Rick Rule is a resource speculator and CEO of asset management firm Sprott US. Rule has generated billions by investing in obscure mining companies worldwide and through commodities trading. Sprott serves 250,000 global clients with $21 billion in assets under management.
We’ll examine Rick Rule’s investment history and analyze three of his most successful stock picks.
Who is Rick Rule?
Rick Rule launched his investing career in the 1970s while still in college. He traded oil futures and built a small fortune as prices surged throughout the decade. However, Rule lost everything in the early 1980s when global oil production expanded and prices collapsed.
Rule established asset management firm Global Resource Investments in 1992, focusing his expertise on resource and mining investments for private clients. Eric Sprott acquired Global Resource Investments in 2011, with Rule continuing as President and CEO of Sprott US. Rule also became Sprott’s largest shareholder.
In 2021, Rule transitioned away from Sprott’s daily operations while remaining managing director and operating a family office. His estimated net worth stands at $133 million.
Rick Rule Investment Style
Rick Rule employs a speculative investment approach, pursuing significant risks when substantial rewards are possible. Throughout his career, he has concentrated on small-cap and mid-cap mining companies, many trading on OTC markets or international exchanges. These companies frequently operate mining concessions in Africa, South America, and Asia.
When discussing his investments, Rule emphasizes that many declined 50% or more before reversing course and generating profits. He candidly addresses several major losses occurring before or after his greatest successes.
Rule practices contrarian investing, seeking value in beaten-down mining sectors or commodities that markets have abandoned.
Rick Rule Stock Picks
Rule’s most successful picks include personal investments and those made through Global Resource Investments and Sprott US. Here are three of his most profitable ventures.
Tenke Mining Corporation
One of Rick Rule’s most successful high-risk investments occurred in Congo during 1996, as civil war consumed the country. Investors had abandoned Tenke Mining Corporation, which controlled a premium copper deposit in the war-torn region. Despite elevated copper prices, Tenke Mining shares traded at just $0.19 each.
Rule recognized the calculated risk was justified given the massive upside potential if the company could deliver quality copper to global markets. The Congolese civil war concluded within years of Rule’s investment, sending Tenke Mining shares soaring. Rule exited at $16 per share—an approximately 8,400% return.
Paladin Energy
In 1998, Rule identified Paladin Energy, a small Western Australian mining company entering uranium production. Rule had sought uranium exposure because it traded at $8 per pound while International Energy Agency calculations indicated $25 per pound value. With nuclear power generating 20% of US electricity, uranium demand appeared stable.
Rule acquired Paladin shares at $0.10 each. Within a year, the stock plummeted to $0.01, but Rule believed he was early rather than wrong.
His conviction proved correct. By 2001, uranium prices reached $145 per pound and Paladin Energy traded at $10 per share. Rule had largely exited by $8 per share, still achieving an 8,000% gain.
Rule also invested in four other junior uranium miners between 1998 and 2000. Even his worst performer generated approximately 3,000% returns.
Atlantic Gold
Rule backed Atlantic Gold through Sprott beginning in 2011. While Rule hasn’t detailed his original investment thesis, he maintained his position partly because of the company’s challenges.
Atlantic Gold struggled as gold prices declined in 2012 and remained depressed through 2018. However, Rule recognized that Atlantic Gold’s mining claims held considerable value for established mining companies better positioned to weather downturns. His assessment proved accurate when St Barbara Mining Co acquired Atlantic Gold in 2019.
Rule reports Sprott achieved an 1,100% profit over eight years.
Rick Rule’s Lifetime Performance
Rick Rule provides limited details about his long-term performance. While achieving spectacular trading successes, he acknowledges significant losses as well.
Rule reportedly received 100 million Sprott Inc. shares worth $1 billion when Global Resource Investments was acquired in 2011. Though Rule remains Sprott’s largest shareholder, the company’s stock has declined approximately 40% since the buyout.
Rick Rule’s current estimated net worth is $133 million.
Conclusion: Rick Rule Stock Picks
Rick Rule ranks among the most successful resource investors. His concentration on small-cap mining stocks produced several high-risk, high-reward victories. Investments like Tenke Mining Corporation and Paladin Energy generated returns exceeding 8,000%. Though Rule recently stepped down as Sprott US CEO, he continues influencing the asset management firm’s portfolio strategy.
