Finding Alpha Where Others Fold with Muddy Waters’ Darren McLean

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And then they went and killed
this pole and they just hit this

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extraordinary grade.
I, I remember just sitting there

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looking at in the morning again,
like, Oh my God, I think I just

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watched $5 billion get created
in a company that's trading for

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hundreds of 1,000,000 and.
I think we've got to keep this

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intro very short because the
conversation is worthy of every

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minute that the money miners
listen to here.

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But we're speaking Darren McLean
of Buddy Waters.

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People might think of Muddy
Waters as this activist kind of

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short seller.
Got a reputation?

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Got a reputation, Darren.
He runs a long fund these days.

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He came from K2 Asset
Management, a hedge fund, where

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he had tremendous success.
Yeah, spent nine years there,

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right, cutting his teeth, ran
the sort of mining sleeve.

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And I think for anyone that is
interested, which I'm sure

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there's a lot of people out
there in just investing in the

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mining sector, in particular,
those companies at the early

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stage all the way through to
seeing these projects get built,

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they're going to love this
conversation.

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There are so many Nuggets of of
wisdom.

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There's so much sort of
experience that he's built up

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over his career.
I'm thrilled to share this

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conversation with Darren.
Darren McLean from Muddy Waters,

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we're hoping that the the waters
clear up and we can have a

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pretty enlightening conversation
about investing in the mining

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sector today with you.
Thank you so much for joining

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us.
Thanks for having me guys,

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appreciate it.
Dan, I'm, I'm super excited to,

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to have this conversation.
We, Trevor and I both listened

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to a conversation of yours a few
months back and yeah, it was, it

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was pretty gripping.
We were messaging each other

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afterwards saying got to get
this guy on the show.

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It was just sort of fascinating
the way you spoke about the

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sector, the way you found
yourself investing in, in the

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natural resources world.
So I, I want to start the

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conversation there.
You're not from a technical

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background, but you spoke in
that conversation we heard and

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and when we spoke on the phone a
little while ago with real sort

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of technical capability and and
thrusting yourself into that

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junior end of the market.
So how did it all kind of come

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about?
How'd it all come about?

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I worked, I got the chance to
work for some extraordinary

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people.
I would say not really from a

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direct teaching perspective,
like an elements of that, but

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but honestly, just the people
that let me just kind of chart

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my own path and do and follow my
my nose and kind of like, Hey, I

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think you're onto something.
Go go chase that down.

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And I just happened to work and
I've only ever, prior to Muddy

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Waters, worked for two different
groups ever.

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And both my previous bosses
were, I think, pretty special

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people who gave me a lot of re
reign and latitude and let me

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chase down and kind of bury
myself and things that I thought

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were compelling.
And even if I couldn't really

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explain them, Yeah, I work for
some great people who just kind

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of enabled me to work in an
unstructured environment and

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emphasize that.
So I mean, that was fantastic.

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They're also both contrarians,
which helped.

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And I think I'm worried that way
by nature.

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And in doing so, you know, you
never know where to begin when

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you start working in any sector.
And I'm a big believer that the

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vast majority of, of what you do
is, is learned on the job.

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Like if you want to be an
engineer or doctor, sure, your,

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your education is, is pretty
important.

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But in finance and business and
anything like that, I mean,

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learned experience ends up
dominating.

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And, and certainly mining it I
think is no exception to that.

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There's like, I think when
people think about technical

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aspects of mining, they think,
well, you need to have a

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technical background to reach
technical conclusions.

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But the reality is, I mean, any
given technical background in

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mining only covers a small area
of the components that make a

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project work, and certainly they
have almost nothing to do with

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capital markets.
So at the end of the day, you

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need to pull together a range of
skill sets and you need to just

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have a general good set of
instincts of what is and isn't

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relevant, what needs to be dug
into, what you can take as a

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given, what you can't, where
the, you know, mines.

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So many things need to come
together for a mind to succeed

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and work.
It only takes one thing to fail

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for a whole project to fall
apart.

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And there's so many risk factors
and they're not necessarily

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readily obvious when you first
look at a project and you say,

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oh, it looks it's got millions
of Oz.

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I saw this other thing.
They look the same.

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It's great that one's trading in
here.

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This one's cheaper.
I should buy this is cheap.

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And then you find out there's a
weird species of something or

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you have to divert a, some a
certain number of cubic meters

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of water flow a year.
And that that's just screws you

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for permitting timelines and
pushes you into, into acts.

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And I think knowing where the
risk factors lie, having a good

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nose for the instincts of that.
And, and yeah, just the ability

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to dig into that and bring
together a bunch of disciplines

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from understanding how to get
confidence in metallurgy, how to

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get confidence and a resource
how to get confidence in, in the

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engineering aspects, how to get
confidence in the the earthworks

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and whether you can take that as
a given and just having a good

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nose for risk and joint
probability.

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These are kind of, I don't feel
like I'm doing a great job of

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answering the question, but I
would say that I don't think

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there's any one technical skill
set that really necessarily

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endows you with the foundation
to go and do it.

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Yeah, I think there's probably
like 10 things you need to pull

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together and you can only really
get an academic education in one

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of them, so.
Yeah, it it sounds like

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curiosity is the the thing you
just sort of follow and it was

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something that sort of gripped
you and interested you from

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pretty early on.
Curiosity is the word.

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Yeah, curiosity is the word.
And tinkering.

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You know, you got to love to
tinker, but it's a contrarians

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industry too.
You have to be a creature of

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your own convictions.
Can you?

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Can you peel into that bit?
I mean, I'm just kind of keen to

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hear you like your synopsis or
your, your opinion of how, how

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do you make money investing in
the sector?

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How do I make money?
How do you make like?

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How do you make money in a
general sense?

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Like how should you make money
If Like how do I specifically

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make money?
Like how you as as maybe like a

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non-technical outsider who's
become a a very like a skilled

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investor with success.
Like what's your synopsis of now

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you like you'll learn method if
you were like writing a book?

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How do you make money in the
sector?

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Well, when I started out, I
worked for this fellow Glenn

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Brown, who had this shop called
Boswell Capital.

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And he's, Glenn's a genius.
He's brilliant and he's into

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deposits and discoveries and
exploration and he's a geologist

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and loves having complex
theories of how a project will

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come together or how expiration
will come together or so on and

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so forth.
And I, I, I sat in his basement

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of his office and just plotted
drill holes.

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I read every single drill hole
news release that came out in

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the market every single day and
tried to figure out if they're

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interesting or not.
And that I did that, you know, I

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spent the first hour or two of
my morning every single day

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doing that.
I did that for years.

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And in doing so, you plot things
out and a lot of it leads to

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nothing.
And then every so often

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something will come by and it
will just knock you off your

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chair and you'll be like, Oh my
God, this is different.

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So just doing that over and over
and over.

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And how to take a drill hole and
make sense of what it's worth

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isn't, there's no book on that.
It's something you have to just

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kind of do and immerse yourself
in.

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And, and I did that and, and I
thought there were probably

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people all over who just did
that.

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And then I kind of quickly
realized that that wasn't the

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case.
I, I had a hard time finding

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anybody who, who did that.
And, you know, we talked about

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exploration projects and people
would ask me about them and I'd

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go and tell this minutia in
detail because I was obsessed

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with this stuff.
And then I realized everyone's

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eyes were glazing back in their
head.

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And I was like, oh, you know,
they don't really, this isn't

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what they do.
But at the same time, in doing

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so, I found like incredible
pieces of value and you know,

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Alpha, where you start spotting
some things and uncovering some

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things that you think are worth
extraordinary amounts of money.

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And the thing about drilling is
drilling is the ultimate

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catalyst.
Like a drill hole comes in and

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walks into a company that might
be 10s of millions of dollars

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and hundreds of millions of
dollars.

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And sometimes it changes the
value proposition by hundreds of

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millions of billions of dollars
in a moment.

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And, and when you watch that
happen and sometimes the stock

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barely responds and you're like,
no, that has to be worth half a

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billion dollars or something
like that.

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And, and it doesn't respond.
And then you, you then you see

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it play out and you're right
from beginning and you say, Oh

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my God, that was just sitting
there hanging out.

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Like that was an extremely
compelling thing for me is

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watching those pieces of
information come in, realizing

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not everyone was very few people
were doing that, and then

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watching them come to fruition
to the positive, to the negative

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and realizing, Oh my God, there
was an incredible opportunity to

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make money there.
So I watched the number of those

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instances go by early in my
career way understood the the

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scenarios intimately and I
understood the value

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propositions early and I
realized, no, there's a real

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edge here and there's a real
transaction opportunity.

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And I, I always say to people,
you know, when we're starting

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out that I've worked with, like
the the first time you see

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something you extraordinary, you
probably won't believe it and

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you won't trust yourself and you
won't have the confidence to

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make enough money on it.
And if you do, you're probably,

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you know, maybe you got a case
of Dunning Kruger where you're

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emboldened by your own naivety,
but you're kind of you're timid

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at first.
You're like, no, we can't, it

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can't be this obvious.
And you watch it play out in the

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second time.
You need to swing.

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If you see it, you need to move.
And so I had a lot of reps of

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first times and that kind of
job.

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And then I got the opportunity
when I went to K2 to transact on

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a number of those.
And yeah.

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Do do you think the the
opportunity out there has gotten

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bigger over the sort of 15 ish
years of of your career?

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As in less funds doing and
competing in that arena.

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Well that's a.
I'd say that's it's a simple

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question.
It's a very multi faceted

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answer.
Has it gotten easier from a

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competition standpoint?
Yes, I think mutual funds have

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been, but they they were a very
traditional source of capital

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and walked in.
They were big players.

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You had these big funds with
very large capital sleeves and

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the people directing them had a
lot more rain and flexibility

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and how they could pursue
things.

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And then I think they've been
regulated and restricted more

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and more.
They've been forced up calf,

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they've been forced to minimum
minimum liquidity requirements,

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minimum deployment requirements.
They're kind of forced into pro

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cyclical vehicles.
It it'd be a tough place to to

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operate, at least for how I like
to invest.

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I think it'd be extremely
difficult from where the

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managers of those funds sit and
what their restrictions are.

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So that's really removed a lot
of that capital out of the

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sector and and the word exists
has been largely pooled up cap

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into, you know, quasi index
funds and then active capital.

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Yeah, honestly, I, I remember
reading something not that long

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ago outlining that mining was
one of the least allocated

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sectors in finance for active
capital and sitting there and

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just being like, Oh my God, it's
one of the most attractive as

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far as I can tell in terms of
value creation and and catalysts

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and ability to get an edge.
So, yeah, yeah, your, your

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competition.
I I think it's certainly reduced

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00:11:44,920 --> 00:11:47,520
a lot of the brilliant activity
and driving deposits forward,

226
00:11:47,520 --> 00:11:51,400
which is what I focus on was has
always been driven by special

227
00:11:51,400 --> 00:11:55,080
characters, ultra high net worth
people, you know, these dogged,

228
00:11:56,720 --> 00:11:59,760
talented individuals who take
extreme risk with their own

229
00:11:59,760 --> 00:12:04,080
Personal Capital.
Those individuals are aging and

230
00:12:04,080 --> 00:12:07,880
they haven't been, there's been
some rising new stars to kind of

231
00:12:07,880 --> 00:12:12,000
take their their place or who
are showing nascent see could

232
00:12:12,000 --> 00:12:14,240
turn into them.
But there's, there hasn't been a

233
00:12:14,240 --> 00:12:17,400
proper replacement mechanism
like they're aging far faster

234
00:12:17,400 --> 00:12:20,920
than they're getting replaced.
So their capital is is

235
00:12:20,920 --> 00:12:24,080
inherently on its way out from
the previous generation.

236
00:12:26,960 --> 00:12:29,200
Yeah, which leaves a big vacuum
in terms of that.

237
00:12:29,200 --> 00:12:33,120
But at the same time, the
industry has attracted less

238
00:12:33,120 --> 00:12:34,520
capital.
It's drilled a lot less.

239
00:12:34,520 --> 00:12:38,880
It's been the driest decade, I
think no in in for discoveries.

240
00:12:39,320 --> 00:12:43,120
And so the opportunity set has
inherently been smaller.

241
00:12:44,440 --> 00:12:46,040
So it's been a smaller
opportunity set.

242
00:12:46,520 --> 00:12:48,720
It's been, but there's been less
competition.

243
00:12:49,360 --> 00:12:51,760
When there's less competition,
the opportunity for yourself,

244
00:12:51,760 --> 00:12:54,480
yeah, it's great.
It's more, it's, it's more

245
00:12:54,480 --> 00:12:55,880
compelling.
At the same time, when there's

246
00:12:55,880 --> 00:12:59,320
less capital getting allocated,
the difficulty of driving that

247
00:12:59,320 --> 00:13:02,880
opportunity to fruition can be
higher, like it can take longer.

248
00:13:03,080 --> 00:13:06,640
Maybe the money doesn't come in,
you know, you, you can be right

249
00:13:06,640 --> 00:13:08,560
about something and it might,
you may not show up a week, it

250
00:13:08,560 --> 00:13:10,520
might be years.
You're driving it forward before

251
00:13:10,800 --> 00:13:15,320
it crosses a threshold of the
market wakes up to with the

252
00:13:15,320 --> 00:13:17,280
value that's there through some
forcing mechanism.

253
00:13:17,680 --> 00:13:20,000
So I think the forcing mechanism
would have came faster if there

254
00:13:20,000 --> 00:13:26,280
was more active capital, which
is a long way of saying, yeah,

255
00:13:26,280 --> 00:13:28,720
the opportunities I think are
greater.

256
00:13:28,720 --> 00:13:30,920
You have more time or is more
intestinal fortitude.

257
00:13:32,160 --> 00:13:33,440
Tell me about follower Capital
in.

258
00:13:35,560 --> 00:13:38,640
What sense?
It's it's a phrase you mentioned

259
00:13:38,640 --> 00:13:40,960
in your last interview, but I
was just keen to tease what it

260
00:13:41,080 --> 00:13:42,960
means to you.
Like your observation of

261
00:13:42,960 --> 00:13:48,560
follower capital sector.
Yeah.

262
00:13:48,720 --> 00:13:51,440
I can't remember the context
which I would have said it in.

263
00:13:51,960 --> 00:13:57,960
I can only guess.
I mean, the reality is I think

264
00:13:57,960 --> 00:14:04,640
most of the money in this sector
right now, I don't think there's

265
00:14:04,640 --> 00:14:08,520
a huge market and there never
really has been of people

266
00:14:08,520 --> 00:14:11,880
independently going out and
qualifying assets and trying to

267
00:14:11,880 --> 00:14:15,160
RIP them down to the nuts and
bolts and figuring out which

268
00:14:15,160 --> 00:14:17,760
ones work, which ones won't
work.

269
00:14:19,200 --> 00:14:22,280
Assets that have failed, really
understanding and a detailed

270
00:14:23,160 --> 00:14:25,440
post mortem as to why they
failed, what really happened

271
00:14:25,440 --> 00:14:27,040
versus what the narrative was in
the market.

272
00:14:27,840 --> 00:14:34,040
And I've generally found if you
do that, there's some very, very

273
00:14:35,640 --> 00:14:39,080
powerful relationships in terms
of things that have worked,

274
00:14:39,280 --> 00:14:42,360
things that haven't worked,
outcomes for assets and certain

275
00:14:42,360 --> 00:14:46,840
tiers versus other tiers.
And I just don't think there's a

276
00:14:46,840 --> 00:14:51,760
big breath of, of capital out
there approaching the market

277
00:14:51,760 --> 00:14:53,200
that way.
I think predominantly what they

278
00:14:53,200 --> 00:14:58,160
do is they look for, they look
for plays, they look for a stock

279
00:14:58,160 --> 00:15:00,320
plays, they look for capital
marketplace, they look for

280
00:15:00,320 --> 00:15:02,520
things that are working.
It's like, you know, you get a

281
00:15:02,520 --> 00:15:06,120
hot deal, market deals are
working, people start playing

282
00:15:06,120 --> 00:15:08,440
deals, you'll start going forex
oversubscribed.

283
00:15:08,440 --> 00:15:11,680
They start padding their orders
because they tend to, you know,

284
00:15:11,680 --> 00:15:14,720
they're everyone's structuring
deals is free trade.

285
00:15:14,800 --> 00:15:16,920
They're free trading in seven
days and every, you know, for

286
00:15:16,920 --> 00:15:19,360
the last eight that have gone
off, Oh my God, they've all,

287
00:15:20,040 --> 00:15:22,840
they've all had liquidity 10
percent, 20% higher like you.

288
00:15:22,840 --> 00:15:25,240
And so money says deals are
working.

289
00:15:25,240 --> 00:15:29,560
They plow into deals.
I think a lot of it's market

290
00:15:29,560 --> 00:15:31,080
activity is just oriented around
that.

291
00:15:31,080 --> 00:15:33,320
I don't think people are going
in funding companies on who's

292
00:15:33,320 --> 00:15:36,960
deserving of capital.
I think they're just, it's a lot

293
00:15:36,960 --> 00:15:41,880
of FOMO and event driven.
And but and then on, on

294
00:15:41,880 --> 00:15:46,720
companies, what I've kind of
witnessed in my time, and this

295
00:15:46,720 --> 00:15:50,000
is just my perception is that
people have become a lot more

296
00:15:50,000 --> 00:15:53,480
gun shy in financing small
companies, venture companies,

297
00:15:53,480 --> 00:15:55,320
exploration companies, and
rightfully so.

298
00:15:55,320 --> 00:15:58,280
I mean, it's extremely risky,
but there used to be a sense

299
00:15:58,280 --> 00:15:59,800
that there was money coming
behind you.

300
00:16:00,240 --> 00:16:02,600
And I think people generally
when they invest in the sector,

301
00:16:02,600 --> 00:16:04,560
they want to feel like money's
coming behind them.

302
00:16:05,560 --> 00:16:08,840
And when they feel that, that's
when they feel the most

303
00:16:08,840 --> 00:16:11,080
emboldened to invest.
And honestly, that's prominent.

304
00:16:11,680 --> 00:16:14,320
That's predominantly the most
important factors why people

305
00:16:14,320 --> 00:16:18,560
invest.
But when the check slowed down

306
00:16:18,560 --> 00:16:23,600
in the market, activity slowed
down, that feeling went away.

307
00:16:23,920 --> 00:16:27,760
I think that enough there'd been
enough kind of false starts and

308
00:16:27,760 --> 00:16:33,840
pulses of excitement that then
washed out that left people kind

309
00:16:33,840 --> 00:16:37,800
of gun shy and worried about
getting into these things,

310
00:16:37,800 --> 00:16:40,840
getting trapped in moments of
the liquidity and not being able

311
00:16:40,840 --> 00:16:42,520
to get out.
I think people are inherently

312
00:16:42,520 --> 00:16:44,640
terrified when they write a
check to a company.

313
00:16:46,080 --> 00:16:48,800
They don't want to be one of the
bigger checks.

314
00:16:48,800 --> 00:16:55,080
Usually they want to be in the
book in a mid medium size.

315
00:16:55,080 --> 00:16:57,280
You know, it's not on them.
Like they don't want to end up

316
00:16:57,280 --> 00:17:00,360
in a situation where they get a
phone call and they say, hey,

317
00:17:00,360 --> 00:17:04,880
listen, we got 3,000,000 until
we need to keep drilling.

318
00:17:04,880 --> 00:17:07,160
Yeah, this year wasn't a success
really.

319
00:17:07,319 --> 00:17:12,720
We had some good prospects, but
like, we need to raise 10 and we

320
00:17:12,720 --> 00:17:16,560
need you to be the lead, by the
way, if you're not the lead,

321
00:17:16,560 --> 00:17:20,599
it's going to be tough.
And that could really be bad for

322
00:17:20,599 --> 00:17:22,319
your investment.
So, you know, that's the

323
00:17:22,319 --> 00:17:25,720
situation they're scared of or
it could fall on them and

324
00:17:25,720 --> 00:17:30,800
they're in too deep to get out.
And so I think we generally what

325
00:17:30,800 --> 00:17:33,560
you've seen in what I've seen
over the last like three to five

326
00:17:33,560 --> 00:17:36,320
years is money wants to tuck in
between individuals they

327
00:17:36,320 --> 00:17:38,720
perceive is very strong.
They want individuals they view

328
00:17:38,720 --> 00:17:40,600
as strong to anoint assets for
them.

329
00:17:41,960 --> 00:17:46,880
Deep pocketed individuals like
you've seen enormous amount of

330
00:17:46,880 --> 00:17:50,480
capital pile in behind like the
Lundin family and Pierre

331
00:17:50,480 --> 00:17:54,800
Lassand, individuals like that.
I mean, Eric Sprott is.

332
00:17:55,880 --> 00:17:58,920
Just.
You know, he, I'd say he's the

333
00:17:58,920 --> 00:18:01,400
ultimate gunslinger in the
sector still.

334
00:18:01,400 --> 00:18:03,880
He still writes big checks, but
a lot of retail money and

335
00:18:03,920 --> 00:18:06,120
institutional money wants to
slot him behind him because they

336
00:18:06,120 --> 00:18:09,560
know all those individuals have
deep pockets of deep convictions

337
00:18:09,560 --> 00:18:14,120
and they follow their money.
And so there's no question that

338
00:18:14,120 --> 00:18:16,200
the companies will run out of
gas before they can reach the

339
00:18:16,200 --> 00:18:24,080
next gas station.
And, and so I, I just think that

340
00:18:24,080 --> 00:18:25,480
honestly drives most market
activity.

341
00:18:25,480 --> 00:18:27,360
And those are the companies that
had been able to attract

342
00:18:27,360 --> 00:18:28,760
capital.
No, things have picked up a bit

343
00:18:28,760 --> 00:18:30,280
recently.
Money's been flowing again.

344
00:18:31,160 --> 00:18:35,120
But I think I found that
generally speaking, you want

345
00:18:35,120 --> 00:18:38,320
guys and they want to say, well,
they're behind it, they believe

346
00:18:38,320 --> 00:18:40,000
in it.
So the project must be good.

347
00:18:40,000 --> 00:18:41,040
They're going to push it
forward.

348
00:18:41,040 --> 00:18:42,360
They're going to keep financing
it.

349
00:18:42,680 --> 00:18:46,480
They're not keen on down rounds
and they've got the money to try

350
00:18:46,480 --> 00:18:49,200
to, you know, keep financing
these companies, these projects

351
00:18:49,200 --> 00:18:51,360
higher.
We feel safe somewhere we can

352
00:18:51,360 --> 00:18:53,520
park, we can slot in, it's not
going to fall on us.

353
00:18:53,520 --> 00:18:56,520
And I'm pretty confident that
this big strong, you know,

354
00:18:56,520 --> 00:18:58,920
leader is going to carry me to
the promised land.

355
00:18:58,920 --> 00:19:01,960
And I think that's driven most
of the market activity and

356
00:19:02,000 --> 00:19:04,600
capital allocation in the
sector, so.

357
00:19:05,880 --> 00:19:08,240
Yeah, it's expected.
Like the whole concept of

358
00:19:08,240 --> 00:19:14,880
funding certainty is being like
a massive de risking like thing

359
00:19:14,880 --> 00:19:18,160
for just earning, earning the
equity because the junior mining

360
00:19:18,160 --> 00:19:21,200
companies definitely fighting
dilution their entire wayfunding

361
00:19:21,200 --> 00:19:24,200
certainty, you know, reduces
that that race to a degree.

362
00:19:24,200 --> 00:19:28,160
If you've got a big backer who
who you know well, we'll kind of

363
00:19:28,160 --> 00:19:30,120
underwrite a check when things
get tough.

364
00:19:30,400 --> 00:19:37,400
Yeah, Yeah, you got, I mean cost
of capital is kind of

365
00:19:37,400 --> 00:19:39,680
everything.
Certainty of cost of capital is

366
00:19:39,680 --> 00:19:41,000
kind of everything.
Well, it's not kind of

367
00:19:41,000 --> 00:19:44,880
everything, but it's it's, it
sure is important.

368
00:19:45,520 --> 00:19:47,640
And I don't think a lot of
people feel like they have the

369
00:19:47,640 --> 00:19:49,520
strength and the wherewithal to
drive these things for

370
00:19:49,520 --> 00:19:52,120
themselves.
And so they're looking to to

371
00:19:52,720 --> 00:19:54,640
talk in behind people who do
feel that way.

372
00:19:56,400 --> 00:20:01,560
Dan, I want to really sort of
hone in on on the part of the

373
00:20:01,640 --> 00:20:05,880
Lausanne curve that that you
find that the sweet spot if you

374
00:20:05,880 --> 00:20:08,400
like.
So I think one of the the things

375
00:20:08,400 --> 00:20:12,600
that really stuck out from that
conversation was that the the

376
00:20:12,600 --> 00:20:18,440
rewrite potential.
From execution is underrated in

377
00:20:18,440 --> 00:20:21,040
a sense.
And I think you might have said

378
00:20:21,040 --> 00:20:24,760
that you know you can you can
see a decent sort of a 3X there.

379
00:20:25,640 --> 00:20:27,760
And it's kind of interesting
because we speak with a lot of

380
00:20:27,760 --> 00:20:31,400
people here and that is really
the part where they might run

381
00:20:31,400 --> 00:20:34,560
away from the stock that
construction hell where things

382
00:20:34,560 --> 00:20:38,720
can only go wrong.
But am I right in thinking about

383
00:20:39,040 --> 00:20:42,440
the the area of the market you
like to play as the project

384
00:20:42,440 --> 00:20:46,040
under appreciated whatever stage
it might be you you come in

385
00:20:46,040 --> 00:20:48,720
there and then you like to see
it all the way through until the

386
00:20:48,720 --> 00:20:53,040
project is built or how else
would you sort of describe that

387
00:20:53,040 --> 00:20:57,200
that phase you love to play in?
Yeah.

388
00:20:58,240 --> 00:21:00,920
In a general sense, I like
single asset companies, usually.

389
00:21:01,360 --> 00:21:05,480
I like because there's more
exposure to the, the area of

390
00:21:05,480 --> 00:21:07,920
alpha that I, that I see.
I like things that are under

391
00:21:07,920 --> 00:21:14,000
appreciated.
I like things that people view

392
00:21:14,000 --> 00:21:16,920
as a bit of maybe a, a haunted
house, Like there's something

393
00:21:16,920 --> 00:21:19,520
wrong with the company and
people have been burned once

394
00:21:19,520 --> 00:21:21,640
there and they don't want to go
back to something's changed.

395
00:21:22,520 --> 00:21:24,480
And that's the, that's the
perfect scenario.

396
00:21:25,280 --> 00:21:27,480
And you're like, well, I know
why people don't want to look at

397
00:21:27,480 --> 00:21:28,800
this.
And I didn't even want to look

398
00:21:28,800 --> 00:21:32,240
at this, but now that I've
looked at it, Oh my God.

399
00:21:32,680 --> 00:21:34,320
And this isn't the same thing as
before.

400
00:21:34,320 --> 00:21:36,480
And, and I know why people are
writing it off.

401
00:21:36,480 --> 00:21:39,360
It makes complete sense.
But like, like something's

402
00:21:39,360 --> 00:21:45,800
changed here.
And it's also, hey, in a perfect

403
00:21:45,800 --> 00:21:50,040
world too.
It's of the size and nature that

404
00:21:50,040 --> 00:21:54,680
I, me, I can walk in the door
and I can change it.

405
00:21:54,960 --> 00:22:00,320
I can change the situation so I
can, I can materially improve

406
00:22:00,320 --> 00:22:02,600
some of the things that are that
are holding the company back.

407
00:22:04,080 --> 00:22:06,280
That's the ultimate situation.
It's not always like that.

408
00:22:06,280 --> 00:22:08,080
Sometimes there's not a single
thing I can do about it.

409
00:22:08,080 --> 00:22:11,360
But my God is, is it just, you
know, something special is going

410
00:22:11,360 --> 00:22:12,600
on here?
And, and I think when I look

411
00:22:12,600 --> 00:22:17,200
back actually at all my, it's
funny, I worked at my previous

412
00:22:17,680 --> 00:22:21,560
firm for 9 years.
I spent probably six of those

413
00:22:22,160 --> 00:22:24,160
just driving the mining side of
things.

414
00:22:25,040 --> 00:22:28,280
But now maybe 7 years.
But when I think back to it,

415
00:22:28,280 --> 00:22:33,160
like, and then in my time at
Muddy Waters now in these years,

416
00:22:33,160 --> 00:22:37,080
like it's really been dominated
by like maybe 5 to 8 files.

417
00:22:37,080 --> 00:22:39,760
I've just hazard a guess.
And pretty much every single one

418
00:22:39,760 --> 00:22:43,840
of those was something that met
that criteria.

419
00:22:43,840 --> 00:22:45,280
It was kind of a haunted house
to people.

420
00:22:45,720 --> 00:22:50,160
Like, I remember, I remember
Michael O'Keefe, one of the most

421
00:22:50,160 --> 00:22:54,480
brilliant individuals I ever
met, He's an Australian, came

422
00:22:54,480 --> 00:22:57,680
into my office at K2 and I took
a meeting with him.

423
00:22:57,680 --> 00:22:58,880
I didn't want to take the
meeting.

424
00:22:59,200 --> 00:23:01,440
I didn't care.
He had this Bloom Lake Asset

425
00:23:01,440 --> 00:23:05,720
Company champion iron ore and I
didn't know who this guy was.

426
00:23:05,960 --> 00:23:08,360
I remember him and David
Cattifer walking in my office

427
00:23:08,360 --> 00:23:13,880
with this fellow John Rothwell
at TD, taking them around 3.

428
00:23:14,000 --> 00:23:18,520
Just absolute wonderful
individuals who I think the

429
00:23:18,520 --> 00:23:20,880
world of now didn't know any of
them at the time.

430
00:23:21,240 --> 00:23:25,440
And I just took the meeting
because I wanted information on

431
00:23:25,440 --> 00:23:27,120
what was going on in the
Labrador trial.

432
00:23:27,880 --> 00:23:30,600
It's a globally significant
export region in Canada.

433
00:23:31,040 --> 00:23:33,080
There's almost no capital
markets opportunities.

434
00:23:33,080 --> 00:23:34,680
So there's not a lot of
competing people trying to

435
00:23:34,680 --> 00:23:36,480
figure it out.
So hey, should probably keep a

436
00:23:36,480 --> 00:23:38,040
close eye.
Maybe something will come out of

437
00:23:38,040 --> 00:23:40,920
that.
And he starts talking to me

438
00:23:40,920 --> 00:23:44,280
about the project and I'm like
ask a few questions.

439
00:23:44,320 --> 00:23:49,440
I'm thinking this is a, this is
a $90.00 project and a $65, you

440
00:23:49,440 --> 00:23:54,080
know, $90.00 cost project in a
60 to $65 price environment.

441
00:23:54,080 --> 00:23:57,800
Who cares?
And I'm just like, yeah, what

442
00:23:57,800 --> 00:24:00,680
about, yeah, the rail contract
though, what you're paying

443
00:24:00,680 --> 00:24:02,080
there?
And he's like, oh, renegotiated

444
00:24:02,080 --> 00:24:06,440
that got a 10 bucks lower.
I'm like, OK, well, if you said

445
00:24:06,440 --> 00:24:07,960
so, he probably did do that.
OK, fine.

446
00:24:07,960 --> 00:24:10,280
It's not a $90.00 assets, It's
an $80 asset now.

447
00:24:10,280 --> 00:24:13,360
Cool, great.
You know, good luck for paying

448
00:24:13,360 --> 00:24:16,320
your capital and that and then,
you know, the port, the ports

449
00:24:16,320 --> 00:24:20,120
undersize that you can't take
supermax vessels together, bury

450
00:24:20,120 --> 00:24:21,920
the material back and forth to
fill the ship.

451
00:24:21,920 --> 00:24:23,520
Like it's a big problem that
kills you.

452
00:24:24,320 --> 00:24:26,520
It's like, Oh no, fix that.
Like how do you fix that?

453
00:24:27,920 --> 00:24:29,760
Well, I built a Newport got a
Newport built.

454
00:24:30,440 --> 00:24:32,360
How did you buy?
How did you build a Newport like

455
00:24:32,360 --> 00:24:34,120
this?
Hundreds of millions of dollars.

456
00:24:34,120 --> 00:24:38,160
So I got the government to build
it or it was something to that

457
00:24:38,160 --> 00:24:39,200
effect.
I'm like, what are you?

458
00:24:39,360 --> 00:24:40,680
Who else is using it?
Just me.

459
00:24:40,680 --> 00:24:43,000
What are you paying to use it?
The answer is basically nothing.

460
00:24:43,000 --> 00:24:45,840
And I was like, I'm like, well,
what's your relationship with

461
00:24:45,840 --> 00:24:47,320
the government here?
Well, they're one of the big

462
00:24:47,320 --> 00:24:48,600
shareholders.
And we structured it and he

463
00:24:48,600 --> 00:24:50,120
starts going up and how we
structured it.

464
00:24:51,200 --> 00:24:53,640
And I'm like, well, that
probably knocks off 10 to 15

465
00:24:53,640 --> 00:24:55,520
bucks a ton.
Oh, OK, now we're getting close.

466
00:24:55,760 --> 00:24:57,680
And then you're like, yeah, the
recoveries though, they couldn't

467
00:24:57,680 --> 00:24:58,760
get that.
I'll fix that.

468
00:24:59,600 --> 00:25:02,040
How'd you fix that?
Like, oh, they're using the

469
00:25:02,040 --> 00:25:03,720
wrong, they're using mineral
sand spirals.

470
00:25:03,720 --> 00:25:05,880
We just use the right ones.
They actually had them sitting

471
00:25:05,880 --> 00:25:07,240
in the mill.
We just moved them over.

472
00:25:07,240 --> 00:25:08,880
And I'm like, OK, and that
really works.

473
00:25:08,880 --> 00:25:10,600
How do I know that?
And he's like, cuz I'm getting

474
00:25:10,600 --> 00:25:14,280
those recoveries right now.
And I'm like, and then he

475
00:25:14,280 --> 00:25:16,600
started to talk more.
I just kind of I shut my mouth

476
00:25:16,880 --> 00:25:18,560
because I couldn't believe what
I was hearing.

477
00:25:18,600 --> 00:25:22,720
And I I was just thinking there.
I'm like, Oh my God, what have

478
00:25:22,720 --> 00:25:25,560
you pulled off here?
Like this is a very complicated

479
00:25:26,160 --> 00:25:27,880
like, like this would have
taken.

480
00:25:27,960 --> 00:25:30,680
You must be this guy must I
realized I was sitting across

481
00:25:30,680 --> 00:25:36,000
from a very impressive
individual and a very determined

482
00:25:36,440 --> 00:25:39,520
like guy who you just kind of
you can't keep down.

483
00:25:39,520 --> 00:25:41,760
He just gets back up.
No matter when he hits, he takes

484
00:25:41,760 --> 00:25:44,920
kind of guy.
And I was like, and I just

485
00:25:44,920 --> 00:25:47,360
didn't say like much of A word
for the rest of the meeting.

486
00:25:48,320 --> 00:25:49,640
We're just sitting there
absolutely floored.

487
00:25:49,640 --> 00:25:50,640
And I walked out of that
meeting.

488
00:25:50,640 --> 00:25:53,840
And then Michael told me after
that he, he mentioned to John,

489
00:25:54,640 --> 00:25:57,520
it's like, like, I didn't care
about anything I had to say.

490
00:25:57,520 --> 00:25:58,440
And I walked out of that
meeting.

491
00:25:58,440 --> 00:26:01,920
I went to my, my business part
partner at the time.

492
00:26:01,920 --> 00:26:03,600
And I'm like, that was either
the greatest lawyer that ever

493
00:26:03,600 --> 00:26:05,760
walked into my office or that
was the best meeting I ever had

494
00:26:07,040 --> 00:26:11,400
got on a plane, flew right up
the site, went there and I get

495
00:26:11,400 --> 00:26:14,560
there and there's a like one
other person in the site visit.

496
00:26:14,560 --> 00:26:18,240
No one cares.
And I'm standing there on the on

497
00:26:18,240 --> 00:26:20,360
the port watching this vessel
get loaded.

498
00:26:20,360 --> 00:26:23,400
I'm just sitting there.
I'm like, I think this guy's

499
00:26:23,400 --> 00:26:25,440
making like thirty, $40 million
a quarter right now.

500
00:26:25,440 --> 00:26:31,240
Like, Oh my God.
And but no one wanted to look at

501
00:26:31,240 --> 00:26:32,760
it for the same reason I didn't
want to look at it.

502
00:26:32,760 --> 00:26:34,960
Who cares about Bloom?
Like, you know, the thing had

503
00:26:34,960 --> 00:26:40,360
blown up consolidated Thompson
and like wrecked Cleveland

504
00:26:40,360 --> 00:26:42,640
cliffs.
Like this thing was a, everyone

505
00:26:42,640 --> 00:26:44,560
knew that asset couldn't work in
this price environment.

506
00:26:45,680 --> 00:26:48,800
And yeah, I just, I couldn't
believe what I was seeing.

507
00:26:48,800 --> 00:26:53,440
So I mean, that's one example.
It was very obvious when no one

508
00:26:53,440 --> 00:26:55,240
wanted to look.
I I feels like a bit of a fluke

509
00:26:55,240 --> 00:26:57,120
that I actually ended up taking
that meeting because I didn't

510
00:26:57,120 --> 00:26:59,040
want it really or any interest
in the company.

511
00:26:59,680 --> 00:27:02,920
And it was one of the greatest
feats I ever saw anyone pull off

512
00:27:02,920 --> 00:27:04,920
in the sector, to be honest.
So.

513
00:27:05,080 --> 00:27:08,680
That's incredible, Yeah.
I mean, I O'Keefe had had run

514
00:27:08,920 --> 00:27:13,480
Glencore Australia and then sold
Riversdale to to to Rio.

515
00:27:13,840 --> 00:27:16,200
But credit to you as well
because that would have been

516
00:27:16,200 --> 00:27:20,600
like 16 or 2017 in the, in the
depths of the iron ore bear

517
00:27:20,600 --> 00:27:23,640
market where everyone was scared
to to go.

518
00:27:23,640 --> 00:27:26,400
So even even taking the meeting
and thinking about investing in

519
00:27:26,400 --> 00:27:29,920
iron ore was a bit of a
contrarian sort of play on your

520
00:27:29,920 --> 00:27:31,920
part there as well, I'm
assuming?

521
00:27:34,280 --> 00:27:38,120
A bit, I think I just, it was
more of a thing that the

522
00:27:38,120 --> 00:27:41,320
Labrador through is something
you should watch if you can, if

523
00:27:41,320 --> 00:27:44,160
you can have relationships with
people and garner information on

524
00:27:44,160 --> 00:27:46,640
what's going on in the Labrador,
which is largely held inside

525
00:27:46,640 --> 00:27:48,600
companies that it's not primary
assets.

526
00:27:48,600 --> 00:27:50,720
It's not a lot of reporting on.
You should know it because

527
00:27:50,720 --> 00:27:53,280
something special could come out
of there and it made sense.

528
00:27:53,280 --> 00:27:54,760
There could be a lot of value at
some point.

529
00:27:54,760 --> 00:27:57,400
There's so much infrastructure,
so many projects and deposits.

530
00:27:57,400 --> 00:28:00,520
You should watch it and and try
to gather as much as you can

531
00:28:01,120 --> 00:28:03,440
because you never know if
something did happen, it could

532
00:28:03,440 --> 00:28:07,160
be special.
And that was really it.

533
00:28:07,240 --> 00:28:10,680
I just didn't think for a minute
this meeting would be that, but

534
00:28:10,680 --> 00:28:13,240
it was.
So it was just I I think I'd

535
00:28:13,360 --> 00:28:16,800
probably credit myself for the
instinct that I should continue

536
00:28:16,800 --> 00:28:19,520
to care and watch that.
And I've also just been of the

537
00:28:19,520 --> 00:28:22,200
mindset that iron ore is was
always one of the most

538
00:28:22,200 --> 00:28:24,920
fascinating medals to me because
I, I walked into my career and I

539
00:28:24,920 --> 00:28:28,360
think it was like, it just been
in like the hundreds and then it

540
00:28:28,360 --> 00:28:31,520
collapsed down to 35 for a
moment, being like 50.

541
00:28:31,520 --> 00:28:34,440
And I'm, you know, reading all
these reports coming out from

542
00:28:34,440 --> 00:28:37,400
like, I think it was Goldman's
and other groups talking about

543
00:28:37,400 --> 00:28:40,840
iron ores never coming back and
never see like 50 above 50 bucks

544
00:28:40,840 --> 00:28:42,960
a ton again.
It was dead.

545
00:28:42,960 --> 00:28:47,240
And I've just as long as I've
been in mining iron ores, been

546
00:28:47,240 --> 00:28:50,840
pricing backwardation, like the
forward curve goes down always.

547
00:28:52,440 --> 00:28:57,280
And here's, listen, I'm not like
the Super macro guy, but I'm

548
00:28:57,280 --> 00:29:00,560
like, I don't know, man.
It feels like in a growing

549
00:29:00,560 --> 00:29:03,160
world, like the whole economy is
predicated on the world growing

550
00:29:03,160 --> 00:29:05,040
and expanding really.
I mean, if it starts shrinking

551
00:29:05,040 --> 00:29:09,560
and you got big problems, hope
you got some really fancy

552
00:29:09,560 --> 00:29:14,360
insurance policies.
But steel seems like something

553
00:29:14,360 --> 00:29:16,160
that probably shouldn't go down
forever.

554
00:29:17,000 --> 00:29:20,640
I don't know, seems like a good
thing to buy when others are

555
00:29:20,640 --> 00:29:23,360
pessimistic and you're kind of
up against the cost curve.

556
00:29:23,360 --> 00:29:25,760
But you know, people thought
that Bo and HP were just going

557
00:29:25,760 --> 00:29:30,880
to print the metal into oblivion
and forever.

558
00:29:31,960 --> 00:29:37,040
Now it's funny because that
predictions being dead wrong.

559
00:29:37,880 --> 00:29:41,200
Iron ore has just continued to
rise pretty much my whole

560
00:29:41,200 --> 00:29:44,840
career.
And yet the backwardation had

561
00:29:44,840 --> 00:29:46,800
always persisted.
The pessimism had always been

562
00:29:47,880 --> 00:29:50,000
like maintained.
And for some reason, all these

563
00:29:50,000 --> 00:29:52,440
banks had maintained their
confidence that you should be

564
00:29:52,440 --> 00:29:57,920
pessimistic on iron ore and you
should price it cynically.

565
00:29:59,560 --> 00:30:01,480
It didn't seem to matter how
many times in a row they were

566
00:30:01,480 --> 00:30:02,880
wrong.
And I'm like, well, that's easy

567
00:30:02,880 --> 00:30:04,840
Alpha.
I'll have to.

568
00:30:05,400 --> 00:30:07,880
All I have to believe is that
like, they don't know what the

569
00:30:07,880 --> 00:30:09,560
heck they're talking about.
That's it.

570
00:30:09,960 --> 00:30:12,760
And the world's more complicated
and and they're probably a bit

571
00:30:12,760 --> 00:30:16,400
emboldened.
I never listen.

572
00:30:16,400 --> 00:30:20,120
I never, I never care for what
anyone has to say on macro in

573
00:30:20,120 --> 00:30:21,520
their convicted beliefs on the
world.

574
00:30:21,520 --> 00:30:25,040
If they can't prove to me they
can solve individual companies

575
00:30:25,040 --> 00:30:27,480
to a great degree of alpha man,
if you can't find alpha and

576
00:30:27,480 --> 00:30:30,320
individual companies to an
exceptional degree, good luck

577
00:30:30,320 --> 00:30:32,120
solving the world.
Like the number of pairwise

578
00:30:32,120 --> 00:30:33,840
combinations there is are
insane.

579
00:30:34,000 --> 00:30:37,520
So whatever, you know, I always
think that's an opportunity in

580
00:30:37,880 --> 00:30:40,120
in commodities and I always
think iron ore is fascinating

581
00:30:40,120 --> 00:30:42,080
for that.
So that's why I wanted to watch

582
00:30:42,080 --> 00:30:43,440
it and that's why I wanted to
watch the through.

583
00:30:44,720 --> 00:30:46,640
So I'm glad to.
Something thankfully, I'm

584
00:30:46,640 --> 00:30:49,280
guessing Champion Iron was one
of the five files that has

585
00:30:49,800 --> 00:30:52,080
mattered a lot in in your
history.

586
00:30:52,400 --> 00:30:55,120
I I can't let you go without
telling me about another one.

587
00:30:56,640 --> 00:30:59,960
Yeah, I think it is absolutely.
It is one of them.

588
00:30:59,960 --> 00:31:02,000
It was one of the most
impactful.

589
00:31:02,080 --> 00:31:04,080
I thought it was brilliant.
I think it's one of the most

590
00:31:04,080 --> 00:31:05,120
brilliant things I saw pulled
off.

591
00:31:06,040 --> 00:31:08,040
In terms of an individual
achievement.

592
00:31:08,040 --> 00:31:10,520
Not to put it all in, Michael.
I mean, I think David

593
00:31:10,520 --> 00:31:13,840
Catterford's an exceptional
individual there as well.

594
00:31:13,840 --> 00:31:15,440
I think the two of them are a
great team.

595
00:31:17,040 --> 00:31:19,760
But I think the world of both
those guys and yeah, that had a

596
00:31:19,760 --> 00:31:22,600
big impact on me.
And it's also just turned into

597
00:31:22,600 --> 00:31:27,200
important relationships.
So, but there's been lots.

598
00:31:27,200 --> 00:31:30,000
There's been, yeah, that's one
of the five to 10, let's call

599
00:31:30,000 --> 00:31:33,920
it.
And and and another one would

600
00:31:33,920 --> 00:31:41,360
be.
GT Gold was a was a big one.

601
00:31:41,360 --> 00:31:45,800
Philo was a very big one.
Actually, those two are those

602
00:31:45,800 --> 00:31:49,760
two kind of like were went end
to end in this kind of

603
00:31:49,760 --> 00:31:55,640
fortuitous fashion because I
sold GT Gold, signed the voting

604
00:31:56,440 --> 00:31:58,600
support agreement and sailed to
Newmont.

605
00:31:59,360 --> 00:32:04,840
I think the transaction closed
and then we were sitting flush

606
00:32:04,840 --> 00:32:09,520
with a lot of money and I was
probably in close to a 50% cash

607
00:32:09,520 --> 00:32:12,880
position at that point and
thinking, my God, what am I

608
00:32:12,880 --> 00:32:14,360
going to do with this?
What am I going to find to

609
00:32:14,360 --> 00:32:16,720
deploy this into?
And then I watched Vilo drill

610
00:32:16,720 --> 00:32:19,520
this exceptional hole up in the
community district.

611
00:32:20,200 --> 00:32:22,920
And both of those were
situations that they thought

612
00:32:22,920 --> 00:32:26,960
were heavily misunderstood.
And they're similar to champion,

613
00:32:26,960 --> 00:32:30,000
I guess, in their own respects.
And that sense that people

614
00:32:30,000 --> 00:32:31,560
didn't want to look at them for
a reason.

615
00:32:32,200 --> 00:32:35,880
And actually they're they, they,
they combine and they connect.

616
00:32:35,880 --> 00:32:42,920
So GT was a, a discovery up in
BC in the Golden Triangle.

617
00:32:43,320 --> 00:32:46,000
This geologist, Charlie Greg had
gone and, and done some

618
00:32:46,000 --> 00:32:48,640
brilliant work.
He found this EPI thermal gold

619
00:32:48,640 --> 00:32:52,480
system very high grade,
extremely discontinuous.

620
00:32:53,040 --> 00:32:55,920
You couldn't, there's no
structure to it, but the grades

621
00:32:55,920 --> 00:32:58,440
had built a market cap and
people have gotten excited.

622
00:33:00,000 --> 00:33:02,120
But it's kind of a veins form.
You just had to mine the whole

623
00:33:02,120 --> 00:33:04,120
cloud and take the average of
the whole distribution.

624
00:33:04,120 --> 00:33:06,640
So even there though there was
all this 5G hits, really you

625
00:33:06,640 --> 00:33:08,640
just had to mine the whole thing
and probably it's going to be

626
00:33:08,880 --> 00:33:13,360
like a gram and a half.
And I think when the market

627
00:33:13,360 --> 00:33:16,480
realized that it collapsed.
So I had this big run up and

628
00:33:16,480 --> 00:33:18,640
then this big collapse and
people felt like, I think they'd

629
00:33:18,640 --> 00:33:22,360
been, I don't know.
The reality is when a stock

630
00:33:22,360 --> 00:33:25,720
falls, people like to blame a
lot of things or complain.

631
00:33:25,720 --> 00:33:28,880
But I wasn't there for that
part.

632
00:33:29,560 --> 00:33:31,440
Instead, I, I watched this drill
hole.

633
00:33:32,160 --> 00:33:37,360
It was like TTD 085 get drilled.
And I believe it was 2018, like

634
00:33:37,360 --> 00:33:42,880
September of 2018.
And they had like 500 meters and

635
00:33:42,880 --> 00:33:48,200
it was a wall of copper gold,
like just completely continuous

636
00:33:48,200 --> 00:33:51,280
for half a kilometer.
I was like .8 or something like

637
00:33:51,280 --> 00:33:52,720
that.
But then it had some like higher

638
00:33:52,720 --> 00:33:55,680
grade zones in the middle.
And I was like, Oh my God.

639
00:33:56,200 --> 00:33:58,920
And and then immediately started
mapping out the topography and

640
00:33:58,920 --> 00:34:01,760
looking at it and being like,
yeah, OK, you know, there's you

641
00:34:01,760 --> 00:34:04,240
got Red Chris across the street,
which looks like an analog in

642
00:34:04,240 --> 00:34:06,560
the same system, like the ratios
of gold to copper.

643
00:34:07,080 --> 00:34:09,679
It's the 1st hole in and you're
like, so Charlie had gone and

644
00:34:09,679 --> 00:34:11,840
found the EPI thermal system.
Then people are always like,

645
00:34:11,840 --> 00:34:14,440
wow, this must there has to be a
porphy nearby and they usually

646
00:34:14,440 --> 00:34:16,080
don't find it or it's not there.
It sucks.

647
00:34:16,080 --> 00:34:17,960
And Charlie when then
immediately next program found

648
00:34:17,960 --> 00:34:20,960
the porphyry like first try.
It was incredible.

649
00:34:21,360 --> 00:34:23,199
And so he deserves all the
credit in the world for that.

650
00:34:25,159 --> 00:34:27,600
And it was one of the best
discoveries I felt like I'd seen

651
00:34:27,600 --> 00:34:29,760
and the stock didn't move.
Thank you.

652
00:34:29,840 --> 00:34:33,840
Like they were still holding
some residual market cap from

653
00:34:33,840 --> 00:34:36,400
the previous discovery.
Just kind of too bad because

654
00:34:36,400 --> 00:34:39,120
they, it would have been a lot
more extraordinary explosive if

655
00:34:39,120 --> 00:34:41,280
it had just been sitting as like
a $10 million company, but it

656
00:34:41,280 --> 00:34:44,639
was like a 5060 and then maybe
added like $10 million in market

657
00:34:44,639 --> 00:34:47,280
cap on that.
And they did financing after

658
00:34:47,280 --> 00:34:48,800
that hole came out.
And I think I was the biggest

659
00:34:48,800 --> 00:34:49,800
order in it.
I was like, Oh my God,

660
00:34:49,800 --> 00:34:51,199
everyone's going to be clamoring
to get in.

661
00:34:51,199 --> 00:34:53,920
And it was kind of like, you can
have whatever you want.

662
00:34:53,920 --> 00:34:57,760
And I'm like, left it.
And then after I'm like looking

663
00:34:57,760 --> 00:35:03,160
at this and I'm just like buying
every share I can.

664
00:35:03,160 --> 00:35:05,240
I'm trying to buy as much as I
can without running the price up

665
00:35:05,240 --> 00:35:08,160
like a month or so straight.
It's just me on the board.

666
00:35:08,160 --> 00:35:10,600
I'm just buying, buying, buying,
buying, buying.

667
00:35:11,840 --> 00:35:14,800
And I'm like, what is going on?
And I, you know, talk, start

668
00:35:15,080 --> 00:35:16,520
calling around.
It's like, hey, what do you guys

669
00:35:16,520 --> 00:35:19,560
think of GT?
And you get the feedback.

670
00:35:19,560 --> 00:35:22,040
Oh yeah, yeah, I know we've seen
splashy holes like this before

671
00:35:22,040 --> 00:35:24,720
from GT.
I'm like, I realized that they

672
00:35:24,720 --> 00:35:27,040
just, it was kind of a haunted
house to people.

673
00:35:27,040 --> 00:35:28,640
They've been burned by the EPI
thermal system.

674
00:35:28,640 --> 00:35:30,640
I don't even think they realized
what this they'd really hit

675
00:35:30,640 --> 00:35:37,120
here.
And and so I've just kept buying

676
00:35:37,120 --> 00:35:40,080
it up and then offered to
finance it.

677
00:35:40,960 --> 00:35:43,440
I said, listen, I think what you
should do is the market doesn't

678
00:35:43,440 --> 00:35:48,240
recognize the value of this.
Well, sorry, actually, I'll

679
00:35:48,240 --> 00:35:50,920
compress the story.
They had a second hole.

680
00:35:51,360 --> 00:35:54,520
The 2nd hole was even better
than the first and it was

681
00:35:54,520 --> 00:35:56,520
extraordinary.
The stock finally Rep people got

682
00:35:56,520 --> 00:36:00,000
excited, but then the company
started arm waving that there

683
00:36:00,000 --> 00:36:04,080
was a third step out and the
alteration looked just like the

684
00:36:04,080 --> 00:36:09,280
first two and the market was
like, oh, they hit, Oh my God,

685
00:36:09,280 --> 00:36:11,960
this thing's going to be like
this big and that means like

686
00:36:11,960 --> 00:36:14,800
this is gone.
And so the whole market had

687
00:36:14,800 --> 00:36:16,200
gotten that in their head.
They're buying with the

688
00:36:16,200 --> 00:36:18,720
excitement of that.
Then the holes came and the

689
00:36:18,720 --> 00:36:20,480
whole actually did hit.
It just didn't hit anything

690
00:36:20,480 --> 00:36:21,840
close to what the previous two
did.

691
00:36:21,840 --> 00:36:24,880
And so I think people felt like
they'd been misled or lied to

692
00:36:24,880 --> 00:36:29,560
and they just the stock which
had gone from like $0.60 after

693
00:36:29,560 --> 00:36:32,400
post, you know, it'd been like
50 to 60 before the big

694
00:36:32,400 --> 00:36:37,160
discovery hole went up like
6570, maybe 80 after screamed up

695
00:36:37,160 --> 00:36:39,080
to like 2:20.
And then when the whole came

696
00:36:39,080 --> 00:36:42,560
out, like collapsed down to
below where I've been buying up

697
00:36:42,560 --> 00:36:46,080
the stock or around same level
as if nothing had been.

698
00:36:46,080 --> 00:36:47,760
No value had been added by this
point.

699
00:36:47,760 --> 00:36:50,160
Like no market cap had been
added to the company from this

700
00:36:50,160 --> 00:36:52,240
discovery.
Except the thing about that was

701
00:36:53,000 --> 00:36:54,560
the market cap.
The market wasn't looking at

702
00:36:54,560 --> 00:36:56,480
this thing and modeling the
deposit, trying to figure out

703
00:36:56,800 --> 00:36:58,920
what it would take for this to
be a mine and actually be

704
00:36:59,240 --> 00:37:02,520
meaningful.
They were just saying, I've been

705
00:37:02,520 --> 00:37:05,400
told the next one's the next
hole's good, next hole bad.

706
00:37:05,440 --> 00:37:08,600
Oh no, that bad.
I sell and they sold it all out

707
00:37:08,600 --> 00:37:11,200
and that we looked at it and
we're like, I wasn't looking

708
00:37:11,200 --> 00:37:12,920
for.
I thought the threshold it

709
00:37:12,920 --> 00:37:16,640
needed for that to become like
clearly a mine was it just

710
00:37:16,640 --> 00:37:18,920
needed to show the
mineralization extended a

711
00:37:18,920 --> 00:37:21,320
certain distance.
And so it showed continuity.

712
00:37:21,480 --> 00:37:23,920
Even if it's bleeding out,
there's some strength of the

713
00:37:23,920 --> 00:37:27,480
system, a certain distance.
I could, you know what that

714
00:37:27,480 --> 00:37:30,360
meant for the shape that I could
assume existed would be enough

715
00:37:30,360 --> 00:37:32,960
and that would be critical mass.
And I got what I was looking for

716
00:37:32,960 --> 00:37:34,640
in the market.
Thought it was the worst news

717
00:37:34,640 --> 00:37:37,040
ever.
And they dumped it and they

718
00:37:37,040 --> 00:37:39,200
started drilling the surface
holes and it looked like it

719
00:37:39,200 --> 00:37:42,360
might come to surface.
And I remember they put it

720
00:37:42,360 --> 00:37:46,120
further holes and going, I
remember telling one really

721
00:37:46,120 --> 00:37:48,720
influential person in the
industry sitting there walking

722
00:37:48,720 --> 00:37:51,640
him through it, he's like, you
really think this is a mind,

723
00:37:51,640 --> 00:37:53,720
Aaron?
I'm like, I think this is 2

724
00:37:53,720 --> 00:37:56,120
drill holes away from being a
mind and I think they're

725
00:37:56,120 --> 00:37:58,040
probably going to hit.
I can't be sure, but I think

726
00:37:58,040 --> 00:38:00,200
this is 2 drill holes from a
mine and I'm paying 0 for that

727
00:38:00,200 --> 00:38:03,960
in the market like.
And so the drill holes came and

728
00:38:03,960 --> 00:38:06,640
they were way better than what I
was hoping for showing this

729
00:38:06,640 --> 00:38:11,520
thing was tracking the surface
and and the stock continued to

730
00:38:11,520 --> 00:38:13,160
go down.
Can you sell down?

731
00:38:13,160 --> 00:38:16,320
No one cared and I was sitting
there and I went out.

732
00:38:16,480 --> 00:38:20,280
This is actually funny because I
had met Muddy Waters through an

733
00:38:20,280 --> 00:38:22,760
activist short selling campaign.
I ran on a company called a

734
00:38:22,760 --> 00:38:24,720
Sanko Gold and they had joined
in on that.

735
00:38:25,640 --> 00:38:28,200
And this is shortly after we had
closed out and completed that

736
00:38:28,200 --> 00:38:30,560
trade, which had been a really
big success.

737
00:38:31,240 --> 00:38:33,160
They had, you know, kept asking
what else is here?

738
00:38:33,160 --> 00:38:35,760
What else you and I'm like,
well, you know, like I don't run

739
00:38:35,760 --> 00:38:37,520
around looking for short selling
ideas in mining.

740
00:38:37,520 --> 00:38:40,640
I I look for, you know, the
alpha and the opportunities on

741
00:38:40,640 --> 00:38:42,640
the asymmetric to the upside,
like that's what you're looking

742
00:38:42,640 --> 00:38:44,920
for.
And I look at this company GT

743
00:38:44,920 --> 00:38:48,040
gold.
So, you know, I start walking

744
00:38:48,040 --> 00:38:49,120
through it.
They ask questions.

745
00:38:49,120 --> 00:38:50,640
I'm like, sure.
I mean, I'll show you why it's I

746
00:38:50,640 --> 00:38:53,840
think it's amazing and map it
out to show the volumes.

747
00:38:53,840 --> 00:38:56,360
I show like the topography, I
show the different ways you can

748
00:38:56,360 --> 00:38:58,080
mine it.
I show like the infrastructure,

749
00:38:58,080 --> 00:39:01,000
what I think the capital costs
will be what you can reasonably

750
00:39:01,000 --> 00:39:03,440
infer the meddler you will be
from the district kind of your

751
00:39:03,440 --> 00:39:09,000
range and and costs with so on
so forth and what I think will

752
00:39:09,000 --> 00:39:12,200
be the economics of the project.
And I'm like, yeah, I think this

753
00:39:12,200 --> 00:39:14,320
is the first thing I've seen in
greenfields.

754
00:39:14,320 --> 00:39:17,960
It's going to sell to a major in
copper in a long time, like five

755
00:39:17,960 --> 00:39:20,080
years or so.
I just going to this is going to

756
00:39:20,080 --> 00:39:24,960
go to big boy and and then, you
know, I talked to them after and

757
00:39:24,960 --> 00:39:27,560
they've been buying.
It's like you guys are buying

758
00:39:27,560 --> 00:39:29,400
long and you're fun like junior
mining.

759
00:39:29,400 --> 00:39:32,600
Are you sure that's like, are
your LP's OK with this kind of

760
00:39:32,600 --> 00:39:35,520
thing?
But you know, for them it was

761
00:39:35,520 --> 00:39:38,880
like a small little position.
And but then as it as it grew

762
00:39:38,880 --> 00:39:42,080
and as the drilling came in and
the deposit got proven out, the

763
00:39:42,080 --> 00:39:45,240
metallurgy came in, the
conviction came in.

764
00:39:45,240 --> 00:39:50,080
Like, yeah, they ended up really
partnering in the sense that

765
00:39:50,080 --> 00:39:52,120
they came in and bought a lot
and, and shared a similar

766
00:39:52,120 --> 00:39:54,080
mindset.
And we're convicted on the same

767
00:39:54,080 --> 00:40:01,520
belief that that I held over
AK-2 and, and ended up selling

768
00:40:01,520 --> 00:40:03,920
to Newmont for most 1/2 a
billion.

769
00:40:03,920 --> 00:40:07,480
And it was the first sale of a
copper project to a major in in

770
00:40:07,480 --> 00:40:08,920
a long time.
It ended up being exactly what

771
00:40:08,920 --> 00:40:12,600
we thought.
I remember getting a call after

772
00:40:12,600 --> 00:40:16,120
from someone.
Saying, hey, Darren, like I got

773
00:40:16,120 --> 00:40:18,880
to ask you, I got a call from
some very fairly well known

774
00:40:18,880 --> 00:40:21,520
person, a talking head in the
industry.

775
00:40:22,280 --> 00:40:25,080
It would be really negative on
the project saying all the

776
00:40:25,080 --> 00:40:29,720
reasons why it sucked, which I I
didn't understand, but we're

777
00:40:29,720 --> 00:40:33,000
just all you need to do is use a
protractor and you could see

778
00:40:33,000 --> 00:40:39,200
they were wrong.
And I heard a rumor that you had

779
00:40:39,200 --> 00:40:42,600
basically extorted Newmont into
blackmailed them into by the

780
00:40:42,600 --> 00:40:45,520
company and threatened to short
their stock or something or

781
00:40:45,520 --> 00:40:47,200
publish on them if they didn't.
But see you.

782
00:40:47,280 --> 00:40:52,200
I'm like, I mean, listen, man,
that guy that is like, I'm not

783
00:40:52,200 --> 00:40:55,320
that cool.
If you want to tell people that

784
00:40:55,320 --> 00:40:58,360
story, I'm OK with that being my
the myth of me.

785
00:40:58,360 --> 00:41:01,120
But no, that's not it.
Yeah.

786
00:41:01,160 --> 00:41:04,440
It was just a good project.
But yeah, GT was like that.

787
00:41:04,440 --> 00:41:07,360
And then we sold.
It's at one point we'd gone to,

788
00:41:11,120 --> 00:41:14,280
you know, if Lucas Lundeen or my
brother had reached out to him

789
00:41:14,400 --> 00:41:18,320
to see if he wanted to invest in
the company and, and he'd come

790
00:41:18,320 --> 00:41:21,200
back with some pretty strong
interest as he'd walked through

791
00:41:21,200 --> 00:41:24,400
the technical aspects in our
work on the, on the project.

792
00:41:24,400 --> 00:41:27,120
It didn't didn't end up coming
to fruition, which ended up

793
00:41:27,120 --> 00:41:29,520
leading to a lot of the tension,
I believe, I think between

794
00:41:29,760 --> 00:41:31,840
ourselves and the chairman,
which obviously came to head in

795
00:41:31,840 --> 00:41:35,520
the proxy matter.
But you know, not to dig that

796
00:41:35,520 --> 00:41:37,800
stuff back up.
It was a big success for us.

797
00:41:37,800 --> 00:41:40,760
And I guess it was a big success
for him in the end too, but the

798
00:41:42,240 --> 00:41:43,520
investment didn't come to
fruition.

799
00:41:43,520 --> 00:41:47,760
But you know, I took a meeting
with him at a conference and

800
00:41:47,760 --> 00:41:52,520
this company, Filo, he had.
And I remember going through it

801
00:41:52,520 --> 00:41:55,600
and just kind of like sitting in
the meeting learning about it

802
00:41:55,600 --> 00:42:00,080
for the first time and kind of
been like, Jesus, this is one of

803
00:42:00,080 --> 00:42:02,560
the best projects in the world.
Like it's it's obvious.

804
00:42:02,920 --> 00:42:05,600
I just laughing.
I'm like, what I can say is

805
00:42:05,600 --> 00:42:07,920
you're not being priced.
What's obvious is like this is

806
00:42:07,920 --> 00:42:09,880
clearly one of the best copper
deposits in the world.

807
00:42:10,440 --> 00:42:12,600
And what's also obvious is
you're not being priced by the

808
00:42:12,600 --> 00:42:15,000
market.
This is not really a, you're

809
00:42:15,000 --> 00:42:17,320
trading on, you know, relative
levels of apathy.

810
00:42:17,880 --> 00:42:21,800
You're just floating at neutral
buoyancy effectively on the

811
00:42:21,800 --> 00:42:24,240
markets apathy because it's like
it's an Argentine, it's on the

812
00:42:24,240 --> 00:42:28,120
Andes, it's right up against the
border between Argentina and

813
00:42:28,120 --> 00:42:29,840
Chile.
You know, trying to get to

814
00:42:30,240 --> 00:42:32,760
something where you can develop
a project there and trying to

815
00:42:32,760 --> 00:42:35,320
get the Argentinian and the
Chilean government at a point

816
00:42:35,320 --> 00:42:37,560
where they're both willing to
work together and transact and

817
00:42:37,560 --> 00:42:39,760
agree to unlock something.
It's kind of like waiting for

818
00:42:39,760 --> 00:42:42,280
the solar eclipse, so or lunar
eclipse.

819
00:42:42,280 --> 00:42:45,960
And they're like, what a really
difficult capital markets

820
00:42:45,960 --> 00:42:47,760
proposition.
What an incredible discovery.

821
00:42:49,000 --> 00:42:52,040
I didn't really buy it for that
reason, but I thought it was

822
00:42:52,040 --> 00:42:56,520
brilliant project.
And then they went and shortly

823
00:42:56,520 --> 00:42:59,440
after I'd sold GT, they drilled
this hole and they just hit this

824
00:42:59,440 --> 00:43:05,120
extraordinary grade.
And I, I remember just sitting

825
00:43:05,120 --> 00:43:07,840
there looking at in the morning
and being like, Oh my God.

826
00:43:08,760 --> 00:43:13,040
And then thinking about it and
being like, I think that I think

827
00:43:13,040 --> 00:43:18,040
I just watched like $5 billion
get created in a company that's

828
00:43:18,040 --> 00:43:19,240
trading for hundreds of
millions.

829
00:43:20,200 --> 00:43:23,080
And being like, this is the
greatest discovery I've seen in

830
00:43:23,080 --> 00:43:25,480
my life.
The frequency with which you'll

831
00:43:25,480 --> 00:43:27,800
see a discovery of this
magnitude like this is different

832
00:43:27,800 --> 00:43:30,840
now.
This isn't like the world needs

833
00:43:30,840 --> 00:43:33,720
this project now.
And when the world needs the

834
00:43:33,720 --> 00:43:36,480
project, you get these monster
things that, you know, they can

835
00:43:36,680 --> 00:43:40,880
be at the like Grasberg, like
these things come forward

836
00:43:40,960 --> 00:43:42,200
because they're just too
powerful.

837
00:43:42,200 --> 00:43:44,240
And I thought I'd watch an asset
cross that threshold.

838
00:43:45,280 --> 00:43:48,280
And I was watching BHP in Rio
Tinto cash flow like the market

839
00:43:48,280 --> 00:43:51,200
capitalist company, like every
week and being like, you know,

840
00:43:51,200 --> 00:43:52,840
this is a crown.
Like these companies are built

841
00:43:52,840 --> 00:43:56,080
off a couple copper projects
that they were, they have a

842
00:43:56,080 --> 00:43:58,800
fractional ownership of
something that looks like this.

843
00:43:59,560 --> 00:44:02,440
And that makes up BH PS like
copper division, like 50%

844
00:44:02,440 --> 00:44:05,720
ownerships in like a couple of
these, you know, like this is a,

845
00:44:05,800 --> 00:44:08,600
this can they have, they're, you
know, the largest copper mining

846
00:44:08,600 --> 00:44:11,920
companies on earth have like 3
crown jewels, fractional pieces

847
00:44:11,920 --> 00:44:13,600
of them.
And this can this can be one of

848
00:44:13,600 --> 00:44:16,680
their penultimate crown jewels
in their crown and can re cement

849
00:44:16,680 --> 00:44:19,640
it for like 200 years like you.
That's how long this thing will

850
00:44:19,640 --> 00:44:21,720
chug for.
You know, can you afford to take

851
00:44:21,720 --> 00:44:25,400
the risk of a week's cash flow
if your BHP or Rio like what you

852
00:44:25,400 --> 00:44:28,000
can't afford not to you get one
of these like once every 20

853
00:44:28,000 --> 00:44:29,880
years.
Like you have to move.

854
00:44:29,880 --> 00:44:32,360
You have to, it cost you nothing
to plant your flag.

855
00:44:33,520 --> 00:44:35,600
And I thought that some one of
them would move.

856
00:44:35,840 --> 00:44:39,560
And so, and it's such a freak
that you get a discovery like

857
00:44:39,560 --> 00:44:41,520
that in the strongest hands in
the sector.

858
00:44:41,520 --> 00:44:45,440
What always happens is like the
because there's so much

859
00:44:45,440 --> 00:44:48,360
randomness in discovery, the
frequency with which you get a

860
00:44:48,360 --> 00:44:51,000
brilliant discovery and hands
commensurate to handle it

861
00:44:51,560 --> 00:44:55,960
without conflict, without
stealing, without corruption and

862
00:44:55,960 --> 00:44:58,000
things like that.
That happens once this object of

863
00:44:58,000 --> 00:45:00,680
immense value forms in the
middle of nothing and a ragtag

864
00:45:00,680 --> 00:45:04,200
group of individuals to see that
happen in the hands of like the

865
00:45:04,200 --> 00:45:09,080
Lundin family.
And it was like, Oh my God, I'm

866
00:45:09,080 --> 00:45:11,640
going to see this once in my
career maybe.

867
00:45:11,720 --> 00:45:16,720
And if I can't move on this,
then like I don't deserve a job.

868
00:45:17,080 --> 00:45:22,240
And so I just said like, screw
it, like you got no choice.

869
00:45:22,240 --> 00:45:24,640
You just got to go.
And so we we plowed in, just

870
00:45:24,640 --> 00:45:29,960
plowed in and ended up making
about as much money as we made

871
00:45:29,960 --> 00:45:33,080
in multiple years of dragging GT
for it in a matter of moments,

872
00:45:33,520 --> 00:45:36,440
which is the funniest thing in a
matter of months and not needing

873
00:45:36,440 --> 00:45:38,440
to do anything or have much of
an active role.

874
00:45:40,480 --> 00:45:45,200
But you know, BHP soon came in
and invested, you know, probably

875
00:45:45,200 --> 00:45:47,720
like a, a double from where we,
we bought in that day.

876
00:45:47,720 --> 00:45:50,760
But the reality is the stock
went $5 billion or $3 billion,

877
00:45:50,760 --> 00:45:52,000
whatever it is you think it's
worth.

878
00:45:53,400 --> 00:45:56,080
This was a discovery that was
worth the MPV was so high.

879
00:45:57,320 --> 00:45:59,960
The outcome of the IT was the
outcome of the company was going

880
00:45:59,960 --> 00:46:01,200
to have nothing to do with the
MPV.

881
00:46:01,200 --> 00:46:04,080
It was just a function of
leverage because like you can't

882
00:46:04,080 --> 00:46:05,800
get someone to pay now for
something that's probably got

883
00:46:05,800 --> 00:46:08,200
like a $20 billion MPV doesn't
happen, right?

884
00:46:08,960 --> 00:46:13,240
So, but you watch that much
value get created, a small

885
00:46:13,240 --> 00:46:15,600
company, it can't cover the gap
instantly.

886
00:46:15,600 --> 00:46:17,760
It just can't go from like
hundreds, millions to three

887
00:46:17,760 --> 00:46:19,640
billion, 4 billion in a in a
moment.

888
00:46:20,160 --> 00:46:23,200
It's a very slow grind.
That was the first thing I

889
00:46:23,200 --> 00:46:25,000
always dreamed of, like a
Boise's Bay moment.

890
00:46:25,000 --> 00:46:28,760
Like these, these things that we
haven't had in the market since

891
00:46:28,760 --> 00:46:31,280
then, these things are just
worth so much.

892
00:46:31,280 --> 00:46:33,640
And everyone comes in and it
takes so long because they can't

893
00:46:33,640 --> 00:46:35,680
get there because it takes so
much capital to take them to

894
00:46:35,680 --> 00:46:38,240
their ultimate valuation.
Everyone makes so much money and

895
00:46:38,240 --> 00:46:40,560
everyone's in on it.
You know, like one of those

896
00:46:40,560 --> 00:46:43,200
things concede a bull market on
its own for how much capital it

897
00:46:43,200 --> 00:46:46,080
gets redeployed on its tail.
And there hasn't been those.

898
00:46:46,200 --> 00:46:48,880
There haven't been those like
Supernova tier ones.

899
00:46:48,880 --> 00:46:52,440
And I thought Vila was kind of
potentially in that caliber,

900
00:46:52,440 --> 00:46:56,040
except it's funnily enough,
almost it was so tightly held

901
00:46:56,040 --> 00:46:57,600
that not many people made money
on it.

902
00:46:57,880 --> 00:47:00,920
But other than the Lundin family
and BHP and their largest

903
00:47:00,920 --> 00:47:04,640
shareholder and one other fund
who was in there very early

904
00:47:04,680 --> 00:47:09,320
before the discovery.
But yeah, it was incredible to

905
00:47:09,320 --> 00:47:13,760
watch.
But it was in Argentina.

906
00:47:13,760 --> 00:47:15,400
And there was a perception that
it was hard.

907
00:47:15,960 --> 00:47:19,240
And and so a there's two things.
One, people just thought

908
00:47:19,240 --> 00:47:21,880
Argentina's too hard.
I just didn't think that

909
00:47:21,880 --> 00:47:23,680
mattered when you had a deposit
of that caliber.

910
00:47:24,120 --> 00:47:25,720
And I didn't almost didn't
matter where it was.

911
00:47:26,480 --> 00:47:29,120
I mean, like, it's like when
Kumo Kukula got discovered in

912
00:47:29,120 --> 00:47:31,360
the middle of the DRC.
Yeah, the middle of DRC is

913
00:47:31,560 --> 00:47:35,280
brutal, but not when you've got
Robert and Kumo Kukula.

914
00:47:35,520 --> 00:47:38,000
You know, there's a guy who can
handle and there's a deposit

915
00:47:38,000 --> 00:47:40,520
that like needs to come forward.
So it's it's just different when

916
00:47:40,520 --> 00:47:47,040
you see things like this.
And yeah, it was, yeah.

917
00:47:47,040 --> 00:47:49,920
That ended up being probably the
biggest one of all.

918
00:47:51,400 --> 00:47:54,480
Obviously ended up getting sold
to, you know, the joint take out

919
00:47:54,480 --> 00:47:58,560
between BHP and and Lundin.
And in the end it ended the way

920
00:47:58,560 --> 00:48:03,520
we thought or about or about
what we thought it would sell

921
00:48:03,520 --> 00:48:07,800
for and just a brilliant,
brilliant discovery.

922
00:48:08,080 --> 00:48:13,080
So I think when I look at
investing in the sector and

923
00:48:13,080 --> 00:48:17,480
things like that, I play a lot
of poker growing up, my brother

924
00:48:17,480 --> 00:48:19,720
and I did.
And what we discussed is like in

925
00:48:19,720 --> 00:48:22,360
this sector, the way we invest,
the type of things you invest

926
00:48:22,360 --> 00:48:24,560
in, you don't play ACE 10 off
suit.

927
00:48:25,400 --> 00:48:28,240
You just don't like, it's a
violent sector.

928
00:48:28,240 --> 00:48:30,800
The consequence of losing the
hand is, is immense.

929
00:48:32,360 --> 00:48:35,600
And you play pocket aces and
pocket kings only.

930
00:48:36,440 --> 00:48:40,720
And you watch a lot of Ace 10's
and Ace jacks go by and you fold

931
00:48:40,720 --> 00:48:43,360
and fold and fold and it hurts
because you think it's a good

932
00:48:43,360 --> 00:48:44,640
opportunity.
Sometimes they work out.

933
00:48:44,640 --> 00:48:46,800
You're like, I should have
played it, but you don't.

934
00:48:47,080 --> 00:48:49,280
You play pocket aces and pocket
kings.

935
00:48:49,280 --> 00:48:52,520
You play hands that almost no
matter what happens preflop, you

936
00:48:52,520 --> 00:48:56,120
have to enter the hand.
You just have to enter the hand.

937
00:48:56,640 --> 00:48:59,400
Filo was one of those.
GT was one of those champions,

938
00:48:59,400 --> 00:49:03,480
one of those there's, you know,
obviously being a certain number

939
00:49:03,480 --> 00:49:05,360
of others.
You could can you lose the hand?

940
00:49:06,200 --> 00:49:07,680
Yeah, of course you can lose the
hand.

941
00:49:08,200 --> 00:49:09,680
There's lots of ways you can get
hurt.

942
00:49:10,440 --> 00:49:14,120
And you know, my my brother's
boss made the comment once.

943
00:49:14,120 --> 00:49:15,720
I've never forgotten it.
And he's like, you can be the

944
00:49:15,720 --> 00:49:18,880
best gunfighter on Earth.
You're getting enough gunfights.

945
00:49:18,880 --> 00:49:21,160
You're getting tagged.
That's just it and that's the

946
00:49:21,160 --> 00:49:23,960
reality of of investing and
especially in the sectors we

947
00:49:23,960 --> 00:49:26,840
invest in.
But but when you got Paz Kadesis

948
00:49:26,840 --> 00:49:28,840
or Pocket Kings, it almost
doesn't matter what happens.

949
00:49:28,840 --> 00:49:31,440
You still have to enter the hand
and play and see the flop.

950
00:49:31,440 --> 00:49:37,640
So that's, that's kind of, yeah,
I'm rambling a bit, but.

951
00:49:40,080 --> 00:49:43,880
That's a wicked synopsis.
Yeah, a wicked synopsis.

952
00:49:43,960 --> 00:49:48,800
And it's, it's like the what you
describe is these moments where

953
00:49:48,920 --> 00:49:52,280
you can see it, you're certain
and the market doesn't see it

954
00:49:52,280 --> 00:49:53,760
yet.
And those are the circumstances

955
00:49:53,760 --> 00:49:57,400
that, like lead to tremendous
opportunity and tremendous like,

956
00:49:57,440 --> 00:49:58,920
yeah, monetary gain from
investing.

957
00:50:00,440 --> 00:50:04,560
Yeah, yeah, absolutely.
Do you ever see that the other

958
00:50:04,560 --> 00:50:07,560
way around where the market is
really excited?

959
00:50:07,560 --> 00:50:10,400
I think something is
spectacular, but you don't.

960
00:50:11,400 --> 00:50:14,720
Oh yeah.
Oh yeah, all the time.

961
00:50:17,280 --> 00:50:24,960
I think you know what thing I
like to talk about is like it's

962
00:50:24,960 --> 00:50:27,440
and I have a tendency to answer
questions in roundabout ways, so

963
00:50:27,440 --> 00:50:30,320
I apologize.
So I'm going to try to be more

964
00:50:30,320 --> 00:50:31,960
direct.
Yes, I see it all the time.

965
00:50:33,400 --> 00:50:35,400
Do I short those things?
Yes.

966
00:50:36,200 --> 00:50:37,920
Do I always short those things?
No.

967
00:50:38,680 --> 00:50:40,960
Are when I see those things are
those things.

968
00:50:41,320 --> 00:50:43,880
What percentage of the time are
they a good short candidate?

969
00:50:44,960 --> 00:50:49,720
Less than 50, maybe 50, just a
lot of things that need to come

970
00:50:49,720 --> 00:50:51,520
together for it makes sense to
short something.

971
00:50:52,640 --> 00:50:56,920
I see a lot of things that I
think are completely overblown

972
00:50:56,920 --> 00:51:03,160
or I don't want to use the F
word, but let's just say not

973
00:51:03,160 --> 00:51:07,560
truthful and, and I think you
can't short it.

974
00:51:07,560 --> 00:51:09,320
It doesn't matter.
People are never going to figure

975
00:51:09,320 --> 00:51:11,320
it out.
And the guys running it are just

976
00:51:11,320 --> 00:51:15,880
too talented at, at talking and,
and going and marketing and

977
00:51:15,880 --> 00:51:20,080
attracting like retail capital
from whatever sector there is.

978
00:51:20,080 --> 00:51:21,480
And you guys are forces in
nature.

979
00:51:21,480 --> 00:51:25,720
And you got to respect, you have
to respect people's talents.

980
00:51:26,800 --> 00:51:28,440
You have to respect their
toughness.

981
00:51:29,320 --> 00:51:33,240
You know, you don't, you don't
get in fights that you're not

982
00:51:33,560 --> 00:51:36,520
extremely confident you're going
to win it just don't get in

983
00:51:36,520 --> 00:51:38,120
fights at all.
It's probably a good strategy

984
00:51:38,120 --> 00:51:43,000
too.
But you know, I found, I think

985
00:51:43,000 --> 00:51:49,680
I'm at the start of my career, I
was a bit more immature at the

986
00:51:49,680 --> 00:51:50,880
stuff.
I thought I'm right, you're

987
00:51:50,880 --> 00:51:55,400
wrong.
This is a scam and therefore it

988
00:51:55,400 --> 00:51:57,640
should go down and it would work
that way.

989
00:52:00,560 --> 00:52:02,560
I didn't start to be a short
seller, but you just live in the

990
00:52:02,560 --> 00:52:04,040
sector and you RIP things to
pieces.

991
00:52:04,040 --> 00:52:07,560
You'll find there's a lot of
scams and then you'll watch them

992
00:52:07,560 --> 00:52:09,800
play out and sometimes they blow
up for the reasons you thought.

993
00:52:10,680 --> 00:52:13,520
And never do I see that happen
and the market actually

994
00:52:13,520 --> 00:52:15,480
understand what happened.
That was actually, that's been

995
00:52:15,480 --> 00:52:17,280
one of the most fascinating
things because watching all the

996
00:52:17,280 --> 00:52:19,120
post mortems of the market, it's
been like, you know, it was

997
00:52:19,120 --> 00:52:22,200
tough.
Yeah, it was just a challenging

998
00:52:22,200 --> 00:52:23,920
whatever.
Or they just they just got this

999
00:52:23,920 --> 00:52:25,480
thing wrong.
And I heard this.

1000
00:52:25,480 --> 00:52:27,320
And it becomes the narrative
that goes around and everyone

1001
00:52:27,320 --> 00:52:29,200
repeats the group think or the
statement they heard.

1002
00:52:29,640 --> 00:52:31,720
Because most people do their
gather their information on

1003
00:52:31,720 --> 00:52:35,160
deposits just by talking to
people and and gather and being

1004
00:52:35,160 --> 00:52:38,360
information gatherers from
conversations rather than going

1005
00:52:38,360 --> 00:52:41,000
and reading tech reports and
trying to break them down.

1006
00:52:41,000 --> 00:52:44,040
And solve the gaps in them and
things like that.

1007
00:52:44,040 --> 00:52:52,480
So, but who's in my train of
thought a bit, I suppose.

1008
00:52:53,320 --> 00:52:57,320
I see them all the time.
Have a For something to be

1009
00:52:57,320 --> 00:53:00,400
short, it's tough.
You need liquidity for one.

1010
00:53:03,520 --> 00:53:07,240
I don't think people understand
how hard short something is if

1011
00:53:07,240 --> 00:53:12,360
you haven't done it.
It's terrifying, like I get

1012
00:53:12,360 --> 00:53:16,120
scared in long positions, but
every long position I enter has

1013
00:53:16,120 --> 00:53:20,560
to has to meet one criteria.
It has to be like in what world

1014
00:53:20,560 --> 00:53:24,840
can I not make this bet or but
more importantly, in what world

1015
00:53:26,520 --> 00:53:29,240
can I not get off this for more
where I'm buying it at the level

1016
00:53:29,240 --> 00:53:33,840
I am buying it at, you know,
like versus what I think it's

1017
00:53:33,840 --> 00:53:36,040
worth and the number of
different ways and outcomes and

1018
00:53:36,040 --> 00:53:39,120
pass to fruition.
This can take or to points where

1019
00:53:39,120 --> 00:53:43,880
I can gain liquidity like like,
how the heck do I lose money on

1020
00:53:43,880 --> 00:53:46,000
this?
And I, I really need to feel

1021
00:53:46,000 --> 00:53:47,880
like that to ever go big in
anything.

1022
00:53:48,360 --> 00:53:54,320
And on the short side, you can
always get hurt and hurt

1023
00:53:54,320 --> 00:53:56,560
extremely badly, no matter how
right you are.

1024
00:53:57,240 --> 00:53:59,880
And the one thing that's
interesting about money is you

1025
00:53:59,880 --> 00:54:03,640
can time it sometimes.
And that's what made a Sanko

1026
00:54:03,640 --> 00:54:07,000
different.
So I published a, I published a

1027
00:54:07,000 --> 00:54:09,240
short selling report on a Sanko
gold in 2016.

1028
00:54:12,440 --> 00:54:17,000
Took a big risk in doing so, but
I was positive.

1029
00:54:18,520 --> 00:54:25,360
But we made Senko different was
it was liquid and I thought I

1030
00:54:25,360 --> 00:54:30,840
could time it so I, I could
track it with satellites, would

1031
00:54:30,840 --> 00:54:33,720
give me elevation scans.
I could rebuild their block

1032
00:54:33,720 --> 00:54:35,800
model.
So they had said that they had

1033
00:54:35,800 --> 00:54:37,920
their previously, you know, the
previous guys hadn't drilled

1034
00:54:37,920 --> 00:54:40,440
under the pit.
There's no drilling data.

1035
00:54:40,440 --> 00:54:42,920
But I, we had actually found the
drilling data on the way back

1036
00:54:42,920 --> 00:54:45,600
machine by Internet archives
from like 10 years ago.

1037
00:54:47,000 --> 00:54:49,120
It's like, so I took it and I
replotted out, built, rebuilt

1038
00:54:49,120 --> 00:54:51,160
the block model from and that
was all the drilling they had

1039
00:54:51,160 --> 00:54:52,400
that they'd used to build the
block model.

1040
00:54:52,400 --> 00:54:56,360
So I had the same data and then
I remodeled it and I'm like, oh,

1041
00:54:56,680 --> 00:54:58,440
this is ridiculous.
It's like half the gold there.

1042
00:54:58,440 --> 00:54:59,440
Actually, I thought it was less
than half.

1043
00:54:59,440 --> 00:55:02,760
I think I published half, but I
thought there's maybe 40% and,

1044
00:55:02,760 --> 00:55:05,880
and there's clearly going to.
Yeah.

1045
00:55:05,880 --> 00:55:09,840
Anyways, but I could build my
own block model.

1046
00:55:10,120 --> 00:55:12,680
I could map out where they were
mining, I could track the pit

1047
00:55:12,680 --> 00:55:15,120
limits, I could fly satellites,
I could scan it to 30

1048
00:55:15,120 --> 00:55:19,360
centimeters accuracy.
And I could, I knew every level

1049
00:55:19,360 --> 00:55:21,240
of the mine.
And I had my own block model.

1050
00:55:21,240 --> 00:55:24,560
And I was seeing what was coming
out of it versus what I thought

1051
00:55:24,560 --> 00:55:26,600
would come out, which is a
fraction of what they had.

1052
00:55:27,400 --> 00:55:31,120
And I knew I was right and I
could predict the future on it.

1053
00:55:31,480 --> 00:55:36,080
So I knew when the pit was going
to close and that was different.

1054
00:55:37,400 --> 00:55:38,960
I could time it.
And actually I think that was

1055
00:55:38,960 --> 00:55:43,680
one of the more impactful things
that ended up getting Muddy

1056
00:55:43,680 --> 00:55:49,280
Waters interested.
So initially I, they came in

1057
00:55:49,280 --> 00:55:53,880
after I published on that and,
and they had questions about

1058
00:55:53,880 --> 00:55:56,360
another company and I'd done a
ton of work in the other

1059
00:55:56,360 --> 00:55:57,720
company.
I said, yeah, it's a scam.

1060
00:55:58,760 --> 00:56:01,400
Not a good short though.
And explain why.

1061
00:56:04,680 --> 00:56:07,720
And it's like, you know, we
talked about a sanko a bit and

1062
00:56:07,720 --> 00:56:10,040
they're like, yeah, we don't
really do mining though, and

1063
00:56:10,040 --> 00:56:11,080
we're not really interested in
it.

1064
00:56:11,080 --> 00:56:13,480
Like interesting report, like
the work.

1065
00:56:13,480 --> 00:56:16,320
But it's like debating the
existence of God mining.

1066
00:56:16,480 --> 00:56:19,520
You know, it's, it's my line
geologist versus your lying

1067
00:56:19,520 --> 00:56:21,320
geologist.
Great.

1068
00:56:21,320 --> 00:56:23,520
And I'm like, yeah, The thing
is, man, it's like when you

1069
00:56:23,520 --> 00:56:26,600
short things, you know, you're
right, but maybe it's being

1070
00:56:26,600 --> 00:56:28,640
propped up by a guy and you
don't know when he's running out

1071
00:56:28,640 --> 00:56:30,920
of liquidity.
You know, you can't tell.

1072
00:56:30,920 --> 00:56:32,960
You know, you'll be right
eventually, or you believe that

1073
00:56:34,160 --> 00:56:37,280
the timing is tough.
I was like, this is down by the

1074
00:56:37,280 --> 00:56:40,000
laws of physics, man.
I can time this for you.

1075
00:56:40,200 --> 00:56:42,120
I can show you what's going to
happen every stage of this.

1076
00:56:42,720 --> 00:56:45,680
And you know, when we're going
back down and walking through

1077
00:56:45,680 --> 00:56:49,400
it.
And I think that had a pretty

1078
00:56:49,400 --> 00:56:52,960
profound impact on him.
And so we did that and it was,

1079
00:56:52,960 --> 00:56:55,360
it was remarkable accuracy.
I think what we predicted.

1080
00:56:55,360 --> 00:56:58,280
It was like, I was even shocked
by how accurate it all ended up

1081
00:56:58,280 --> 00:56:59,840
playing out towards our
expectations.

1082
00:57:01,960 --> 00:57:05,960
Not so many that one doable and
it obviously just become the

1083
00:57:05,960 --> 00:57:07,880
market darling at the time it
was.

1084
00:57:08,640 --> 00:57:12,320
So it's pretty liquid and you
could you could get a lot of

1085
00:57:12,320 --> 00:57:14,480
borrowing.
Oftentimes you just literally

1086
00:57:14,480 --> 00:57:15,640
there's another borrow
available.

1087
00:57:15,640 --> 00:57:18,240
You can't short things naked and
people always talk about naked

1088
00:57:18,240 --> 00:57:20,080
shorts.
That's not a thing.

1089
00:57:20,800 --> 00:57:24,080
You know, you need to get borrow
and there's just often not there

1090
00:57:24,080 --> 00:57:26,720
for a lot of things.
And so it's pretty rare you get

1091
00:57:26,720 --> 00:57:32,000
things that are overvalued and
have liquidity and have borrow

1092
00:57:32,000 --> 00:57:34,240
available.
And even when they do for it to

1093
00:57:34,240 --> 00:57:39,320
be a good idea.
Like, man, you know, when you're

1094
00:57:39,320 --> 00:57:44,280
down 50% on a long, it hurts.
It really hurts when you're down

1095
00:57:44,280 --> 00:57:46,800
50% on a short.
Oh my God, is a terrifying, you

1096
00:57:46,800 --> 00:57:49,880
know, so you, you said that you
shorted, you shorted 5,000,000

1097
00:57:49,880 --> 00:57:51,480
bucks or something.
You're trying to make 20%.

1098
00:57:51,480 --> 00:57:55,160
You know, you're trying to make
$1,000,000 fucking rips on you.

1099
00:57:55,160 --> 00:57:59,960
All right, it goes up 50.
Now you're down 2 1/2, you're

1100
00:57:59,960 --> 00:58:01,640
trying to make a million, you're
down 2 1/2.

1101
00:58:02,360 --> 00:58:07,640
OK, you know, and you're like,
like, oh, that's a tough one.

1102
00:58:07,800 --> 00:58:11,600
And what do you do?
Are you walk away or you're

1103
00:58:11,600 --> 00:58:13,840
like, no, I'm still right.
Or do you, you press it?

1104
00:58:13,840 --> 00:58:16,800
Do you increase it?
That's like, well, if you hold

1105
00:58:16,800 --> 00:58:20,480
on, I mean, you got to, you got
to make 3 1/2 just to get to

1106
00:58:20,480 --> 00:58:24,200
where you you wanted to get now,
like that's a long way from

1107
00:58:24,200 --> 00:58:26,320
where you are.
And that's a big percentage

1108
00:58:26,320 --> 00:58:28,880
drop.
And then or you can just

1109
00:58:28,880 --> 00:58:30,760
increase it.
You can short more.

1110
00:58:32,240 --> 00:58:33,840
OK, so you short another two and
a half million.

1111
00:58:33,840 --> 00:58:36,720
You short of five before now you
short, you down 50%.

1112
00:58:36,720 --> 00:58:38,160
You short two and a half million
more.

1113
00:58:38,160 --> 00:58:42,560
You're now short $10 million and
it goes another 50%.

1114
00:58:43,720 --> 00:58:46,880
You just lose another $5,000,000
and suddenly you're like, I'm

1115
00:58:46,880 --> 00:58:48,800
down seven and a half million
dollars.

1116
00:58:49,320 --> 00:58:51,240
I set out trying to make
$1,000,000.

1117
00:58:51,240 --> 00:58:53,200
Oh my God, like what is
happening here?

1118
00:58:53,200 --> 00:58:58,840
Like it is as a I've been there.
It is terrifying.

1119
00:58:58,960 --> 00:59:02,200
It is like the most stomach
churning feeling on Earth.

1120
00:59:02,520 --> 00:59:04,160
So short selling is extremely
difficult.

1121
00:59:05,080 --> 00:59:08,760
Being rights isn't enough on
your thesis.

1122
00:59:09,640 --> 00:59:12,920
You can you can.
It's Yeah, I can't.

1123
00:59:12,960 --> 00:59:16,320
I can't explain to you the pain.
If you're like if that

1124
00:59:16,320 --> 00:59:19,080
situation, you start with five
trying to make a chameleon goes

1125
00:59:19,080 --> 00:59:22,000
50%.
You had 2 1/2 goes another 50%.

1126
00:59:23,160 --> 00:59:25,000
Usually when I'll short
something is when I feel like,

1127
00:59:25,000 --> 00:59:26,640
in what world can this double
again?

1128
00:59:26,840 --> 00:59:30,200
It has to satisfy that criteria.
So you see something you're

1129
00:59:30,200 --> 00:59:32,360
like, I think that's worth 100
million bucks, man.

1130
00:59:32,360 --> 00:59:33,800
And it goes to like half a
billion.

1131
00:59:33,800 --> 00:59:36,200
You're like, that's insane.
I don't short it.

1132
00:59:36,440 --> 00:59:37,920
I'm not going to put a big short
on that.

1133
00:59:38,360 --> 00:59:39,600
Like can that go to a billion,
dude?

1134
00:59:39,600 --> 00:59:44,200
I've seen guys promote like,
like, like complete moose

1135
00:59:44,200 --> 00:59:46,200
pasture up to a billion.
Like of course it can go to a

1136
00:59:46,200 --> 00:59:47,520
billion.
And they've got actually there's

1137
00:59:47,520 --> 00:59:50,040
something, something real there.
It goes to 2 billion.

1138
00:59:50,040 --> 00:59:52,560
You're like, Oh my God, like,
but can it go to four?

1139
00:59:52,560 --> 00:59:54,600
I'm like, well, I've seen a lot
of crazy pumps and critical

1140
00:59:54,600 --> 00:59:56,880
minerals and things like that,
and these assets that are never

1141
00:59:56,880 --> 00:59:59,320
going to see the light of the
day go to 4 billion before.

1142
00:59:59,320 --> 01:00:01,520
So I guess in theory it can.
Then it goes to 4 billion and

1143
01:00:01,520 --> 01:00:04,840
you're like, wow, can it go to
8?

1144
01:00:04,840 --> 01:00:07,000
You're like, probably not.
Then it goes up even more and

1145
01:00:07,000 --> 01:00:10,560
you're like goes to like 6 and
you're like OK, 12's different.

1146
01:00:12,120 --> 01:00:14,600
You know, getting our company to
$12 billion in mining is a

1147
01:00:14,600 --> 01:00:16,560
different thing.
Like you're talking like being a

1148
01:00:16,560 --> 01:00:19,880
major now, like that's not going
to happen on this, on this piece

1149
01:00:19,880 --> 01:00:21,400
of junk.
And at that point it's like, OK,

1150
01:00:21,400 --> 01:00:23,760
now I'll short it.
But like you can't short it

1151
01:00:23,760 --> 01:00:25,440
because you think it's
overvalued or it's extremely

1152
01:00:25,440 --> 01:00:26,960
overvalued.
You got to feel like, in what

1153
01:00:26,960 --> 01:00:31,120
world could this ever possibly
double again, like ever like it

1154
01:00:31,200 --> 01:00:33,680
like that double S again, it's
going to compete with, you know,

1155
01:00:34,040 --> 01:00:38,680
Ken Ross or something like that.
And you get those opportunities,

1156
01:00:38,680 --> 01:00:39,720
you just don't get them that
often.

1157
01:00:39,920 --> 01:00:42,400
Short selling novices.
They they, they don't realize

1158
01:00:42,400 --> 01:00:45,480
that their returns are path
dependent, that you know, if you

1159
01:00:45,480 --> 01:00:48,440
short something at 10 bucks and
it does eventually go to 0 but

1160
01:00:48,440 --> 01:00:52,240
it goes via 100, your losses are
incredible.

1161
01:00:54,960 --> 01:00:57,120
Yeah, again, it's just one of
those.

1162
01:00:57,480 --> 01:01:00,480
It's one of those pains you
can't experience, you can't

1163
01:01:00,480 --> 01:01:02,120
describe unless you've
experienced it.

1164
01:01:02,120 --> 01:01:04,240
So I never want to be back there
ever again.

1165
01:01:04,880 --> 01:01:07,320
And luckily in that situation,
I'm talking about where I'd been

1166
01:01:07,320 --> 01:01:14,120
there, I came out ahead.
But what a white knock

1167
01:01:14,120 --> 01:01:17,880
overnight.
So yeah, I feel like maybe that

1168
01:01:17,880 --> 01:01:22,240
was, yeah, I definitely walked
away saying never again, that's

1169
01:01:22,240 --> 01:01:25,720
for sure.
No, I mean, short selling is not

1170
01:01:25,720 --> 01:01:27,520
my my focus.
I mean again, mining is

1171
01:01:27,520 --> 01:01:29,880
asymmetric to the upside.
You walk around looking for

1172
01:01:29,880 --> 01:01:31,480
longest occasion.
You stumble across shorts.

1173
01:01:33,800 --> 01:01:37,600
You, you said one other thing
that I want to ask you about in

1174
01:01:37,600 --> 01:01:40,920
in this conversation, and that
was that you've got this real

1175
01:01:40,920 --> 01:01:43,240
ambition to, to actually run a
mining company.

1176
01:01:43,720 --> 01:01:48,040
And yeah, I, I want to hear you
expand upon that.

1177
01:01:48,040 --> 01:01:51,600
I know you've got involvement in
a in a gold business already,

1178
01:01:51,600 --> 01:01:59,280
but where does that stem from?
Yeah, I would love to.

1179
01:01:59,800 --> 01:02:03,280
I'd love to.
Where does it stem from?

1180
01:02:06,640 --> 01:02:08,040
Listen, you use the word
ambition.

1181
01:02:08,440 --> 01:02:10,840
Does it stem from ambition?
Yeah, to some extent it does.

1182
01:02:11,160 --> 01:02:17,600
Is that the primary driver?
No, I think it stems from belief

1183
01:02:17,600 --> 01:02:20,400
more than anything.
I'll address the ambition

1184
01:02:20,400 --> 01:02:22,440
aspect.
I want to build a mind.

1185
01:02:23,080 --> 01:02:24,560
Yeah.
I mean, I, I found something

1186
01:02:24,560 --> 01:02:29,440
early come the, you know,
predominant force in the market

1187
01:02:29,440 --> 01:02:32,840
for the primary financiers and
things sold them, had them come

1188
01:02:32,840 --> 01:02:37,200
to fruition that way.
It's great shorted things

1189
01:02:37,200 --> 01:02:39,520
publicly, obviously had those
come to fruition.

1190
01:02:42,400 --> 01:02:48,720
Have I But you know, building
something feels like feels like

1191
01:02:48,720 --> 01:02:50,200
that's something obviously I
haven't done.

1192
01:02:50,960 --> 01:02:55,920
And when I look at assets,
usually it's very rare you get

1193
01:02:55,920 --> 01:02:58,600
something you're like, you need
a lot of exits.

1194
01:02:59,440 --> 01:03:02,760
You need to look at any, any
time you go, OK, let me step it

1195
01:03:02,760 --> 01:03:04,720
back one minute.
When you invest in mining things

1196
01:03:04,720 --> 01:03:08,560
and you either need to be in
small enough that you can get

1197
01:03:08,560 --> 01:03:11,560
out in a hurry, or you can just
get out relatively unscathed if

1198
01:03:11,560 --> 01:03:15,040
you don't like what you see.
Or you need to be in a large

1199
01:03:15,040 --> 01:03:19,440
enough that you can take control
of the situation and change it

1200
01:03:19,440 --> 01:03:23,880
if you don't like what you see.
And the worst place to be in no

1201
01:03:23,880 --> 01:03:30,560
man's land in the shooting zone
or you know, is, is when you're

1202
01:03:30,560 --> 01:03:34,280
in too big to have any influence
over the company or so too small

1203
01:03:34,280 --> 01:03:36,760
to have any influence over the
company, but too big to get out.

1204
01:03:38,040 --> 01:03:42,720
And I see a lot of guys end up
in that situation and stuck

1205
01:03:42,720 --> 01:03:45,320
behind bad management and
corrupt individuals and things

1206
01:03:45,320 --> 01:03:49,920
like this and complicit boards
and and just frustrated, banging

1207
01:03:49,920 --> 01:03:52,200
their hands against the wall.
But in a relatively liquid

1208
01:03:52,200 --> 01:03:55,400
situation and with no power, you
can't be there.

1209
01:03:57,360 --> 01:04:04,440
So anytime you go into an
investment, you need a lot of

1210
01:04:04,440 --> 01:04:07,200
different outs.
You need to say, OK, you know,

1211
01:04:07,200 --> 01:04:09,840
you need a bunch of if then
sequences that lead to success.

1212
01:04:10,160 --> 01:04:13,520
And your worst case scenario is
not that bad.

1213
01:04:14,360 --> 01:04:17,360
Like y'all get hurt, but it's
not going to be a mortal wound.

1214
01:04:19,280 --> 01:04:23,880
So what I haven't really ever
had before in a project was

1215
01:04:23,880 --> 01:04:26,920
where I thought one of the outs
was you just build your way, you

1216
01:04:26,920 --> 01:04:31,760
can build your way forward.
I couldn't build GT No way I can

1217
01:04:31,760 --> 01:04:37,600
handle that like FILO.
Like come on, I can't take on

1218
01:04:37,640 --> 01:04:40,360
Filo.
I mean, you're kidding me.

1219
01:04:40,360 --> 01:04:44,280
Like it's you need BHP to drive
forward Filo.

1220
01:04:45,320 --> 01:04:48,960
But what I found is that when
people execute on simple

1221
01:04:48,960 --> 01:04:51,080
projects, it's most amazing
rewrite.

1222
01:04:51,880 --> 01:04:53,920
I've never seen anyone execute
on a fairly.

1223
01:04:53,920 --> 01:04:56,720
It's funny, I've watched, I
think I said earlier, if you

1224
01:04:56,720 --> 01:04:59,200
really study things and you pull
them apart, you start to see

1225
01:04:59,200 --> 01:05:01,840
some very obvious relationships.
And what ends up happening is

1226
01:05:01,840 --> 01:05:04,560
the market doesn't ever do that.
And some people do, but the

1227
01:05:04,560 --> 01:05:08,960
market on mass holistically on
average does not do that.

1228
01:05:09,480 --> 01:05:12,520
And so they don't really
understand what assets sold, why

1229
01:05:12,520 --> 01:05:15,200
they sold.
You know, sometimes they think

1230
01:05:15,280 --> 01:05:18,000
someone just extorted the
world's largest gold mining

1231
01:05:18,000 --> 01:05:19,800
company from his small desk and
divine them.

1232
01:05:19,800 --> 01:05:26,160
They think things like that.
But and but when you when you

1233
01:05:26,160 --> 01:05:28,240
really write them apart and you
understand the nuances and

1234
01:05:28,240 --> 01:05:30,640
differences, you see things
where it's like they occur with

1235
01:05:30,640 --> 01:05:33,480
such extreme frequencies.
I remember in GT looking at that

1236
01:05:33,480 --> 01:05:37,760
and explaining to the company,
it's like, listen, I don't

1237
01:05:37,760 --> 01:05:41,720
really want to say what the
criteria is, but you know, give

1238
01:05:41,720 --> 01:05:43,160
it away too much.
But I was like.

1239
01:05:44,120 --> 01:05:47,800
Sorry to butt in here, but JD, I
have to.

1240
01:05:47,840 --> 01:05:51,400
I have to reveal something.
We we managed to squeeze this

1241
01:05:51,400 --> 01:05:53,680
out of Darren post conversation.
He wasn't he wasn't willing to

1242
01:05:53,680 --> 01:05:56,680
say it when we're talking, of
course, but we had to pry him on

1243
01:05:56,680 --> 01:05:59,840
what are these criteria that
actually leads to take out

1244
01:05:59,840 --> 01:06:02,080
within two years and he told us
one of them.

1245
01:06:02,160 --> 01:06:03,040
What was that mate?
That.

1246
01:06:03,120 --> 01:06:06,880
One that one thing was in this
study that they do put out are

1247
01:06:06,880 --> 01:06:10,080
they pricing things based on
using Sandvik ground support.

1248
01:06:10,480 --> 01:06:14,800
It's so true mate, you check the
criteria to make sure you are a

1249
01:06:15,120 --> 01:06:17,680
guaranteed takeover.
Sam, you've got to use Sam the

1250
01:06:17,680 --> 01:06:20,400
ground support mate.
Gotta use the company that is at

1251
01:06:20,400 --> 01:06:24,000
the forefront of R&D, the
forefront of technology when it

1252
01:06:24,000 --> 01:06:25,880
comes to ground support.
Don't believe it, look at their

1253
01:06:25,960 --> 01:06:29,000
there's a mixed bolt mate.
This is a dynamic resin bolt.

1254
01:06:29,040 --> 01:06:31,920
I'll let the man Derek heard
explain it himself.

1255
01:06:32,120 --> 01:06:36,280
How has ground support changed
over like the the last 20 years

1256
01:06:36,280 --> 01:06:39,480
for example?
Some people might say not much

1257
01:06:40,360 --> 01:06:42,920
at the end of the day because it
looks like a, a steel bolt or a,

1258
01:06:43,880 --> 01:06:46,440
a splitty or a friction bolt.
Depends, you know what you call

1259
01:06:46,440 --> 01:06:48,680
it sort of thing.
But they've been around forever

1260
01:06:48,680 --> 01:06:51,760
and a day because they're a good
product at the end of the day

1261
01:06:51,760 --> 01:06:53,880
and they they do their job.
But there's been a lot of

1262
01:06:53,880 --> 01:06:58,760
evolution on sort of the that
are dynamic capability of

1263
01:06:58,760 --> 01:07:03,080
products, you know, that can
hold more capacity, more energy.

1264
01:07:03,160 --> 01:07:06,360
Again, as these conditions
become more challenging, you

1265
01:07:06,360 --> 01:07:09,280
know, there's more requirements
for, you know, higher capacity

1266
01:07:09,720 --> 01:07:12,200
products at the end of the day.
The other thing that's that's

1267
01:07:12,200 --> 01:07:15,560
probably changed over the years
is the, the frequency of use

1268
01:07:15,760 --> 01:07:19,080
probably ground support probably
was a almost an afterthought,

1269
01:07:19,120 --> 01:07:22,560
you know, 20-30 years ago.
Now it's critical as part of the

1270
01:07:22,560 --> 01:07:25,160
development cycle, you know, to
provide again, provide that safe

1271
01:07:25,160 --> 01:07:26,840
working environment.
How good is that mate?

1272
01:07:26,840 --> 01:07:29,920
The company at the forefront the
cutting edge of underground

1273
01:07:29,960 --> 01:07:32,080
mining technology.
Go sand at ground support.

1274
01:07:32,360 --> 01:07:35,320
Back to Darren.
If you look at every project

1275
01:07:35,320 --> 01:07:38,080
I've ever seen in my career that
satisfied this basic criteria

1276
01:07:38,080 --> 01:07:41,880
set here and actually satisfied
it wasn't like just a fake phony

1277
01:07:41,880 --> 01:07:44,480
resource scam pretending to be
that it was a real project.

1278
01:07:47,280 --> 01:07:50,720
Because people talk about the
Lassong Curve a lot, which I

1279
01:07:50,720 --> 01:07:52,040
think is a heavily misunderstood
thing.

1280
01:07:52,040 --> 01:07:57,240
But like, do you know what the
average life expectancy of one

1281
01:07:57,240 --> 01:08:01,440
of those companies post their
first economic study and the

1282
01:08:01,440 --> 01:08:07,520
answer was a year before they
got taken out.

1283
01:08:09,000 --> 01:08:12,280
Whatever, whether it's PA or
PFS, do you know what the

1284
01:08:12,280 --> 01:08:14,520
longest survivor was of those
companies?

1285
01:08:14,520 --> 01:08:18,720
There was about 10-2 years.
None of them had made it longer

1286
01:08:18,720 --> 01:08:20,760
than two years without being
bought out, Not single ones.

1287
01:08:20,760 --> 01:08:22,840
People are like, oh, you get
stuck in the doldrums of this.

1288
01:08:22,840 --> 01:08:25,040
You're like, no, you don't.
Not if you're in a certain tier.

1289
01:08:25,800 --> 01:08:27,720
And you know, I broke down all
the tiers of assets to the

1290
01:08:27,720 --> 01:08:30,439
company and why?
And I was like, like, you fit.

1291
01:08:30,439 --> 01:08:32,479
You're not in a, you're not a
Tier 1 project, but you fit in

1292
01:08:32,479 --> 01:08:35,200
this tier.
And that tier is an interesting

1293
01:08:35,200 --> 01:08:36,520
tier.
And nothing in that tier has

1294
01:08:36,520 --> 01:08:38,439
ever survived or in two years
post study.

1295
01:08:39,680 --> 01:08:45,040
GT didn't either.
And, and that was a 100% hit

1296
01:08:45,040 --> 01:08:48,040
rate and across things.
And every single one of those

1297
01:08:48,040 --> 01:08:51,960
projects outlined just had
something about it that made

1298
01:08:51,960 --> 01:08:54,120
your skin crawl, that every
night you went to bed just

1299
01:08:54,120 --> 01:08:56,800
terrified of that risk factor
and you couldn't think about it

1300
01:08:56,800 --> 01:09:00,240
and stop thinking about it for,
you know, in the case of GT, it

1301
01:09:00,640 --> 01:09:04,640
had a very obvious 1.
And I was terrified of it every

1302
01:09:04,640 --> 01:09:08,840
single night.
It had it not been for that risk

1303
01:09:08,840 --> 01:09:10,600
factor, I would never have sold
it for half a billion.

1304
01:09:11,200 --> 01:09:13,240
I mean, you would have played
for billions on that project,

1305
01:09:14,640 --> 01:09:16,560
but it had that.
I don't want to say what it was,

1306
01:09:16,560 --> 01:09:20,439
but and that didn't mean it
wasn't going to get taken out.

1307
01:09:20,439 --> 01:09:23,960
And when I ranked like the risk
factors in the, you know, soil

1308
01:09:23,960 --> 01:09:27,640
your underpants factor scale of
all those different assets all

1309
01:09:27,640 --> 01:09:30,160
been taken out, I'm like, this
is basically like second

1310
01:09:30,160 --> 01:09:34,080
quartile risk.
Like we're not talking like

1311
01:09:34,080 --> 01:09:36,200
active coup going on in the
country.

1312
01:09:36,200 --> 01:09:41,760
You know, we're not, you're not
talking about subordinated

1313
01:09:42,040 --> 01:09:45,760
minority interest to a private
Turkish conglomerate type of

1314
01:09:45,760 --> 01:09:55,680
risk.
So I, I, when you look at

1315
01:09:56,080 --> 01:10:00,240
projects, I guess where I'm
going and in development

1316
01:10:00,240 --> 01:10:03,400
projects, I watched a perception
form in my career that building

1317
01:10:03,400 --> 01:10:07,000
minds was a really bad idea.
And I've heard that from a lot

1318
01:10:07,000 --> 01:10:12,120
of people, a lot of people I
respect and you know, but I

1319
01:10:12,120 --> 01:10:15,400
thought that that that opinion
was falsely formed.

1320
01:10:15,400 --> 01:10:18,680
I'm like, well, you know, they,
you think that because you

1321
01:10:18,680 --> 01:10:20,880
watched all these companies try
to build mines and blow up, but

1322
01:10:20,880 --> 01:10:22,680
you don't understand what they
all blew up because they're all

1323
01:10:22,680 --> 01:10:24,640
resource scams, real gold
projects.

1324
01:10:26,160 --> 01:10:29,600
And you don't understand that
because I'd studied those

1325
01:10:29,600 --> 01:10:33,000
projects and it shorted a lot of
them because I thought they're

1326
01:10:33,000 --> 01:10:37,600
resource scams.
And it's just, we just went

1327
01:10:37,600 --> 01:10:39,400
through a world where the gold
price collapsed.

1328
01:10:39,480 --> 01:10:42,120
No new discoveries were made
with the driest like decade.

1329
01:10:43,080 --> 01:10:46,240
And it does.
I mean, the only projects

1330
01:10:46,240 --> 01:10:51,920
getting pushed forward we're
we're not projects that were

1331
01:10:51,920 --> 01:10:53,400
real.
They were the projects where you

1332
01:10:53,400 --> 01:10:56,040
could turn the knobs on like the
Krieging or the Interpolant and

1333
01:10:56,040 --> 01:10:58,600
blow out the resource or fuck
with the wireframes and just,

1334
01:10:59,160 --> 01:11:01,440
you know, 2X3X the actual
resource.

1335
01:11:01,920 --> 01:11:05,280
And then get, you know, like the
chain of custody of information

1336
01:11:05,280 --> 01:11:07,080
is some guy.
You just need one guy to go do a

1337
01:11:07,080 --> 01:11:09,520
block model.
The wireframe could be Joe Blow,

1338
01:11:09,520 --> 01:11:11,960
it can be your buddy.
OK, just needs to sign off.

1339
01:11:12,680 --> 01:11:14,520
You do that, you get your
resource, you pass it off to

1340
01:11:14,520 --> 01:11:17,200
another group who does, who then
says, OK, well, I take that as a

1341
01:11:17,200 --> 01:11:19,040
given now.
And now I build you your mind

1342
01:11:19,040 --> 01:11:21,760
plant and here's your
feasibility study and your MPV

1343
01:11:21,760 --> 01:11:24,080
is $2 billion.
Amazing.

1344
01:11:24,560 --> 01:11:26,480
It's not like there's like
multiple audits along the way.

1345
01:11:26,480 --> 01:11:28,240
You just need to get Joe Blow to
sign off.

1346
01:11:28,440 --> 01:11:30,880
That's the most important thing.
You do that, boom, you're good.

1347
01:11:31,880 --> 01:11:37,720
And but the only things that
went forward that looked like

1348
01:11:37,720 --> 01:11:39,720
they were good enough to go
forward, only it looked like

1349
01:11:39,720 --> 01:11:41,560
they were good enough to go
forward because I want to crank

1350
01:11:41,560 --> 01:11:43,200
the knobs on them.
There weren't any real projects.

1351
01:11:44,200 --> 01:11:46,440
And so you watch resource Cam
after resource Cam get built and

1352
01:11:46,440 --> 01:11:51,080
blow up for various reasons.
And people are like destructive

1353
01:11:51,120 --> 01:11:52,360
building minds.
Terrible idea.

1354
01:11:52,360 --> 01:11:54,560
And then they also came off a
decade of access where people

1355
01:11:54,560 --> 01:12:00,040
were just blowing their brains
out, you know, with pro cyclical

1356
01:12:00,040 --> 01:12:03,520
mentality buying, you know,
paying the same insane prices.

1357
01:12:03,520 --> 01:12:07,120
And so, you know, the the
industry is ending this period

1358
01:12:07,120 --> 01:12:09,040
of austerity.
And then the only thing they got

1359
01:12:09,040 --> 01:12:12,160
for the sins of they just
incurred in the bull market of

1360
01:12:12,160 --> 01:12:16,280
the early 2000s and culminating
up to about, you know, the 2010

1361
01:12:16,280 --> 01:12:19,240
ish time.
And then then you watch a bunch

1362
01:12:19,240 --> 01:12:23,080
of scams get built only and
there's no price environment for

1363
01:12:23,080 --> 01:12:25,640
real projects to go forward.
And then so that's what

1364
01:12:25,640 --> 01:12:26,920
happened.
That's where that mentality came

1365
01:12:26,920 --> 01:12:28,440
from in my understanding and my
belief.

1366
01:12:29,120 --> 01:12:32,960
And then I watched some guys try
for some other projects.

1367
01:12:33,120 --> 01:12:37,560
I did work on them and I
thought, I think that one's

1368
01:12:37,560 --> 01:12:41,440
going to work, you know, and not
that I can make that full

1369
01:12:41,440 --> 01:12:43,160
determination myself, but you
get a sense for it.

1370
01:12:43,160 --> 01:12:44,640
You're like, I don't see any
problems with this.

1371
01:12:44,640 --> 01:12:47,560
I don't see any obvious things
where I see with it make my skin

1372
01:12:47,560 --> 01:12:48,920
crawl and and tend to hurt
people.

1373
01:12:48,920 --> 01:12:51,720
I don't see all the earthworks.
I don't see all the redirecting

1374
01:12:51,720 --> 01:12:55,560
water dealing with mocky earth,
you know, saying you can move it

1375
01:12:55,560 --> 01:13:00,640
for X dollars when you you know,
it's straightforward projects

1376
01:13:00,640 --> 01:13:03,920
building straightforward like
while your CapEx is assembling a

1377
01:13:03,920 --> 01:13:06,480
mill assembly doesn't go wrong.
It's like you know, they just

1378
01:13:07,440 --> 01:13:10,320
you can price it exactly and
then just put it together and

1379
01:13:10,320 --> 01:13:12,960
bolt it together on site.
Things like that.

1380
01:13:12,960 --> 01:13:15,760
You're like, these are simple
builds, simple projects, simple

1381
01:13:15,760 --> 01:13:19,160
regions, good location for the
tailings, good location for the

1382
01:13:19,160 --> 01:13:22,440
mill, good infrastructure, good
access to mining services, good

1383
01:13:22,440 --> 01:13:25,320
workers, all the likes.
And you're like, and they're

1384
01:13:25,320 --> 01:13:27,920
doing it prudently.
They're passing off the parts of

1385
01:13:27,920 --> 01:13:30,000
the project that they shouldn't
be taking on themselves or doing

1386
01:13:30,000 --> 01:13:32,200
it to good counterparties.
I have friends who are technical

1387
01:13:32,200 --> 01:13:34,880
experts in various regions, call
them, but for verification, get

1388
01:13:34,880 --> 01:13:36,520
it?
You're like, huh, I think that

1389
01:13:36,560 --> 01:13:38,680
one's going to work.
Yeah, watch them build.

1390
01:13:38,680 --> 01:13:39,760
You're like, yeah, it's not
that.

1391
01:13:39,760 --> 01:13:41,160
It's not that interesting of a
project, though.

1392
01:13:41,160 --> 01:13:43,040
It doesn't have a big MPV, but
they're going to build it.

1393
01:13:43,040 --> 01:13:47,160
It'll make money and they do it.
And the thing just turns into

1394
01:13:47,160 --> 01:13:52,560
this like, like ends up selling
or trading for like 2-3 X what

1395
01:13:52,560 --> 01:13:53,960
it's worth.
And you're like, Oh my God,

1396
01:13:54,360 --> 01:13:56,080
people plow in.
They think it's like the

1397
01:13:56,080 --> 01:13:57,120
greatest thing they've ever
seen.

1398
01:13:57,120 --> 01:13:59,120
You're like, my God, these guys
are rock stars.

1399
01:13:59,120 --> 01:14:00,320
The greatest technical team
ever.

1400
01:14:00,320 --> 01:14:01,880
Because they built a mind.
It didn't screw it up when

1401
01:14:01,880 --> 01:14:04,200
everyone else did.
And I'm not saying they don't

1402
01:14:04,200 --> 01:14:05,880
deserve their reputation.
A lot of these people I think

1403
01:14:06,360 --> 01:14:08,280
are amazing.
But they stayed within

1404
01:14:08,280 --> 01:14:10,840
themselves.
They bought a real project.

1405
01:14:10,840 --> 01:14:13,600
It was simple, it was elegant.
They executed it in a simple

1406
01:14:13,600 --> 01:14:16,560
fashion.
And every time I've seen someone

1407
01:14:16,560 --> 01:14:18,640
do that, it's been an
extraordinary success.

1408
01:14:19,520 --> 01:14:24,120
So there's that.
And you know, we, you know, our

1409
01:14:24,120 --> 01:14:26,440
largest investment right now is
a company called Mayfair Gold.

1410
01:14:27,480 --> 01:14:32,960
And Mayfair is to us that and we
watched, I watched Atlantic Gold

1411
01:14:33,400 --> 01:14:38,120
in this fellow Steven Dean build
Atlantic Gold and he built a

1412
01:14:38,120 --> 01:14:41,800
5000 ton a day project in Nova
Scotia.

1413
01:14:41,800 --> 01:14:45,200
I believe it was like on a
highway on power and you're

1414
01:14:45,200 --> 01:14:48,080
building on bedrock flat, no
real pre strip sitting right

1415
01:14:48,080 --> 01:14:50,440
there.
Bit of a nugget swarm.

1416
01:14:51,760 --> 01:14:53,320
You know, I thought the resource
was sketchy at first.

1417
01:14:53,320 --> 01:14:56,320
Did more work and I'm like it's
it's I think it's kind of there.

1418
01:14:56,320 --> 01:14:59,120
It probably works.
I'm like, I can't poke any holes

1419
01:14:59,120 --> 01:15:00,640
in this.
I think this actually works, but

1420
01:15:00,640 --> 01:15:03,960
it's small.
It was like 450,000 oz 1.2g.

1421
01:15:04,640 --> 01:15:06,200
This is built with goals like
1400.

1422
01:15:06,200 --> 01:15:11,480
OK guys, guys won't even look at
400,000 oz at 1.2g today at

1423
01:15:11,480 --> 01:15:14,360
3:30, three $100 goals.
I mean he was building was 1400.

1424
01:15:14,680 --> 01:15:16,680
You know, like, how the heck do
you do that?

1425
01:15:17,360 --> 01:15:19,520
I haven't seen someone build
this or something that look like

1426
01:15:19,520 --> 01:15:20,520
that.
And he builds it and he builds

1427
01:15:20,600 --> 01:15:22,920
like 120 million, a 140 million
CAD.

1428
01:15:22,920 --> 01:15:29,520
And I remember calling a friend
of mine, you know, who is kind

1429
01:15:29,520 --> 01:15:33,520
of responsible for that mind
build and asking him like, hey,

1430
01:15:33,520 --> 01:15:35,520
dude, can you just connect me
with the guys that built that

1431
01:15:35,520 --> 01:15:36,480
mind?
Like I, I just want to

1432
01:15:36,480 --> 01:15:38,680
understand how that happened,
how you do that.

1433
01:15:39,720 --> 01:15:41,680
And he's just like, oh, he's not
Australian.

1434
01:15:41,680 --> 01:15:47,000
He's like, as you guys would
say, too easy and walks through

1435
01:15:47,000 --> 01:15:50,080
and you know, it's just like
it's all there, man.

1436
01:15:50,800 --> 01:15:52,920
Power's there, the road's there.
The workforce is there.

1437
01:15:52,920 --> 01:15:54,720
It's drive and drive out.
You don't need to deal with the

1438
01:15:54,720 --> 01:15:57,440
camp.
It's, you know, the it's a

1439
01:15:57,440 --> 01:16:01,200
creature of just your elegance,
simplicity gets it up and

1440
01:16:01,200 --> 01:16:03,280
running, gets a trading and
evaluation.

1441
01:16:03,280 --> 01:16:05,520
I couldn't believe it reach.
And then he sells it to Saint

1442
01:16:05,520 --> 01:16:07,720
Barbara for like 800 million
bucks or something.

1443
01:16:07,720 --> 01:16:09,600
And I was just flabbergasting
like, whoa.

1444
01:16:10,560 --> 01:16:12,960
And then he had this backer,
this guy named Ryan BD and

1445
01:16:13,280 --> 01:16:16,720
Steven and Ryan had just
absolutely hit a home run there.

1446
01:16:17,640 --> 01:16:20,960
And then I watched him go buy
this other project off New Gold

1447
01:16:20,960 --> 01:16:25,280
Blackwater.
And it looked like a good

1448
01:16:25,280 --> 01:16:27,680
project.
You're like, I mean, Gold was

1449
01:16:27,680 --> 01:16:30,160
like almost 2000 at the time, I
want to say when they bought it.

1450
01:16:30,960 --> 01:16:34,600
And you're like, that's a good
looking project.

1451
01:16:34,600 --> 01:16:38,080
I think that probably works.
And you're like, it's pretty

1452
01:16:38,080 --> 01:16:41,240
much really permitted.
You look at it and it kind of

1453
01:16:41,240 --> 01:16:43,080
looked like a bigger Atlantic
Gold.

1454
01:16:43,600 --> 01:16:46,200
You're like, it's like the same
flow sheet, very similar thing.

1455
01:16:46,200 --> 01:16:47,720
It's a very similar build
actually.

1456
01:16:48,680 --> 01:16:51,120
It's a power line, but it's not
complicated getting power there.

1457
01:16:51,120 --> 01:16:54,280
You know, like the First Nation
situation was very complex, but

1458
01:16:54,280 --> 01:16:58,880
they navigated it and and it was
also like had been well advanced

1459
01:16:58,880 --> 01:17:00,280
by the time I got it down that
path.

1460
01:17:03,000 --> 01:17:05,600
And you're like, that doesn't
look like a scary build, just

1461
01:17:05,600 --> 01:17:08,480
looks like a bigger version of
Atlantic Gold almost.

1462
01:17:09,880 --> 01:17:15,600
I think that's going to work.
And I think Steven and Ryan LED

1463
01:17:15,600 --> 01:17:18,240
from the front.
They believed in their bones and

1464
01:17:18,240 --> 01:17:20,560
they wrote the checks from the
front every single time.

1465
01:17:20,560 --> 01:17:24,440
It was epic.
Love that and all the respect in

1466
01:17:24,440 --> 01:17:27,680
the world for guys that do that.
They say like, no, this is

1467
01:17:27,680 --> 01:17:28,920
awesome.
I believe in it.

1468
01:17:29,600 --> 01:17:31,720
You can get behind me or you can
miss out.

1469
01:17:31,840 --> 01:17:35,680
We're driving this forward.
We're just taking immense risk.

1470
01:17:36,200 --> 01:17:38,680
And now there you have made an
extraordinary amount of money

1471
01:17:39,680 --> 01:17:41,640
for doing so.
And look, with that three rated

1472
01:17:41,640 --> 01:17:45,040
suit, getting that thing into
into production, it's

1473
01:17:45,040 --> 01:17:47,240
remarkable.
And then I watch G mining go and

1474
01:17:47,240 --> 01:17:50,680
buy this like thing for like it
was like 100 million USI can't

1475
01:17:50,680 --> 01:17:56,120
remember in Brazil.
And it's a simple project and

1476
01:17:56,120 --> 01:17:59,880
they built it and they they're
like, yeah, that's going to

1477
01:17:59,880 --> 01:18:01,240
work.
I mean, it's not very sexy.

1478
01:18:01,240 --> 01:18:03,400
The MPV is not huge.
The resource isn't huge.

1479
01:18:03,400 --> 01:18:05,720
It's, it's a good little project
though.

1480
01:18:05,720 --> 01:18:09,360
And they built that good little
project and look what they're,

1481
01:18:09,520 --> 01:18:13,440
look what they've become.
And I just watched that.

1482
01:18:13,440 --> 01:18:15,360
I watched the rewrite.
I watched The Power of Just

1483
01:18:15,360 --> 01:18:20,320
prudence and the what it does
for your cost of capital and

1484
01:18:20,320 --> 01:18:22,200
your credibility in the market
is people staying within

1485
01:18:22,200 --> 01:18:25,760
themselves and executing on
simple projects smartly.

1486
01:18:25,760 --> 01:18:28,280
But understanding that people
don't understand elegance and

1487
01:18:28,280 --> 01:18:31,120
projects and how that that what
people suck at is understanding

1488
01:18:31,120 --> 01:18:33,880
joint probability.
Human beings by nature really

1489
01:18:33,880 --> 01:18:35,680
are poor at understanding two
things.

1490
01:18:35,680 --> 01:18:37,800
Compounding exponential rates of
increase.

1491
01:18:37,920 --> 01:18:43,080
They don't really understand
inherently and they don't

1492
01:18:43,080 --> 01:18:45,720
understand joint probability.
And they look at projects and

1493
01:18:45,720 --> 01:18:49,240
they're like, yeah, that's like,
yeah, it's like, I think it's

1494
01:18:49,240 --> 01:18:51,720
like an 8% chance that that's
good, 8% chance, that's good.

1495
01:18:51,720 --> 01:18:53,320
That's probably an 8% chance
that's good.

1496
01:18:54,040 --> 01:18:56,320
You know, like, oh man, yeah,
this is awesome.

1497
01:18:56,640 --> 01:18:58,640
You're like, well, cool, what's
pointing to the power of 3?

1498
01:18:58,640 --> 01:19:02,400
It's like less than a coin flip,
you know, and now add in a .9

1499
01:19:02,400 --> 01:19:05,000
over there and a pointed over
there on those two factors, on

1500
01:19:05,000 --> 01:19:07,960
those risk factors and suddenly
you've got to like a, you know,

1501
01:19:07,960 --> 01:19:10,400
a one in four or one in three
chance of success.

1502
01:19:10,400 --> 01:19:12,600
And one of them is their head.
And people are like, you know,

1503
01:19:12,640 --> 01:19:14,680
if it just hadn't been for that,
they're like, no dude, that's,

1504
01:19:15,000 --> 01:19:19,200
that's not how probability.
And so it would would you know,

1505
01:19:19,200 --> 01:19:22,520
when you get these elegant
objects where the risk factors

1506
01:19:22,520 --> 01:19:25,520
are so low because like mines
are just victims of joint

1507
01:19:25,520 --> 01:19:27,560
probability.
There's so many risk factors.

1508
01:19:28,280 --> 01:19:30,280
If every risk factors got a
probability of 10, you got a

1509
01:19:30,280 --> 01:19:33,040
problem.
So you need really, really high

1510
01:19:33,040 --> 01:19:36,880
probabilities on it across the
board on all various factors or

1511
01:19:36,880 --> 01:19:40,040
you need huge margins of error
and safety or you can withstand

1512
01:19:40,040 --> 01:19:46,400
a lot of bad luck And, and I
find might succeed on elegance.

1513
01:19:46,400 --> 01:19:48,800
And I find any time people
execute on those and stay within

1514
01:19:48,800 --> 01:19:50,600
themselves, the it's
extraordinary.

1515
01:19:50,600 --> 01:19:52,440
And then there's there's
ancillary factors.

1516
01:19:52,440 --> 01:19:56,600
I'm talking for a long time on
this, but do you ever need me to

1517
01:19:56,600 --> 01:19:58,720
speed it up?
You can just kind of go like

1518
01:19:58,760 --> 01:20:06,280
that and I'll take the hint.
But but you know, building,

1519
01:20:07,000 --> 01:20:10,520
bringing technical teams under
your umbrella, like from a fun

1520
01:20:10,520 --> 01:20:12,880
perspective.
Yeah, I love the building.

1521
01:20:12,880 --> 01:20:17,360
Entire technical team.
Expensive, you know, you got to

1522
01:20:17,360 --> 01:20:20,440
keep them fed, but you know,
having networks with technical

1523
01:20:20,440 --> 01:20:24,040
people and working with people
and succeeding together and

1524
01:20:24,040 --> 01:20:26,520
working as a team, there's a lot
of value in that.

1525
01:20:27,320 --> 01:20:30,160
The learning opportunity is
extraordinary.

1526
01:20:31,200 --> 01:20:32,960
You know, learning, going
through permitting, being

1527
01:20:32,960 --> 01:20:36,600
involved in that, learning it,
dealing with First Nations,

1528
01:20:36,600 --> 01:20:40,040
trying to figure out how to work
for mutually beneficial

1529
01:20:40,040 --> 01:20:42,520
outcomes.
You know, navigating that,

1530
01:20:42,520 --> 01:20:45,800
navigating the difficulties,
the, the, you know, how do you

1531
01:20:45,800 --> 01:20:48,160
maintain positive relationships
and dealing with the intensity

1532
01:20:48,160 --> 01:20:50,800
of negotiations and making sure
you, you get through that with

1533
01:20:50,800 --> 01:20:52,560
mutual respect and all those
types of things.

1534
01:20:52,560 --> 01:20:55,880
Like those are things you kind
of need to go through.

1535
01:20:55,880 --> 01:20:58,200
So it's incredible learning
opportunities from it as well.

1536
01:20:58,880 --> 01:21:04,240
There's incredible opportunities
to build to pull certain skill

1537
01:21:04,240 --> 01:21:06,720
sets into your your network,
which you can then leverage for

1538
01:21:06,720 --> 01:21:14,880
other opportunities potentially.
Sharpen your pencil and you can

1539
01:21:14,880 --> 01:21:17,280
then apply the lessons learned
from those groups elsewhere.

1540
01:21:17,280 --> 01:21:23,240
And then, but most importantly
of all, you know, I think I

1541
01:21:23,240 --> 01:21:26,400
explained this in the other
interview I did that you guys

1542
01:21:26,400 --> 01:21:28,400
were referencing or probably
touched on this.

1543
01:21:29,480 --> 01:21:33,160
You know, I always use companies
like I definitely talked about

1544
01:21:33,160 --> 01:21:36,200
this, but for me, like my, my
focus on companies is on like a

1545
01:21:36,200 --> 01:21:38,200
decision making matrix.
I think that's the powerful

1546
01:21:38,200 --> 01:21:40,120
thing.
I think that's the most powerful

1547
01:21:40,120 --> 01:21:41,440
thing.
You just say, OK, cool.

1548
01:21:42,360 --> 01:21:47,720
You try to figure out, OK, when
you look at companies, people

1549
01:21:47,720 --> 01:21:51,560
are generally bad or it's
difficult or have a hard time

1550
01:21:51,560 --> 01:21:54,200
figuring out what's a more
talented team or a better

1551
01:21:54,200 --> 01:21:57,680
structured entity than another.
And so they're looking for like

1552
01:21:57,680 --> 01:22:00,040
financial things and EPS
multiples and things like this

1553
01:22:00,040 --> 01:22:03,040
and try to, they think if I can,
you know, do smart accounting, I

1554
01:22:03,040 --> 01:22:04,880
can figure it out.
Maybe you can, but it is it's

1555
01:22:04,880 --> 01:22:08,000
all worthless unless you can see
through see through the numbers

1556
01:22:08,000 --> 01:22:11,080
and see talent or see
brilliance.

1557
01:22:11,440 --> 01:22:17,560
And, and because at the end of
the day, it's like you take it

1558
01:22:17,560 --> 01:22:21,680
to something where people
obviously understand sports.

1559
01:22:22,240 --> 01:22:24,880
You know, I remember reading
this watching this reading or

1560
01:22:24,880 --> 01:22:26,560
watching this quote from Roger
Federer.

1561
01:22:27,360 --> 01:22:30,400
And these things are obviously
kind of cliche and lame, but

1562
01:22:30,400 --> 01:22:31,560
this one actually kind of got
me.

1563
01:22:31,560 --> 01:22:34,640
He was talking about like the
percentage of points he'd won in

1564
01:22:34,640 --> 01:22:38,120
his career.
He was like just about 50 and

1565
01:22:38,120 --> 01:22:42,280
you're like, that is incredible,
but everyone. 52 I think.

1566
01:22:43,480 --> 01:22:48,360
Yeah, but you put Roger Federer,
you got to realize he's playing

1567
01:22:48,360 --> 01:22:50,840
most of his points against like,
competition that he's never

1568
01:22:50,840 --> 01:22:52,400
going to lose to, right?
He only really faces the

1569
01:22:52,400 --> 01:22:53,600
challenge when he gets the
finals.

1570
01:22:55,560 --> 01:22:59,760
And through these dominant runs,
you understand the other

1571
01:22:59,760 --> 01:23:03,760
opponent has a 0% chance
basically against this guy, even

1572
01:23:03,760 --> 01:23:08,200
though that's because that teeny
margin and that's the power.

1573
01:23:09,560 --> 01:23:11,960
But The thing is, there's so
many shots and so many points

1574
01:23:12,200 --> 01:23:15,440
they such as robust and deep
sample size that the power of a

1575
01:23:15,440 --> 01:23:21,360
slight edge inefficiency over a
relevant sample size is

1576
01:23:21,360 --> 01:23:24,400
extraordinary.
And you know, look at the best

1577
01:23:24,400 --> 01:23:26,440
golfers in the world.
We're in awe of Scotty Shuffler

1578
01:23:26,440 --> 01:23:31,840
right now for what he's doing.
Like it's amazed.

1579
01:23:31,840 --> 01:23:35,600
It's but like it's a it's one
shot around, you know, it's one

1580
01:23:35,600 --> 01:23:39,400
ship that he doesn't hit a
little huff around.

1581
01:23:39,400 --> 01:23:42,080
It's it, that's, it's that's the
that's the edge they're grinding

1582
01:23:42,080 --> 01:23:43,400
for.
You know, it's amazing that he's

1583
01:23:43,640 --> 01:23:45,200
he wins by three strokes in a
major.

1584
01:23:45,200 --> 01:23:47,360
Like, why is that amazing?
Because it's that hard.

1585
01:23:47,360 --> 01:23:50,200
The margins aren't that thin.
And we understand that when we

1586
01:23:50,200 --> 01:23:52,520
look at sports, we understand
the inevitability of these

1587
01:23:52,520 --> 01:23:54,560
marginal advantages with
relevant sample sizes.

1588
01:23:54,560 --> 01:23:57,120
We don't understand it with
companies typically and

1589
01:23:57,120 --> 01:24:00,600
investing and people have a hard
time saying, well, how do I get

1590
01:24:00,600 --> 01:24:01,880
to that?
How do I see that?

1591
01:24:02,560 --> 01:24:05,560
And it's tough and things play
out over many years and

1592
01:24:06,200 --> 01:24:07,280
management's changing and all
that.

1593
01:24:07,280 --> 01:24:09,920
So culture understand the spot,
a culture that's dominant

1594
01:24:10,160 --> 01:24:11,920
decision making matrix is
dominant.

1595
01:24:12,520 --> 01:24:15,400
And so you know, it's like
everyone understands it's like

1596
01:24:15,400 --> 01:24:17,640
Formula One cars.
OK, this is be a good example.

1597
01:24:17,640 --> 01:24:24,720
I think if I think you watch F1
and you and you say if you gave

1598
01:24:24,720 --> 01:24:28,040
investors and they were their
job was to go analyze F1 cars

1599
01:24:28,080 --> 01:24:31,280
and put them on a comp sheet and
predict winners and losers,

1600
01:24:31,320 --> 01:24:33,320
they'd have a really hard time
knowing nothing.

1601
01:24:33,320 --> 01:24:35,400
They'd say these are identical
objects.

1602
01:24:36,800 --> 01:24:38,840
You watch F1, you say that car
has no chance.

1603
01:24:38,840 --> 01:24:40,320
That is no chance.
That is no chance because that

1604
01:24:40,320 --> 01:24:41,640
one corners better over here in
this.

1605
01:24:41,640 --> 01:24:44,800
And like over the course of, you
know, just give them a hundred

1606
01:24:44,800 --> 01:24:46,520
turns, like it's going to be
like 1000 turns in the race.

1607
01:24:46,520 --> 01:24:48,840
Give them a hundred like they're
going to be, you know, long

1608
01:24:48,840 --> 01:24:53,560
gone.
And companies are like that.

1609
01:24:54,280 --> 01:24:56,960
If you pull away a little bit
with every decision, it doesn't

1610
01:24:56,960 --> 01:24:58,760
matter if you have a better
asset.

1611
01:24:59,200 --> 01:25:02,760
You're starting, you know, we
understand you can put like the

1612
01:25:02,960 --> 01:25:06,960
the McLaren car of yesteryear,
you can give it a one lap lead

1613
01:25:07,400 --> 01:25:09,400
over the Red Bull and you think,
Oh my God, that's cheap.

1614
01:25:09,840 --> 01:25:11,920
Well, no, I mean, we all
understand that the Red Bull is

1615
01:25:11,920 --> 01:25:13,960
going to dominate them and pass
them by lap 10.

1616
01:25:14,960 --> 01:25:16,320
The same thing happens in
companies.

1617
01:25:16,320 --> 01:25:23,240
So anyways, that's a very long
winded way of saying I think

1618
01:25:23,360 --> 01:25:26,840
mining is a very fertile place
for good decision making.

1619
01:25:27,960 --> 01:25:31,040
And I think it's inherently
structure.

1620
01:25:31,040 --> 01:25:34,640
It's the people and companies
have a hard time employing good

1621
01:25:34,640 --> 01:25:38,520
decision making.
I was just talking like my

1622
01:25:38,520 --> 01:25:41,920
neighbor about it and he works
for some large companies.

1623
01:25:41,920 --> 01:25:43,800
Like how big is like your team?
And I remember you told me the

1624
01:25:43,800 --> 01:25:45,960
number.
I was like, Oh my God, that's a

1625
01:25:45,960 --> 01:25:47,320
lot of people.
You're like, God, that's a big

1626
01:25:47,320 --> 01:25:48,800
bureaucratic entity.
I was shocked.

1627
01:25:48,800 --> 01:25:51,400
It was like 5 times bigger than
what I thought it would be.

1628
01:25:52,160 --> 01:25:54,520
Holy grow.
That's a lot of people, a lot of

1629
01:25:54,520 --> 01:25:56,520
committees, a lot of things.
He's telling me the size of like

1630
01:25:56,520 --> 01:25:59,400
their ESG department and, and
like the power of it.

1631
01:25:59,400 --> 01:26:05,600
I'm like, whoa.
But I, I think there's a huge

1632
01:26:05,600 --> 01:26:09,640
opportunity in mining and in
gold actually, especially in

1633
01:26:09,640 --> 01:26:15,840
gold for a nimble entity that
makes good decisions and

1634
01:26:15,840 --> 01:26:19,160
aggressive decisions to take the
strategy.

1635
01:26:20,720 --> 01:26:24,240
You know, we generally employed
and investing in the sector and

1636
01:26:24,240 --> 01:26:29,320
apply it to a company or find
individuals that share the

1637
01:26:29,320 --> 01:26:32,640
philosophy and, and have them
apply to the company and support

1638
01:26:32,640 --> 01:26:36,960
them.
And, and I think that can yield

1639
01:26:36,960 --> 01:26:39,120
extraordinary success for a
number of reasons.

1640
01:26:39,120 --> 01:26:41,320
I think that the industry is
perfectly set up for, I think

1641
01:26:41,320 --> 01:26:45,800
gold special in that regard.
You know, there was my brother,

1642
01:26:45,800 --> 01:26:48,400
my brother told me this one time
and again, this is one of these

1643
01:26:48,400 --> 01:26:51,480
things that always stuck with me
and I thought was really simple

1644
01:26:51,480 --> 01:26:57,560
but very profound, which was
he's just like, it's like, like

1645
01:26:57,560 --> 01:27:00,360
everyone's been on the copper
thesis forever, my entire

1646
01:27:00,360 --> 01:27:01,920
career, the supply demand
thesis.

1647
01:27:02,800 --> 01:27:05,160
And he's like, he was kind of
like, who cares, man?

1648
01:27:06,400 --> 01:27:08,560
And it's a really good thesis
and I was interested in it.

1649
01:27:08,560 --> 01:27:11,800
I couldn't ever get confidence.
I don't really make macro bets

1650
01:27:15,360 --> 01:27:17,240
again, solving the world's hard.
It's a lot easier to solve

1651
01:27:17,240 --> 01:27:22,960
companies and drill holes.
But it's just like how many

1652
01:27:22,960 --> 01:27:27,040
copper bull markets you seen
during, I'm like, well, zero.

1653
01:27:27,040 --> 01:27:30,000
I've heard of 1 though, you
know, try a super cycle.

1654
01:27:30,640 --> 01:27:34,320
And he's like, you know, how
many bull markets in gold have

1655
01:27:34,320 --> 01:27:37,960
you seen moments of like
exuberance, euphoria and capital

1656
01:27:37,960 --> 01:27:40,600
flowing in and all this?
And that's just like, I've seen

1657
01:27:40,600 --> 01:27:44,000
a bunch of them even though not
much had happened in gold or for

1658
01:27:44,000 --> 01:27:45,520
a lot of those periods of times
where they formed.

1659
01:27:45,960 --> 01:27:50,200
But you got these pulses and
it's just like gold makes bull

1660
01:27:50,200 --> 01:27:54,360
markets more frequently and more
violently than anything else.

1661
01:27:55,240 --> 01:27:58,600
And it's because it's it's not
driven by these big industrial

1662
01:27:58,840 --> 01:28:00,120
things.
It's driven by like central

1663
01:28:00,120 --> 01:28:01,680
banks.
It's driven by global conflict.

1664
01:28:01,680 --> 01:28:06,440
It's driven by, you know, people
trying to run away from the US

1665
01:28:06,440 --> 01:28:09,880
reserve currency, you know,
shift assets out of the SWIFT

1666
01:28:09,880 --> 01:28:11,120
banking system.
Who knows what.

1667
01:28:11,120 --> 01:28:14,720
You know, it's just, and the
world is such a violent,

1668
01:28:14,720 --> 01:28:16,640
volatile place.
There's always some major

1669
01:28:16,640 --> 01:28:19,080
conflict, major strife, major.
Like how many things have you

1670
01:28:19,080 --> 01:28:21,400
seen in the last 10 years, like
major global events?

1671
01:28:21,880 --> 01:28:27,080
They're just being jarring and
and it just, that's when it's

1672
01:28:27,080 --> 01:28:30,040
driven by that the frequency of
those markets and the capital

1673
01:28:30,040 --> 01:28:32,560
flows come faster.
The ground is shaking more

1674
01:28:32,560 --> 01:28:36,680
frequently.
And I always thought that was a

1675
01:28:36,680 --> 01:28:40,360
brilliant thought.
And I was like, kind of just was

1676
01:28:40,360 --> 01:28:43,880
like, yeah, holy crow, how would
I focus on anything else?

1677
01:28:44,680 --> 01:28:47,160
And so I think the playing and
on top of that, it just, you

1678
01:28:47,160 --> 01:28:48,760
look at copper, you're
fascinated.

1679
01:28:48,760 --> 01:28:50,240
Copper, it's just not that many
ways to play it.

1680
01:28:51,400 --> 01:28:54,600
There's so many gold companies
and there's gold companies from

1681
01:28:54,600 --> 01:28:57,480
like very small scale, micro
scale, teeny heat bleaches,

1682
01:28:57,480 --> 01:29:03,120
small projects, medium size,
bigger, medium size, small unit

1683
01:29:03,120 --> 01:29:06,520
size, large size, super size
jurisdictions, the range of

1684
01:29:06,520 --> 01:29:08,520
jurisdictions, the breadth of
jurisdictions, the breadth of

1685
01:29:08,520 --> 01:29:10,880
scale, the breadth of market
caps, you name it.

1686
01:29:11,280 --> 01:29:15,280
The playing field is diverse.
The ground is shaking, the money

1687
01:29:15,280 --> 01:29:17,520
is coming and and going and
faster.

1688
01:29:19,600 --> 01:29:22,880
That's where opportunity is.
That's where opera if you're,

1689
01:29:22,960 --> 01:29:27,360
and I've always believed that
when you have that type of a

1690
01:29:27,360 --> 01:29:32,160
landscape, it kind of hit me.
I'm like, man, in that

1691
01:29:32,160 --> 01:29:34,520
landscape, how much value is
there just being an object of

1692
01:29:34,520 --> 01:29:37,840
stability?
If you know that other people

1693
01:29:37,840 --> 01:29:40,720
are going to get washed out
frequently and so much the money

1694
01:29:40,720 --> 01:29:43,240
is procyclical and is forced to
be largely deployed all the

1695
01:29:43,240 --> 01:29:47,280
time, That's like the washouts
are going to be brutal and

1696
01:29:47,280 --> 01:29:48,920
you're going to be able to buy
things on fire sale.

1697
01:29:48,960 --> 01:29:50,720
So you should always send a
decent position of cash.

1698
01:29:50,720 --> 01:29:54,080
And like how much value is there
in being in in a position of

1699
01:29:54,080 --> 01:29:56,160
strength and other people are in
a position of weakness, knowing

1700
01:29:56,160 --> 01:29:58,560
those positions of weakness and
strength come and oscillate back

1701
01:29:58,560 --> 01:30:00,760
and forth so fast.
And it seemed immense.

1702
01:30:00,760 --> 01:30:04,160
And so, you know, that was my my
dominant philosophies in

1703
01:30:04,160 --> 01:30:07,040
investing in the sector was to
do that always structure

1704
01:30:07,040 --> 01:30:10,280
yourself the so you will always
be in a position of strength to

1705
01:30:10,880 --> 01:30:13,240
the best of your ability.
I mean, there's no always in

1706
01:30:13,240 --> 01:30:17,040
anything, but when others are in
a position of weakness and have

1707
01:30:17,040 --> 01:30:19,800
the confidence to move in those
moments and it's never the

1708
01:30:19,800 --> 01:30:22,080
bottom is not usually obvious.
There's only one time in my

1709
01:30:22,080 --> 01:30:24,240
entire career I've seen a moment
where I couldn't believe I was

1710
01:30:24,240 --> 01:30:25,720
like, there's no way you don't
make money buying this.

1711
01:30:25,720 --> 01:30:28,040
Like remembering COVID, seeing
some things are like royalties

1712
01:30:28,040 --> 01:30:31,040
on potash, trading at a few X
cash flow or things like that.

1713
01:30:31,040 --> 01:30:33,760
And you're like, OK, that's,
that's a freebie.

1714
01:30:33,880 --> 01:30:36,160
That's just structural.
I just buy, thank God I had some

1715
01:30:36,160 --> 01:30:37,800
liquidity, you know, to buy some
of those things.

1716
01:30:41,240 --> 01:30:44,120
But yeah.
And so that's the gold

1717
01:30:44,120 --> 01:30:46,320
landscape.
And I'm just like, well, you

1718
01:30:46,320 --> 01:30:47,440
know, I play from the investment
side.

1719
01:30:47,440 --> 01:30:49,560
That's great.
But man, what could you do if

1720
01:30:49,560 --> 01:30:52,440
you're a company, think of all
the different ways and the more

1721
01:30:52,440 --> 01:30:54,040
diverse ways you could play the
field.

1722
01:30:55,000 --> 01:30:59,920
And, and if you can just go and
build a company that has a an

1723
01:31:00,320 --> 01:31:04,120
incredible culture and decision
making, you can set the culture

1724
01:31:04,120 --> 01:31:07,920
of the company.
You can create a culture where

1725
01:31:07,920 --> 01:31:10,640
people lay information
unfiltered on the table and

1726
01:31:10,640 --> 01:31:12,520
surrounded by a bunch of
extremely bright people who then

1727
01:31:12,520 --> 01:31:14,480
digest it and try to make
rational decisions.

1728
01:31:15,520 --> 01:31:19,720
And you know what?
I, one of my mottos for

1729
01:31:19,720 --> 01:31:22,440
investing in the sector is, you
know, on the front foot and

1730
01:31:22,440 --> 01:31:25,880
terrified all the time and
you're scared constantly

1731
01:31:25,880 --> 01:31:27,640
investing the sector and you're
crazy if you're not.

1732
01:31:28,560 --> 01:31:30,680
You should, you should be
thinking about risk every night

1733
01:31:30,680 --> 01:31:33,680
you go to bed.
And honestly, you can't help it

1734
01:31:33,680 --> 01:31:37,000
if you're paying attention, but
you can never let it put you on

1735
01:31:37,000 --> 01:31:38,680
the back foot.
It's you.

1736
01:31:38,760 --> 01:31:40,920
You can only, you have to be
aggressive to be successful, but

1737
01:31:40,920 --> 01:31:42,720
you have to be very, very
fearful at the same time.

1738
01:31:42,720 --> 01:31:47,240
It's A and a company that
reflects that the things like

1739
01:31:47,240 --> 01:31:52,320
that, that has a bunch of really
bright, talented people that has

1740
01:31:53,040 --> 01:31:56,640
it's ethically aligned that who
are, you know, are generally

1741
01:31:56,640 --> 01:32:01,360
incorruptible and and you don't,
you know, like one cancer.

1742
01:32:01,360 --> 01:32:03,560
I see in companies all the time
as guys go and they don't want

1743
01:32:03,560 --> 01:32:05,640
to talk about their their
losses, only want to talk about

1744
01:32:05,640 --> 01:32:07,440
their wins.
The meetings that went well, the

1745
01:32:07,440 --> 01:32:09,280
conversations that led to
something they don't want to

1746
01:32:09,280 --> 01:32:11,920
talk about, the conversation
they had with with whomever that

1747
01:32:11,920 --> 01:32:14,600
they screwed up and they burned
a bridge.

1748
01:32:14,960 --> 01:32:16,960
And the problem is when you
start getting filtered

1749
01:32:16,960 --> 01:32:19,680
information on a table, you
don't know how it's filtered and

1750
01:32:19,680 --> 01:32:21,280
what you're missing.
You start making decisions

1751
01:32:21,280 --> 01:32:25,000
around bad information.
It's not that useful.

1752
01:32:26,280 --> 01:32:30,760
So having a small room of really
bright, talented, aligned,

1753
01:32:30,920 --> 01:32:35,520
ethical human beings of that
mentality and having an object

1754
01:32:35,520 --> 01:32:37,480
to play the field in that way, I
think you could achieve

1755
01:32:37,480 --> 01:32:40,560
extraordinary things.
And I think that you could, you

1756
01:32:40,560 --> 01:32:43,000
know, I don't know the insides
of a bunch of companies.

1757
01:32:43,000 --> 01:32:45,360
I, there's a few I could
probably name that I think

1758
01:32:45,680 --> 01:32:47,840
reflect that to some extent.
And I think they've done some

1759
01:32:47,840 --> 01:32:49,160
brilliant moves and brilliant
things.

1760
01:32:51,400 --> 01:32:52,760
I think there's a huge
opportunity for that.

1761
01:32:52,760 --> 01:32:54,000
And I think there's room for
more.

1762
01:32:54,600 --> 01:32:59,040
And I, I would, would love to
see that through.

1763
01:32:59,040 --> 01:33:03,240
I just, I just, I believe in
that thesis about as much as

1764
01:33:03,240 --> 01:33:04,960
anything I've ever believed in
in my career.

1765
01:33:05,480 --> 01:33:10,240
And so that's a very long,
sorry, long winded answer to to

1766
01:33:10,240 --> 01:33:11,800
what you asked.
But I think those are the

1767
01:33:11,800 --> 01:33:15,880
primary facets.
And for us, we believe Mayfair

1768
01:33:15,880 --> 01:33:17,760
represents that.
And you know, there's a whole

1769
01:33:17,760 --> 01:33:21,880
story there and a reason why
there was a reason why the

1770
01:33:21,880 --> 01:33:24,360
market didn't like it.
It was very obvious.

1771
01:33:25,720 --> 01:33:32,560
And then we watch things change
and in a very meaningful way.

1772
01:33:33,160 --> 01:33:35,600
And it's a it's an object of
it's one of those objects of

1773
01:33:35,600 --> 01:33:39,320
elegance doesn't jump off the
page of people, but there's a

1774
01:33:39,320 --> 01:33:42,360
it's the coalescence of elegant
factors make it extraordinary in

1775
01:33:42,360 --> 01:33:46,920
our mind.
And yeah, so that's our focus

1776
01:33:46,920 --> 01:33:50,600
through that company is to is
the whole hopefully build

1777
01:33:50,600 --> 01:33:52,560
something that reflects that.
It's not our company.

1778
01:33:53,520 --> 01:33:55,600
We are the largest shareholder,
but it's not our company.

1779
01:33:56,160 --> 01:34:00,800
So, you know, at the same time,
you still have to build a

1780
01:34:00,800 --> 01:34:03,040
company.
You can't force it you, but you

1781
01:34:03,040 --> 01:34:04,480
can hopefully guide it and steer
it.

1782
01:34:06,600 --> 01:34:09,920
That that rationale of creating
a sort of network of of super

1783
01:34:09,920 --> 01:34:14,480
switched on people just getting
to to integrate and work closely

1784
01:34:14,480 --> 01:34:17,680
with people from different
fields and getting the

1785
01:34:17,680 --> 01:34:20,680
experience from from permitting.
And all those various sort of

1786
01:34:20,680 --> 01:34:25,040
facets must must come back with
a lot of sort of spades as as an

1787
01:34:25,040 --> 01:34:27,360
investor as well.
So yeah, that that really

1788
01:34:27,360 --> 01:34:30,120
resonates.
Appreciate you massively sharing

1789
01:34:30,120 --> 01:34:33,760
the sharing your time Darren and
and hearing about your thinking

1790
01:34:33,760 --> 01:34:36,240
in in every single facet of what
you do.

1791
01:34:36,320 --> 01:34:37,600
Really enjoyed this
conversation.

1792
01:34:38,640 --> 01:34:39,960
Well, thank you.
Appreciate that.

1793
01:34:40,280 --> 01:34:42,320
Thanks for having me.
Thanks so much mate.

1794
01:34:42,360 --> 01:34:45,080
Mate that was a fantastic
conversation, so stoked to to

1795
01:34:45,080 --> 01:34:48,480
share that one and a massive
thank you to our fantastic

1796
01:34:48,480 --> 01:34:51,640
partners Rounded Sandy Ground
support and Cross Boundary

1797
01:34:51,640 --> 01:34:53,000
energy.
Peter Roo.

1798
01:34:58,200 --> 01:35:01,000
Now remember, I'm an idiot.
JD is an idiot.

1799
01:35:01,360 --> 01:35:03,440
If you thought any of this was
anything other than

1800
01:35:03,440 --> 01:35:06,200
entertainment, you're an idiot.
And you need it right out of

1801
01:35:06,200 --> 01:35:06,640
disclaimer.