King: Takeaways from Rick Rule’s Resource Conference

A remarkable conference, and I’m bringing tickers to you from it. August 21, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Takeaways from Rick Rule’s Resource Conference BYRON KING It’s mid-July, so where does one go? How about down to hot, muggy Florida for the annual Rick Rule resource conference in Boca Raton? Who doesn’t want to swelter in 95-degree temps in the shade and 95 percent humidity? Then again, and as an old friend – a rompin’ stompin’ retired Navy SEAL – says, “There’s no bad weather, only inappropriate clothing and poor preparation.” No need to fret, though. It was all okay because the heat and humidity was outside, while we were inside a superb venue with excellent air conditioning and many other great amenities. And c’mon; hot weather or no, I was there to learn and learn I did. Because Rick puts on one of the best resource-focused conferences you’ll find anywhere. (Another great conference is upcoming in New Orleans. See the P.S. at the end.) This recent event was four solid days of deep dives into junior and intermediate-scale resource companies, particularly gold and silver, royalty ideas, and the fast-evolving world of copper. Let’s look at four key takeaways, and I’ll list the names of several companies that impressed me greatly: Caveat Emptor When You Buy Gold Day One began with an insightful talk about gold by Dana Samuelson, president of the American Gold Exchange of Austin, Tex. He runs a sizeable operation, and when you sell hundreds of millions of dollars in gold and silver coins and bullion, you tend to know things. First, per Dana, “beware of fake gold.” Dana is a certified numismatist who has served for many years as an expert witness in litigation over quality and purity disputes and for the U.S. government in fraud and other criminal prosecutions. Dana’s point was that, with rising gold prices, the market has attracted fraudsters. Incidents are rising of coins and metal bars that are not what they purport to be. With ingots and some coins, gold and silver may be alloyed down in purity. You can only tell with sensitive measuring techniques. In extreme cases, a so-called “gold” bar may be nothing more than a gold veneer over a mass of far less valuable tungsten. More than a few coins for sale on websites may also be counterfeit, even ones inside those impressive-looking plastic slabs. This is not a reason NOT to buy physical coins, ingots, etc. But it IS a caution to be careful and judicious with whom you deal. Dana’s advice is to buy from established, reputable dealers. You should ask about the background of the people on staff, particularly their expertise in the field, as well as what testing equipment and methods they utilize to ensure the fineness of the metal offered for sale. And one final point: if or when the time comes to sell a coin or metal ingot, it helps to go to the dealer from whom you bought it in the first place. Good dealers ought to be willing to buy back what they sold you, allowing for price changes. And it’s not hard to understand that many dealers don’t want to buy products that they never carried or sold in the first place, like many specialty coins. Who Is Buying the Gold? Dana also offered solid insights into the current worldwide demand for gold. In essence, central bank gold buying has soared in the past two years, while investment demand for gold from Asia is way up as well. As for central banks, the historical trend is that about 15% of total annual global gold output from mines has gone into central bank vaults, but in the past two years, since mid-2022, that number has more than doubled. In fact, right now, about a third of the annual global gold mine output is being purchased by central banks. This alone is a major change in the supply-demand dynamics of the metal. It’s not hard to understand why central banks have increased their gold buying. It’s directly traceable to Western sanctions on Russia over the Ukraine military operation, which commended in February 2022. Shortly thereafter, The U.S. and Western allies froze about $350 billion in Russian-owned U.S. treasury securities; that is, state assets of the Russian Federation. Another way to say it is that the U.S. and Western partners confiscated Russian state funds, and this sent shock waves across the world. If the U.S. can freeze the assets of a nuclear power like Russia, what chance does anyone else have if politicians and bureaucrats in Washington decide to pull a money-grab? The immediate and most effective means to protect assets is to de-dollarize by selling off U.S. treasuries, and use the proceeds to buy physical gold. At least then, central banks can control their own fate via hard assets and avoid counterparty risk. Meanwhile in Asia – mostly China, but many other nations as well – investors are buying more and more physical gold and silver. The idea is to transfer funds out of depreciating local currencies, and at the same time avoid the traceability that comes with something like buying U.S. Treasuries. Meanwhile, gold is a hedge against inflation both in local currency as well as with U.S. dollars. Up and down the line, Asian gold buying is strong. Purchasers range from individual investors to family offices, banks, businesses and even governments, plus the above-noted central banks. Right now, considering the current world situation, people and institutions in many places wish to avoid local currencies and even dollars, and accumulate an immutable asset with the capability to protect wealth across years and even generations. Hence the trend towards gold-buying. Royalty Companies One part of the sector has done quite well with rising gold prices, namely royalty companies. These are not mining plays; they’re more like specialized bankers to the mining industry. And when gold prices rise, shares in royalty plays tend to move early and fast. Here’s how it works. Let’s say that an exploration or development project is proceeding apace out in the field, but the company needs cash. Management can issue new shares, but that dilutes existing shareholders. And most commercial banks won’t lend at decent terms to a project that isn’t producing gold or cash flow. So, along come royalty companies with a business model designed to advance funds into a project in return for a future payout, or even a stream of actual metal, when the project goes into production. There’s much geological thinking, engineering, and solid banking involved in the business, and every deal is different. However, the idea is that the royalty company puts money into a project in the early days and then benefits long afterwards from its foresight and patience. One great advantage of the royalty model is that the company avoids most day-to-day issues of running a mine. Royalty companies generally don’t worry too much about the price of diesel fuel, labor issues, operations logistics, or anything else. They put their funds into play with the project operator and then, after a while, collect a payout on the backend. You may have heard of some of the biggest royalty plays such as Franco Nevada (FNV), market cap over $24 billion; or Royal Gold (RGLD), market cap over $9 billion. These are both great companies, and have done well as gold prices rose, but they’re also so large that it’s kind of hard for them to grow organically. Right now, at this stage of the gold cycle, my view is to focus on relatively smaller royalty plays that can also benefit from rising gold prices, but with the ability to grow at faster rates; or they might get bought at a premium by the big guys that must deliver numbers back to Wall Street. Two names that I particularly liked at the Rule Conference are Osisko Gold Royalties (OR), with a market cap of about $3 billion; and a much smaller company named Empress Royalty (EMPYF), with a smallish market cap of about $34 million. Osisko came to life as a royalty play in 2014, as a spinout from the largest gold mine in Canada, called Canadian Malartic, located in Quebec (yes, I’ve been there). This mine is truly a long-life, cornerstone asset, paying out a lucrative, 5% “net smelter return” from operations. All this, and over the past decade Osisko also acquired interests in over 180 other royalties, streams and precious metal offtakes from across (mostly) North America. It’s fair to say that Osisko will be spinning royalty cash for many years to come. Another impressive company at the Rule conference was Empress. It’s relatively new, founded in late 2020. I’ve followed Empress for three years and watched management deftly deploy cash into a list of worthy assets in Mexico, Peru and Africa. Everything takes time, of course, but things are paying off now. Recently, Empress reported a profit, with even better prospects for the future as early investments move towards production and cash flow, and cash begins its journey back to the mothership. With both Osisko Gold Royalties and Empress Royalty, I foresee solid organic growth from the business model and the positivity of generally rising gold prices. That, along with continuing and growing profitability from royalties and streams coming home. Plus, we have the distinct possibility of upside via third-party acquisition. [Emergency DNC Update From Rickards]( Jim just put the finishing touches on a major update to his 2024 election thesis and it needs your viewing ASAP [(click here to watch now).]( And it all centers on a shock he sees taking place this week at the Democratic National Convention in Chicago… A shock that could unleash a “hidden” profit window from now until election day for those who are prepared. We’re talking about targeting gains as high as 100%, 200% or even 500% in the next few months… [Click here now to watch Jim Rickards' Emergency Election Briefing.]( Gold, Silver, and Copper Now, let’s look at two promising companies that are each developing projects in the search for gold, silver, copper and more. These are not mining companies, as such, because just now they are not moving rock, crushing ore, and delivering products for sale. Instead, these companies are exploring and developing their mineral claims to move along the journey and become producing mines in the future. It’s important to learn now about strong development companies like these, while they’re still in the pre-operational stage. These kinds of plays offer significant future upside in terms of new discoveries, impressive development, and possible buyouts or spinouts to larger companies. Along these lines, “All wealth is created by a drill bit,” declared Sean Roosen, CEO of Osisko Development (ODV). “The rest is just filling in the details.” Speaking of drill bits, about twenty years ago, Sean discovered and developed the above-noted Canadian Malartic gold mine in Quebec. Then he sold it for a couple of billion dollars while spinning out a sturdy royalty into Osisko Gold Royalties. Now with Osisko Development, which is an entirely different company, Sean is back in the exploration and development business. His plan is to work in past-producing areas that still offer high probabilities of significant gold, and in the process uncover what the old timers missed. Thus, Osisko Development is currently working in three well-endowed mineral arenas: the Cariboo Mining District of central British Columbia; the Tintic Project in Utah, along a major geologic trend south from the gigantic Bingam Canyon Mine, operated by Rio Tinto; and the San Antonio Gold Project in Sonora, Mexico. In each area, Osisko Development holds large mineral claims and land packages, all backed up and supported by significant mining and production history. In this regard, each of these three areas present opportunities for large scale exploration with significant discovery upside. The company has aggressive, well-funded programs to conduct geologic work, drilling, engineering assessments and more. In a rising gold price environment, strong news flow should feed back towards the share price as Osisko Development creates internal value by building gold, silver and copper reserves. It’s a long-term buy and hold. Another great company I saw at the Rule conference holds phenomenal geologic real estate, and boasts of seriously large resources of gold, silver and copper, namely Seabridge Gold (SA). Over the past twenty years, when gold prices were much lower than now, Seabridge acquired a stable of gold-silver-copper projects across the U.S. and Canada. These include the Three Aces play in the Yukon (which I’ve visited), as well as a massive deposit called KSM in British Columbia, which may be the largest undeveloped gold project in the world at over 47 million ounces. And I could list more names and locales (Northwest Territories, Nevada, etc.), but believe me when I say that all of the projects are more than impressive. Added together, Seabridge’s gold, silver and copper numbers are eye-popping, which makes the company attractive as a takeover target. That is, hers’s the kind of play that could move anybody’s proverbial needle. Meanwhile, Seabridge is cashed up, and work is proceeding apace with exploration and development efforts. Whether on its own, or in partnership or takeover from another company, Seabridge is going places. In the near-term, I expect the company’s share price to do well just on the rising tide of gold prices. Longer-term, Seabridge is the kind of company that you buy and park away in a retirement or college account. The downside is limited, and the upside is wide open. Note: none of the companies I’ve discussed here are official recommendations from Lifetime Income Report. They will not be in the tracked portfolio, but I follow them and like what I see. If you buy shares, be sure to watch the charts, wait for down days in the market, use limit orders and never chase momentum. And with that, I’ll end here and thank you for subscribing and reading. Best wishes… Byron W. King Contributing Editor Rude Awakening P.S. – Consider attending the New Orleans Investment Conference this upcoming Nov. 20 – 23 for another superb resource-themed event. Note that it’s after the forthcoming presidential election, so the information will be all about how to invest in the context of a new and inbound administration. This one, down in the Big Easy, in the Riverside Hilton adjacent to the Mighty Mississippi, is the granddaddy of all the hard asset get-togethers. It dates back to 1974, begun by the late, legendary Jim Blanchard. This year marks the 50th anniversary of this important conference, so that alone offers a setup to be epic. For more information, click [here](. Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Biden: Lies, Damn Lies, and Statistics SEAN RING This much is clear: Joseph Robinette Biden is something we should clean off the bottom of our shoes. That this cretin ever came to hold the highest office in the land is a stain Americans will wear with everlasting shame. It’s all finally coming out; too little, too late. That Joke Biden was a liar was confirmed by his title: politician. As the old joke goes, “How do you know a politician is lying?” “When his lips move.” And if Joke Biden was anything, he was the quintessential politician. He’d palm candy from the babies he kissed if he could get away with it. This, we all knew. But now it’s out in the open, no longer deniable. Company Men who defended him all along will keep doing it, no matter the damning evidence. But the fence sitters can’t unsee this. And Biden’s enemies will feel a sense of vindication for the crap they took over the past 3 ½ years. Let’s get to the three stories that have unraveled before our eyes. Lies: The Russians… Didn’t Do It! First, let me state my belief plainly: [The Wall Street Journal article]( claiming the Ukrainians got drunk one night, drew up the plans, and then blew up Nordstream all by themselves is the biggest waste of ink since Johnny Depp got “Winona Forever” tattooed on his bicep. The elephant in the room is that the Russians didn’t do it, as I’ve written [more than a few times in this very newsletter](. The great journalist Seymour Hersh blamed the US. The Journal’s “The CIA tried to stop them!” doesn’t wash with me. It’s easy to see how easily the CIA could’ve trained the Ukrainians on such a deep dive with explosives, probably supplied them with the requisite equipment, and then let them off the leash. Germany’s Chancellor Scholz probably knew about the operation beforehand and reluctantly agreed, thinking the US and Ukraine couldn’t possibly be caught. After all, [Biden embarrassed Scholz at a joint press conference]( by saying, “We will bring an end to it” in front of the cornered Chancellor. The Poles, though not a part of the operation, were positively delighted when the pipeline was destroyed. But now, the chickens are coming home to roost. From [Zero Hedge]( Russia's Foreign Minister Sergei Lavrov has responded to the WSJ's recent reporting, saying Monday it was "clear" the US ordered the Sept 2022 attacks on the vital Russia to Germany gas pipelines. The central thesis of last week's Wall Street Journal report is that a Ukrainian crew conducted the covert attacks with the oversight of Kiev's then-military commander-in-chief, but that Zelensky tried to stop it when he got a call from the CIA. But the general went 'rogue' and carried out his own op anyway. Lavrov responded during a visit to Azerbaijan on Monday by stressing, "It is clear that to carry out such a terrorist attack, there was a command from the very top, as they say. For the West, the very top is, of course, Washington." As to the WSJ's narrative that the idea to blow up the pipelines was hatched among Ukrainian officers and businessmen having a wild boozy night, Lavrov told the Izvestia outlet that this is "not serious." Lavrov is the most respected diplomat on the planet and speaks for Russia, which means they know this story is nonsense. Now, [Germany suddenly wants to cut all military aid to Ukraine]( which would cripple their war effort. [Bundestag lawmakers are now demanding Ukraine pay them back for the Nordstream damage]( probably because they’re too afraid of the US to ask them directly. All this because Biden couldn’t control Victoria Nuland. But what’s worse is Biden’s grift in Ukraine. [Secret Gold Back currency RUINING Biden’s plans for a digital dollar?]( Secret Gold Back currency RUINING Biden’s plans for a digital dollar? There is a secret currency that’s beginning to spread across America. You only have a limited time to claim one of these “Gold Dollars” for yourself. You’ll receive one of these [“Gold Dollars” as a FREE gift]( once you upgrade your account… Watch this [short 2 minute video]( and respond by Wednesday at midnight. [Click Here To Learn More]( Damn Lies: Corruption Everywhere Too little, too late, indeed. The House says it’d impeach Biden if he weren’t the lamest of lame ducks. [The New York Post]( – notice it’s not The New York Times… I checked – wrote up a peach of an article detailing all of Joke Biden’s transgressions. But [Zero Hedge]( summarized it nicely, saving you some time. However, it won’t save you from your anger. - Foreign Payments: The Biden family reportedly received over $27 million from foreign sources, often through shell companies, with some funds directly reaching Joe Biden’s bank account. - Burisma Involvement: Hunter Biden was paid $1 million annually by the Ukrainian company Burisma. He used his influence to support the company and allegedly shut down corruption investigations. - CEFC China Energy: Hunter Biden received a $5 million "interest-free" loan from entities linked to CEFC China Energy, intended to benefit the Biden family. - Vice Presidential Influence: Joe Biden allegedly used his position as Vice President to support his son’s foreign business ventures, meeting or speaking with his son’s business partners from Ukraine, China, Russia, and Kazakhstan. - $3.5 Million from Russian Oligarch: Hunter Biden’s businesses received $3.5 million from Russian oligarch Yelena Baturina shortly before a reported meeting between her and Joe Biden. - $8 Million in Loans from Donors: The Biden family allegedly obtained over $8 million in loans from Democratic donors, including nearly $6 million from entertainment lawyer Kevin Morris, covering various personal expenses for Hunter Biden. - DOJ Favoritism: IRS whistleblowers alleged that the Justice Department gave Hunter Biden preferential treatment, blocking investigations and concealing evidence to avoid charges. Filthy. Filthy dirty. Next time one of your leftist friends claims Biden was a great president, show them this list. He shouldn’t have gotten within 10 miles of the Oval Office. And feel good about yourself. You knew all along. Finally, we have some numbers tampering. And Statistics: Fake Payroll Numbers Goldman has called BS on the BLS, the Bureau of Lies and Storytelling… sorry, the Bureau of Labor Statistics. It’s rumored the BLS will revise its nonfarm payroll numbers downward by 600,000 to 1 million jobs. That means it was a lie every time nonfarm payrolls came in above the consensus from March 2023 to March 2024. Credit: Goldman Sachs How can they do that? Zero Hedge was none-too-pleased about it. Credit: [@zerohedge]( It’s another bit of filthy business. They goosed the payroll numbers to make Bidenomics look far more benign than it was. But honestly, should you sell your stock right now? Of course not. We’re a hair away from the SPX all-time high. Once we get above 5,670, we’ll be on our way to 6,000. It’s crazy to get short right now. The SPX, Nazzie, and Russell 2,000 are again above their 50-day moving averages, which means we’re in a bull market. If we have panic selling on Wednesday, we may need to reconsider. But I doubt it. And gold? Gold futures closed at 2,541.30, while silver futures closed at 29.30 today. It’s all coming together now. Wrap Up In a 19th-century speech, former British Prime Minister Benjamin Disraeli decried, “There are lies, damn lies, and statistics.” Joke Biden has taken that sentiment and somehow elevated or desecrated it to a new level. Believe nothing of what you hear or see of this administration. It can’t end soon enough. All the best, Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. 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