Legendary Mining Investor Rick Rule on the Power of Private Placements

November 29, 2019 12:34 PM PST

Legendary Mining Investor Rick Rule on the Power of Private Placements


Video Transcript

AA: So we're just gonna get right into it. Rick, you've built an incredible reputation as a private placement financier. When you're looking at deals, what is the ideal structure that you look for, that gets you excited about participating?

RR: Well let's just start with this. You say I'm a financier. What I look for in a private placement to show progress for our clients, is one where I'll take a bunch of the offering myself. In other words, in every circumstance, it has to suit me as a speculator. 

The reason why I'm well known as a private placement structurer is because I've been buying private placements for my own account for 40 years. So I would say that the first thing you recognize with a private placement is that it is a transaction where you're providing company the capital, in return for equity in the capital, not on market from another investor. And the capital should, in every case, be catalytic. It should be used by the company to either further an existing business, or answer an unanswered question in the exploration business. Or attempt to answer an unanswered question. 

It's important to you, before you give an exploration company money, as an example, as an investor, to say, "What is the unanswered question that you propose to address with this capital?”. "Tell me what you think a Yes answer would be worth?”. "Tell me what you think the probability of a Yes answer is?". “Tell me how much time it's going to take to get me an indication as to whether I have a Yes or a No.". And reassure me that you're gonna have enough money including general and administrative expenses to get there. 

I'm less concerned about the structure of the stock, as an example, the market, the way that the market is organized, and much more concerned about how the money is going to be used. But notwithstanding, it's always a good sign to me if the management team themselves are substantial investors in the private placement. I like partners, as opposed to employees.

AA: So you have access to these management teams, you can pick up the phone and they'll answer your call. A lot of times, they're calling you. For retail investors and a lot of the viewers that we have here that don't have that access, what's their best path forward?

RR: Well, they do have that access. Retail investors and institutional investors that don't have access to me, should email me, [email protected]. The first thing is don't assume that you don't have access. 'Cause you have access.

But, if people are going to do it on their own, which many people will attempt to do, and the truth is, there are many sources of private placements. I think you start with the people behind the company. The first screen, if you will, is people. I think I bored you before with my Pareto's Law analogy. Pareto was a famous Italian social scientist who first codified what is now called the 80/20 rule. Where 20% of the population generates 80% of the utility.

Remember that this is a bell-shaped curve, so you have one good 20 over here, that does 80% of the good stuff, you have a different 20 over here, the bad 20, that does 80% of the bad stuff. So your first job as an investor, private placement or not, is to try and hang out with the good 20 and avoid the bad 20. It really is as simple as that.

You've seen this in your career. There are a small number of groups who are serially successful. They get good projects, they don't spend the money on fast women and slow horses. They actually put the money in the ground. They don't have extravagant general and administrative expense. 

People who are successful, of good reputation, of good character, and who have been successful before. 

AA: What is another aspect retail investors should look for when screening?

RR: I think, in the minerals business, in the exploration business, is the question that they're trying to answer should be sizeable. Too often, management teams go to look for small mines, and sadly, occasionally they're successful. Small mines make small money with big risks. Only big mines gives you the outcome that you need to take the risk to go into the business. 

[One] thing that I try and do, without spending an awful lot of time on it, is I go through, back through maybe five years of balance sheets, financial statements, and proxy statements. And I don't spend a lot of time on it. But if I'm gonna spend a million dollars, as an example, for sure. I'll spend four or five hours, or my team will. And what you wanna see doing that is, what they said they were gonna try to accomplish in the upcoming year, and whether they accomplished it. [I ask myself], how much money that they raised went to general and administrative expense, relative to project expense? 

I think I shared this with you some years ago, and I forget the year it was, but maybe 10 years ago: I pulled 25 TSXV companies at random, and looked through their income statement. And we found that in the preceding year, the group, in aggregate, 25 companies, had spent almost 65% of all the money raised on G and A. Which means that only 35% of the money raised went in the ground. Well, no wonder the results were so bad – these were basically lifestyle machines. Now I'm not trying to say the 25 stocks are representative across the 1,500 resource stocks on the TSXV. What I am trying to say is that it was a completely randomized study. And it tells you that you'd have to be very careful before you put money up. 

You have to examine the track record of the people you're giving the money to, relative to the rest of the industry, and relative to the success that they suggest that they're going to accomplish.

AA: So what are some other red flags investors should keep in mind?

RR: [Excessive G&A] is a particular red flag. I think that's the most egregious red flag. Another red flag is high closing. And some very good friends of mine, who I invest with, are guilty of this – serially, guilty with this. They understand that they're going to do a private placement and they get their friends to buy a bunch of stock for the three months before the private placement. They negotiate the price of the market. In other words, they bid the price up, to set the price. And then of course, they give you the discount from a price that they've inflated the stock to, over the preceding three months. 

You see a stock that has a stock chart like the electrocardiogram of a corpse for a year, and then suddenly it goes from 25 to 50 cents. And they offer you a 43% private placement, on a quote, discount. Those are silly tricks. And, you know, it used to be, when I think this was legal, that I would negotiate back. If I had an idea that somebody was gonna do a private placement, I had some stock and I was watching them trying to jitney it up, I'd whack it down. And you know, I'd sort of call them and say, "I could do this as long as you can. I have as much stock as you do. Do you wanna meet in the middle somewhere?" Of course, we can't do that anymore. All of the stuff that used to be good business practice are now indictable offenses in Canada.

AA: So when you talk about a lot of the people that, let's say, are considered the A+ people, it's actually hard to access their deals, right? There's only a select few investors that can have that kind of access. And I've always heard you talk about the next wave, right? Let's say they're the B+, on their way to being an A, and then one day, A+. What are those characteristics that makes an A+ player? And what are some things that people can look for, in management teams, that they can look at and almost like a scout and say, "You know what, this person or this team "has these qualities, and in five years "they could be in that A+ seat."

RR: A players invariably start up the business in their 20s. So what happens is, you know how Malcolm Gladwell talks about having 10,000 hours? Well they have 10,000 hours by their 30s. Most of their competition is coming into the racket, having sold cars or sold real estate or done something else. They come into the racket in their 30s. They don't have their 10,000 hours until their 50s. 

The A players, the Ross Beatys of the world, the Robert Friedlands of the world, the Clive Johnsons of the world, all started in the business in their 20s. They were already players, they'd already had some sort of success, and by the way, a failure or two, along the way, by the time they hit their 30s.

AA: That's also important, the failure. It's that failure is not necessarily a red flag.

RR: Critical, critical. Yeah, nobody I know got through this life and became a real success without having a couple of missteps, a couple of serious missteps.

AA: I guess the difference is the obsession, or if there is a failure, to turn it around.

RR: Well that's where I was gonna go. Intelligence is important. But determination, grit, the ability to carry a company through, as an example, when you've just had seven bad years, that takes special fortitude. Where you do everything right, everything right, and the company still isn't working, and you just have to, because you'd have faith in your team, and you have faith in your asset, pull it through. That unbelievable determination. 

I remember the first time I met Clive Johnson in the 80s. You could just tell. To make that company a success, he would shoot through concrete, no doubt. Like fire in the belly. You know, you'd say "Clive, what a beautiful day." He'd say, "Yep, yep, absolutely a beautiful day to talk about Bema." It was wonderful. And it wasn't a sort of circular selling thing. It was just the way his mind worked. The same with Robert Friedland. 

To them, in a sense, it wasn't work. It was a mission, it was fun. Even when it was hard, it was fun. So I really really really look for determination. And we touched on this earlier. I look for partners. 

Doug Casey taught me way back in the early 80s, somebody isn't gonna work hard enough to make a junior mining company a success if they're not gonna get rich. They're not gonna do it to get you rich. They're happy to get you rich, they appreciate the fact that they contribute to your lifestyle and your reputation and all of that kind of stuff. But they're doing it to get rich. And somebody who doesn't own a lot of stock, a lot of stock that they paid for, not gave themselves, that is important. You know, it's not just the fact that there's blood on the table, some of it's gonna be theirs, it's gonna be that in order to work the decade or so that it takes to really really really truly get ahead, somebody has to be able to make a real difference for themselves and their family. 

And importantly, if they're capitalists, which the good ones are, they are using this first deal to get the capital to build the second deal. That's very important as far as I'm concerned. 

I also look for people who are generous in the sense that they want their team to prosper too. I remember when Bob Quartermain succeeded with Silver Standard. And succeeded is an understatement. Where he took that stock from the 72 cent placement, with a full warrant, mercifully, to $45 over eight years. And I got a wonderful call from a woman who was the receptionist at Silver Standard, thanking me for my contributions to the company, because her options package allowed her, as a single mother, to buy a condo. 

Now Bob Quartermain didn't have to drop options all the way down through the organization. He could have hogged them all himself. But he wasn't looking to taking the stock from $1 to $1.75. He was looking to build a big company. And to do that, he needed everybody wearing the same jersey, everybody on the same team. He got the options all the way down to the receptionist. So somebody who is pragmatically generous, is somebody who you wanna do business with too.

AA: Now going back to structure, I know you've said there is a particular structure that you look for but I know you like your warrants. Can you, for the viewers, let's say the retail investors, that don't fully appreciate the value of a warrant, can you give them the Rick Rule?

RR: A warrant is the right, it's an instrument that gives you the right but not the obligation to buy more stock later at a fixed price. If you follow back to my statement that the purpose of a private placement is to answer an unanswered question, if you get a Yes answer, it's very nice to get paid twice. Let's say that you're doing a private placement to conduct some form of exploration. And the unanswered question, let's say just for discussion sake, that there's a surface expression, a mineralized anomaly along some ridge. And the data that you have is that a whole bunch of rows of trench samples ran economic grades of gold. And what you wanna see is whether or not the mineralization extends at depth. And so you proposed to drill sort of 10 holes across this fence of trench samples. So the answer to the unanswered question is is this a surface anomaly, a scab, or is this in fact a deposit? 

And you do the private placement at $1, and low and behold, the CES answer and the stock goes to $3. That in itself is a nice outcome. But if you had a warrant keeping every share that you bought company, and the warrant exercised to $1.50, what was otherwise to you a $2 gain, becomes much larger, becomes a $3.50 gain. Interestingly, what it does for the company is, if it's structured correctly, in other words, if the company can call the warrant after some form of financial performance in the underlying stock, what it also is to the company is a guaranteed fee-free financing. It's good for the company too. Everybody benefits.

Of course, the answer to the unanswered question must be Yes [everyone benefits]. Now in the market that I think that we're coming into, I mean I think we're coming into a pretty good bull market, personally for [precious metals]. These things are cyclical, every sort of four or five years.

Sometimes a delightful thing happens. Which is the market gets ebullient enough that the excitement around the anticipation of the Yes answer is enough to make the stock go up. I've had circumstances where I thought that a Yes answer would result in a doubling of the stock. And the stock doubled before the question was ever answered. 

[With private placement] it's important to know when to sell, and how to sell. If you get the result that was your expectation, you should sell some stock. Regardless of whether the question has been answered. People are very greedy, often. And a stock that goes from $1 to $2, if nothing else has changed in the company, it's precisely half as attractive, right? The value has stayed the same but the price has doubled. Which means that the relationship of price to value is much worse. But people feel good about it. It's very difficult to separate somebody from the stock, to get a client to sell a stock that's gone from $1 to $2 when nothing has happened. Because the price action verifies the narrative in their mind and that’s very very dangerous. 

AA: So what's some of Rick Rule's favorite private placement wins? Where you got a double win on the warrant?

RR: My very very very favorite, because it was educational, was Paladin in the uranium business. I was, as you know, very early on in the uranium business. In fact, I was five years early. And if you just count money at 10% per year, five years early is wrong, not early but that's a different story. 

So I met this amazing man named John Borshoff, just a bundle of determination and knowledge. A wonderful human being. Two million dollar market cap, you know, nobody cared about uranium, instant love between John and I. We financed his company at a dime, with a full warrant.

AA: Sorry, how did that instant love happen? Was it based on the things we covered?

RR: He was so intense. I mean here's an example: this guy had been worldwide exploration manager for an arm of the government of Germany in uranium exploration. And when they finally shut down that thing, they'd spent a billion dollars looking for uranium around the world. They had a huge database. When they shut it down, they were gonna give him his severance. He said, "How about if you give me the database?" And so they did. He had enough faith in the uranium business, and his own skillset, that rather than taking cash, he took this database.

AA: He bet on himself and the database.

RR: I would say so. When I first met him, I would say "So what's your advantage in the uranium business? How do I know that you'll be able to find properties and stake them?" He said, "I don't have to find them. I have a database that represents a billion dollars in exploration expenditures. All I have to do is stake them because nobody wants to be in the business anymore." 

That's a really good answer to that question. Anyway, so we do the stock. And I think it was a buck, with a 15 cent warrant. And the stock immediately went to 12 cents, which I took as a good sign. What it was was investors following on to me, because of my reputation. I accidentally made the stock go up. And then it began a long slow decline. Because when uranium's out of favor, it's really out of favor. People aren't just bored, they hate it. And it went to 10 cents, which was what I had paid for it. Eh I'd been there before. Nine cents, no problem. Eight cents, this is getting boring. 7%, you know, seven cents, really? Six cents, five cents, four cents, finally at a penny, I had to say, “Well you know what? If you're down 90%, there's no such thing as a hold. "This is either a buy, you're either right to begin with, or this is a sell, you were wrong." 

So I went through the whole process with Borshoff again. Mercifully for me, I came away thinking, "You know what? "I'm right, the market's wrong." Bought a whack of stock with my clients at a penny, penny and a half. And four and a half years later, it was a $10 stock. Now having a 15 cent warrant, in a market that's two bid, $2 bid, for millions of shares, is one of the finest experiences that one can have.

AA: What a feeling, yeah.

RR: Yes, it's really truly wonderful.

AA: I guess that's your kind of a unicorn in the business.

RR: Well the other thing that was so good about it, and the reason I like telling the story so much is that it was educational. Because I had to re-examine my premise. And I had to re-think through the juxtaposition of price to value. Many people think that a stock going up, per se, is a good thing.

It has to go up for a reason. If stocks go down without a reason, that's a good thing too. Because if you have the courage of your convictions, you can spend money around work that you've already done. It's in effect, from the point of view of intellectual capital, it's a second return on sunk capital. It's very very very good.

AA: So you touched on something that's really important which is, I was entering a precious metals bull market, okay? You've seen a few of these cycles, right? And with each one you get smarter, you make adjustments to your strategy and your game plan. At this stage of the game, what's the best strategy? Is it a quantity game where you just try to make a long list and acquire a little bit, or do you narrow it down to just quality deals?

RR: Maybe I'm a little different, because there's 180 employees in Sprott worldwide, so I have access to lots of people who will do work for me. Most investors have lives. And there's only a limited amount of time that they can spend on their portfolio. 

I would suggest that for most smart high net worth retail investors, they limit the names in their portfolio to the numbers of hours per month that they're willing to spend studying the companies. [For example] going to conferences, reading proxies, reading the annual reports, reading press releases, calling management, calling their brokers if they haven't. 

So if you're willing to spend 10 hours a month on your portfolio, I think you should limit yourself to 10 stocks. Warren Buffet says the same thing. He says, regard your portfolio as a hog trough. And there's room on the trough for 12 hogs. In order to bring in a new hungry active hog, you gotta kick an old fat one off the troughs. And I think that's important to do. I think it's really important to focus, to concentrate. 

I think having more companies than you can reasonably follow merely increases the frequency with which you'll have to accept losses.

AA: You think it's smart to also pick jurisdictions that you feel better about or would you spread it around?

RR: I think knowledge is a better substitute for diversification. I think political risk, as an example, or jurisdiction, is something that we could talk about in another interview because that's a half an hour discussion in and of itself. 

It is certainly important to know your biases. There are some biases and prejudices which I have, which I realize are irrational, but I also realize I've had them for 40 years. And if I'm going to be uncomfortable about a holding, and it's gonna cost me to be less rational as a speculator than I should otherwise be, I should know that it's not a flaw with the company, it's a flaw with me. And it's important that you understand yourself well enough. 

You're gonna be tested in this business, right? As an example, there's a great entrepreneur known to both of us well, Ross Beaty. I've participated in every deal Ross Beaty has ever done, since university. 14 deals. Ross Beaty has given me, I don't know, seven or eight 10-fold gains. Truly spectacular gains. Not one of them took less than five years. And not one of them didn't have a 50% decline in price, between the time I bought it and the time I sold it. So with the best of the best, you're going to be tested. 

And if you don't have the courage of your convictions, if you don't understand yourself and if you don't understand why you made the investment, you're gonna get shaken out in these declines, and you're gonna miss these wins. 

So it's important when you buy a private placement, to understand the private placement and to have a plan. What will cause you to buy more? What will cause you to anticipate failure and sell? And it doesn't mean that as the data available to you changes, that your plan doesn't change. But it's very important for you to have a plan. 

You had a plan when you started Blender Media. Well, Blender Media is a stock. It's just you happen to own it all. And the business plan is important. You, as a speculator, have to understand the company's business plan, and you have to have a business plan for that investment too, which may or may not coincide.

AA: Sounds like a vision of a business plan that can change and adjust based on what's going on in the market. But I agree with you, I think that vision is very important, just for the team and investors and stakeholders. 

AA: Your conference activity is hyperactive. At every conference, you have multiple speaking engagements, interviews, where you also hold court at your booth or just in a hallway. I've heard you say this in interviews where you like to make yourself indispensable to management teams and investors. Can you explain what that means and how that benefits either side?

RR: I'm lucky to have entered into a business or career, very early on, that fascinates me. And that I love, and I stayed at it. And the consequence of that is I've been very successful at it. I am told by management teams that having myself and having Sprott on the roster, on the shareholders roster, increases their prestige. So if I bring more than money to a transaction, I like that to be accommodated in the price that I pay for a transaction.

AA: It's a Rick premium.

RR: If a normal circumstance these guys would go to a broker, who was just there to earn a fee, who wasn't gonna put their own money in, wasn't gonna support the company. Let's say that a retail price for a private placement was $1. When a company's calling up and pitching me saying, "We'd really like to have you on the roster "for the following reasons," if they were gonna hire me as a financial public relations guy, I might charge them $250,000. So if this is a $2.5 million financing, why shouldn't I get half of that off the price? Why shouldn't I get $125,000 off a $250,000 financing? 

If, as they suggest, they have benefit from me that's greater than the amount of money that I spend? I mean doesn't that seem fair to you? And so, the benefit to me of being indispensable, is that I get to see more transactions to other people. I'm also known as the guy who raise a check in bad markets. When nobody's around, when the market doesn't have a pulse, when you don't have a prayer of stupid follow-on buying, which is delightful, of course, I'm still willing to write a check. And I cultivate that image. I'm your best friend in a bad market. I may be your only friend in a bad market. Now the consequence of that is you have to come see me in good markets too, when money is plentiful. If you forget me, I will forget you later. That's a guarantee.

AA: Next time things slow down.

RR: That's a guarantee. My pledge to clients is different. My pledge is that I'm not an agent. I'm not doing this primarily to earn a commission. Every private placement that Sprott Global, the US arm of Sprott does, every single one, I'm willing to buy the whole issue personally, if the clients don't buy it. Now that doesn't mean sadly that everything I buy goes up. That's far from the truth. What it means is that I have the courage of my convictions to the extent that if the placement is for $1 million, I'll buy it all. If it's for $30 million, I'll buy it all. I allow the clients to participate with me in things that I am willing to do with my own money. I don't know anybody else who does that. So in that sense, I try to be indispensable to my clients because we're not primarily agents. We're primarily principals. And I try and be indispensable to the issuer because I'm their friend when nobody else is. Because I do the work, and because the reputation that Sprott enjoys, we enjoy for a good reason. We like to get to know people a little bit. We like to visit with them by phone for 40, 50 minutes, an hour. So that we help them determine the biases and the experience that they have that will help them either succeed or fail in private placements.

AA: So certainly a tailored approach to their needs and their profile.

RR: It has to be. It has to be bespoke. It really truly has to be bespoke. You know, I have clients that react, you might say rationally, to the evening news. They won't speculate in Congo or Indonesia or Bolivia or Russia. I have some clients who will only invest in the United States. I happen to believe that's a mistake. And usually, if I get somebody that ethno-centric, I'll suggest frankly they take their business somewhere else. Because it limits my ability to make them money.

AA: Especially in the resource space, that really limits.

RR: But you really do, I think, given both the risks and the rewards, but the psychological challenges inherent in private placement investing. You almost have to have a bespoke approach.

I've had other clients who, for moral reasons, wouldn't invest in uranium. Now I happen to believe that nuclear energy is low cost and low carbon. I happen to believe it's a moral choice. In other words, positive moral choice. Others feel differently. And in circumstances like that, depending on how many other limitations they put on the way, that we were able to show them transactions, we might suggest to them that they'd be better off somewhere else, looking for their private placements.

AA: Right, so you guys make sure it's a right fit?

RR: Yep.

AA: Okay, so the other question, you get pitched a lot by companies. And we'd probably have some CEOs and management teams watching us as well. In order to get Rick's interest, what are you looking for? And I don't mean the company and its assets. But how they're pitching you, how they're trying to get your interest. What's best practices almost?

RR: I'd prefer if they're polite enough not to give me eight pages about why gold's going up. You know, Sprott's reasonably familiar with the gold market. So I don't need that part, you know. I don't need dinner or lunch, frankly.

AA: In a way, that's almost a turn-off for you.

RR: Well I don't have a lot of time. Sprott worldwide looks at about 20 transactions a working day. And, you know, it probably takes us an hour to say no. So we're spending 20 hours a day on fairly highly compensated people. So it would be useful if someone was respectful of our time. That's good. 

I'd like somebody to give me, before they get into the guts of it, one page. And the one page tells me what the unanswered question is. What the investment thesis is. What the scientific thesis is. And it also tells me enough about them to know that they have the background. That I should care what they think the question is. 

Too often in this business, someone will say to me "Well I've been a success in mining." Well their success is that they operated a gold mine, a two billion year old Archean terrain in French-speaking Quebec. But the unanswered question involves exploring rather than producing for a copper gold porphyry in accreted, tertiary terrain, 15 million year old terrain, in Spanish-speaking Peru.

AA: It's not relevant experience.

RR: The experience is not relevant experience. So I wanna know what the question is and I wanna know why I should care about their perception of the question and the answer. I wanna see sources and uses. Ha, I guess I'm the source. 

I wanna see uses, I wanna see a budget. I found a lot of times where it appears to me that the unanswered question is gonna cost say, $3 million. And it's in Northern Canada, so it's gonna to take two field seasons, right? So I know it's gonna take 18 months. So it's gonna take $2.5 million to answer the question. And all forms of G&A combined for two years are gonna be $2 million. So they need $4.5 million, and they go out to raise $2.5. Now this is bad arithmetic. In order to get the result that's gonna make me money, they need $4 million. And they have 2.5. Now how's that gonna work? You know, probably 80% of the financings that we turn down we turn down because the management team had no plan. 

When you ask to bet against unanswered questions, you come to the realization very quickly that the unanswered question for him is, "Will I have a pay check in 12 months?" Now I realize that's relevant to him, but it's not sufficient inducement to me.

AA: Right, that's not what you're trying to support.

RR: Right.

AA: Okay, last question. An ideal Rick Rule portfolio, what percentage's cash, what percentage allocated to precious metals, what percentage's energy, and what percentage not precious metals?

RR: I understand the question, it's not the way my mind thinks.

AA: Okay.

RR: I am just aggregated. In other words, I'm opportunity-centric. I like a mix of placements where I think that there's a probability that it will make some money. With placements where the probability is I'll lose money, but the possibility exists that I'll make 20:1. 

I'm agnostic as to commodity. Although I prefer commodities that other people don't like, because they tend to be cheaper. I mean, the opportunity getting in tends to be cheaper. I prefer to pay up for good people rather than getting not so good people cheaply. But I don't do portfolio allocation in the way that you suggest. I'm old enough now that I have a lot of money, and so I have a lot of cash by nature. I have more ability to do transactions than I have transactions to do, which is a good thing. And frankly, as one ages, money isn't good for everything but it's good for the nerves. And it enhances my sense of wellbeing. So cash is, of course, an important component. 

The other thing about cash is that, you know, these markets periodic resets, that's the way they work. And if you have the cash, you'd have both the courage and the tools to take advantage of the stress in the market. Which is when you really really really make money. You know, right now of course, I'm feeling very smart and all that kind of stuff. I'm feeling smart because of decisions I made in 2015 and 2016. Buying lots and lots and lots of paper that nobody else wanted. I had the ability to do it 'cause I had the cash, and I had the courage to use the cash because I had the cash in those periods. So cash is certainly an important component in a portfolio.

AA: Are there any sort of companies that you like right now, or specific metals that you like that you're buying up right now?

RR: What I try to do right now is to be in the exploration space. Because everybody else is in other places. What everybody else wants to be in is takeover targets. Well I actually like those too but you can't buy them in private placements. Or they wanna be in the quote, growth goals, or they wanna be in optionality stories. They wanna be in themes that worked a year and a half ago. And that's the way the market works. The price justifies the narrative. And so when an idea's already worked, when the juice is out of it, that's when the money comes into it. And you have to be where it's going. 

So where it's going for me is exploration. Exploration is hard right now. We've had seven or eight years where there wasn't much money available for exploration, which means most work didn't get done. So there isn't the data that I'm used to in the exploration space, to speculate the way I have in the past. I have to speculate on big targets and good people. But really where I'm focusing my own money right now is on exploration. 

I'm not focusing on exploration in Canada, because it's too comfortable. You know, Canadians like everybody else in the world, are ethno-centric. Canadians believe that Canadian gold is somehow worth more than other golds, like Americans do. But the truth is, the gold doesn't care where it's from. So I try to look for commodities that are out of favor, activities that are out of favor, and jurisdictions that are out of favor.

AA: I guess, they're the best deal.

RR: Hm mm.

AA: Perfect.

RR: Yeah, it exposes me to some occasional stress, but I don't feel much stress. I've done this for a long time, I enjoy the process.

AA: That's great, Rick; thanks for your time.

RR: My pleasure.

AA: Appreciate it.

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