Transcription
The price action, uh, well, I think the price action is wonderful because I'm trying to buy more. Uh, is I think operationally easily the best gold mining company on the planet. Easily my favorite silver stock. I have it as a four. They've done a very good job operationally.
>> You're watching Capital Cosm. My name is Danny. My guest today is Rick Rule. Rick, thank you so much for coming on, my friend.
>> Pleasure. Thank you for having me back, Danny.
>> Yeah, it's always a pleasure hearing from you, Rick. Today, we've got uh one of our ranking episodes. We haven't done one of these in quite a while. I think over a year now. So, uh, you know what we're going to do here. We're going to go through a various number of sectors here. Gold, silver, copper, uranium, etc. And uh, you know, we're going to get Rick's take on the macro and then we're also going to pick a few companies within that sector that Rick is going to, you know, kind of give us a high-level take on uh on that company, but also tell us why he ranked what he ranked so there's some, you guys can understand some of the thought process that goes into, you know, picking out stocks, picking out uh good opportunities. So uh, Rick, let's go ahead and start off with gold. I'm going to pull up a chart of gold here. Oh, and by the way, guys, don't forget to hit the like and subscribe if you haven't already. Hit the like button as well to help push this in the algorithm. And here is gold today. It is trading at 4363. It is, FYI, June 17, 2026. I don't know why I forgot to say that at the start of the show, but uh, there it is. And we are trading at 4362. From a technical standpoint, looks like we broke down beneath support, but coming off the news of a deal in Iran, gold has been rallying. Um, but uh, Rick, what do you, what do you see here? Uh, for the price of gold in general?
>> Uh, I, I think what you see on that chart is the effect of higher US interest rates.
>> Okay.
>> Uh, pretty clearly uh, gold is denominated in dollars. Higher interest rates generate a stronger US dollar. Ergo, uh, something denominated in dollars tends to fall in nominal pricing. Uh, also because of higher interest rates, uh, people look at the yield on the US 10-year Treasury and they understand that that's a foregone yield in gold. It wouldn't surprise me this summer for gold to be weaker yet. As soon as the political class in the United States loses their courage on interest rates, you'll see that chart look very differently. Uh, very, very differently. This chart reminds me of nothing so much as 1975.
>> M.
>> The first time that inflation became a real uh political issue in the United States and the political class uh, I was going to say caused rather allowed the US interest rate to go up. Uh, and that demolished the gold price. Uh, the gold price fell, if my memory serves me correctly, 50%. Uh, it also destroyed the long bond market. Uh, did substantial damage to the equities market. Uh, was harmful for new home sales and consumer durables like automobiles. Nine months into the experiment, Congress lost their nerve, caused the Fed to lower the interest rate fairly precipitously, and that set gold off on a six-year romp from a low of about $100 an ounce to a high of $850 an ounce. If we have a circumstance where the political class in the United States keeps their nerve uh and allows interest rates to represent a real yield uh against the depreciation in the US dollar, then gold stays weak. Uh, I think the probability of that approach is nil, but that notwithstanding, um, that I think explains that chart.
>> Yeah. So you flash back to the 1970s. Uh, 1974, you had gold topping out around $200 and then it, it plummeted all the way down to $100, just like you said, 50% correction or crash, where you want to look at it within the span of, I want to say a year and a half from December '74 all the way out until August '76. And then from there on out, from that bottom to the next peak here, from '76, August '76 up to January 1980, four years of gold pure dominance, 9x in the price of gold. Uh, just a quick reference point, here's the TNX, the 10-year yield, and we were knocking at the doorstep of uh 4.5% here with uh the 10-year yield. Uh, that was rejected, um, again at the news of a deal in Iran, and now we're back down to 4.4%. So you're anticipating lower yields, Rick, is that correct?
>> I think uh, what the administration is trying to signal is that they aren't going to cut interest rates. I think that's wrong. Uh, I mean, I think I think the right thing to do is to let is to get out of the way and let interest rates take their course.
>> Right.
>> Uh, that's not what government does. Uh, and so my suspicion is that they're going to cut interest rates. The cost of servicing debt in the United States means that market interest rates would be very, very difficult. We also have a circumstance where there's cracks in the credit market. So I am anticipating at some point in time, perhaps it's six months out, perhaps it's nine months out, that the political class has their way and the interest rate gets cut. Uh, if that happens, uh, I believe that's a when, not an if, but let's say if that happens, then I think you'll see a very, very different gold chart.
>> Interesting. Well, we'll keep an eye on that, but uh, let's go ahead and deliver on our promise to the audience here. Let's go ahead and start off with our first gold mining company. This is Newmont. Uh, you know, one of the bigger names in the the gold mining space here, trading at $111 today. Today it's up 2.98%. You know, day-to-day moves. You're looking at a top here at 135. Today it's uh, it's down about 17, 18% from the previous high in January. Um, although it did hit a low of, I want to say $92, a 31% correction, 32% correction in the price from peak to to bottom here. Uh, where are we at with Newmont do you think? Oh, and before we get started, uh, explain your ranking system to to the audience really quick.
>> Uh, yeah, I should tell people it's a 10-point system. Uh, a one is the best, a 10 is the worst. I comment on individual issues if I think I have my comments might have value. I should also tell your audience that this ranking is always available to anybody. If you go to ruleinvestmentmedia.com and list your natural resource stocks, I personally will rank them, at least if I follow them, according to the same system. I've ranked almost 100,000 portfolios for free going back 35 years. Rule Investment Media, the rankings are subjective. Uh, and it's important to say that they're snapshots in time. In other words, uh, and I will in a second return to Newmont, but, uh, a new piece of news or some difference in a quarterly filing with regards to income or the balance sheet of the resource statement could change it. So, understand that these rankings are snapshots in time. They are not meant to be timeless. If you're listening to this interview six months from now, assume that the ranking will have changed as a consequence of that. Now, let's get back to the process. Newmont, as a consequence of delivering some very, very good quarters and experiencing lower share prices, has moved up from a six to a five. Remember, one is best, 10 is worst.
>> My suspicion is that I will be able to increase Newmont's ranking if, as I suspect, the gold trade stays soft through the summer and if they continue to deliver such bang-up quarters. The price chart does not reflect the internal improvements taking place in Newmont. Nor does it reflect, I think, the benefit that shareholders will receive from the sell-off of most of their tier 2 mines and the wonderful development schedule that they have uh in front of them. Their pipeline is probably the best it's ever been. It also doesn't reflect the fact that there's an outside possibility, and I say an outside possibility, that uh Newmont's North American assets and the North American assets of Barrick could be combined into one company and the remaining assets of both companies then spun off to shareholders in a different fashion. If that occurred, you would have what would be easily the most valuable gold mining company on the planet. Notice that I said if.
>> Understood. So five here. Uh, thanks for the background there, Rick. The next company is another big one, Agnico Eagle. Uh, that is AEM on the New York Stock Exchange. What do you think about them?
>> I have Agnico as a four. The price action in Agnico. Uh, well, I think the price action is in Agnico is wonderful because I'm trying to buy more. Uh, Agnico is, I think, operationally easily the best gold mining company on the planet. I I've had the good fortune to know all three uh chief executive officers of Agnico over the last 50 years very well and I will be hosting Ammar Aljundi, the CEO of Agnico Eagle at the Natural Resources Investment Symposium in Boca Raton, July 6th through 10th. Wonderful mine builders, wonderful disciplined capital allocators, um the premier operating gold mining company on the planet. Built-in uh pipeline uh for production growth over five years and extraordinary capital discipline.
>> Interesting. Yeah. And and from a technical standpoint, you do have this descending wedge, which is a continuation pattern to the upside typically. Um, so from a price action standpoint, it, it, uh, looks, looks pretty good as well, my view.
>> I'll have to rely on you for that part.
>> All right. Well, next one is another big one. Barrick Gold. Uh, what do you think about Barrick? Barrick has hit a high of 55 in January. Now it's at 43. It's seen about a, uh, what is that, 20% correction from the top of the bull rally in metals earlier this year. I have Barrick as a five. Uh, I could easily raise it to a four. If their plans for their future become more apparent to shareholders, the idea that they're going to spin off their North American assets, I think is a good one. The question is what becomes with the rest of the company. To the extent that their African assets uh then get merged with Endeavor's African assets and Reikodik, their massive property in Pakistan gets sold, and if it gets sold, likely to Zijin, uh, I would raise Barrick to a four. As it sits today, I see it as a five.
>> All right, next one. Franco-Nevada.
>> Go ahead. I I believe Franco-Nevada is the finest gold-oriented company on the planet. Uh, I have Franco-Nevada as a four. Uh, if the price continues to fall, I may be able to award it a three. Uh, the company always by conventional metrics seems overpriced because it's valued on a net present value basis and the company enjoys 30 or 40-year long assets on a net present value basis at an 8% discount. Virtually any cash flow which might occur after year 10 is valueless. The difficulty with that kind of analysis is that five years out, uh, the net present value calculation is always the same as it was at year one. Uh, this is also a company where their general and administrative expense, as a percentage of their revenue, is the lowest, which is to say the very, very best in the industry. Finally, with both Franco-Nevada and Wheaton Precious, uh, they're key competitors in the financial stack, the big transactions. Wall Street believes that the big transactions are behind them. And I believe that the big transactions are ahead of them. Specifically, I believe that the $250 billion that the copper industry must spend in the next 10 years to maintain current copper production will involve massive, massive sales by the copper producers of gold and silver streams. Very much like the recent BHP sale to Wheaton Precious. People penalize Franco-Nevada because they suspect that the great big transactions that built the company are a thing of the past. And I believe they're a thing of the future.
>> Yeah. Well, uh, next one is Gold Fields, GFI, on the New York Stock Exchange. So, kind of a similar pattern here. You had a top at around 61, uh, fell down 46% from the peak to the bottom, and now it's trading at a 33% discount at where it was at the peak here back in January. Uh, what do you think about Gold Fields?
>> I have Gold Fields as a four, although I must admit I do not own it. Uh, I have Gold Fields as a four because their production profile uh is so bullish. Uh, it's uh, it's a major that has done a reasonably good job both in sustaining capital and in new project investment. And I think what you'll see two years out is a company with substantially higher production and substantially higher profitability. Note, uh, unlike uh Agnico and Franco-Nevada, I don't own Gold Fields any longer.
>> Gotcha. Well, we're going to transition into silver next, which is trading at $70. That's a little under $71 spot market. But however, before we get into that, I want to speak about your upcoming event, the Rick Rule Symposium. I'm super excited to share this with you here, guys. Uh, so it's coming up on July 6th through the 10th. Unfortunately, in-person tickets are sold out, but uh, you still get tickets on the virtual side, and we do have a special coupon code in the description box and a pinned comment that you guys can take advantage of and get $50 off your sign-up here. But Rick, what can people expect if they sign up to your virtual uh, if they sign up for a virtual ticket here to your 2026 Rule Symposium?
>> I believe, uh, because I've been doing this now for 30 years, that this is the best single natural resources investment event of the year by any sponsor. Uh, I believe that for several reasons, not the least of which is because we've been doing it for 30 years. If you make something a little better every year for 30 years and you, and you stood the test of time, you know, um, how do we make it better than other people's? We have great big picture thinkers. Uh, not journalists, but rather uh insiders. Nomi Prins talking about, as an example, uh, the corrupt nature of Wall Street. How would she know? Well, she was a partner at Goldman Sachs. She's from the belly of the beast.
>> Mhm.
>> Uh, Daniela DiMartino Booth talking about uh, the Fed. How would she know? She was a Fed researcher. So we tell you about big picture things the way they are rather than the way that the CNBC or Fox would have you believe. We go from there right away to uh, investment analysts and portfolio managers who have made money successfully in resources over four decades. Not some wet behind the ears newsletter writer who made his reputation in the last 18 months in a bull market, but rather people like Adrian Day, as an example, who have made money in resources for investors for four decades through good markets and bad. We go from there to a group called the Living Legends. People who appear on our stage who have built multi-billion dollar companies from scratch, telling you how they did it, telling you how their experience can make you a better investor, and telling you what they're investing in today. It's important to note, Danny, that every exhibitor at our conference, every public company exhibitor at our conference has been vetted. Specifically, if the shares in the exhibitors aren't owned in the accounts of the conference sponsors, they're not permitted on our floor. We have 69 public company exhibitors this year and we turn down 135 applications. So unlike every other investment conference on the on the planet, ours are vetted. Another difference is that before the conference, I personally interview every exhibitor and many of the speakers. Those are published at the Rule Investment Media YouTube channel. That allows you to be prepared before you get to the conference so that you can allocate your time, your resources more efficiently. No other conference sponsor that I know of uh prepares uh their attendees as well as we do. Uh, so I would say that's a critical difference. Uh, in addition to that, we will give you 46 hours of very, very dense programming in four days, more frankly than you can absorb in four days. So we give you access to the recordings of the entire conference for the balance of 2026. The truth is that you will spend more than four days involved in the conference because we give you more content than you can absorb in four days. As an example, we often hold four breakout sessions simultaneously. You can't attend four events simultaneously. Having the recordings allows you to do so over time. And that combination of factors allows me to say to your listeners the following. Unlike any other investment conference I've ever heard of, ours comes with an unconditional money-back guarantee. If your listeners, at their sole discretion, believe that we didn't deliver them value, all they have to do is email us and get their money back. This is a riskless financial transaction for your listeners. Danny, I'm delighted to say in 30 years of making unconditional money-back offers on investor education uh products, I've had to refund a little less than one-tenth of 1% of the tuitions charged. But that guarantee is your listeners' guarantee that our product has stood the test of time. Uh, it has and will uh make attendees money.
>> Awesome. Yeah. And and like we mentioned before, uh, we do have a special discount link and promo code in the description box down below. So you guys are going to learn from the best of the best in the natural resource space. If you're going to invest in this space, you may as well learn from, you know, the top tier, right? All right. If you're going to play basketball, you may as well learn from LeBron James, for example. So, yeah, there it is. Here's the page that you'll see when you click on the special link. You You're going to want to register now. Uh, days are counting down. Not that far off uh from the 6th now, July 6th. So, take advantage of it, guys. And let's get back to the rankings. And uh, we left off here with silver. I want to get your sense on silver here, Rick. $70. Uh, it seems to be trading a little weaker than gold from a relative standpoint. How's silver looking?
>> Uh, in my experience, and I can't tell you why, I can just tell you that in my experience, uh, gold follows silver's leads in both directions. If gold continues soft in the face of higher interest rates, I suspect that silver will be marginally softer. Given that the motivation behind gold purchases is usually fear and the motivation behind silver purchases is usually greed. Uh, I would suggest that silver in effect functions as a trend follower or a trend exacerbator with gold. And so my suspicion is that the near-term weakness in gold leads to more near-term weakness in silver. When the market trades around, pardon me, if the market trades around, my suspicion is that when gold reestablishes momentum and the generalist investor comes into the precious metals trade, that that silver will again uh outpace gold. Again, I'm not sure why this is. I've just watched markets for 50 years and that that has been my expectation. I am widely quoted accurately, by the way, uh, as having sold 80% of my physical silver in January of this year. I did that because silver occupied a speculative position in my accounts. Uh, I bought the silver back when folks hated it. By uh, January of this year, silver was in effect in a melt-up. Uh, silver had a parabolic up chart. And I always sell parabolic up charts. I do that. Uh, it wasn't to vote against silver. It was simply saying that silver had done its job for me. Silver stocks, by contrast, were priced at a discount to their appropriate valuations given the then silver price. And as the silver price has gone down, the price of silver stocks has fallen, although not to the same degree.
>> Mhm. So that's interesting. If you look at the price of silver, you're about, you know, you had a high of 120. Today you're at 70. That's about a, we'll do that math here really quick, 41% correction here. If you look at let's say SIL, the silver miners ETF, that dropped down from a high of 120, 120 as well on the index down to 92. So only a 22% correction. So while while both have dropped, the mining stocks have dropped less so. And this week it's been interesting to watch. But if you compare SIL to the price of silver, you'll notice some, let's go ahead, take a look at the weekly chart. It's been outperforming SIL. Silver miners have been outperforming the price of silver so far this week. Um, again, following the news about the Strait of Hormuz and all that stuff. So, is this a positive development for silver investors when they start seeing capital being flooded into, or not flooded, but relatively outperforming uh, the capital in the silver market?
>> Well, to me, it isn't a function of a week. I don't think in weeks. Uh, I'd prefer that you looked at the outperformance since January. I believe that that outperformance uh is a function of the fact that in January, the silver stocks were valued on Wall Street and Bay Street as though silver were trading at 40 or $45 when silver was trading well north of 80. Uh, that set up an interesting circumstance. If the silver price went up, one could expect the silver stocks to do well. If silver traded sideways, one could still expect the silver stocks to do okay because their valuations were predicated on much lower silver prices. And if, as occurred, the silver price fell, there was more shelter in the silver stocks because the silver stocks prices were predicated on net present value calculations that assumed a 40 or $45 silver price relative to the $80 price that we're in today. And the operating performance of silver companies, at least the better silver companies, uh, over the last two or three uh quarters has been spectacular. Nothing short of spectacular. So there should be no surprise whatsoever that the silver stocks have outperformed silver.
>> All right. Well, let's uh, kick it off with First Majestic, ticker symbol AG. Uh, what do you think of First Majestic?
>> Uh, I have First Majestic as a five. Um, I need to say I own First Majestic, uh, not necessarily because of relative valuations, but rather because of a skill set they have for taking large, uh, undercapitalized silver deposits, throwing love and attention at them and working it out. They have one big failure, which is Jarrett Canyon, which they're still working out. The separate thing they have is a traditional investment of well over a hundred million dollars in financial public relations. They have a constituency that responds very aggressively to increased silver prices. Were I to value uh, First Majestic solely on a price to NAV basis, I would probably have them as a six, but I value them in a, I value them in a much more holistic fashion. Uh, as a consequence of understanding their capital allocation decisions, uh, and understanding too the off-balance sheet asset they have by way of, uh, you can't call it anything else, a cult, a group of shareholders that respond extremely aggressively to good silver news.
>> All right, let's go ahead and move on to the next one, which is Fresnillo, FRE, on the London Stock Exchange.
>> I have Fresnillo as a five and I'm tempted to upgrade it to a four. The difficulty that Fresnillo has, uh, I think is that, uh, in common with its parent company, Penoles, the current president of Mexico, who is on record as being anti-mining, uh, is also very anti-Chihuahua. She doesn't like the dominant uh economic class in Chile, which includes the predominant shareholders uh of Fresnillo and their parent, Penoles. You take political risk here. Uh, I have to say I court conventional political risk and I indeed own uh Fresnillo.
>> All right, Pan-American Silver, PAS, on the New York Stock Exchange.
>> Pan-American is easily my favorite silver stock. I have it as a four. They've done a very good job operationally uh, assimilating the portion of the assets that they bought from uh, Yamana. What I particularly like about them though is the incredible silver optionality embedded in their balance sheet. They have two separate deposits, one in Guatemala, a former producer, and one in Argentina, undeveloped. Two separate deposits with well over a half a billion ounces of high-grade silver each, that isn't factored in the valuation. If they can come to political accord in either Argentina or Guatemala, they've not been able to so far. Uh, either uh, of those breakthroughs would double the company's silver production. In addition to that, uh, they have another half a billion ounces of silver, I believe, in the scars beneath La Colorada in Mexico, where there is no, um, obstacles, other than uh, extraordinary frontend capital expense to their development. Uh, I, I think Pan-American Silver, more than any other silver company on the planet, uh, has upside baked into the cake uh, in a way that isn't expressed in the equities market.
>> Okay, the next one is another big one. It's Hecla. Hecla had a massive run last year. See, it traded from 450 all the way up to 3650, almost 10x there. Although it's been uh, correcting down from those highs, down about 49 percentage, about 50% off its high back in January. How do you rank Hecla, HL, on the New York Stock Exchange?
>> Uh, I have Hecla, Hecla as a six. I don't own it. Uh, Hecla has a history of fairly poor capital allocations. They've made a lot of acquisitions. Some have worked, some haven't. Uh, they have also exhibited fairly stubbornly high all-in sustaining capital costs. They are hugely leveraged to the silver price. They have a constituency, a shareholder constituency, as you can see from that graph, that absolutely positively loves silver. But when I compare their capital allocation decisions and their pipeline with Pan-American, uh, I prefer Pan-American. I must say, however, that the current Hecla management team has uh, generated a lot of positive operational uh improvements.
>> All right. Well, let's go ahead and transition over to copper. Uh, copper is trading at $6, just about $6.50 today. It's at an all-time high and uh, copper has been making a run for it. It's been outperforming both gold and silver and much of the other metals. Why is copper the exception to the rule here, Rick, in the commodity in the metal space?
>> I think there's zero doubt that if you look five years out, there will be production shortages. We have underinvested in copper as a species for 30 years, and it's a long-term capital-intensive business. You can't undo 30 years of sin in five years. No matter what we do, short of a depression, uh, we will not be able to balance supply and demand because supply is falling. Should we have a depression, obviously you can have declining uh production and have declining demand and prices don't have to move. But that would likely be the least of our problems. That is to say, our copper stocks would then be the least of our problems. In the very near term, I think copper is vulnerable because uh, copper reflects the state of the economy and there are two things in the very near term that conspire against the copper trade. The first is higher interest rates, uh, which makes holding copper inventories, particularly in perspective accounts in China, increasingly expensive. So there is pressure in the near term to liquidate the copper and pay down the debt associated with holding it. Uh, one also too needs to understand what the impact of higher interest rates and also structurally higher energy prices that we've experienced over the last four months will do to the economy. Higher energy prices function as a tax, and all taxes are bad for the economy. So in the near term, my economic outlook is not good, and if my economic outlook proves to be accurate, that uh, attractive looking chart that you see in copper will go sideways at best. Looking longer term, looking in the five-year period and the 10-year period, uh, you will see a continuation of that chart going from the lower left to the upper right. Put simply, we have underinvested in copper for a very long time and we will not be able to produce enough copper to keep up with our demands. At uh, uh, Mining Metals Week in London, pardon me, at the end of last year, there was a a paper delivered that suggested that the 10 largest copper companies in the world needed to spend $250 billion constant $225, which is to say not adjusted for inflation, to maintain last year's copper production numbers. The problem with that is that those dollars uh, are not, are not staying constant. In fact, the inputs uh, around uh, capital expenditures are increasing at about 8% compounded. The second problem is that the copper industry doesn't have $250 billion to spend. The third problem is that if you did spend it, if you could spend it, uh, current copper production is at a deficit to current copper consumption. In other words, you only maintain the deficit. And the fourth problem, and this is the biggest, is that copper demand is forecast to increase at between 1 and 4% compounded. If the data center uh, um, investments that have been publicly disclosed occur, we will use, according to my friend Robert Friedland, as much copper in the next 15 years as we have mined in human history in recorded human history. And we don't have the ability to do that with our current uh, copper mines. There's nothing that we can do in the intermediate term that matches supply to demand.
>> Yeah. Well, it's a, isn't that a case of things being inevitable versus imminent?
>> Uh, unless we have a depression, uh, which is
>> Something I guess that your listeners have to consider for themselves. I'm no economist.
>> Understood. All right. Well, let's start off with our first name here. It's Southern Copper Corp. Uh, SCC on the New York Stock Exchange. It looks like it's been kind of kangaroo and just hopping back and forth sideways for the last several months here. Rick, what do you think of SCC?
>> Uh, I have I have as a four, although it wouldn't surprise me to see that chart break down. Uh, wonderful opportunities. Uh, okay. Capital allocators. Lots and lots and lots of political risk here. Not for the faint of heart. Yes, I own it.
>> All right, next one. Freeport, one of the bigger names in the copper space. FCX on the New York Stock Exchange. Looks like
>> I have FC I have FCX as a four. Yes, I own it. I'm crossing myself because that four suggests that they will be able to repair fairly significant damage done uh, at their biggest and best mine, uh, which is the uh, Grasberg mine in Indonesia. It also suggests that they will be able to continue to deal with the extortionate demands of the Indonesian government.
>> All right, next one. BHP.
>> I have BHP as a I have BHP as a five and I own a lot of it. Uh, I need to say that if it were solely a copper company, I would have it as a four. Uh, in fact, most of BHP's free cash flow comes from the iron business. And I think that iron quotes on a global basis will decline as a consequence of the introduction of a massive new iron iron mine, Simandou, in Guinea, and the ability of the Chinese to uh, jawbone down Australian prices as a consequence of access to new sources of ore.
>> Okay, next one is Rio Tinto, RIO, on the New York Stock Exchange. Looks like it's got a little bit of a double top here from in May.
>> Identical, identical comment. This is an iron company in drag.
>> All right, next one. Glencore.
>> Uh, I've liked Glencore a lot. Uh, ironically, not necessarily because of its copper, but more because of its coal. Uh, it bought coal assets when nobody wanted them. Uh, including one particular asset in Colombia where they bought a 30-year mine life for one and a half times free cash flow. I mean, a stupid deal. Uh, there is a lot of political risk inside Glencore. Uh, there are a lot of questions around the company's acquisition tactics in emerging markets, which is to say allegations of corruption. But Glencore is easily, in terms of uh, capital allocation, returns on capital employed, the best of the major mining companies. I'm not sure I would regard it as a copper company, more a multi-strat mining company. Uh, but certainly if you look at that chart over time, um, it has performed for shareholders. It's also worthy to note that the existing management team are themselves extraordinarily large shareholders.
>> Understood. Well, that's it for copper. Uh, I want to transition into something we haven't talked about in a while on this channel, and that's uranium. Uh, uranium has been kind of, uh, you know, there's not much chatter about uranium. Here's URNM, the Sprott Uranium ETF, and it looks like it's in a bit of a downward channel. What do you think about uranium in general, Rick?
>> You know, you and I have talked a lot about uranium over the years. Uh, I, I would suggest that the easy money in uranium has been made, but the sure money in uranium is ahead of us. Uh, for a whole bunch of reasons. And by the way, I'm not talking about in weeks. I'm talking about in years.
>> Mhm.
>> The easy money was made uh when uranium was at $20 a pound and everybody hated it. Uh, all you had to believe in, like all you had to believe in, in silver at $20 an ounce, was that when the hate subsided, the prices would go up, and that occurred. The move from $20 uranium to $80 uranium was forecastable, took time, but it was easy. That's over. So what has changed to make the sure money ahead of us? Really three things. Uh, first of all, there's a large deficit between what we produce and what we consume. That deficit is being accommodated right now by above-ground stocks, but those above-ground stocks fall every month. Meanwhile, new plant construction around the world, but particularly in China, is extraordinary. So demand is increasing despite the fact that supply is fairly static and going sideways. When we use up the buffer in above-ground inventories, there's only one way that the price can go. The second thing is that uranium has gone from being a pariah to being politically correct. Uh, it is the only source of base load power in the world that doesn't generate carbon, and as a consequence of that, uh, even the former co-founder of Greenpeace is on the side of uranium. More importantly, the popularity of uranium in, as an example, Japan, has gone from 70% opposed to 80% in favor. Finally, Danny, the unsung beneficiary, if there is a beneficiary of war, of the conflict of the Straits of Hormuz, is uranium because it reacquainted uh governments and investors around the world with the concept of energy security. Dialing oneself back to 1973 and the Arab oil embargo, the last time that energy insecurity was large on everybody's horizon. One consequence was the development of the French nuclear fleet, now the fourth largest in the world. Another consequence was the development of the Japanese nuclear fleet, now the third largest in the world. After 50 years of relative geopolitical stability, the renewed sense of the need for politically secure energy has reared its ugly head. Uranium is the only substance in the world that is energy dense enough that, uh, as was stated in the Japanese diet, their parliament, uh, enough fuel to power Japan for five years could be stored in one warehouse. You can't store that much coal or that much oil or that much that much gas, never mind that much wind or solar. Uranium is the only fuel that for resource-poor industrialized countries, say Korea, Japan, or Taiwan, the only fuel source that gives them any sense of energy security, and that will be reflected in new plant construction and demand.
>> Well, let's start off with the biggest uh name in the space, or one of the biggest ones, Cameco, CCJ. I'm a large Cameco shareholder. Uh, my concern about Cameco was whether or not they could, um, adequately, having bought it, operate uh, Westinghouse, that is to say, transition from being a pure miner to a miner and engineer. The last four, last three, pardon me, quarterly income statements, I think have answered that statement fairly conclusively. They can and they are. Uh, I'm not trying to say that the Cameco chart in the next year will look like stairsteps to heaven, but I can't imagine a better franchise to be part of for the next 10 years than Cameco.
>> What was the ranking for that one?
>> Four.
>> Four. Okay, gotcha. Uh, the second biggest one, Kazatomprom. What about Kazatomprom?
>> Uh, I have Kazatomprom as a five. Uh, my, it is in effect on a reserves basis, a larger company than Cameco. Uh, my nervousness around Kazatomprom has been the massive defection of middle management from the company. I don't know the reason for it. Um, the attraction that I felt to Kazatomprom six or seven years ago was the extraordinary, extraordinarily high quality of the people who worked for it, and many of those people who had I, who I had a very high regard for, no longer work for the company. I don't know why that is, but I certainly penalize for that kind of uncertainty. I no longer own because I have it on a valuation basis, I have it as a five, but I need to say I no longer own the stock.
>> Understood. Uh, NexGen, NXG, down 22% from the highs in January.
>> Uh, love and hate. Uh, I own a lot of it. Uh, I need to disclose I owned it at a much lower price and I've sold enough that I no longer have any cost in my remaining holdings. This is easily the finest and largest undeveloped uranium deposit on the planet. Uh, it is a deposit that is by any stretch of the imagination a tier one deposit. It's a deposit that is so rich that despite the front-end capital cost, it could be built by NextGen, by the junior. Uh, the long-term contract markets mean this could happen. It is also a deposit that could be sold at auction. One of my criticisms around NextGen historically is that you can't have an auction with one bidder. And it looked to me like the only bidder that would be permitted to buy it would be Cameco, uh, which means that Cameco could do nothing, act in its own interest. That's changed. Uh, I think it could be sold to Cameco. Uh, I think it could also be sold to Rio Tinto, who, although they're a foreign buyer, operate a very large phosphate deposit in Saskatchewan. I think too that it could be sold to the newly formed Anglo-American, the copper giant that has been formed by the merger of Anglo-American and Teck Corp in Vancouver. Uh, so I have this company as a four. Normally I would have it higher ranked. The company's general and administrative expenditures, I think are excessive, and although I credit management for doing certain things very well, de-risking the project, as an example, Aboriginal and Métis relationships, baseline studies around the environment, uh, some of their expenditures, uh, in particular things like sponsoring, you know, Formula 1 racing, I think are very excessive. Uh, some of their capital raising decisions appear to have been not so much in done, not so much in terms of the cost of capital, but rather in terms of ensuring incumbent management control. Uh, if the management practices around general and administrative expenses were different, I would have this company as a three, which is for me a very high ranking.
>> Understood. All right. Next one. UEC, Uranium Energy Corp.
>> Uh, they're a victim of their own success. Uh, uh, UEC has done a truly spectacular job over time. I own a lot of UEC. I need to disclose that. Uh, I have sold enough UEC that I have no basis in my stock. The the founder of the company is a good personal friend of mine. On a valuation basis, I would have UEC as a six probably, but I have UEC as a five because I think there will be a premium paid for US-produced uranium. Uh, and UEC has put themselves in a place over 25 years where it is likely that three or four years out, they will be, uh, far and away the largest US domestic producer of uranium. They have gone from a circumstance where, uh, as an aspiring uranium producer in the US, they were hated to one where their relationship with the Trump administration is such that they will likely be subsidized. Uh, that's an amazing transformation.
>> All right. And finally, last one here in uranium land. It is Energy Fuels, UUUU.
>> I own Energy Fuels. I don't think they have, uh, the franchise, uh, as an example, uh, that UEC has, but I think they have some of the same benefit, uh, in particular, uh, uh, permitted mill and tailings facility. Uh, yes, I am a shareholder. Uh, but I'm a shareholder who has sold enough stock that not only have I taken my basis out, but I've put a substantial amount of money in my wallet. So, I'm a less committed shareholder.
>> What was the ranking for that one?
>> Five. I'm bullish on the whole uranium sector over time.
>> Understood. Well, it looks like we're coming up on time here, Rick. Um, but really quickly, I just want to get an update uh, from you on how you see uh, oil and gas as well. We we'll save, we'll go through some stocks next time you you come on, but um, oil and gas, it looks like it's selling off. It's south of $80 today. Um, is it, how are you seeing the trade?
>> In the very near term, if the Strait of Hormuz actually opens, uh, the oil price goes lower. The uh, two things there were allegedly about 200 car goes north of the strait which could move immediately. The second thing is that the uh, pricing of oil had a lot to do with targeting, hoarding, and uh, the implicit pricing by scarcity. Scarcity hasn't really occurred yet, but their pricing anticipated it. The third thing was that the very high oil prices that we've experienced the last three months in poor countries have destroyed demand. Uh, Danny, if you face something where the price of gas is up at the pump, uh, you might use a few words in English that you shouldn't normally use and then you pump the gas and you drive away. In a country like Pakistan, uh, or Bangladesh or Sri Lanka, if you're a cab driver, you park your cab because people can't afford the fare. So these very high energy prices that we've experienced in the last three, three and a half year, months, pardon me, have, I think, done real damage to demand, and I think if oil starts to flow again, that that damage will be reflected in the imbalance between supply and demand on global markets. It wouldn't surprise me, although I'm not a market forecaster, it wouldn't surprise me to see uh, oil test $60 in the near term. In the longer term, as I've been saying to you in interviews, for years, the lack of sustaining capital investment made by the oil industry has exceeded a billion dollars a day for a substantial period of time. This will impact our ability to produce and we will have scarcities in the future that aren't war-related. They're due to the fact that we've underinvested in sustaining capital. The prices that we see today, or the prices that we saw a couple weeks ago, should have occurred in 2029 or 2030, and they will again. Uh, they occurred ahead of time because the scarcity that I talked about as being sustaining capital driven were in fact war driven. So what one needs to do in the oil market is what is one needs to consider one's time frame. If your time frame includes, uh, 2029 and 2030, be right, sit tight, or add. If your time frame doesn't, uh, it might be that you can add to positions in the fairly near term, cheaply, as the supply demand, uh, imbalance shifts to oversupply relative to demand. So I think it's really a function of the investor, in the investor's time frame. As you know, Danny, I'm a big fan of the energy trade. Uh, I've been talking on your show, as an example, about Exxon for as long as I've had a voice. Talking about Exxon at a price that existed seven or eight months ago versus Exxon today is a very different exercise. So, that's really a function of your time frame. I will say, uh, and I'm using Exxon to sort of paraphrase the entire industry. My own Exxon, which I hold at a much lower price, is not for sale.
>> Interesting. Well, Rick, thank you so much for your time, as always, my friend. It's always insightful and uh, intellectually nutritious to hear from you. Um, and I'd like to remind the audience as well that you can get a special discount link on uh, the Rick Rule Symposium coming up for the virtual session, for the virtual uh, tickets. Uh, that that is in the description box and pinned comment down below. Get $50 off your tickets. Um, Rick, anything else you want to shout out before we head out?
>> No, that's it. Except for people who've enjoyed my rankings can personalize them. Go to ruleinvestmentmedia.com, list your natural resource stocks, and I will for free rank them. I look forward to seeing all of you uh, at the Rule Symposium via live stream. Remember, absolute ironclad money-back guarantee should you think that I didn't deliver value.
>> Excellent. Rick, thank you so much for coming on, guys. Thank you so much for watching. Hit the like button if you haven't already. Uh, subscribe to the channel if you haven't already as well. And like the video if you're watching on mobile. I do appreciate it. A little bit does go a long way. And uh, yeah, special link down below. Get, get $50 off, and I will catch you all next time. Bye.