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From: Sprott US Media editor@sprottmedia.

Subject: Rick Rule- Anatomy of a Serially Successful Entrepreneur
Date: 22 February 2017 at 2:03 PM

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Sprott's Thoughts
Rick Rule Explains What It Takes to Be a Serial Success
By Albert Lu, President & CEO, Sprott US Media

The numbers don't lie; just ask Rick Rule, the president of Sprott U.S. Holdings.

In a recent interview with Maurice Jackson, Rick explains that out of the roughly 250,000 to 300,000 people
involved in mining exploration, the majority will never be involved in the discovery of a single mine. This despite
spending most of their life at it—an incredible fact.

Yet there are others, the serially successful, who have been involved in 10 or more discoveries each.

Who are they? And what makes them so special?

It's quite simple actually...

Interview Highlights (edited for readability)

Maurice: You know, Rick, you’re noted for a number of famous quotes and there were two in particular that
are germane for today’s discussion, which are “to separate the wheat from the chaff” and “to have courage and
conviction.” Listeners will note that I’ve stated before I’ve made the error of understanding the macro-picture of
why I need to invest in the sector and I used a buckshot approach in selecting companies in that sector. But as
we will discuss today, it’s not the name, not the sector or the commodity, it’s the people. Rick, can you expand
on the narrative on my remarks?

Rick: Sure, Maurice. Assets are basically latent until a person or a group of people turns them into wealth.
That makes good common sense if you think about it. And it also makes good common sense that some
people are better at certain things than other people. An example would be if you’re looking to put together a
good basketball team, it would be useful to get a couple of 7-footers, you know, people closer to the basket.

And the truth is that in any field of human endeavor, some people succeed better than others. So, surrounding
yourself with a team or more properly for this discussion, investing with people who have been serially
successful and importantly serially successful in tasks that are relevant to the tasks that they are involved in
now. It’s probably more important than any other single variable.

One example would be that I think there’s something like 4500 or 5000 operating mines in the world and there’s
probably 250,000 or 300,000 people involved and looking for them. What that simple statistic tells you is that
most people are—although they work most of their life at it, never involved in the discovery of a mine. But then
you have other people who have been involved in discovery of 10 or 11 or 12 of them. You just have people
that are serially successful, and those people stand to have 2 or 3 standard deviations better performance than
the run-of-the-mill participants in any given activity, which is enormously important from statistical viewpoint.

Maurice: In reference to statistical viewpoint, can you discuss further Pareto’s Law and how it applies to this

Rick: Sure. I think the first name was Vilfredo. Pareto was an Italian social scientist who documented what is
in common parlance known as the 80/20 rule. The 80/20 rule, of course, is where 80% of the utility in a given
activity—some people would give it work—is done by 20% of the population base. It’s important to note when
considering the 80/20 rule, two important facts, the bell curve which is really what it describes actually has two
lips, which would suggest that in a population base of 100 people, 80% of the good work is done by 20% of the
population and 80% of the bad work or, if you will, the aggravation is done by another 20% of the population.
So in the first instance, Maurice, you want to hang out with the good 20 and you want to avoid the bad 20.

Another interesting piece of information is that if the population base is large enough, the performing and non-
performing lips, those 20% that we talked about, both the good and the bad lips, if they were exposed to the
same performance dispersal curve again, you would see that the lips would conformably align, meaning that
20% of the 20% generated 80% of the 80%, or more appropriately, 4% or 5% of the population base would
generate in excess of 60% of the positive utility and another 4% or 5% would generate 50% or 60% of the
negative performance.

What that tells you is that to the extent you can in your investing activities, you segregate the management
teams that you’re considering investing with and try and confine your investing activities to the best of the best,

I’m thinking about it now and many times. Ian and Lukas. as you suggest to look at the success in the company not nearly in terms of the major ego. And it’s important too. While both activities are related to mining. moving on. I guess. honest people. He or she is going to acquire the expertise. if you will. Ross Beaty. certainly dogged determination is important. curious not just about what they’re doing but curious about a whole range of things. All of them are serially successful. maybe less successful if the task at hand is exploring rather than producing. yourself included but also newsletter writers. to hang out with a lot of the serially successful people and I’m lucky enough to be able to continue investing with them often today. And. Now. pardon me. determined. that company has fallen in price dramatically. and his two sons. I would say one thing is that the responsible sources of information. very intelligent but I wouldn’t say that being incredibly intelligent determines conclusively whether or not somebody is going to be successful. and others should and often do make it their business to describe serially successful people in the context of describing companies. In addition. you need to refine this a lot more directly in order to profit from serially successful people. sooner and more certainly than somebody who’s work schedule is more leisurely. my friend Bob Quartermain. but also look for serially successful people on that team. in talking about how you can identify and identify with serially successful people. the various working people. I’ve been lucky enough. it fell by 50% and twice Bob fought through adversity and brought the company back ultimately as I say. Maurice: You know. of course. You know. serially successful people do not lie and they act honorably in every regard. in tertiary volcanics rather than ancient Archean rocks. taking it from $0. to being curious. I’ve been fortunate enough in my life to manage to invest alongside. understanding that 5% of the population base will generate well in excess of 60% of the economic returns. The ability to see a project through and not quit no matter what the adversity is. is their expertise applicable to the task at hand? Are the people who have selected the various constituencies. brokers. but rather it refers to success particularly at the task at hand. Rather. they have to be very hardworking. We’ve learned through various social scientists that somebody becomes an expert at something with the application of 10. a different friend Bob Kaplan. that serially successful doesn’t mean generally successful. in Spanish-speaking Peru rather than in French-speaking Quebec. But in my experience. They are. I don’t know. Maurice. Certainly the serially successful people that I know have been extremely honorable people. for copper rather than gold. mercifully in my life. adult supervision for the company have success in guiding companies in the past? Are the exploration personnel in mineral exploration successful in similar rock packages in similar terrain with similar mineralogy? In other words. who is now deceased. of course. An example would be somebody who has been a successful biotech entrepreneur who suddenly migrates into software or natural resources. And if you have somebody who works 2400 or 2500 hours a year. diligent. the application of intelligence through curiosity and determination I think matters a lot. Maurice: What attributes have you noted amongst serially successful people? Rick: One I would say is incredible determination. So. Maurice.75 to $45 with Bob Quartermain. an example would be Silver Standard Resources.75 to $45. Has the chief financial officer been successful in the past raising the capital and allocating the capital that’s required for the task at hand? Do the directors who are providing. 12 or 15 of those. that person is going to become successful.000 hours in whatever discipline that they choose to succeed in. which we enjoyed a run from $0. That would seem to be the tipping point in terms of development of expertise if somebody is going to develop the expertise. An example in mining. and you must guard yourself against that enthusiasm. which means that their self-confidence is so boundless that sometimes they act as though something that they are certain will take place has already taken place. Twice during the period of time we owned that stock. You know. Maurice. almost every time that I’ve been involved in a company with a singularly successful and serially successful person. in fact. What names resonate in that category? Rick: You know. And it’s important to note. which you’ve heard me use before is that someone who describes their success as having taken place operating a gold mine in Archean terrain in French-speaking Quebec.teams that you’re considering investing with and try and confine your investing activities to the best of the best. Some of the names that come immediately to mind are the Lundin family. I’m not trying to say that serially successful people don’t exaggerate on occasion even to the extent that they tell what I laughingly call preemptive truths. Maurice. The other thing that I have found with serially successful people who develop excellent reputations which brings money to them is that they are invariably honorable. While they may have been successful and would suggest to you that they’re a mining magnate as a consequence of that. probably a couple times while I’ve owned it. that 5% you’re referring to are the serially successful. the CEO or the largest shareholders. which most people’s are. both Adolf Lundin. The other thing—or another thing that I’ve noticed about serially successful people is that they’re almost pathologically curious. Maurice. the truth is that the skillsets that are involved in both tasks are so different that success in one may hold no promise for success in the second. There’s no guarantee that the success that he or she enjoyed in one sector of the market will give them the ability to successful in a sector of the market where they have not yet generated the expertise and experience that made them successful initially. Robert Friedland whom we’ve talk about before. .

Mercifully for me. precious metals explorers. So. Maurice: Investors want to know what is attracting your attention in the space right now. Many factors could cause actual results. an adviser registered with the Ontario Securities Commission..or 3-year timeframe attempting to outcompete other people whose timeframes are much shorter. “plan”.. Should one or more of these risks or uncertainties materialize. meaning that they sort of unilaterally disarm when they compete with us. industrial materials and energy markets have recovered this year. “expect”. These forward-looking statements are made as of the date of this presentation and Sprott does not assume any obligation to update or revise. I have been surprised with how well the base metals. I would suggest that if the market conditions that we’re seeing right now persist that I will be involved in financing—private placement financing both on the debt and equity side. but the truth is that the market is ahead of itself. “estimate”. a US full service broker-dealer and member FINRA/SIPC. the equities up in excess of 100%. “believe”..or 3-year timeframe but where our competitors are discouraged by the current market action. which is a public company listed on the Toronto Stock Exchange and operates through its wholly-owned direct and indirect subsidiaries: Sprott Asset Management LP. meaning that we don’t have as much competition as we. many of the hedge funds that we compete against have a 90-day horizon in what’s really a 3. You’ll recall. These factors should be considered carefully and undue reliance should not be placed on these forward-looking statements. And to be able to have the advantage of despair in the market to make some investments. And mercifully for us. Maurice. we’ve seen those markets sell off by 30% or 35%. “could”. Inc. also an SEC Registered Investment Advisor. CA 92008 This email is intended for obmasilo@yahoo. and similar expressions have been used to identify these forward-looking statements. and junior producers. We will certainly look to out-of-favor sectors in commodities this year where we expect the sector to do well in the 2. “anticipate”. I look forward to being in the energy and industrial materials sector. “would”. suitable for the task at hand? Are the major shareholders behind the company. And one’s ability to assemble facts with regards to human resources in addition to physical resources and financial resources will have a big leg up on their competitors who either don’t have the expertise or haven’t even thought about this type of human test. by the end of the year. security. the task at hand? Are the people who have selected the various constituencies. Although the forward-looking statements contained in this document are based upon what management currently believes to be reasonable assumptions. words such as “may”. Maurice. would which is something that we like. Sprott U. Update your preferences or Unsubscribe . developers. We normally. or should assumptions underlying the forward- looking statements prove incorrect. Sprott Private Wealth LP. results of operations. So we’ll be looking to deploy capital in 2017 where we’re looking to harvest that capital in 2019 or 2020. I’m pretty generally attracted to the people who have been successful in the past in financing a company to its ultimate success? Or are they merely paper-hangers. actual results. Exactly which opportunities become the best opportunities are something that we’ll be able to tell you in retrospect. there is no assurance that actual results. Sprott US Media 1910 Palomar Point Way. Suite 200 Carlsbad. invest for the 2. Media. the sort of involved people. I still suspect that that’s going to happen this year. the various working people. they’re stock-traders? All of these things are important. That took me a bit by surprise and I’m tempted to say it’s been a little head fake. The information contained herein does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. of course. performance or achievements to be materially different from any future results. performance or achievements will be consistent with these forward-looking statements. Sprott Asset Management USA Inc. otherwise. Forward-looking statements involve significant known and unknown risks. that last year in the first half. “intend”. and Resource Capital Investment Corp. of course. We refer to the above entities collectively as “Sprott”. Views expressed regarding a particular company. industry or market sector should not be considered an indication of trading intent of any fund or account managed by Sprott. an investment dealer and member of the Investment Industry Regulatory Organization of 5-year business. We’re seeing a lot of opportunity there and we’re seeing a market where the investing community is discouraged. performance or achievements that may be expressed or implied by such forward-looking statements. the precious metals markets particularly the precious metals equities markets went in a tremendous tear—the metal up 20%. “will”. performance and business prospects and opportunities. Wherever possible. Maurice. Forward-Looking Statement This report contains forward-looking statements which reflect the current expectations of management regarding future growth.S. I had expected the second to be really bombed out this year. Sprott Global Resource Investments Ltd. which makes them. Any reference to a particular company is for illustrative purposes only and should not to be considered as investment advice or a recommendation to buy or sell nor should it be considered as an indication of how the portfolio of any fund or account managed by Sprott will be invested. an SEC Registered Investment Advisor. is a wholly owned subsidiary of Sprott Inc. as you know. Rick: Well. 30% or 35% more attractive. These statements reflect management’s current beliefs with respect to future events and are based on information currently available to management. performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this document. uncertainties and assumptions.