I’m I I’m trying to find a the downside if you would of royalty company that’s what I’m having ltic good problem to have but that’s I think there’s two downsides uh I think some royalty companies because of the success uh the sector has enjoyed uh trade at too high a price relative to net asset value uh when you are buying a royalty for more than the royalty is worth uh at current commodity prices you have to believe that a commodity prices are going to go up you have to be buying some optionality and you have to believe that uh exploration development will increase the value of the royalty now this is not a bad bet if the royalties are on very large projects uh I would point out as an example that Franco Nevada’s royalty on the uh Barrack lands in Northern Nevada were purchased for if my memory serves me correctly $2 million us and have now generated 1.15 billion us while at the same same time replacing the reserves that they mined uh which means they started with a certain Reserve number they pres produced that Reserve number but exploration has replaced those reserves the point here is that very large deposits always yield you surprises and those surprises are almost always good the other risk you have is in the very small subscale royalty companies uh where they don’t have durable competitive advantages over their larger competitors in terms of cost of capital and where the costs associated with being a public company are too high relative to the royalty portfolios in this circumstance you need to buy uh nent small royalty companies where you believe they have some durable competitive advantage that will give them the ability to acquire royalty companies pardon me royalties at a reasonable enough uh cost of capital and at a reasonable enough Pace to amortise the public company expense uh met too royalty companies third tier me to royalty companies are an absolute positive dead end if you’re buying companies that are subscale and I own a couple of them uh you’re buying them because you believe that the management team has some durable competitive advantage in the space that will allow them to achieve scale and lower their cost of capital relative to their competitors got it well Rick um I’m going to see you down in batan tell me about what’s going to happen in July B I’d love to our listeners to hear this I want to talk to you if I’m allowed to about my whole value proposition uh if you like the way I think and you like my rankings you can access it for free go to rural investment media.com list your natural resource talks I’ll rank them personally 1 to 10 I’ll rank them for free why do I do that because after after I’ve ranked them for free I want to sell you some things uh I want you to come to my boot camps uh eight hour long sessions every three months where we do a deep dive on some topic uh we’ve done royalty and streaming we’ve done silver we’ve done uranium very well timed by the way the next one we’re going to do is about private placement so we want to see you there the granddaddy of our paid events though is the natural resources investment Symposium this year July 7 through 11 in boa ratton Florida I’m delighted by the way Andy that you’re coming this is my uh highest value effort what does that look like well first of all we bring great big picture thinkers you know the Jim Rickards of the world the bill boners of the world the noi prins of the world Daniela D Martina boo of the world people who tell you about the world in terms of macro the way it is not the way that CNBC wishes it were but we be we go Beyond macro macro is just to set the stage we go to micro we have great portfolio managers we have great analysts people who have made money in resources for 30 years not failed investment bankers who blew out a supermarket portfolio or a financial services portfolio and a parachuted into mining where they can’t do any damage but I’m talking about people who’ve been really successful but beyond that uh our best feature I think is we have the living legend we have a group of people who have built multi-billion dollar mining companies from scratch not beating their chest well maybe a little of that uh but really telling you how they did it uh and telling you how that path made them better investors and can make you a better investor too so the Robert friedin of the world the Bob quarters of the world the Ross bees of the world the Shawn Rosen of the world the Randy smallwoods of the world they’re all going to be there by the way I had a guy email me years ago saying following Robert fredland around the exhibit floor seeing what booths he stopped in front of and lurking and listening to what questions he asked was worth more than the cost of admission I got the whole rest of the conference for free but let’s move on with the value proposition every public company exhibitor at our conference is owned in accounts owned or managed by me which is to say every single exhibitor is vetted at every other investment conference I know the qualific to be an exhibitor is a check that cashes that’s it no guarantee because I own a stock it goes up but there is a guarantee believe me but I’ve looked very very very closely these are all vetted now the upshot of all this is that any educational product that I sell be it the boot camp be it the paid interviews be it the natural resources investment Symposium comes with a goldplated money back guarantee if you come physically to Boer Raton which is what I would prefer uh or if you uh attend in the comfort and convenience of your own home via live stream if you don’t believe for any reason that I haven’t delivered value for money email me and I’ll give you your money back no questions asked I would prefer if I fail that you tell me how I fail but that’s not a requirement we’ve had money back guarantees on our investment uh educational products for 30 years and I’m delighted to say that we’ve delivered enough value value for our attendees that we’ve had to let that we’ve had to refund less than one tenth of 1% of the tuitions that we’ve received but that notwithstanding no other investment conference in the world I know of has an absolute unequivocal money back guarantee that’s the best guarantee you have that we deliver value for money about that it was 1994 Rick I was at an investment conference I met you spoke very briefly and then I followed you around the investment conference talking to all the companies and yes I made a lot of money just so that that’s a technique just so as you know that I did in the early part of the decade of the 70s I mean we all learned from mentors right now 50 years later I am one you’re my mentor I that Rick I can you so much for just your time um I am utterly grateful and again as I mentioned to you offline I’ve been looking forward to this all week so um I’m also looking forward to seeing you in Florida and maybe I’ll talk with you before then but seeing you in Florida and spending a lot of time with you in Florida well I look forward to both I’m happy to do these interviews given how hard you worked before them at any time you’d like and I’m absolutely delighted that I’ll be seeing you in bokeh uh I hope I see a lot of your listeners there if they can’t come uh I would encourage them uh of course to attend via live stream by the way whether you attend live or live stream we’re going to give you 50 hours of intense programming in four days there’s no way on Earth you’re going to absorb it all the consequence of that is that the recordings will be available to you for a year uh and and to get full value uh out of the conference you will have to refer to the recordings several times I put on the conference and I have to refer to the recordings all right well thanks again Rick well uh I’ll talk to you soon thank you good

For more infor on Rick Rule please visit:
https://ruleinvestmentmedia.com/
For Rule Investmewnt Symposium:
https://opptravel.zohobackstage.com/TheRuleSymposiumonNaturalResourceInvesting2024#/?affl=NaturalResourceStocks
And Follow Rick on X:
Tweets by RealRickRule

In this extensive discussion, Rick Rule shares his insights on investment opportunities across different sectors, including commodities, mining, and uranium. He introduces a unique ranking system to evaluate companies based on their investment potential, differentiating them into tier one through tier ten.

Rule explains the macroeconomic factors influencing commodity markets, including interest rates and political pressures, particularly highlighting the case of gold and its robust performance in the market due to geopolitical instability and central bank actions. The conversation also touches upon the principles behind investing in junior mining stocks, exploring the prospect generator business model and emphasizing the importance of management track records and project potential. Specific companies and their rankings are discussed, offering viewers a detailed analysis of investment prospects. Lastly, Rule extends an invitation to the rural symposium in Boca Raton, where further insights and investment strategies will be shared.

00:00 Unveiling Investment Gems: The Tier System Explained
01:04 Meet Andy: Announcing Symposium Attendance
01:50 A Deep Dive into Macro Economic Views and Gold’s Surge
06:30 Evaluating Mining Companies: A Masterclass
15:30 Spotlight on Gold: Analyzing Specific Companies
23:31 The Copper Conundrum: Insights and Opportunities
32:51 Uranium’s Market Dynamics and Investment Strategies
37:47 Exploring the Royalty Company Advantage
41:58 A Sneak Peek into the Natural Resources Investment Symposium
46:53 Closing Thoughts and Future Engagements