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This was, by most accounts, the most crowded and buoyant PDAC in years (maybe ever?). Sushi and lobster at cocktail receptions were the normal thing, and that’s historically been a reliable contrarian indicator, according to the veterans I spoke to. Rick Rule, who said this is his fourth real bull market and expects it to be the second most dramatic of his career after the 1970s, was the most quotable voice of the bunch and set the intellectual tone for most of the conversations that followed, which included interview with 17 different junior mining companies.
Rick Rule’s core message was that money is made on the delta between price and value, not on narrative or price action. He said the single most important question to ask any management team is what their durable competitive advantage is (what do they do better than anyone else) and that most teams, if honest, cannot answer it well. He also said that most gold company managements, aside from promotion, do not actually believe in gold, and that misalignment between management and shareholder interests is a persistent and underappreciated problem.
After that, I went to talk to 17 junior mining companoes.
Three themes came up in almost every single conversation, that I think are worth noting not because they are new but because the repetition itself is the signal.
1. Capital discipline.
Almost everyone acknowledged that money is easy to raise right now and that this creates exactly the conditions under which companies historically overspend, overdilute, and then get caught when the cycle turns.
The better-run companies are explicitly building war chests or locking in contracts now specifically because they know the window will close.
2. Talent scarcity.
Nearly every CEO mentioned that finding quality technical people is getting harder fast. One CEO pointed out that the labor market for mid-level mining professionals tightened meaningfully over just the past year, and that when you add three acquisitions in 20 months on top of that, managing human resource constraints becomes as important as managing capital.
3. M&A timing.
Majors and mid-tiers are always late to buying juniors, they wait until the market is frothy, and the window for truly accretive acquisitions is earlier than most companies act on it.
Rick Rule Interview at PDAC (+ 17 Others)
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