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  I'm Charlotte Mloud with investingnews.com and here today with me is Rick Rule, proprietor at rural Investment Media. Thank you so much for being here. Great to have you. >> Pleasure to be back with you. Thank you. >> Yeah, so nice to catch up. This time we are at PDAC. We've made it almost all the way through day two. We're getting there. So, I wanted to start by asking you about sentiment on the show floor. Key themes that you've picked up on. >> Uh, clearly anybody who was here last

year made pretty good money. So, there's a lot of enthusiasm here this year. Uh, the financing window that was probably constrained to large caps and midcaps last year has certainly come down to the juniors. The consequence of that is that the exhibitors here in the you know subund million dollar market cap space feel much better than they had previously. Uh as a speaker speaking yesterday in the investors forum I would say too that what last year might have been expressed as cautious optimism is a

much more broadly based optimism. So I would suggest that the mood here is ebulent from the point of view of a check casher. That's a good thing. From the point of view of Rick Rule, a Czech writer, it's less good. >> Right. Right. I see what you mean. I didn't I didn't get a chance to see your presentation, but I did hear it was standing room only. So, I think that tells us something about the mood here. We're we're catching up. We last talked about a month ago at VRC in Vancouver,

and we got some pretty big updates on your portfolio. You were explaining how you sold 80% of your physical silver and what you did with that. I'm curious, what were what were the reactions that you got to that now that we're finished with that event? >> You know, that's a great question. They were overwhelmingly hostile, which lets me know I was doing the right thing. As you know, Charlotte, I perversely love hate and I sell love. Uh, the world was in love with silver. I sold my silver

and the social media response was overwhelmingly negative, which let me know I was doing the right thing. Uh, my purpose for buying the silver, as I explained to you then, was when I bought it, it was unloved or pardon me, I mean, totally unloved. It was hated and I figured when the hate dissipated, the silver price would go up. That happened. It was in my speculative account, so I sold it. Um, and as I say, for me, it was a good decision. >> Well, and here's what I didn't think to

ask at the time. So, 80% sold. You still have 20%. So, what is the plan for that? >> I don't know. I mean to be honest with you, I sold that which was easy to sell. Uh that was in the Sprat physical silver trust. My the remaining 20% is actually physical silver. >> So to silver to sell it uh I would have to go through some aggravation and the the silver market is so volatile right now that the dealers are bidding a 7% discount to spot. Uh and I'm you know I'm I'm in no particular hurry. I sold

the vast majority of myself my silver and I sold it for what I think is a very handsome price. So I'm not disincined to hang on to the balance particularly because it would represent some effort on my behalf to sell it. >> Yeah. Yeah. Okay. Fair enough. Fair enough. We also I mentioned we talked about how you deployed the profits from selling that silver and one of the places you put it was into wheat and precious metals. So I wanted to bring that up. I wondered if you could share your thoughts on the company's recent

deal with BHP. What are what are your thoughts there? >> You might remember Charlotte, you interviewed me about a half a year ago and I said that the knock on Bay Street against the big royalty and streaming companies was that the big transactions for them were in the past. And I argued that the big transactions were in the future particularly because the copper industry on a global basis needs to invest in excess of $250 billion in the next 10 years and they don't have it. Uh the transaction that we saw which was

BHP monetizing part of the silver stream from Antimina and raising $4 billion is the shape of things to come. precious metals revenue, but particularly silver revenue, if it's lumped in with copper revenue in a big based metals company, trades at 5 to seven times cash flow, isolated as a silver stream uh away from the requirement for sustaining capital. That same revenue goes for 15 to 20 times cash flow. What that means is that uh Wheaton's cost of capital is systemically lower than BHP's. So they

can do a transaction, a big transaction that benefits BHP and benefits Weaten simultaneously. And that was precisely what caused me to make the last of many many many transactions in Wheaten. I >> think that that so this is the shape of things to come. That was one of the things I was going to ask you. Do you think we will see more deals like this? And it's interesting because I think when I think about royalty and streaming deals, I tend to think, oh, this is something that maybe a developer might

do to get their project on the move. What can you talk about why it's good for a company like BHP to do that? BHP uh well Vunia as an example which BHP will be doing with Londinine the front-end capital cost in the first phase of Vunia will be between 8 and 10 billion dollars. It is likely that selling the precious metal stream out of Vunia could yield between three and four billion which is to say that all of the equity before the debt required to build the mine could come from selling about

15% of the revenue stream. uh that's a tremendous advantage if you're BHP and you are raising capital at an effective EBITDA multiple of seven cash flow multiple of seven uh and you can cut that cost of capital in half uh by selling a minor fraction of your revenue it is simultaneously good for the streamer and good for you >> and I think maybe I know the answer to this maybe I don't would you consider investing in smaller royalty and streaming companies. It's there's the

ones at the top that everybody knows, but there are are smaller ones you can look at. >> Yes, is the answer to that. The uh smaller royalty and streaming companies are selling at lower price nav multiples. Now, in fairness, their NAV is riskier. Uh but what will happen at least with regards to the well-run ones is that either the discount will disappear partially in the market due to nav arbitrageers like me or else the big guys will take over the little guys. Those are the only two options. Uh

what that means is sort of that the market pays me now or the market pays me later. Uh I like transactions like that. Now, it's important to note that not all royalty and streaming companies are created equally. When you're looking at the little ones, you need to find ones that have a durable competitive advantage. You have to find somebody who has access to royalty and streaming products that other people don't have access to. Whatever that speciality might be, it's important that you don't

just look at the whole small cap royalty and streaming space, but rather you differentiate qualitatively from amongst the people in the running. >> Do you have examples of smaller scale royalty and streaming companies that you like? >> This is not a recommendation, but one example would be Nation's Royalty uh controlled by indigenous people uh in northern BC, the Nishka band in particular. Their uh distinct competitive advantage is that they can deal nation to nation with other indigenous people across Canada to help

those nations uh first of all negotiate impact benefit agreements uh but also to monetize uh their uh royalty revenue. The royalty revenue might otherwise beneficiate benefit benefit the tribe over 50 years. This gives the first nation the ability to monetize part of that to use currently while maintaining the rest of it over time. That would be an example. Uh a different example uh again not a represent not a uh not a recommendation but a stock I own would be Empress Royalty. Uh Alexandra Woodyear there uh

is part of the team at Endeavor Financial which is one of the largest financial consultants in mine finance. they have access to uh the product if you will the relationships from Endeavor Financial which they don't have to fund by way of overhead. That would be another durable competitive advantage that I would suggest. >> Okay. Thank you for going through that. And another follow-up question from VR. So another stock that you mentioned you put some of the profits into is Visa Silver. And we've had a lot of questions

about that one since that happened because they had the tragic event at their company where their workers were kidnapped and now also violence unfolding in Mexico. So how how have you handled that situation? >> Thus far that's been a mistake. Uh that's a wonderfully high high quality silver deposit. It is in terms of my knowledge the third best undeveloped silver deposit on the planet. Uh, I haven't sold because I don't have enough information and I'm not sure enough information exists. The management team

there are people that I know well, I'm friendly with. There are conflicting reports as to what precipitated the violence. Uh, my suspicion is that it was a negotiating tactic of the cartel for payments, but I don't know that to be true. And I don't know how it ends. Uh, I don't know if the Mexican government has the will to intervene and if they have the will to intervene, I don't know if the Mexican government has the power to intervene in Siloa. Senaloa is the only part of Mexico that I have

ever been personally uncomfortable being in. I've been in Sinoa a fair number of times and I was always uncomfortable. It'll be interesting to see how that pans out. Uh, the rest of my silver speculations worked well. That one I was rewarded for my rewarded from my for my genius with an over overnight 50% decline in the share price. >> Well, it is it is very tricky and more information certainly is needed. Hopefully, we get that. Does it make you rethink Mexico as a jurisdiction overall? Charlotte, if you're going to

be in the silver business, actually, you're going to be in Mexico and you're going to be in Peru or you're not going to be in a silver business. There are other parts of the world that produce silver, but not in the quantity, not at the cost that Mexico and Peru do. I've been investing in Mexico now for 40 years. This is not my first rodeo. The circumstance that happened is tragic. I hope it doesn't happen to any company again, whether I invested or not. But I'm a full cycle silver

investor. Uh I own Polis, the largest silver producer in Mexico. Uh I'm an Agniko Eagle shareholder. I'm a First Majestic shareholder. I'm a Go Gold shareholder. I'm exposed to Mexico across my portfolio. And I have been for 40 years. I'll be there till I die, which hopefully is a long time from now. >> Hopefully. Yeah. And that is the sentiment that I've been hearing a lot about. If you want to be in silver, you're you're going to be in Mexico. >> All right. Well, we'll we'll set silver

aside for now. I want to take a look at gold as well because you're often telling us about how underinvested the general public is in gold. So, to what extent is that changing? I thought it's a good question to ask while we're here with all this high attendance. I don't have statistics on this, but I heard at mining week in London that the market share of gold in global portfolios has doubled from a 1% market share to a 2% market share. So if you talk about the fact that the market share has

doubled, that's a pretty impressive number. If you talk about the fact that precious metals and precious metals equities represents 2% of global savings and investment assets, it tells you about how far we have to go. There are estimates that in 1981 at the end of the last bull market that the market share of precious metals and uh precious metals related investments uh was between 8 and 10% of global savings and investment assets. So it tells you that there's an awful lot of room left.

>> It does. And I have to imagine, so that's global. I have to imagine much of it is coming from the east. And this is a point I wanted to bring up with you because I've been hearing so much about the rise of China's and the east in general influence on the gold market. So do you have any comments on that note? >> Well, certainly all things considered, China's been the bid. If you look at the increase that we've enjoyed, if that's the right phrase, certainly for me it's

been enjoyable in the gold price, one of the things that sticks out is that in the period 2018 to 2024, the buyers were foreign central banks. There wasn't really retail participation until the end of 2024, 2025. And the predominant buyers are still central banks with the exception of Tether which really represents retail buying if you will in drag. uh the most important central bank has been China because China is the country that's enjoyed the greatest trade surpluses and China was also a country that had an awful lot of

its sovereign wealth in US treasuries when the US government irrespective of how you feel about Russia stole $300 billion in Russian treasuries it caused many central banks around the world but particularly those who thought that they might have policy disputes with the US government to rethink their holdings. Uh a and the leading one of those was the Chinese. >> If we're talking about gold price drivers and what's moving the price, I think we need to talk at least a little bit about current events. And for

context for everybody, we're talking on Monday midday. We have tensions, violence in the Middle East going on as we speak. How does this impact the gold market? I typically hear that when we have events like this, the price goes up, quickly comes down. What are your thoughts this time? >> That's been my experience. My experience has been that news, geopolitics gives people the psychological excuse to do what they wanted to do anyway. But the impact of the news doesn't last very

long. In my experience, what moves precious metals is people's fear of the maintenance of their purchasing power in fiat denominated instruments. The consequence of that unfortunately I think those fears are real is that my suspicion is over the next 10 years gold does fairly well irrespective uh of geopolitics. >> Is there more of an impact on your oil thesis might be a better question? probably not. Uh that oil will come to market irrespective of who controls it in the in the very near term. The um the

fact that oil can't transit the straits of Hormuse where approximately 50% of the world's export crude, not total crude, but export crude transits is a problem. Uh and if the Iranians are able to continue to manage uh a closure in the straits, the world oil markets will feel that uh and they'll feel it in spades. There's plenty of oil around for the next 3 weeks, but the anticipation of what might happen four weeks out, provided that the closure holds, very different story. >> And here's here's another call back to

our previous interview. You said you're still really underweight compared to where you want to be in oil and gas. So I wonder your process for scaling in. How would that look? >> I'm out of the way right now. Yeah. You know, >> understandably loving Exxon, which I did several interviews ago with you was easy at 100. It's less easy at 165. Uh I'd like to see the oil quote slip. I'd like to see the oil stock slip. The one caveat to that Charlotte is there is one class of oil company which is very small

subund million market cap companies that aren't involved in the popular shale plays but rather are involved in conventional exploration offshore in jurisdictions that are considered to be risky that are still cheap. So, I recently monitored 31 of those stocks and I put together a buy list of five. Uh, you'll excuse me for not naming names because I'm still trying to get full on those positions. But I am buying a select group of explorers, non-producers that are active in deep water, conventional exploration

in emerging markets, countries. >> Okay. Still still very helpful. So, thank you for that. And you know I I like to bring some audience questions to you and this one I thought I thought this one was funny. So the question is they wanted your thoughts on agriculture the potach market and the thesis there. They said please don't do loads of gold and silver. It's so boring. So podach and agriculture your thoughts. >> I've owned uh nutrient uh for a very long time. My suspicion is

it trades sideways to down for a little while. I mean, I love the egg business and I've been a a highquality farmland investor for 40 years, very long time. And I suspect that the sell decision on my farmland will be made by my heirs literally that isn't for sale. uh if anytime reasonably soon there's a resolution uh of the dispute in Ukraine and Russian pod ash supplies and Bellarusian pod ash supplies come back into the world market the potachsh price goes lower in the absence of that then

the podash price stays steady and western producers who are less efficient like the Canadian producers will do well >> okay I think that's that's helpful and I'll give you my fun question that I'm trying to ask all or most people here if if there was a young investor who's coming into the resource space for the first time they have $10,000 they want to deploy what would you say to them? How should they do that? >> Uh first of all they should do nothing for 6 months and they should study. They

should invest in themselves. Uh as a young investor intellectual capital preserves physical capital. So read things like the intelligent investor, read things like securities analysis, read things like economics and one one lesson for six months do nothing and then after six months uh don't follow your greediest instincts but employ the lessons that you learned from reading which will necessarily put you into the biggest and the finest companies in the natural resource space. If you are a youngster, particularly if you're male

uh aggressive, you will tend to be a reward chaser rather than a risk manager. And you will likely lose most of that $10,000. If you invest in yourself first and you invest then with a much more measured approach, employing the lessons that you learned, that $10,000 will be your first step to a fortune. >> I like this answer a lot. I'm so impressed with the variety of answers I'm getting with this question. So that's great. I will send you back out onto the show floor, but before I do, we

should talk about the rule symposium coming up. I don't know if there is space left. >> Well, the great news is if you attend the natural resources investment symposium July 6th through 10 in Boca Ratan, Florida, you'll get a chance to meet uh Charlotte Mloud live. Uh the bad news is that we will sell out the live portion of the conference and we'll sell it out very quickly. For the first time in 20 years, we will run out of physical space. If you'd like to attend via live stream, of course, the

the attendance is limitless. Uh you can attend uh online from the comfort and convenience of your own home anywhere in the world. Whether you attend live or live stream, remember that we're going to give you more information in four days than you can absorb. To that end, we have recordings and to get your money's worth out of the conference, you have to listen to those recordings. Further, uh, I myself interview every single exhibitor and most of the speakers before the conference. We run

those interviews on YouTube. Arrive at the conference fully prepared. Listen to the interviews before the conference. That'll that'll allow you to allocate your time more efficiently when you're at the conference. And also remember at our conference, unlike any other conference on the planet, if for any reason you aren't happy with the value that we delivered, there's an unconditional money back guarantee. The risk is mine, not yours. >> Well, we will have the link in the video

description for people to sign up. And I can attest there's so much content. You really do have to prepare before you go. Any final final thoughts before I send you back out into PDAC? Well, I always like to tell uh your listeners and thousands of them have taken advantage that any of them who wish uh can have their natural resource investment portfolios reviewed by me personally. If you go to one of my websites, ruleinvestmentmedia.com and you list your natural resource stocks, I personally will review and

rank your portfolio one to 10, one being best, 10 being worse, and I'll comment on individual issues as I've done on your interviews for free. uh which is a really good price. >> We will have that link as well. Thank you for reminding me and thank you so much for coming on to talk. This was great. >> Pleasure Charlotte. Thank you for having me back and uh once again I look forward to hosting you in Poca Raton, Florida. >> Yes, me as well. Thank you very much and once again I'm Charlotte Mloud with

investingnews.com and this is Rick Rule. Great.