Paul’s Notes #19 — Friday October 9th
Rick Rule is a veteran natural-resource investor who began in 1974, built Global Resource Investments (sold to Sprott in 2011), and led Sprott U.S. Holdings until retiring in 2021 to found Rule Investment Media. His free Substack covers contrarian speculation in mining, energy and critical minerals — gold, silver, copper, nickel, royalty and streaming companies — framed by geopolitical risk.
In plain words
This report says copper supply could get tighter because nearly 500 million tonnes of discovered copper are stuck in permitting, equal to three-quarters of current global output. The author is bullish on copper and gold miners but puzzled by falling uranium stocks despite nuclear deals. Key holdings: Anglo American (LSE:AAL) must promise to supply copper to China to get its merger with Teck Resources (TSX:TECK) approved; Constellation Energy (NASDAQ:CEG) signed a 20-year nuclear power deal with Google, but uranium stocks didn't rise; StrikePoint Gold (TSXV:SKP) bought a gold mine from Newmont (NYSE:NEM) for $70 million, seen as positive.
At a Glance
One-sentence summary: The author is extremely bullish on copper supply prospects, arguing that nearly 5 million tons of discovered copper are stalled due to permitting delays, exacerbating shortages, while remaining optimistic about gold mining stocks but puzzled by the persistent decline in uranium mining stocks. [Bullish]
- Nearly 5 million tons of discovered copper mines globally cannot advance due to permitting stagnation, equivalent to three-quarters of the global operating base, worsening supply shortages.
- Chile's copper production in August fell to a 15-year low (369,500 tons), down 13% year-over-year, with ongoing deterioration from declining ore grades and strikes.
- U.S. copper smelting capacity is severely insufficient (China accounts for 52% of global capacity); Trump's tariff logic aims to promote domestic smelting, but this is difficult to resolve in the short term.
- Gold mining stocks outperformed all other sectors in the S&P 500 in the third quarter of 2026, delivering strong performance.
- Uranium mining stocks continue to decline despite nuclear energy tailwinds (e.g., Google signing a 890 MW nuclear power purchase agreement with Constellation Energy), which is puzzling.
At a Glance
The report argues that the core issue behind copper supply shortages is not a lack of new discoveries, but rather a large number of already-discovered copper projects stuck in the permitting process. Terry Lynch, CEO of Power Metallic (TSXV:PNPN), cited S&P Global data indicating that nearly 5 million tonnes of copper have been discovered but cannot advance, with 115 projects stalled at the PFS (pre-feasibility study) stage. The author's original words: "Nearly 500Mt of copper has already been found and is going nowhere. 115 discoveries, sitting at PFS. Found, drilled, defined, not advancing." The report further judges that the scale of these stalled projects is equivalent to three-quarters of the global operating base.
Chile's Output Continues to Decline: August Production Hits 15-Year Low
Chile's copper output continues to deteriorate, falling 9.3% year-on-year in the first seven months of 2026, with August production hitting a 15-year low. According to data from Chile's National Statistics Institute (INE), August output fell 13% year-on-year to 369,500 tonnes, the lowest since February 2011. A study by GEM Mining Consulting's Production Risk Index shows that an average of 5.2% of output from Chile's large copper mines is at risk from strikes, weather, accidents, and geological issues. Specific events include: a strike just broke out at Antofagasta (LSE:ANTO) 's Centinela mine; Codelco suspended the Andes Norte project at its El Teniente mine due to earthquake concerns. The author believes that declining grades, combined with these disruptions, are exacerbating the output decline.
U.S. Copper Smelting Shortfall and Tariff Arbitrage Logic
The U.S. has a severe shortage of copper smelting capacity, with China accounting for 52% of global smelting capacity, which explains the logic behind Trump's push for tariffs. The author points out that even if the U.S. increases copper mine output, the ore would still need to be shipped to China for smelting into cathode copper before it can be used. China's antitrust authority required Anglo American (LSE:AAL) to commit to supplying copper concentrate to China as a condition for approving its $54 billion merger with Teck Resources (TSX:TECK), giving China effective veto power over the deal. McKinsey forecasts that global grid investment will grow at an annual rate of 4.4% through 2035, while the copper industry is already struggling to support 3% global GDP growth. Aldebaran Resources (TSXV:ALDE) intersected a 1.7-kilometer mineralized zone (0.41% copper equivalent) at its Altar project, which will be used to update resources and advance the PFS.
Uranium and Gold: Nuclear Tailwinds Not Transmitted, Gold Miners Shine
Despite a positive outlook for nuclear energy, uranium stocks continue to decline, which is puzzling. The author notes that Constellation Energy (NASDAQ:CEG) signed a 20-year power purchase agreement with Google (NASDAQ:GOOG) for 890 MW of new nuclear power, but uranium stocks did not rise on the news. Discovery Mining (TSX:DSV) received a federal environmental permit for its Cordero silver mine in Mexico, allowing it to advance development. StrikePoint Gold (TSXV:SKP) acquired the Northumberland gold mine in Nevada (containing 4 million ounces of resources) from Newmont (NYSE:NEM) for $70 million in cash. The author concludes on an optimistic note: in the third quarter of 2026, gold mining stocks outperformed all other sectors in the S&P 500.
Position Moves
| Instrument | Direction | Author's One-Line View | Key Data |
|---|---|---|---|
| Power Metallic (TSXV:PNPN) | Hold & Watch | Cites CEO data, highlights copper mine approval bottlenecks; no explicit position disclosed | Nearly 5 million tonnes of copper stuck in approval; 115 projects stalled at PFS stage |
| Antofagasta (LSE:ANTO) | Hold & Watch | Mentions Centinela mine strike, exacerbating Chile's output decline | Chile's August production down 13% YoY to 369,500 tonnes |
| Codelco | Hold & Watch | Suspends El Teniente mine's Andes Norte project due to earthquake concerns, worsening output decline | No specific data provided |
| Anglo American (LSE:AAL) | Hold & Watch | China's antitrust authority requires commitments to supply copper concentrate to China as condition for approving merger with Teck Resources | $54 billion merger deal |
| Teck Resources (TSX:TECK) | Hold & Watch | Merger with Anglo American constrained by China's antitrust authority | $54 billion merger deal |
| Aldebaran Resources (TSXV:ALDE) | Hold & Watch | Drills long mineralized interval at Altar project, to be used for resource update and advancing PFS | 1.7 km mineralized interval, 0.41% copper equivalent |
| Constellation Energy (NASDAQ:CEG) | Hold & Watch | Signs nuclear power purchase agreement with Google, but uranium stocks did not rally | 890 MW new nuclear power 20-year PPA |
| Google (NASDAQ:GOOG) | Hold & Watch | Signs nuclear power purchase agreement with Constellation Energy, but uranium stocks did not benefit | 890 MW new nuclear power 20-year PPA |
| Discovery Mining (TSX:DSV) | Hold & Watch | Obtains federal environmental permit for Cordero silver mine in Mexico, enabling development to proceed | No specific data provided |
| StrikePoint Gold (TSXV:SKP) | New Position | Acquires Nevada's Northumberland gold mine from Newmont for $70 million cash | Contains 4 million ounces of resources |
| Newmont (NYSE:NEM) | Reduced Position | Sells Nevada's Northumberland gold mine to StrikePoint Gold | $70 million cash |