Who is Rick Rule?
Rick Rule is a resource investor known for probing mining management rather than accepting a polished presentation. In a published interview with mining educator Donald Gentry, he explains the questions he asks to understand a junior company’s assets, people and financing.
How the method works
Start with downside and liquidation value, then ask what important uncertainty the company is trying to resolve. Find out how much answering that question will cost, whether the cash is available and whether the people have done comparable work before.
What makes the approach distinctive
The strength of this approach is its insistence on a testable plan. Exploration creates information in stages. A company that cannot explain the next meaningful question, the budget and the financing has not given an investor enough to evaluate its proposal.
Turn the next management interview into a research record. Save the original promise, expected timing and cost beside the eventual result. In the playbook, distinguish money already available from money management hopes to raise. Check how new financing changes ownership per share.Trendstockers takeaway, not an investor quotation
Where it can go wrong
Liquidation value is uncertain and specialist assets may have few buyers. Experienced management can still fail. Our practical extension is to record the three risks most capable of breaking the case, rather than giving a convincing interview the weight of a guarantee.
Read the original sources
Follow the underlying material and form your own view.
Sources behind the facts · 3 additional
Additional references for sourced investor facts in Terminal. These are not claims of verbatim quotations.
