Rick Rule: Rule Symposium, Uranium Stocks & Top Commodity Picks

Vale's tailings dam failure in Brazil was the operator's fault, not weather or regulatory, creating a material liability (half of $18-30 billion estimated); Rule will not own the stock despite it being extremely cheap because the political/legal resolution of the liability is uncertain and remains a work in progress.

“I am not an owner of Valet uh at its current value. I'm very attracted to its iron assets, but the outcome of the tailings dam fail in Brazil is very much a work in progress. Uh whether their ultimate liability is half of $18 billion or half of $30 billion is another circumstance. Make no mistake, it's a liability. That tailings dam failure was not the fault of the weather and not the fault of Brazil. It was the fault of the operator Bali.”

Lobo Triacca's research identified a consistent pattern: junior mining companies that move from development into construction phase through first production typically double in value over roughly two years; backtesting over 20 years confirms this 'pre-production sweet spot' pattern with statistical reliability.

“from when a junior goes into the development stage, they start construction, you know, they're actually building something. They're pouring concrete. They're they're building. The time frame from that to first pour is about two years and it averages about a double.”

Canadian natural gas export growth is constrained by Canadian government policy: Prime Minister Trudeau does not see a business case for Canadian natural gas exports, while all of Canada's major trading partners do see the business case, creating an artificial policy barrier to supply growth.

“the Canadian natural gas market is constrained by the same reason and further constrained because the guy who runs the company, the country, pardon me, uh Mr. Trudeau, doesn't seem to see the business case for the export of Canadian natural gas, although all of his major trading partners do. The only one in the world who seemingly doesn't see a business case for Canadian natural gas is the prime minister of Canada. I guess he can't see the business case because he won't allow it.”

NextGen's 9% convertible debt used to purchase 2.7 million pounds of uranium at $100/pound is problematic because the conversion dilutes equity in what Rule calls the best undeveloped uranium deposit on the planet, and the company's $30 million quarterly general administrative expense is excessive for a non-producing company, indicating either misallocation of capital or unjustified spending.

“they sold a convertible security to buy 2.7 million pounds of uranium. uh buying 2.7 million pounds of uranium at $25 or $30 like Sprat did was a very good idea. Whether or not buying that at $100 was a good idea is something that we will need to see over time.”

Alpham is by a factor of two the highest-grade tin mine in the world and is about to double production over two years, but every time you look at nightly news you'll be scared to death about your investment, making it unsuitable for nervous investors.

“So if you want a a a really really really attractive tin play and you can suffer insane political and social risk uh as I say it's by a factor of two the highest grade tin mine in the world production will double over two years but every time you look at the nightly news uh you'll be scared to death about your investment.”

Tin is the forgotten energy transition material; tin production is constrained; tin prices have performed well over the past two years and should continue to perform well as long as soldering remains necessary for electrical applications.

“tin is the forgotten energy transition material. Uh, I I mean, the tin price has done well in the last two years. I think tin continues to do well. Uh to the extent that there is ever any need to solder anything uh for electricity, uh tin will do well. It's the best substance in the world. Uh tin production is fairly constrained too.”

Rule made most money on 10-baggers in his career by buying misunderstood world-class deposits in commodities out of favor, selling at 50% discount to current net present value where he could see path to 10-bagger in 4 years.

“Uh when I look back at my career, Steve, uh I made reasonable amounts of money trading stocks. I made good money building businesses. But I made most of my money on 10 baggers. Uh I made most of my money buying companies that were misunderstood in commodities that were out of favor where I believe that they were selling at a 50% discount to their current net present value and where I could see a path to a 10bagger in four years.”

The reason junior mining companies experience multiple years of investor wear-out during the permitting and financing phase is that this period is boring and lacks the psychological anchor of visible progress, making it difficult to hold conviction; investor fatigue ends at the point of 'first dirt' (breaking ground), which psychologically signals the end of the waiting period.

“It would appear that the boring period of the Land curve uh which is to say the period of obtaining permits, obtaining financing, doing advanced engineering wears investors out. The beginning of the end of the period where you wear investors out would seem to be uh for shovel. The permits have been obtained, the financing has been obtained, the uh lead engineering is done, the long lean time items have been done.”

Denison Mines' in-situ recovery technology applied at depth (rather than at surface) is unproven and offers downside optionality risk; Rule exited a 400%+ position because abundant other uranium opportunities exist, prioritizing capital preservation over waiting for technology validation.

“If they make their insitu recovery experiment at depth work, this is going to be a long ball home run. What I like about Denison uh, is two high-grade discoveries in the Aabaska basin and an interest in a permitted mill and tailings facility. They don't have to permit stuff because they're already permitted.”

Metals X's optionality in tin is appealing superficially, but Rule has learned that optionality equates to marginality—it works well when conditions align but creates excessive risk concentration; therefore, Rule prefers big deposits with durable advantages over optionality plays.

“Yeah, I like big deposits. I like low-grade deposits. Metal X uh is all about optionality in tin. And I have learned that optionality equates to marginality, which is to say it's wonderful when it works for you, but you're taking too much risk.”

The Xinyak family's backing from the Londine family (due to their track record building Futa del Norte) creates logical conditions for a future three-way consolidation: G Mining + Reunion + the adjacent G2 deposit (part of the same mineralization event) becoming 7-10 million ounce operation that could ultimately be absorbed into Londine Gold, though this is not guaranteed.

“It's important to note that the Xinyak family has the explicit backing of the Londin family uh as a consequence of the Ginyaks building Futa del Norte in Londinine gold. When I allow myself to fantasize, uh, Steve, there's a deposit to the north of Reunion called G2, which I believe is part of the same mineralized event. Consolidating G2 into Reunion takes what appears to me now to be a 5 million ounce deposit and takes it to being a 7 million ounce deposit, probably on its way to 10.”

Uranium Energy Corporation (UEC) has psychological advantages from the U.S. ban on Russian uranium imports in the near term—despite the ban being political theater (as uranium will simply flow to China and India from other sources while Canadian and Australian uranium redirects to the U.S.)—because Amir Adnati has spent $70 million in public relations building a 90,000-person constituency for whom narrative matters as much as reality for stock price movements.

“From a real viewpoint, it doesn't matter at all. The uranium that we don't take in the US, the Russians will sell to the Chinese and the Indians. And the uranium that goes to China and India, primarily from Canada and Australia, will come to the United States. It's all political theater.”

G Mining Ventures' acquisition of Reunion Mining solves two parallel problems: G Mining addresses investor concerns about how to grow and what's next (Reunion answers that), and Reunion investors gain visibility into financing and construction execution (G Mining's proven track record answers that), creating logical alignment between complementary assets.

“The acquisition of Reunion by G Mining solves two problems. When people look at G mining, they think how do they grow? What's next? Well, you see what's next? Reunion. When people look at reunion and they say, 'How do you finance it? How do you build it?' That's been answered. G mining.”

EMX Royalty's market capitalization is entirely explained by the T-Mook royalty in Serbia (operated by Zijen Mining, the world's largest gold miner by market cap), meaning the rest of the company—including nearly 200 generated royalties and other royalty purchases—is effectively free; however, this requires patience, as the stock experiences extreme 10-15% weekly volatility from fund flows unrelated to fundamentals.

“I would suggest to you that the market capitalization uh of EMX royalty is explained away in one asset, the T-Mook royalty in Serbia, currently producing uh operated by Zjen Mining, now the largest by market cap gold mining company in the world. Uh but that royalty doesn't account for the deeper part of the t-ook, the t-ook pfery, which will ultimately become a top 10 copper gold producer in its own right. My belief is that the t-muk royalty explains away the entire market capitalization of EMX and you get the whole rest of the company for free.”

Natural gas is too cheap and will stay too cheap for a while because U.S. natural gas is produced as a byproduct of oil production, particularly from Permian and West Texas producers who profit from oil regardless of gas price; this low-price setup encourages consumption and infrastructure investment, setting up demand explosion when oil capex declines (projected 2025).

“natural gas is too cheap. Uh and I think it's going to stay too cheap for a while. In the United States, the natural gas market is burdened by the fact that natural produc natural gas is produced as a byproduct of oil production. uh and in particular the West Texas producers, the Perian producers don't care about the gas price. They're making so much money in the oil business.”

Biden administration has decided to subsidize uranium business (courting American uranium producers through subsidized cost of capital), so US uranium companies can sell product at premium prices while having zero or subzero cost of capital courtesy of taxpayers—an attractive setup despite libertarian objections.

“the Biden administration uh in their wisdom uh who four years ago hated the uranium business have decided to subsidize it. So the cost of capital that American producers have courtesy of the taxpayer may go to zero or even subzero. The idea that you sell your product for a premium and you have a subsidized cost of capital, however unpalatable that might be to libertarians like myself uh is attractive to speculators who have learned to attempt to monetize the stupidity of the voters.”

Uranium's easy money phase has ended as the sector moved from unloved to liked to interested, and future certain money requires patient work: the shift from spot/overnight uranium sales to term/long-term contracts means reliable profits lie ahead for those willing to do the work, but the rapid initial returns are gone.

“I believe that the easy money in uranium has been made. When the sector went from unloved to liked to of interest, the easy money was made. To make the easy money, you had to buy it in 2022”

Alphamin Resources operates the highest-grade and longest-duration tin asset on the planet with only 15% exploration of concession, but requires acceptance of extreme political and social risk (northeastern Congo: war zones, warlords, AIDS, Ebola); despite risks, the company mints cash and distributes generously to shareholders, offering 2x the value of any competing tin play.

“the best tin stock that I know of if you have a tolerance for real political risk is alpham. I'm a very large shareholder. I have been for a very long time. It has the highest grade and longest duration tin asset on the planet. Uh its concession I think has been about 15% explored. Uh I've been there. Uh but when I say there uh I'm talking about northeastern Congo.”

Equinox Gold's acquisition of Orion's 40% Greenstone interest at a premium price is highly risky unless the mine achieves nameplate capacity as forecast, because Equinox would vault above 1 million ounces per year production (a significant capital markets threshold) but faces teething problems if execution falters; however, Ross Bey's track record of frugal management and on-time, on-budget delivery is a mitigating factor.

“Uh Equinox did not steal the deposit. uh they pay an absolutely full price if they obtain name plate capacity. Which is to say if the deposit produces uh as forecast by the feasibility study uh this will be a very good acquisition. Uh and it will vault uh Equinox uh in this one transaction above the million ounce per year uh threshold which will make a difference in capital markets. The risk is that they paid a premium price for a deposit which will have teething problems.”

Gold Royalty was formed by entrepreneur Amir Adnani who spent 15 years buying 22 advanced gold deposits that had fortunes spent on them but weren't economic at current gold prices; he burdened properties with royalties, raised $20M expecting to get $90M, and used this currency to buy other royalties.

“Gold Royalty is another one that I thought was very fully valued a year and a half ago, but they've begun the process of monetizing their royalties. For the people in your audience who don't know the origin of gold royalties, it was formed by a wonderful young entrepreneur uh airdani uh who began in the process of a related company gold mining inc of buying advanced gold deposits during periods of time when the outlook for gold was very poor. Uh, young Amir spent 15 years buying, if my memory serves me correctly, 22 gold deposits that had had fortunes spent on them, but weren't economic at current gold prices. Fast forward, the gold price goes up. Uh, companies are able to attract capital fairly cheaply in the royalty business. And so Amir burdens all of his own properties with the royalties, spins them out, went out to raise $20 million, came home with $90 million”

Uranium Royalties (URoy) has improved because its working capital increased through a non-dilutive revaluation of physical uranium inventory, and the company is now growing into its previously premium valuation as it deploys accumulated capital, making it materially more attractive than it was a year ago.

“what I like about Uroy is they've started to deploy the money. Uh also their working capital has risen because part of their working capital was phys physical uranium. So their working capital went up an oldfashioned way. It wasn't uh looting institutions or widows and orphans with an equity interest. uh it was in fact a revaluation of their inventory.”

Uranium Energy Corporation has collection of small mines which Rule dislikes, but the hub-and-spoke model consolidating South Texas and Wyoming mines around a central processing hub is attractive; the company can produce 8 million pounds per year in the US.

“I think it has several advantages. Uh let's talk through the disadvantages yet rather than having one big mine. It's a collection of small mines and I don't like small mines. The fact that there's a hub and smoke, which is to say that you consolidate several small mines in South Texas and several other small mines in uh Wyoming around a central processing hub. I do like I like too the ability that they have to produce 8 million pounds of uranium a year in the United States.”

Origin Royalties is already profitable and cash-flow positive from its existing silver royalty (Matano, operated by First Majestic in Mexico) and its own exploration activities, with upside optionality from the Silicon royalty on a 10+ million ounce gold deposit discovered by Anglo Gold in Nevada, representing significant hidden value for a fairly small market-cap company.

“They are enjoying income now. They aren't just cash flow positive. They're profitable uh based on the Matano royalty operated by First Majestic in Mexico. It's also worthy of a note worthy of note that they generate enough money from prospect generation and management that the company's exploration activities uh are cash flow positive in their own right, which is truly a spectacular outcome.”

Natural gas producers like Devon, Equitable, PO, Bircliffe, and Tormolene are currently profitable and generating spectacular dividend income with sufficient reinvestment to sustain production; dividend protection shelters investors from time value of money concerns, allowing patients to wait for commodity recovery.

“Despite this insane setup, gas producers like Devon in the mid-continent in the United States, equitable in the Marcelus in the US Northeast, PO, Bircliffe, uh, Tormolene in Canada, uh, are not only profitable uh, but are generating really truly spectacular dividend income with enough reinvestment to sustain the production.”

Centaurus Metals' nickel deposit is a Tier 1 asset (in-situ reserves and resources exceeding $10 billion) that should generate returns on capital employed in excess of 25% even at today's depressed nickel prices, placing it in the best decile of sulfide nickel deposits; the market's hatred of nickel makes it a contrarian buying opportunity despite current technical unattractiveness.

“Centaurus has some spectacular advantages. Uh, it is maybe the biggest undeveloped sulfide nickel deposit on the planet. Uh it is a true tier one deposit which is to say uh in sichu value of reserves and resources exceeding $10 billion. Uh it will be easily in the lowest cost cortile for sulfide nickel deposits worldwide. It should generate a return on capital employed even at today's nickel prices in excess of 25%.”

Rule has been long gas stocks for a long time and is extraordinarily patient; the setup of low prices encouraging consumption and capex while supply constraints emerge makes patience worthwhile despite the time required.

“note to listeners, I'm way long the gas stocks, but I'm also extraordinarily patient.”

Rule's bullishness on Equinox is contingent on his own underlying bullishness about the gold price over the 2-3 year term; if his gold price forecast is wrong, his Equinox ranking is 'pure fiction.'

“It also has to do with my underlying bullishness about the gold price. Um, I personally am over the two or threeyear term very, very, very bullish about the gold price. If I'm wrong about the gold price, then my ranking is pure fiction.”