Brokers, Bankers and Miners; the World of Mining Corporate Finance

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Right eye money miners, we've
got a special episode today and

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it is brought to you by a
special exploration drilling

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company, Swig.
The underground leaders of the

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underground exploration drilling
pack.

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We talked to 90 rigs, 17,000,000
drill meters.

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Mate, tell you what you don't
become leader of the pack by

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following the pack GC.
No, you do not.

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Mate, every bloody one of those
meters was done with innovation

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and grit.
Love it and determination but

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don't.
And mate, they can talk about

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going deeper.
They can go bloody deep with the

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deep X division.
Yes, drilling 2000 plus metres

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with rigs built for reliability.
I love it.

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Go swig right out swig.
We're gonna do a two party but

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I've just made an executive
decision.

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We are doing A1 parter and it is
about the life inside finance

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firm, inside a bank, inside the
world of investment banking.

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Bit of Finance 10.
One brought to you by the much

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experienced Ali JC.
I want to hear about your life

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back in the day.
What it's like doing capital

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raises, what it's like being in
investment banking, what it's

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how these capital raisings come
about.

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Who sets the price?
What is a non deal roadshow?

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What is wall crossing?
Who bloody what does a company

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choose this company to do the
capital raising?

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Why do they wanna do a capital
raising so much?

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I wanna know it all GC.
Let's get into it, Maddie.

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I cannot wait for this.
This is the Welcome to the

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Autobiography of Ali GC.
Right.

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Where should we start?
Let's start with OK, the minor.

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It all starts with a minor.
And they wanna.

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They've got a project and it's
gonna cost them bloody $100

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million to build this project.
Yep.

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They come to Ali GC and her team
and say, right, we don't know.

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We've got we need 100 million
bucks somewhere.

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We don't know.
Do we get 80 million bucks worth

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of debt and try raise 20 million
bucks in the market?

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Should we just raise, try raise
$100 million?

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Like what price do we raise this
at?

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Like how does this world work?
Where does this process start?

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And do you all just get in a
room and sort it out in a day?

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Take me through it allergy so.
It's an interesting one because

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you know, there's certainly
different, you know, sort of

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funding or financing sources or
mechanisms and you know,

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depending on, you know, your
company, your project, the

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commodity, sometimes even the
jurisdiction, you know, it can

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affect how you kind of assess
that funding mix.

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But I mean, ultimately you want
to sort of assess all these

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various factors across these
sort of different financing

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mechanisms and go, OK, what
combination of sort of pathways

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suits this project the best
where the cost of funding is

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minimised.
And by cost, I mean not just

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your financing costs, but you
know dilution, you know,

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compulsory hedging, you know
that that sort of things and

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it'll sort of some way
flexibility as well, so.

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And is that and I assume that
has the formula that is correct

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In 2021 is.
Must be very.

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Different for the exact same
situation could be different in

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today 2025 with different
commodity prices, different

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markets, different demand.
Oh, 100%.

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So you know, and you know that's
so commodity price, absolutely.

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But even, you know, the markets
for equity and debt, you know,

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this year looked very, very
different four years ago during,

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you know, COVID times, right?
And the the appetite for funding

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via debt or via equity at
different points in the cycle

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changes so and.
What do you mean by saying the

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appetite for equity?
Please explain that.

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You know, people want to
basically give, they're quite

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happy to give you money to fund
your project because I think,

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you know, they'll get a good
return on it a financial.

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Show, so you're saying the
appetite for equity means say

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you're you're trading at a
dollar it means and you need

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$200 million and you say if it's
within your placement capacity

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or you do it in two tranches and
we can talk about two tranches,

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we can as well.
But side right, we want to raise

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$200 million at $0.82, so 18%
discount.

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But you're saying that, you
know, four years ago you

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couldn't have done that because
no one would have given you the

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money you and you wouldn't have
been able to get the $200

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million worth of shares or it
might have been at 70 cents or

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is.
And when that doesn't work,

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you've got to go down the road
of looking at things like debt.

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Yeah, appetite's essentially
another word for the interest or

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or demand basically.
So for example, trying to do an

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equity raising for a for a
nickel project this year, a very

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different situation than doing
that say a few years ago.

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And so how do you know if the
appetite's are not there?

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Is it like funds are saying no,
we are not paying that or no we

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are not interested?
Pretty much we are really

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interested.
Yeah, yeah.

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So, so from talking to different
financiers, different funds,

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they'll just say, yeah, look,
you know, 'cause you, you show

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them different opportunities and
things like that and they go,

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yeah, cool.
But no, yeah.

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So it's, you know, it's
sentiment, but then, you know,

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feedback from the sort of
investing community and sort of

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financing community as well.
The other thing that's can be is

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an important thing to think
about when you sort of OK,

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Hammer, this is, you know,
there's a say, let's call it a

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for simplicity, $100 million
CapEx bill to bring this goal

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developer into production, you
know, but their market caps $20

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million.
So you know, the, the CapEx

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requirement is five times out of
their market cap.

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Now it's it's challenging to do
a lot of that via equity.

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You know, when you're only 20
million market cap, it's pretty,

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pretty difficult just because of
the you know, it's pretty that

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much bigger.
So that might say, OK, well,

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maybe I can only do around this
much equity.

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I'll have to look to other
sources of financing like debt

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or royalties or streams or, you
know, something else to do with

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the balance you see that can
sometimes be.

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It's not that it's impossible,
but it can be a bit of a

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limiting factor.
So is it like if you, so if

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you're a 20 mil market cap and
say we want to raise $100

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million via equity, we can raise
$3,000,000 within our 15%

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placement capacity which is
Tranche 1 and then we want to

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raise 97 million in tranche 2.
And there is enough people that

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want to invest at that at a
certain price and a certain

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discount to put that money in.
Can it be done?

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Well, I think with with
placements, you know, there's a

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second tranche probably just to
take a step back.

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What does that mean?
It basically companies have

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what's called placement capacity
with you know they can issue up

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to sort of 15% of their issued
capital sort of on a rolling 12

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months basis sort of as they
place they can get another 10%

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which is called 7.1 A under the
the listing rules.

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And that has to be voted.
At the you pretty much like

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renew it every year.
It's just like a standard.

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You'd see it in a lot of notices
and meetings, you know, renewing

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7.1 A capacity now that not
every company can get there, I

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think you have to be under a
$300 million market cap company

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to have 7.1 A from memory.
So yeah, that's the component.

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So what tranche 2, you, you
often hear that Tranche 2, what

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does that mean?
It's basically the component of

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the the placement, which you
can't do under your placement

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capacity.
It's subject to shareholder

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approval.
And that's just a special what?

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Is it at a general meeting?
X So you'll say, is it EGM

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extraordinary, extraordinary?
General, Just a general meeting,

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yeah.
And they can schedule that

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whenever they want to approve
that tranche to.

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Yeah.
So I think you gotta give like,

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I think it's like about six
weeks notice or or something

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like that.
But look, I think on paper, I

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guess you can do it, but it's
just it really depends on the,

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the, the, the project, the
company, the deal, the, the, the

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interest.
It's just not typically done

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that amount of equity for for
something that's you know, for

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companies saying this examples
like a 20 mil market.

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Cap Well, I think it's, it's
more saying if there was, it's

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never realistically gonna happen
because if there was that many

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funds or investors that wanted
to tip in $100 million worth

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into a $20 million company, if
that interest was there, the the

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share price would have been
higher already 'cause there

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would have been interest.
Yeah, it usually just doesn't

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add.
Up, that's often a

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consideration.
It's I mean we're talking about

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more project financing here, but
it may be in a situation where

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they're like doing a deal to
acquire an asset, for example.

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That may be a situation where
you sort of say that for sort of

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extraordinary capital raising
size relative to a company's

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market cap.
But in project financing, it's

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it's, it's certainly not common.
So the latest examples probably

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was it MI 6 the.
Yeah.

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So that was a deal more of a
deal, an acquisition as opposed

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to project financing.
But even with even say, OK, I'll

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have to look at some debt as
part of my financing mix, say if

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that's sort of appropriate, you
know, what's the appropriate

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even, you know, even debt, you
can't just, you know, not every

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project can just be 100% debt
funded, you know, because, you

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know, what's the appropriate
debt size So that project's cash

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flows that that those project
cash flows can sort of

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comfortably support.
And you know, even that will

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have, you know, a, a limit as
well.

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And then there's also like, OK,
would a sort of a traditional

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bank lend me this money or will
I have to look to something a

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little bit more, you know, niche
or obscure, which, you know,

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they might charge more a, a, a
bigger margins, a bit more

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financing costs.
Like getting a shitty home loan.

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Yeah, Tier 2 lender.
Yeah, that's that's, that's

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actually a great way to think
about it or not necessarily.

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They're not necessarily shitty
lenders.

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There's there's some that are,
but they can, they've got a

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bigger risk appetite then
perhaps they're like a ACBA for

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example, so.
They upped the interest rate to

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counteract the risk.
Yeah, and they often, sometimes

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they're more, you know, sort of
specialist in natural resources.

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So they because they can
understand it.

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But this owner at A at a simple
level have a better

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understanding, you know, maybe
they've got a bigger technical

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team of things like that.
They can understand the risk

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better and sort of take on a bit
more risk.

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That's I mean just a, a general
comment.

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Another thing is you know is, is
hedging mandatory, you know, and

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that adds to your sort of
considerations as well.

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Why is it mandatory sometimes?
JC.

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Just pretty much to manage risk
really.

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For the lender.
For the lender, yeah.

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And 'cause if you know, OK, I've
got a good chunk of my cash

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flows, I know I'm getting this
price for and you know, OK, say

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a portion that's at the spot
level which you know might move

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up and down, left, right,
whatever.

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It gives them a bit more
confidence because like, OK,

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well, if the spot price did this
or if the spot price did that,

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because I've got that certainty
for the hedging component.

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As far as the pricing for that
bit, can the the cash flows are

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going OK, Are the cash flows
enough to service the debt under

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sort of those scenarios?
Yep, cool, great.

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It's just a bit more bit more
certainty and sort of manage the

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risk profile.
But then in, in some instances

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you've seen like say in the gold
scenario, right, where you know,

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company, some companies have
survived just fine.

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But it's just more they've
tapped out a bit of the upside

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in this sort of really rising
gold price environment because

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they've had to put those hedges
in place back in the day when

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they were getting project
financing.

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00:13:00,840 --> 00:13:04,600
So it's sort of a bit of a
bummer now, but it is ultimately

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00:13:04,600 --> 00:13:08,080
there just to sort of help
minimise downside risk.

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So when and when this process is
happening, a company is coming

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for could be a mix of corporate
advisory, like the actual

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funding, the equity rise itself
and they come in and who's

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figuring out the strategy.
What are you all just get in a

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00:13:24,080 --> 00:13:27,280
room and have a big meeting?
Like how long does this process

224
00:13:27,560 --> 00:13:31,120
take and who's involved to
determine we're going down,

225
00:13:31,360 --> 00:13:34,240
we're going to be doing 70%
equity and 30% debt or we're

226
00:13:34,240 --> 00:13:36,920
going to be doing 70% debt, 30%
equity.

227
00:13:37,200 --> 00:13:40,160
How does that work?
Well, it's just a combination

228
00:13:40,160 --> 00:13:45,000
of, you know, you'd have like a
A-Team from the say the

229
00:13:45,000 --> 00:13:47,560
corporate finance team at a
bank.

230
00:13:47,920 --> 00:13:52,000
You'd have, you know, the, the
company's side, you might have

231
00:13:52,000 --> 00:13:56,840
their sort of CDOMJ, you know,
CFO, that sort of thing.

232
00:13:57,200 --> 00:14:01,320
And you're basically trying to
understand the project, it's

233
00:14:01,320 --> 00:14:07,080
cash flows, what it can support
as from a financing perspective,

234
00:14:07,280 --> 00:14:11,560
you know, how you know, like all
those various commodity equity,

235
00:14:11,760 --> 00:14:14,440
debt, etcetera, financing
markets, how they're looking at

236
00:14:14,440 --> 00:14:17,040
the minute.
And it's a lot of sort of

237
00:14:17,240 --> 00:14:21,040
strategy and discussion and you
know, financial modelling and

238
00:14:21,040 --> 00:14:23,680
things like that and sort of
scenario analysis.

239
00:14:23,800 --> 00:14:28,680
And then also, you know, testing
the appetite or the interest

240
00:14:28,680 --> 00:14:31,320
with prospective financiers as
well.

241
00:14:31,320 --> 00:14:35,640
So it's just a lot of a bit of a
feedback loop from all those

242
00:14:35,640 --> 00:14:40,080
sort of various items.
It can take, I mean it depends,

243
00:14:40,080 --> 00:14:44,840
it can take, it often can take
quite a few months depending on

244
00:14:44,840 --> 00:14:48,480
the project and sort of what's
going on at the minute and

245
00:14:48,480 --> 00:14:51,840
things like that.
But but it, it, it warrants that

246
00:14:51,840 --> 00:14:55,360
time, you know, you want to get
that as right and as best as you

247
00:14:55,360 --> 00:14:59,600
possibly can to get the right
financing sort of package for a

248
00:14:59,600 --> 00:15:06,240
particular project that ideal.
Is it not Not too costly either?

249
00:15:06,640 --> 00:15:09,400
Can get that project into
production as soon as possible.

250
00:15:09,440 --> 00:15:11,840
Well, how do you determine if it
is costly or not?

251
00:15:11,840 --> 00:15:14,480
Like when we hear, hear everyone
say, oh, they're, they're

252
00:15:14,840 --> 00:15:17,960
Scripps valued good at the
moment or they're, you know,

253
00:15:17,960 --> 00:15:21,520
it's, it's cheaper for them to
get equity than debt at the

254
00:15:21,520 --> 00:15:23,440
moment.
Who determines that?

255
00:15:23,560 --> 00:15:26,880
What metrics are used?
How do you say Scripps valued

256
00:15:26,880 --> 00:15:29,880
good?
Is it a comparison to other

257
00:15:29,880 --> 00:15:33,160
stocks or historical performance
or how do they determine?

258
00:15:33,520 --> 00:15:36,280
Oh bloody we we should raise
money now instead of taking

259
00:15:36,280 --> 00:15:37,680
debt.
We'd better bang for buck.

260
00:15:38,280 --> 00:15:40,280
Yeah.
Oh, oh, look, it's a bit, it's a

261
00:15:40,280 --> 00:15:42,120
bit of both.
You're looking at, you know,

262
00:15:42,360 --> 00:15:46,240
your, your relative performance,
you're looking at your own this

263
00:15:46,240 --> 00:15:48,560
talking as a as a company, you
know, you're looking at your

264
00:15:48,920 --> 00:15:52,080
absolute performance.
You know what, you might your,

265
00:15:52,080 --> 00:15:55,160
your stock might have doubled in
price in the in the last two

266
00:15:55,160 --> 00:15:58,320
years.
You know, you're looking at what

267
00:15:58,320 --> 00:16:02,840
does cost mean?
You know, it's, it's like it's

268
00:16:02,840 --> 00:16:05,800
dilution.
So, you know, if you have to,

269
00:16:06,200 --> 00:16:08,520
you might you, the cash flows
are the cash flows, But if you

270
00:16:08,520 --> 00:16:11,600
have to spread those cash flows
over more and more and more

271
00:16:11,600 --> 00:16:14,880
shares and you know, as far as,
you know, a shareholder or

272
00:16:14,880 --> 00:16:18,120
earnings per share metric, it's
going to go down.

273
00:16:19,080 --> 00:16:21,200
But then, you know, if you have
financing costs, if you're

274
00:16:21,200 --> 00:16:25,360
paying like a 20, you know,
equivalent of a 20 to 30%, you

275
00:16:25,360 --> 00:16:28,480
know, financing costs, you know,
that's coming off your cash

276
00:16:28,480 --> 00:16:29,600
flow.
So you might have the same

277
00:16:29,600 --> 00:16:32,960
number of shares, but if you
cash flow number has come down a

278
00:16:32,960 --> 00:16:37,520
whole heap, you know, your
earnings per share might come

279
00:16:37,520 --> 00:16:41,640
off a whole heap too.
So it's it's, it's a few things.

280
00:16:41,840 --> 00:16:43,120
Yeah.
So, so when you're and you're

281
00:16:43,120 --> 00:16:45,840
saying it, we'll get one piece
of terminology out of the road

282
00:16:45,840 --> 00:16:48,800
before I ask about this sounding
process.

283
00:16:48,800 --> 00:16:53,040
Yeah, wall crossing crossed.
What does that mean?

284
00:16:53,200 --> 00:16:57,880
Yeah, so wall crossing away.
With money miners, I do know the

285
00:16:57,920 --> 00:16:59,920
answers to some of these.
It's just like the interview

286
00:16:59,920 --> 00:17:01,960
process.
Yeah, I'm not a complete idiot.

287
00:17:02,520 --> 00:17:04,920
It is all right?
No, it's a good question.

288
00:17:04,920 --> 00:17:08,200
So you often hear this term
bringing someone over the

289
00:17:08,200 --> 00:17:12,040
Chinese wall.
So that's the other one or wall

290
00:17:12,040 --> 00:17:14,920
crossing, you know, you're
crossing over the Chinese wall

291
00:17:15,040 --> 00:17:17,800
kind of thing.
So it's the Chinese wall is

292
00:17:17,800 --> 00:17:21,920
essentially an information
barrier between publicly

293
00:17:22,040 --> 00:17:25,760
available information and
confidential material

294
00:17:25,760 --> 00:17:27,480
information that's not yet
public.

295
00:17:27,480 --> 00:17:32,560
So in the finance world, you
know, in my experience, this is

296
00:17:32,560 --> 00:17:35,640
often done in like a capital
raising sense where you might

297
00:17:35,640 --> 00:17:40,840
walk across potential investors
in relation to a rise to test

298
00:17:40,840 --> 00:17:45,360
their appetite for the deal.
So it's a very proper step by

299
00:17:45,360 --> 00:17:48,640
step documented process.
Records are kept in, you know,

300
00:17:48,640 --> 00:17:52,920
across the hallway.
So you might ask a, you know, a

301
00:17:52,960 --> 00:17:57,680
fund, we've got an opportunity
I'd like to walk across you on.

302
00:17:57,680 --> 00:18:01,280
Is that OK?
They might say yes, OK, war

303
00:18:01,280 --> 00:18:03,840
cross me and they might and you.
Have to say it first.

304
00:18:04,400 --> 00:18:08,120
You have to ask because you
can't, you can't force it on on

305
00:18:08,120 --> 00:18:09,280
them.
They might not want to be war

306
00:18:09,280 --> 00:18:11,680
crossed.
They'll say no, no, speak to me

307
00:18:11,680 --> 00:18:14,520
when the deal's live.
Or some of them say, is it a

308
00:18:14,520 --> 00:18:18,120
stock that I own?
And if it's no, they'll just

309
00:18:18,120 --> 00:18:21,400
say, yeah, I don't want to know.
Tell me when the deal's live if

310
00:18:21,400 --> 00:18:23,760
it is a stock they're owned.
Sometimes, you know, more often

311
00:18:23,760 --> 00:18:27,040
they'll they'd like to know or
some say like, oh, what

312
00:18:27,040 --> 00:18:30,480
commodity is it?
This OK, tell me or or not, you

313
00:18:30,480 --> 00:18:32,480
know, it could be a whole whole
range of things, but it's, you

314
00:18:32,480 --> 00:18:34,120
know, it's you.
You're sort of seeking

315
00:18:34,120 --> 00:18:36,040
permission.
So that that combat could go out

316
00:18:36,040 --> 00:18:38,640
for bloody 10 minutes before
anything's even the stocks.

317
00:18:38,920 --> 00:18:41,320
Oh, it's it's often, it's often,
it's often pretty quick.

318
00:18:41,320 --> 00:18:44,600
Yeah, yeah.
So if basically if they tell you

319
00:18:44,600 --> 00:18:47,040
yes, I'm I'm happy to be
Walcross.

320
00:18:47,040 --> 00:18:50,240
You explain, you know, you
explain to them, you know, you

321
00:18:50,240 --> 00:18:55,120
know, XYZ company looking to
raise this much to fund, you

322
00:18:55,120 --> 00:19:00,000
know, development of this asset
looking to go live tomorrow,

323
00:19:00,000 --> 00:19:02,240
you're looking to go live in two
days.

324
00:19:03,880 --> 00:19:07,840
This is what we're thinking the
deal will look like and terms

325
00:19:07,840 --> 00:19:12,720
and pricing, whatever we'd like
to ask for your, you know, would

326
00:19:12,720 --> 00:19:16,400
you have any interest in sort
of, you know, participating in

327
00:19:16,400 --> 00:19:22,080
deal things like that whatever.
So, and The thing is, and the

328
00:19:22,080 --> 00:19:26,040
purpose of doing that is sort of
to like what they call like in a

329
00:19:26,040 --> 00:19:28,680
raising sense building like a
softbook.

330
00:19:28,680 --> 00:19:34,040
So like, OK, sort of you know
that perhaps 48 hours prior to

331
00:19:34,040 --> 00:19:37,240
launching a capitalising, OK,
Yep, I think we've got enough

332
00:19:37,240 --> 00:19:40,800
interest to cover what we're
proposing to raise.

333
00:19:41,120 --> 00:19:42,760
Let's go ahead and launch sort
of thing.

334
00:19:42,960 --> 00:19:47,640
But The thing is, if you've once
your war crossed, say I've

335
00:19:47,640 --> 00:19:49,880
shared this information with you
about this raise, you say, oh,

336
00:19:49,880 --> 00:19:52,360
thanks Sally.
Yeah, I think I might put

337
00:19:52,360 --> 00:19:54,040
$2,000,000 in this deal, blah,
blah, blah.

338
00:19:54,600 --> 00:19:58,120
You can't trade on that stock
until that information that I've

339
00:19:58,120 --> 00:20:01,960
shared with you.
So in this example, a raise has

340
00:20:01,960 --> 00:20:04,440
become public because otherwise
it's insider trading.

341
00:20:04,640 --> 00:20:09,040
So, and but there's no, there's
no form signed or anything, is

342
00:20:09,040 --> 00:20:11,160
there?
It's it's a verbal exchange.

343
00:20:11,280 --> 00:20:14,120
It's all documented.
Oh, so it is document being wall

344
00:20:14,120 --> 00:20:18,040
crossed is documented.
Yeah, yeah, yeah, right.

345
00:20:18,480 --> 00:20:23,680
So what every So when a broker
rings up a fund and every phone

346
00:20:23,680 --> 00:20:28,480
call will they the broker have
to they will document that phone

347
00:20:28,480 --> 00:20:31,640
call to that person?
Yeah, oh, you, you basically

348
00:20:31,640 --> 00:20:34,880
keep investor you, you just keep
notes, you know, as discussed

349
00:20:35,280 --> 00:20:37,560
will cost you on this
opportunity at this time, blah,

350
00:20:37,560 --> 00:20:39,080
blah, blah, blah, blah.
Right.

351
00:20:39,160 --> 00:20:40,160
So it is.
Yeah, Yeah.

352
00:20:40,320 --> 00:20:45,160
Yeah.
So that's, that's sort of that

353
00:20:45,160 --> 00:20:48,480
process sort of, you know, in
high level nutshell.

354
00:20:48,520 --> 00:20:52,440
How?
Who gets priority like over like

355
00:20:52,440 --> 00:20:55,800
say there's 10 funds wanting to
tip in like is it how much of it

356
00:20:55,920 --> 00:21:00,680
is relationship based and who
gets a bigger allocation or is

357
00:21:00,680 --> 00:21:02,400
it?
So this is say in a, in a

358
00:21:02,440 --> 00:21:04,320
capital raising.
Yeah, like, well, like a, let's

359
00:21:04,640 --> 00:21:07,440
say there's a big equity raise.
Like Spartans for instance,

360
00:21:07,440 --> 00:21:11,360
Spartan raised a big, big, well
they raised a couple 100 million

361
00:21:11,360 --> 00:21:14,040
to, you know, fund pre
production activities and things

362
00:21:14,040 --> 00:21:18,920
like that.
Out of the the brokers that run

363
00:21:18,920 --> 00:21:22,080
these processes, the lead
managers or the joint lead

364
00:21:22,080 --> 00:21:27,000
managers determine the
allocation of OK, XYZ fund gets

365
00:21:27,000 --> 00:21:29,480
this much, ABC Fund gets this
much.

366
00:21:29,480 --> 00:21:33,960
It's a very good question.
And to be honest, in, in my

367
00:21:33,960 --> 00:21:38,000
experience, it's, it's often a
bit of an art rather than a

368
00:21:38,000 --> 00:21:42,160
science, you know, sort of
taking it a step back, you know,

369
00:21:43,040 --> 00:21:48,040
when a sort of capital raise is
launched, it's, you know, you

370
00:21:48,040 --> 00:21:52,200
hear this term, the book, the
books open or submit your bid

371
00:21:52,200 --> 00:21:53,320
before the books close the
books.

372
00:21:53,320 --> 00:21:59,640
Basically, you know, where it's
something that the, the brokers

373
00:21:59,640 --> 00:22:03,960
or the lead managers submit
their bids to participate in a

374
00:22:03,960 --> 00:22:05,800
capital raising.
That's where they, they put

375
00:22:05,800 --> 00:22:07,600
their bids into the book.
It's basically.

376
00:22:07,600 --> 00:22:10,400
They're not writing and writing.
Not in a physical book.

377
00:22:10,440 --> 00:22:12,440
Maybe back in the day it may
have been.

378
00:22:12,440 --> 00:22:15,280
That's where maybe where the
term was coined.

379
00:22:15,280 --> 00:22:19,120
But investors, you know, are
saying, OK, this this deal has

380
00:22:19,120 --> 00:22:22,240
gone live on, you know, for
example, you know, Spartan

381
00:22:22,240 --> 00:22:24,040
raising this much money at this
much price.

382
00:22:24,360 --> 00:22:27,880
I like to submit a a bid to
participate in that capital

383
00:22:27,880 --> 00:22:30,840
raising.
The brokers collect those bids

384
00:22:31,120 --> 00:22:34,240
in the book, the book, you know,
closes at a certain time.

385
00:22:34,600 --> 00:22:37,680
And then the brokers then have
to allocate the stock that's

386
00:22:37,680 --> 00:22:41,440
being offered as part of that
raise to, you know, the range of

387
00:22:41,440 --> 00:22:42,800
investors that have submitted
bids.

388
00:22:42,800 --> 00:22:48,320
And often, you know, you'd say,
so if you're raising $150

389
00:22:48,320 --> 00:22:51,880
million, sorry, if you're
raising say $100 million, but

390
00:22:51,880 --> 00:22:54,920
you've received $150 million
worth of bids, you you've got to

391
00:22:54,920 --> 00:22:58,920
squeeze 150 into 100.
And then the next, that next

392
00:22:58,920 --> 00:23:01,400
step is what's called, you know,
we're going to cut the book.

393
00:23:01,560 --> 00:23:05,920
So put make that 150 into 100.
So to answer your first

394
00:23:05,920 --> 00:23:09,640
question, you know, how do you,
how do you decide?

395
00:23:09,760 --> 00:23:12,680
Is it just everyone just gets a
straight 2/3 of their

396
00:23:12,680 --> 00:23:15,040
allocation?
Often that's not the case,

397
00:23:15,040 --> 00:23:17,280
especially in an institutional
placement.

398
00:23:18,760 --> 00:23:23,560
It can honestly depend on a on a
range of factors, but I had to

399
00:23:23,800 --> 00:23:26,080
go back into my memory bank a
little bit.

400
00:23:26,080 --> 00:23:30,360
But a few factors, for example,
you know, are there an existing

401
00:23:30,360 --> 00:23:33,280
shareholder?
It's pretty hard not to give an

402
00:23:33,280 --> 00:23:36,680
existing shareholder their their
pro rata basically, you know, if

403
00:23:36,680 --> 00:23:42,480
they own 10% of the stock,
giving them an allocation where

404
00:23:42,480 --> 00:23:44,640
they can maintain their existing
holding.

405
00:23:44,640 --> 00:23:46,920
It's it's pretty hard to argue
against that.

406
00:23:48,040 --> 00:23:52,320
You know, did this investor who
put this bid forward, did they

407
00:23:52,320 --> 00:23:54,800
cornerstone the raise?
Did they provide really early

408
00:23:54,800 --> 00:23:58,680
interest and support to sort of,
you know, get the raise sort of,

409
00:23:58,880 --> 00:24:00,760
you know, going and over the
line?

410
00:24:01,680 --> 00:24:07,920
Is that investor along only fund
where, you know, could you see

411
00:24:07,920 --> 00:24:12,760
them buying on market post the
race sort of to meet their ideal

412
00:24:12,760 --> 00:24:14,360
position size?
Because the other thing, and

413
00:24:14,360 --> 00:24:18,240
that's where sort of, you know,
working with the, the

414
00:24:18,240 --> 00:24:21,880
stockbrokers in an investment
bank sort of have, have that,

415
00:24:22,080 --> 00:24:24,480
you know, knowledge about funds.
Because, you know, for example,

416
00:24:24,480 --> 00:24:29,440
you might have a fund where they
have, they manage $100 million

417
00:24:30,720 --> 00:24:35,440
and you know, they have take 10
positions in that fund.

418
00:24:35,440 --> 00:24:37,680
So each position size is $10
million.

419
00:24:38,160 --> 00:24:44,120
Now, if you're giving them an
allocation of say $7,000,000 in

420
00:24:44,120 --> 00:24:46,920
this place, but you know that
they're pretty likely going to

421
00:24:46,920 --> 00:24:50,080
have to chip away at $3,000,000
worth of buying to get to that

422
00:24:50,400 --> 00:24:54,080
$10 million position size, which
is, you know, great aftermarket

423
00:24:54,080 --> 00:24:55,760
support.
But you know, if you give them

424
00:24:55,760 --> 00:24:59,520
1,000,000 and then they've got
to buy 9 million on market and

425
00:24:59,520 --> 00:25:02,040
perhaps that stock isn't super
liquid, so that 9 million might

426
00:25:02,040 --> 00:25:04,800
take them six months to buy a
market.

427
00:25:04,800 --> 00:25:07,000
They might go, oh, it's all too
hard.

428
00:25:07,000 --> 00:25:10,680
You know, I'm not gonna bother.
I'll just skip, you know, I'll

429
00:25:10,680 --> 00:25:13,240
just offload the position or
something like that.

430
00:25:13,240 --> 00:25:16,280
See, even that something like
that's important to to keep in

431
00:25:16,280 --> 00:25:17,760
mind.
What about if they've helped

432
00:25:17,760 --> 00:25:20,240
them out before?
There was a previous raise where

433
00:25:20,520 --> 00:25:22,480
like they couldn't fill the
book.

434
00:25:22,480 --> 00:25:26,240
They're like, look, we need can
you help us out for another 3

435
00:25:26,240 --> 00:25:29,240
million to fill?
The yes, so just a, a support,

436
00:25:29,240 --> 00:25:30,840
yeah.
So that could be, you know,

437
00:25:30,840 --> 00:25:34,400
existing shareholder that's
continued to be supportive.

438
00:25:34,400 --> 00:25:38,080
So and they and the next round
they're they're supportive

439
00:25:38,080 --> 00:25:41,320
again.
You know, the other thing as

440
00:25:41,320 --> 00:25:43,440
well, which you're often
thinking perhaps a bit more in

441
00:25:43,440 --> 00:25:48,240
the early days before you get to
the kind of equity raise for the

442
00:25:48,400 --> 00:25:53,840
development funding pace is are
these, do these say in a fund

443
00:25:53,840 --> 00:25:58,000
sense, do these funds have the
capacity to write a bigger

444
00:25:58,000 --> 00:26:01,840
check?
So for when we do get down the

445
00:26:01,840 --> 00:26:06,320
track project financing wise,
could they write us a 10 to $20

446
00:26:06,320 --> 00:26:10,160
million check for our $100
million development funding

447
00:26:10,200 --> 00:26:13,080
equity raise?
Because that's important to keep

448
00:26:13,080 --> 00:26:15,400
in mind too, because they're OK,
Like they, whereas if it's a

449
00:26:15,400 --> 00:26:17,840
very small fund, yeah, they
might participate in the raise,

450
00:26:17,840 --> 00:26:21,600
but it's not, it may, it's not
like you'd knock them back.

451
00:26:21,600 --> 00:26:25,360
It's more so when you're
thinking about prioritising

452
00:26:25,600 --> 00:26:28,200
allocations, you know, that's
another consideration, you know,

453
00:26:28,240 --> 00:26:32,160
and there's there's plenty more
those of you that came to mind.

454
00:26:32,160 --> 00:26:37,320
So that's why it is very much a
bit more of an art than a

455
00:26:37,320 --> 00:26:40,480
science, a lot of robust
discussions and things like

456
00:26:40,480 --> 00:26:41,000
that.
But.

457
00:26:41,320 --> 00:26:43,160
And who, who is having those
discussions?

458
00:26:43,160 --> 00:26:48,200
Is it the the head of the the
corporate finance team?

459
00:26:48,320 --> 00:26:51,120
Like who, who has the final say
on this on the bid?

460
00:26:51,120 --> 00:26:55,200
Is it like, is it the MD of the
OR CEO of the actual company or

461
00:26:55,200 --> 00:26:59,920
the CFO who's got more?
Yeah, no, like that's a good

462
00:26:59,920 --> 00:27:03,560
question.
So often like a, a, a, a broker

463
00:27:03,840 --> 00:27:08,520
will sort of work through that
with their internal team.

464
00:27:08,520 --> 00:27:12,200
So like the, the corporate
finance team, perhaps some of

465
00:27:12,200 --> 00:27:15,840
the senior stockbrokers in that
time that have, you know, been

466
00:27:16,720 --> 00:27:20,760
collecting the, the bids in the
book from these institutions

467
00:27:20,760 --> 00:27:24,640
sort of come to OK, this is what
we think, you know, internally

468
00:27:24,640 --> 00:27:28,040
is, is a good book for, for, you
know, for this project and what

469
00:27:28,040 --> 00:27:30,280
we're trying to fund and, and,
and the rest of it.

470
00:27:30,720 --> 00:27:35,720
And then that's, you know,
presented to the company and

471
00:27:36,920 --> 00:27:41,160
that sort of recommended book,
but ultimately it's, you know,

472
00:27:41,400 --> 00:27:44,640
the company are take, you know,
receiving that money to fund

473
00:27:44,640 --> 00:27:47,200
their project or fund their
expiration program or what have

474
00:27:47,200 --> 00:27:52,000
you, you know, ultimately they
get to decide how they'd like it

475
00:27:52,120 --> 00:27:54,320
allocated.
But that's I mean, the whole

476
00:27:54,320 --> 00:27:58,160
point of appointing a broker is
to help with that process and,

477
00:27:58,160 --> 00:27:59,840
and get a recommendation and
things like that.

478
00:27:59,840 --> 00:28:04,120
So and look, there's often, you
know, you, it's not to say

479
00:28:04,120 --> 00:28:06,920
they're like, oh, look, I really
like this, this book you've

480
00:28:06,920 --> 00:28:09,240
presented, but can we tweak
this, tweak this?

481
00:28:09,240 --> 00:28:10,040
Yep, Yep.
OK.

482
00:28:10,400 --> 00:28:15,000
And then go from there.
So, and often, you know, be, you

483
00:28:15,000 --> 00:28:18,520
know, sort of senior executive
executives from the company who

484
00:28:18,640 --> 00:28:22,600
who do that.
So like COMD support from SAFO,

485
00:28:22,840 --> 00:28:24,040
things like that.
What?

486
00:28:24,040 --> 00:28:25,800
What about what is the
chairman's book?

487
00:28:25,800 --> 00:28:27,120
Is that?
Is that what it's called The

488
00:28:27,120 --> 00:28:28,640
Chairman's book?
Yeah.

489
00:28:28,640 --> 00:28:32,880
So chair or chairman's book or
chairman's list, that's the term

490
00:28:32,880 --> 00:28:36,920
gets thrown around a bit.
It's basically might be, you

491
00:28:36,920 --> 00:28:40,080
know, some, some existing
holders say that the company

492
00:28:40,080 --> 00:28:43,680
would like to ensure that they
have participation in the book,

493
00:28:43,800 --> 00:28:47,120
you know, things like that.
So, and is that so say you're

494
00:28:47,120 --> 00:28:54,360
raising 1,000,000, is there
potentially 200 grand allocated

495
00:28:54,360 --> 00:28:57,680
to the chairman's list that the
the companies board gets to

496
00:28:57,680 --> 00:29:02,680
decide exactly who gets that?
It's, it's more of a, it's more

497
00:29:02,680 --> 00:29:06,080
of a, you know, that's what,
that's what they'd like to do.

498
00:29:06,080 --> 00:29:08,760
You know, like what we want in
your example, you know, we want

499
00:29:08,760 --> 00:29:14,720
200 grand to go to these, you
know, 5, you know, shareholders,

500
00:29:14,720 --> 00:29:16,840
We want them to get looked after
as part of the raise, blah,

501
00:29:16,840 --> 00:29:19,960
blah, blah.
That's can form part of the race

502
00:29:19,960 --> 00:29:21,520
for sure.
I was on a chairman's list

503
00:29:21,520 --> 00:29:22,920
yesterday.
Oh, good on you.

504
00:29:22,920 --> 00:29:24,960
I've.
Got that type of guy.

505
00:29:25,160 --> 00:29:27,360
Love it.
Oh, just one of my existing

506
00:29:27,360 --> 00:29:29,920
holdings.
But just you know who Who

507
00:29:29,960 --> 00:29:31,760
wouldn't want me on the
Chairman's list?

508
00:29:33,600 --> 00:29:35,000
What a good name to have on
there.

509
00:29:35,120 --> 00:29:37,680
Oh, just a but just a ripping
bloke look.

510
00:29:38,000 --> 00:29:43,040
Yeah, absolutely.
But oh, look, like I said, it's,

511
00:29:43,080 --> 00:29:46,520
you know, ultimately the
company, it's, it's, it's, you

512
00:29:46,520 --> 00:29:50,040
know, they have the final say
and that's sort of sort of one

513
00:29:50,040 --> 00:29:53,200
way they can do it.
But I mean, really they can just

514
00:29:53,200 --> 00:29:55,160
say, oh, look, you know, we're
happy with this, but you know,

515
00:29:55,600 --> 00:29:58,920
up, you know, their allocation
be pulled out a little bit, try

516
00:29:58,920 --> 00:30:01,160
and balance it out.
But that's, that's one way.

517
00:30:01,200 --> 00:30:05,000
Probably that's more on a I'd
say on a more on a smaller,

518
00:30:05,120 --> 00:30:08,880
smaller scale.
So the price, the capital raise

519
00:30:08,920 --> 00:30:12,480
price, yes.
Now, I mean, I've heard yarns

520
00:30:12,480 --> 00:30:16,720
about like whoever's tipping the
most in the capital raise sets

521
00:30:16,720 --> 00:30:18,720
the price.
But then I've heard stories

522
00:30:18,720 --> 00:30:23,880
about there's a company that
could get a price with a very

523
00:30:23,880 --> 00:30:26,520
skinny discount.
They could get it from multiple

524
00:30:26,520 --> 00:30:29,760
places.
And this fund has gone to a mile

525
00:30:29,760 --> 00:30:34,200
now where this is the price.
He's like, no, I can get it at

526
00:30:34,560 --> 00:30:35,920
this amount.
I can go elsewhere.

527
00:30:35,920 --> 00:30:38,040
He's like, no, this isn't how
this works.

528
00:30:38,040 --> 00:30:39,360
He's like, well, it is in this
case.

529
00:30:39,360 --> 00:30:41,520
And there there was this argy
bargy.

530
00:30:42,400 --> 00:30:46,480
And then the broker's like, oh,
you know, that's not really how

531
00:30:46,480 --> 00:30:47,800
this works.
It's like, well, what do you

532
00:30:47,800 --> 00:30:49,560
mean?
I don't don't understand.

533
00:30:49,560 --> 00:30:52,000
Like I, I can get it at this
price.

534
00:30:52,000 --> 00:30:53,800
I'm not going to get it at a
lower price.

535
00:30:53,800 --> 00:30:56,520
Yeah, yeah.
If I can get it at Y and so they

536
00:30:56,520 --> 00:30:59,200
put their foot down, but how
much of that is it?

537
00:30:59,600 --> 00:31:01,720
Who sets?
How does the price get set?

538
00:31:02,160 --> 00:31:05,440
So there's a lot of different, I
mean, you're going to sort of

539
00:31:05,440 --> 00:31:08,440
figure out, you know, how do you
actually figure it out?

540
00:31:08,440 --> 00:31:12,720
So you know, there's and it
look, it depends on again,

541
00:31:12,720 --> 00:31:16,320
you're sort of looking at a
small cap type raising to, you

542
00:31:16,320 --> 00:31:19,720
know, more like a institutional
placement style thing.

543
00:31:19,720 --> 00:31:21,320
You know, there's a lot of
different factors you got to

544
00:31:21,320 --> 00:31:23,520
look at.
So you know, a simple one to

545
00:31:23,520 --> 00:31:28,520
start off with is like, OK, if
I'm a copper developer, 100

546
00:31:28,520 --> 00:31:33,160
million market cap in the last
few months, how much?

547
00:31:33,400 --> 00:31:35,920
And it's not like they say the
issue price itself.

548
00:31:35,920 --> 00:31:41,720
It's more so the the the
discount to the last close.

549
00:31:41,720 --> 00:31:45,240
So the last price the company
traded at or the discount to

550
00:31:45,720 --> 00:31:50,200
Vwaps as a percentage.
So Vwaps are volume weighted

551
00:31:50,400 --> 00:31:53,360
average prices.
So I'm going down a tangent

552
00:31:53,360 --> 00:31:55,960
here.
So a VWAP, why not use an

553
00:31:55,960 --> 00:31:58,280
average price?
Why use volume weighted?

554
00:31:58,280 --> 00:32:02,760
Well, for example, one day you
could have 1000 shares traded,

555
00:32:03,120 --> 00:32:07,720
traded at a dollar, but then the
next day you have 2 shares

556
00:32:07,880 --> 00:32:12,560
traded at $2.00.
The average price would make it

557
00:32:12,680 --> 00:32:16,160
$1.50.
But really most of the trading

558
00:32:16,160 --> 00:32:17,480
happened at a dollar.
Yeah.

559
00:32:17,760 --> 00:32:20,560
So that's why you use OK,
where's most of the trading

560
00:32:20,560 --> 00:32:22,200
occurring at?
It's more down the dollar end.

561
00:32:22,200 --> 00:32:27,720
So that's why we you often say
in in announcement things like

562
00:32:27,720 --> 00:32:32,280
discounts to fee wops.
So taking that that back a step

563
00:32:32,360 --> 00:32:34,120
a step back.
So you're sort of looking at OK,

564
00:32:34,160 --> 00:32:36,800
well, all right, copper
developers around my sort of

565
00:32:36,800 --> 00:32:42,560
market cap size, they're sort of
raising, you know, money that,

566
00:32:42,640 --> 00:32:46,360
you know, sort of that 10 to 15%
discount range.

567
00:32:46,800 --> 00:32:50,760
OK, that sort of gives me a good
luck ballpark or starting point.

568
00:32:51,080 --> 00:32:54,480
But then if that's a general
rule of thumb, but then, you

569
00:32:54,480 --> 00:32:58,320
know, if you're raising money
because, you know, you're a ramp

570
00:32:58,320 --> 00:33:01,720
up and you've run out of money
and you need need money to get,

571
00:33:01,760 --> 00:33:05,880
get through, that'll be, you
know, obviously at a much bigger

572
00:33:05,880 --> 00:33:09,600
discount to you say in this
example, 10 to 15%.

573
00:33:10,440 --> 00:33:13,560
Then it was, oh, you know, we,
we weighed a great discovery six

574
00:33:13,560 --> 00:33:16,880
months ago and now we want to
put 20 kilometre drill program

575
00:33:16,880 --> 00:33:20,680
through it.
That'll feed it different

576
00:33:20,680 --> 00:33:22,880
discount to those sort of
pricing points.

577
00:33:22,880 --> 00:33:26,360
So that's sort of a good general
rule of thumb to sort of start

578
00:33:26,360 --> 00:33:28,840
off with.
But then, yeah, you know, what

579
00:33:28,840 --> 00:33:31,480
are the funds actually being
raised for that might, you know,

580
00:33:31,480 --> 00:33:35,200
you might be a bit different to
what the, you know, the average

581
00:33:35,920 --> 00:33:38,720
copper developer might be doing
in in recent history.

582
00:33:38,960 --> 00:33:43,480
So, So if they're stocks trading
at $2.00, who decides whether

583
00:33:43,480 --> 00:33:47,000
it's gonna be raised at the
funds are going to be raised at

584
00:33:47,000 --> 00:33:52,520
$1.85 a dollar, 72 or $1.77?
Who comes up with the number?

585
00:33:53,000 --> 00:33:57,360
Then so the the, the other thing
which sort of goes to answering

586
00:33:57,360 --> 00:34:01,320
your question a bit.
So sometimes with larger raises

587
00:34:01,320 --> 00:34:04,960
where you know you're reaching
out, you know, sort of on a

588
00:34:05,000 --> 00:34:08,600
confidential war crossing basis
like hey, you know, we want to

589
00:34:08,600 --> 00:34:10,120
raise, this is what we want to
do.

590
00:34:10,120 --> 00:34:12,040
We're going to launch in a
couple of days.

591
00:34:12,440 --> 00:34:15,239
What's your sort of level of
interest and sort of pricing?

592
00:34:15,920 --> 00:34:20,840
You you you'd look at and they
might say like, you know, you

593
00:34:20,880 --> 00:34:22,679
might say we're thinking to
price it at this.

594
00:34:22,679 --> 00:34:24,679
No, OK, yeah, that's about
right.

595
00:34:24,679 --> 00:34:29,679
Or then we go no, we we think
this and then other funds you

596
00:34:29,679 --> 00:34:33,320
you sort of getting a bit of a
feedback loop as part of that

597
00:34:33,320 --> 00:34:37,520
process.
And, you know, ultimately the

598
00:34:37,520 --> 00:34:41,920
company can decide, you know,
what, how, what they want to

599
00:34:41,920 --> 00:34:44,600
raise it.
But that sort of looking at

600
00:34:44,600 --> 00:34:46,840
precedence, what am I raising
the money for?

601
00:34:46,840 --> 00:34:50,239
What's that sort of immediately
before the raise that, you know,

602
00:34:50,520 --> 00:34:52,840
soft book process?
What's that feedback loop

603
00:34:52,840 --> 00:34:57,840
telling me?
And then, you know, as the, the

604
00:34:57,840 --> 00:35:00,720
broker, the, you know, given
sort of like a recommendation,

605
00:35:00,720 --> 00:35:04,920
we think something like this
would work.

606
00:35:04,920 --> 00:35:06,320
You know, it's, it's a lot of
things.

607
00:35:06,440 --> 00:35:08,080
It's a lot of things.
Yeah, OK.

608
00:35:08,320 --> 00:35:13,400
So and could that like if you go
too skinny, you could lose

609
00:35:13,520 --> 00:35:15,440
people that might have had
interested a lot?

610
00:35:15,440 --> 00:35:18,200
Yeah, 'cause they go like, Oh
no, that's that's too.

611
00:35:18,600 --> 00:35:21,000
That discount's too tight.
No 'cause.

612
00:35:21,120 --> 00:35:23,160
They or they want a bigger
discount 'cause they got more

613
00:35:23,160 --> 00:35:27,520
chance of potentially than
trimming a bit on the way out

614
00:35:27,520 --> 00:35:29,480
'cause it won't.
It might trade high though.

615
00:35:29,480 --> 00:35:31,600
They obviously just want better
bang for buck.

616
00:35:31,960 --> 00:35:34,680
Yeah, but I mean, the more you
discount it, the more shares you

617
00:35:34,680 --> 00:35:36,400
got to issue and more dilution
as well.

618
00:35:36,400 --> 00:35:38,640
Yeah.
So it's trying to, you know,

619
00:35:38,640 --> 00:35:42,120
then, you know, that can be a
bit of a factor too, Dilution.

620
00:35:43,720 --> 00:35:47,360
But yeah, it's, it's, yeah,
there's a lot of things you got

621
00:35:47,360 --> 00:35:49,480
to think about it.
It's just trying to get that

622
00:35:49,840 --> 00:35:54,400
perfect, you know?
Oh God, was it Goldilocks and

623
00:35:54,400 --> 00:36:00,160
the three bears that like happy
medium trying to trying to it.

624
00:36:00,200 --> 00:36:03,000
It's, it's a bit of hard work,
but yeah, it's just trying to

625
00:36:03,160 --> 00:36:06,480
take into account all those
various factors and find a a bit

626
00:36:06,480 --> 00:36:07,360
of a happy medium.
Really.

627
00:36:07,360 --> 00:36:11,640
So what what cases would you say
like contribute to the most like

628
00:36:11,960 --> 00:36:15,000
a a real skinny discount or a
discount that is pretty close to

629
00:36:15,000 --> 00:36:18,960
the last traded price?
Is it like commodity price?

630
00:36:18,960 --> 00:36:20,360
Is it?
Low price.

631
00:36:20,840 --> 00:36:23,920
If MMS has been appointed as the
open pick contractor.

632
00:36:24,080 --> 00:36:26,040
That is often a big factor.
Yeah.

633
00:36:26,480 --> 00:36:28,840
So like that'd be like there's a
there's a chance you'll probably

634
00:36:28,840 --> 00:36:32,120
just raise at the last traded
price.

635
00:36:32,120 --> 00:36:35,200
Maybe a premium, I don't know.
Raise it a premium like develop

636
00:36:35,440 --> 00:36:38,520
like develop did.
Like remember Bill raised it.

637
00:36:38,520 --> 00:36:42,920
I think a 14% premium early on
raised it like 3 odd bucks.

638
00:36:42,920 --> 00:36:45,440
Yeah, wow.
'Cause that's what he can do

639
00:36:45,440 --> 00:36:48,160
'cause he's got the name, that's
what MMS can do like.

640
00:36:48,400 --> 00:36:51,400
Now that they've got that
technical services team as well.

641
00:36:51,520 --> 00:36:53,680
Yeah, yeah.
So you're so you're saying if

642
00:36:53,680 --> 00:36:56,920
you if you want to avoid raising
at a discount, potentially raise

643
00:36:56,920 --> 00:36:59,600
at a premium, look after the
shareholders with minimal

644
00:36:59,600 --> 00:37:03,280
dialogue position, appoint MMS
as your open pick contractor.

645
00:37:03,400 --> 00:37:06,400
Have that as public knowledge
and it just makes she's all

646
00:37:06,440 --> 00:37:09,640
good.
The book build is just like

647
00:37:09,640 --> 00:37:12,880
it'll be like a friggin one of
those Encyclopaedia Britannicas.

648
00:37:12,880 --> 00:37:16,000
The book could be huge.
Like funds from all over the

649
00:37:16,000 --> 00:37:17,840
world, I love it.
Oh, there you go.

650
00:37:17,920 --> 00:37:22,560
But there's they Look, I'll just
the indirect benefits of having

651
00:37:22,560 --> 00:37:25,160
MMS on board for us, for your
company.

652
00:37:25,240 --> 00:37:27,560
Sorted.
Just like avoid shareholder

653
00:37:27,560 --> 00:37:29,640
dilution.
Oh, good segue chase.

654
00:37:29,960 --> 00:37:34,320
That was a very good segue.
Now what about one thing's the

655
00:37:34,320 --> 00:37:38,640
discount?
But in the world of Spivkos

656
00:37:39,680 --> 00:37:44,480
opies options that get thrown in
like a yeah, you get rise of the

657
00:37:45,240 --> 00:37:49,600
2530% discount and you get a one
for two attaching.

658
00:37:50,360 --> 00:37:53,480
Free attaching option, yeah.
So that's that's another way

659
00:37:53,480 --> 00:37:58,280
which you can it's sort of
adding to the the to the

660
00:37:58,280 --> 00:38:02,400
discount, but rather than doing
it directly by the issue price,

661
00:38:02,760 --> 00:38:04,800
you know, you've obviously got
the shares that you're issuing

662
00:38:04,800 --> 00:38:07,960
at a some sort of a discount.
But then you the free attaching

663
00:38:07,960 --> 00:38:13,360
option, you know, if you valued
that option, you know, that sort

664
00:38:13,360 --> 00:38:17,440
of adds to the, you know,
implied discount rate to.

665
00:38:17,440 --> 00:38:25,400
So you often see at the smaller
end of town that can be included

666
00:38:26,480 --> 00:38:29,240
as as part of the terms as well.
You know one for two free

667
00:38:29,240 --> 00:38:32,680
attaching option of whatever
exercise price.

668
00:38:32,840 --> 00:38:37,640
Who who determines the exercise
price or like you know, is it

669
00:38:37,800 --> 00:38:40,560
like, is it always 50% above the
placement price?

670
00:38:40,560 --> 00:38:45,160
Is it like to what determines
the exercise price of the

671
00:38:45,160 --> 00:38:49,520
options and the time frame on
when the expiry date of those

672
00:38:49,520 --> 00:38:52,040
options it?
Really depends, but it all it'd

673
00:38:52,200 --> 00:38:57,520
typically be a, you know, I
don't know, 30-40, fifty

674
00:38:57,520 --> 00:39:02,040
something percent premium to the
the issue price, the capital

675
00:39:02,040 --> 00:39:05,600
raising price or the the last
close.

676
00:39:06,520 --> 00:39:13,000
Normally with, with most options
I've seen usually give them sort

677
00:39:13,000 --> 00:39:16,480
of 2-3 years.
It can be different.

678
00:39:16,480 --> 00:39:18,920
It's really depends on the
situation.

679
00:39:18,920 --> 00:39:24,280
But yeah, sort of a the company
and their their their brokers

680
00:39:24,280 --> 00:39:26,880
sort of work together to sort of
figure out what's what's

681
00:39:26,880 --> 00:39:28,080
suitable there.
Yeah.

682
00:39:28,080 --> 00:39:32,040
So it take us to some real life
examples based on your

683
00:39:32,040 --> 00:39:34,880
experience.
Has there been ones where the

684
00:39:34,880 --> 00:39:39,960
soft book was filled and then
you go to cut the book or

685
00:39:39,960 --> 00:39:45,160
finalise the book and the pages
just start getting ripped out of

686
00:39:45,160 --> 00:39:48,160
the book and like the investors
just go missing or something

687
00:39:48,160 --> 00:39:50,440
happens?
Like is it usually, is it pretty

688
00:39:50,440 --> 00:39:53,080
regimented or can it really fall
apart ever?

689
00:39:54,760 --> 00:39:58,800
I mean, you can never say never,
but typically the reason you do

690
00:39:58,800 --> 00:40:04,080
that is then so when the big day
comes is it's usually not a

691
00:40:04,080 --> 00:40:07,640
problem.
And one thing that can help

692
00:40:07,720 --> 00:40:13,280
intercept that is.
So if you sort of broadly got

693
00:40:13,280 --> 00:40:16,920
your soft book, you're like, OK,
you know, we feel comfortable to

694
00:40:16,920 --> 00:40:22,480
formally launch this the morning
off.

695
00:40:22,480 --> 00:40:24,200
So very, very early in the
morning.

696
00:40:24,200 --> 00:40:28,240
So before trading halts Lodge to
sort of formally commence the

697
00:40:29,080 --> 00:40:33,600
capital raising, you'd have a
what's called a, a go no go call

698
00:40:33,960 --> 00:40:38,240
between the the the company and
the company's brokers to say,

699
00:40:38,240 --> 00:40:40,960
OK, gold as safe.
It's gold coming.

700
00:40:40,960 --> 00:40:44,720
You know, gold hasn't dropped
50% overnight.

701
00:40:44,920 --> 00:40:48,240
No one's bombed anyone.
There's no sort of big market

702
00:40:48,240 --> 00:40:52,480
shock or something horrible's
happened that would, you know,

703
00:40:52,480 --> 00:40:56,960
materially detriment us our
ability to go ahead with this.

704
00:40:57,160 --> 00:40:58,480
No, all good.
Yep, Yep.

705
00:40:58,600 --> 00:41:02,040
Let's go then Lodge the trading
off, then off, off you go that

706
00:41:02,040 --> 00:41:05,920
morning.
So that sort of helps, you know,

707
00:41:05,920 --> 00:41:09,000
because there have been, it's,
it's rare, but there have been

708
00:41:09,000 --> 00:41:12,040
situations where it's like, oh,
you know, someone's bombed

709
00:41:12,040 --> 00:41:15,280
someone and the market's been
off overnight and stuff.

710
00:41:15,280 --> 00:41:21,160
And you might go, oh, OK, hold
off for a moment or, you know,

711
00:41:21,360 --> 00:41:24,560
things like that.
But having that sort of step in

712
00:41:24,560 --> 00:41:27,680
the process can help that.
But it's normally it's, it's a

713
00:41:27,680 --> 00:41:30,440
bit like, you know, you do your
homework before you sort of get

714
00:41:30,440 --> 00:41:32,280
started.
As well and it's done pretty

715
00:41:32,280 --> 00:41:33,920
quick.
That's why it's like we've done

716
00:41:33,920 --> 00:41:38,480
within a couple of days like the
the going to trading halt books

717
00:41:38,480 --> 00:41:43,120
built and then like finalized
closed then.

718
00:41:43,680 --> 00:41:45,360
Yeah, yeah.
So generally.

719
00:41:45,520 --> 00:41:47,600
A couple of days later usually
or three days later.

720
00:41:47,600 --> 00:41:50,560
Yeah.
So generally on ASX you, you get

721
00:41:50,560 --> 00:41:56,080
a 2 day trading halt window to
basically launch, complete the

722
00:41:56,080 --> 00:42:00,640
raise, allocate the stock and
then you know, after those two

723
00:42:00,640 --> 00:42:04,320
days announce, Yep, we raised so
much money, this is what it's

724
00:42:04,320 --> 00:42:07,080
going towards.
Shares are settling in a week's

725
00:42:07,080 --> 00:42:09,200
time.
So it's, it's a very quick turn

726
00:42:09,200 --> 00:42:11,640
around on ASX.
Yeah.

727
00:42:11,680 --> 00:42:17,800
Why does every broker want to do
capital raises?

728
00:42:18,480 --> 00:42:21,080
Why is there the competition for
capital raises?

729
00:42:22,040 --> 00:42:23,920
The competition for capital
raises.

730
00:42:23,920 --> 00:42:25,960
Because they all want to be on
the ticket they.

731
00:42:26,040 --> 00:42:27,960
All I mean, but that's how they
earn, I guess that's how they

732
00:42:27,960 --> 00:42:29,280
earn money, right?
Yes.

733
00:42:29,360 --> 00:42:30,840
So that's what I was getting to.
Yeah.

734
00:42:30,840 --> 00:42:34,760
So like there's obviously it's
obviously some good coin in it

735
00:42:34,760 --> 00:42:38,000
for brokers to be running a
capital raise process.

736
00:42:38,280 --> 00:42:42,920
Yeah, yeah.
Oh, I mean, you know, you can a,

737
00:42:42,920 --> 00:42:46,000
a fun fact.
So when a company announces a

738
00:42:46,000 --> 00:42:50,000
capital raise after they've
announced that they put out

739
00:42:50,000 --> 00:42:54,520
what's called an Appendix 3B.
And part of that you can it's,

740
00:42:54,720 --> 00:42:56,240
it's detailed that's out in the
world.

741
00:42:56,480 --> 00:43:00,360
You can say, you know, if any,
what fees have been paid to

742
00:43:00,360 --> 00:43:03,720
brokers to conduct this capital
raising And you have to the

743
00:43:03,720 --> 00:43:07,720
company has to state that, you
know, often you say it's sort of

744
00:43:07,720 --> 00:43:10,360
five and six percents running
around.

745
00:43:10,360 --> 00:43:13,280
Sometimes really big ones will
be, you know, that percentage

746
00:43:13,960 --> 00:43:17,280
point will drop a bit.
So 5 and 6%.

747
00:43:17,280 --> 00:43:22,400
So you're saying if company
raises a small company raises

748
00:43:22,440 --> 00:43:27,880
$2,000,000, they get 106 percent
of that is 120 grand.

749
00:43:28,320 --> 00:43:33,240
So they get 120 grand just to
run this, you know, 2-3 day

750
00:43:33,240 --> 00:43:36,520
process and the probably the so
they've, they've done a lot of

751
00:43:36,520 --> 00:43:39,160
work in the lead up to.
Yeah, yeah, yeah as well.

752
00:43:39,280 --> 00:43:41,320
Yeah, yeah.
And it's, it's made, you know,

753
00:43:41,320 --> 00:43:43,840
they're maintaining
relationships with not just the

754
00:43:43,840 --> 00:43:47,400
company, but the prospective
investor pool and things like

755
00:43:47,400 --> 00:43:50,920
that.
So and then you know the, you

756
00:43:51,280 --> 00:43:54,280
know, that prep work, obviously
there's a lot going on in that

757
00:43:54,280 --> 00:43:57,360
sort of few day process sort of
putting it together.

758
00:43:57,840 --> 00:44:00,280
Yeah.
And a lot of mouths to feed as

759
00:44:00,280 --> 00:44:03,240
well.
For well, yeah, yeah, investment

760
00:44:03,240 --> 00:44:05,600
banks aren't small these days.
Yeah, yeah.

761
00:44:05,600 --> 00:44:10,480
So how, how does we're we're
this is just a full alley GC

762
00:44:10,480 --> 00:44:15,000
shark 'cause I'm interested not
it's as is like can you pick

763
00:44:15,000 --> 00:44:17,360
you've got now got a whole
episode about yourself.

764
00:44:17,360 --> 00:44:19,440
Like, you've got this Twitter
profile, you've got this

765
00:44:19,880 --> 00:44:22,080
overarching.
Like, everyone's looking at your

766
00:44:22,080 --> 00:44:24,800
assessments.
Like, welcome.

767
00:44:24,800 --> 00:44:27,800
I don't understand.
Into my into the den GC.

768
00:44:28,040 --> 00:44:33,440
So who does?
How does a company choose who is

769
00:44:33,440 --> 00:44:40,840
the lead manager, the joint lead
manager, The Who do like between

770
00:44:41,240 --> 00:44:44,880
all your you know, like
Canaccord, Argonaut, EUR,

771
00:44:44,880 --> 00:44:52,040
Hartley's, Shoreham Partners,
Bloody then God, there's that

772
00:44:52,040 --> 00:44:52,960
many of them.
Bloody.

773
00:44:52,960 --> 00:44:58,720
Discovery Capital, CPS Capital,
Evolution Capital JP Equity

774
00:44:59,320 --> 00:45:00,480
Buddy, who else have I been?
You're.

775
00:45:00,480 --> 00:45:02,640
Listening the whole, but then
you got all the big guys like,

776
00:45:02,640 --> 00:45:05,360
you know, Macquarie and Baron
Joey and things like that as

777
00:45:05,360 --> 00:45:07,680
well.
So you know it's.

778
00:45:07,720 --> 00:45:10,320
Are they more on?
How do do do they do equity

779
00:45:10,320 --> 00:45:13,240
tickets as well?
Yeah, yeah, but not as they're

780
00:45:13,240 --> 00:45:17,320
more advisory than ECM deals.
They've got both.

781
00:45:17,720 --> 00:45:18,760
They do both.
Yeah.

782
00:45:18,880 --> 00:45:20,240
Yeah.
But it's they.

783
00:45:20,520 --> 00:45:22,440
Who, who else is?
But I'm trying to think of every

784
00:45:22,440 --> 00:45:25,200
night Cumulus wealth.
What was the other one?

785
00:45:26,200 --> 00:45:29,440
There is Sydney 1.
They'll be loving the free plugs

786
00:45:29,440 --> 00:45:30,480
here.
They they.

787
00:45:30,880 --> 00:45:32,760
Especially the small ones.
I love this shit.

788
00:45:34,600 --> 00:45:36,640
Oh, forget this.
I'll let it come to you.

789
00:45:37,280 --> 00:45:40,280
But yeah, I mean, there's I.
Did the one for Maker recently,

790
00:45:40,280 --> 00:45:44,120
can't remember.
But yeah, look, there's there's

791
00:45:44,120 --> 00:45:49,120
sort of different, different
banks suit different sort of

792
00:45:49,640 --> 00:45:52,800
style and size, you know,
companies, you know, you see

793
00:45:52,800 --> 00:45:55,320
those more bulge bracket banks,
you know, play at the bigger

794
00:45:55,320 --> 00:45:56,600
end.
You know, you won't.

795
00:45:57,720 --> 00:45:59,640
I don't think you've would have
ever seen them playing in that

796
00:45:59,640 --> 00:46:01,720
sort of five, $10 million market
cap.

797
00:46:02,400 --> 00:46:06,600
And, you know, you've got some,
you know, it's, it's it's

798
00:46:06,600 --> 00:46:13,200
relationships, it's, you know,
you know, what else is there?

799
00:46:15,000 --> 00:46:18,120
You know, if the particular,
there often be people on, on the

800
00:46:18,120 --> 00:46:21,200
desk part of the stockbroking
team that may have been, you

801
00:46:21,200 --> 00:46:26,800
know, following or supporting
the stock over a period of time

802
00:46:26,800 --> 00:46:30,880
and introduce this, you know,
the story to the firm.

803
00:46:30,880 --> 00:46:33,800
And you know, they can sort of
see an opportunity like how we

804
00:46:33,800 --> 00:46:37,840
can, you know, you know, we've
got a client base we think would

805
00:46:37,840 --> 00:46:41,600
be interested in, in supporting
your exploration efforts and

806
00:46:41,600 --> 00:46:45,320
things like that.
You know, sometimes there's two

807
00:46:45,520 --> 00:46:50,760
lead managers that sort of fit
that bill and they work together

808
00:46:50,760 --> 00:46:55,320
to help, you know, arrange an
equity raising or things like

809
00:46:55,320 --> 00:46:59,480
that.
It it it's very case by case,

810
00:46:59,480 --> 00:47:03,400
but those are some general ones
that can often help.

811
00:47:03,640 --> 00:47:05,440
Petra Capital.
Oh, Petra capital.

812
00:47:05,440 --> 00:47:06,360
That's it.
Bloody yeah.

813
00:47:06,400 --> 00:47:09,080
Over E, yes.
God, God, thank God for that.

814
00:47:09,600 --> 00:47:11,600
Oh, that'd be because that would
have been like, why have you

815
00:47:11,600 --> 00:47:13,360
mentioned that?
But there's probably fucking

816
00:47:13,360 --> 00:47:18,640
mistakes.
But yeah, So what about the the

817
00:47:18,640 --> 00:47:23,520
Wheeling and dealing in the
networking and the maintaining

818
00:47:23,520 --> 00:47:27,440
those relationships and do the
do the dinners with these

819
00:47:27,440 --> 00:47:31,160
companies or the like, you know,
like hosting an event for these

820
00:47:31,160 --> 00:47:34,080
companies?
Do they sort of, you know, do

821
00:47:34,080 --> 00:47:39,240
the frequencies of that amplify
when they might be perceived to

822
00:47:39,240 --> 00:47:41,040
be low on cash maybe needing
them?

823
00:47:41,040 --> 00:47:43,560
It certainly tends to happen,
yeah.

824
00:47:43,560 --> 00:47:47,760
So, so they're in the front of
their mind that this finance

825
00:47:47,760 --> 00:47:50,080
firm is like, oh geez, we'll use
them.

826
00:47:50,440 --> 00:47:52,640
Yeah, that's that's certainly
one way.

827
00:47:52,640 --> 00:47:57,800
Or you know, taking them on on
sort of non deal Rd. shows is,

828
00:47:57,800 --> 00:47:59,720
is one way.
So you're sort of building that,

829
00:47:59,960 --> 00:48:02,600
you know, relationship with the
company and introducing them to,

830
00:48:02,600 --> 00:48:07,880
you know, various, you know,
funds in the space that you

831
00:48:07,880 --> 00:48:10,640
know, like those sort of
companies or stocks or projects

832
00:48:10,640 --> 00:48:16,920
and things like that.
You know the the research team

833
00:48:17,280 --> 00:48:20,520
might find an interest in that
asset or company go, you know

834
00:48:20,520 --> 00:48:22,240
we'd like to initiate coverage
on it.

835
00:48:23,400 --> 00:48:25,920
So is that what?
Is that what research is for?

836
00:48:26,480 --> 00:48:30,080
Like research?
Because companies don't make

837
00:48:30,080 --> 00:48:32,640
money out of research.
Typically not.

838
00:48:32,680 --> 00:48:37,320
But they do it for a presence to
try and get in on the capital

839
00:48:37,320 --> 00:48:39,960
rise.
Well, technically research is,

840
00:48:40,200 --> 00:48:43,520
is independent.
They you can't technically.

841
00:48:43,520 --> 00:48:48,520
So, you know, the, the research
team that often, you know, I, I

842
00:48:49,200 --> 00:48:53,320
wasn't part of a research team
myself, but you know, generally

843
00:48:53,320 --> 00:48:57,080
they'll have certain, you know,
criteria or, you know, that

844
00:48:57,320 --> 00:49:00,760
they'd like to meet, you know,
to sort of work them going, you

845
00:49:00,760 --> 00:49:05,040
know, this is something we, we
think is worth, you know,

846
00:49:05,040 --> 00:49:07,280
providing research coverage on
because that's time, that's

847
00:49:07,280 --> 00:49:10,040
resources and everything that
they've got to commit to, you

848
00:49:10,040 --> 00:49:14,560
know, to doing that.
So it's a process, but you know,

849
00:49:14,560 --> 00:49:16,680
you can't sort of say, oh, you
need to cover this.

850
00:49:16,680 --> 00:49:22,560
Like it doesn't work like that.
So a non deal roadshow because

851
00:49:22,920 --> 00:49:27,080
the finance firm the what what
is the term like?

852
00:49:27,080 --> 00:49:28,960
Is it what do you call it?
Because they're not a bank.

853
00:49:28,960 --> 00:49:31,400
Are they the broker?
Like do you call them a broker?

854
00:49:31,400 --> 00:49:33,320
It's.
Sort of the the terms sort of

855
00:49:33,320 --> 00:49:38,440
used interchangeably, but yeah,
bank broker it's.

856
00:49:38,640 --> 00:49:42,120
Bank broker, what is?
So if they're taking a company

857
00:49:42,120 --> 00:49:45,760
on a non deal roadshow from
taking them to Melbourne,

858
00:49:45,760 --> 00:49:51,160
Sydney, Brisbane to one, what is
on a non non deal roadshow?

859
00:49:51,160 --> 00:49:55,880
And I assume the bank, the
finance firm pays for

860
00:49:56,440 --> 00:49:58,560
everything.
How does it work?

861
00:49:58,880 --> 00:50:02,000
I'm not sure on your latter
part, but the whole purpose of

862
00:50:02,000 --> 00:50:05,200
it's really to say, hey, you
know, we've, we've, I don't

863
00:50:05,200 --> 00:50:07,200
know, we've just discovered this
asset.

864
00:50:07,200 --> 00:50:11,720
We've just bought this asset.
We want to, you know, sort of go

865
00:50:11,720 --> 00:50:14,760
around to the, you know, certain
members of the investing

866
00:50:14,760 --> 00:50:18,720
community funds, you know, the
specialists in resources or you

867
00:50:18,720 --> 00:50:22,320
know, you know, you know,
stockbroking teams and things

868
00:50:22,320 --> 00:50:24,120
like that to go, hey, you know,
this is our asset.

869
00:50:24,120 --> 00:50:25,960
This is what we're about.
This is what we're doing.

870
00:50:26,560 --> 00:50:28,760
Just, you know, awareness
basically.

871
00:50:28,880 --> 00:50:33,160
And sometimes, you know, you can
do as much as you like, sort of,

872
00:50:33,240 --> 00:50:37,360
you know, in your ASX releases,
so as investor presentations and

873
00:50:37,360 --> 00:50:42,160
more that the kind of like
digital or virtual type things.

874
00:50:42,160 --> 00:50:46,520
But sometimes doing that in
person, just this just works

875
00:50:46,520 --> 00:50:49,040
better.
So that's why people, you know,

876
00:50:49,240 --> 00:50:52,920
physically, you know, they might
fly over East or fly to North

877
00:50:52,920 --> 00:50:56,520
America, Europe to actually, you
know, look these people in the

878
00:50:56,520 --> 00:50:59,440
eye and, and talk to them about
what they're doing and, and

879
00:50:59,440 --> 00:51:00,560
things like that.
So.

880
00:51:00,760 --> 00:51:03,040
So what a bro.
Promotion awareness.

881
00:51:03,200 --> 00:51:05,480
Yeah, yeah.
So the broker like could be a

882
00:51:05,480 --> 00:51:10,280
broker and an analyst might take
them around and they will.

883
00:51:10,280 --> 00:51:14,520
Sit there like chaperoning them
around and you know, you know,

884
00:51:14,520 --> 00:51:17,200
introducing them to various, you
know, funds and investors and

885
00:51:17,200 --> 00:51:19,600
things like that.
And the company will tell their

886
00:51:19,880 --> 00:51:22,400
story and their what they're
doing with the project and, and

887
00:51:22,400 --> 00:51:23,360
things like that.
So.

888
00:51:23,680 --> 00:51:25,080
They sit in the meeting with
them.

889
00:51:25,160 --> 00:51:27,440
Yes, on the presentation.
Yeah, a lot of the time, yeah.

890
00:51:27,440 --> 00:51:29,800
So that's when, so that's what a
non deal roadshow is.

891
00:51:29,800 --> 00:51:32,560
It's just a promotional thing.
It's not.

892
00:51:33,080 --> 00:51:35,080
And what is it called Non deal
roadshow.

893
00:51:35,120 --> 00:51:40,480
It's time where there is no,
there is not a deal happening to

894
00:51:40,480 --> 00:51:42,520
get excited about that's going
to rise the share price.

895
00:51:42,520 --> 00:51:44,920
We're just spreading the
company's story.

896
00:51:45,360 --> 00:51:48,880
Yeah but then why do a lot of
deals and risings or stuff

897
00:51:48,880 --> 00:51:51,000
happen after non deal roadshows
sometimes?

898
00:51:51,000 --> 00:51:53,480
That's a question we'd all love
to know the answer to, Maddie.

899
00:51:54,520 --> 00:51:58,080
Maybe they come up with the idea
while they're having a meeting

900
00:51:58,080 --> 00:51:58,720
on the non.
Deal.

901
00:51:58,720 --> 00:52:02,520
It very well could be the case.
Have you ever been on a non deal

902
00:52:02,520 --> 00:52:06,640
roadshow JC?
One or two, not a lot, but.

903
00:52:06,680 --> 00:52:09,800
You've organised a couple.
Sort of helped out here and

904
00:52:09,800 --> 00:52:10,800
there.
What do you do?

905
00:52:10,800 --> 00:52:13,520
Book the meetings or.
They're pretty much

906
00:52:14,000 --> 00:52:17,280
administrative really.
But you know, reaching out, you

907
00:52:17,280 --> 00:52:20,880
know, sort of thinking you sort
of, I guess you got to sort of

908
00:52:21,080 --> 00:52:25,280
put it from the say if we're
talking about funds from their

909
00:52:25,280 --> 00:52:27,960
perspective, like, OK, you know,
what's their mandate?

910
00:52:27,960 --> 00:52:33,000
What, what sort of size company
are they interested in?

911
00:52:33,000 --> 00:52:34,960
What sort of commodities are
they interested in?

912
00:52:35,000 --> 00:52:37,920
What have they invested in
recently?

913
00:52:38,400 --> 00:52:41,800
And that sort of can give you a
bit of clues to sort of, OK,

914
00:52:41,800 --> 00:52:46,080
well, I think, you know, they're
worth asking, you know, for a

915
00:52:46,080 --> 00:52:49,400
meeting or, you know, worth an
introduction, you know, sort of

916
00:52:49,840 --> 00:52:51,360
based on all those sorts of
things.

917
00:52:51,360 --> 00:52:54,240
I mean, you know, it's just
because they invested in this

918
00:52:54,240 --> 00:52:56,120
gold explorer, doesn't mean
they're going to like that gold

919
00:52:56,120 --> 00:52:59,400
explorer, but it just sort of
gives you a bit of a starting

920
00:52:59,400 --> 00:53:02,200
point sort of doing that
research and that homework to

921
00:53:02,200 --> 00:53:05,600
go, OK, well, we think this is
a, you know, short list of

922
00:53:05,600 --> 00:53:10,440
people that are worth and
reaching out to and based on the

923
00:53:10,440 --> 00:53:13,720
sort of those factors and
imagine many more that I just

924
00:53:13,720 --> 00:53:16,840
mentioned before.
Let's give them a crack and see

925
00:53:16,840 --> 00:53:18,920
what they have to say and see
what they're about and.

926
00:53:19,240 --> 00:53:21,560
They might start buying on
market and drive the share price

927
00:53:21,600 --> 00:53:23,840
up.
Yeah, maybe, maybe, maybe they

928
00:53:23,840 --> 00:53:26,680
love it that much, who knows?
But that's, I think you got to

929
00:53:28,160 --> 00:53:31,080
think about it from their
because if you know, it's a bit,

930
00:53:31,680 --> 00:53:34,720
you look a bit silly.
If it's like, oh, we don't, we

931
00:53:34,720 --> 00:53:36,960
don't touch base metals, but
you're reaching out to us and

932
00:53:36,960 --> 00:53:39,320
you're a copper developer a lot.
That's just, you know, you're

933
00:53:39,320 --> 00:53:42,240
wasting people's time there.
So yeah.

934
00:53:42,560 --> 00:53:47,280
So what about what about if
finance mob takes a company on a

935
00:53:47,280 --> 00:53:52,040
non deal roadshow then they rise
and tell I assume this has

936
00:53:52,040 --> 00:53:55,880
happened before they launch a
capital raising a month later

937
00:53:56,120 --> 00:53:58,920
and the company that took them
on the non dual roadshow is not

938
00:53:58,920 --> 00:54:03,040
one of the lead managers or is
not one of the people companies

939
00:54:03,040 --> 00:54:04,560
on the ticket?
Are you saying?

940
00:54:05,040 --> 00:54:09,800
That happened.
I probably have, I mean, it'd be

941
00:54:10,720 --> 00:54:18,960
it's it's it's unusual, but it's
not just because, I guess just

942
00:54:18,960 --> 00:54:22,080
because someone's taking a new
on a non deal roadshow or they

943
00:54:22,080 --> 00:54:24,320
organised and invested dinner
for you, something like that.

944
00:54:24,960 --> 00:54:30,520
You're not obligated to use
them, but you know, if someones

945
00:54:30,520 --> 00:54:34,440
being consistently like a bank
or a broker has been very

946
00:54:34,440 --> 00:54:39,120
consistently supportive across a
number of channels and different

947
00:54:39,120 --> 00:54:43,600
ways of the company and the
project and all that, and then

948
00:54:43,600 --> 00:54:48,240
they didn't get on the ticket.
It's I can understand why they

949
00:54:48,240 --> 00:54:50,880
might be frustrated.
But yeah, just because you you

950
00:54:50,880 --> 00:54:52,480
do that, it's not, it's not a
guarantee.

951
00:54:52,600 --> 00:54:54,880
Have you seen a physical
outburst of someone that's a bit

952
00:54:54,880 --> 00:54:56,840
frustrated after something like
that has happened?

953
00:54:56,960 --> 00:54:59,720
Oh, there's a lot of colorful
echoes in banking so.

954
00:54:59,960 --> 00:55:04,960
How did little bloody early 20s
little Alley GC go in that alpha

955
00:55:04,960 --> 00:55:06,040
male environment?
Oh.

956
00:55:06,520 --> 00:55:10,880
You know what?
Actually, there's I, I really

957
00:55:10,880 --> 00:55:15,840
enjoyed doing the, the equity
deals because you sort of break

958
00:55:15,840 --> 00:55:19,240
out of that the corporate
finance bubble and you're

959
00:55:19,240 --> 00:55:24,040
getting to really work with, you
know, the whole, the whole team

960
00:55:24,040 --> 00:55:26,800
across, across the firm.
And there's just, I was like, I

961
00:55:26,800 --> 00:55:29,320
feel like I'm in a movie
sometimes, like some of these

962
00:55:29,320 --> 00:55:33,160
characters and egos and, and
things like that, which which

963
00:55:33,160 --> 00:55:37,800
made it fun.
But in my experience, I think I

964
00:55:37,840 --> 00:55:41,120
was pretty fortunate to be part
of a culture where it's like,

965
00:55:41,120 --> 00:55:45,000
you know what, if you, you're
smart, you work hard, you know,

966
00:55:45,080 --> 00:55:49,160
everyone gets trade the the same
around here and gets same

967
00:55:49,160 --> 00:55:52,600
opportunities.
And you know, my opinion and and

968
00:55:52,600 --> 00:55:54,120
thoughts and ideas are
respected.

969
00:55:54,120 --> 00:55:55,960
I'm like, you know what, that
that's for me.

970
00:55:56,720 --> 00:56:00,360
That's that's all I need is is a
good culture because the rest,

971
00:56:00,360 --> 00:56:04,240
the rest comes after that.
So what does more dress sense

972
00:56:04,240 --> 00:56:06,760
affect the culture around here?
Like is it a good culture?

973
00:56:07,600 --> 00:56:11,240
It is because you know what I
used to take so long to, you

974
00:56:11,240 --> 00:56:14,320
know, this is a like corporate
thing and you do do the hair and

975
00:56:14,320 --> 00:56:17,120
the makeup and this and that.
I'm like, I can just put on like

976
00:56:17,160 --> 00:56:19,920
a, you know, quick bit of powder
and some mascara.

977
00:56:20,040 --> 00:56:23,160
And I'm like, it's actually
just, I can sleep in a bit more

978
00:56:23,160 --> 00:56:25,440
these days, which is nice.
Happy to help you mate.

979
00:56:25,720 --> 00:56:27,320
Happy to help.
I just, you know, I think, you

980
00:56:27,320 --> 00:56:32,840
know, I think the people just, I
mean, this is sort of any career

981
00:56:32,840 --> 00:56:36,320
really, but particularly in, you
know, sort of high, high

982
00:56:36,320 --> 00:56:39,720
pressure, high demanding areas
like, you know, finance and

983
00:56:39,720 --> 00:56:41,880
mining and stuff.
If you've got good people around

984
00:56:41,880 --> 00:56:44,960
you that, you know, you can have
a laugh with you, they sort of

985
00:56:44,960 --> 00:56:47,360
don't take you too seriously.
But you know, when shit hits the

986
00:56:47,360 --> 00:56:49,800
fan and you gotta hustle, you
gotta hustle, you know that just

987
00:56:50,640 --> 00:56:54,080
that just absolutely makes it.
Send the last bit I want to

988
00:56:54,080 --> 00:56:57,440
touch on is we've talked about
the relationship between the

989
00:56:57,440 --> 00:57:01,760
companies and the the banks
finance for the brokers.

990
00:57:02,120 --> 00:57:06,160
What about the funds and the
brokers?

991
00:57:06,160 --> 00:57:08,920
Because you've obviously got the
broking arm of that business

992
00:57:08,920 --> 00:57:11,680
where you know, the brokers are
doing the trades, You've got the

993
00:57:11,680 --> 00:57:14,920
and you've got the insto insto
desk, which is dealing with the

994
00:57:14,920 --> 00:57:16,480
funds.
You've got the retail desk

995
00:57:16,480 --> 00:57:20,000
dealing with the bloody, you
know, the Maddie Michaels of the

996
00:57:20,000 --> 00:57:23,320
world having a punt and they're
doing trades and everything.

997
00:57:23,640 --> 00:57:29,600
And I assume like the big funds
have got multiple brokers that

998
00:57:29,600 --> 00:57:31,920
they could use.
Oh, of course, but.

999
00:57:31,920 --> 00:57:37,400
I assume there there's a
relationship as well between

1000
00:57:37,880 --> 00:57:41,800
when there's a good deal that
when they're talking about

1001
00:57:41,800 --> 00:57:46,200
allocation and everything.
If you're not broking much

1002
00:57:46,200 --> 00:57:48,640
through a company and you're
doing shit loads of brokerage

1003
00:57:48,640 --> 00:57:51,440
over here, they're not going to
have you at the top of the line

1004
00:57:52,040 --> 00:57:54,560
for a big allocation.
Whereas if you're broke with

1005
00:57:54,560 --> 00:57:58,120
them all the time, is there a?
Does that happen on?

1006
00:57:58,400 --> 00:58:00,400
Yes and no.
Figuring out who gets what in a

1007
00:58:00,400 --> 00:58:03,200
capital raise.
Yes and no, because it's I mean

1008
00:58:03,200 --> 00:58:07,760
ultimately so you know, capital
raising the, the client is the,

1009
00:58:08,640 --> 00:58:11,400
is the the mining company that's
approached you.

1010
00:58:11,400 --> 00:58:18,920
So you know, what is, is having
that particular fund good, you

1011
00:58:18,920 --> 00:58:20,800
know, on their register a good
thing?

1012
00:58:20,920 --> 00:58:24,400
Is it, you know, if it is, then
you know, they, you know, they

1013
00:58:24,400 --> 00:58:26,600
should probably get a, a good
allocation.

1014
00:58:27,160 --> 00:58:29,240
You know, that's from an
internal perspective.

1015
00:58:29,240 --> 00:58:31,760
Oh, they always broke it through
so and so, you know, no, no, no.

1016
00:58:31,760 --> 00:58:34,160
But like, you know, that's sort
of, that's not really the point.

1017
00:58:34,400 --> 00:58:37,200
So I assume that's where, but
that's where the research gets

1018
00:58:37,200 --> 00:58:41,520
used.
Research is comes important

1019
00:58:41,520 --> 00:58:45,680
because you've got you've got
the research arm that is feeding

1020
00:58:45,680 --> 00:58:49,280
the Insta, insta brokers.
Yeah, gives them a good tool,

1021
00:58:49,360 --> 00:58:51,040
yeah.
And then that are then feeding

1022
00:58:51,680 --> 00:58:54,840
information and trade ideas to
the funds.

1023
00:58:56,120 --> 00:59:00,400
And then obviously, if they, the
researchers have got good ideas

1024
00:59:00,400 --> 00:59:03,240
and good trade ideas for the
funds and the funds make money

1025
00:59:03,240 --> 00:59:05,560
off it and the funds will keep
going through them.

1026
00:59:05,560 --> 00:59:09,000
And then they, oh, did you ever
get A tag, JC?

1027
00:59:09,440 --> 00:59:09,800
No.
Oh.

1028
00:59:10,640 --> 00:59:12,760
You bloody get.
It was too junior for A tag.

1029
00:59:13,400 --> 00:59:15,040
Oh so A tag for people don't
know.

1030
00:59:15,040 --> 00:59:19,880
So if if a if a fund does a
trade though they could send and

1031
00:59:19,880 --> 00:59:22,240
they make money on it.
They at their discretion,

1032
00:59:22,240 --> 00:59:26,640
they'll usually have a pool to
distribute each year or between

1033
00:59:26,640 --> 00:59:30,600
each person, each fund portfolio
manager and they'll just say

1034
00:59:30,600 --> 00:59:34,840
we're going to send old mate A5
grand tag because they gave us

1035
00:59:34,840 --> 00:59:38,800
this idea to buy this stock.
But that doesn't go directly to

1036
00:59:38,800 --> 00:59:41,320
that person.
It goes to the to the bank.

1037
00:59:41,320 --> 00:59:43,400
The broking house.
Broking House and then they

1038
00:59:43,400 --> 00:59:46,560
distribute it accordingly for
the the big end of year bonus,

1039
00:59:46,560 --> 00:59:48,680
but it doesn't go directly to
that person.

1040
00:59:49,080 --> 00:59:52,800
It'd be good if it did.
I swear I should be getting tags

1041
00:59:52,800 --> 00:59:54,160
for all the shit I'm saying on
the show.

1042
00:59:54,160 --> 00:59:56,840
All.
Your darts on the dartboard.

1043
00:59:56,960 --> 00:59:59,360
Oh yeah, bloody.
Imagine the tag when they come

1044
00:59:59,360 --> 01:00:02,280
off mate.
That's that has been bloody.

1045
01:00:02,920 --> 01:00:05,800
That's gone for an hour.
Oh shit, it actually has.

1046
01:00:06,080 --> 01:00:10,800
We were, we were going to do a 2
parter and a mining bit and a

1047
01:00:10,800 --> 01:00:14,480
finance bit, but we've got an
extra episode up our sleeve we.

1048
01:00:14,560 --> 01:00:16,360
Sure do.
But yeah, no, because.

1049
01:00:16,560 --> 01:00:20,160
That was bloody interesting.
Well, a day in the life of a

1050
01:00:20,640 --> 01:00:25,840
banker, broker, yeah.
So I'll assume as you said, when

1051
01:00:25,840 --> 01:00:28,000
you go into the raising side,
assume when you're in the

1052
01:00:28,000 --> 01:00:30,960
banking bit and you decide, OK,
we're going to raise capital to

1053
01:00:30,960 --> 01:00:34,680
fund this, then you go sort of
assist with the the capital, the

1054
01:00:34,800 --> 01:00:37,160
ACM side, the capital raised
side and.

1055
01:00:37,160 --> 01:00:39,960
Pretty much in my experience,
you know, followed it the whole

1056
01:00:39,960 --> 01:00:44,520
way through from sort of the
inception to to execution, which

1057
01:00:45,280 --> 01:00:47,600
was really cool.
Just yeah, being part of seeing

1058
01:00:47,600 --> 01:00:50,160
it the whole way through.
But yeah, so hopefully the, you

1059
01:00:50,800 --> 01:00:54,320
know, we sort of, you know,
throw around sort of terms and

1060
01:00:54,320 --> 01:00:56,960
and concepts and make
assumptions sometimes when we're

1061
01:00:56,960 --> 01:01:00,160
we're on the show and talking
through various, you know, deals

1062
01:01:00,160 --> 01:01:01,840
and things like that.
So hopefully the money miners

1063
01:01:01,840 --> 01:01:05,080
got something a bit more
educational out of that and I

1064
01:01:05,080 --> 01:01:07,440
understand the sort of the
finance side a little better.

1065
01:01:07,440 --> 01:01:10,000
But I've certainly got some
questions for Matthew as well,

1066
01:01:10,000 --> 01:01:13,040
which we'll get into very soon.
We're going to well, that might

1067
01:01:13,040 --> 01:01:16,240
be tomorrow's app if there's
another slow Newsday, we're just

1068
01:01:16,240 --> 01:01:19,880
you can just and here's the
prelude.

1069
01:01:19,920 --> 01:01:22,520
You want to know about jumbos
and long aisles and I've got

1070
01:01:22,520 --> 01:01:26,360
some videos to show of what this
machinery does on 101, but it's

1071
01:01:26,360 --> 01:01:29,000
probably probably giving me time
to get more.

1072
01:01:29,000 --> 01:01:32,000
But even like I'm looking
forward to discussing the you

1073
01:01:32,000 --> 01:01:35,480
know, finance is one thing like
looking at all, you know, bloody

1074
01:01:35,480 --> 01:01:39,520
EVD, but Darpy NAV and all those
things like looking multiples or

1075
01:01:39,520 --> 01:01:42,400
what things are trading that.
And it's all based on sort of

1076
01:01:42,400 --> 01:01:45,440
what has happened and and it is
based on predicted earnings.

1077
01:01:45,440 --> 01:01:48,200
But I'm going to talk about the
stuff you can look at in a

1078
01:01:48,280 --> 01:01:52,240
mining operation to maybe give
yourself a statistical chance to

1079
01:01:52,240 --> 01:01:53,400
predict what's going to happen
in.

1080
01:01:53,680 --> 01:01:57,440
The leading indicators.
Yeah, yeah, just to and it's all

1081
01:01:57,440 --> 01:02:02,360
about rocks pretty much and the
angles and shapes and sizes of

1082
01:02:02,360 --> 01:02:05,840
rocks.
So exciting times, JC.

1083
01:02:06,040 --> 01:02:09,760
That was that, that was.
I cannot wait 'cause I assume

1084
01:02:09,760 --> 01:02:13,400
tonight at the dinner table with
Stella JC you are gonna be on

1085
01:02:13,400 --> 01:02:17,840
telly cause we've just delivered
the world the story of Ally JC.

1086
01:02:17,840 --> 01:02:19,120
Oh, love it.
No.

1087
01:02:19,200 --> 01:02:22,120
You tricked yourself into do it.
This was your idea too, and you

1088
01:02:22,120 --> 01:02:24,680
tricked yourself into.
Well, it was to do a bit of

1089
01:02:24,680 --> 01:02:28,360
both, but then it's all become a
one hour special on pine.

1090
01:02:28,480 --> 01:02:31,320
It's just so I was just so I was
so interested.

1091
01:02:31,480 --> 01:02:34,640
Love it just and if I'm
interested, hopefully other

1092
01:02:34,640 --> 01:02:37,040
people are.
Let's go run with that, yeah?

1093
01:02:37,920 --> 01:02:39,360
But you know who else are pretty
interesting?

1094
01:02:39,360 --> 01:02:43,280
Maddie is MMS.
Oh, especially when they're

1095
01:02:43,440 --> 01:02:47,160
helping you raise at a premium.
Who else is interesting to you?

1096
01:02:47,160 --> 01:02:49,920
JC on the list?
Oh don't forget about the

1097
01:02:49,920 --> 01:02:53,440
interesting Oz IMM underground
operators tickets that you can

1098
01:02:53,440 --> 01:02:56,400
get 100 bucks off.
Mom 100 discount code.

1099
01:02:56,400 --> 01:02:59,560
Link is in the show notes.
Adelaide April 7th the 9th.

1100
01:02:59,600 --> 01:03:01,800
Cannot wait.
Who else is interesting?

1101
01:03:01,800 --> 01:03:05,000
JC got.
Grounded Sand, Ground Sport, CRE

1102
01:03:05,000 --> 01:03:10,080
Insurance, Pedro Saltbush
Contracting, SWEC, Quattro,

1103
01:03:10,080 --> 01:03:13,160
Project Engineering and Cross
Boundary Energy.

1104
01:03:13,520 --> 01:03:17,480
Peter Reid Money Miners Peter
Reid Information contained in

1105
01:03:17,480 --> 01:03:20,280
this episode of Money of Mine is
of general nature only and does

1106
01:03:20,280 --> 01:03:23,080
not take into account the
objectives, financial situation

1107
01:03:23,120 --> 01:03:25,120
or needs of any particular
person.

1108
01:03:25,440 --> 01:03:28,480
Before making any investment
decision, you should consult

1109
01:03:28,480 --> 01:03:31,520
with your financial advisor and
consider how appropriate the

1110
01:03:31,520 --> 01:03:35,200
advice is to your objectives,
financial situation and needs.