Datt Capital get vocal over Koonenberry incentives

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But if you benchmark this
against every company, it

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probably it's not probably that
extravagant.

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I think there's just obviously
some internal battles going on

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between that capital and the
board, which has got to this

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point where they have a
resolution to remove the two non

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exec.
Because at the end of the day,

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they are a 12% owner of this
business and with other

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shareholders they they should be
the ones to a degree dictating

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what sensation to set out.
It's inexcusable not to disclose

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Section 2O39-D from 4 weeks ago
to shareholders like where's the

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cleansing of the to the market
about before you announced your

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updated incentive package?
Rhino buddy miners, we've got a

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bit of a bloody proposed
proposed board tilt for a NSW

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and other places mining
explorer.

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Lover board tilt.
Lots of lots of familiar faces

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involved in this one, so keen to
unpack.

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That I know lots of all been on
most of them have been on the

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show.
Oh love it bloody.

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So pretty much if you don't want
to get your board tilted, don't

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let these people on our show.
No right.

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What else we got JD Bit of a
bloody murder in you for a real

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NSW Eastern states field in
today's episode.

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Yeah, you're neck of the woods,
mate.

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We're going to chat about a gold
deal, a merger of equals in

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predominantly NSW, but also a
bit in Victoria, a bit in

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Sweden, a bit all over.
Gerald James, I think it's time

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to get a NSW water boars
division, WA water boars with

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everything you're about to talk
about, possibly the need for NSW

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water boars we've got and
there's Namibian.

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Water boars as well, but it's
coming, It's coming.

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This week, but maybe let's focus
on NSW.

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Gerald James WA water balls.
Thanks for coming on for it.

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Bloody it's been great to have
them back.

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They're best bud Rotary drillers
in the world.

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They're going to have separate
divisions in every friggin

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state, territory, province in
the world soon because they are

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the guy too.
You just have to pick up the

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phone as well.
They'll come set it all up.

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No dramas.
They've got the trucks, got the

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kit, good to go.
Probably already scoping your

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job out without even picking up
the phone because they want to

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be ahead of the pack.
So mate, anything water drilling

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related you give them a call.
Let's get into it.

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Canonbury.
Canonbury Start.

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And finally on the just on the
back of old headers, giving it a

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good plug a couple of weeks ago.
Yeah, And the episodes, we

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haven't put it up yet, but we
actually just spoke with John

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Forward as well.
Who, who's a portfolio, You

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know, Canonbury is one of his
portfolio companies as well.

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So unfortunately we didn't get
to ask him about the the, the

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shareholder tilt that's going on
right now.

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But I'm excited, I'm excited to
talk about, you guys know how

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much we get fired up about a bit
of shareholder activism in this

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one has it all.
We've got the hot stock with a

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new discovery.
It's really captured the

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attention of of retail in the
midst of a, a gold bull market.

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We've got a, a Section 249-D
tended by a major shareholder to

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oust 2 of the directors of the
board.

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We've got not one, not 2, but
three former guests about

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podcasts who are shareholders of
this company.

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And to top it all off, we've had
a, a complete kind of lack of

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disclosure of a Section 2O3D out
of coonvery for four weeks until

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the shareholder went public
themselves today.

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This one is juicy.
Yeah.

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Right.
OK, so out of all the people

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that have been on the show and
everything, which is the actual

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person that's on the show is
that that is running this U2

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have to go process?
None other than Emmanuel Dat of

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Dat Capital, who is a is a 12%
shareholder of Coonanbury.

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Here's what we know so far.
So Dat Capital made confidential

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requests for board changes to
Coonanbury.

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Historically, these were
rejected.

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Following this, Dat Capital
notified Coonanbury of its

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intentions to to move
resolutions for removing certain

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directors under section 2O3D of
the Corpse Act on the 31st of

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March.
That was 4 weeks ago.

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Coonbury did not disclose that
Capital's notice on ASX.

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Instead, 10 days later, Coonbury
announced an incentive package

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for all of its directors.
In total 54,000,000 performance

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rights tied to nothing more than
kind of 10 Day V WAP hurdles

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were were put forward on the
10th of April, 10 days later.

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Then this morning that Capital
goes public disclosing that they

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are requisitioning shareholder
meeting under Section 249-D of

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the Corps Act Amazingly, that
capital had to be the ones to

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disclose this themselves.
It was another kind of hour

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after that capital's release of
of trading on ASX before an

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announcement from Cunningbury
was finally made it's way to

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shareholders acknowledging the
receipt of the notice from from

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that capital.
So I think it might be fair to

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assume they've taken issue with
this incentives.

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Package, Yeah, well, and keep in
mind the incentive package came

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subsequent to their, their, you
know, request to remove

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directors already.
So I, I think, I think it's, you

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know, kind of one of the number
of things here.

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But yeah, remember, debt
capital's a 12% shareholder and

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unlike all, all of the
directors, you know, every,

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every single share that they
own, it's come about by having

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to, to pay the share price on
market for it as opposed to, you

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know, performance rights and the
like.

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So the specifics of what they
want shareholders to vote on is

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#1 removal of Darren Glover and
George Rogers from the Board of

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coonanbury #2 the appointment of
Tim Kennedy and Tony Goo to the

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board to the board of coonanbury
#3.

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They want to vote against the
performance rights incentives

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announced on the 10th of April,
which I just mentioned, which

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that says will dilute existing
shareholder value by almost 6%

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with without tangible benefit.
And and finally to vote for

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consolidation of of share
capital, which is somewhat kind

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of insignificant compared to the
other resolutions here.

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But on the incentives point, I
thought it would be actually

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worthwhile to read this quote
from the debt capital letter.

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It says the proposed vesting
conditions are linked to short

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term share price movements
rather than the accrual of

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tangible fundamental value.
A well structured incentive

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package should include vesting
conditions linked to a tangible

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quantum of gold resources
verified under the short code,

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in addition to a total
shareholder return condition

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based on a volume weighted
average price over at least 30

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days.
The company used similar

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methodology in combination with
other vesting hurdles in the

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previously approved incentive
package.

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Comparatively, the board's new
proposal departs from past

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practice and continues an
inexplicable transfer of value

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from shareholders to the board,
which is inconsistent with good

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governance.
What do you guys think from debt

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capital?
Where do we start?

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Very, very logical what debt
capital has said there.

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And it's in line with investors
that think long term about, you

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know, increasing the value of a
company.

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It's it's nothing at the
ordinary, It's nothing crazy.

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You know you're not asking for
too much there, right?

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Yeah, well, I bet it, but it
can't go the other way.

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Look at used Bellevue for
example, they had their

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performance rights were based on
total shareholder return and

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mineral resources and look what
happened there.

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It can.
It can go either way I think.

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I think.
Of the two though, yeah, you'd

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rather have what you've just
said, right?

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To be honest, I'd rather if I
was.

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I think the the best incentive
to have for those executives is

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not performance rights, it's out
of the money options instead

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like because as you said, these
performance rights are you get

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given them, they're on a 10 day.
I agree with the 30 day thing.

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It's a bit more longer term for
the for the V WAP.

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But like if you're going to what
if you want management to, you

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know, get the best value for
them themselves and the company

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out of the money options is
like, right.

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They either put their money
where their mouth is or they use

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a cashless exercise facility and
they get issued less equity,

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which is less dilutive.
But I'll look at the performance

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rights.
It's like vesting at 12 and a

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half cents, which is what, 6X of
the share price not long ago or

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over double what it is today
When the execs getting paid 300

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green.
It's not like they're getting a

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huge seller.
It's like on the lower end for

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an explorer.
I think it's like.

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Yeah.
I mean, personally, I think.

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You do double the share price,
it's just me that capital just

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can't get value from it because
I hold a shit load of it.

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Yeah, I mean.
That 12 1/2 share price, yeah, I

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think you've got to look at the
the date at which that those

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incentives were proposed and the
day at which they were proposed.

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So the OK, the the V WHAP
milestones are exclusively 7 1/2

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cents, 10 cents, 12 1/2 cents.
But that on the 10th of April

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when, when this was released, I
think the share price was about

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$0.06.
So it was a very minor uplift.

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And they got 5A5 year term
attached with them and a 10 day

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V WHAP.
I mean, you can, you can do

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spiffy shit, release it to the
market, visible gold, yadda,

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yadda.
And your V Whap's 10%, but

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there's no long term value
created for shareholders.

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You just found a way to dilute
shareholders.

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So yeah.
Yeah, I think on, on the on the

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salary as well, right.
This is a, this is a company

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that doesn't doesn't make any
money.

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It comes down to what the owners
are willing to pay.

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But you know, I'd say like a
package of 300 grand is more

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than adequate.
And I think that is a part of a

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much broader point of like how
many exploration companies we

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have in, in the industry and how
they're how they're compensated

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and how they're all
incentivized.

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Like it it's very hard to
structure the right incentives

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package.
You know, options aren't perfect

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either because the incentive
bias people just go all out to

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hit a particular target when
they don't have to pay a price

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for downside risk that they
might undertake.

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And that also has differences
whether it's a producing company

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or an exploration type company.
So I mean, maybe worthy of a

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sort of R.E.M. expert on on that
point.

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But I think if you look across
the the sort of here set, this

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does seem pretty short term
focused even compared to sort of

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other other sort of explorers,
which is a a bit of a sort of

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sense check to see if what
you're doing is in the ballpark

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of right.
Yeah, I think if you bench, but

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if you benchmark this against
every company, it's probably,

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it's not probably that
extravagant.

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I think there's just obviously
some internal battles going on

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between that capital and the
board, which has got to this

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point where they're trying to,
you know, have a resolution to

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remove the two non execs.
I don't think it's, yeah.

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I'd just like to say benchmark
to against, Yeah, to say if it

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is, I don't think it's actually
that.

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I think there's more going on
beneath the surface than.

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Absolutely.
And I think at the end of the

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day, it comes to like who, who
the owners are of the business.

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So Trev, I'm sure you've dug
into like what the actual

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shareholding is before this of,
yeah, management and of, of debt

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because at the end of the day,
they are a 12% owner of this

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business and with other
shareholders, they, they should

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be the ones to a degree
dictating what compensation is

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set out.
And regardless like both both

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valid, it's inexcusable not to
disclose a section 2O39-D from 4

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weeks ago to shareholders like
where's the cleansing of the to

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the market of that before you
announced you uploaded incentive

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package that's great.
That's preposterous.

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Yeah, yeah.
So, so at at 9:36 AM per time at

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Couldn'tbury, they finally kind
of came to the market.

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They said acknowledge they
received 249-D request from debt

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capital and on the back they
also finally disclosed that they

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received that 2O3D from debt
capital back in March.

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So it took them, took them a
while there.

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I think we, we kind of want to
answer the question like who,

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who, who's going to win this
battle?

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It's going to be debt capital or
it's going to be, you know,

225
00:11:06,480 --> 00:11:09,720
couldn't be in defence of it.
I think it's a typical small cap

226
00:11:09,720 --> 00:11:12,080
dogfight.
The register has just a handful

227
00:11:12,080 --> 00:11:14,640
of select funds on there.
So, you know, proxy advisors

228
00:11:14,640 --> 00:11:15,800
aren't going to have an
influence.

229
00:11:16,080 --> 00:11:18,680
I mean, you know, there's no,
there's no, you know, passive

230
00:11:18,680 --> 00:11:20,080
money to be influenced by proxy
advisors.

231
00:11:20,080 --> 00:11:23,200
This is going to be, you know,
whoever wants to vote that owns

232
00:11:23,200 --> 00:11:25,560
the stock and does vote will,
will have an influence.

233
00:11:26,200 --> 00:11:29,000
So you look at who are the
shareholders from Canonbury's

234
00:11:29,000 --> 00:11:32,480
presentation just three weeks
ago, they show you Headley wid

235
00:11:32,480 --> 00:11:36,560
UPS line selection and John
Forward's Lau resources fund as

236
00:11:36,560 --> 00:11:40,200
being cornerstone investors as
well as that rounding out the

237
00:11:40,240 --> 00:11:43,280
the, the pool of of shares owned
by the funds.

238
00:11:43,280 --> 00:11:46,000
And I assume just those three
funds to 26% total.

239
00:11:46,640 --> 00:11:49,920
The the same slow slide shows
that board and management only

240
00:11:49,960 --> 00:11:52,560
owned 13%.
So at face value, you kind of

241
00:11:52,560 --> 00:11:54,320
think that that capital has a
bit of a home run here.

242
00:11:54,320 --> 00:11:56,880
If if the, you know, funds
management cohort all think the

243
00:11:56,880 --> 00:11:59,160
same and the, and the board
management don't actually

244
00:11:59,160 --> 00:12:03,080
control that much stock.
But but I, I, you know, having

245
00:12:03,240 --> 00:12:06,640
having said that, like I don't
actually know if, if it's, if

246
00:12:06,640 --> 00:12:08,560
it's the right assumption to
have that all of the funds will

247
00:12:08,560 --> 00:12:10,600
be aligned in thinking the same
way here.

248
00:12:10,600 --> 00:12:14,560
Because those funds you think
of, you think of line selection.

249
00:12:14,560 --> 00:12:17,200
I think they came into it in
the, in the recap raise sort of

250
00:12:18,000 --> 00:12:20,520
not all that long ago, but since
then the stock is 7X.

251
00:12:20,520 --> 00:12:23,600
So maybe you, maybe you actually
think that look, I, I support

252
00:12:23,600 --> 00:12:26,640
the board and management and I
can see shareholder value

253
00:12:26,640 --> 00:12:28,520
creation.
Yes, maybe this performance

254
00:12:28,840 --> 00:12:31,160
rights and stuff is, is
egregious, but I'm, I'm, I'm

255
00:12:31,160 --> 00:12:34,520
happy to not be kind of active
or disruptive for the sake of,

256
00:12:34,640 --> 00:12:36,880
you know, the, the greater pool
of value that's been created.

257
00:12:36,880 --> 00:12:39,360
That's a completely valid
perspective a fund might have.

258
00:12:39,360 --> 00:12:42,600
And, and some funds are a far
less kind of have, have a far

259
00:12:42,600 --> 00:12:45,760
less of propensity to be seen as
being activists because of the,

260
00:12:45,880 --> 00:12:47,320
the risk it can have to the deal
flow.

261
00:12:48,360 --> 00:12:50,400
And that's a, that's a valid
thing, a valid perspective to

262
00:12:50,400 --> 00:12:52,160
have.
So, but if you just assumed that

263
00:12:52,160 --> 00:12:54,440
all of those funds were on the
same page, there's 26% of the

264
00:12:54,520 --> 00:12:58,280
the shareholding like straight
away slide shows that board and

265
00:12:58,280 --> 00:13:00,200
management have 13% on the on
the other side.

266
00:13:00,200 --> 00:13:01,760
You just show them on the other
side of things here.

267
00:13:02,240 --> 00:13:04,600
The overwhelming majority of
that comes from shares

268
00:13:04,600 --> 00:13:07,120
influenced by Darren Glover, who
was he was a vendor in

269
00:13:07,120 --> 00:13:08,520
Cunningbury's acquisition of
Lachlan.

270
00:13:09,040 --> 00:13:11,720
He is the nominee of it's called
Gilmore, which was issued

271
00:13:11,720 --> 00:13:15,160
95,000,000 shares in that deal
and his appointment to the board

272
00:13:15,160 --> 00:13:19,080
came as a right from that deal.
He is named as one of the

273
00:13:19,080 --> 00:13:21,280
directors that is aiming to to
oust here.

274
00:13:22,040 --> 00:13:25,560
The main point is I don't think
it's kind of kind of clear cut

275
00:13:25,560 --> 00:13:28,840
how things will actually go when
it when it comes down to to a

276
00:13:28,840 --> 00:13:32,000
vote.
There's 940 million shares in

277
00:13:32,000 --> 00:13:34,680
total on issue.
A huge portion of them.

278
00:13:34,680 --> 00:13:39,440
In fact, 450 million shares were
issued in a very recent capital

279
00:13:39,560 --> 00:13:42,240
capital raising, which enabled
kind of a recap and acquisition,

280
00:13:42,240 --> 00:13:45,880
all that sort of stuff.
And other than like Lion and

281
00:13:45,880 --> 00:13:48,320
Lau, like I don't really know
who bought the shares in that

282
00:13:48,360 --> 00:13:52,320
big, big placement, but the but
the block, however, the

283
00:13:52,320 --> 00:13:55,360
shareholders within that block
do vote, if they vote will be a

284
00:13:55,360 --> 00:13:57,560
big influence here.
And yeah, I just think it's

285
00:13:57,560 --> 00:14:01,360
going to be a contest of ideas,
a contest of of, of merit and

286
00:14:01,360 --> 00:14:04,120
sort of just see see how
shareholders kind of, you know,

287
00:14:05,400 --> 00:14:08,400
feel about about this and the
and the arguments put forward by

288
00:14:08,720 --> 00:14:11,000
by DAT and time expect the board
to.

289
00:14:11,720 --> 00:14:14,640
Can you give me a quick
refresher on what percentage

290
00:14:14,960 --> 00:14:18,000
votes need to go?
They'll they'll have to win 50%

291
00:14:18,000 --> 00:14:20,120
of the simple majority.
Yeah, yeah.

292
00:14:20,240 --> 00:14:22,040
Over 50% + 1 for the R.E.M.
Report.

293
00:14:22,080 --> 00:14:23,640
Yeah, yeah.
But but interesting on the

294
00:14:23,640 --> 00:14:27,120
R.E.M. report, if you do think
about that, I don't think any of

295
00:14:27,120 --> 00:14:28,280
those directors going to be
allowed to vote.

296
00:14:28,600 --> 00:14:31,720
So you have to put a line
through the the, you know,

297
00:14:31,760 --> 00:14:34,560
perceived 13% on the R.E.M.
report because that's a

298
00:14:34,560 --> 00:14:36,320
conflict.
So I don't think they can win

299
00:14:36,320 --> 00:14:37,000
the R.E.M.
Report.

300
00:14:37,280 --> 00:14:38,680
But R.E.M. report's not.
It doesn't.

301
00:14:39,080 --> 00:14:40,280
Nothing happened.
It's not actually a R.E.M.

302
00:14:40,280 --> 00:14:40,800
report.
Sorry.

303
00:14:40,800 --> 00:14:43,400
This is, Yeah, this is a, this
is a, it's not actually a R.E.M.

304
00:14:43,400 --> 00:14:45,480
report that they're voting on.
It's actually a change to

305
00:14:45,480 --> 00:14:49,160
incentives or new new shares to
be issued to to directors or

306
00:14:49,160 --> 00:14:53,400
performance rights to be issued
so that that that passing or not

307
00:14:53,400 --> 00:14:55,080
passing is actually.
Yeah.

308
00:14:55,640 --> 00:15:00,160
It's on, yeah, yeah, yeah.
So that that's the, that's an

309
00:15:00,160 --> 00:15:01,600
interesting thing to think
about.

310
00:15:01,600 --> 00:15:04,520
It might make those additional
like performance rights pretty

311
00:15:04,520 --> 00:15:06,720
challenging to get up.
I think there's a broader

312
00:15:06,720 --> 00:15:08,880
conversation to be had about
what good alignment looks like.

313
00:15:08,880 --> 00:15:15,200
And when you think of small cap
like junior mining companies, we

314
00:15:15,200 --> 00:15:17,360
all know what de risking a
project looks like.

315
00:15:17,400 --> 00:15:20,960
Like We know the milestones that
help de risk and progress and

316
00:15:20,960 --> 00:15:25,000
and add value to a project.
Those milestones when you, when

317
00:15:25,000 --> 00:15:29,280
you strip them out and you put
them into, you know, milestones

318
00:15:29,280 --> 00:15:32,120
in, in, in remuneration for
performance riser options or

319
00:15:32,120 --> 00:15:37,120
whatever, be it, be it defining
A delineating a drug resource

320
00:15:37,120 --> 00:15:42,280
of, of X or, or be it, you know,
a feasibility study like you,

321
00:15:42,360 --> 00:15:44,320
you, you can do that.
And a lot of companies do that

322
00:15:44,320 --> 00:15:46,200
and, and that is good practice
it.

323
00:15:46,240 --> 00:15:48,000
Sometimes you can have
unintended consequences that

324
00:15:48,000 --> 00:15:50,160
come along with that because
you, you're trying to reduce the

325
00:15:50,160 --> 00:15:51,720
numbers just to reach that
milestone.

326
00:15:51,720 --> 00:15:55,040
And then that that leads you to,
to take shortcuts or not do best

327
00:15:55,040 --> 00:15:57,320
standards when it comes to your
actual resource reporting or

328
00:15:57,320 --> 00:16:00,320
your defeat or your declare FID
on a project that never should

329
00:16:00,320 --> 00:16:02,400
have had FID, all of those sorts
of things.

330
00:16:02,560 --> 00:16:04,800
It's a complicated area, there's
no doubt.

331
00:16:04,800 --> 00:16:07,480
But I just think the important
consideration for shareholders

332
00:16:07,480 --> 00:16:12,440
is to zoom out and think are
like, are these are these

333
00:16:12,440 --> 00:16:13,800
incentives incentivizing the
right thing?

334
00:16:13,800 --> 00:16:15,800
Like in the, in the words of
Charlie Munger, and they're so

335
00:16:15,800 --> 00:16:17,480
true.
Show me incentives, I'll show

336
00:16:17,480 --> 00:16:19,360
you the outcomes.
Yeah, well said.

337
00:16:19,360 --> 00:16:21,120
So we should see a vote in a
month.

338
00:16:22,040 --> 00:16:26,640
The the, the actual shareholder
meeting hasn't been announced

339
00:16:26,640 --> 00:16:27,920
yet when that would be.
So yeah.

340
00:16:28,240 --> 00:16:30,000
Should we speak?
What do you think's going on?

341
00:16:30,880 --> 00:16:32,840
I think it's, I think it's just
it's, it is, yeah.

342
00:16:32,840 --> 00:16:36,400
I don't think there's anything
more than like, yeah, I don't, I

343
00:16:36,400 --> 00:16:38,960
don't think there's anything
more than I think you've got to

344
00:16:38,960 --> 00:16:42,200
ask the question why did DAT
want to remove to board direct,

345
00:16:43,000 --> 00:16:46,080
remove board directives before
30th of March or whatever, like

346
00:16:46,120 --> 00:16:48,320
before the incentives.
That's that's the question mark

347
00:16:48,320 --> 00:16:49,600
that we don't know.
Yeah.

348
00:16:49,720 --> 00:16:52,480
I think because you look at if
you look at the zoom out on the

349
00:16:52,960 --> 00:16:56,160
what is this company like, it's
all heavily focused around this

350
00:16:56,160 --> 00:17:00,840
what the Enmore project, which
is what 20 guys South of

351
00:17:01,160 --> 00:17:05,040
Lovato's Hill Grove, which is a.
As you've spoken about, yeah.

352
00:17:05,160 --> 00:17:08,599
So what's the the value, the
pathway that this is like going

353
00:17:08,599 --> 00:17:12,800
to be a, you know, delineating a
a resource and exploration play.

354
00:17:12,800 --> 00:17:15,280
But it's like, OK, they're
probably not going to build it

355
00:17:15,280 --> 00:17:18,079
themselves because it's tough
district to build it logical

356
00:17:18,079 --> 00:17:21,359
will be some trying to get a
deal done with Lovato.

357
00:17:22,200 --> 00:17:26,200
Maybe, maybe is there a division
on the what's a five person

358
00:17:26,200 --> 00:17:26,800
board?
Like?

359
00:17:26,800 --> 00:17:29,760
Is there a division about
whether they want to amenable to

360
00:17:29,760 --> 00:17:32,080
doing a deal with to get an
outcome or they want to just

361
00:17:32,320 --> 00:17:33,960
keep the exploration thing
going?

362
00:17:33,960 --> 00:17:37,080
Like is there something going on
there and that or obviously want

363
00:17:37,080 --> 00:17:40,240
to get an outcome for themselves
and don't want it to see do

364
00:17:40,240 --> 00:17:42,720
this.
Don't I think there's something

365
00:17:42,720 --> 00:17:46,760
else bubbling below there that's
probably 'cause this, because as

366
00:17:46,760 --> 00:17:50,040
you said, this affects the the
brand of the company when this

367
00:17:50,040 --> 00:17:53,440
stuff comes out.
Like this can affect the the

368
00:17:53,440 --> 00:17:57,120
share price.
If there's 249 D's and or you

369
00:17:57,120 --> 00:18:00,160
know stuff in the papers about
an exploration company, it

370
00:18:00,160 --> 00:18:01,360
doesn't look good.
Nah.

371
00:18:01,760 --> 00:18:05,280
So it doesn't doesn't look good
for dats shareholding because

372
00:18:05,360 --> 00:18:10,480
really it might like it may if
they lose this and that stigma

373
00:18:10,480 --> 00:18:13,640
is attached to it, it could have
a negative.

374
00:18:13,720 --> 00:18:15,000
I think it does.
It does have.

375
00:18:15,120 --> 00:18:17,480
Yeah, I think the exact.
Perception of an active like an

376
00:18:17,480 --> 00:18:20,280
activist, which there are
negative consequences of fund

377
00:18:20,280 --> 00:18:22,960
managers doing that because you
get less steel flow US appetite

378
00:18:22,960 --> 00:18:25,720
to be a big sizeable shareholder
and a register all those sorts

379
00:18:25,720 --> 00:18:28,720
of things are very real but.
249-D has downside, I think.

380
00:18:28,720 --> 00:18:29,720
Yeah, you're right there,
Maddie.

381
00:18:29,720 --> 00:18:31,760
And and it comes at a cost.
It's not an easy thing to do

382
00:18:31,840 --> 00:18:34,480
either.
Like yeah, it's a big effort.

383
00:18:35,120 --> 00:18:37,080
Yeah.
Tony Goo, one of the one of the

384
00:18:37,080 --> 00:18:39,160
dat guys is going to jump on the
board.

385
00:18:39,160 --> 00:18:41,720
That's more of his time on
focused on that and everything.

386
00:18:41,720 --> 00:18:43,400
It's not your first preference,
but.

387
00:18:44,960 --> 00:18:49,520
Yeah.
But yeah, in general, like like

388
00:18:49,520 --> 00:18:50,960
that is a shareholder like
everyone else.

389
00:18:50,960 --> 00:18:52,840
They don't have special
privileges as a shareholder

390
00:18:52,840 --> 00:18:54,880
different other retail
shareholders on that register

391
00:18:55,240 --> 00:18:58,320
when they make an argument they
don't have, they don't have, you

392
00:18:58,320 --> 00:19:00,320
know, superior rights to any
other shareholder.

393
00:19:00,320 --> 00:19:05,680
So I think when you evaluate
their motivations, all they care

394
00:19:05,680 --> 00:19:09,040
about is maximizing shareholder
value, which is like because

395
00:19:09,040 --> 00:19:10,360
they have equal rights to every
other shareholder.

396
00:19:10,360 --> 00:19:13,400
So I just think I internalize
their views as having a

397
00:19:13,400 --> 00:19:15,600
different view to directors on
what maximizing shareholder

398
00:19:15,600 --> 00:19:17,400
value looks like.
And what they've put forward to

399
00:19:17,400 --> 00:19:20,120
the market is saying there's 6%
dilution to everyone, which we

400
00:19:20,120 --> 00:19:22,640
don't think is appropriate at
all, especially given that only

401
00:19:22,640 --> 00:19:27,080
4-5 months ago that that the,
the AGM actually approved, I

402
00:19:27,080 --> 00:19:30,960
think it was 50 odd million
incentives there, which had

403
00:19:31,000 --> 00:19:34,320
relatively low hurdles too.
So, yeah, I think, I think you

404
00:19:34,880 --> 00:19:36,760
maybe they're just fearful that
this is a new discovery.

405
00:19:36,760 --> 00:19:40,240
It's hot and the directors are
going to consistently or

406
00:19:40,240 --> 00:19:44,520
potentially consistently keep
diluting value of the company

407
00:19:44,520 --> 00:19:47,120
and enriching themselves.
But the performance is kind of

408
00:19:47,120 --> 00:19:48,880
it is whatever the discovery
will be, it's not actually

409
00:19:48,880 --> 00:19:50,880
derived by the input of those
directors.

410
00:19:51,120 --> 00:19:52,560
That's a valid thing to be
grumpy about.

411
00:19:53,280 --> 00:19:56,560
Yeah.
And it might not be a a sort of

412
00:19:56,840 --> 00:20:00,160
specialty that have, but they
unlike a retail shareholder do

413
00:20:00,160 --> 00:20:04,000
have more than 5% which gives
them the ability to do this and

414
00:20:04,000 --> 00:20:05,480
they want to exercise that
right.

415
00:20:05,800 --> 00:20:09,200
Yeah, but difference to a retail
shareholder, if I sell more

416
00:20:09,200 --> 00:20:12,040
shares and I have fuck all in,
it doesn't affect the share

417
00:20:12,040 --> 00:20:15,640
price.
If they want to realize value at

418
00:20:15,640 --> 00:20:18,160
their level, it really affects
the share price.

419
00:20:18,160 --> 00:20:21,040
Look what it is, consideration.
They picked up their share from

420
00:20:21,440 --> 00:20:24,160
GUE, which was one of the the
vendors of that project.

421
00:20:24,160 --> 00:20:26,080
Yeah.
Was that that global uranium in

422
00:20:26,080 --> 00:20:29,680
enrichment which was CARPE?
Yes, I think, yeah.

423
00:20:29,960 --> 00:20:32,920
Yeah, interesting.
There we go.

424
00:20:33,560 --> 00:20:37,480
Juicy 249-D.
Yeah, so I'll be interested to

425
00:20:37,480 --> 00:20:43,560
see the bloody the outcome.
I just want to say what's fun.

426
00:20:43,560 --> 00:20:46,000
There's something there'd be
some word on the decline.

427
00:20:46,120 --> 00:20:49,360
Oh better get on the blower
after this throws it in here at

428
00:20:49,360 --> 00:20:51,200
the bar and me shop which is
open today.

429
00:20:51,240 --> 00:20:54,160
Thank God.
Thank you Q&T for returning to

430
00:20:54,160 --> 00:20:58,600
my life.
Right Next up alkane and man

431
00:20:58,600 --> 00:21:01,120
delay.
We've got a merger of vehicles

432
00:21:01,320 --> 00:21:06,640
still in NSW.
First thoughts of this were on

433
00:21:06,640 --> 00:21:10,000
the back of this is a bit out
there theory, but on the back of

434
00:21:11,680 --> 00:21:16,200
evolution using Quattro to do
their pace plan I think how kind

435
00:21:16,200 --> 00:21:18,480
of Mandalay I think and do we
need to get to a similar scale

436
00:21:18,480 --> 00:21:22,680
to evolution to get Quattro on
site and get a rewrite in NSW

437
00:21:23,880 --> 00:21:28,600
been out there I think possibly
a possibility.

438
00:21:29,360 --> 00:21:31,320
I think it's a possibility.
I don't think they have to get

439
00:21:31,320 --> 00:21:33,640
to evolution scale before they
can use Quattro.

440
00:21:34,040 --> 00:21:35,840
Yeah, they can engage.
Yeah.

441
00:21:36,200 --> 00:21:39,400
Yeah.
Will Quattro become that big and

442
00:21:39,400 --> 00:21:41,800
popular that they're just going
to be consumed by the likes of

443
00:21:41,800 --> 00:21:43,040
evolution?
Possibly.

444
00:21:43,040 --> 00:21:45,920
That's a real risk.
Yeah, as like dead set

445
00:21:45,920 --> 00:21:49,240
thetically integrated turnkey
design engineer construct EPC

446
00:21:49,240 --> 00:21:53,720
gurus for pace plants and any
piece of infrastructure surface

447
00:21:53,720 --> 00:21:55,040
underground.
Best in the biz?

448
00:21:55,160 --> 00:21:58,480
Best in the biz and not just
pigeon dialed in Western

449
00:21:58,480 --> 00:22:00,840
Australia.
As I said, look at this video.

450
00:22:00,920 --> 00:22:04,480
That is the light cow pace plant
from Quattro.

451
00:22:04,960 --> 00:22:07,600
Sexy stuff.
That is, that is the best

452
00:22:07,600 --> 00:22:09,480
looking ace plan I've ever seen,
Matthew.

453
00:22:09,680 --> 00:22:12,720
I know, and you've seen.
A lot of pace, plan and.

454
00:22:12,720 --> 00:22:13,880
Influence.
That is not a lie.

455
00:22:13,920 --> 00:22:16,440
You've also spoken about the
tech advancements in the last 10

456
00:22:16,440 --> 00:22:18,120
years.
Imagine looking forward the next

457
00:22:18,120 --> 00:22:18,960
10 years.
Yeah.

458
00:22:19,480 --> 00:22:21,160
Yeah, exactly.
You won't have to do anything.

459
00:22:21,240 --> 00:22:23,960
So JD, I'm not saying I'm right
on this theory, but take me

460
00:22:23,960 --> 00:22:27,760
through this Mandalay Alkane
merger and just see if what

461
00:22:27,840 --> 00:22:31,480
other possibilities there are
rationales for this and what's

462
00:22:31,480 --> 00:22:32,760
going on.
Who's the parties mate?

463
00:22:32,760 --> 00:22:33,880
What is happening all?
Right.

464
00:22:33,880 --> 00:22:36,520
Let's let's talk about it.
So it's a a merger of vehicles,

465
00:22:36,520 --> 00:22:39,360
which I always think of in very
sort of heavy quotation marks,

466
00:22:39,360 --> 00:22:41,640
but this one does seem to be
pretty fair.

467
00:22:41,640 --> 00:22:45,880
So our cane have the producing
asset in Tom and Lee and

468
00:22:45,880 --> 00:22:50,320
development asset in Boda or
also called Boda Kaiser both in

469
00:22:50,320 --> 00:22:52,600
NSW.
And then you've got Mandalay TSX

470
00:22:52,600 --> 00:22:56,000
listed Canadian company, but
they're in Australia, they're

471
00:22:56,000 --> 00:23:01,840
producing at Costa Field down in
Vic as well as at Bjorkdale up

472
00:23:01,840 --> 00:23:05,320
in Sweden.
So the merged entity is

473
00:23:05,320 --> 00:23:09,920
described as a 160,000 oz
producer in this year.

474
00:23:09,920 --> 00:23:12,320
Looking to scale that up into
next year.

475
00:23:13,040 --> 00:23:16,680
Yeah.
Is this what is the deal before?

476
00:23:16,680 --> 00:23:18,480
Because there's some good
numbers wrapped around this in

477
00:23:18,480 --> 00:23:24,480
terms of the projections which
could as bloody Paul Armstrong

478
00:23:24,600 --> 00:23:26,640
says, it screams the share price
rewrite.

479
00:23:28,200 --> 00:23:29,040
Yeah.
There might have been a bit of

480
00:23:29,040 --> 00:23:30,440
that on on the call as well
here.

481
00:23:30,440 --> 00:23:36,280
So all script deal, the merged
entity is going to be made-up of

482
00:23:36,280 --> 00:23:40,720
what's now sort of 45% Alcane
shareholders and 55% Mandalay

483
00:23:40,720 --> 00:23:43,880
shareholders.
But in saying that, it's

484
00:23:43,920 --> 00:23:46,240
Mandalay shareholders that are
going to get awarded for

485
00:23:46,240 --> 00:23:52,240
everyone share 7.875 shares and
it's a pretty much nil premium,

486
00:23:52,240 --> 00:23:55,480
2% premium.
The Mandalay share price was was

487
00:23:55,480 --> 00:23:58,800
flat and Alcane's share price is
pretty flat on the news as well.

488
00:23:58,800 --> 00:24:02,400
So the combined merged entity is
about a billion market cap or an

489
00:24:02,440 --> 00:24:06,760
EV of just under 900 million.
And you're getting a new board

490
00:24:06,760 --> 00:24:09,000
that's not too big.
You're getting 3 nominees from

491
00:24:09,000 --> 00:24:13,000
Mandalay and two from Alcane,
plus a new independent chair.

492
00:24:13,000 --> 00:24:17,280
You're going to have a company
that has net cash of just under

493
00:24:17,280 --> 00:24:20,880
130 million dollars and then you
need your standard approvals

494
00:24:20,880 --> 00:24:25,120
for, for the Canadians, 2/3 of
votes up there.

495
00:24:26,120 --> 00:24:30,800
And then here in Australia for
the share issuance, you need a

496
00:24:30,800 --> 00:24:33,080
simple majority.
So that's a vote that outcome

497
00:24:33,080 --> 00:24:37,960
shareholders will undertake and
you've got decent size inside

498
00:24:38,000 --> 00:24:40,440
ownerships and voting
commitments here already.

499
00:24:40,440 --> 00:24:44,520
So already 45% of Mandalay
shareholders have given their

500
00:24:44,520 --> 00:24:48,240
intention to vote this one
through and just under 20% of

501
00:24:48,240 --> 00:24:51,000
Alcane shareholders.
So they're a good portion of the

502
00:24:51,000 --> 00:24:53,160
way they're already.
And then you've got a pro forma

503
00:24:53,160 --> 00:24:58,520
company that's going to be held
over 20% insider ownership,

504
00:24:58,600 --> 00:25:00,960
which is, you know, which is
pretty good.

505
00:25:00,960 --> 00:25:01,920
It's what you kind of want to
see.

506
00:25:01,920 --> 00:25:05,000
It's a strong amount of insider
ownership.

507
00:25:05,280 --> 00:25:08,400
Just to round out on the deal
details 17,000,000 either way is

508
00:25:08,400 --> 00:25:11,880
the is the breakthrough for a
dealer that should close next

509
00:25:11,880 --> 00:25:15,360
quarter.
Break fee, break fee, break fee.

510
00:25:15,360 --> 00:25:17,760
Yep, Yep.
So that's, I think so it's

511
00:25:17,800 --> 00:25:25,080
pretty similar to friggin West
Gold and Korora in a way.

512
00:25:25,200 --> 00:25:27,720
Like they're, they're going to
be trading on the ASX, they're

513
00:25:27,720 --> 00:25:31,800
going to seek ATSX listing, but
it's pretty much bringing, you

514
00:25:31,800 --> 00:25:35,640
know, 55% Mandalay pro forma
onto the ISX, Yeah.

515
00:25:35,880 --> 00:25:37,840
Yeah, bang on.
There's there are definitely

516
00:25:37,840 --> 00:25:42,400
similarities, you know,
extending why, other reasons why

517
00:25:42,400 --> 00:25:44,120
they might be looking to do this
deal.

518
00:25:44,840 --> 00:25:47,440
When Nick Earner, who's the
managing director of Arcane,

519
00:25:47,440 --> 00:25:50,480
who's going to lead the merged
entity, got asked what the

520
00:25:50,480 --> 00:25:52,920
number one reason why they want
to do the deal is from the

521
00:25:52,920 --> 00:25:57,000
Arcane perspective, it was size,
scale and access to capital

522
00:25:57,000 --> 00:25:59,400
markets.
So very similar to the deal you

523
00:25:59,400 --> 00:26:02,240
mentioned there, Maddie Index
inclusions, they outline

524
00:26:02,240 --> 00:26:07,880
specifically GDXJ and ASX 300
inclusions going to help them

525
00:26:08,120 --> 00:26:12,280
access capital markets better,
better flows, more trading

526
00:26:12,280 --> 00:26:15,720
liquidity, all these sorts of
things, larger free float.

527
00:26:16,080 --> 00:26:18,840
OK, Genuinely gets like missed a
lot of the times when you're

528
00:26:19,000 --> 00:26:21,040
even doing comps of of gold
producers.

529
00:26:21,080 --> 00:26:23,880
Like we just forget it.
It's like part of that's because

530
00:26:23,880 --> 00:26:27,360
it's a 70 1000 oz per annum
producer and part of that

531
00:26:27,360 --> 00:26:30,760
because it's just in NSW, but.
Yeah, it's just, it's just not

532
00:26:30,760 --> 00:26:33,960
in the.
Yeah, they're not headquartered

533
00:26:33,960 --> 00:26:36,320
in Perth.
Either the and then there's, I

534
00:26:36,320 --> 00:26:38,600
think not very much free float
of that that stock either.

535
00:26:38,600 --> 00:26:40,960
It's yeah, exactly liquid.
So, yeah, those are can't,

536
00:26:41,200 --> 00:26:44,240
can't, you know, if any
company's going to be told that

537
00:26:44,240 --> 00:26:46,560
those are valid reasons for for
a deal, it's probably, it's

538
00:26:46,560 --> 00:26:48,720
probably this.
One 100,000 oz per annum

539
00:26:48,720 --> 00:26:51,360
production was like the marker
of relevance right here.

540
00:26:51,680 --> 00:26:53,680
You weren't relevant if you
produce less than that.

541
00:26:53,680 --> 00:26:57,160
And it's a bit of a mute point
nowadays because the cash flow

542
00:26:57,160 --> 00:26:59,920
in this environment, you know,
today that you can generate

543
00:27:00,400 --> 00:27:03,160
reducing, you know, half that is
still is still pretty decent

544
00:27:03,520 --> 00:27:06,600
cash flow.
But yeah, it's even more of a

545
00:27:06,600 --> 00:27:09,840
mute point now for this company
that wants to do 160,000 oz this

546
00:27:09,840 --> 00:27:14,000
year and 180,000 oz next year.
Balance sheet is looking better

547
00:27:14,000 --> 00:27:16,920
because Mandalay brings lots of
cash with it.

548
00:27:16,920 --> 00:27:20,880
So like I said, about 130
million in cash for a group that

549
00:27:20,880 --> 00:27:24,560
the Mandalay boss reckons will
do half a billion dollars in

550
00:27:24,560 --> 00:27:28,040
free cash flow in the next year
and years to come.

551
00:27:28,040 --> 00:27:30,760
That's that's not a number to to
sniff at.

552
00:27:30,880 --> 00:27:33,000
If we look at the.
You'd open it, make it this gold

553
00:27:33,000 --> 00:27:35,000
price, wouldn't you produce them
that many ounces?

554
00:27:35,000 --> 00:27:37,440
Absolutely and they did you know
mention the words free cash flow

555
00:27:37,440 --> 00:27:40,160
which you know you always like
to hear listening into the call

556
00:27:40,160 --> 00:27:42,880
to to sort of piece together the
assets that people understand

557
00:27:43,560 --> 00:27:48,360
cost of field about 45,000
ounces in gold equivalent.

558
00:27:48,360 --> 00:27:52,920
So this is a small high grade
operation in Victoria.

559
00:27:52,920 --> 00:27:54,760
The biggest producer of antimony
I was.

560
00:27:54,760 --> 00:27:57,640
About to say that.
In the, in the Western world,

561
00:27:57,640 --> 00:28:01,840
granted the Western world isn't
a very big producer of antimony.

562
00:28:01,840 --> 00:28:06,520
So we've got, you know, roughly
10% of global production comes

563
00:28:06,880 --> 00:28:10,320
from the West.
And these guys earmark 2025 at

564
00:28:10,920 --> 00:28:17,560
1100 tons, which at a $35,000 a
ton price does net you a decent

565
00:28:17,560 --> 00:28:19,880
amount of cash.
It's the type of asset that has,

566
00:28:19,880 --> 00:28:23,240
you know, a couple years in mine
life and that has been the case

567
00:28:23,240 --> 00:28:26,160
for a long time.
So they specifically said for

568
00:28:26,160 --> 00:28:29,000
the last 15 years they've had
three to five years or two to

569
00:28:29,000 --> 00:28:31,880
four years of fine life.
And at these prices does 100

570
00:28:31,880 --> 00:28:34,560
million in free cash flow.
So not too bad.

571
00:28:34,560 --> 00:28:39,160
Then you've got Yorkdale in
Sweden, which first thoughts

572
00:28:39,160 --> 00:28:41,600
are, are they just going to kind
of get rid of it given what the

573
00:28:41,600 --> 00:28:44,680
merged entity looks like?
They were adamant that they

574
00:28:44,680 --> 00:28:48,160
wouldn't, that the mind does a
lot of cash flow.

575
00:28:48,160 --> 00:28:52,600
It's been in operation since the
late 80s, still has a 10 year

576
00:28:52,600 --> 00:28:56,280
mine life today, does a similar
amount of output to cost of

577
00:28:56,280 --> 00:28:58,640
goods.
So a bit under that 50,000 oz

578
00:28:58,640 --> 00:29:02,000
per annum mark.
But again, they say sort of $50

579
00:29:02,000 --> 00:29:06,280
million in Aussie free cash flow
per annum at these prices.

580
00:29:06,280 --> 00:29:10,160
So, so not bad at all.
And then you've got Tom and Lee

581
00:29:10,160 --> 00:29:14,560
doing about 70,000 oz that's
meant to tick up a little bit

582
00:29:14,560 --> 00:29:17,360
next year.
They had Alcan had a bit of a

583
00:29:17,360 --> 00:29:20,240
rough hedge book, which is kind
of getting fixed up by way of

584
00:29:20,240 --> 00:29:22,960
just being a much smaller part
of the pro pro forma.

585
00:29:23,480 --> 00:29:26,360
It was going to be sort of 35
ish percent of the next two

586
00:29:26,360 --> 00:29:31,600
years production at about 2850
Aussies.

587
00:29:31,600 --> 00:29:34,640
So not great.
And you know for those kind of

588
00:29:34,640 --> 00:29:36,680
reasons, I think it just wasn't
mentioned at all in the

589
00:29:36,680 --> 00:29:39,240
presentation, but it was
mentioned in the call.

590
00:29:39,640 --> 00:29:42,680
But with the pro forma company
now, it's less than 20% of

591
00:29:42,680 --> 00:29:44,200
production over the next couple
years.

592
00:29:44,200 --> 00:29:47,680
So they'll just sort of work
their way through that one

593
00:29:47,680 --> 00:29:49,520
there.
And then you've also got the

594
00:29:49,520 --> 00:29:51,800
kind of growth angle at
Tommingley, which we've spoken

595
00:29:51,800 --> 00:29:54,400
about in the past.
They want to lift mill

596
00:29:54,400 --> 00:29:56,080
throughput to 1.5 million ton
per annum.

597
00:29:56,720 --> 00:30:00,200
Need to move a road bit, a bit
of CapEx to go in into that.

598
00:30:00,200 --> 00:30:03,360
So hence the company talks a lot
about the balance sheet being

599
00:30:03,360 --> 00:30:05,680
able to finance all these sorts
of things now.

600
00:30:05,680 --> 00:30:09,680
So yeah, that that one had
approvals and other kind of hold

601
00:30:09,680 --> 00:30:11,600
UPS for a long time.
But it does seem like we're

602
00:30:11,600 --> 00:30:14,680
getting closer to that one
actually, actually happening.

603
00:30:14,800 --> 00:30:17,000
What?
How much out of the do you know

604
00:30:17,000 --> 00:30:20,800
how much out of the money the
hedge book is JD is it so 75,000

605
00:30:20,800 --> 00:30:23,760
oz at 2800?
Is that today's?

606
00:30:24,880 --> 00:30:27,520
Yeah, a bit less than that
because the March ones would

607
00:30:27,520 --> 00:30:29,280
have been delivered into.
So it would have been about sort

608
00:30:29,280 --> 00:30:32,600
of 72,000 oz at that price.
So so it.

609
00:30:32,600 --> 00:30:35,320
Should be about what, 180 mil or
something?

610
00:30:36,200 --> 00:30:38,240
Something less than. 200 mil.
Yeah.

611
00:30:38,520 --> 00:30:41,320
I mean, if you look at it the
other way on the on the free

612
00:30:41,320 --> 00:30:44,000
cash flow that they should
generate next year, it's given

613
00:30:44,000 --> 00:30:47,560
the company has only 60 million
in debt and they've got more

614
00:30:47,560 --> 00:30:50,160
than enough cash to outweigh
that already.

615
00:30:50,160 --> 00:30:52,120
They they should be able to just
work their way through that one,

616
00:30:52,120 --> 00:30:54,040
OK.
I'd be interested to know if the

617
00:30:54,280 --> 00:30:57,000
there's some big payouts to
Mandalay resources.

618
00:30:57,000 --> 00:30:59,200
A lot there was for the Corolla
ones.

619
00:30:59,880 --> 00:31:02,680
It's part of that merger because
remember that was a bit of a not

620
00:31:02,680 --> 00:31:06,120
a sticking point, but it like
she cost a bit of dosh to to do

621
00:31:06,120 --> 00:31:08,480
that because they had themselves
pretty well lined.

622
00:31:08,480 --> 00:31:11,120
I'm not sure if me and delay are
in the same boat.

623
00:31:11,200 --> 00:31:15,560
Yeah, list them on the ISX it'd.
Be worth diving a bit deeper on

624
00:31:15,560 --> 00:31:17,240
that one.
There was one other point I did

625
00:31:17,240 --> 00:31:20,440
want to speak about and that is
the asset boda.

626
00:31:20,440 --> 00:31:23,040
And I think in the, in the
context like you mentioned

627
00:31:23,040 --> 00:31:26,120
Trevor of Donlin that we spoke
about up in Alaska last week,

628
00:31:26,120 --> 00:31:29,560
it's an interesting asset.
Now I'll, I'll run through the

629
00:31:29,560 --> 00:31:32,480
numbers just very quickly.
They put out a scoping study

630
00:31:32,480 --> 00:31:36,680
last year talking about a 51020
million tonne per annum option.

631
00:31:37,280 --> 00:31:40,280
I'll run through the 20 million
tonne per annum numbers here.

632
00:31:40,640 --> 00:31:45,600
But they're processing .26g per
tonne gold and .15% copper.

633
00:31:45,600 --> 00:31:50,920
So very, very low grade big
scale project CapEx, 1.8

634
00:31:50,920 --> 00:31:54,600
billion, NPV at 7 percent, 1.8
billion as well.

635
00:31:54,600 --> 00:31:57,560
So no doubt talking about
incentives and stuff, they would

636
00:31:57,560 --> 00:32:00,040
have done a bit of work to to
line those numbers up I'm sure.

637
00:32:00,280 --> 00:32:04,320
But here's the thing, the study
numbers used 15,000 Aussie

638
00:32:04,320 --> 00:32:09,720
dollars a ton copper, $3500 in
Aussie for the gold price.

639
00:32:09,720 --> 00:32:13,320
So a fair bit below where we are
on that gold front today.

640
00:32:13,640 --> 00:32:16,240
Cost is about the same butter.
Yeah, yeah, about the same.

641
00:32:16,240 --> 00:32:21,200
Yeah, 17 year mine life at that
big 20 million ton per annum

642
00:32:21,280 --> 00:32:26,400
scenario to produce 165,000
ounces of of gold each year and

643
00:32:26,400 --> 00:32:29,840
35,000 tons of copper.
And you can see on the the

644
00:32:29,840 --> 00:32:33,320
sensitivity that they have that
a 10% lift in revenue already

645
00:32:33,320 --> 00:32:36,480
takes that MPV from 1.8 billion
to 2.6 billion.

646
00:32:36,480 --> 00:32:39,680
So permitting is the huge
question mark here.

647
00:32:39,680 --> 00:32:41,760
As you pointed out before,
Maddie, you can't understate

648
00:32:41,760 --> 00:32:46,440
this one enough, given we're
talking about kind of central

649
00:32:46,440 --> 00:32:51,400
NSW, those just listening in
imagine a bit southeast of

650
00:32:51,400 --> 00:32:56,680
Dubbo, so in the same kind of
region as Mcfillimmie's as well

651
00:32:56,680 --> 00:33:00,880
as Katie and not not crazy far
from Lake Cal, these sorts of

652
00:33:00,880 --> 00:33:03,720
assets there.
So not an awful lot of assets

653
00:33:03,720 --> 00:33:06,960
have been permitted in that part
of the world for for some time.

654
00:33:06,960 --> 00:33:10,080
And you know, they're at scoping
study level, like a lot of water

655
00:33:10,080 --> 00:33:12,920
has to go under the bridge here.
A lot more on the the Met front.

656
00:33:12,920 --> 00:33:14,520
They want to do more
exploration.

657
00:33:14,760 --> 00:33:17,920
They've already spoken about
trying to find AJV partner for

658
00:33:17,920 --> 00:33:21,720
this asset, somebody now that
they're more or better

659
00:33:21,720 --> 00:33:24,680
capitalized, they'll be in
better stead to go through some

660
00:33:24,680 --> 00:33:27,880
of these motions.
But yeah, I don't think they

661
00:33:27,880 --> 00:33:31,680
were getting much value for this
asset beforehand in any case.

662
00:33:31,880 --> 00:33:33,840
And yeah.
So it's a it's a long term

663
00:33:33,840 --> 00:33:36,200
option.
Yeah, and it's like, what's your

664
00:33:36,200 --> 00:33:38,520
outcomes?
You like someone's either going

665
00:33:38,520 --> 00:33:42,600
to buy it off them for a fucking
very, very long term thing to

666
00:33:42,600 --> 00:33:46,600
keep in the bank because it's
not knockout numbers and you

667
00:33:46,600 --> 00:33:48,840
just measure it.
You put it against Mcfillimmies.

668
00:33:48,840 --> 00:33:52,600
It's like if Mcfillimmies is
sitting there, which would be

669
00:33:52,600 --> 00:33:56,840
printing shit loads of cash
right now at these prices, this

670
00:33:56,840 --> 00:33:59,360
is going to be obviously well
behind that.

671
00:33:59,680 --> 00:34:04,560
So it's would, yeah, would have.
It just doesn't look like the

672
00:34:04,560 --> 00:34:07,640
numbers that they'll pay up big
for compared to what else is out

673
00:34:07,640 --> 00:34:09,960
there.
I think with with more work

674
00:34:09,960 --> 00:34:12,960
going into this one and the idea
of like a, a bigger company

675
00:34:12,960 --> 00:34:15,760
coming in partnering, I wouldn't
sort of completely put a put a

676
00:34:15,760 --> 00:34:17,719
line through it.
I think there is a fair bit of

677
00:34:18,239 --> 00:34:21,000
value here, especially in an
environment where gold keeps

678
00:34:21,560 --> 00:34:22,840
heading the way it has been
going.

679
00:34:22,840 --> 00:34:26,639
I mean, we're at least five
years from studies being being

680
00:34:26,639 --> 00:34:29,400
wrapped up on this one.
And I think it's sort of could

681
00:34:29,400 --> 00:34:31,639
look a fair bit different to
what it looks like now.

682
00:34:31,800 --> 00:34:34,960
But yeah, with the with the big
permitting question mark hanging

683
00:34:34,960 --> 00:34:37,480
over it.
Big CapEx, but the production

684
00:34:37,480 --> 00:34:40,239
profile is like really, really
respectable like it's a it's a

685
00:34:40,239 --> 00:34:44,080
fair bit of you know production
that's possible that gives a

686
00:34:44,080 --> 00:34:46,960
tremendous leverage to to bull
market prices.

687
00:34:47,320 --> 00:34:49,719
You know, it's not worth very
much in status quo markets.

688
00:34:49,719 --> 00:34:54,199
But yeah, when, when gold's
where it is and if copper does

689
00:34:54,199 --> 00:34:56,639
the same, then all of a sudden
this asset is, is is

690
00:34:56,880 --> 00:35:00,200
tremendously in the money in a
way that, you know, makes it so

691
00:35:00,200 --> 00:35:03,520
much more valuable than it than
it's unthinkable would have been

692
00:35:03,520 --> 00:35:05,120
possible a few years ago.
Yeah.

693
00:35:05,360 --> 00:35:06,680
Yeah.
And and that's why it has those

694
00:35:06,680 --> 00:35:09,480
sort of parallels with Donlin,
which was obviously bigger, much

695
00:35:09,480 --> 00:35:12,320
bigger outlook.
But Alaska's not historically

696
00:35:12,320 --> 00:35:15,160
been the easiest part of the
world to permit in either.

697
00:35:15,160 --> 00:35:17,680
But the government's not going
to take the asset off you once

698
00:35:17,680 --> 00:35:20,320
you can get it permitted.
All those sorts of things make

699
00:35:20,320 --> 00:35:23,120
it kind of enticing.
Yeah, yeah, no, she's definitely

700
00:35:23,120 --> 00:35:24,840
a life one.
This one because you, because

701
00:35:24,840 --> 00:35:28,840
you look like who's going to pay
2 billion for plus CapEx to get

702
00:35:28,840 --> 00:35:32,680
160,000 oz for five years.
She's a lot of money for not

703
00:35:32,680 --> 00:35:36,160
much at the start for sure, but
it's a it's all a long, long,

704
00:35:36,160 --> 00:35:39,120
long, long, long, long life.
She just can't say an open pit

705
00:35:39,440 --> 00:35:45,080
or a sinkhole getting chucked in
the farming areas of NSW any

706
00:35:45,080 --> 00:35:49,280
time within this decade.
But unless Depends if Alba gets

707
00:35:49,280 --> 00:35:51,760
back in or not.
But you don't understand what

708
00:35:51,760 --> 00:35:55,680
the outcome of the federal
election is going to be with

709
00:35:56,320 --> 00:36:02,240
things like Mcphillimmys and or
I think as you said before, JD,

710
00:36:02,240 --> 00:36:04,720
like when if everything else
starts dropping off, they're

711
00:36:04,720 --> 00:36:06,640
like, right, what do we got that
we can make money off in

712
00:36:06,640 --> 00:36:08,640
Australia?
Hard Rock mining?

713
00:36:08,840 --> 00:36:11,160
Yeah, we might make all that a
bit easier for everyone.

714
00:36:11,160 --> 00:36:12,280
Who'd a thought?
Who knows?

715
00:36:12,360 --> 00:36:14,720
I'm interested in that that
point your eyes about the

716
00:36:14,720 --> 00:36:19,600
comparison to Carrera as well.
It it does pose the question

717
00:36:19,600 --> 00:36:23,560
like why would you be a willing
seller of your of your gold

718
00:36:23,760 --> 00:36:26,240
project?
It's got, you know, outlook to

719
00:36:26,360 --> 00:36:30,160
to decent, like better cash flow
then it's been able to achieve

720
00:36:30,160 --> 00:36:32,240
in a long time over the the
outlook.

721
00:36:32,240 --> 00:36:35,120
Like why would you be willing to
why would you be willing to sell

722
00:36:35,120 --> 00:36:38,920
that at at no no premium
effectively, in the case of

723
00:36:38,920 --> 00:36:41,160
Corora and West gold, it's kind
of become apparent through the

724
00:36:41,160 --> 00:36:44,440
fullness of time that there was
some short term pain that would

725
00:36:44,680 --> 00:36:46,920
that Corolla would have had to
warn, plus the big incentives to

726
00:36:46,960 --> 00:36:48,880
to executives, which totally got
paid out.

727
00:36:48,880 --> 00:36:51,600
So yeah, that's the the looming
question mark over over your

728
00:36:51,600 --> 00:36:53,120
head.
If you're an investor in Elkane

729
00:36:53,320 --> 00:36:55,880
looking at this deal is like, is
there is there any, any kind of,

730
00:36:56,000 --> 00:36:58,600
you know, similar short term
pain associated with this with

731
00:36:58,600 --> 00:37:01,080
this deal that could could wash
out, But hopefully that can be

732
00:37:01,080 --> 00:37:05,080
evasquerated by the by the by
the gold price and and the and

733
00:37:05,080 --> 00:37:05,920
the rest of it.
Yeah, I think.

734
00:37:05,920 --> 00:37:08,680
Because I think what Westcott
share price, considering all the

735
00:37:08,680 --> 00:37:11,400
gold price movement, I think
their share price is what's

736
00:37:11,400 --> 00:37:15,760
still below what it probably was
pre Carrara deal.

737
00:37:15,760 --> 00:37:19,520
I think though, you know, 3:30
or something, then from memory,

738
00:37:19,520 --> 00:37:21,520
I think they're just cracked
through now.

739
00:37:21,800 --> 00:37:24,320
All that's gone through,
everything's settled and yeah,

740
00:37:24,320 --> 00:37:25,960
they haven't haven't performed
that well.

741
00:37:26,240 --> 00:37:28,400
It'd be an interesting comp.
Yeah, It'd be interesting to

742
00:37:28,400 --> 00:37:32,280
look at the quarterly coming up,
be good to say if this is step

743
00:37:32,280 --> 00:37:35,040
one to maybe producing
something, getting something of

744
00:37:35,040 --> 00:37:38,800
a bit bigger skull or are they
going to, is that strategic

745
00:37:38,800 --> 00:37:41,600
stake in Medallion going to
eventuate to something.

746
00:37:41,920 --> 00:37:46,360
So if you picture this getting
together, then if they sort of

747
00:37:46,360 --> 00:37:48,960
did another deal there and bring
the Medallion stuff into the

748
00:37:48,960 --> 00:37:52,440
portfolio like things start
getting a bit more interesting

749
00:37:52,440 --> 00:37:54,240
diversified bit of scale about
it, it's.

750
00:37:54,240 --> 00:37:58,120
An interesting point because
like Elkane without Mandalay's

751
00:37:58,120 --> 00:38:01,080
cash that's coming in all of a
sudden they're, they're, they're

752
00:38:01,080 --> 00:38:03,360
trying to achieve a lot with the
kind of the cash balance that

753
00:38:03,360 --> 00:38:08,120
they they have, including the,
the expansion and the, the road

754
00:38:08,120 --> 00:38:09,960
that they're, Yeah.
They have to move the road.

755
00:38:09,960 --> 00:38:11,240
Moving the road, all that sort
of stuff.

756
00:38:11,680 --> 00:38:15,200
So if you're kind of, you know,
capital constrained in some ways

757
00:38:15,600 --> 00:38:18,520
with your internal projects, are
you, are you as capable of

758
00:38:18,520 --> 00:38:21,000
following your money as
Medallion progresses to

759
00:38:21,000 --> 00:38:23,160
production?
Now, now, now, all of a sudden

760
00:38:23,160 --> 00:38:24,720
they're a lot more capable of
following their money and

761
00:38:24,720 --> 00:38:26,000
maintaining their ownership with
Medallion.

762
00:38:26,280 --> 00:38:28,720
Might be, and it might end up
being better for Medallion

763
00:38:28,720 --> 00:38:31,840
because if it takes as
hypothetically it took a similar

764
00:38:31,920 --> 00:38:35,640
journey to what the West Gold
Corolla thing did and Medallion

765
00:38:35,640 --> 00:38:38,680
might get a Might be easy to get
Medallion to vote for because

766
00:38:38,680 --> 00:38:41,320
they'll be voting on more of a
chunk for themselves.

767
00:38:41,800 --> 00:38:44,480
Which is exactly what happened
with Remelius and Spartan.

768
00:38:45,000 --> 00:38:46,360
But.
Medallion don't vote.

769
00:38:47,160 --> 00:38:50,840
If it's a scheme, if they're
going to take medallion, you

770
00:38:50,840 --> 00:38:52,000
know they.
Don't.

771
00:38:52,000 --> 00:38:54,240
Medallion have to vote in favour
of the scheme.

772
00:38:55,400 --> 00:38:57,760
Medallion shareholders.
Yeah, yeah, yeah.

773
00:38:58,000 --> 00:39:01,560
Medallion shareholders.
So that's that's we're thinking

774
00:39:01,560 --> 00:39:03,200
along down way down the road
here.

775
00:39:03,480 --> 00:39:06,480
But if it's an all script offer
to take medallion after this all

776
00:39:06,480 --> 00:39:08,120
happens.
But you could say it all

777
00:39:08,120 --> 00:39:10,320
happened.
It's all set here first, as per

778
00:39:10,320 --> 00:39:11,360
usual.
You're always thinking about the

779
00:39:11,360 --> 00:39:12,640
next step.
Don't worry, you got to think

780
00:39:12,680 --> 00:39:14,440
buddy, right?
All steps ahead.

781
00:39:14,560 --> 00:39:17,360
Oh, you got to think about
headens in three time, the three

782
00:39:17,360 --> 00:39:19,680
headens away in the bloody shift
mate.

783
00:39:20,680 --> 00:39:24,880
Right, Very good.
Bloody heaps other shit coming

784
00:39:24,880 --> 00:39:26,840
out too.
Quarterlies, anything.

785
00:39:26,840 --> 00:39:29,680
What?
What else was Pantoro bit under

786
00:39:29,680 --> 00:39:32,280
guidance or saying?
Yeah, they got whacked 10%.

787
00:39:32,280 --> 00:39:34,520
Yeah, that one.
They made, I think they made 12

788
00:39:35,080 --> 00:39:37,200
million up.
So you'd hope so in.

789
00:39:37,200 --> 00:39:40,520
This they added 12 cash, yeah.
Yeah, Yep.

790
00:39:40,640 --> 00:39:44,240
So what else?
Westguild expanded 2.6

791
00:39:44,240 --> 00:39:47,920
potentially at Higginsville.
Yeah, and I saw Linus's cash

792
00:39:47,920 --> 00:39:49,880
position dropped 40 million
bucks.

793
00:39:49,880 --> 00:39:51,880
They did about.
Stock was up.

794
00:39:52,080 --> 00:39:55,360
You believe the stock was up?
Did 2.3 or 2.4 in rare earth

795
00:39:55,360 --> 00:40:00,360
oxide total output, Yeah, 70 odd
million in CapEx over the last

796
00:40:00,360 --> 00:40:02,680
quarter, which is a bit less
than what they've, you know,

797
00:40:02,960 --> 00:40:05,520
been doing lately as things get
built.

798
00:40:05,520 --> 00:40:09,280
Yeah, but started.
Accounting for Kalgoorlie in as

799
00:40:09,720 --> 00:40:12,680
OpEx as of February.
So, yeah, expect the CapEx to.

800
00:40:13,600 --> 00:40:15,240
Yeah, definitely.
Yeah.

801
00:40:15,240 --> 00:40:21,680
But it went up it.
Went up just like no, the price

802
00:40:21,680 --> 00:40:24,080
goes down if you use the
discount code for the GRX

803
00:40:24,080 --> 00:40:25,920
conference that we have in the
show notes.

804
00:40:26,200 --> 00:40:31,840
MOM 190 bucks off if you're a
member one or Oz IM 160 bucks

805
00:40:31,840 --> 00:40:35,480
off if you're a non member using
MOMNM.

806
00:40:36,680 --> 00:40:38,600
I cannot say it more simply in
Lincoln.

807
00:40:38,600 --> 00:40:41,800
The show notes come have a beer
with me in Brisbane for the JRX

808
00:40:41,800 --> 00:40:44,920
conference.
Due for a beer with all these

809
00:40:44,920 --> 00:40:47,480
people.
Mineral Mining Services Legends,

810
00:40:47,680 --> 00:40:52,280
grounded Sambi Ground Sport CRE
Insurance, K drill, WA water

811
00:40:52,280 --> 00:40:56,680
boards, Quattro mentioned show
along with WA water boards, KCA

812
00:40:56,680 --> 00:41:00,200
Solid services, Black diamond
drilling services and Cross

813
00:41:00,320 --> 00:41:02,560
Boundary Energy, Udaru Money
miners.

814
00:41:02,600 --> 00:41:05,400
Udaru.
Yeah, information contained in

815
00:41:05,400 --> 00:41:08,200
this episode of Money of Mine is
of general nature only and does

816
00:41:08,200 --> 00:41:11,000
not take into account the
objectives, financial situation

817
00:41:11,080 --> 00:41:13,040
or needs of any particular
person.

818
00:41:13,360 --> 00:41:16,400
Before making any investment
decision, you should consult

819
00:41:16,400 --> 00:41:19,480
with your financial advisor and
consider how appropriate the

820
00:41:19,480 --> 00:41:23,160
advice is to your objectives,
financial situation and needs.