Categories: Base Metals / General Market Commentary / Precious Metals
Topics: General Base Metals / General Market Commentary / General Precious Metals

Rick Rule’s Top Stock Picks

Rick Rule’s Top Stock Picks

Sprott's Rick Rule names Ivanhoe Mines, Altius Minerals, Alterra Power as top stock picks.

In an interview with BNN, Rick Rule, President and CEO of Sprott US Holdings, discussed his top stock picks: Ivanhoe Mines, Altius Minerals and Alterra Power.

Here is the breakdown of his top stock picks and how he thinks the precious metals, copper and energy markets will fare in 2017.

Ivanhoe Mines (TSX:IVN)
Despite already having a successful share price performance–its stock has gone from 60 cents to $2.29 in the past nine months–Ivanhoe continues to represent outstanding speculative value.

Two of their projects are both tier-one deposits – Kamoa, a joint venture between Ivanhoe Mines and Zijin Mining, has been independently ranked as the world’s largest, undeveloped, high-grade copper discovery. Platreef, located in South Africa, has world-class deposits of PGMs (platinum and palladium).

The Kamoa copper project includes the Kukula deposit, a major extension of the Kamoa copper deposit, which the company discovered in 2008. This deposit isn’t coming into full production until  2019-2020 – But once it is, the mine’s life will last approximately 70-80 years.

According to Rule, Kipushi – also known as King Leopold – is the highest grade undeveloped zinc-copper mine in the world. The cutoff grade is six times the international average. Ivanhoe Mines acquired its 68 percent interest in the Kipushi Project in November 2011. The remaining 32 percent is held by the DRC’s state-owned mining company, Gécamines.

Rule was also impressed with the company’s balance sheet. The company has 5 million cash in the treasury and a solid financier. The company is financially backed by Robert Friedland, who has had a “serially successful” track record – he’s led and financed the discovery of Ft. Knox, Voiseys Bay and Oyu Tolgoi.

There are some risks for the stock. The biggest thing for investors to consider is that the Democratic Republic of Congo and South Africa – where Kamoa and Platreef are located – tend to stall production due to political unrest and unsafe working conditions. Also, the company has lots of expenditures in front of them in the next few years – but partnerships with Chinese and Japanese governments will go a long way when mitigating such risks, he said.

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