Rick Rule Warns Us Debt Makes Gold Unsellable

TITLE: Rick Rule Warns, US Debt Makes Gold Unsellable | Rick Rule CHANNEL: Mining Network DATE: 2026-06-03 ---TRANSCRIPT--- Welcome back to Mining Network. We’re joined today by a man who needs no introduction. It’s legendary resource investor Rick Rule. Rick, thanks for joining us.

Thank you, Matt. It’s a pleasure to be back uh on your show. Well, this week gold was down 20% from its all-time high, stabilizing around the $4,500 per ounce mark. Rick, is this a position that you’re comfortable buying physical gold again or are you expecting another leg lower? Uh the answer to that question is I don’t know. To the second part of the question, for me personally, I save in gold. Uh and I’m fairly price insensitive. I maintain liquidity in US dollars, but I’m a systematic saver and have been a systematic saver in gold since 2000. Uh for me personally, and I know that many of your viewers won’t share this sentiment, I hope the gold price goes lower. Um I’d like to acquire more and it’s in my interest to acquire more at lower prices. Uh I think the decline in the gold price uh is fairly easy to explain. uh that is uh ironically with the Gulf conflict uh and the flight to quality the US dollar is still the most liquid currency in the world uh and it has attracted inflows as a con consequence of turmoil and the higher US interest rates uh have also attracted uh currencies uh into the US dollar given that gold is denominated in dollars dollar strength translates fairly directly into uh gold weakness. Uh unfortunately from my point of view, because I’m American, I think the next 10 years will see a fairly precipitous decline in the absolute purchasing power of the US dollar. Specifically, I think that we’ll emulate uh the ugly track record uh of the 1970s where according to the Congressional Budget Office, the US dollar lost 75% of its purchasing power in 10 years. If I’m right, and by the way, I hope I’m not, uh I expect that gold will maintain its absolute purchasing power. uh which means that at least in nominal terms in US dollar terms the gold price I think will do very well over the next 10 years whether it does well over the next 10 weeks or not is a very different subject and one one I can’t opine on well we see the uh every week with the straight of Hormuz we seem to have a prospect of a peace deal which is quickly dashed um when we look back in the long term you mentioned the 1970s and obviously the OPEC crisis. But when we look back uh in in the future at this straight of Hormuz crisis, do you think we’ll just see this as a blip in the road or a major structural shift in the global economy and geopolitics? I hope it becomes a blip. Um it’s I’m not a geopolitical analyst. I’m a credit guy. But I note that for both the Israeli government and the Iranian government um if not for their citizenry for the government both of them seem to view this conflict as existential and I’m not sure sure how you resolve that circumstance. I’m not saying it’s unresolvable. I’m just trying to say I’m a credit guy and I don’t know how to resolve it. Uh if this circumstance doesn’t resolve itself fairly quickly, you’re going to see another pretty ugly move in energy prices, uh right now energy prices are priced in anticipation of shortages. Very soon we’re going to see the reality of shortages. We’re seeing that reality in some very poor underserved markets. Um but if you don’t resolve this crisis fairly quickly, you’re going to start rationing oil by price uh which means a you’re going to see higher prices and you’re going to see countries like Sri Lanka and Pakistan uh that can’t afford the price not have supplies uh which will have I think for those economies fairly ugly circumstances and I guess there are two other related questions. The first is very high energy prices act as a damper for the whole economy. They they function like a tax and to the extent that you drain liquidity out of a market uh even a market like the US that is beginning to express credit concerns other ways and if you raise interest rates simultaneously that has the potential for some fairly ugly followon effects. I’m not saying we’re going to experience it, but we haven’t had structural issues like this in the global economy probably since 2008, 2009. Maybe we get through this unscathed, maybe we don’t. Um, I would suggest to your listeners maintain liquidity in their accounts. Uh having liquidity gives you the advantage uh in an illlquid market. Uh it gives you the tools and hopefully the courage to take advantage of a circumstance rather than being taken advantage of. If you maintain excess liquidity and nothing bad happens, nothing really bad happened to you. It’s just opportunity cost. But if you don’t maintain liquidity and liquidity disappears in global markets, which it might, um you’ll have serious problems with your own portfolio. Okay. And I seem to remember last year you were saying that oil stocks looked particularly cheap. I seem to remember you sort of saying Exon Mobile in particular being uh great value. I mean are we still at that stage? Are there other opportunities? Is that the still the way you’re playing it or are there other opportunities in more niche areas of the energy system? I haven’t sold my Exxon. In fact, I haven’t sold very many of my oil stocks. A couple of them have been taken over uh which were in effect involuntary sales. But I, you know, saying that Exxon was cheap at $90 was a no-brainer. Saying that Exxon is cheap at 180 or 185 requires a bit more courage. If we did resolve the circumstance in the straits of Hormuse, uh, and the caros north of the straight were able to flow through the straight uh, and the impact of demand destruction that we’ve had from higher prices, I I think you’d see sharply lower crude prices. Uh notice I paraphrase that with the word if because I don’t know if we’re going to reopen the straits of Formoose. So I think the question uh involving oil stocks is much more personal. If you’re like me and you have a boatload of these things, uh you don’t need to add more. Uh despite the certainty of very good oil markets in 2029 and 2030, you don’t need to add more because if the straits situation resolves itself, the oil price goes lower. If you don’t have oil stocks in your portfolio, that’s a very different matter. uh we have been treating oil for 20 years uh like an asset that was going out of favor. Uh you know the big thinkers in the world you know Greta Thornberg, Al Gore, Anala Merkel uh people like that would have you believe that peak oil demand was going to occur in 2030. Peak oil demand isn’t going to occur in my lifetime. I’m 73 and by the way I’m very healthy and I don’t think peak oil is going to peak oil demand is going to occur in your lifetime. Uh which means that the world is systemically underinvested in oil. The oil industry itself has by its own admission been underinvesting in sustaining capital to the tune of over a billion dollars a day a day for three years. uh and this systemic underinvestment in sustaining capital will ultimately in the outy years impact the company’s ability to produce. If you want um to illustrate that you look at the national oil companies of Mexico PMEX and Venezuela Penvesa and you’ll see what systemic underinvestment does. Both of those countries are sitting on massive reserves of oil. And both of them have seen their productive capabilities fall by 80%. That’s what deferred sustaining capital does to you over time. In addition now to the fact that the industry’s been underinvesting a billion dollars a day, we have to go fix all the stuff we just blew up in the Gulf. Uh the Iranians not only meet need to make up for uh a decade or more of deferred sustaining capital investments, they need to repair all the facilities that got blown up uh as do the Saudis uh as do the Amiradis. So that circumstance with regards to deferred sustaining capital investment has become exacerbated as a consequence of the war. And obviously nobody in the Gulf while they’re blowing stuff up is making the sustaining capital investments that they need to make. So if you’re looking at 2029 2030 uh assuming that the Gulf crisis is over uh you are looking at uh an industry that is production constrained but likely is enjoying very very very high margins. Well, the US certainly seems to be pivoting uh its trade and and natural resource uh security towards Latin America and you mentioned Venezuela a minute ago. I was covering Colombia in the 2010s when there was a major boom in uh ENTP activity in Colombia. Is a similar boom in Venezuela and ENTP something that you’re interested in and looking to to play? I’m just starting to play. Uh there will be a lot of opportunities in Venezuela. Uh Venezuela hasn’t been explored by modern technology ever. There was great technology in Vene in Venezuela. Pedveso was a fantastic uh company, but the workers the people who utilize that technology aren’t in Caracus anymore. they’re in Houston and Calgary and Singapore and places like that. Uh so there’s a real skills shortage in Venezuela. There’s no target shortage in Venezuela. It’s worthy to note though uh that I think there’s still a fair bit of political risk. Yes, the United States kidnapped the thug at the top, but all the thugs that worked for that thug are still in power. And you know, perhaps a deal’s been made. You know, perhaps m Mr. Trump has said to them, you know, you guys can continue to rape and pillage if you want to. You just have to share it with the US. I mean, I don’t know what the political reality in Venezuela is. But I would suggest to you that there’s a multitude uh of conventional uh targets in Venezuela, as an example, in the Marbo basin uh utilizing, you know, uh threedimensional seismic measurement well drilling, all the technologies that have made the United States work. And then there’s this wonderful wonderful uh heavy oil belt in the Oronokco uh which will require lots and lots and lots of capital and lots and lots of technology. Probably wouldn’t be producing if you started working on it now. Probably wouldn’t be producing for eight or nine years, but it’s an absolutely massive pool of oil. Uh in answer to your question, yes. Uh I’m part of funding two exploration ventures in Venezuela. I should mention that over 30 years, uh, I’ve invested pretty heavily in Venezuela four times and I’ve been nationalized four times. So, I’m coming back for two more kicks at the camp. That’s a 100% record. Um, that brings me to one of the next questions. Let’s bring it back to mining. But when we talk about uh you know rising copper prices and gold prices and record profitability for mining companies, governments hear those messages too. And we can enter a period, we could see us enter a period of higher taxes, changing regulations, resource nationalism. I mean if you’re an investor in junior mining or development stocks, how should you be thinking about political risk going through the next five years? I mean, what are the major changes you’re going to have to anticipate? I would suggest that it’s a guarantee. Uh government’s job, I think, put bluntly, is to steal. Uh you reallocate resources from those who you can take resources from with minimal fuss and you redistribute those resources to your constituencies. uh and oil and gas businesses and mining businesses have traditionally been unpopular with voters. During periods of time, as you rightly suggest, when there is a lot of margin in the oil and gas and mining business, the political clamor for theft becomes deafening. Uh you’ll notice at the beginning of the decade of the 70s when the copper price was cheap, there was no nationalization in Peru or Zambia or Congo. They weren’t stealing because there was nothing to steal. when the copper price moved from 30 cents to a buck and a half, all of a sudden nationaliz nationalizations happened like crazy. And it just didn’t happen in places like that. Uh in the West were very smug. Um as an example, uh in the United States when the oil price rose, they put in place excess profits tax. That’s nationalization. They didn’t take all the money. They just took as much as they figured they could get away with. So one thing that resource investors need to do is be much less ethnosentric in their view of political risk. I think that you need to look at a price deck a prospective price deck and look at a net present value and understand that at least half of the economics ultimately are going to go to the host government. So when you’re thinking about a net present value uh after capital of say $3 billion, understand you’re going to see a billion and a half of that that the other guys are going to see the other billion and a half. And that’s likely to occur uh whether you’re operating in the People’s Republic of California uh or in Congo. That’s just sort of what it is. Uh unpleasant to be sure. Uh but that doesn’t matter much. uh it is just what you’re going to have to look at. It’s important for uh and I just need to say this bluntly. It’s important for people who look like you and I to understand that money stolen from us by white people in English through the legislature is just as gone as money that’s stolen from us in tropical Africa by people who don’t look at us who don’t look like us and maybe take the money by more traditional methods. So, I’d like to bring it back to the US. I mean, uh, President Donald Trump has been pretty much at war with the Fed since he returned to office. With the appointment of Kevin Walsh, has he won that war? No. Um, well, let me rephrase that. Um, he I think that Mr. Trump will succeed in job owning short-term rates lower. Uh but it would appear in the market that the Fed has already lost control of the long rate. They’ve been doing their very best to buy longdated debt uh refinanced with short-term notes to bring the long-term rate down, but the long-term rate has been uh really very stubborn. And I think that’s a consequence of the fact that the market uh doesn’t believe that America’s fiscal problems are in the near- term solvable. And I don’t think that an appointment of the Fed chair changes that. Uh we owe at the federal level almost $40 trillion in onbalance sheet obligations and most people don’t talk about it but offbalance sheet uh it’s estimated by the Congressional Budget Office uh that the net present value of unfunded entitlement liabilities Medicare, Medicaid, Social Security, military pensions, federal pensions, it’s estimated that that number exceeds 120 trillion. And that’s not a nominal number. That’s a discounted net present value number. If you juxtapose that $160 trillion in debt with the Fed’s $6 trillion balance sheet, it brings the net debt down to $154 trillion. And if you juxtapose that number with the IRS estimate of the private net worth of all American citizens combined at $172 trillion, you’ll see that the delta between what we have and what we owe is distressingly small. And what we owe is increasing by $2 trillion a year on balance sheet and $2 trillion a year off balance sheet. which means that the delta itself goes away at current spending levels within five years. Now, yes, the government has other assets. But I can’t see myself as a bond holder pitching up and saying, ” Mr. Trump, you owe me yusede.” You know, the probability that I can perfect against the assets of the United States government are very low. The consequence of that is that you’re starting to see in the long what is in effect a political risk premium. And I don’t see that as being solvable. Uh in fact, I see it exacerbating itself. Uh I see a circumstance where the interest on the federal debt uh uses up an increasingly important uh part of the tax base. And I don’t see any arithmetic way around that. You know, people often say, “Rick, what would get you to sell your gold?” And I said, “Well, that’s easy.” uh a balanced budget uh including entitlements and a resolution of $154 trillion in net debt and positive interest rates which is to say interest rates on the 10-year Treasury that exceeded the rate in the deterioration of the purchasing power of the US dollar which I guess from my viewpoint is a never is is a different way of saying never. I just don’t see how the how the math maths. Copper is entering what many analysts believe to be the start of a super cycle. JP Morgan is forecasting a refined copper deficit of 330,000 tons in 2026, growing to around 2 million tons by 2030. Major mining companies are now circling the largest underdeveloped projects of which there are only around five billion ton plus copper deposits in single asset company hands. One of which is copper giants Makoa copper malibdinum project in Colia. This video’s sponsor Makoa hosts an inferred resource of 1.12 billion tons at 0.51% copper equivalent. Right now they have three drills turning and a PA underway. As we often talk about on this channel, mining is just as much about people as it is about the rocks. And Copper Giant is led by a team behind two of the six largest copper mines built in the past 10 years. Their largest backer and shareholder is Frank Gustra with incountry expertise having co-founded Colombia’s largest gold producer Aris Mining. With what we know already, you can do a back of the envelope valuation and that’s pretty exciting, you know, in the back of my mind waiting for that to happen because there will be a rerating and it’s going to be significant. So, we have to just do it right. It’s all about execution in this game. You can have the best assets, but you got to you have to execute intelligently. And I know he’s done it a couple times before. I trust him. If you want to do your own due diligence, you can find out more at coppergiant.co. So, you mentioned earlier that these high bond long-term bond yields were having a depressionary effect on the gold price. At what point do people realize that inflation is the bigger fear and that they they need to own precious metals? I don’t know. Uh I remember uh the decade of the 70s. I remember from reading the decade of the 60s uh 1967 1968 it was very clear that the United States was heading into an inflationary period but nobody paid attention. We’d lived through two very good decades in the 50s and 60s uh the nifty50 and all that. Uh and despite the fact that uh there was concern about inflation, uh that concern didn’t manifest itself until at least 1972. There had to be 5 years of cumulative and compounding impacts of rising prices relative to wages and savings before the sense of inflation took hold across the American public. Now it’s worthy to note uh in the context of the question that you asked in the decade of the 70s uh nominal interest rates rose about four-fold and the gold price rose 25fold. It’s not impossible for interest rates and the gold price to go up simultaneously. If the cause of the increase is uh the deterioration the purchasing power of the US dollar which is precisely unfortunately the circumstance I see. And where does silver fit into that equation? It seems we’ve consolidated around the $74 uh value at the moment um where there’s going to be a major shortfall in silver moving forward. Is that part of the uh precious metals play or do you see do you see it being that short bill being filled anytime soon or is demand going to continue to outstrip supply? Uh I laugh because I’ve been studying the silver market for 50 years and I’m struck by how little I know after 50 years. Uh specifically I don’t know the why with silver. Um, what I do know is that in my life in precious metals bull markets, gold leads. It goes first. And I think that’s because the gold buyer is a fear buyer. Uh, and in my experience, I’m not saying that this is fact, by the way, this is just observation on my part. uh when the momentum in the gold price attracts people to the precious metals narrative particularly generalist investors when the generalist investors come into the metal space what happens is that price leadership changes from gold to silver I surmise although I don’t know that that’s because of the lower unit cost of silver uh particularly poorer people in emerging markets that don’t have sufficient financial resources because of the unit price to invest in gold find themselves particularly in India investing in silver and you’re seeing that occur right now record inflows of silver into the Indian market. I personally and all of this is subjective depending on your own needs and prejudices. I personally save in gold uh and I personally speculate in silver. My silver speculation occurred some years ago when silver was hated. And my whole speculative thesis was that we would have a precious metals bull market and that leadership would change from gold to silver. And when that happened, silver would be unhated. That happened in December of last year and January of this year. You’ll remember a hyperbolic upchart in silver. Uh when that happened, I couldn’t convince myself that silver was hated anymore, which means my reason to own it in the speculative account went away. So I sold 80% of my physical silver. There are other people who might invest or speculate in gold. I don’t I save in gold. It’s uh it’s wealth to me. Uh but I do speculate in silver. And right now I think the silver stocks are much better speculations than silver itself. happy to uh and it really depends on the level of sophistication and appetite for work that your audience has. Uh what you find in natural resource bull markets is that even the beta I define beta as the extent to which the sector outperforms the the broad market is attractive. And so I would suggest that people begin their silver stock portfolio if they don’t have one by buying the best of the best uh wheat and precious which is primarily by revenue uh gold producer but still has a strong silver constituency and just bought a very large silver stream 4 billion dollar silver stream. Um Agniko Eagle uh a senior gold producer that’s uh important in silver and Pan-American Metals used to be called Pan-American silver. Uh those are all good silver names. If you are less ethnosentric and you’re willing to take more political risk um than many Americans are, uh I think you look at companies like industri panles in Mexico. Uh risky because the president of Mexico does not like the mining business and perhaps you look at Hoth Shields or Buventura uh in Peru. If you can afford to take more risk, uh if you can subject yourself to more volatility, and if you’re willing to do the work, then you can come down the quality trail a fair bit. Uh one stock that I regard as potentially severely undervalued is Visla Silver. It’s undervalued because they’re involved in a dispute with a drug cartel uh in Sinoa and the negotiating tact apparently of the cartel was to kidnap 10 of Visla’s workers and murder them. Uh this is not a circumstance that’s going to be resolved anytime soon. And when it is resolved, it’s unlikely that Visla will issue a press release saying we’ve successfully negotiated uh sufficient bribes with this cartel. In other words, admit to a felony so that they can drive on. This is a fairly complex circumstance, but it’s also the third or fourth or fifth best undeveloped silver deposit in the world. My preference for most of your listeners who don’t have a taste for uh speculation that could involve murder uh would be to look at something like Pan-American sil Pan-American medals, pardon me. The attraction there is an undeveloped deposit uh in Argentina and a different undeveloped or or halted deposit in Guatemala. Between those two deposits, you have about a billion ounces of very high-grade silver that the market gives Pan-American no credit for. If, and it isn’t, if one or both of those deposits were to come into production, either one of those deposits would double Pan-American silver production. But you’ll notice that I preface that statement again with the word if. There’s no guarantee that that occurs. Well, you mentioned Mexico, and it’s a very interesting country. Like you said, the uh current president Shane Bum is no fan of the mining industry, but she’s also renowned as something of a technocrat and a pragmatist. A lot of projects have been held up due to a open pit mining ban. Do you get the sense that anything shifting or changing positively in in favor of these companies in Mexico? Uh the answer is I think so. I’ve been investing in Mexico for a very long time and one consequence of that is that I have very good friends in Mexico. One of my friends who is uh a great investor and fairly well-connected politically tells me that there’s a political consensus uh among the PRI that there are six foreignowned projects in Mexico that will be permitted this year because they enjoy substantial local political support. uh and these include open pit mining. Uh the president said that she recognizes that mining is an important part of rural economies in the Sierra Madreal and she has said that despite the fact that she doesn’t like open pit mining to the extent that there is demonstrated local support where she’s asked by the municipalities to permit it that she will cause that to occur. I am told that there are six foreign controlled projects that are slated for approval in

We’ll see. You mentioned earlier that the uh effects of high energy prices could place a dampener on, you know, the global economy. We often talk about copper as being Dr. copper as rising and falling in line with wider economic trends. Does that with copper prices standing uh near record highs today, should that mean we should be skeptical of an increase or could it uh delink from the global economy?

I think in the near term we have to be very skeptical and I think you have to segregate between the near-term and the long term. In the long term uh we needed to have invested in copper capacity 15 years ago. Uh we have inescapable shortfalls on the supply side. If we have a synchronized global depression or recession where you have shrinking demand, you can have shrinking supply and you don’t move the price in the very near term. Uh I think the combination of uh a probable slowdown, liquidity based slowdown and higher interest rates uh which makes the hoarding of copper more expensive particularly in China uh means that there could be near-term price weakness in copper. Uh I’m not saying that’s going to occur. My trading track record is unblenmished by success. But when I look at the big arithmetic uh around the fact that you are al already starting to see the economic impact of higher energy prices and you combine that with the increased uh inventory financing costs associated with uh higher interest rates, I think there could be near-term copper price weakness. Looking long term, it’s difficult not to be a bull. Unless you believe uh and some of my close friends do that we’re going to really sail off the cliff in terms of the economy uh that recession may be too light a word. I’m not an economist so I’m not going to offer an opinion unless you believe in that we are going to be rationing copper by price. At Metals Week in London at the end of last year, there was a paper, I think it was authored by Wood McKenzie, that suggested that the 10 largest copper companies in the world needed to invest $250 billion to maintain copper production at its current level. There’s three problems with that. They don’t have $250 billion. That’s the first one. Uh the second one is that currently the copper market’s in structural deficit. So you need to invest $250 billion to maintain a current structural deficit. And that doesn’t take into account the increases in copper demand. Uh increases in copper demand are estimated to be 1 and a.5% compounded without AI data center uh investments. uh if the uh forecast investments in data centers put forward by you know people like Google uh and Amazon take place and I’m not saying they will by the way I’m not smart enough to know that but if they do uh we will need to produce more copper between now and 2050 than has been mined in recorded history and given the fact that we have underinvested in copper exploration for 30 years. Um that I think is a physically impossible challenge. Uh a second question that I think would be easy for your listeners to understand if they thought about it was the fact that that $250 billion capital number was in constant uninflated $225. Right now, the mining industry is experiencing about an 8% compounded escalation in capital costs. Things like labor and steel and cement, never mind energy costs. And what that really means is that five years from now, what is a $250 billion expenditure becomes a $375 million billion expenditure, pardon me. So, there’s a lot of challenges, a lot of challenges for copper users. There’s a lot of opportunity for copper investors and copper speculators. I mean realistically where could that copper supply come from in uh you know across the world? Are there sufficient major projects that are known about or in under development that could ease that supply gap? If you ask me to say ease it yes uh ease it yes the difficulty is that these they’re very very very large long time frames. The other thing is when we start looking for it, we’re going to find it. Uh we haven’t found the stuff for 30 years because we haven’t looked for it in a concerted basis for 30 years. That whole belt of rocks uh the tethian metallogenic belt that goes depending on your point of view from Turkey to Mongolia or Romania to Mongolia uh the central Asian part of the tethe metalogenic belt has never been systematically explored using technology. uh and it’s an ideal place to look for great big copper pureries. Uh the problem is it takes a very long time for those exploration efforts to bear fruit. Typically a grassroots exploration campaign in a new promising district takes 10 years from initiation to discovery. Uh after the initial discovery, it takes probably three years to drill off the discovery. Then it takes three years to permit and finance the discovery and two years to build a mine. That means if you and I started looking for copper today in Usbekistsan or Kazakhstan or Kyrgyzstan and we were lucky enough to find something, we would impact supply 18 years from now. In order to impact supply today, we would have needed to begin this trek. Pardon me, 18 years ago. Okay. Talking about M&A, we’ve seen an uptick in some major acquisitions in the gold space. uh what’s held it back so long and my I suppose my associated question is what lessons have companies learned about M&A since the last sort of 200720 uh bull cycle? They’ve learned a lot but they’re going to forget them. You know, easy money makes people do stupid things. Uh we aren’t in the easy money phase yet, but the easy money phase is coming. I think this M&A thing has at least two more years to go. at least two uh and you’re starting to see I mean you have been seeing now for three or four years strategic acquisitions a strategic acquisition is like the acquisition that Agniko Eagle just did in Finland where you acquire adjacent deposits that you can use to leverage existing infrastructure. Uh those are really good acquisitions mostly, but you’re starting to see tactical acquisitions now. Uh growth for growth’s sake. The acquisition by Equinox uh of first caliber and then Ora uh exhibited no strategic synergy. Uh it was growth for growth sake. Now, I I happen to believe that both acquisitions were good acquisitions, but what they really were looking to do was increase the size and trading liquidity of Equinox so that they allowed Equinox to enjoy more index inclusion and more passive buying. larger companies have greater trading volumes, higher share prices, and lower cost of capital, which is a wonderful strategic imperative. To the extent that uh Equinox successfully digests Ora uh and the share price of Equinox does well, there are probably I don’t know 10 or 15 uh people who would love to emulate uh the growth by tactical acquisition. We have um in a less exaggerated sense in gold than copper uh underinvested in productive capacity in gold for a very long time and it’s a hell of a lot easier to buy assets than it is to find them. Uh you may have to pay up for them but the market has proven in the last two years that paying up is not a bad strategy. If you take uh which I think is where your question is going the performance of mergers and acquisitions in the gold business in the decade 2000 to 2010 the mining industry’s track record over time of successful M&A is horrific. Uh in that decade uh where the gold price went up sevenfold a little known fact is that the free cash flow per share in the gold mining industry actually fell in that decade. It took real skill to generate uh falling cash yields when the price of the commodity that you produce increased sevenfold. But the mining industry managed to do it. Now, we thanked and excused virtually all of the management teams that were responsible for that failure. And you’re seeing a circumstance today where the institutional investors and some loyalist retail investors like myself uh have been asking the mining companies to exhibit fiscal discipline. uh the mining companies are swimming in cash, truly swimming in cash, and they’re having a very difficult time at these output levels maintaining production. So what Wall Street is going to be asking the mining industry to do two years from now, two and a half years from now, is exhibit sustaining sustainability and growth in terms of output. uh rather than emphasizing fiscal discipline, prudence uh and return to shareholders. Those are very different asks. Well, I can think of a number of mid-tier uh gold mining companies which are, you know, very uh pulling in record amounts of cash but actually have quite depressed share prices in comparison to where you would expect them to be. would they be prime targets for the kind of tactical acquisition to get onto an exchange uh that you were suggesting and you know who would be top of the list for as targets in that respect? Well, you know, certainly if you look at companies like Oceanceiana, um the amount of cash that they’re generating their pipeline and the sustainability of their cash from current operations in particular hail suggest that if the share price doesn’t improve organically in the market that the symbol’s going to change. Uh similarly I think uh if B2 gold can achieve name plate capacity in Nunovet uh the stock is very cheap. It’s worthy to note too that the founder and major driver of B2 Clyde Johnson is stepping down next week. Uh I I’ve known Clyde for many years. He’s a wonderful guy. Very very very tough. Personally, I wouldn’t have wanted to try to take over B2 when Clyde Johnson was CEO. Uh, but that’s about to end. You know, um, I think people will be leery to take over B2 until they’ve proven that they can attain name plate capacity uh, in Nunovet. That’s been a it’s been a very very hard project. Uh actually the market action in B2 reminds me of the market action in Equinox when they were behind schedule and over budget with another high-profile Canadian build. Uh when they proved 12 months late that they could attain name plate capacity uh irrespective of the cost overrun the stock doubled. Uh and I would suspect that if B2 is successful that either the market will notice or an acquirer will notice. Right, Rick? Thanks a lot. A final question for you. If you were starting from scratch today, how different would your portfolio look to the one you currently have? Probably not that different. If I was starting a portfolio today, I would emphasize quality. Uh, and five or six years ago, I emphasized quality. Um, as it got speculative, uh, I got my rewards too quick. And I was able last October to sell, uh, about 20% of my speculative portfolio. And I was able to recoup all of my investment plus pay the capital gains tax. Um, will that prove to be a smart thing over time? I don’t know. but I’m 73 years of age and the fact that I was able to 100% derisk my portfolio and pay the t capital gains tax um without substantially detracting from the upside was very attractive to me. Uh I have you may know this over 35 years graded almost 100,000 portfolios for other people. I do that for free. And one of the things I’ve noticed is that most of the unsuccessful portfolios don’t emphasize quality. Uh they don’t have enough highquality names. And most speculators own too many names. That is they own more names than they can reasonably follow. Uh and I’ve noticed too uh because of a portfolio interest me, I’ll often call the person who submitted the portfolio to me to ask them about portfolio construction. There’s a mismatch uh in most speculators mind between the time that they’re willing to allocate a stock uh and the time that you would rationally expect uh improvements to happen in the company that would justify a higher share price. In other words, many many many speculators have the strategy right. uh shortfall in copper production that could take five years. And those same speculators seem to have trauma holding a stock over a long weekend and the juxiposition between investors often correct strategy and their often idiotic tactics is I think one of the reasons that most people fail with regards to my own portfolio. But whatever wisdom I have has happened as a consequence of 50 years experience in the sector and my continued willingness to do a lot of work. Uh that willingness has taught me that in resource bull markets you make enough money on beta. Beta being defined by me as the outperformance of the sector relative to the broad market. You make so much money on beta that you don’t actually need alpha. Uh I do the alpha because I’m addicted to it and I like to do the work. But for most investors, people who have lives, uh constructing a high quality portfolio of 10 or 12 names and then getting on with your life for five years is probably the right tactic. Regroup. A pleasure. Thank you.