Rick Rule: “Gold Companies are  selling at the greatest discount”

Rick Rule, President and CEO of Rule Investment Media, joins Kitco Mining’s Paul Harris to discuss gold’s breakout, silver’s leverage, record copper prices, and why mining investors should focus on the gap between price and value. Rule says gold remains sensitive to U.S. real and nominal interest rates in the near term, but longer term he expects artificially low rates and quantitative easing to support the metal. He says silver can take leadership when gold momentum attracts generalist investors, while copper’s record run reflects years of underinvestment in exploration, development and productive capacity, alongside supply problems at major operations. Rule also weighs Ivanhoe Mines’ Western Forelands copper discovery in the Democratic Republic of Congo, including its grade, 100% ownership and access to existing infrastructure. He says host countries can ultimately capture about 50% of a deposit’s economic value after capital is returned, and argues streaming agreements could help governments participate in price upside while giving companies clearer terms. Rule also discusses why North America is not immune from fiscal risk, what gold-equivalent resources can obscure after Collective Mining’s maiden resource at Guayabales, and why investors must separate market price from underlying value. “Money is made on the delta between price and value,” he said.