Rick Rule: An ‘explosive’ bull market is coming in this commodity
From Tekoa Da Silva, Editor, Sprott’s Thoughts:
I had the chance to sit down once again with Mr. Rick Rule, President & CEO of Sprott U.S. Holdings Inc. It was a fascinating discussion as usual, as Mr. Rule recounted, “the most spectacular financial event of my life … [which was] the last uranium bull market.”
In reflection, Mr. Rule noted, “the circumstance we saw [during the last bull market is] eerily similar to the circumstance we see [now] … the cost to produce a pound of uranium is about $60 per pound … and yet the market clearing price … is about $20 per pound.”
So, “we make the stuff for $60,” he added, “and sell it for $20. [The industry] loses $40 a pound … We’re [only] able to do this … because we have a surplus in uranium.”
Exhaustion of that surplus however, “is a when question, not an if question,” Mr. Rule noted. The ultimate uranium price response may be explosive when it does occur, Mr. Rule concluded, as power plant consumers will purchase the product at any available price.
Here are his full interview comments: