Sprott monthly market update with Rick Rule: Cobalt bubble coming; Kaminak & The Yukon; streaming & royalties

In the current bull market, with more equity available, streaming and royalty companies continue to provide much needed revenue in the base metals and industrial materials sectors.

By-product precious metals revenues in a base metals companies can trade at 5 – 7 times EBITDA and top tier companies at 15 – 20 times EBITDA. Gold equities are in the midst of a momentum trade having been under-owned and gold being the one resource that is actually moving up.

In the very near term, if the gold price doesn't follow the equities, some weakness in the junior equities is possible. The discovery market in the 90s caused a dramatic bull run in the juniors, a big precious metals discovery now could be spectacular although the highest chances of large discoveries are in political unstable or risky areas that have been under explored.

Successful long term speculation discipline and rationality set apart the successful long term speculator; money is made in the long term by the arbitrage between stupidity and reality.

In the current bull market, with more equity available, streaming and royalty companies continue to provide much needed revenue in the base metals and industrial materials sectors.

By-product precious metals revenues in a base metals companies can trade at 5 – 7 times EBITDA and top tier companies at 15 – 20 times EBITDA. Gold equities are in the midst of a momentum trade having been under-owned and gold being the one resource that is actually moving up.

In the very near term, if the gold price doesn't follow the equities, some weakness in the junior equities is possible. The discovery market in the 90s caused a dramatic bull run in the juniors, a big precious metals discovery now could be spectacular although the highest chances of large discoveries are in political unstable or risky areas that have been under explored.

Successful long term speculation discipline and rationality set apart the successful long term speculator; money is made in the long term by the arbitrage between stupidity and reality.

Talking points from this week's interview:  

• Junior equities may be in for some consolidation

• A big discovery to shake up the market

• How high quality deposits attract big premiums

• Over time good people will make you good money

• A cobalt bubble may be in the makings

Rick Rule began his career in the securities business in 1974.. He is a leading investor specializing in mining, energy, water, forest products and agriculture. Rick founded California-based Global Resource Investments, Ltd., which grew into a much larger organization with significant affiliated companies. As Director, President, and Chief Executive Officer of Sprott US Holdings, Inc., Mr. Rule leads a highly skilled team of earth science and finance professionals who enjoy a worldwide reputation for resource investment management.

BY COLLIN KETTELL