[Music] [Music] I'm Charlotte McLoud with investing.com and here today with me is Rick Ru proprietor at rural investment media thank you so much for being here great to have you Charlotte thank you great to be back really good to be catching up with you of course we're here at VC and we've made it halfway through day one so I feel like I can start by asking you how the sentiment is feeling what are you seeing and hearing feels like a c change to me I mean last year was better than the year before this year's
markedly better than last year uh very interesting I maybe it has to do with J sus marketing maybe it has to do with the change in the market I don't know but the exhibit hall is genuinely crowded the speaking Hall admittedly there's not many seats in there one way you get standing room only is not to have enough seats uh but the truth is in terms of attendance it is markedly better this year than prior years okay that was my sense too as well and I did hear that they're going to add some more
seats down there so we'll we'll check tomorrow and see if it's still standing room only but good to hear you say that because that's what I was feeling too but I I always have a hard time judging these things okay so a lot to get through today of course I want to start with gold and maybe maybe we make it simple it's got a lot of positive drivers in its Corner what will be most important in 2025 the real rate of inflation not the CPI stated rate of inflation in the United States is substantially higher than the
interest yield on the US 10e Treasury which means that Savers are losing money gold traditionally is moved when consumers are nervous about the deterioration in the purchasing power of their savings they have reason to be uh I think that that's going to be the big theme people believe that President Trump is gon to reduce the size of government that's not going to happen the deficit is going to increase it's going to become increasingly likey likely as goes on and that's there's
evidence of that right now Charlotte the FED is lowering the interest rate and the long rates are rising uh investors are saying fool me once you know don't fool me twice the market is already pricing in higher inflation I think we're just getting started sadly yeah yeah I think I think that hits on big theme that we're going to see this year so I told you before we started I'm going to intersperse some questions from our audience throughout this conversation because we we had a lot of
people write in with things that they want to know from you this one is about gold so the question is similar to the paper silver market to what extent you feel paper gold is used to artificially deflate the current spot price I'm not one who believes in the conspiracy theories around precious metals in the long term I've been in financial markets my whole life and I know that in the short term term trading desks manipulate prices all the time markets as big as the US Treasury Market the euro dollar
market and the Euro Market are manipulated so it would be very easy in the short term to manipulate the gold and the silver market the idea that gold and silver prices were manipulated by mysterious forces in the period 1982 to 2022 fails to acknowledge the fact that gold was going down anyway why would you work really hard to manipulate the price of something lower when it was already going lower short-term man ation all the time now the part of that that's important uh involves the paper trade
because here's the way short-term manipulation works somebody will understanding that in gold and silver markets the paper markets the Futures markets often trade in a day a hundred times the value of the gold and silver set AC course you know set aside for good collateral for that trade so people construct a book either long or short in the Futures Market market and then they act in the physical Market overnight when the volumes are the least to change the price of gold in the Futures Market settle a trade done uh
that's going to continue to happen if you have physical volumes required to see to settle trades that are 1% of the value of the trades that take place daily the Temptation for manipulation is too high it's GNA it's going to keep happening okay and I think think we've talked about that topic probably before in the past but really good to review your thoughts there all right so I want to go back to our last conversation which was in November and you said for speculators you should be considering
the better gold juniors in 2025 and I thought to follow up on that maybe you can Define what you mean by the better gold Juniors I think it's a good review uh in this in this circumstance in in in the context of the audience I was talking about gold producers and I think the one I had particularly in mind was G mining uh where you had a management team that had a specific skill set and the task at hand was exactly suited of that skill set their skill set is constructing big mines in tropical high high rainfall environments
they were constructing a big mine in a tropical high high rainfall environment another example would be lendine gold uh but even coming down the quality Trail the high quality developers and explorers have actually had a pretty good year the caveat there is the high quality the sort of Penny dreadfuls the $15 million market cap companies with realizable asset values of a million dollars didn't have a good year they didn't deserve to have a good year in fact they didn't have much gold they were merely looking
for it so the increase in the gold price wasn't of much use for them but I think that uh in terms of the the description of the type of stock that I was pointing out it turned out to be true I think it'll continue to turn out to be true I think that we are still at a market where the market progression described by lre which is say to say the end of the lisson curve when projects are through bankable feasibility study they've obtained con construction financing when their shovel ready or
better yet shovel turned that period between that period in time and economic completion seems to be the sweet spot in the market right now for juniors okay okay good to go over that as well and so talking about a little bit more on the performance of the gold stocks I've started to hear people say that maybe in this gold bull market we won't see that across the board gains where everything goes up it'll be a little bit more selective than that so what are your thoughts on that I would hope that's the
case but I don't think it's going to happen uh human nature is what it is you and I Charlotte have been trying for 10 years to teach better people to be better investors and they don't want to be they don't want to think they want to feel uh they don't want to do the work that's necessary to separate in movie parlaments The Good the Bad and the Ugly uh they just want to follow their emotions and following your emotions doesn't work in this business it's very strange and I know you've noticed this
because you've asked me questions that referred to it at least elliptically when people are investing in a narrative that's a 5-year narrative and they have trauma Holding stock over a long weekend it means that their strategy and their tactics are at odds and and unfortunately that is not how money is made money is made in this sector with a two-year Viewpoint a four-year Viewpoint a five-year Viewpoint and unfortunately most of the people on the exhibit floor below us most of the attendees have a two-month
back you a sort of a two-month time frame and it doesn't work it just does not work the consequence of that is that they fall for stories they fall for narrative they don't pay attention to whether or not that narrative is true so they buy storytellers um stellers normally aren't good company Builders yeah I think that's that's an interesting way to look at it we'll we'll get those across the board games but we shouldn't actually want them okay so again during that last conversation
we had you mentioned silver stocks they were something that worked for you in 20124 uh we did have a number of people right in about Silver Company so so I will ask one question one person was wondering if you can tell us your favorite Pure Play silver companies I don't have one uh I really don't I wish I did uh every Pure Play Silver company that I know and like has obvious warts uh I don't have a one siiz fits allall silver stock believe me I wish I did uh but there's warts on everything I
see Andrew so so what does that mean for your investment strategy then when it comes to Silver I own a few Juniors uh I own a silver although I think based on current production it's overpriced uh I own Abra silver because I like the you know exploration progress I like panamerican although they aren't predominantly a silver Centric company no more but I like uh I like the new found production efficiencies that they're enjoying across a range of assets I like the fact that they sold some residual assets and
cleaned up their balance sheet there's a few things I like but there's nothing that I have the courage to say to Charlotte McLoud in front the 30,000 people you should buy this I don't have one of those okay I appreciate that okay so we're going to continue going through some of the the favorite Commodities I know you're on a number of Outlook panels here at the conference including of course uranium and it's been about six months since we checked in on where we're at in the market fundamentals seem
to have only improved spot prices lower than this time last year so where are we in this cycle well that's attractive to me uh I noticed postings in social media where people who have uranium as part of their handle uh are saying I sold my uranium stocks the game's over that's lovely it truly is lovely when the hot money goes away it means that sanity is reflecting to the you know the sector uranium poodle you know but whatever these posters are you know the fact that these people are now going to disgrace some of
their commodity I think is a very very good thing but I do think the fundamentals are improving whenever you and I have talked for the last four or five years I said the real near near term catalyst was the resumption of Japanese production it's happening the material that was Supply is now material held for fuel very very very bullish sign there are also I mean the thing that excites the market is interesting because they not going to matter for six or seven years what people are talking about now as data
centers uh those facilities need to be permitted financed created it will impact uranium demand 8 years out 10 years out no doubt whatsoever what matters right now is Chinese new construction uh not progressing with shutdowns in Western Europe in the United States but rather extending lives and the pace of Japanese restarts the thing that's happened very recently that's very boish for Uranium is the unsuccessful restart of inai which I had believed to be the best uranium Market in the world best uranium
mind in the world uh at the time that that shut down that was the lowest cost producer on the globe because of a because of many things including uh a short uh uh an unavailable unavailability of sulfuric acid in kazakstan that mine hasn't resumed production anywhere near at the rate that I thought it would so there's 10 million pounds in reduced Supply in 2025 and the spot Market is already pretty skinny another thing that people don't realize you and I have talked about this in the past is that the available for
sale inventory in the spot Market was reduced by my former employer Sprat by about 65 pound 65 million pounds some days the dollar volume in the Sprat physical uranium trust is bigger than the dollar volume in the spot Market which is to say that the spot Market has become the Sprout market and that points to the fact that there is a growing unavailability of Supply which I believe over the next five years will force both producers and consumers to meet each other in the term market and that is
ultimately healthier for both parties okay okay so given all of these circumstances that you've laid out how are you approaching the uranium sector right now because he told us it feels like so long ago right now easy money has already been made yeah I think we're coming back into the easy money period I think you have to concentrate but whenever I see hate in social media I get attracted and I'm seeing Hate in Your uranium I'm when I uh talk about fundamentals around NextGen or around
fision or around Paladin or around uh Lotus there's an immediate outpouring of social media comment from people who seven years ago couldn't spell uranium and they don't dispute any of the facts that I brought up they just say uranium's junk in other words they respond emotionally I love that I love that in my life from a financial point of view when I'm hated I'm about to be rich okay okay and I'll throw in one uranium company question again from the audience somebody was asking about your
number ranking for Dennison Minds I have Dennison as a five uh I own a lot of fives myself uh what it means is no immediate Catalyst the good news around Dennison is that they're sort of the go-to name in the aabas Basin for the second tier uranium companies when generalist investors come into the space they're going to look at Dennison they also have a wonderful database they've been in the business for 70 years they're not Johnny come lately's and they have a permitted Mill those permits
are hard to get a wonderful land base the thing that makes me nervous about them is their near term near-term value proposition is establishing in in Inu recovery technique but not on Surface in sandstones as a RF front but rather deep deep sandstones this has never been done before if it works it's a true game Cher but I caveat B by saying if it's worked it's never worked before so to me it's a science project I've spent 10 or 12 hours trying to understand it I can't understand it so I don't know how to
Value it okay and I think that helps kind of with part two of the question which was involving how you assign those rankings so I think that that gives some insight there okay I'm going to leave uranium there for now I also want to touch on copper with you because I noticed you're on the copper Outlook panel so I've gotten a little bit of mixed messages about copper I've been hearing for a long time that this is a longer term story and now I'm starting to hear about it maybe it's happening
this year so your thoughts on CER and I think I'm on the copper panel because one of the exhibitors asked that I be on the panel because I draw a crowd I think it was a commercial response um I have opinions about the supply side of copper which I think is extremely attractive I don't have much of an opinion in the near term about the interplay between supply and demand I have zero doubt that 5 years from now we're going to have Supply deficits because we needed to be investing to cure those Supply deficits 25 years ago
and we didn't I said this before and it's self-deprecating humor but if your audience looks at me they see a metaphor for copper mine 71 years of age fat bald past his prime when you look at the mines worldwide that we derive our Copper from chuki kamada is 115 Bingham Canyon's 165 the newcomers grassberger 60 years old escanda 45 years old I mean these things are past their Prime and we need to find and put into production one big mine big big big mine every year and we're not doing it
in fact we're falling further behind there's a wonderful copper deposit in the US called resolution 1.2 billion tons so a super giant 1 a half% copper three times the average mind grade worldwide it's been in permitting 26 years so zero doubt over the next five years we have production sword Falls what happens to the price between 20125 and 2030 I don't know is there a global recession I don't know now as to why I'm on the panel as I say I think it's because I draw a crowd frankly okay very
very fair fair response there okay so we'll leave we'll leave coofer there right now I want to do a little bit of current events I think when we talked in November we we went over Trump pretty well so I'm going to leave him aside for now but we've got we've got changes going on in Canada as well and I think it makes sense because we're in a Canadian conference right now Justin trau is resigned we're waiting for a replacement we're probably heading to an election thoughts on the landscape in
Canada as we go through these changes Charlotte you know that my politics are libertarian I don't have much use for the conservatives or the greens or the liberals or the NDP from the point of view of extractive Industries Canada would be much better off with the conservative government uh your current prime minister uh as an example I'm not suggesting that you did or didn't support him but you're Canadian your prime minister didn't believe there was a business case for Canadian natural gas
despite the fact that that gas in Alberta sold for $2 a million btu the same gas in reram and Canadian firm sold for $14 and the Germans wanted to buy it the fact that he couldn't see a business case is astonishing to me I suspect whoever your next prime minister is given the government's need for Revenue will see a business case for the export of Canadian resources which will be good I think the political landscape change in the United States is good for Canadian resources too one of the
problems that your resource business but particularly oil and gas business is had is access and degress to markets and I think that the Trump Administration will remove at least a deao objection regulatory objection to increase transmission infrastructure in the United States that's good for Canadian natural gas it's particularly good for heavy oil if you don't have an imp a political impediment in Canada and a political impediment in the United States then Canada can get back to doing
its own extractive businesses which it does well the Western Canadian sedimentary Basin is one of the great oil provinces in the world and Canada punches way above its weight in terms of Human Resources in both oil and gas and Mining uh administrations in both countries that aren't overtly anti-development can only be good for your extractive industries yeah I think we've talked quite a number of times at this point about Canada's oil and gas stocks and how they're due for a reating
and so yeah I guess one of the points I was hoping to talk about so that reating is probably coming sooner than later well right now the rate is down and I think it's a mistake people are looking and they believe it when Trump says that he's going to impose tariffs he's not I mean maybe selective tariffs but he's not going to get away with it the truth is that Americans while they aren't uniformally brilliant aren't stupid either tariffs are taxes and he cast himself as antitax and
the supply chain in the United States is dependent on imports from other places what terrorists do is they systemically raise cost for American manufacturers who are trying to compete against Chinese and Indian manufacturers who don't have those same impediments this is a non-starter so people are saying Canadian oil and gas is going to be subject to 25% tffs ridiculous Canadian politicians who know it's ridiculous who don't want to run on their track record are running against Trump and they're saying if Trump
imposes these tariffs why we're going to do this this is all barnab and Bailey stuff these are circus clowns in both countries using each other to popularize the eles with their bases okay I have one more question before I let you go and this is this is going in a different direction I think so I was seeing all these wildfires in in California and it reminded me of before we've talked about investing in water and I wanted to ask if that is something you're still interested in and how could we get exposure just to review
that it's getting more scary because as water gets scarce the government Temptation rather than to deregulate the water markets is to steal water uh so unfortunately the the California wild fires likely give uh Governor gruesome uh the ability to use popular opinion to steal privately held water in the Central Valley in the sieras uh so that theme is increasingly a dangerous theme which is really sad uh I when you used to interview me lived place called carlbad California and we spent about
$1,000 an acre foot to desalinate water from the Pacific Ocean to fulfill our needs that same water was available in the Central Valley uh for $150 an acre foot it would have taken us $100 an acre foot to get it from the Central Valley to us that's 200 bucks an acre foot 250 an acre foot the politics were so bad that it was cheaper to spend $1,000 to desalinate it than it was to move agricultural water and I was always interested in that Arbitrage between $250 $1,000 water what's happened is
that the political classes decided to steal the Arbitrage for themselves okay yeah I think it's definitely I don't know an area to pay attention for sure so thanks for going into that and I said that was the last question but I'll put it back to you anything final that you want to share with the audience we're at this conference I know yours is coming up this summer anything you'd mention uh I I think think we're coming into a pretty good market for resources and I hope that some number of the people who
listen to your show invest in themselves in anticipation of that market learn how to do a little bit of Securities analysis learn how to segregate good people from bad people you know almost all the value in our sector Charlotte and I think you've learned this uh as an interviewer almost all of the value in the sector is generated by about 5% of the players and if your audience merely divorced themselves from The Narrative and focused on the people they would do much much much better than they do I've
now graded over a 100,000 portfolios in 10 years and I've learned an awful lot grading portfolios if you look at 100,000 portfolios you can see the mistakes that people make you can see that they got excited by sectors when they were already fully priced you can see that they hate sectors that are cheap uh correcting those faults but the easiest fault to correct is to look for management teams that have been serly successful and hang out with them okay I think that is a good place to wrap up and we'll we'll leave the
link as we usually do for your portfolio grading in the video description so thank you so much for for taking the time pleasure thank you for having me back okay and once again I'm Charlotte McCloud with investing news.com and this is Rick rule thank you for watching if you like this video make sure you hit the like button and subscribe to our Channel we'd also love to hear your thoughts so leave us a comment below [Music]
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