Rick Rule: My Best (and Worst) Call of the Last Decade

Interview by Charlotte McLeod; article by Scott Tibballs.

Speaking with the Investing News Network at Mines and Money London, Rick Rule of Sprott (TSX:SII) offered his thoughts on what investors should be on the lookout for to indicate that there’s a big discovery on the way.

“The first sign is people,” he said, explaining that in the resources industry there were some people who have been successful in either exploration or management (rarely both), and those were the ones to watch.

“I think it’s critical to align yourself with the best people at any part of the value creation chain, but certainly, people’s track record in discovery does not align conformably. You have people like Robert Friedland who over 40 years have been part of discovering five tier-one mines, while most people haven’t found any.”

In short, Rule said that you needed to pay attention to “people, people, people” if you want to be part of a big discovery.

He went on to talk about the different approaches to exploration and discoveries, explaining that, while a well-known name in the exploration field like Robert Friedland and prospect generator companies may have different approaches to exploration, they both know that it takes 10 years to make a great discovery.

Exploration was a big part of the interview, with Rule saying that major companies in the resources space were rectifying a dearth in exploration spending.

“The major mining companies I think have both underinvested and mis-invested in exploration for 20 years, and I think the major mining companies themselves have begun addressing that imbalance.”

Rule said that the successes enjoyed by Rio Tinto in exploration meant that major companies were still well and truly in the game of exploration, and as more interest went in to exploration by them and other companies, “the exploration spending by majors joint venturing with juniors will increase dramatically, and the participation in junior equity markets financing by majors will also increase dramatically (going forward in 2020).”

Speaking of 2020 and the new decade, Rule also shared his thoughts on what his best and worst calls were over the last 10 years. Listen to the full interview above for more in-depth comments from Rule on what he thinks he did right and what he thinks he did wrong. Rule also talks extensively about what to expect from gold in the next few years.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.