In the middle of June I caught up with Nick The Mining Book Guy and we had the chance to talk about him meeting Rick Rule, mining projects in West Africa, and Gold.
Welcome back to The Next Bull Market Move, how are you today Nick?
Great and thanks for having me Kerem.
Before the interview we were talking about you meeting Rick Rule, what was that like, that experience?
So I happened to be in San Diego for a long weekend, my first time for a vacation, and I thought I should try to do a little trip up to Carlsbad, just a 30, 40 minute drive north of San Diego, and it was neat because I got to meet the whole I guess food chain of Sprott.
I was very lucky to meet Andrew Jackson who’s one of the lead in house geologists, my broker Sam Broom, and then extra lucky to meet Rick Rule as well. I mentioned some of the great interviews you’ve done with him, and immediately he responded by saying Kerem really prepares for these interviews. He actually knows what he’s talking about, so that was great to hear.
Rick is always very generous with his time, so that’s nice to hear. Okay, so I’m going to give you a quote from Peter Cundill, who was one of Rick Rule’s mentors early in his career.
“All we try to do is buy a dollar for 40 cents." So what does that mean to you, as a speculator in the resource space?
It’s a great question because sometimes people like to put the investing world in its own bucket, and the speculating world in its own bucket and you don’t think necessarily that you can learn from both sides.
And I disagree with that and I’m sure that Rick does and I think using some examples from my speculating career in the junior space, buying a dollar for 40 cents, I think that if you turn that a little bit you can find a lot of these small juniors that are selling, if not for cash value, maybe a little more than cash value, but the immediate upside would be some type of catalyst, like a drilling opportunity in the near future.
And so maybe not everyone would agree with me, but if you have that combination of selling for just over cash value, and drilling, if the drilling, if the attempted discovery fails, the stock often won’t go down too much. But if it works out, that’s how you immediately get a multi-bagger.
Now of course, you could get that as well for a stock that’s already moved up three or five times, but your risk reward is very skewed and so I think that quote absolutely applies to what I do even though it’s turning that a little bit.
Great, let’s move onto Nickel. What’s your opinion on that sector? Are you interested in it? Have you been researching anything?
I am definitely interested in it, and I think I immediately take a bit of a different perspective from what I tend to hear. I hear so much from the demand side about electric vehicles which I think is excellent, but I’m still a bit skeptical about it playing out as optimistically as I see.
On the other hand, what I really love about nickel is that it is very difficult to make those discoveries, especially the class one discoveries that my understanding is will be needed for the electric vehicle demand side.
So you have this very interesting supply side which I can wrap my head around, honestly, I still have more difficulty wrapping my head around the lithium and cobalt side, on supply.
I know that there’s a lot of people interested in optionality plays, there are some nickel plays that have moved up and that I’m not quite a fan of. But I am on the lookout for them. I just don’t own any at the moment.
But if somebody really can find the next Norilsk, which is the big one up in Russia, you will be handsomely rewarded and you do really have to look around the world. Nickel is not something that like uranium, most of the best plays are in Saskatchewan, you really have to look around. So I don’t own any right now, but I’m very keen to find an early stage discovery story with that big potential.
Yeah, last week I got the chance to interview Mark Jarvis who is the CEO and President of Giga Metals and he’s got a big Nickel sulphide deposit in British Columbia, so if anyone wants to check out the interview just go to this link.
Okay, let’s move on to gold. What’s your opinion of gold at the moment? It seems to be doing pretty much nothing, it’s just consolidating around 1200 - 1300 area, what are your views on that?
So you know, I used to be so in touch with the gold price and trying to understand the macro environment. Honestly, I barely even pay attention to the day to day price. What I love though are that some stocks are working out quite well and it’s a bit of a stealth bull market. And the one area which I don’t see much mainstream talk at all is that a lot of the better performers are some of the mid tiers in West Africa.
There’s one I don’t own right now but unfortunately I sold near the bottom last year, Teranga Gold is over double since the beginning of the year, and they’re an emerging mid tier in West Africa.
I’ve also noticed that there are at least five emerging mid tiers in that area. You also have development projects, you have exploration projects, and to kind of tie this in with Rick Rule, there’s this classic Rick Rule article, it was called Finding Bargains Down Under with Rick Rule from 2013, and he had talked about the consolidation in West Africa and how exciting it would be over the next four or five years. Unfortunately that didn’t really play out between 2013, 2018, but I think that had just been delayed.
Great. I know you’ve done a lot of research about West Africa and I think the average investor still doesn’t really have much information about that region or if it’s an up and coming area. There’s a video you did recently about your top pick, Mundoro Capital. Give us a few reasons why that’s your top pick.
Well first of all thanks for bringing that up Kerem and I’m glad you enjoy watching my videos. And I don’t like to just pump the video but hopefully people who watch them get something out of them even if they’re not interested in the company, so I don’t want to come off that way.
But with that said, yes, Mundoro is still my top pick and I guess I will add that it really fits my style of investing it even fits some of the stuff we talked about with Peter Cundill, there has been a need for patience with a company like Mundoro, MUN on the TSXV, but I do think this summer and this fall it could be coming to fruition because they’ve had some of the best land for a junior in the Timok area of Serbia.
Alright, thanks Nick. Thanks for coming on.
Many thanks Kerem.
The Next Bull Market Move
For more information on Nick and what he’s up to visit: https://www.youtube.com/c/MiningBookGuyTV
Disclaimer - Interviews are conducted in the name of research and learning from the best. Only you can decide what makes a good speculation/investment.