Fire Sale for Anglo Coal Bidders

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Righto money miners.
Half the content in the episode

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today is because of MMS move in
the dirt.

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We got, we got, we're going to
have a big yarn about all things

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happening, category processing
facilities and like categories,

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a bunch of money.
Sandfires put out a quarterly.

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I'm going to spin some shit
about the Anglo coal sale

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investment process and jade is
going into diamonds.

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Diamonds.
Diamonds and Vault reported.

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To where we where we starting
today?

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Guys, MMS, they're a diamond of
a company, I can tell you that

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much.
The diamond of open pits go in

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there.
Oh, right where we start.

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GC.
Bit of bloody Sandfire.

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Sandfire Dip.
A company close to my heart.

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Glad they recovered after I
left.

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No, they're doing just fine.
So no, they they've put their

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quarterly report out today.
So, so this quarter they had

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group copper equivalent
production of around sort of

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38,000 tonnes.
They reiterated guidance and

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that production result was very
much largely in line with

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expectations.
So that was 27,000 tonnes of

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copper, 21 1/2 thousand tonnes
of zinc.

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So fairly similar to last
quarter.

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We'll just splash up the chart.
You can say what they've done

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this quarter sort of compared
against other quarters

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production and costs and things
like that.

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So they did just shy of 24,000
oz copper equivalent at MATSA,

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which is a a slight increase on
the previous quarter and

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maintain their annualised
processing right there at 3.6

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million tonnes per annum.
And there was an improvement in

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in copper and zinc recoveries,
which saw that copper equivalent

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production go a little bit
higher.

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Why is Mateo down quarter on
quarter?

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Just looking at that chart out
there, I thought that was

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ramping up.
They did have a plan shut down

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there.
Right, Yeah.

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So there was a plan shut down
and then they also had some

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slightly lower head grades for
that quarter as well.

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So they they did 14.3, 1000
tonnes of copper equivalent at

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Matthea as well.
And just at Matsa, they also

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received an environmental
approval for a new tailings

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facility there.
So construction of that is sort

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of scheduled to commence Q4 FI
25.

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So that that's obviously driven
by the 'cause they still said

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they maintained their annual
processing, right, but the grade

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obviously smashed them there.
Yeah, Yeah, that's right.

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So then cost performance was
mixed.

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So MATSA was a lot of these
numbers, I'm speaking here AUS,

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so $1.88 per pound versus $1.54
last quarter.

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They sort of attribute that to
sort of lower by product volumes

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and prices.
But then sort of looking forward

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beyond that sort of those
treatment and refining charges

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component of cost is likely to
decline in the sort of second

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half of the financial year is
sort of benchmark rates reset

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with sort of what's happening in
the market at the minute.

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Is that does the costs there for
copper and zinc mines work the

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same as gold and copper?
A lot of the zinc gets taken off

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the cost like an.
All of the product credit, yeah.

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Is that so that OK?
Yeah.

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So that's not the, that's not
the.

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IT works the same as someone
that's selling a copper con for

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a gold project.
I think so, it's sort of quite

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similar.
Let's run with that.

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And then Mattheo slightly a
slight improvement of the

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previous quarter down to $1.42 a
pound.

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But probably more importantly,
you know, the the net debt has

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reduced again by you know, US
$51 million down to US

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345,000,000.
You know that was, you know,

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largely attributable to, you
know, operating cash from mats

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of US 73 and Mattheo US 65 mil
and they had group CapEx of US

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55.
So you know, they're continuing,

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you know, quarter on quarter to
sort of daily lever this balance

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sheet and you know, they could
be in, you know, net cash pretty

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soon if they continue at this
rate.

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This is actually has to be one
of our favourite waterfall

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charts.
Look at this just sort of

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explaining from the start to the
end of the quarter and then

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providing that extra bit of
detail even on the the the CapEx

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components there.
So no good work on the.

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Waterfall.
I like chucking the dead in.

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I like that.
Yeah, no, it's just you can see

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like where, where things are,
you know, from start to finish

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not rather than just an
aggregated, you know, net debt

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number or net cash number,
whatever it might be.

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Go, Sam.
Fine, go.

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Sam, I do find I.
Told them to do that one, yeah.

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They're quite, really
interesting, like like look at,

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look at the relative
contributions of both Mateo and

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Matsa now.
One of them they paid a lot of

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money for, the other one they
did not pay very much money for

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at all.
Like Even Stevens episode on

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Jerry on Seinfeld.
Yeah, yeah, bit of it.

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I think Mataos turned out to be
a Ripper acquisition.

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I think, you know, like that's
a, you know, in time, you know,

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it requires the elevated cup of
price to sort of backfield the

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what they actually paid for
that.

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Yeah.
And it you know and that is

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reflecting in the in the PNL as
well.

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So they generated USA 121
million of of underlying group

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EBITDA for this quarter.
So just for reference, FY24

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group EBITDA was US 362.
So there's about a, you know,

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1/3 of that, you know, sand fire
currently kept about Aussie 4.8

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billion.
So adding on that net net debt

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US 350 roughly is AV of about
say 5.3 billion.

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If you were to, I know this is
very back of the envelope mass,

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but if you annualise that Q1
EBITDA, it's sort of is trading

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on an AV to FY25 a but I'm
multiple for of about 11 times.

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So it's still a little bit EXE,
but we'll get to it in a minute.

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But you know what else has
happened for for Sapphire during

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sort of past quarter, not a
whole heap.

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I mean they've they updated the
Mattheo resource and reserve

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they put out like a a Portugal
expiration update on this Alva

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Lade joint venture apology for
pronounced that completely

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wrong.
Now I reckon that spot.

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I like it.
But interestingly they were

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added to the ASICS 100 during
the quarter.

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So that was effective from the
23rd of September.

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So they're up 15% since they've
been added to the index.

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But they are year to date.
I think at least last time I

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looked at least sort of 4445%
which it's far you know

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outperformed.
It's sort of other a sixes copy

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peers, not that there's much
anyway, but yeah, no, that's

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pretty much the the update on
sand Farm.

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You look at that, that, that,
yeah, trading mode that you

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mentioned the LA 1111 times
EBITDA, it's pretty, pretty

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full, right.
That's pretty full like you

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would.
I imagine management is going to

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be pretty damn motivated to use
their script while it's got a

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got a bit of a bit of full value
in it as a result of going into

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the index, blah blah blah.
Especially before a couple of

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prices go up if they do.
Yeah, yeah.

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Yeah, Aqua, you got the best of
both sides there.

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Yeah, the the, the so they'll
be, they'll be wanting to do a

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deal.
I'm, I'm almost certain of that.

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The challenge is just like.
Everyone.

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Everyone wants to do a couple of
deals, but, you know, this is

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this is the time when creative
deal doers can come.

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Like, can really.
Yeah, have a big impact.

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You've got, you've got funding
capability, you've got capital

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market support like the, the
deal makers need to get creative

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and, and find out where they can
maybe carve out even just like a

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minority interest in an
established asset, things like

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that, that just, you know, the
other, the rest of the market

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might not really say as as an
option, like do funky deals like

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that and, and, and you'll get
rewarded, especially with a

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script like this.
With something in lot the Kalari

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copper belt make the most sense,
like, you know, getting

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something else because I've
already got obviously same for

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America, like they're obviously
spread over vast across the

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world at the moment and even
coming back into Australia's

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like you know, that's 4
jurisdictions they're operating

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in, but it sounds like pureplay
copper companies have to.

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Yeah, yeah.
I think you don't want to be

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stretched across too many time
zones and I think even heard

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Brendan Harris speak words for
that effect and I called before,

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but yeah, that's right, 11 sale
process is documented at the

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moment.
That's right.

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In their backyard is the port,
those Portuguese assets, JD.

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Nevas Cuvo, yeah, that's the,
that's the one I've sort of got

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my eyes on in, in Portugal
saying that Siberian pyrite belt

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there.
There was sort of talk about Mac

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having a look at it.
So we're not sort of breaking

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ground on that conversation.
The assets owned by the London

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Mining Group.
So I think that is 1, you know,

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they'll have, they'll have run
the ruler over in the past.

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No idea where they're kind of at
with that.

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But yeah, Brendan Harris of all
people will know the, the value

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of his company's script right
now.

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So very keen to see the other
opportunities they're kind of

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looking at.
Dumb question with probably

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smart answers coming.
Are there any copper Atfs?

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Yes.
I'm sure they would be.

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Which ones?
What ticket for one of them is

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wire I think.
Do you think we will say more of

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them in the future if the
thematic gets a bit of momentum

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behind it?
Probably.

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I think you see the way you get
the best multiples is if you're

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the pure black copper listed on
there NYSE all I guess like free

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no one can get multiple like
Freeport.

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It's just amazing.
You know, southern copper's sort

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of similar so there's others
too.

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The.
The ETF on the ASX is ticker Y.

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It's one of those global X ones.
AUM right now is 265 odd million

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Aussie dollars.
But what you'd really want to

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see to conversations we've had
in the past, Maddie is like AUS

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one or a lot of US kind of money
goes and that attracts capital

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from from all over.
But I do agree with what what

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Trev said report being one of
those sort of stand out

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examples.
The pure plays have attracted a

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lot of capital in the past.
The generalists, those big the

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big companies just pull in the
money from the funds that look

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at the first name on the list
when they turn to mining.

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Yeah, interesting.
It'd be interesting to say if we

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say that'll get a bit of bloody
mongrel behind copper.

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Speaking of copper, but not
copper for this mob, Anglo coal

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asset divestment.
Ding Ding Ding for me on this

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one.
Yeah.

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Not technically a shareholder,
but I have exposure.

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Yeah.
So there's, there's been a bit

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of a bit of a straight talk
conjecture about the sale

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process of Anglo's Queensland
coal portfolio, which is, yeah,

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anchored by the Moran Bar and
Governor mines.

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Yeah, I probably just want to
mention we're going to talk

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about Anglo American and Yankel,
which Maddie and I are Ding,

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Ding, Ding respectively on that
one.

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The the crux of the article in
the Fin is that the bidders in

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the in the sale process of of
these assets have very little

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information in relation to the
status of Grosvenor where a fire

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earlier in the year saw that
operation got shut down.

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A bunch of CapEx is going to be
required to remediate and get

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that back online.
It's going to take a long time.

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It couldn't be the worst bloody
time for a fire at a coal mine

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in terms of when this happens in
BHP deal and like.

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Super, super average timing.
Yeah.

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00:11:05,600 --> 00:11:07,560
Yeah.
I'll, I'll read this bit out

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here, it says.
Sources said Anglo's data room

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contains reams of documents on
Grovner's geology and how coal

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can be extracted.
However, it's all theoretical,

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and Anglo has carefully sidestep
making any implicit legal

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guarantees to buyers.
Since it could be years away

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before the mine is again up and
running.

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I think that that revelation in
itself sort of, it's not the end

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of it, like a, you know, a sale
process like this.

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Anglo's a pretty motivated
seller given the circumstances.

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And I think the, the
practicality of, of bidding in a

226
00:11:35,880 --> 00:11:38,520
sale process like this is it's a
pretty simple solution.

227
00:11:38,920 --> 00:11:41,400
You, you just structure
contingent consideration around

228
00:11:41,400 --> 00:11:45,200
the, the, the, the, into your
deal mix that you, you provide

229
00:11:45,200 --> 00:11:46,640
to Angler.
You, you'll have some contingent

230
00:11:46,640 --> 00:11:49,360
consideration in relation to the
time it takes to get governor

231
00:11:49,360 --> 00:11:51,240
back online and what the
ultimate budget is.

232
00:11:51,240 --> 00:11:53,440
And, and then you can have kind
of kind of a scale accordingly.

233
00:11:53,440 --> 00:11:56,120
And everyone wins in those
circumstances.

234
00:11:56,120 --> 00:11:58,800
And you have a alignment on the
seller and the buyer as a result

235
00:11:58,800 --> 00:12:00,800
of that.
Similar, similar to Woodlawn in

236
00:12:00,800 --> 00:12:04,400
a way in terms of first
production is payment.

237
00:12:04,520 --> 00:12:07,360
Yeah, well, that's a.
Deferred consideration, I'm

238
00:12:07,360 --> 00:12:11,000
talking contingent like you.
You tied again, deferred, yeah.

239
00:12:11,240 --> 00:12:13,360
On an outcome happening.
Yeah, contingent on first

240
00:12:13,360 --> 00:12:16,080
production.
Like, yeah, I mean, I would, I

241
00:12:16,080 --> 00:12:19,120
would, you know, I don't have
like a sliding scale and some

242
00:12:19,360 --> 00:12:21,920
the variables on both the time
it takes to get it back online

243
00:12:21,920 --> 00:12:23,880
because that's a big impact on
value.

244
00:12:23,920 --> 00:12:26,120
Yeah, yeah.
And also the amount it costs you

245
00:12:26,120 --> 00:12:28,240
to to get it back online too.
Yeah, yeah.

246
00:12:29,080 --> 00:12:32,600
But yeah, I mean, bankers can
structure stuff around like

247
00:12:32,840 --> 00:12:35,720
things like this all the time.
It's not out of out of the

248
00:12:35,720 --> 00:12:37,240
wheelhouse just from a sale
process.

249
00:12:37,240 --> 00:12:43,960
But you know, I, I, I think I
want to talk about like the the

250
00:12:43,960 --> 00:12:45,720
bidders that are in the mix
here, because not all the

251
00:12:45,720 --> 00:12:47,520
bidders in the mix are, are made
equal.

252
00:12:48,000 --> 00:12:51,240
The bidders remaining according
to a street talk are Yankel

253
00:12:51,600 --> 00:12:53,280
Peabody.
I'm going to group the next

254
00:12:53,280 --> 00:12:55,840
three together because they're
kind of all affiliated and

255
00:12:55,840 --> 00:12:59,960
resources Stanmore and
Indonesia's with Jar Jar family.

256
00:12:59,960 --> 00:13:02,400
Not saying that wrong.
Then there's an Indian

257
00:13:02,400 --> 00:13:06,120
consortium led by Avid Sys Group
and of course Glencore.

258
00:13:06,680 --> 00:13:10,040
So when I group the some of them
together, there's basic 5

259
00:13:10,040 --> 00:13:13,880
independent bidders left, right.
The most motivated to pay top

260
00:13:13,880 --> 00:13:16,560
dollar, I agree with Street Talk
is Yankel.

261
00:13:16,560 --> 00:13:19,840
They've got a whopping $2
billion in cash, no debt.

262
00:13:20,000 --> 00:13:23,000
They've signalled that they want
to bid on these assets and the

263
00:13:23,000 --> 00:13:25,960
parent company of Yankel be
supportive of that.

264
00:13:25,960 --> 00:13:28,520
They even turned off their
dividend to be able to bid as

265
00:13:28,520 --> 00:13:30,520
much as possible in this sale
process.

266
00:13:30,840 --> 00:13:33,160
But there's just one catch Ferb
approval.

267
00:13:33,600 --> 00:13:36,520
Bingo.
Recently, like we've seen Ferb

268
00:13:36,520 --> 00:13:39,800
just just dragged their feet
with approvals on, on minerals

269
00:13:39,800 --> 00:13:43,200
projects that are, you know,
sign boasted to be sold to, to

270
00:13:43,200 --> 00:13:45,240
majority kind of Chinese
entities.

271
00:13:45,560 --> 00:13:48,520
And, and what you know, what
they, what Ferb has done in

272
00:13:48,520 --> 00:13:50,760
these situations is they just
keep, they simply keep extending

273
00:13:50,760 --> 00:13:52,960
by a month, they extend by
another month, they extend by

274
00:13:52,960 --> 00:13:54,880
another month.
They don't definitively say we

275
00:13:54,880 --> 00:13:58,280
don't approve, but it's just the
death by 1000 cuts off extending

276
00:13:58,280 --> 00:14:00,200
another month.
It's it's in effect what they've

277
00:14:00,240 --> 00:14:03,720
they've done in the past when
you know, it's stalemate and it

278
00:14:03,720 --> 00:14:06,160
looks like they've done that
again in relation to CZR

279
00:14:06,160 --> 00:14:08,280
resources.
It's been 10 months now and no,

280
00:14:08,680 --> 00:14:12,560
no determination from Ferb yet,
although other deals get Ferb

281
00:14:12,560 --> 00:14:14,720
determination pretty quickly
when there's no Chinese entities

282
00:14:14,720 --> 00:14:16,960
involved.
And I think it's that timing

283
00:14:16,960 --> 00:14:21,520
uncertainty which kills deals.
And personally, I think it'd be

284
00:14:21,560 --> 00:14:25,760
a pretty brave thing for an
advisor to do to, to recommend

285
00:14:26,520 --> 00:14:30,400
Angler actually engage with the
angle as as the preferred bidder

286
00:14:30,680 --> 00:14:33,960
in a sale process when without
having certain clarity on how

287
00:14:33,960 --> 00:14:36,520
fair will determine the
acquisition and how long it will

288
00:14:36,520 --> 00:14:38,640
actually take to make that
determination.

289
00:14:38,640 --> 00:14:41,800
So absent that certainty, I
think for now we've got to put a

290
00:14:41,800 --> 00:14:43,080
line through.
Yeah.

291
00:14:43,080 --> 00:14:45,280
And Cole and look at the rest of
the field there.

292
00:14:45,600 --> 00:14:53,120
Is can can you get any clarity
on Ferb prior to going with you

293
00:14:53,120 --> 00:14:54,760
and Carl?
I don't know.

294
00:14:54,760 --> 00:14:58,040
I think you you engage with Ferb
early and you can get some kind

295
00:14:58,040 --> 00:15:01,120
of in principle guidance.
But I think the reality of it,

296
00:15:02,240 --> 00:15:04,600
yeah, I'm not an expert, but I
think the reality of it is you

297
00:15:04,600 --> 00:15:06,920
don't actually get any
determination and it's all

298
00:15:06,920 --> 00:15:08,680
subject to change and blah,
blah, blah, blah, blah.

299
00:15:08,680 --> 00:15:13,720
So, yeah, as a result, I, I just
kind of think, you know, unless,

300
00:15:13,720 --> 00:15:16,480
unless you had certainty on what
Fed would do, you can't, you

301
00:15:16,480 --> 00:15:18,680
can't, like you can't advise
that.

302
00:15:18,680 --> 00:15:20,120
Yeah, they should be your
preferred bidder, even if

303
00:15:20,120 --> 00:15:22,600
they're willing to pay a billion
dollars more than the next

304
00:15:22,600 --> 00:15:23,920
bidder.
Yeah, yeah.

305
00:15:23,920 --> 00:15:27,560
So I've heard that on the street
a bit that that is the obstacle.

306
00:15:27,560 --> 00:15:30,080
That is the thing with Gann
Carl, after it got hammered, it

307
00:15:30,080 --> 00:15:34,080
has has recovered a bit since
then, but it's like, yeah, that

308
00:15:34,120 --> 00:15:36,560
overhang and like because the
cash hasn't gone anywhere.

309
00:15:36,560 --> 00:15:38,480
Cash hasn't gone and there's
other, there's other assets for

310
00:15:38,480 --> 00:15:42,400
sale like you got olive Downs,
which is, yeah, like they could

311
00:15:42,400 --> 00:15:44,880
bid on as well.
But like for all intents and

312
00:15:44,880 --> 00:15:46,520
purposes, Kestrel now too, by
the way.

313
00:15:46,920 --> 00:15:53,480
So yeah, then then I want to
talk about Glencore, right?

314
00:15:53,480 --> 00:15:57,560
They stand out in the rest of
the field because I do hear that

315
00:15:57,560 --> 00:15:59,840
they're pretty motivated to pick
out these mines, but they'll be

316
00:15:59,840 --> 00:16:02,040
disciplined on on price.
They're not.

317
00:16:02,320 --> 00:16:04,040
They're Glencore after all.
They're, you know, they're going

318
00:16:04,040 --> 00:16:06,880
to be pretty sensible.
Word on the decline is that they

319
00:16:07,720 --> 00:16:10,800
won't pay any more than US $3
billion for, for the mines

320
00:16:10,800 --> 00:16:13,560
given, you know, Glencoe's own
trading multiple isn't sort of

321
00:16:13,840 --> 00:16:16,000
reflecting their, their
intrinsic valuation.

322
00:16:16,000 --> 00:16:18,840
So, you know, they, they or
their shareholders believe that,

323
00:16:19,200 --> 00:16:21,040
you know, it might be more
creative for them to simply just

324
00:16:21,080 --> 00:16:23,960
buy back their own stock instead
of actually spending 3 billion

325
00:16:23,960 --> 00:16:26,440
bucks getting these.
These new mines would otherwise

326
00:16:26,440 --> 00:16:27,720
be a higher multiple if they
paid more.

327
00:16:28,120 --> 00:16:30,400
Because there's there's
ordinarily back to the stage

328
00:16:31,040 --> 00:16:34,160
they're trading a bit above
before when lot Tribeca went

329
00:16:34,440 --> 00:16:37,000
activist on them.
Are they that a bit of a RIP

330
00:16:37,000 --> 00:16:39,600
after that, but they're, you
know, back down at 4-4 bucks

331
00:16:39,600 --> 00:16:41,800
now.
Yeah, yeah, yeah.

332
00:16:42,280 --> 00:16:44,720
And Metcall prices have come
down, they've get on the balance

333
00:16:44,720 --> 00:16:47,320
sheet to acquire Oak Valley,
which in time I think will be a

334
00:16:47,320 --> 00:16:48,440
roofing acquisition.
That one.

335
00:16:49,400 --> 00:16:52,520
The, the, the rest of the field
I don't really have a tonne of

336
00:16:52,880 --> 00:16:56,600
insight on other than to say the
acquisition price is, is a

337
00:16:56,600 --> 00:16:59,440
pretty big bite size relative
to, you know, the market caps of

338
00:16:59,440 --> 00:17:01,400
those other kind of listed
entities in the field.

339
00:17:02,280 --> 00:17:05,119
So like, you know, funding an
acquisition is going to be a

340
00:17:05,119 --> 00:17:08,480
tough task without a lot of debt
or, or using Anglo's balance

341
00:17:08,480 --> 00:17:11,079
sheet or bringing in a partner
into the mix to sort of, you

342
00:17:11,079 --> 00:17:12,440
know, have some sort of
consortium funding.

343
00:17:12,440 --> 00:17:14,560
All of those are possible
outcomes by the way.

344
00:17:14,560 --> 00:17:18,119
But you know, I think for now
there's one more thing in this

345
00:17:18,119 --> 00:17:20,119
IFR article I wanted to to bring
up.

346
00:17:21,000 --> 00:17:23,839
Firstly, the, the, the opening
sentence in the article is it's

347
00:17:23,839 --> 00:17:27,160
two weeks until Anglo American
collects binding offers for its

348
00:17:27,160 --> 00:17:29,480
Queensland called assets.
And then the second last

349
00:17:29,480 --> 00:17:32,560
paragraph says the auction was a
direct result of BH PS

350
00:17:32,880 --> 00:17:36,280
unsuccessful hostile takeover
approaches earlier this year.

351
00:17:36,280 --> 00:17:39,360
Of note, British takeover laws
permit the big Australian to hit

352
00:17:39,360 --> 00:17:41,960
back with a fresh bid at the end
of November.

353
00:17:42,680 --> 00:17:44,320
So just just contemplate this
for a moment.

354
00:17:44,560 --> 00:17:48,760
Final bids for this sale process
are due in two weeks and BHP is

355
00:17:48,760 --> 00:17:51,680
allowed to bid for Anglo again
in four weeks.

356
00:17:52,560 --> 00:17:56,320
Combine that with the FTS big
scoop 2 weeks ago that Mike

357
00:17:56,320 --> 00:17:59,200
Henry and his Chief Development
Officer was spotted in South

358
00:17:59,200 --> 00:18:02,680
Africa and even met with Anglo's
second largest shareholder, the

359
00:18:02,680 --> 00:18:03,840
South African state owned
manager.

360
00:18:03,840 --> 00:18:08,520
PIC like as you can see here.
Call me stupid, but if I if I

361
00:18:08,520 --> 00:18:11,120
was running Anglo and I and I
wanted to be as sensible as

362
00:18:11,120 --> 00:18:13,720
possible and value creation or
optimization.

363
00:18:14,480 --> 00:18:17,080
Like are you really in a rush to
wrap up the sale process on the

364
00:18:17,080 --> 00:18:20,200
Queensland coal assets before
BHP is statutorily allowed to

365
00:18:20,640 --> 00:18:22,760
bid again for the entire
company?

366
00:18:23,720 --> 00:18:26,520
Given the fact that they appear
to be, you know, getting ready

367
00:18:26,520 --> 00:18:28,400
to make another bid?
It looks looks like that's what

368
00:18:28,400 --> 00:18:29,720
they're doing by going South
Africa to me.

369
00:18:30,400 --> 00:18:34,960
Remember, BHP wanted Angler to
keep the coal assets where, you

370
00:18:34,960 --> 00:18:36,400
know, they have pretty
attractive synergies.

371
00:18:36,400 --> 00:18:39,520
BHP, they've got a bunch of rail
and port infrastructure and they

372
00:18:39,520 --> 00:18:43,240
can, you know, certainly kind of
achieve some like very real

373
00:18:43,240 --> 00:18:46,760
synergies via acquiring Anglos
Queensland call assets.

374
00:18:46,760 --> 00:18:50,120
However, BHP at every
opportunity has told the market

375
00:18:50,120 --> 00:18:52,120
they're not participating in the
sale process, they're not going

376
00:18:52,120 --> 00:18:54,920
to bid for these call assets and
they're not named to sort of,

377
00:18:55,000 --> 00:18:57,040
you know, still being in the
data room or anything like that.

378
00:18:57,040 --> 00:19:01,280
But what if the sale process
drags out for a few extra weeks

379
00:19:01,480 --> 00:19:05,360
to the point where BHP is
allowed to bid for Anglo again?

380
00:19:05,520 --> 00:19:10,360
So that's November 29th then do
you really sell those call

381
00:19:10,360 --> 00:19:13,600
assets to any of those, you
know, parties in the in the list

382
00:19:14,320 --> 00:19:20,280
if you get an NB I/O from BHP on
November 29th and November 30th

383
00:19:21,400 --> 00:19:24,440
and it's a fair value and one of
the conditions is you keep the

384
00:19:24,440 --> 00:19:26,000
call because they're going to
get synergies from.

385
00:19:27,280 --> 00:19:31,480
Are they trying to do this to
for whatever reason to get BHP

386
00:19:31,480 --> 00:19:34,840
away?
I think there's a well, a lot of

387
00:19:34,840 --> 00:19:38,400
what Anglo strategy has been,
has actually been like all of

388
00:19:38,400 --> 00:19:40,880
the things that BHP wanted them
to do other than sell the coal.

389
00:19:41,120 --> 00:19:43,840
So they're, you know, they are,
they are, you know, divesting

390
00:19:43,840 --> 00:19:45,880
the platinum.
They're looking for a strategic

391
00:19:46,080 --> 00:19:49,320
option for the diamonds that
like, you know, the halted CapEx

392
00:19:49,320 --> 00:19:54,240
on wood Smith, which you know,
like all of the other parts, all

393
00:19:54,240 --> 00:19:56,440
the other things that you know,
Anglo is doing is kind of in

394
00:19:56,440 --> 00:19:59,720
line with the things that BHP
wanted them to do conditionally

395
00:19:59,720 --> 00:20:02,880
on getting a deal over the line.
I just think like.

396
00:20:03,480 --> 00:20:06,680
Yeah, I think BHP is going to
pay more for Anglo if those coal

397
00:20:06,680 --> 00:20:09,400
assets are still in the
portfolio versus divested.

398
00:20:09,440 --> 00:20:13,200
I don't think you're maximising
value if your ultimate end game

399
00:20:13,200 --> 00:20:18,080
is selling to BHP by divesting
them, you know, after a fire at

400
00:20:18,280 --> 00:20:19,960
Grosvenor.
Like I just think you keep in

401
00:20:19,960 --> 00:20:22,320
the BHP will pay more.
But how much?

402
00:20:22,320 --> 00:20:25,560
Why do you put in towards the
coal assets for BHP in contrast

403
00:20:25,560 --> 00:20:30,000
to the copper of Anglo?
It's a it's a, it's 100% like

404
00:20:30,480 --> 00:20:33,120
like secondary.
This is, it's about like, you

405
00:20:33,120 --> 00:20:36,080
know, big juicy long life coal
assets, but sorry, cop assets.

406
00:20:36,200 --> 00:20:39,960
But don't discount the
phenomenal cash flow generation

407
00:20:39,960 --> 00:20:43,720
that is these like, you know,
unbelievable coal mines as well.

408
00:20:43,720 --> 00:20:47,400
And yeah, the like BHP is a
funny one because everyone talks

409
00:20:47,400 --> 00:20:50,880
about our BHP once, you know,
cut like cut more copper in its

410
00:20:50,880 --> 00:20:53,000
portfolio, blah, blah, blah.
Yeah, I know.

411
00:20:53,000 --> 00:20:54,920
And the Met call are going to be
it's like cash printers for a

412
00:20:54,920 --> 00:20:56,920
long time.
Yeah, yeah.

413
00:20:57,320 --> 00:21:01,400
I guess taking it as a set back,
you know, how strongly do you

414
00:21:01,400 --> 00:21:05,840
feel or rather how likely do you
think it is that BHP will on the

415
00:21:05,840 --> 00:21:11,200
29th or or 30th of November make
another, you know have another

416
00:21:11,200 --> 00:21:17,520
crack at Anglo And but at a
level that does say that that

417
00:21:17,520 --> 00:21:21,080
better value sort of attributed
to the coal versus it being

418
00:21:21,080 --> 00:21:22,920
divested to sort of someone
else.

419
00:21:23,440 --> 00:21:25,920
I'm not sure I think like if you
read the FT article, they try

420
00:21:25,920 --> 00:21:30,360
and suggest that sources close
to BHP say that, you know, BHP

421
00:21:30,360 --> 00:21:33,560
won't actually make another move
until like Anglo has further

422
00:21:33,560 --> 00:21:35,440
simplified its portfolio.
So it may be divested.

423
00:21:35,440 --> 00:21:38,680
It's it's, it's platinum
business.

424
00:21:39,200 --> 00:21:43,000
BHP took issue with with Kumba
as well, which is the the iron

425
00:21:43,000 --> 00:21:46,480
ore business there too.
So like, there are parts that

426
00:21:46,480 --> 00:21:48,680
are attracted to BHP, parts that
aren't based on what Anglo is

427
00:21:48,680 --> 00:21:51,120
doing.
But yeah, it looks like they're

428
00:21:51,120 --> 00:21:52,680
coming back.
You don't go to you don't fly to

429
00:21:52,680 --> 00:21:56,280
South Africa with your chief
development officer, meet with

430
00:21:56,400 --> 00:21:59,400
government officials and you
know, the the state money

431
00:21:59,400 --> 00:22:04,760
manager unless you're pretty
motivated to find a sensible

432
00:22:04,760 --> 00:22:06,240
path forward and do it the right
way this time.

433
00:22:06,360 --> 00:22:08,960
But but wouldn't they?
They could literally put forward

434
00:22:08,960 --> 00:22:11,520
all the same previous
conditions, just on a better

435
00:22:11,760 --> 00:22:14,800
ratio, couldn't they?
For for an improved.

436
00:22:14,800 --> 00:22:16,320
Bid yeah.
And I think it's like it's a

437
00:22:16,320 --> 00:22:17,920
combination of both things
because they're going to have to

438
00:22:17,920 --> 00:22:20,480
convince Angler shareholders as
well.

439
00:22:20,480 --> 00:22:22,200
And part of that's like
definitely valued.

440
00:22:22,200 --> 00:22:25,280
The other thing too is like
Angler shareholders might get

441
00:22:25,280 --> 00:22:29,120
pretty disgruntled with the lack
of value uplift from a share

442
00:22:29,120 --> 00:22:31,920
price perspective since their
kind of gold a loan strategy.

443
00:22:31,920 --> 00:22:34,880
And it's like for Duncan, we've
given you like six months.

444
00:22:34,880 --> 00:22:37,160
Like how long do we have to give
you before you like create some

445
00:22:37,160 --> 00:22:39,360
value here?
Like we're net down since BH,

446
00:22:39,360 --> 00:22:42,320
since before BHP bid like bid
like what's going on?

447
00:22:43,080 --> 00:22:44,600
Copper prices up like.
Yeah.

448
00:22:45,520 --> 00:22:47,800
So.
I sort of agree with with most

449
00:22:47,800 --> 00:22:50,720
of what you said there Trevor,
think it it all kind of makes

450
00:22:51,000 --> 00:22:53,040
makes sense.
The one thing I just sort of add

451
00:22:53,360 --> 00:22:57,280
as kind of info for for money
miners is Anglo sort of they're

452
00:22:57,280 --> 00:23:01,200
down 10% on you know looking
back the last six months now

453
00:23:01,200 --> 00:23:04,520
kept at US 33 billion.
Remember that in includes

454
00:23:04,680 --> 00:23:07,840
everything the stakes and the
other businesses and all £33

455
00:23:07,840 --> 00:23:13,400
billion.
So that is 65 billion Aussie and

456
00:23:13,560 --> 00:23:16,040
if you're taking the US 3
billion value of the coal

457
00:23:16,040 --> 00:23:20,480
assets, 4 1/2 billion sort of
puts into context the the stake

458
00:23:20,480 --> 00:23:24,360
of what the market's valuing
that at I guess post the the

459
00:23:24,360 --> 00:23:27,520
growth and fire and whatnot, but
just interesting to kind of

460
00:23:27,520 --> 00:23:31,120
think about.
Yeah, it's, I'd assume

461
00:23:32,040 --> 00:23:35,440
Australia's coal expert for this
sale process, Adam Batista's

462
00:23:35,440 --> 00:23:40,360
being consulted so far regarding
this sales process.

463
00:23:41,320 --> 00:23:44,040
Is there anything about CR
insurance being engaged?

464
00:23:44,160 --> 00:23:45,720
I'd assume.
I'd assume so.

465
00:23:45,720 --> 00:23:47,840
I think it's quite a sensible
thing to do.

466
00:23:48,640 --> 00:23:53,560
Yeah, Yeah.
I mean, yeah, like I imagine any

467
00:23:53,560 --> 00:23:56,360
potential bidder in this sale
process is going to want to

468
00:23:56,360 --> 00:23:58,520
ensure that they have adequate
coverage for business

469
00:23:58,520 --> 00:24:01,680
interruption on any of these
mines because we've already seen

470
00:24:01,840 --> 00:24:04,480
how bad things can be when there
is business interruption at

471
00:24:04,480 --> 00:24:04,960
Grosvenor.
Yeah.

472
00:24:05,280 --> 00:24:07,960
Yeah, and like, because like,
and that probably goes to the

473
00:24:07,960 --> 00:24:11,760
point, you know, why Adam loves
coal insurance so much, breaking

474
00:24:11,760 --> 00:24:13,240
those policies.
It's a big coal man.

475
00:24:13,240 --> 00:24:15,760
Fucking hard work.
He goes for runs with a coal hat

476
00:24:15,800 --> 00:24:17,360
he loves.
It he loves it.

477
00:24:17,360 --> 00:24:21,160
They, they like CRE, operate
like a Millennium or a citadel

478
00:24:21,320 --> 00:24:22,600
in a way.
They're in pods.

479
00:24:22,840 --> 00:24:24,760
Yeah, well, Adam's your coal
pod.

480
00:24:25,200 --> 00:24:28,920
Dave Harrison's your bloody
construction engineer and

481
00:24:28,920 --> 00:24:30,840
manufacturer and probably
renewables.

482
00:24:30,840 --> 00:24:32,080
So that's his pod.
Yeah.

483
00:24:32,600 --> 00:24:35,360
Steve Tarr.
Hardware pod.

484
00:24:35,360 --> 00:24:40,720
Australian, African, rest of the
world Hard Rock mining insurance

485
00:24:40,720 --> 00:24:42,320
pod.
Yeah, right.

486
00:24:42,360 --> 00:24:46,680
Yeah, you know CRE is the first
3 letters in creative, credible

487
00:24:47,280 --> 00:24:50,040
and cremate 'cause that's what
they do to the insurance

488
00:24:50,040 --> 00:24:51,960
competition.
Create them.

489
00:24:52,240 --> 00:24:54,320
Not that good.
We call 5 lbs.

490
00:24:54,360 --> 00:24:55,760
We.
Call 5.

491
00:24:56,120 --> 00:25:01,880
Guys CRE well right?
Ally JC Black cat, yeah it's

492
00:25:01,880 --> 00:25:07,080
raised a good chunk of dosh. 80
bucks at $0.52 and considering

493
00:25:07,080 --> 00:25:11,320
what they were trading that pre
gold being awesome, she's a

494
00:25:11,320 --> 00:25:13,600
bloody good chunky rise at a
pretty good price.

495
00:25:13,720 --> 00:25:17,120
Yeah, no, like you said Maddie,
you know, huge raise $80

496
00:25:17,120 --> 00:25:21,440
millionbucks.52.
So why have they you know raised

497
00:25:21,440 --> 00:25:25,400
all this money for.
So I'll just flash up the the

498
00:25:25,400 --> 00:25:29,520
sources and use of funds here.
So in a nutshell, they want to

499
00:25:29,520 --> 00:25:33,840
accelerate the construction,
acquisition or refurbishment of

500
00:25:34,080 --> 00:25:38,320
an enlarged processing facility
at one of their projects, Cal

501
00:25:38,320 --> 00:25:41,920
East and sort of bringing that
forward by 12 months and they

502
00:25:41,920 --> 00:25:43,400
want and.
They can only do that because

503
00:25:43,480 --> 00:25:45,240
MMS ripped The Dirty outside
quick.

504
00:25:45,240 --> 00:25:46,920
At Murray, Yeah, that's right.
Exactly.

505
00:25:47,400 --> 00:25:50,280
And so they want to increase,
they initially designed that at

506
00:25:50,360 --> 00:25:53,360
point 8 million tonnes per and
they want to increase that to,

507
00:25:53,400 --> 00:25:56,560
you know, over 1.2.
So as part of this race, they've

508
00:25:56,560 --> 00:26:00,680
set aside $35 million as they've
labelled it as the equity

509
00:26:00,680 --> 00:26:03,760
contribution of a calise plant
installation acquisition.

510
00:26:04,400 --> 00:26:07,640
It sounds like they're currently
own some major mill components.

511
00:26:07,920 --> 00:26:11,840
So we'll revisit that in a bit
and they're sort of currently

512
00:26:11,840 --> 00:26:15,480
envisaging mining operations
with this sort of acceleration

513
00:26:15,480 --> 00:26:18,400
in mind.
You know commencing mid 2026,

514
00:26:19,000 --> 00:26:22,440
there's another 20 million that
they've attributed to the sort

515
00:26:22,440 --> 00:26:25,200
of the remaining Paulson's
restart costs.

516
00:26:25,280 --> 00:26:28,920
They want to drill $10 million
across sort of all their

517
00:26:29,160 --> 00:26:32,800
operations and then there's
around $33 million left in sort

518
00:26:32,800 --> 00:26:35,360
of working capital and and
balance sheet sort of

519
00:26:35,360 --> 00:26:38,920
restructuring.
So it's sort of by doing this,

520
00:26:38,920 --> 00:26:41,320
Rose, it sort of removes the
need for their, you know,

521
00:26:41,320 --> 00:26:44,840
previously play and secured debt
with Nabari and the associated

522
00:26:44,840 --> 00:26:47,760
warrants with that.
And it also enables them to

523
00:26:47,760 --> 00:26:52,840
repay their existing convertible
notes with Sunday, which are

524
00:26:52,840 --> 00:26:56,400
worth just shy of $10 million of
principal and interest.

525
00:26:56,800 --> 00:27:00,200
And they're apparently permitted
to, you know, make an early

526
00:27:00,200 --> 00:27:03,000
repayment without penalty.
I think this is like the

527
00:27:03,000 --> 00:27:05,800
branding in the gold sector at
the moment, debt free and

528
00:27:05,800 --> 00:27:07,120
unhedged.
Oh no.

529
00:27:07,160 --> 00:27:09,760
They're the two big words.
Right, like the balance sheet

530
00:27:10,120 --> 00:27:13,680
like not much fragility in it
like that's I think that's.

531
00:27:13,680 --> 00:27:15,560
Why balance sheet strength?
That's what the money's looking

532
00:27:15,560 --> 00:27:17,960
for at the moment.
No, very much so.

533
00:27:18,000 --> 00:27:22,920
And so by the time you wash all
of that, you know, through what

534
00:27:22,920 --> 00:27:25,160
does this pro forma cash kind of
look like now?

535
00:27:25,160 --> 00:27:30,080
So that $18 million at at 30
September, if you had the gross

536
00:27:30,080 --> 00:27:34,800
proceeds of the cap raise of say
$80 million, take away the 10

537
00:27:34,800 --> 00:27:38,680
million that they're intending
to repay to Sunday for those

538
00:27:38,680 --> 00:27:42,640
convertible notes, that leaves
around $88 million in, in cash

539
00:27:42,640 --> 00:27:44,480
in the bank.
This is obviously before capital

540
00:27:44,480 --> 00:27:45,840
raising costs and things like
that.

541
00:27:46,120 --> 00:27:48,560
There's no more debt, no more
convertible notes.

542
00:27:48,840 --> 00:27:51,080
And going forward, like what are
they actually planning to do?

543
00:27:51,080 --> 00:27:54,640
There's there's still mining and
producing it at Myri and

544
00:27:54,640 --> 00:27:59,200
boundary at at Cal East.
They're expecting first gold at

545
00:27:59,200 --> 00:28:02,440
Paulson's later this year.
They want to start doing more

546
00:28:02,440 --> 00:28:05,880
drilling at Calise to help, you
know, sort of backfill this, you

547
00:28:05,880 --> 00:28:08,600
know, expanded processing
capacity.

548
00:28:08,600 --> 00:28:12,640
They're they're looking at sort
of having and also drilling and

549
00:28:12,640 --> 00:28:15,280
studies at one of the other
projects, Coyote to accelerate,

550
00:28:15,560 --> 00:28:18,400
accelerate its restart by
another one or two years.

551
00:28:18,680 --> 00:28:21,440
That's a tonne of my one.
Yeah, yeah, that's the one.

552
00:28:21,440 --> 00:28:24,560
And so you know in the next year
they want to be producing around

553
00:28:24,560 --> 00:28:28,000
100,000 ounces pranum, so I
guess.

554
00:28:28,320 --> 00:28:30,480
Between the two.
Between Paulson, Kelly.

555
00:28:30,560 --> 00:28:33,440
So that's right, yeah.
It's funny, I know remember like

556
00:28:33,440 --> 00:28:36,200
I remember we talked about black
cat in the early money of mine

557
00:28:36,200 --> 00:28:39,960
days, such different gold price.
But like talking about, you

558
00:28:39,960 --> 00:28:42,760
know, very like very, I know
it's a small part of the mine

559
00:28:42,760 --> 00:28:47,720
plan, but like, you know, the
riskiness of the Gabrovane areas

560
00:28:47,720 --> 00:28:51,040
and everything, but it's like
when it's freaking unhedged and

561
00:28:51,040 --> 00:28:54,560
selling it over 4000 bucks an
ounce, Holy shit, there's a lot

562
00:28:54,560 --> 00:28:58,320
of wiggle room now.
And like stringers in dry, like

563
00:28:58,600 --> 00:29:01,200
people talk about all the
reserves and all that sort of

564
00:29:01,200 --> 00:29:03,000
stuff.
Like places like Paulsons,

565
00:29:03,360 --> 00:29:07,560
They're just there's, you know,
potential stringers everywhere

566
00:29:07,560 --> 00:29:11,360
you could go and Chuck a jumbo
drive in like you there's so

567
00:29:11,360 --> 00:29:13,920
it's so forgiving and it's like
you can't put all that shit in

568
00:29:13,920 --> 00:29:15,640
reserves.
You like your mind.

569
00:29:15,640 --> 00:29:18,880
It's sort of reactively and as
you go.

570
00:29:18,880 --> 00:29:22,360
And it's just the landscape has
changed so much since the start

571
00:29:22,360 --> 00:29:26,800
of this year for places like
this with a freaking mill and a

572
00:29:26,960 --> 00:29:29,680
existing brownfields operation.
So.

573
00:29:29,960 --> 00:29:32,880
And that's why you'd say it all
in the friggin share prices of

574
00:29:32,880 --> 00:29:36,120
these companies.
Yeah, it's yeah, yeah.

575
00:29:36,200 --> 00:29:37,640
It's go gold.
Yeah.

576
00:29:37,640 --> 00:29:40,760
And, and even just, you know,
getting rid of the debt from

577
00:29:40,760 --> 00:29:44,840
the, from the balance sheet.
Like I, I always feel really,

578
00:29:45,200 --> 00:29:49,240
really just nervous when you've
got a like a marginal producer

579
00:29:49,240 --> 00:29:52,440
that has sort of like even a
modest debt quantum as they're

580
00:29:52,440 --> 00:29:55,680
going through what is a, you
know, a tricky phase of ramping

581
00:29:55,680 --> 00:29:57,040
up.
And, you know, a lot of

582
00:29:57,040 --> 00:30:00,080
unexpected things come your way
having no debt.

583
00:30:00,480 --> 00:30:03,360
Like I think in the long run,
you know, is the right risk

584
00:30:03,360 --> 00:30:06,120
adjusted thing thing to do
because, yeah, you know, you

585
00:30:06,120 --> 00:30:08,440
don't have to then, you know,
pay out your debt by raising

586
00:30:08,440 --> 00:30:10,200
your equity.
If you, if you encounter one of

587
00:30:10,200 --> 00:30:14,320
those hiccups, you kind of
you've got the yeah, the, the,

588
00:30:14,320 --> 00:30:17,760
the equity only kind of balance
sheet, which makes me more

589
00:30:17,760 --> 00:30:19,040
comfortable.
And yeah, and you're so

590
00:30:19,040 --> 00:30:21,760
protected against if the gold
price goes down.

591
00:30:22,760 --> 00:30:25,920
Yeah, yeah, yeah, yeah.
You'll still be operating at a

592
00:30:25,920 --> 00:30:27,840
loss if the gold price went
down, and then, you know, I

593
00:30:28,080 --> 00:30:29,680
don't have to pay debt as well.
Exactly.

594
00:30:29,680 --> 00:30:31,040
Yeah, exactly.
You don't copy it both ways.

595
00:30:31,080 --> 00:30:33,360
Yeah, yeah, yeah.
So, yeah, just on on those

596
00:30:33,360 --> 00:30:36,200
points really about that sort of
switch from, you know, having a

597
00:30:36,320 --> 00:30:39,840
debt component and you know sort
of and other or wrap the

598
00:30:39,840 --> 00:30:43,000
convertible notes in there too,
you know a more equity funded

599
00:30:43,000 --> 00:30:45,160
strategy.
I mean, so they, they actually

600
00:30:45,160 --> 00:30:48,000
entered into a credit approved
term shape with Nabari on the on

601
00:30:48,000 --> 00:30:51,560
the 5th of August for US 20 and
a half million dollars, three

602
00:30:51,560 --> 00:30:54,920
years sort of senior secured
debt facility had an interest

603
00:30:54,920 --> 00:31:00,120
rate essentially of a, a base
plus a 8.75% margin and, and a

604
00:31:00,120 --> 00:31:03,840
bunch of warrants as well.
That facility was actually like

605
00:31:03,840 --> 00:31:06,400
all the docks and everything
like that was due to close this

606
00:31:06,400 --> 00:31:08,320
month's.
But you know, like we said,

607
00:31:08,320 --> 00:31:12,480
what's changed since since then?
Higher share price.

608
00:31:12,480 --> 00:31:15,200
I mean, look at the spark chart,
you know, early August, the

609
00:31:15,200 --> 00:31:18,200
black, it was trading in the
early 30s and since then, as you

610
00:31:18,200 --> 00:31:20,680
know, practically doubled in a
few months.

611
00:31:20,680 --> 00:31:22,720
It's currently trading in the
mid 50s.

612
00:31:23,040 --> 00:31:27,080
Aussie gold prices going up 10%
in that time as well.

613
00:31:27,360 --> 00:31:30,560
And so they've obviously gone
through some sort of assessment

614
00:31:30,560 --> 00:31:34,080
process and gone OK, what's the
cost of equity?

615
00:31:34,280 --> 00:31:35,880
OK.
I mean, you know, dilution

616
00:31:36,800 --> 00:31:42,720
versus debt and you know and the
much you know higher share

617
00:31:42,720 --> 00:31:45,840
price, gold price, all the rest
of it and they've obviously gone

618
00:31:45,840 --> 00:31:47,560
well.
No, let's take advantage of the

619
00:31:47,680 --> 00:31:50,600
the current environment and and
equity fund.

620
00:31:50,720 --> 00:31:52,920
Well, it's good to even after
like what, a couple of months

621
00:31:52,920 --> 00:31:56,400
later you I'm sure there's a bit
bit of work that goes into that,

622
00:31:56,400 --> 00:31:59,160
but acknowledging like right,
even though we've put all in the

623
00:31:59,160 --> 00:32:02,320
work, share price is good.
Let's just fucking clear it now.

624
00:32:02,640 --> 00:32:06,080
So that's that's a good move.
And so as a, as a reminder for

625
00:32:06,080 --> 00:32:10,280
the money miners, so that the
Cal E feasibility study update

626
00:32:10,560 --> 00:32:15,000
which bucket released early this
year shows around a 50,000 oz

627
00:32:15,520 --> 00:32:18,840
per annum production profile
over an initial mine life of

628
00:32:18,880 --> 00:32:23,200
around 7 years at all a
sustaining of around 1700 bucks

629
00:32:23,200 --> 00:32:26,920
an ounce for pre production
capital of 98,000,000.

630
00:32:27,120 --> 00:32:30,720
There's also an additional 123
million of of future development

631
00:32:30,720 --> 00:32:33,160
capital.
I'm not sure at what point in

632
00:32:33,160 --> 00:32:36,240
the the mine life this occurs,
if it's sort of spread out of a.

633
00:32:36,360 --> 00:32:39,880
Couple of that.
But either way, Calise will

634
00:32:39,880 --> 00:32:43,080
still need some more funding to
get completely up and away.

635
00:32:43,080 --> 00:32:46,720
But today's raise, you know, the
35,000,000 that they've set

636
00:32:46,720 --> 00:32:50,720
aside for the meal side of
things is certainly a good

637
00:32:50,720 --> 00:32:53,640
start.
And you know, future cash flow

638
00:32:53,640 --> 00:32:56,200
from Paulsen's and, and the
current operations at Murray

639
00:32:56,880 --> 00:33:00,280
could help contribute to, to at
least some of that balance of

640
00:33:00,280 --> 00:33:02,360
the remaining, you know, funding
pace too.

641
00:33:03,480 --> 00:33:06,600
I did actually notice in the
Calais study update they they

642
00:33:06,600 --> 00:33:12,160
noted that all the firefight
personnel are are likely to be

643
00:33:12,160 --> 00:33:15,480
accommodated in an existing
mining camp located at Mount

644
00:33:15,480 --> 00:33:20,520
Munger Pastoral Station, 15 KS
of one of their deposits.

645
00:33:20,520 --> 00:33:22,480
Majestic.
Don't you don't want to drive

646
00:33:22,480 --> 00:33:24,560
that far each day, do you JC?
No.

647
00:33:24,560 --> 00:33:26,920
I mean, do you think they've
considered just getting a

648
00:33:27,120 --> 00:33:28,840
grounded camp right there on
site?

649
00:33:28,840 --> 00:33:30,880
They should now, after you've
said that, yeah.

650
00:33:31,080 --> 00:33:34,040
So I mean, look, we've shown
everyone a lot what these

651
00:33:34,040 --> 00:33:37,200
grounded camps look like from
the outside, but check out the

652
00:33:37,200 --> 00:33:39,080
inside.
Look at this.

653
00:33:40,120 --> 00:33:44,200
Double beds, blackout blinds,
better acoustics and security,

654
00:33:44,360 --> 00:33:46,640
larger showers and TV's.
I mean, how good is this?

655
00:33:46,640 --> 00:33:49,880
You might even catch Paul Natoli
and the team they're serving

656
00:33:49,960 --> 00:33:52,480
your fresh Sicilian pasta and
cannolis on arrival.

657
00:33:52,480 --> 00:33:54,840
But.
You see the you see the soap at

658
00:33:54,840 --> 00:33:56,920
the front of the bed there?
There's gonna be some bloody

659
00:33:56,920 --> 00:33:58,760
custard cannolis sitting there
as well.

660
00:33:58,760 --> 00:34:01,200
Just right there for you.
You know the best thing about a

661
00:34:01,200 --> 00:34:03,320
double bed on a mine site?
What's that?

662
00:34:04,160 --> 00:34:06,240
You can sleep a different side
each night.

663
00:34:06,480 --> 00:34:09,600
That's the best.
That is the best thing.

664
00:34:09,880 --> 00:34:12,239
It's funny you say they should
build a new 115 days away mate

665
00:34:12,239 --> 00:34:13,600
ground.
They also upgrade existing

666
00:34:13,600 --> 00:34:15,159
facilities so that they're more
luxurious.

667
00:34:15,280 --> 00:34:18,400
They could upgrade the Bloody
Mount Manga Pastoral station

668
00:34:18,400 --> 00:34:18,920
though.
You got.

669
00:34:18,920 --> 00:34:21,719
There's two options available.
You got all the options you

670
00:34:21,719 --> 00:34:24,040
need.
To a Sicilian quality.

671
00:34:24,520 --> 00:34:27,199
Yeah, with the Sicilian service
cannolis.

672
00:34:27,199 --> 00:34:31,320
Seven star mining camps love it
with cannolis.

673
00:34:31,560 --> 00:34:33,520
This is all very interesting,
Ali.

674
00:34:33,520 --> 00:34:36,280
The thing I think about always
like the like, so there's a

675
00:34:36,280 --> 00:34:40,120
little bit of equity side post
of processing like solution like

676
00:34:40,120 --> 00:34:44,000
at least which throws into the
question, well, where are they

677
00:34:44,000 --> 00:34:45,920
gonna process the callers?
Cause at the moment MMS are

678
00:34:45,920 --> 00:34:48,320
doing they're, they're sending
it, I think to Paddington.

679
00:34:48,320 --> 00:34:49,880
Addington.
I hear Paddington is kind of

680
00:34:49,880 --> 00:34:52,239
chock a block at the moment with
a bunch of different talk.

681
00:34:52,239 --> 00:34:55,239
In fact, all of the kind of, you
know, milling infrastructure

682
00:34:55,239 --> 00:34:58,160
that is, you know, you can
you're able to talk stuff doing

683
00:34:58,200 --> 00:35:00,120
in in around the goldfields.
He's like chockablock at the

684
00:35:00,120 --> 00:35:00,960
moment.
So it.

685
00:35:01,040 --> 00:35:02,560
Costs more to do it.
Yeah.

686
00:35:02,600 --> 00:35:05,720
Like, yeah, yeah.
And even Norton Goldfields are

687
00:35:05,840 --> 00:35:08,640
making money out of it.
Yeah, on a processing front.

688
00:35:08,760 --> 00:35:11,360
Even even like Piggy Butler's
effort, like I'm pretty sure

689
00:35:11,360 --> 00:35:14,800
that Middle East is chockablock
with Northern Star like demand

690
00:35:14,800 --> 00:35:16,720
for the next like 12 months too,
which is what's that that's.

691
00:35:16,720 --> 00:35:21,200
The Greenstone 1, is that right?
I think Greenfields, Greenfields

692
00:35:21,200 --> 00:35:23,040
or whatever it is, I think
greenstones another.

693
00:35:23,040 --> 00:35:25,800
Yeah, yeah, it's like, 'cause
and they, as I said, talking

694
00:35:25,800 --> 00:35:29,920
about acquisition of a mill, it
is interesting because another

695
00:35:29,920 --> 00:35:33,080
one I've heard is, you know, if
you say that one's chockablock,

696
00:35:33,080 --> 00:35:35,520
I've heard Lakewood is being
underfed.

697
00:35:36,120 --> 00:35:39,520
OK, Beta hunt.
So it sounds like, it sounds

698
00:35:39,520 --> 00:35:43,120
like at the moment, like a lot
of that could go to

699
00:35:43,160 --> 00:35:46,160
Higginsville.
So I'm not sure if West Gold

700
00:35:46,600 --> 00:35:49,280
would ever flog off Lakewood
because I think it is.

701
00:35:49,520 --> 00:35:52,640
I think Higginsville is the
better mill than Lakewood.

702
00:35:53,080 --> 00:35:57,720
Blackwood's only got 7 years of
of tail, like there's racing

703
00:35:57,720 --> 00:36:01,440
down one more tails lift and
seven years left that you know,

704
00:36:01,920 --> 00:36:05,440
capacity there and that's it.
There's no more.

705
00:36:05,440 --> 00:36:07,480
There's no more.
You can't do another lift after

706
00:36:07,480 --> 00:36:08,440
that.
That is the maximum.

707
00:36:08,440 --> 00:36:10,320
You can't get seven years.
Worth out of that.

708
00:36:10,440 --> 00:36:14,440
All right, So what?
Why is that permitting?

709
00:36:14,480 --> 00:36:16,080
Yeah.
So if you wanted to sell the.

710
00:36:16,080 --> 00:36:18,360
Opportunity to.
No, that's it.

711
00:36:18,440 --> 00:36:21,760
That's so if you wanted to get
value for, for that

712
00:36:21,760 --> 00:36:24,240
infrastructure and you did want
to sell that, I think you, you

713
00:36:24,400 --> 00:36:27,000
know, you, you do it while
there's still like capacity in

714
00:36:27,000 --> 00:36:29,320
that.
Yeah, yeah, So that'll be and

715
00:36:29,320 --> 00:36:34,440
because if for the West Gold 1
is that's if they did just send

716
00:36:34,440 --> 00:36:36,440
everything to Higginsville.
The other, the other thought, if

717
00:36:36,440 --> 00:36:39,400
my little astral prediction
comes through like that,

718
00:36:39,760 --> 00:36:44,480
probably like what's not big
enough to probably take there's

719
00:36:44,520 --> 00:36:48,200
you wouldn't be trucking open
pit dirt up there anyway.

720
00:36:48,360 --> 00:36:51,000
So it's like it might become
redundant if they bought that

721
00:36:51,000 --> 00:36:53,760
and added 2,000,000 tonne base
food coming from pits there.

722
00:36:54,120 --> 00:36:57,840
Probably build an enlarged
facility there and take and take

723
00:36:57,840 --> 00:37:00,360
beta hunt there.
That's one option there.

724
00:37:00,440 --> 00:37:02,560
Well, the other one there's
plenty of mills in the friggin

725
00:37:02,560 --> 00:37:04,920
district, but it's size.
If they want to go to one half

726
00:37:05,200 --> 00:37:07,760
1.2 to one half million tonne,
you need the size.

727
00:37:07,760 --> 00:37:11,760
Like I think the the Northern
Stars are Jubilee processing

728
00:37:11,760 --> 00:37:13,440
plant.
That's not care of maintenance

729
00:37:13,440 --> 00:37:15,080
one.
Point 2,000,000 tonne, but I

730
00:37:15,080 --> 00:37:18,520
think that's what probably 50
mil reefer but least or circuit

731
00:37:18,840 --> 00:37:21,160
plucking numbers out there.
That's interesting because they

732
00:37:21,160 --> 00:37:22,800
said they wanted to go up to
1.2.

733
00:37:23,160 --> 00:37:25,320
Didn't they 1.2?
At least 1.2.

734
00:37:26,360 --> 00:37:28,000
That fits the.
That fits the description.

735
00:37:28,240 --> 00:37:30,720
Yeah, well, but it's all I guess
it's on the other side

736
00:37:31,000 --> 00:37:34,000
interesting ones.
KB, Kanana Bell, Yep, for

737
00:37:34,000 --> 00:37:36,760
Northern Star.
So because it's 2,000,000 tonne

738
00:37:37,480 --> 00:37:41,120
still pumping the they're still
got it looks full based on the

739
00:37:41,120 --> 00:37:45,840
last quarterly.
But you would assume when KC

740
00:37:45,840 --> 00:37:50,360
KCGM expansion is done buddy,
Kanada Bell, South Cal

741
00:37:50,360 --> 00:37:54,120
operations, everything will go
to KCGM.

742
00:37:54,120 --> 00:37:57,560
You would, I would assume, I'd
assume that just turn everything

743
00:37:57,560 --> 00:38:00,640
off and just Chuck everything to
feed 27,000,000 tonne through

744
00:38:00,640 --> 00:38:03,760
KCGM.
So do you reckon will KB come

745
00:38:03,760 --> 00:38:05,720
onto the table?
Tonight there's.

746
00:38:05,720 --> 00:38:06,840
Have they talked about that,
Maddie?

747
00:38:07,000 --> 00:38:08,320
Have they?
Have they said it like that?

748
00:38:08,320 --> 00:38:11,080
No, ChatGPT said there was
comments but.

749
00:38:11,480 --> 00:38:13,880
I couldn't find it.
KB has such.

750
00:38:14,040 --> 00:38:15,640
A.
But they have talked about like

751
00:38:15,640 --> 00:38:17,720
sending everything.
I.

752
00:38:18,080 --> 00:38:21,200
Swear I've talked about
centralising everything just

753
00:38:21,840 --> 00:38:25,200
straight into KCGM lot.
Fuck if you got 27,000,000 tonne

754
00:38:25,200 --> 00:38:27,800
why wouldn't I now?
Ever remember him saying S Cal

755
00:38:27,800 --> 00:38:31,000
stuff would probably go there?
I don't know if that was in an

756
00:38:31,000 --> 00:38:36,200
announcement or at a pub.
And that's 27 by 2029, is that

757
00:38:36,400 --> 00:38:37,320
right?
Yeah, I think.

758
00:38:37,320 --> 00:38:38,800
It's gone off memory from a good
while ago.

759
00:38:38,920 --> 00:38:42,720
Yeah, I think it, I think it
gets to 24 or 25 before that and

760
00:38:42,720 --> 00:38:44,760
then yeah, it is obviously
staged.

761
00:38:44,760 --> 00:38:48,480
But yeah, don't, I don't know if
that had ever come onto the

762
00:38:48,480 --> 00:38:52,960
table, but it's probably not
short term enough.

763
00:38:53,520 --> 00:38:55,920
I wouldn't imagine, but he had
to be.

764
00:38:56,520 --> 00:38:59,600
I'm sure it's been sure it's
been looked option.

765
00:38:59,760 --> 00:39:02,240
I reckon because you get all
these efficiencies from sending

766
00:39:02,240 --> 00:39:04,960
like, you know, deposits here
and there depending on how far

767
00:39:04,960 --> 00:39:06,800
you're trucking it and all that
sort of stuff would come in and

768
00:39:06,800 --> 00:39:09,680
you've got to track it a bit
further from from like, you

769
00:39:09,680 --> 00:39:12,640
know, KB to the, to Finniston.
Yeah, but.

770
00:39:13,040 --> 00:39:15,360
Depending on where you're from.
Manning as well, yeah.

771
00:39:15,480 --> 00:39:18,880
Bigger mill, less like.
You've got to have a whole extra

772
00:39:18,880 --> 00:39:22,320
bloody whole level of
management, you know, operating

773
00:39:22,320 --> 00:39:25,280
that processing plant where you
can like centralised it in one.

774
00:39:25,280 --> 00:39:28,040
I think there's there'd be a lot
it's I think every day of the

775
00:39:28,040 --> 00:39:33,280
week you'd save cash trucking it
to a big massive meal with less

776
00:39:33,280 --> 00:39:34,400
personnel work in there.
I.

777
00:39:34,520 --> 00:39:38,040
Think I'd be a tonne can be the
lot like the last roaster in WA.

778
00:39:38,160 --> 00:39:40,880
They're still operating too.
That the gidgy.

779
00:39:41,040 --> 00:39:42,760
The Gidgy.
It's not, it's not GIDGY.

780
00:39:42,760 --> 00:39:44,560
Yeah, it's Canal.
Barrel's got a roaster.

781
00:39:45,640 --> 00:39:47,360
Yeah, I know.
I know they were.

782
00:39:47,600 --> 00:39:51,000
But that I think as part of this
expansion, I remember a comment

783
00:39:51,000 --> 00:39:55,960
1/4 or two ago that was trying
to get it to the stage sooner

784
00:39:55,960 --> 00:40:00,000
where all the roasting, all all
the, you know, use of the

785
00:40:00,000 --> 00:40:04,400
refractory was going to be done
at the KCJM and not at the I

786
00:40:04,480 --> 00:40:07,800
think GG one or something.
I don't know, I should research

787
00:40:07,800 --> 00:40:10,160
more.
But yeah, my point is just that

788
00:40:10,160 --> 00:40:13,160
that roaster in and of itself,
it is a pretty interesting kind

789
00:40:13,240 --> 00:40:16,480
of has a fair bit of value
because that is a processing

790
00:40:16,480 --> 00:40:19,120
solution for a fair few old
bodies in and around the region

791
00:40:19,120 --> 00:40:21,400
which don't have a processing
solution.

792
00:40:21,400 --> 00:40:25,800
Think of Ephradi which is in
Genesis portfolio beautiful or

793
00:40:25,800 --> 00:40:28,640
body underneath the road but
needs needs a roaster.

794
00:40:29,320 --> 00:40:33,040
Yeah.
What was the, what was the other

795
00:40:33,040 --> 00:40:34,800
one?
Now that's the main one.

796
00:40:34,800 --> 00:40:37,440
What's our Zoroastrian?
That's the non refractory one,

797
00:40:37,640 --> 00:40:39,840
yeah.
And then that's, I mean,

798
00:40:40,840 --> 00:40:45,040
bringing it back to, you know,
sort of black Cat and Callie's

799
00:40:45,040 --> 00:40:47,800
and try and sort of address this
in the next, you know, year or

800
00:40:47,800 --> 00:40:50,320
two, whether.
And you know, some of those

801
00:40:50,320 --> 00:40:54,440
options might be too long, long
dated to to to suit them.

802
00:40:54,440 --> 00:40:57,840
And, you know, will they have to
perhaps construct something.

803
00:40:57,840 --> 00:41:00,120
And then, you know, what's the
timing and the permitting and,

804
00:41:00,160 --> 00:41:02,920
you know, everything, you know,
associated with with going down

805
00:41:02,920 --> 00:41:06,640
that path as well.
So just something else to have

806
00:41:06,640 --> 00:41:09,480
in the back of the mind.
But then yeah.

807
00:41:09,480 --> 00:41:13,240
And then separately, I mean they
they've got some options

808
00:41:14,440 --> 00:41:17,200
expiring sort of within the next
year, which are which are pretty

809
00:41:17,200 --> 00:41:18,880
in the money at the moment.
So they might have some other

810
00:41:20,200 --> 00:41:24,440
cash potentially coming in the
door just to help towards that,

811
00:41:24,640 --> 00:41:26,240
you know that funding pace as
well.

812
00:41:26,240 --> 00:41:27,720
So that's.
About 6,000,000 bucks.

813
00:41:27,920 --> 00:41:30,800
Yeah, sort of that expiring, you
know, in the next year and

814
00:41:30,800 --> 00:41:33,640
there's sort of a bunch of other
unlisted ones at various

815
00:41:34,160 --> 00:41:36,480
exercise prices expiring in the
next few years as well.

816
00:41:38,000 --> 00:41:42,320
Yeah, no, great to see, you
know, mine's mine's getting

817
00:41:42,320 --> 00:41:44,960
built and, you know, accelerated
and all of that.

818
00:41:44,960 --> 00:41:47,720
So I'll.
Suppose to touch with the saying

819
00:41:47,760 --> 00:41:50,560
the saying it's been accelerated
till the bloody government gets

820
00:41:50,560 --> 00:41:52,960
involved.
Yeah, we shall say.

821
00:41:53,320 --> 00:41:55,040
Yeah, it's right.
Next up, Vault.

822
00:41:55,360 --> 00:41:57,840
First time we've flashed up the
Vault logo I think.

823
00:41:57,840 --> 00:41:59,680
Yeah, look at that.
Looks slick, doesn't it?

824
00:41:59,680 --> 00:42:02,200
And I'm a Ding Ding on Vault as
well.

825
00:42:02,480 --> 00:42:04,840
They're and they're a Ding,
Ding, Ding of a lot of cash.

826
00:42:05,880 --> 00:42:10,480
So vault the old Red 5
Silverlight thingamajig you'd

827
00:42:10,480 --> 00:42:14,000
say.
So I sold a bit over 100,000 oz

828
00:42:14,000 --> 00:42:20,600
for the quarter, 102 1/2 at an
average sale price of 3162.

829
00:42:20,600 --> 00:42:22,680
We'll get into their hedging a
bit later.

830
00:42:22,680 --> 00:42:27,600
So yeah, lot the open pits are
sort of ramping up at Mount

831
00:42:27,600 --> 00:42:29,280
Monger.
It looks like the underground

832
00:42:29,280 --> 00:42:32,720
for side of things at Daisy and
that's starting to drop off as

833
00:42:32,720 --> 00:42:35,760
they said they got like six
years of base load mill feed

834
00:42:36,200 --> 00:42:39,920
coming out of the pits there.
You know, deflector, deflector

835
00:42:39,920 --> 00:42:43,080
out a Ripper of a bloody thing.
But over 30,000 ounces of gold

836
00:42:43,200 --> 00:42:46,560
producers are pretty 1820 all
and sustainable.

837
00:42:46,560 --> 00:42:49,280
Remember they got the copper
that comes off that as well.

838
00:42:49,280 --> 00:42:54,320
So Leonora, so king of the hills
and so that's Leonora refers to

839
00:42:54,320 --> 00:42:57,960
King of the hills and Dallas.
So a bit below 50,000 oz for

840
00:42:57,960 --> 00:43:04,280
their so it looks like they're
in a bit of a big pre stripping

841
00:43:04,280 --> 00:43:07,600
mode for King of the Hills.
So they're limited.

842
00:43:07,720 --> 00:43:11,840
I think that limited mining
fronts lot of you see the amount

843
00:43:11,840 --> 00:43:16,920
of extra waste moves.
So like they be total BCM moved

844
00:43:16,920 --> 00:43:21,360
of the Orem waste was, you know,
significantly a good chunk ahead

845
00:43:21,360 --> 00:43:23,760
of what had been done in the
previous quarter.

846
00:43:23,760 --> 00:43:28,040
So it says, I don't think till
about second half FY25 they get

847
00:43:28,040 --> 00:43:31,600
to sort of access the the new
newer mining areas once a lot of

848
00:43:31,600 --> 00:43:35,560
that the next stage expansions
done.

849
00:43:35,560 --> 00:43:39,480
So and hence you say the mine
grade dropped from .7 down to

850
00:43:39,480 --> 00:43:43,960
.54 for King of the Hills.
But they're obviously going well

851
00:43:43,960 --> 00:43:46,240
with the the throughput and
everything.

852
00:43:46,240 --> 00:43:48,440
God, I lost me bloody thing.
Here we go, I'm back.

853
00:43:48,440 --> 00:43:53,560
But yeah, operating about, you
know, the 4.3 million tonne run

854
00:43:53,560 --> 00:43:55,640
rate for that mill.
So she's all taken along talking

855
00:43:55,640 --> 00:43:58,720
about expanding it to 6,000,000
tonne per annum.

856
00:43:58,880 --> 00:44:01,800
Wow, that's big, yeah, just go
big.

857
00:44:01,800 --> 00:44:05,200
Just go big.
Go to 88's good, 8 million's

858
00:44:05,200 --> 00:44:12,120
good cash and bullion on hand,
523 million buckaroos.

859
00:44:12,120 --> 00:44:15,920
So underlying free cash flow for
the quarter of 35 mil.

860
00:44:15,920 --> 00:44:19,680
So it actually went, it
increased 70 mil, but that the

861
00:44:19,840 --> 00:44:23,160
sold the shares in themselves
and and all that sort of stuff.

862
00:44:23,160 --> 00:44:25,160
So there's a bit of post merger
stuff.

863
00:44:25,440 --> 00:44:26,880
Out of Treasury shares, yeah,
yeah.

864
00:44:26,920 --> 00:44:31,880
Yeah, so, but yeah, so the so
the hedge book, which is

865
00:44:31,880 --> 00:44:35,160
obviously the the legacy stuff
that come from, you know, King

866
00:44:35,160 --> 00:44:37,600
of the Hills being debt funded,
it's one of the ones where it

867
00:44:38,000 --> 00:44:40,000
was debt funded, get hyper
hedging.

868
00:44:40,160 --> 00:44:43,440
Then you had to do a hyper
capital raises and it's all

869
00:44:43,440 --> 00:44:45,120
being cleared.
But you have to keep the hedging

870
00:44:45,120 --> 00:44:48,480
unfortunately, which they just
got, which they're like you're

871
00:44:48,480 --> 00:44:50,280
debt free.
We'll just we'll get rid of the

872
00:44:50,280 --> 00:44:53,360
hedging for you.
They, they said, they said when

873
00:44:53,360 --> 00:44:57,760
they did the old like, OK, we've
got access to Silver Lakes cash

874
00:44:58,080 --> 00:45:01,600
opportunity synergies include
paying out the hedge, closing

875
00:45:01,600 --> 00:45:04,480
out the hedge book without cash
or, or accelerating growth of

876
00:45:04,480 --> 00:45:06,520
cost.
And it looks like they've chosen

877
00:45:06,520 --> 00:45:09,920
accelerating growth of cost with
the cash instead of closing out

878
00:45:09,920 --> 00:45:11,520
the hedge book, but with gold
price running.

879
00:45:12,440 --> 00:45:15,320
Yeah, yeah, it's like, it's like
maybe two months ago, but but

880
00:45:15,880 --> 00:45:18,120
you don't know, you close it out
now and the bloody gold price

881
00:45:18,120 --> 00:45:19,160
goes down.
Like you.

882
00:45:19,480 --> 00:45:23,720
As I said, you need to get about
5% lift in it just to negate the

883
00:45:23,720 --> 00:45:26,240
interest you would have earned
on that money in the gold price.

884
00:45:26,240 --> 00:45:29,520
So because they got pretty much
40% of their forecast of

885
00:45:29,520 --> 00:45:34,840
production for FY25 hedged
122,000 oz at 2734.

886
00:45:35,040 --> 00:45:40,520
Remember gold price is sitting
in over 4000 FY20 622,000 oz

887
00:45:40,520 --> 00:45:46,440
again at 20802882 per oz.
That's about 31% of their

888
00:45:46,840 --> 00:45:51,600
production beyond FY20 6, pretty
much unhedged.

889
00:45:51,600 --> 00:45:54,680
I think they got 10,000 oz
hedged at 2797.

890
00:45:54,680 --> 00:46:01,240
So it's getting them which looks
like it will line up to no.

891
00:46:01,240 --> 00:46:05,320
So when do they get, they get
into the high grade areas FY25

892
00:46:05,840 --> 00:46:07,760
end of FY25.
So yeah.

893
00:46:07,800 --> 00:46:09,520
So they'll have a, it's one of
them ones.

894
00:46:09,520 --> 00:46:13,880
Do you close it out now or they
just ride the wave and get to

895
00:46:13,880 --> 00:46:18,480
FY20 6 when she was start start
raining a bit end of FY20 6

896
00:46:18,480 --> 00:46:21,400
which starts raining a bit more.
So yeah, bit.

897
00:46:21,520 --> 00:46:24,320
Of a tricky 1 because yeah,
you're trying to take a bet on

898
00:46:24,320 --> 00:46:26,800
the commodity price rather, you
know do you believe it's going

899
00:46:26,800 --> 00:46:32,200
to continue going as high as it
has you know, in the last year

900
00:46:32,200 --> 00:46:34,840
or if you.
Because you know, you could take

901
00:46:34,840 --> 00:46:37,600
it out like you say, Maddie, and
then if the gold price doesn't

902
00:46:37,600 --> 00:46:39,760
move or it goes lower, well
then, you know, what was the

903
00:46:39,760 --> 00:46:41,560
sort of point thing?
And you know, perhaps is there a

904
00:46:41,560 --> 00:46:45,280
better use of capital to, I
mean, they're obviously, you

905
00:46:45,320 --> 00:46:48,600
know, looking at expanding cost
further.

906
00:46:50,080 --> 00:46:53,040
You know, they're due to put out
their, you know, their capital

907
00:46:53,040 --> 00:46:57,360
sort of management, you know,
programme or sort of a plan

908
00:46:57,720 --> 00:47:01,600
imminently as far as you know,
you know, maybe that'll be, you

909
00:47:01,600 --> 00:47:05,200
know, returns to shareholders
like a buyback or a dividend or,

910
00:47:05,560 --> 00:47:07,440
you know, things like that as
well.

911
00:47:07,440 --> 00:47:11,720
So is they've got, I guess the
fortunate position is they've

912
00:47:11,720 --> 00:47:16,040
got, you know, a fair bit of
cash and and at present no debt.

913
00:47:16,480 --> 00:47:20,520
Yeah, to to sort of service and
work through those hedges.

914
00:47:20,840 --> 00:47:23,640
Yeah, yeah.
I think the best way to minimise

915
00:47:23,640 --> 00:47:28,040
the amount of the percentage of
production that is hedged get

916
00:47:28,040 --> 00:47:30,760
more Oz merge with Genesis
already.

917
00:47:31,400 --> 00:47:33,440
They don't have.
They don't have to keep frigging

918
00:47:33,440 --> 00:47:35,480
talking about it.
It's going to happen sooner

919
00:47:35,480 --> 00:47:37,040
rather than later.
Easy.

920
00:47:38,240 --> 00:47:41,040
Yeah, that'll just yeah.
Then it'd be like 20% of their

921
00:47:41,040 --> 00:47:43,040
production piece of piece.
There you.

922
00:47:44,920 --> 00:47:48,800
Go God.
Diamonds, JD.

923
00:47:49,680 --> 00:47:52,720
Let's talk a bit about diamonds.
On man you're the biggest

924
00:47:52,720 --> 00:47:56,040
diamond in Washington mining
commentary that is sub 30.

925
00:47:56,040 --> 00:48:00,480
JD tell you that, Matt.
Mcblash mate, have have we

926
00:48:00,480 --> 00:48:02,520
spoken about diamonds?
I was trying to think before.

927
00:48:02,520 --> 00:48:05,680
I'm not sure if we actually have
in any sort of great detail

928
00:48:05,880 --> 00:48:07,960
besides Burgundy.
To beers with Anglo.

929
00:48:08,440 --> 00:48:09,640
Yeah, really.
Yeah, Yeah.

930
00:48:09,640 --> 00:48:11,440
That was the one that briefly
came to mind.

931
00:48:11,440 --> 00:48:16,960
So Burgundy, you know, bar Rio
like is the the only way you can

932
00:48:16,960 --> 00:48:19,360
get it's the only way you can
get direct exposure on the ASX

933
00:48:19,360 --> 00:48:21,120
and there's a bit of a new
vehicle.

934
00:48:21,120 --> 00:48:23,640
So I'll sort of preface what I'm
going to say here that I've got

935
00:48:24,000 --> 00:48:25,960
Pretty Little knowledge of the
diamond space.

936
00:48:25,960 --> 00:48:30,320
I'm keen to learn more keen to
get an expert in the field on.

937
00:48:30,520 --> 00:48:33,520
But I thought the the quarterly
that came out today was worth a

938
00:48:33,520 --> 00:48:36,720
peek for a few reasons.
So first and foremost,

939
00:48:37,160 --> 00:48:40,400
Burgundy's got some, you know, a
decent management team with some

940
00:48:40,400 --> 00:48:42,680
big names sort of in their
ranks.

941
00:48:42,680 --> 00:48:47,360
So first up you've got Michael
O'Keefe, he's of Riversdale and

942
00:48:47,360 --> 00:48:50,920
Champion Iron fame, sort of made
a lot of money for himself and

943
00:48:50,920 --> 00:48:53,240
shareholders.
Previous to that, he was the the

944
00:48:53,240 --> 00:48:56,400
boss of Glencore Australia.
He's the non exec chair at the

945
00:48:56,400 --> 00:48:58,600
company owns about 5% of the the
stock.

946
00:48:59,960 --> 00:49:06,760
These guys bought the eccarty
mine 15 months ago and on 23

947
00:49:06,960 --> 00:49:10,280
numbers, it's the sixth biggest
diamond mined globally.

948
00:49:10,280 --> 00:49:13,520
And it's the only one that kind
of sits in the hands of a, you

949
00:49:13,520 --> 00:49:17,880
know, a small cap.
BDM is capped at 150 million net

950
00:49:17,880 --> 00:49:22,000
debt of that's Aussie dollars
here, net debt of Aussie 34.

951
00:49:22,320 --> 00:49:24,160
But they've got diamond
inventories.

952
00:49:24,480 --> 00:49:29,560
These are carried at cost at
Aussie $108 million.

953
00:49:29,560 --> 00:49:33,560
So the balance sheet has changed
quite a bit since these guys

954
00:49:33,760 --> 00:49:37,240
took control of the company.
All the while the stock is

955
00:49:37,240 --> 00:49:40,200
actually halved.
So the the chart isn't pretty

956
00:49:40,200 --> 00:49:42,960
and that's sort of in the face
of a a diamond industry that's

957
00:49:42,960 --> 00:49:45,360
struggling.
Make my interest, JD.

958
00:49:46,600 --> 00:49:48,360
Yeah.
And you know, I was thinking the

959
00:49:48,360 --> 00:49:50,320
exact same.
It's it's a hated space.

960
00:49:50,320 --> 00:49:53,240
There's complexities to it, but
it's enough to sort of get

961
00:49:53,240 --> 00:49:55,600
interested.
So diving into the actual

962
00:49:55,600 --> 00:49:58,840
quarterly result today, the the
outcome is kind of so, so

963
00:49:58,840 --> 00:50:01,240
they're doing a lot of mine life
extension work.

964
00:50:01,920 --> 00:50:04,720
A lot of this work did disrupt
the actual mining.

965
00:50:04,720 --> 00:50:08,360
They also transitioned from the
Sable open pit to the Point Lake

966
00:50:08,680 --> 00:50:11,680
open pit.
Recoveries were a bit lower than

967
00:50:11,680 --> 00:50:13,120
expected.
That was sort of on the back of

968
00:50:13,120 --> 00:50:16,000
the grades process being a bit
lower as well.

969
00:50:16,000 --> 00:50:18,920
But on the cash front, I'll
Chuck up the waterfall charts so

970
00:50:18,920 --> 00:50:20,520
you guys can have a bit of a
look.

971
00:50:20,520 --> 00:50:25,360
Now they did US 23 million in
operational cash flow before

972
00:50:25,800 --> 00:50:29,440
working capital comes into
account, whilst the revenue per

973
00:50:29,440 --> 00:50:32,320
carat dropped 20%.
So you've got the commodity

974
00:50:32,320 --> 00:50:34,480
price not not going in your
favour.

975
00:50:34,920 --> 00:50:38,480
You're at the the sort of lows,
if you like, in a commodity

976
00:50:38,480 --> 00:50:41,520
price whilst you're still making
money on an operational front.

977
00:50:42,160 --> 00:50:45,600
They did pay back a condo.
So like I said, cleaning up the

978
00:50:45,720 --> 00:50:48,920
the cap structure to the tune of
US $23 million.

979
00:50:49,200 --> 00:50:52,920
They also spent US 36,000,000
bucks on CapEx, 2/3 of that

980
00:50:52,920 --> 00:50:57,960
going towards waste stripping.
So overall EBITDA it was down a

981
00:50:57,960 --> 00:51:00,760
couple million to US $22
million.

982
00:51:00,760 --> 00:51:03,120
And yeah, just just pull up the
waterfall chart.

983
00:51:03,120 --> 00:51:06,120
There's a lot of numbers are
sort of slung out just then.

984
00:51:06,520 --> 00:51:10,160
But bearing in mind that the
commodity hasn't done so well,

985
00:51:10,160 --> 00:51:12,320
it doesn't look all that kind of
bad.

986
00:51:12,320 --> 00:51:16,440
And we're expecting a strong
finish to the year because these

987
00:51:16,440 --> 00:51:19,720
guys actually give revenue and
EBITDA guidance.

988
00:51:19,800 --> 00:51:24,080
Now that guidance was revised
lower, but given where we are

989
00:51:24,080 --> 00:51:27,200
and where they said they'll
still get to, the numbers should

990
00:51:27,200 --> 00:51:30,800
finish quite strongly.
So all our cash flow side of

991
00:51:30,800 --> 00:51:35,000
things, very interesting from my
perspective to see operationally

992
00:51:35,360 --> 00:51:38,080
a bit of cash coming in the door
while things have been pretty

993
00:51:38,080 --> 00:51:40,040
beaten up.
And this this next chart I'll

994
00:51:40,040 --> 00:51:42,040
show you here.
It's quite an interesting one

995
00:51:42,040 --> 00:51:43,800
for those listening in and not
looking at the chart.

996
00:51:44,160 --> 00:51:46,480
It breaks out over, I think, the
last sort of five quarters or

997
00:51:46,480 --> 00:51:50,600
so, a few different balance
sheet items, and you can just

998
00:51:50,600 --> 00:51:51,920
sort of get a feel for the
trend.

999
00:51:52,040 --> 00:51:54,120
So firstly, it's a good sign to
see that the company's focused

1000
00:51:54,120 --> 00:51:57,240
on what's kind of important, and
it's good to see how they're

1001
00:51:57,240 --> 00:51:59,560
kind of working towards them.
So I'll give a couple of

1002
00:51:59,560 --> 00:52:01,600
examples.
One of them is diamond

1003
00:52:01,600 --> 00:52:03,120
inventory.
These guys have had a lot of

1004
00:52:03,400 --> 00:52:07,240
money tied up in inventory, and
they're aiming to reduce that.

1005
00:52:07,520 --> 00:52:10,160
Another pretty straightforward 1
is reducing your debt

1006
00:52:10,160 --> 00:52:13,800
obligations.
So again, working well to clean

1007
00:52:13,800 --> 00:52:17,280
up these sorts of things.
They also said that in the

1008
00:52:17,280 --> 00:52:20,320
quarter that we're now in,
they're going to put aside US

1009
00:52:20,320 --> 00:52:22,920
$22 million for an environmental
trust.

1010
00:52:22,920 --> 00:52:26,560
This is a a pretty common thing
we've kind of seen with the the

1011
00:52:26,560 --> 00:52:29,920
Canadian miners.
It's your cash, but it's not

1012
00:52:29,920 --> 00:52:31,040
your cash.
You know, you've got to have it

1013
00:52:31,040 --> 00:52:34,360
tied up in a trust and there's
some tax benefits to that.

1014
00:52:34,360 --> 00:52:36,720
The company said as well.
So.

1015
00:52:37,000 --> 00:52:39,320
Really interesting mate.
The, the, when I think of the,

1016
00:52:39,720 --> 00:52:42,480
you know, the whole diamond
industry, it's like the, the

1017
00:52:42,480 --> 00:52:46,360
price has been under pressure
because lab grown diamonds

1018
00:52:46,680 --> 00:52:49,560
coming way lower on the cost
curve and people have been, you

1019
00:52:49,760 --> 00:52:53,400
know, willing to accept them as
it's literally the same thing.

1020
00:52:53,400 --> 00:52:55,480
It's just.
It's not the same.

1021
00:52:55,520 --> 00:52:59,160
It's like.
It's like Bush weed and hard

1022
00:52:59,160 --> 00:53:02,520
drive basically.
It's not the same.

1023
00:53:02,560 --> 00:53:05,920
What would you have done if if
Paul proposed with a with a lab

1024
00:53:05,920 --> 00:53:06,760
grown rock?
Oh.

1025
00:53:08,120 --> 00:53:09,680
Take it back.
Take it back.

1026
00:53:09,680 --> 00:53:11,760
No, Yeah.
Oh, no.

1027
00:53:11,840 --> 00:53:12,360
It's.
I don't know.

1028
00:53:12,360 --> 00:53:14,440
There's something romantic about
a real diamond.

1029
00:53:14,440 --> 00:53:15,920
That's interesting.
See I've I've had the.

1030
00:53:16,000 --> 00:53:18,560
Just the engaged.
Woman I've had.

1031
00:53:18,560 --> 00:53:21,120
The chat with all my mates,
granted all my mates, you know,

1032
00:53:21,400 --> 00:53:25,000
knuckleheads, but lab grown
rocks like everyone's a lab

1033
00:53:25,000 --> 00:53:26,520
grown rock.
I've had the chat with brides.

1034
00:53:26,520 --> 00:53:28,120
She's happy with the lab grown
rock like.

1035
00:53:29,360 --> 00:53:32,160
I mean, like chemically, it's
like it's basically the same

1036
00:53:32,160 --> 00:53:34,680
thing.
It's just formed, you know, in a

1037
00:53:34,880 --> 00:53:37,440
lab.
Yeah, Go to the last picture

1038
00:53:37,440 --> 00:53:39,680
I've got here, guys.
We'll flash it up now for those

1039
00:53:39,680 --> 00:53:41,680
listening.
And you can see obviously the

1040
00:53:41,680 --> 00:53:46,800
company addresses this head on
and obviously the company talks

1041
00:53:47,120 --> 00:53:51,520
about growing demand for mined
diamonds as opposed to lab grown

1042
00:53:51,520 --> 00:53:54,760
market, lab grown diamonds.
And you can sort of see they

1043
00:53:54,760 --> 00:53:59,320
talk about a bifurcation in the
diamond market and you obviously

1044
00:53:59,320 --> 00:54:01,040
they have put their own numbers
to it.

1045
00:54:01,040 --> 00:54:04,040
It's from the sort of analysts
that they kind of use, but it's

1046
00:54:04,040 --> 00:54:07,520
interesting to see the size of
the mined diamond market

1047
00:54:07,520 --> 00:54:11,280
relative to the diamonds that
are grown in labs.

1048
00:54:11,280 --> 00:54:15,680
So again for those listening, I
will say the 2023 numbers is $43

1049
00:54:15,680 --> 00:54:22,720
billion of demand for those that
are mined versus a lab grown

1050
00:54:22,720 --> 00:54:26,720
market of seven.
So mind is still bigger and you

1051
00:54:26,720 --> 00:54:29,280
know, it ties in with what
you're saying, Trev, we're at

1052
00:54:29,280 --> 00:54:33,840
that kind of Inflexion point
now, which makes it a very

1053
00:54:33,840 --> 00:54:37,320
interesting debate because you
know that the debate wasn't a

1054
00:54:37,320 --> 00:54:39,880
really fair one to have 10 years
ago, five years ago, because the

1055
00:54:39,880 --> 00:54:42,840
costs were so different.
So that outweighed anyone's sort

1056
00:54:42,840 --> 00:54:46,320
of feelings to the emissions or
anything else that's sort of

1057
00:54:46,320 --> 00:54:49,560
tied up in the the purchase of,
you know, what's been a pretty

1058
00:54:49,560 --> 00:54:51,520
big purchase for a lot of
people.

1059
00:54:51,520 --> 00:54:54,400
So that is one of the big knocks
on the company.

1060
00:54:54,400 --> 00:54:57,240
And there's another couple that
we should kind of address as

1061
00:54:57,240 --> 00:55:01,160
well, short mine life that, you
know, wakes you in the face when

1062
00:55:01,160 --> 00:55:02,680
you kind of look at it.
And again, the company's doing

1063
00:55:02,680 --> 00:55:04,880
heaps to kind of address that.
Lots of drilling.

1064
00:55:04,880 --> 00:55:07,960
Like I said, it sort of
disrupted their, their quarter

1065
00:55:07,960 --> 00:55:10,080
just gone.
But that's also on the flip

1066
00:55:10,080 --> 00:55:13,840
side, a big catalyst, Misery,
the the Kimberlat pipe pipe at

1067
00:55:13,840 --> 00:55:17,240
Misery is the, the big one, the
high grade one.

1068
00:55:17,240 --> 00:55:20,560
If they can extend that beyond
2026, that's a bit of a

1069
00:55:20,560 --> 00:55:23,080
catalyst.
And they've got a bunch of other

1070
00:55:23,080 --> 00:55:25,400
deposits that you'll have seen
in the map before.

1071
00:55:25,400 --> 00:55:28,640
If they can extend the mine life
beyond where it kind of sits

1072
00:55:28,640 --> 00:55:33,080
right now trailing off in 2029,
then that's a sort of big bone

1073
00:55:33,080 --> 00:55:35,440
for the company.
And the other kind of knock is

1074
00:55:35,440 --> 00:55:39,840
single asset miner in a
relatively remote part of the

1075
00:55:39,840 --> 00:55:42,840
world does come with it's fair
share of risk.

1076
00:55:42,840 --> 00:55:45,640
But on the positive side of
things, like I said, management

1077
00:55:45,640 --> 00:55:49,160
team that looks the goods on
paper, cap structure that's

1078
00:55:49,160 --> 00:55:53,120
being cleaned up, an asset
that's being optimised for

1079
00:55:53,120 --> 00:55:55,440
varying sort of degrees.
So they're, they're a bunch of

1080
00:55:55,440 --> 00:55:58,240
the, the positive boxes that
these guys are checking.

1081
00:55:58,240 --> 00:56:01,720
And yeah, I mean, that's all in
a sort of hour of digging into

1082
00:56:01,720 --> 00:56:03,560
the company.
I think there's more than enough

1083
00:56:03,560 --> 00:56:06,600
for us to kind of get interested
and speak with some experts in

1084
00:56:06,600 --> 00:56:08,680
the in the space and learn a bit
more about it and.

1085
00:56:09,080 --> 00:56:11,440
I was under the like, yeah, I
think I've made the comment

1086
00:56:11,440 --> 00:56:12,600
before.
I think the diamond mark is

1087
00:56:12,600 --> 00:56:13,560
fucked.
But I think like, you know,

1088
00:56:13,560 --> 00:56:17,160
heck, Alex V.
There in itself is evidence that

1089
00:56:17,160 --> 00:56:21,120
there is like demand for plenty.
Plenty of people have different

1090
00:56:21,120 --> 00:56:23,400
consumer preferences, right?
And, and there's a subset of

1091
00:56:23,400 --> 00:56:26,000
consumers that are going to want
buying diamonds and they're

1092
00:56:26,000 --> 00:56:27,960
willing to pay a lot more for
them as a result, because more,

1093
00:56:28,680 --> 00:56:31,360
more like, you know, more sexy,
more prestigious, more romantic,

1094
00:56:31,360 --> 00:56:35,400
but.
Buy shares in friggin family

1095
00:56:35,400 --> 00:56:39,280
lawyers because bloody those
homegrown diamonds might result

1096
00:56:39,280 --> 00:56:43,040
in a shit load of divorces in
the future.

1097
00:56:43,680 --> 00:56:46,000
Yeah, mate, that's bloody.
Where the coins going to come

1098
00:56:46,000 --> 00:56:47,280
in?
Yeah.

1099
00:56:47,280 --> 00:56:49,760
I mean, I think the the other
part of the debate with De Beers

1100
00:56:49,760 --> 00:56:54,640
back when we spoke about them is
like the they're kind of a

1101
00:56:54,640 --> 00:56:59,240
luxury retailer as well.
So it goes in De Beers case,

1102
00:56:59,240 --> 00:57:01,040
that is.
It's not the exact same case for

1103
00:57:01,040 --> 00:57:05,200
Burgundy, but there's definitely
nuances to it.

1104
00:57:07,000 --> 00:57:08,520
We need to get a Dominic spit
on.

1105
00:57:09,240 --> 00:57:11,000
We do.
I've reached out to 1 so it's

1106
00:57:11,000 --> 00:57:12,320
going to happen soon.
Love it.

1107
00:57:14,400 --> 00:57:15,360
Beautiful.
Oh, very good.

1108
00:57:15,440 --> 00:57:19,760
Well, we better mention all our
homegrown, our sorry natural

1109
00:57:19,760 --> 00:57:24,600
diamond partners, not homegrown,
we only have natural diamond

1110
00:57:24,600 --> 00:57:28,400
partners from the Earth Mineral
Mining services.

1111
00:57:29,000 --> 00:57:32,320
Grounded at the top of the show
and CRE at the top of the show

1112
00:57:32,400 --> 00:57:33,120
as well.
Oh.

1113
00:57:33,560 --> 00:57:36,520
God, I feel like I feel like
getting engaged now, talking

1114
00:57:36,520 --> 00:57:39,840
about all these people.
Cross boundary energy.

1115
00:57:39,840 --> 00:57:43,720
Sandy ground support, freelands,
equipment, K drill, MMTS,

1116
00:57:43,720 --> 00:57:46,040
Australian earthworks and
haulage and get a spark drop.

1117
00:57:46,320 --> 00:57:49,960
Yeah, Huda.
Root that's good.

1118
00:57:51,160 --> 00:57:53,800
Information contained in this
episode of Money of Mine is of

1119
00:57:53,800 --> 00:57:55,880
general nature only and does not
take into account the

1120
00:57:55,880 --> 00:57:59,480
objectives, financial situation,
or needs of any particular

1121
00:57:59,480 --> 00:58:01,520
person.
Before making any investment

1122
00:58:01,520 --> 00:58:04,560
decision, you should consult
with your financial advisor and

1123
00:58:04,560 --> 00:58:07,720
consider how appropriate the
advice is to your objectives,

1124
00:58:07,920 --> 00:58:09,920
financial situation and needs.