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Transcript Greetings and thank you for joining us at, I’m here with Rick Rule of Sprott Asset Management. Rick, thank you for joining us.

Rick Rule: Always a pleasure, thank you for having me. Rick, this time last year there were over 200 companies, we’ve talked to the people hosting this, they said there was about 70 companies today. Is this what the bottom feels like, or is this what a bottom feels like?

Rick Rule: I think this is a very good indicator of a bottom, certainly. Diminished participation, both in terms of the number of attendees and the number of issuers is a very good thing. We have not, as you and I have talked about in previous interviews, seen professional capitulation in this market, issuer capitulation. But this may be a good forward indicator of just that. It may be a good forward indicator of issuer capitulation which is always the mark of a market bottom. Are you optimistic that gold will go to 1,000?

Rick Rule: No. I have an opinion about the gold price, but as we’ve talked about before I’m not an economist, I’m a credit analyst. So while I have an opinion, I don’t assign my opinion any professional value whatsoever. Yeah, but at this point. I mean, if it got worse, wouldn’t it be a lot better for you?

Rick Rule: Absolutely. I mean, for me, I buy precious metals, at least gold and silver, for insurance purposes. So for me, I buy the stuff every month. If the price goes down, it means my insurance premium goes down. What rational consumer wouldn’t value lower priced premiums? Most gold and silver buyers have a very different point of view. They’re buying it as punters, they’re buying it as speculators, and they have a crisis of confidence when it goes down as opposed to goes up. I buy it as a store of value, and as an insurance policy. So for me, lower gold price are a benefit but I realize I’m in a distinct minority. You’re the keynote speaker at a lot of these shows. I only come to a few, so I’m at the San Francisco show. Not that many attendees, the mining companies are kind of demoralized. Is this the feeling around the world when you go to see these shows?

Rick Rule: This is ebullient. I was just at Mines & Money Sydney, in Australia, and I think I am the only bullish voice in Australia. In ten days in Australia, as a consequence of being this sort of unique lone wolf, I was interviewed by 22 news outlets, including the Australian, which is in Australia sort of a combination of the New York Times and the Wall Street Journal; by the Australian Broadcast Corporation. I can say without a doubt that as depressed as this market is, the Australian market is more depressed, which is a different way of saying better. So you’re very comfortable and confident in buying right now?

Rick Rule: Absolutely. It doesn’t mean I’m going to be right in the near term. But listen, the TSX.v is (down) 75% in three years? I mean, the market is 75% less risky? Every set of circumstance that existed in 2010, every argument for the bull market, exists today. What’s different, is that the stocks are off by three quarters. What part of that shouldn’t people like? If people walk out of this hotel, go down the street to Union Square, that great retail shopping area, who wouldn’t like a 75% off sale if they like the goods? Anybody in their right mind? What sectors are you interested in as far as the resource stocks, or does it not matter? Do you care about copper, uranium, gold?

Rick Rule: Yes, yes, and yes. I am particularly attracted to companies that are being produced for a cost that exceeds their sales price. I am particularly interested in industries that are in liquidation. Uranium is in liquidation. Will it go up next year or the year after? I don’t know but I think it’s a three or four year double. As an old man, the idea of a probable four year double is pretty attractive to me. I’m more attracted to platinum and palladium, because they’re precious metals, but they’re precious metals with a difference. The supply demand scenario is more in their favour. I live in California, which means I love water. I love water, but investors couldn’t care less about water because the thesis might take a year to play out, or two years. Most punters, most of my competitors, have apoplexy holding stock over a long weekend. I can afford the duration associated with water. Do you think we’ll start to see some mines shut down especially in the precious metal sector?

Rick Rule: Absolutely. Imminently?

Rick Rule: Absolutely imminently. I mean, these aren’t my number but Scotiabank says that on a total cost of production basis, which includes exploration costs and acquisition costs, that the all in cost to produce and ounce of gold industry wide, worldwide, is $1,760 an ounce or something like that. So you make this stuff for $1,760, you sell it for $1,260. You lose $500 and being a miner you try to make it up on volume. This is profoundly tough math. It’s frustrating because they are wasting their asset. The mine is going to deplete itself so why sell it for a dollar profit or at a loss?

Rick Rule: Well, you know most mining company managements don’t believe in their product. Most people who are in the gold mining business are in the gold mining business because their cost of capital is low. If gold miners believed in gold mining, they would hold their working capital in gold. They mouth the sort of precious metal story about how gold is better than dollars, but they keep their working capital in dollars. Don’t confuse the interests of management as being in every way aligned with your interests. They aren’t. More companies should be having mergers and amalgamations if they were caring about their shareholders. But they don’t, they care about their salaries. They’re just like you and I, they’re greedy, self-serving people, which is great, they’re easy to understand. Company A, company B, company C, and company D should merge from a shareholders point of view, but that means that the management team of three of the four goes to management heaven and stops getting salaries. Managers think in terms of what is to them, real yield which is yield to managers. If you understand that you’ll understand their behaviour. Rick, thank you so much for joining us.

Rick Rule: Always a pleasure, thanks for the opportunity.