Rick Rule Evaluates 9 Resource Stocks

[00:00:00] Speaker 1: I've noticed that with increasing frequency and high quality financings where I will reflect, you know, a significant order. And I, you know, I'm a high profile investor. People like to talk about the fact that I'm a shareholder. And in a circumstance like that, where capital is allegedly tight, I'm finding myself getting 50 or 60 or 70 percent of what I've indicated for, which suggests, at least for the higher quality companies, that capital is much less short than the industry suggests. Now, for the lame, the halt and the blind, you know, which is much most juniors, the fact that they can raise money on any terms means they're overpriced. And some of those companies mercifully weren't able to obtain capital. The sooner they go broke and go out of business, the better off the industry will be. [00:00:56] Speaker 2: Rick Rule, good afternoon to you, my friend. It's really good to see you. How are you? [00:01:06] Speaker 1: Andy, I'm doing well. The better for being on with you. Thank you for your attendance and support of our symposium a couple of weeks ago. [00:01:14] Speaker 2: You know, it was my it was actually my pleasure. It's something now that we look forward to not only look forward to every year, but we look forward to it in anticipation and more about that. But before we go there and I can't tell you and I want to spend most of our time on that. But before we go there, talk about this really the second half of the year here, your expectations. And I don't want to put words in your mouth. I'll just give you mine first. I see money coming and flowing back into the sector. And I think gold stabilized as well as silver. I don't know if this is going to be a rocket up like it was in 25. It might be a who knows what it's like. But I see money flowing back. What are your thoughts on the second half? [00:01:56] Speaker 1: I think the near term market depends on U.S. interest rates if if the market asserts control, continues to assert control over the long bond and the 10 year rate rises and the 30 year rate rate rises. That'll be tough on commodity prices. It'll result in a stronger U.S. dollar commodities, including gold, are priced in dollars. So it should be hard. I think, unfortunately, that corrects itself. And if you see political pressure in the United States from Congress and the president and you see a downward manipulation of interest rates, if you see an active Fed pushing interest rates down, that will signal to the market, to savers, that the U.S. dollar, pardon me, the U.S. government is more concerned about short term U.S. politics than they are the sanctity of the dollar. If that happens, you'll see gold scream, absolutely scream. My own anticipation for the balance of the year is a fairly soft market. I think you will see the equities do a little bit better, simply given the severity of the contraction that we saw, you know, February to July. August is traditionally the worst month in precious metals equity. So you're right in the middle of it right now. And, you know, when we talk about the softness and the equity prices, one thing I've noticed, Andy, is that among the better junior companies, at least with regards to financings, that softness didn't occur. I noticed that almost no decent issuer in the junior market has to give up warrants to attract money, which doesn't suggest to me that money is scarce. And I would note, too, in several recent financings, the most recent of which was ARRAS, A-R-R-A-S mining, that I participated in, that despite them regarding me as an attractive shareholder, and despite giving them a lead order, I got cut back. And I've noticed that with increasing frequency and high-quality financings, where I will reflect, you know, a significant order. And I, you know, I'm a high-profile investor. People like to talk about the fact that I'm a shareholder. And in a circumstance like that, where capital is allegedly tight, I'm finding myself getting 50 or 60 or 70 percent of what I've indicated for, which suggests, at least for the higher-quality companies, that capital is much less short than the industry suggests. Now, for the lame, the halt, and the blind, you know, which is much, most juniors, the fact that they can raise money in any terms means they're overpressed, overpriced. And some of those companies mercifully weren't able to obtain capital. The sooner they go broke and go out of business, the better off the industry will be. [00:04:56] Speaker 2: I'm really happy that you brought that up, because I've noticed the same thing. I've participated in a few financings, really, in the past six months. None of them, which, to my surprise, and I still participated in them, none of them were with warrants, which was to my disappointment. But also, but also to my, as a shareholder, that was a good thing. I was like, these guys are, these are quality names, and they're running their company as well. [00:05:26] Speaker 1: I think that's true, but I think it's also symptomatic of the market. You know, I remember back when I formed the old Expo Partners in the early part of the decade of the 90s, for high-quality juniors, there were five or six bidders in the market. I think the performance of those early partnerships was part of the thing that sponsored so many other institutional investors in the marketplace. You know, I was part of a group with Ned Goodman and others that created the monster that came back to compete with us. [00:05:59] Speaker 2: Right. Well, let's talk a little bit about the symposium here, and we'll actually spend the rest of the time on the symposium here. Again, I am saying this just as a statement of fact, not because you're, I'm talking to you. Well, I am talking to you, so I am saying that. I enjoyed it so much, and the first thing, mostly what I enjoyed was actually the halls. I enjoyed meeting people, not only viewers of the show, but also attendees of the conference, and also just some really high-profile people. And I will name drop, like the Rob McEwens of the world that were there, or the Jeff Phillips, who's not high-profile, but should be high-profile. I'm just spending a lot of time with him, or Tavi Costa. These are really, really good people, not only personally, but just have high, high levels of expertise. I can't tell you how enjoyable that was, just as me as a nobody, rubbing shoulders with them. So, well done, and yeah. [00:06:58] Speaker 1: Well, I think three things about the conference, and by the way, I would echo what you said, as you might suspect I would do, given that my name was on it. But we've put on the conference for 31 years now. We started the conference in 1995. This was the first year in 31 years that the conference really, truly lived up to my expectations. It did it for four reasons. The first is, if you do something for 31 years, and you make it a little better every year, it gets pretty good. Right. The second thing is, and I think you pointed it out, the high quality of the attendees. The idea at a conference like this, that all of the information in the hall, all of the knowledge goes up from the dais to the assembly is wrong. There's a lot of knowledge in the assembly. This year, there were four different, very sophisticated family offices among the attendees. The third thing was that finally, Andy, about 75% of the live attendees were students of the rural classroom. And they came to the conference armed with the tools for evaluating companies that we teach at the classroom. And I noticed that the attendees self-organized into what I would call posses, cooperative groups of attendees that would coordinate their interrogation of the exhibitors, which was wonderful. The fourth was, as you pointed out, the ability to mingle with the speakers. We have tried for 31 years to, when we pay a speaker who comes, delivers his or her speech, and then holds up in their room and goes back home. We allow those speakers to speak at other people's conferences. We provide gaps in their schedule, which we allow them to fulfill. We want the Rob McEwens. We want the Nomi Prinzes. I mean, Nomi, Jesus, I mean, she shuts down the bar. She goes on the cruises. She became a director of one of our exhibitors. And we believe that our speakers need to involve themselves in the conference, not merely cop a fee, give a speech, and leave. As I say, those speakers, without naming names over 31 years, who haven't chosen to integrate themselves thoroughly into the conference, are encouraged to speak at other people's conferences rather than our own. [00:09:39] Speaker 2: Yeah. Okay. So, shout out to Nomi, because I'm just going to tell you a story. First year, she signed my book that I bought of hers, and we chatted. Second year, recognized me, gave me a hug, and, hey, you're going on the cruise. Third year, it's, Andy, so good to see you. Hey, are we going to catch up? When are we going to catch up? Can I get on your show again? Blah, blah, blah. I mean, it's like seeing an old friend. [00:10:03] Speaker 1: She's a superstar. She's just a superstar. [00:10:05] Speaker 2: Not only in personality, but also just a knowledge, wealth of knowledge, and all of that. So, okay, well, I want to talk to you about some companies here, but before we do a deep dive into those companies, talk to me about the RULA classroom. Talk to me about portfolio evaluation. It really is. It's something I'm a part of, and it's that I'm honored to be a part of, and that really is the best deal really out there online or wherever you're going to find it. Talk to me about that. [00:10:34] Speaker 1: I guess three things to talk about. The first is that the conference tapes are available. The recordings are available. We've sold almost 300 tapes since the conference, and I'm delighted to say that the symposium recordings have the same money-back guarantee as the symposium did. If you buy the recordings and listen to them, that's the caveat, and you think for any reason I didn't give you your money's worth, I'll give you your money back. Simple as that. The probability that we'll have to do that is low. We had 2,300 people, as an example, that attended via live stream with an absolute irrevocable money-back guarantee. Six people out of 2,300 asked for their money back, and four people gave us the reason, the fact that the course material was too sophisticated for them. In other words, we gave them too much. That's a good excuse. Very understandable. But the symposium had an awful lot of valuable information. A lot of that information is timeless information that can be yours with an absolute pure gold money-back guarantee. Now that I'm done with that commercial, I'll do two more. Anybody who cares what I have to say about natural resources and wants to personalize it can do so for free. If you go to ruleinvestmentmedia.com and list your natural resource stocks, I will for free evaluate them. Rank them, 1 to 10, 1 being best, 10 being worst, and comment on individual issues where I think my comments might have value. Caveat there, I'm a little behind in the database. So I'll rank them now. Resubmit them in three months. The conference is a very busy time in my life. So there's a chance that if you submit a portfolio in the next two weeks, that you will get a portfolio ranking that isn't up to date. So consider submitting them now and then submitting them three weeks from now. Eighty or 85 percent of the companies will have consistent rankings unless the news changes between now and three months from now. And then, of course, there's the rural classroom. If you want to learn how the rankings are done, if you want to learn how to evaluate natural resource companies, there's well over 300 hours of instructional programming at the rural classroom, including, when I'm in town, weekly free question and answer sessions with me on Thursdays. And that's absolutely free, which is a really good price. Joe Mazumdar is, you know, participating in this. Adrian Day is participating in this. There's a wide range of people who are participating in the rural classroom other than rural. There's lots and lots and lots of original programming. In particular, there's lots of very, very high quality discussion groups, not unlike the discussions that took place at the conference. And it's all free, which is an extraordinary price. [00:13:24] Speaker 2: Yeah. Well, I'll make sure my producer, Colby, will put that both on YouTube below as well as Apple and Spotify. Let me ask you about some companies. And just to all my viewers and listeners, and so you know this, what I do is I make a list before and after the list. Some of these I've invested in, and some of them I'm not. Most of them I'm not. Really, I want to get people that I'm not invested in, companies I'm not invested in, so get your opinion. That's what this is all about. Also, I do not chase. I don't chase. If a stock goes up after we talk about it, I'm not running after it. And again, just a few of these I'm invested in. So I'll just wait until it comes, hopefully, let's say hope is a bad word, but comes to my liking where I like the price and I'm comfortable averaging in. So just everybody knows. But are you ready to go? Yes, sir. Yeah. Okay. So let's start with some royalty companies here. I'm going to give you a background on one. One of these I am an investor in. I spent actually dinner with the president at the symposium. He asked me to dinner. I've known this company for over a year. I do have some skin in the game with them, and I think the world of them, but more importantly, I think the world of their assets and how they're run. Give me your opinion on Acora royalties. [00:14:45] Speaker 1: Well, Acora's done a great job. Haven't they? I've owned it, including predecessor companies that became Acora, Anglo-Pacific, for 20 years. And what they did was they pivoted from their principal asset, which was two coal royalties in Queensland, Australia, understanding that these royalties would eventually run out of coal and understanding, too, that the market didn't like coal, despite the fact they made a boatload of money from it. And they used that money to diversify into other kinds of royalty, in particular copper, but other types, too. I suspect, Andy, that you know from dinner that the best is to come, which is to say that not all of the royalties that they bought were producing royalties, but rather royalties that would come into play in the five to seven-year time frame. Importantly, they made those investments four years ago, so five to seven years is eminent now. Right? You wait one to three years, while Rick waited five to seven years. So what I particularly like about Acora is the near-term and mid-term growth profile in Acora, there is zero doubt in my mind that the cash flow, which is already ample, is going to become spectacular, separate and apart from my belief that the copper price is going to do well. Assuming the copper price went nowhere, but you take the number of producing royalties from three to nine, right? Now, this is not the kind of stock to own if you expect to sell it in September or something like that. A three to five-year time frame requires three to five years. So don't buy a stock with a five-year time frame if you have trauma holding stock over a long weekend. But if you are prepared to wait for the maturation of this portfolio, which has been carefully constructed, buying mid-term royalties at a discount and then letting time solve the problem, you're right in the sweet spot here. [00:16:52] Speaker 2: Yeah. And also about leadership on Acora, I've gotten to know them for, you know, I met them at PDAC. I had breakfast with Mark, I've talked to him many times over the telephone and met him for dinner. And a comment I made to him, and this is a really good thing, Mark, you're like an accountant. You're very, you're very concise, you're very calculated. And, you know, that's such a good thing. He's watching money and he's making a company grow. [00:17:21] Speaker 1: Andy, one of the things you'll notice is that the managers who are attracted to the royalty business relative to the higher rhetoric exploration business tend to be higher quality people. I look back to Brian Dalton, you know, who built Altius. I've owned Altius since it was a 10 cent stock. Now it's a $55 stock. When I compare Brian with the young entrepreneurs that I met at the same time that he was coming into the business, I'm struck with the uniformly high quality of the entrepreneurs and managers in the royalty space, including at Acora, relative to the rest of the mining industry. It's a better business. And I think it attracts better businessmen and women than other parts of the industry. [00:18:14] Speaker 2: Yeah, I couldn't agree more with you. I really, well said. That leads me to a second royalty company that I believe you are an investor in is Empress Royalty, a little bit of background on them. I first found out about them at this second time, which was 25, when I was at the symposium. I thought an interesting model, very interested in royalties. I liked the gold and silver, but I didn't know a whole lot, but they were on my list to buy and they ran away from me in 25. I saw them again. I've gotten to know them better. Alexandra Woodward. I'm sorry. I want to make sure I get this right. Woodyer, Sharon. And then the chairman, David Rhodes. I had a chance to sit and talk with him and interview him as well as spend time with both of them off camera. I found them to be fantastic. And they also both reminded me of accountants, going back to Acora. But I have not bought them, but they are on my buy list. What are your thoughts on that? [00:19:11] Speaker 1: Well, in the case of Alexandra, she is an accountant. Right? From Pricewaterhouse. [00:19:18] Speaker 2: There you go. [00:19:19] Speaker 1: What's important to know about her is that she began working for her father in the finance business when she was 14 years of age. So despite the fact that she's fairly young, at least from my viewpoint, she's fairly young with a 35-year career in mining. And importantly, for the first 10 or 12 years, at the knees of an absolute mining finance genius who had incentive because she was his daughter to teach her what she needed to know. Their competitive advantage, I would say, comes partly from David because they are the royalty finance arm of Endeavor Financial. Endeavor Financial has probably generated $10 or $12 billion in resource financings, which means that Empress Royalty has access to the deal flow of Endeavor Financial. And deal flow is everything. They've chosen to focus on royalties in smaller transactions, often with public companies. Pardon me, private companies, which means that they have a little bit of a knowledge moat around their business. Now, the first time you met them, I brought them to the conference. Well, I bought them because they were selling at half-nav. The idea that I could buy 50-cent pieces for 25 cents with the same durable competitive advantages is no longer true. I would suggest that the company, relative to the royalties and the cash that it enjoys today, is fully priced. But their financial flexibility, which is to say their debt is extinguished, they have $20 or $25 million in cash and gold, and they still have access to the durable competitive advantage with Endeavor Financial, means that their financial flexibility now is much greater than it was when I bought them. You will also note, as I think you did, that they've built an amazing cult of shareholders at the conference. It isn't like those two hang at the booth. I watched David Rhodes personally in the pool give a seminar on royalties to a bunch of investors. There was a love fest between Empress and their shareholders at the conference that's been built up over years, which is wonderful to see. [00:21:57] Speaker 2: Yeah, it really is. And I think it's part of the season and their maturation. I agree with you as far as value is concerned, not to say that you can't find, there's not a lot of meat on the bone, but I think you're buying into execution now. Is that correct to assume that? Yep. [00:22:12] Speaker 1: And they've always been good executors. I mean, if you look at the royalty transactions that they've done, sometimes with private companies, with small mines, this is all about underwriting skill and execution. Everything that could go wrong with a big mine can go wrong. The small mine, but usually big mines and little ones can make you big money. The fact that they've been able to operate in the private mining sector in emerging and frontier markets and have no failures. Let's just say their track record with regards to that is better than mine. [00:22:45] Speaker 2: Yeah. Well said. Okay, moving right along, I want to talk about some developers here, or what I call developers. We're both very familiar with this next company. It's Revival Gold, our friend Hugh Agro. I first met Revival Gold Hugh in 25. I was very, very impressed, but I didn't buy them at the conference. I bought them right after the conference. And it was just some talking with Hugh. And I was like, they're in my mind then, and just became more apparent now as I've grown with them, they have two, correct me if I'm wrong, they have two potential tier one world-class assets, and it's in here in North America. I love the assets that they have. Give me your thoughts on Revival, and also give me your thoughts on where and how they can stub their toe with these assets that they have right now. [00:23:38] Speaker 1: You know, for those of your listeners who don't know the background, what the company did is they acquired two past-producing gold mines that shut down 20 years ago as a consequence of low gold prices. They didn't shut down because they ran out of gold. They shut down because that gold wasn't economic, $250 or $300 an ounce. And then they re-engineered the projects, and they lavished a lot of love, care, and capital on them to drill them out. In other words, they made the deposits better than they were when they bought them, and they bought them dirt cheap. Now, the thing that made the deposits uneconomic, which is to say low gold prices, is a thing of the past. I would suggest that both of these deposits, as they originally bought them, are economic, but they're not as they originally bought them. They're both re-engineered, and they're both substantially larger as a consequence of drilling and delineation. There's a truism in mining that the best place to look for gold is in the shadow of the head frame of a gold mine. And buying existing gold mining assets and then drilling off the unutilized reserves is a time-honored tactic. Mercure is, of course, an asset that Hugh is familiar with, with his past. ShareTrak is an asset that I'm extremely familiar with because once upon a time I owned it and sadly sold it very, very, very, very cheaply. So it's a deposit that I've known about and been familiar with for a very long period of time. If you assume, as I do, that gold holds at the $4,500 level or goes up from here, these assets are very, very, very cheap. What could go wrong is they could take their eye off the ball. They could run into permitting difficulties, although mostly, well, at least Mercure is on patented land. Or I could be wrong about the gold price. The gold price skated these assets on side and could skate them off sides, too. If you aren't a believer in $4,500 gold, if you're a believer in the fact that we're going to have a balanced budget or something like that, then you might not want to own these things. If you believe like I do, that's not a concern. You know, it's important to note that Hugh, despite, again, his relatively young age, has been in the mining business for a very long time. And his background as an engineer makes him much more sober than he might be if his background was as a geologist. His job is to look at these assets with a very fresh eye, but a jaundiced eye, and think about the right way to optimize their return to production in a much more permissive gold price environment. So I think he's the right guy for the job he's chosen. [00:26:35] Speaker 2: Yeah, really, amen to that. And I've gotten to know Hugh very well over the past year. I met him again at your conference. I've spent time with him in Atlanta, and I've spent time with him in other places, at other places in North America. [00:26:50] Speaker 1: One comment I would give is that he was a star performer at this year's conference, and the consequence of that is that his share price advanced really dramatically after the conference. So I would encourage people who look at his company to consider using good till cancel limit orders. I think we've used up every seller in the universe right now. And if you only have buyers and no sellers, the market in the very near term can get very, very strange. So form an opinion as to the value of the cup, and then use good till cancel limit orders. Don't chase this one when it's ripping. Yep, exactly. Don't chase. Don't chase. [00:27:31] Speaker 2: And just full disclosure, this is my biggest hole in my portfolio. And I don't typically allocate more than 2% to one position. But just everybody know that, that I am an investor. Let's talk real quick about GoGold. I interviewed Bradley Langell there. I was very familiar with them before the conference. And I bought them in May. Two reasons why I bought them. Really, first thing is what they got. I think they got a ton of metal. Then they just also got permitted, correct me if I'm wrong, in May. And they've been waiting on that for a while, but it was great timing. And then I saw great value relative to being permitted. It just seems like all the stars aligned. And then I got to see Brad and Steve, the head of IR, at your conference. And I really got to spend some time with them. But talk to me about GoGold, why you like them, and where they can stub their toe. [00:28:30] Speaker 1: Well, I was an investor with Brad in his two prior companies. So I have long familiarity with the fact that over time, he does what he says he's going to do. Neither of those companies were overnight successes, but they were both spectacular successes. He seems to be a specialist in finding out-of-favor gold and silver districts in Mexico, consolidating fragmented private ownership, and building big companies. Now, what he's involved in, GoGold, is precisely that, which is to say he's involved in an activity that describes his past success. He's doing something that he already knows how to do, which is something I like a lot. I agree with your geological assessment, which is to say the mine, the initial mine that they've permitted, I think is in what will become a multi-mine district. And I think they'll control the whole district. As you suggest, they've been waiting for permits for a fairly long time. The property has been permittable for three and a half years. The constraint has been Mexican federal politics. The president of Mexico is anti-mining, which she says, but she's pro-vote. And she said that mines that had the substantial support of the community that they existed in would be permitted. And I think that GoGold has done a good job of community relations in the last five or six years. And I think that some of that community relations effort contributed to the fact that GoGold will be one of four or five mines permitted in Mexico this year. It's important to note that what was permitted was the first of what I think will be two underground mines and that the open pit mine has not yet been permitted. There are suggestions that we have heard that the permitting process for the second underground mine and the open pit mine, assuming success by every measure of success, including community support, is demonstrated in the first mine. So, you know, I think it's important to note that again, the people who have trauma holding stock over a long weekend will be people who don't have the patience to see that permit evolve into mine construction and then mine operation, then a second permit, and then a third permit. What you're involved in in GoGold is a company that we believe will go from, you know, 2,000 ounces a month production in the tailings processing operation, which, by the way, pays for all their G&A, to a company that produces 250 or 300,000 ounces of gold a year. That's going to take some time. But if you're prepared to wait, and if they deliver, you're going to be paid well for that time. [00:31:41] Speaker 2: Yep. Couldn't agree more. Well said. Talk to me about, I want to get this correct, their booth was by me, and so the only way I got to know them was just by talking to them, because they're next to me, was Amarc, Diane Nicholson. Got to know her. Wow. First thing about her, she's intense. Very, very qualified and intense. That's the first thing. The second thing was getting to know them. They're sitting in on a ton of resource up in B.C. So, yeah, give me your thoughts on them. [00:32:10] Speaker 1: I don't want to come across as too politically correct, but I've known Diane for a very long time. Wow. She grew up in exploration, mineral exploration, when women didn't do that. Right. You know, they didn't have separate washrooms for women out there. They didn't have separate tents, separate bunks. And I will say it wasn't necessarily the friendliest environment in the world. Women weren't expected to be porphyry geologists in rural British Columbia 30 years ago. When she came up mercifully, she came up working for a guy named Bob Dickinson, who couldn't care less about somebody's plumbing. He cared about whether she could find copper. And she's had a great career. Now, she's a good friend of mine. I got a lot of time for Diane, a high regard for her. But I think people that are listening to this need to understand something about the grit that was required for her to become a top-tier exploration geologist at a point in time when women weren't expected to be in the field. They were supposed to be secretaries, stuff like that. Diane was out dirtbagging, which is what they call people who bring samples back into camp and search them. And as you say, the deposit that they've discovered is, I think, an important one. It's important to note the history of that, too. They are an outgrowth of the Hunter and Dickinson group, Bob Hunter, rest in peace, and Bob Dickinson. This will be, I believe, the fifth economic porphyry in British Columbia that they've discovered. We talk a lot about the management team having experienced past success at the task of hand. Diane, as part of the Hunter-Dickinson group, and the Hunter-Dickinson group behind them, who are supporting them, this will be their fifth or sixth success in porphyry copper exploration in British Columbia. It's important to note, too, that they have adult supervision in the part of Freeport-McMoran. Oh, I had no idea. Their joint venture partner is one of the most important copper producers in the world. I did not know that. Wow. It's important because that means that Diane is backed up by a technical team of probably 200 geoscientists who aren't on AMARC's payroll, which is attractive. [00:34:29] Speaker 2: Yeah, okay. Go ahead. Go ahead. [00:34:31] Speaker 1: Go ahead. No, that's fine. [00:34:32] Speaker 2: Well, and that leads me, that really leads me to really the next category. That's a great segue because of just, there's three other companies that I want to talk about that I would consider prospect generators, which is a model, correct me if I'm wrong, that you really hold high. And it's because of that, you have access to, you have access not only to capital, but expertise in once something's found. But yes, so Annette, the first one, I am not a buyer. I have not bought, but I've been very interested now for two years. I went to the luncheon, and that was Kennerland Minerals prospect generator, Zach. Again, I had some time to talk with him at his booth as well, just about the projects, as well as go to his lunch. And I was just not aware that they were prospect generators. So tell me your thoughts. [00:35:30] Speaker 1: Zach's a superstar, but let's do prospect generation first for those listeners who don't know. Prospect generators are basically technology companies. They're companies that use their human capital to develop exploration theses around tracks of land and then sell the concept. To third parties, very much like the way a molecule for a drug company in biochemistry might be, you know, biotechnology might be done. It's important to note that they recognize that their skill sets are technical, but that their most important capital is human capital. They use their talents and other people's money. The unsung benefit that you get from that is what I just described with AMARC. If you are and you farm a project out to Homestake, pardon me, Newmont, you have 200, 250 geoscientists at Newmont that are working for you indirectly, and you don't have to pay for them. Right. Anyone pays for them, which is truly spectacular. I got attracted to the prospect generation business because I worked for a prospect generator in the oil and gas business in the 1970s. And we had one particular well that we drilled that scared the hell out of me, overpressurized well with large concentrations of hydrogen sulfide, which if it got away could kill people. And I remember that there were 30-something engineers involved with that well, and I was happy for every damn one of them. And I only had to pay for two. You know, the rest of them worked for Exxon. Right. And that really appealed to me. Getting back to Kennerland, Zach Flood is a fairly young geologist. He is. He's young. But he has superb respect in the geological world, partly because his father, Ed Flood, was something that all of us old dragons worked with before he died. And we got to all of us got to know Zach when he was in high school. And we've watched his career progress for many years, despite the fact that he's a young man. He's worked for Robert Friedland. I mean, he he had a wonderful and rough apprenticeship. And he's been successful already. Their second exploration asset, Frotte, which they joint ventured with Sumitomo Metals, is going to be a mine. Zero doubt in my mind. And they have a four percent uncapped royalty on a project that I think will produce at least four million ounces of gold. And I would suggest to you that most of the value in Kennerland, most of the price in Kennerland, is accounted for by the value of the Frotte royalty. I'm very confident that they could sell that royalty to Franco or Wheaton or Osisco or anybody else that they wanted right now. Think about that. Think about that. Done. What you have behind that is an exploration team that is absolutely superb at developing very large grassroots concepts, staking the ground, doing the preliminary work, the geophysical work, the geotechnical work, the surface sampling, developing an exploration thesis, and bringing in a mining, a major mining company. Think about it once they have deristed to drill it. [00:38:39] Speaker 2: Mm-hmm . [00:38:40] Speaker 1: Yeah. That's really the story in a nutshell. It's already proven to be a success. This is another one where they've been at the conference long enough to develop a cult around Zach Flood. So this is a stock not to chase. [00:38:59] Speaker 2: Yeah. Well said. I have not chased them. I don't own them. I regret not owning them as of right now, but they are on my buy list when their price comes to the terms that I'm willing to pay for them. Talk to me about two other prospect generators. The first one is Headwater Gold. I bring them up. Our friend Jeff Phillips introduced them to me. I got to spend some time with them. I love them. What I loved was just, again, you talked about the new months of the world, just looking at who they're doing business with. [00:39:30] Speaker 1: Headwater comes out of another prospect generator that I helped found, EMX, now EMX Royalty. The Headwater team was part of the EMX team, which is where I came to know them, one of the best teams of explorationists active in the US, and the Headwaters guys actually took the EMX portfolio and built a new company around it so that they could focus on it. As you point out, their exploration ground is prime hunting ground for Newmont. And so their key third-party funding partner is, in fact, Newmont. Yeah. They've done a good job early on. And also, as you suggest, the stock is fairly closely held. Your audience listening to this call needs to know that I'm one of the founding shareholders of that, as I was one of the founding shareholders of EMX Elemental. I didn't know that. Yeah. I'm familiar with EMX. I actually, I owned EMX before Davey Cole, the current CEO, was even employed there. [00:40:37] Speaker 2: No kidding. I had no idea. [00:40:39] Speaker 1: Way, way, way back. I tried to hire Davey a long time ago. And when I couldn't hire him to be an exploration analyst for me, we put him in a company that we then had called Southern European Exploration. Proposed symbol on the exchange, sex. And that's what became EMX. [00:41:01] Speaker 2: No kidding. I had no idea. That's an interest. That's a good story. Okay. Well, I'll put them. I spoke to Caleb at the conference and enjoyed my time with him. But yeah, two more I want to get to. Latin Metals, Keith Henderson. Again, like the year before, I was introduced to Keith the year before at the conference. I love their assets in South America, I want to say, in Argentina. I believe, and I don't have any inside information, but I believe they're near term to a few deals. And they got several things. They're prospect generous, so they have a lot of things can happen. I think that will happen sooner than later. But yeah, just give me your thoughts on Latin Metals. [00:41:50] Speaker 1: Well, again, in Keith, you have a guy who's been serially successful as an explorer in Latin America who is exploring in Latin America. In other words, you have a person whose prior successes are germane to the task at hand. Importantly, he has a very, very, very deep network of contacts among geologists, prospectors, landowners, small miners in Chile, Argentina, Peru. And so he has an unusually good idea flow. When he is able to stake those ideas, he has a ready market for turning them. I, like you, believe, partially as a consequence of Jeff Phillips' persuasive nature, that they will expand pretty dramatically the population of joint venture partners. And hence, expand pretty dramatically the amount of third-party exploration expenditures on their projects. Like many of Jeff Phillips' companies, this is intelligently structured, which is to say that the share float relative to the total outstanding issuance is fairly tight. So any good exploration news can be expected to generate an outside share price move, assuming, of course, that there is some successful news. [00:43:08] Speaker 2: Yeah, well said. Just for the record, I did start buying them at the conference. They are fairly priced for me to take that risk. And so I started allocating capital since July, just FYI to all my viewers and listeners. And Latin Metals is not a sponsor of mine in anything. I'm just an investor now. So just for the record. Last company I had. I really like these guys. I'm not an investor as of yet. I've done no business with them. But I think it's such a compelling story. But I know this much of it. And it's an energy company called NG Energy Company. Had the opportunity to talk to George, the CEO of George. I'm going to butcher his last name so I won't mention it. But I got all of his, all of the information they were passing out. Started doing a deep dive. What I really like about them, number one, I really like energy on a pullback, number one. I love that they're in Colombia and they have access to Venezuela. And it sounds like or it seems like that they're a player or could be a player there, both in oil and natural gas. That's my initial, my initial due diligence. What do you have to say about them? [00:44:18] Speaker 1: I was introduced to NG by a speaker at the conference this year, Keith Hill, who's an absolute superstar. Keith Hill built a lot of the Lundeen business in offshore emerging markets. I've done business with Keith for 35 years. He's become a good personal friend of mine. And he's made me a boatload of money. Both things, of course. And dear me to him. Keith introduced me to NG Energy. Ironically, I knew both the Venezuelan asset, which I've been involved in before. No, they don't have it yet, but they're, I think, gonna. And the Colombian asset. And so I like the, I like the assets. I like the people who run the assets. They have, and I'm not at liberty to disclose that, I think, you know, a large shareholder who, not the Lundeen's, who are very large oil and gas investors. It stands to reason that being the case, and this family is a household name in the energy business. It stands to reason that they are likely to get this Venezuelan concession. Now, Venezuela is either going to work or it's not. I have an odd relationship with the country. I've been involved in four exploration projects in Venezuela, and I've had four exploration successes in Venezuela. There's no other part of the world where my hit ratio is high. And I've had all four successes nationalized. So, you know, take all of this with a grain of salt. There is a lot of work for them to do in Colombia, but the upside, the icing on the cake, is Venezuela. The control shareholder behind the scenes is a U.S.-based family that has a lot of success in the global oil and gas. And they will have the ability, to the extent that they enjoy success, to really grow this company. In the meantime, I have my godfather. I have Keith Hill, who is also invested in the company, monitoring it on my behalf. So, the best of all possible worlds for me. But don't own this one if bad headlines out of Venezuela will freak you out, because you will get them. [00:46:48] Speaker 2: Yeah. Yeah. Well, they were the company I actually, that was most intrigued with, because they're different, as well as I don't have all of the information that you do. But I have enough information that just made it very enticing and made me very curious. And that's where, I haven't put money in yet, but that's where I usually start. [00:47:09] Speaker 1: Right now, nobody cares about conventional oil and gas exploration. Most people don't care about oil and gas. They don't care, for the most part, about offshore oil and gas. They don't believe that juniors belong there. Well, I've made a fortune among juniors who were involved there. And people don't like jurisdictions that they can't pronounce or spell, like Colombia, Venezuela, Namibia, Guiana. I love them. My duration investing with the Lundines, you know, took me to Sudan and New Guinea and Mauritania and all kinds of places other people can't pronounce. And the consequence is I got to make a lot of money that they missed. [00:47:50] Speaker 2: Right. Right. Okay, well, that wraps it up. Why can't you give me just really two minutes or three minutes of your time, just with some final parting advice, just in reflecting on the symposium, as well as just walking into the second half of the year. What's your advice you can give to the viewers and audience? And I think you already gave me some great advice and you gave Tiffany some great advice. And that was doing your homework, do your homework, do due diligence, be engaged, and really just invest in yourself. And that's the advice I give to everyone now. And that's the advice you gave to her and to me. But what's some advice you would give? [00:48:31] Speaker 1: Well, investing in yourself is really important and really doesn't matter your age. I'm 73 years of age. I've been in this business for 50 years and I learn new stuff every week, you know. So you don't have to be Tiffany's age, although it helps. You know, Tiffany is going to get more benefit from compounding at her age than I am at 73. That's simple arithmetic. So her return on capital employed, investing in herself, is going to be higher than mine. But everybody needs to do it. And we try to make it easy. First of all, the knowledge at the conference was mostly timeless. Yes, there was some information about companies that presented immediate opportunity. But the learning, the lessons that you can learn at the conference is timeless and they're still available to you. You can, you know, buy the conference tapes, buy the recordings. I'm listening to them right now. And employ those lessons. And unlike any other investment that you can make, this one's riskless in the sense that if you buy the tapes and listen to them and you don't think I gave you your money's worth, I'll give you your money back. Ironclad money back guarantee, which is a really good deal. And if you hyperdrive your knowledge, you can go to the rural classroom, ruralclassroom.com. There's 350 hours, actually now in excess of 350 hours of material there, educational material is free. One of the delightful things about the conference was that about three quarters of the live attendees were students of the rural classroom. And I watched them employ the lessons that we taught in the rural classroom and organize themselves into posses of attendees to interrogate the exhibitors, which was wonderful to watch. It was wonderful for the exhibitors, too, because they had to answer fewer stupid questions. But rural classroom is a place where you can learn to evaluate mining companies yourself. And then finally, there's rural investment media where you can short circuit some of that. If you go to ruralinvestmentmedia.com and you list your natural resource talks, I personally will rank them for you. One to ten, one being best, ten being worst. And I will also include individual commentary like I've done in this interview if I think my comments might have value. And that's absolutely free. Ruralinvestmentmedia.com, list your natural resource talks. Please, no crypto, no pot stocks, no tech stocks, just resources. Ruralinvestmentmedia.com. [00:51:04] Speaker 2: Yeah, well, I'll have Colby put all of this in the show notes. And really, on that note, I want to thank you, number one, for bringing me there. And number two is you may have just made a comment. And I want to thank you for that comment. Just these companies like hard questions or good questions. I couldn't agree more. I do this now every week. I either go to a lunch or multiple luncheons and dinners of people, companies putting on a luncheon or dinner here in Atlanta. And I can't tell you how many times CEOs or a VP of exploration will come up to me and thank me for asking hard, engaging questions. And so, to all my viewers and audience, learn how to ask hard, engaging questions. And don't be shy about it. This is your money. And, yeah, that's really what we do. And I want to thank you, Rick, for helping me ask those hard, engaging questions to companies. [00:51:59] Speaker 1: Well, it's been a pleasure. I've watched you mature in the decade that we've known each other. And I take some pride in the little bit I had to do with contributing to that. [00:52:08] Speaker 2: It was a lot. [00:52:10] Speaker 1: But maybe some of the guidance was mine. Thank you, too, for your participation in and support of the symposium. [00:52:19] Speaker 2: It is my pleasure. And I really am. I'm already looking forward to 27. So thank you, Rick. [00:52:24] Speaker 1: We're going to make it better next year. I promise you. [00:52:26] Speaker 2: Yep. Let's do that. All right. Thank you. Have a good one, Rick. [00:52:29] Speaker 1: Thank you.