Rick Rule Is Still Buying Franco-Nevada After the Gold Run-Up
On Palisades Gold Radio, Rick Rule said he has been actively adding to Franco-Nevada alongside other senior precious-metals names, arguing these stocks are cheaper at $4,000 gold than they were at half the price because margins have doubled.
Investor angle
Rule's NPV-to-EV test: at $4,000+ gold, senior royalty and streaming names like Franco-Nevada are mathematically cheaper than they were at $2,000 gold, because the price move has dropped almost entirely to margin while reserves and production have also grown. His recent FNV purchase is part of an explicit pivot from junior speculation to senior investment-grade exposure inside the same gold thesis.
Franco-Nevada Corp (FNV) is one of three senior precious-metals names that Rick Rule said he has been actively buying on a recent episode of Palisades Gold Radio, alongside Agnico Eagle and Wheaton Precious.
Rule's framework is straightforward. He values these companies on the net present value (NPV — the total discounted value of all the cash a mine or royalty is expected to generate over its life) of future cash flows relative to enterprise value (EV — market cap plus debt) today. At a gold price of $4,000 to $4,200 an ounce, he argues the math still works in the buyer's favor.
"The move in the gold price from $3,000 to $4,200, yes, it's a $1,200 move on a $4,000 base, which is a 25% move or something like that. But it's all margin," Rule said. "If these guys were breaking even, totally breaking even, including cost of capital at $2,000, they had a $1,000 announced margin at $3,000. They have a $2,000 announced margin today, which is to say their margin has doubled while at the same time their reserves and their production has increased."
The argument: even after a multi-year run in gold equities, the senior royalty and streaming names are cheaper, on Rule's NPV-to-EV metric, than they were when gold was half its current price. The price gain has flowed almost entirely to operating margin (the gap between revenue and the cost of producing an ounce), and reserves and production have grown alongside it.
## Why Rule is buying FNV now
Rule framed his FNV purchase as part of a deliberate portfolio shift. After selling 25% of his junior mining portfolio in August 2025 — enough to recoup all the capital he had invested in the sector since 2020 plus the capital gains tax due on the sales — he redeployed the proceeds in two directions.
First, he rotated from speculative juniors into senior, investment-grade names. "I bought a package of investments, including physical gold, Franco-Nevada, Wheaton Precious and Agnico Eagle. In other words, I didn't diversify out of the sector. I diversified or reverse diversified from alpha to beta in the sector. I went to investment quality rather than speculation because of the mismatch in risk adjusted pricing in the sector."
In plain terms, "alpha" is the extra return a manager earns from picking better-than-average juniors, while "beta" is the broad return delivered simply by owning the sector. By moving into FNV, Rule said he was giving up speculative upside in exchange for lower-volatility exposure to the same gold thesis.
Second, he moved into oil and gas, a sector he describes as "hated" — he singles out Exxon and Schlumberger as his preferred vehicles in that space.
The read for Franco-Nevada specifically: Rule sees a structural mismatch between price and value at the junior end of the precious-metals sector, and is using that dislocation to add to senior names like FNV at what he considers attractive NPV-to-EV ratios. The full sector, in his telling, has moved simultaneously rather than the usual progression of metal first, then the best seniors, then the best juniors — and he views the resulting junior valuations as stretched. "I've never seen money cascade down the sector so quickly," he said.
## Caveats from the conversation
The host opened the discussion by naming FNV alongside Agnico Eagle and Wheaton Precious as exemplars of the high-quality royalty and streaming space. Rule's enthusiasm is conditional: "That's predicated on the fact that I believe that the gold price in nominal terms, I keep saying nominal in US dollar terms, increases." If gold does not hold at or above $4,000–$4,200, the NPV math he is relying on does not hold either.
The discussion does not address Franco-Nevada's specific royalty agreements, individual assets, or recent operating performance. Rule's case for FNV is built on the company being representative of the senior royalty and streaming group, which he is buying as a category rather than on company-specific catalysts.
For investors running their own work, Rule's framework leaves a clear test: track FNV's NPV-to-EV at today's gold price against the same ratio when gold was around $2,000. If his arithmetic is right, the stock today screens cheaper than it did back then — independent of where the share price has been.
Generated by Pixys from the source video below. Not investment advice.
