By Otto rock
Rick Rule did BNN’s Market Call today and the whole thing is up on the website’s video shelf now. I’m going to offer up this segment on Pretium (PVG) as the most interesting (for my taste, anyway). Here’s the transcript and below that, the Ottotrans™:
Rule: “I have been a recent buyer of Pretium Resources. I have a very very high degree of confidence in the CEO Bob Quartermain, who I backed in his first venture which was Silver Standard I remember it going from 72c to $45 which of course engendered a certain fondness in me. Pretium as you may know started up a mine in Northern British Columbia and the first quarter they had was extraordinarily good which set market expectations very high. The second quarter was fairly bad. I think what you have to do in a deposit like this is you have to let them break the mine in. I remember saying to my clients six or seven months ago, “It’s going to take four quarters before we see what we see here”. I’m not saying that Pretium is out of the woods, what I’m saying is it is way oversold, risk relative to reward. I personally object to some market participants’ criticism of Bob Quartermain, who has become over 30 years, in addition to somebody who has made me look smart, a close personal friend and any criticism of Quartermain is insane.
Interviewer: “And that aside, what would you say is the biggest misconception about this stock?”
Rule: “I just think it’s too early to know how it’s going to work out. They had a spectacular first quarter which is tough to do when you’re breaking a mine in, obviously with regards to grade they got lucky. In the second quarter they had a lousy quarter. We have known for some period of time, given the erratic and very high grade nature of that gold, you’re going to have good quarters and you’re going to have bad quarters, you’re going to have to look over the course of a year to get a feeling of how that thing is going to produce over time.
Ottotrans™: “I am underwater on Pretium and have averaged down.”