Forget FalconBridge. NexGen is Gilman's Big Score

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Trav, we've got an awesome guest
today, Warren Gilman.

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We've spoken with him a couple
times in the past, and we're

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going to jump into a whole bunch
of his history, how he's seeing

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the world and a whole lot more.
For people that aren't familiar

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with Warren, tell us a bit about
him, man.

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We know Warren as the guy that
heads up Queen's Road Capital,

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this very interesting listed
investment company that has

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their fingers in some of the
world's best projects by virtue

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of these like convertible
instruments.

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Add to that the names on his
register.

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Lee Cashing, Jack Cowan, Brett
Blundy, he as we get into in the

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conversation is backed by some
of the most successful

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entrepreneurs in the world.
And he gives, he sheds a bit of

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light on on how he's done that,
how he's built those

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relationships, as well as his
long 25 year plus career as an

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investment banker to some of the
absolute biggest names in the

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mining world, working on some of
the most influential deals and

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the biggest deals of their time
throughout the history from the

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90s through to the China boom
and onwards.

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I'm excited to share this
conversation.

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He also sits on the board of
Next Gen. which gets more and

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more interesting by the day and
as a potential corporate outcome

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approaches.
And we ask him about that, too.

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To Warren.
Given, given the performance the

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last couple months, it's yeah,
the story might be falling on

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very receptive years.
Well, that's it.

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You know, if you're ever going
to do this, do it when all the

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news is good.
The news is very good right now,

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so it's it.
It's a lot easier to do it when

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it's all good news rather than
bad news.

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So I'm striking while the iron
is hot, as they say.

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I, I, I like it.
We might, we might actually

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start the, the conversation
properly there, Warren, because

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we want to, we want to chat
about a whole range of things

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today.
But first and foremost in my

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mind is your, your long and
extensive experience in the

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investment banking specific to
metals and mining.

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And I was, I was reading through
the, the book on the Voices Bay

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discovery a couple of months ago
and I noticed your name again in

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there.
And I want to, I want to hear

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about that.
I want to hear about the the

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great experiences you had in
that part of your your career

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and the memories that stick out.
Oh yeah, that it is a great

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story.
So you're talking about the big

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score and, and the Boises Bay
story and, and I knew you were

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going to ask me a little bit
about the deal history and so

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on.
So I actually pulled out some of

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the tombstones that I have
laying around the office in

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here.
The momento.

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Once an investment bank, always
an investment bank.

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But it it's relevant.
It's relevant because it leads

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into the the big score story.
So because there are three deals

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and and OK, we'll start with the
first one.

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So here's here's the Falcon
head.

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Oh nice.
There's a logo you haven't seen

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in a while.
Falcon Bridge.

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Wow.
Awesome.

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Wow.
So.

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So I led the IPO of Falcon
Bridge back in the day and that

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was the world's biggest mining
IPO to date.

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It was 1.4 billion.
And and, and so that that was a

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Seminole transaction obviously
in my career in history.

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Two years later, we did a
billion dollar secondary when

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Trelleborg sold out all of their
shares of Falcon Bridge at a big

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profit.
So that was the biggest

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secondary equity offering in
global mining history at the

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time.
So two big deals that were

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Falcon Bridge related.
And then to close the loop 2

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years later we're having the
takeover Boise Bay.

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I'm advisor to Falcon Bridge
obviously and we reached an

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agreement if you read in the big
score with with Robert to

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acquire Diamond Fields and we
are literally at the closing

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dinner when that and we are
going to.

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We had the perhaps the closing
dinner 12 hours prematurely

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because the deal was actually
closing at 8:00 AM the next

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morning.
And during the closing dinner,

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Robert announced that Inco had
come over the top and

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substantially over the top, not
a little bit, a lot.

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And so that, you know, unless we
countered that and we weren't

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going to counter it because it
was a knockout bid that Inco

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made.
He was selling to Inco.

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So we had a lovely closing
dinner and, and, and didn't

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celebrate the closing of the
deal, but we wound up, we wound

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up getting paid $121 million
break fee, which is to this

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date, I think the largest break
fee ever paid in mining history.

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So it was sort of a good news,
bad news.

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OK, we got a big fee, but we
didn't get the prize.

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And but the good, the, the also
the good news was that Inco

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massively overpaid for Boise's
Bay and had to write down part

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of the investment a few years
later.

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So long, long history you've.
Got you've got your like, yeah,

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your fingers all over the Voices
Bay story.

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And I think we could ask more
questions about it, but I can't

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help but think of the parallels
between Voices Bay and Arrow at

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a similar juncture in time right
now too.

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Do you feel like you're, you
know, there could be a similar

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kind of scenario around the
corner?

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Of course, you know, these great
ore bodies are once in a

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lifetime and to have an
opportunity to be associated

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with those fabulous ore bodies
in your career is, is a, you

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know, a great joy and a unique
experience.

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But also you have to be
proactive and you have to get

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involved.
And, you know, there's an

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another one.
This is a $60 million convert

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that we did with Mr. Lee back 10
years ago when I got Mr. Lee

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involved in in Next Gen. 10
years ago and that was because

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you know, we were proactive and
went out and made a cold call to

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Lee Courier and said these are
these intersections are

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incredible.
We have to we have to get

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involved and we've been involved
for the past 10 years.

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It took 10 years to get our
permits.

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As you know, 2-3 weeks ago we
finally got our final permit.

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So we're building this mine, but
fabulous ore bodies, generally

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speaking in the industry.
And I we're not talking any

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specifics here, but it's
obviously an industry phenomenon

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that these fabulous ore bodies
ultimately wind up in the hands

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of multi billion dollar mining
integrated giants who need these

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ore bodies to be part of their
long term portfolios.

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That that's, that that is
something that is almost

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inevitable in the mining
industry.

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You know, we, we hope it doesn't
happen, but that that is the

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history of the mining industry.
Do do you think the current Iran

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crisis, like I think about a lot
of parallels to, to the 70s and

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how it sparked energy security
implications for the next decade

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and nuclear was a massive build
out following that in 1973, the

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the first Arab oil crisis.
Do you think about that in the

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same way?
And do you also think that that

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might attract the likes of BHP
and Rio and the the real big

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boys who've, you know,
henceforth not been so keen on

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uranium despite what BHP does at
Olympic Dam?

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I I can't speak for Rio or BHP.
Sometimes logic doesn't drive

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their decisions, but what you
state is is absolutely true.

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If anything would remind us all
of the need for energy security

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and energy self-sufficiency.
It's what's going on in the gulf

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today.
And when you know the cost of

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your energy input can increase
50% in a matter of days or you

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know in one day we were up 40%
in a matter of minutes, that is

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not energy security.
It is simply not energy

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security.
So it reinforces the need for

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nuclear and the major companies
will take note of that and not

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just the mining integrated major
companies.

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You know the carbon based
industry.

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You know, one of the one, one of
the jobs I had at the shortly

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around the time of the Falcon
Bridge IPO was I was hired by

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British Petroleum BP to sell all
of their mining assets that they

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held in Canada.
They had a copper mine, they had

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a gold mine, they had a lime
operation.

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And this is the leftover of
their takeover in the what was

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it early 90s or late or sorry,
early 80s or late 80s of

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selection trust to get access to
you know the Zambian copper belt

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and so on.
So it wasn't that long ago that

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the oil companies you will
recall were pretty substantial

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in the mining business and this
will be as much of a wake up

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call to them as it will be to
the mining integrateds.

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That energy comes in many forms.
You don't necessarily have to

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pump it out of the ground, you
can dig it out of the ground.

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The.
There's, there's some other like

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interesting tropes in, in
history, Warren, which which

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yeah, I don't know if I've heard
you talk about, but I'd love to

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just hear about like your
experiences advising some of the

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the major, major Chinese miners
of the world.

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Yeah, a continuation of the
story and and when you when you

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were asking me about highlights
of my career as an investment

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banker, the first highlight of
course is I met my wife there.

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And and so when you're a banker,
when do you have time to have a

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social life?
Well, you don't other than if

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you sort of lucky enough to
create a social life within the

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work environment, which is
probably not, not something

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that's allowed anymore these
days, but.

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Yeah.
I'm sure it has to, it has to,

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but that was a highlight and
obviously personal highlight.

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And then one of the second
highlights was when they said,

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oh, by the way, you're moving
from Toronto to Perth and, and,

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and, and, and, and that was,
that was another highlight.

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So I moved to Perth in 97 and
Gee lucky me, I was there 9899

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at the height of the Internet
boom and gold went to 200 bucks

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an ounce.
And I was in the lucky country,

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the mining country, in the
mining center of that country,

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in Perth, twiddling my thumbs,
not doing anything because no

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one cared about the mining
industry.

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So I moved to Hong Kong.
The bank was kind enough to say,

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we're going to save your job
where?

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And we like you, but this mining
thing is over.

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It's a Rust Belt industry.
You remember that term, Rust

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Belt industry.
We, we don't need metals

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anymore.
You know, it's all about the

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Internet and mobile phones and
so on.

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So we're going to ship you up to
Hong Kong.

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We told you to move to Perth.
Now we're going to move you to

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Hong Kong.
And guess what?

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There are no mines in Hong Kong.
There are no mining engineers in

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Hong Kong.
You can't get into trouble

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there.
And you'll look after this

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fellow Lee Cashing, one of the
world's richest man, who's the

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largest shareholder in the bank,
largest borrower of the bank, So

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big client.
Oh, and by the way, you don't

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have to pay Aussie taxes
anymore.

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You can pay Hong Kong tax.
So.

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This, this was the most
wonderful thing I had heard of.

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Are you kidding me?
I get to keep my job.

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I get to keep my paycheck and
keep more of it.

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And I have some exciting things
to, to learn about and, and get

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to know Mr. Lee.
But the sad part of it is, oh, I

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guess my mining career, my
illustrious mining career is

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over.
And then as you say, the world

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changed, or should I say the
world evolved.

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China became and is to this day,
as you guys know, the most

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dominant force in the
commodities business generally

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and in the mining industry in
particular.

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And here I am by default sitting
in China, the only mining guy

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here and you know, working on a
day-to-day basis with the

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richest guy in Asia at the time,
Lee Kai Shing.

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So it was, you know, manna from
heaven.

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It was it was totally being at
the right place at the right

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time.
And then all of these deals that

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I mentioned earlier, which at
the time were world records, the

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numbers started to change and
the numbers went from being

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billion dollar deals to $10
billion deals.

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And, you know, you had the likes
of Min Metals looking at Miranda

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and Falcon Bridge and you had
Xstrata taking over Falcon

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Bridge and Valet taking over
Rinco and the emergence of Z

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Gin.
But the leader at the time was

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China Mint Metals.
That was the one company that

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was that was tasked with the the
international outreach.

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And then it expanded from there
and with Ginshuan and the nickel

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00:14:30,720 --> 00:14:36,120
business.
Yeah, great, great times.

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00:14:36,120 --> 00:14:41,560
And another one became, you
know, the merger of Placer and

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00:14:41,560 --> 00:14:44,840
Barrack to create the world's
largest gold company, a $10

229
00:14:44,840 --> 00:14:48,840
billion transaction at the time.
So that all happened during that

230
00:14:48,840 --> 00:14:53,920
period of time of, you know, the
last great commodities boom,

231
00:14:53,920 --> 00:14:58,200
2005, 2007.
It's so funny you get these

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00:14:58,200 --> 00:15:01,840
tombstones made-up to to to give
to the company as like a little

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00:15:01,840 --> 00:15:04,200
memento for the deal, but really
they're they're they're for you.

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00:15:04,200 --> 00:15:09,840
The bank could hold on totally.
Totally the one.

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00:15:10,000 --> 00:15:14,720
The one I haven't tried to now.
This was the largest gold IPO in

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00:15:14,720 --> 00:15:19,640
global history at the time,
which was the IPO of Meridian

237
00:15:19,640 --> 00:15:24,080
Gold, which we I read domiciled.
It was called FMC Gold, which is

238
00:15:24,080 --> 00:15:27,560
a whole other story.
FMC Gold was based out of

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00:15:27,560 --> 00:15:32,480
Chicago and run by it was the
arm of FMC.

240
00:15:32,480 --> 00:15:38,000
You might have seen the little
little machines running around

241
00:15:39,480 --> 00:15:44,160
airport tarmacs because they do
all the luggage handling these

242
00:15:44,240 --> 00:15:49,160
FMC machines, which stands for
Farm Machinery Corporation.

243
00:15:49,680 --> 00:15:52,720
But one of the other things Farm
Machinery Corporation did,

244
00:15:52,720 --> 00:15:57,680
besides making baggage handling
and little tugs, was they made

245
00:15:57,680 --> 00:16:01,400
Bradley Fighting Vehicles.
So they were their biggest

246
00:16:01,400 --> 00:16:03,440
business was as a defense
contractor.

247
00:16:03,760 --> 00:16:07,320
And so the entire management of
FMC was all military.

248
00:16:07,320 --> 00:16:13,960
They were all Air Force generals
and submariners and Marine Corps

249
00:16:13,960 --> 00:16:17,360
vets.
And it was a very, very

250
00:16:17,720 --> 00:16:20,320
unpleasant transaction to work
on.

251
00:16:21,440 --> 00:16:26,640
But as you say, we make
tombstones for the banker, not

252
00:16:26,640 --> 00:16:29,440
necessarily for the for the
client.

253
00:16:29,800 --> 00:16:34,760
I, I put a Maple Leaf coin and
that's a real Maple Leaf in here

254
00:16:35,800 --> 00:16:38,960
because at the time, gold was
all of 200 bucks an ounce.

255
00:16:39,480 --> 00:16:41,640
Well, this tombstone is actually
worth something.

256
00:16:41,640 --> 00:16:43,960
Now I'm going to have to bring
it up to get the coin out of it.

257
00:16:45,120 --> 00:16:48,040
One one of the very few to
Everything else here is totally

258
00:16:48,040 --> 00:16:50,240
worthless, but this is worth a
lot of money.

259
00:16:52,040 --> 00:16:54,000
That's awesome.
Warren, you, you shared some

260
00:16:54,000 --> 00:16:56,840
comments when we last spoke with
you about your predictions.

261
00:16:57,280 --> 00:17:01,240
And what sparked my thinking was
what you just said about China

262
00:17:01,240 --> 00:17:04,800
and the, the great boom through
the 2000s into the early 20

263
00:17:04,800 --> 00:17:07,640
tens.
But you had a much more bearish

264
00:17:07,720 --> 00:17:11,920
outlook from from where we are
today looking forward for, for

265
00:17:11,920 --> 00:17:13,760
China.
How, how does that sort of

266
00:17:13,760 --> 00:17:18,640
shaped up right now as we speak?
Yeah, I think it's shaking out

267
00:17:18,640 --> 00:17:24,079
precisely as I had said, you
asked me for and and we'll and

268
00:17:24,079 --> 00:17:26,520
we'll get to the bullish calls
later, I'm sure.

269
00:17:26,520 --> 00:17:29,720
But the bearish call, one of
your questions was, you know,

270
00:17:29,720 --> 00:17:33,800
where are you bearish or where
are you against consensus?

271
00:17:35,160 --> 00:17:38,760
And I thought that, you know,
copper was, was riding a little

272
00:17:38,760 --> 00:17:44,520
too hot.
And part of that was given, you

273
00:17:44,520 --> 00:17:48,560
know, the influence of, you
know, Independence Day and the

274
00:17:48,560 --> 00:17:53,760
whole tariff impact on copper
trade flows and inventories.

275
00:17:53,760 --> 00:17:59,840
And you know, those flows have a
somewhat temporary impact on the

276
00:17:59,840 --> 00:18:01,960
price of a metal.
So we were going through that

277
00:18:01,960 --> 00:18:09,120
experience and we're still going
through an experience of and,

278
00:18:09,160 --> 00:18:12,560
and, and that was biasing short
term prices higher.

279
00:18:14,240 --> 00:18:17,960
But at the same time, when you
looked at fundamentals, you

280
00:18:17,960 --> 00:18:24,200
know, I, I lived in China, China
light in Hong Kong for 25 years.

281
00:18:25,320 --> 00:18:28,760
So we're pretty close to what's
going on in the mainland here.

282
00:18:29,800 --> 00:18:36,560
And you knew that China was
still struggling with the whole

283
00:18:37,040 --> 00:18:41,880
real estate fiasco, the the
backlog of over building that

284
00:18:41,880 --> 00:18:50,440
was going to take still years to
clear that the economy partly as

285
00:18:50,440 --> 00:18:53,320
a result of that, but the
economy generally was still

286
00:18:53,320 --> 00:18:57,080
struggling.
The fact that they were

287
00:18:57,080 --> 00:19:01,400
targeting 5% GDP growth, which
you knew they weren't going to

288
00:19:01,400 --> 00:19:04,600
get to, even though they would
announce that they got there.

289
00:19:06,240 --> 00:19:11,560
And you know, the transition
through the consumer LED economy

290
00:19:12,560 --> 00:19:18,560
that has often been profitized.
But frankly, I'm a bit of a

291
00:19:18,560 --> 00:19:21,680
skeptic in, in, in with regard
to that as well.

292
00:19:22,240 --> 00:19:26,760
Just wasn't happening.
So long winded way of saying

293
00:19:26,920 --> 00:19:30,160
things in China weren't great.
Things in China were slower than

294
00:19:30,400 --> 00:19:32,480
people actually probably
thought.

295
00:19:32,960 --> 00:19:38,080
And the short term price
movement in copper was probably

296
00:19:38,080 --> 00:19:41,560
a little hot for external
reasons.

297
00:19:41,840 --> 00:19:45,200
And so, you know, did I think
that the price of copper at the

298
00:19:45,200 --> 00:19:50,120
end of the year was going to be
lower than it was at the time?

299
00:19:50,160 --> 00:19:54,000
Yeah, And that's certainly
playing out to be the case right

300
00:19:54,000 --> 00:19:57,120
now.
But it's the one commodity

301
00:19:57,120 --> 00:19:59,880
that's actually, you know, year
to date down.

302
00:20:01,600 --> 00:20:04,320
You know, we've all been
watching gold every minute for

303
00:20:04,320 --> 00:20:06,160
the last several days,
obviously.

304
00:20:06,600 --> 00:20:14,120
But people forget even after
yesterday's $230 an ounce fall,

305
00:20:15,080 --> 00:20:18,160
gold is still up here today.
Gold is still up.

306
00:20:19,800 --> 00:20:22,680
So that shows you how far gold
is has has moved.

307
00:20:23,080 --> 00:20:26,280
But but copper is down, you
know, and but I'm not, I'm not

308
00:20:26,280 --> 00:20:28,720
ultra bullish.
I'm just thinking in this,

309
00:20:28,760 --> 00:20:32,320
sorry, ultra bearish in this
bullish environment where in

310
00:20:32,320 --> 00:20:37,320
generally speaking we're in a
long term bullish market for

311
00:20:37,320 --> 00:20:38,720
commodities.
Generally.

312
00:20:39,200 --> 00:20:42,200
I just thought copper was the
one that maybe at the time was

313
00:20:42,200 --> 00:20:44,240
getting a little ahead of
itself, and that's playing out.

314
00:20:44,560 --> 00:20:47,680
So, daddy, you know how these
these are these very successful

315
00:20:47,680 --> 00:20:51,040
entrepreneurs these billionaires
trust Warren with, with their

316
00:20:51,040 --> 00:20:51,520
money?
Yeah.

317
00:20:51,520 --> 00:20:53,720
We've seen that.
That that element of trust,

318
00:20:53,720 --> 00:20:56,480
that's the same kind of trust
that the underground mining

319
00:20:56,480 --> 00:20:58,160
industry has for Sandvik Ground
support.

320
00:20:58,160 --> 00:21:00,320
Sandvik ground support.
You're dead, right?

321
00:21:00,320 --> 00:21:03,240
You need a trust to to like
under all circumstances at all

322
00:21:03,240 --> 00:21:06,680
times to be completely reliable.
It's kind of that trust for for

323
00:21:06,680 --> 00:21:08,040
Derek Kurd that people have as
well.

324
00:21:08,040 --> 00:21:11,360
The billion dollar man.
I trust Derek with I, I, I trust

325
00:21:11,360 --> 00:21:12,720
him with my kids that I don't
have yet.

326
00:21:14,240 --> 00:21:17,360
I trust him and I trust the team
to keep making the latest and

327
00:21:17,360 --> 00:21:21,120
the greatest underground mining
equipment, the plates, the bolts

328
00:21:21,120 --> 00:21:23,160
that keep this industry
thriving.

329
00:21:23,200 --> 00:21:25,320
We've done the homework, mate,
We've been to the facilities,

330
00:21:25,320 --> 00:21:28,560
we've seen them churning out.
So you out there running your

331
00:21:28,560 --> 00:21:31,440
operation, you can trust them to
get in and order with sand at

332
00:21:31,440 --> 00:21:33,440
ground support.
The ground support you can

333
00:21:33,440 --> 00:21:35,520
trust.
One of your bullish calls from

334
00:21:35,520 --> 00:21:40,520
that predictions was beating
your own drum of Queen's Road

335
00:21:40,520 --> 00:21:42,400
Capital.
And if anyone's listening this

336
00:21:42,400 --> 00:21:45,440
far and still, still don't
recognize you, it might be the

337
00:21:45,440 --> 00:21:47,840
first time they've heard you.
You head up Queen's Road

338
00:21:47,840 --> 00:21:50,680
Capital, a very interesting
listed investment company these

339
00:21:50,680 --> 00:21:54,320
days with, with the primary
assets being these convertible

340
00:21:54,760 --> 00:21:58,720
notes, which which yeah, like
entitle you to an enormous

341
00:21:58,720 --> 00:22:01,720
amount of equity and some really
interesting deposits, the

342
00:22:01,720 --> 00:22:05,320
majority of which these days is
attributable to Next Gen.

343
00:22:06,400 --> 00:22:09,480
And you were trading a big
discount to, to, to NAV when we

344
00:22:09,480 --> 00:22:12,880
had that conversation.
The Queens Road Capital, I think

345
00:22:12,880 --> 00:22:16,040
it's doubled since that.
So yeah, you've you've gone some

346
00:22:16,040 --> 00:22:17,400
ways to bridging the discount to
NAV.

347
00:22:19,160 --> 00:22:22,160
Yes, we have.
We've, we've done a good job of,

348
00:22:22,640 --> 00:22:25,240
of significantly reducing that
discount.

349
00:22:25,240 --> 00:22:30,760
And I I asked at the time, would
it would it be in politic or in

350
00:22:30,760 --> 00:22:36,320
polite of me to recommend my own
stock as my big bold call and,

351
00:22:36,400 --> 00:22:39,160
and, and you guys were kind
enough to indulge me.

352
00:22:39,400 --> 00:22:41,320
I was sold.
I I said I was going to go buy

353
00:22:41,320 --> 00:22:43,240
some stock before the episode,
but I I didn't.

354
00:22:45,040 --> 00:22:50,520
Not too late, not too late.
But it's one of those situations

355
00:22:50,520 --> 00:22:54,440
you talk to the CEO at the time
and you say, hey, this is a no

356
00:22:54,440 --> 00:22:57,320
brainer.
It is the best stock out there

357
00:22:57,320 --> 00:23:00,080
right now to buy.
And and as you quite rightly

358
00:23:00,080 --> 00:23:03,280
point out, since we had that
conversation back in December,

359
00:23:03,280 --> 00:23:07,880
the stock has doubled.
So it's done, it's done

360
00:23:07,880 --> 00:23:13,120
extraordinarily well in part
simply by getting the getting

361
00:23:13,120 --> 00:23:15,360
the story out and telling more
people about it.

362
00:23:15,360 --> 00:23:19,240
I've been out on the road doing
a retail roadshow in Canada.

363
00:23:19,240 --> 00:23:21,840
I just came back from Europe
doing a retail roadshow there

364
00:23:21,840 --> 00:23:24,840
and I leave on Sunday to do
another retail roadshow in

365
00:23:24,840 --> 00:23:27,800
Eastern Canada.
So we're just getting to be a

366
00:23:27,800 --> 00:23:31,800
little bit better known, but
what a great story to tell.

367
00:23:32,040 --> 00:23:37,200
And I should say before I go any
further, Queens Road Capital QRC

368
00:23:37,480 --> 00:23:41,360
listed on the TSX under the
ticker QRC.

369
00:23:41,560 --> 00:23:44,680
Just so your viewers know what
we're talking about here.

370
00:23:46,280 --> 00:23:53,040
So the stock that doubled is QRC
and we, we're not stopping

371
00:23:53,040 --> 00:23:54,880
there.
And, and you haven't mentioned

372
00:23:54,880 --> 00:23:57,520
it, but we're a dividend paying
company.

373
00:23:58,240 --> 00:24:01,640
We're highly profitable, highly
cash generative.

374
00:24:01,880 --> 00:24:06,440
So it's a, it's a, and we're an
investor as you say, in

375
00:24:06,640 --> 00:24:13,560
convertible debt securities.
So we are a conservative way to

376
00:24:13,560 --> 00:24:19,760
invest in the mining sector,
which in this environment where

377
00:24:19,760 --> 00:24:24,240
you want a defensive exposure to
the industry, we're a great way

378
00:24:24,240 --> 00:24:29,120
to play it.
But why is the stock moved one?

379
00:24:29,120 --> 00:24:32,600
Yes, we got out there and beat
the drum and told the story.

380
00:24:33,040 --> 00:24:36,400
We are trading at a significant
discount to NAV.

381
00:24:36,920 --> 00:24:40,720
So that was low hanging fruit.
Just get people to pay what the

382
00:24:40,720 --> 00:24:45,520
stock is worth, nevermind all
the potential future growth.

383
00:24:45,920 --> 00:24:49,720
But look at the track record.
You know, we started this

384
00:24:49,720 --> 00:24:54,680
company six years ago.
Our convertible debentures are

385
00:24:55,200 --> 00:24:57,480
generally speaking five year
maturity.

386
00:24:57,880 --> 00:25:02,280
So when I asked people to invest
in the company six years ago, it

387
00:25:02,280 --> 00:25:07,400
was trust me, it was this is
what we're going to do, this is

388
00:25:07,400 --> 00:25:10,560
the business plan.
Trust me, it's all going to work

389
00:25:10,560 --> 00:25:17,000
out really well.
And some people did, some, as

390
00:25:17,000 --> 00:25:21,560
you know, my top five, six
shareholders are Australian

391
00:25:21,560 --> 00:25:26,560
billionaires.
So some important smart people

392
00:25:26,800 --> 00:25:33,400
trusted me.
Well, now six years later, those

393
00:25:33,400 --> 00:25:38,440
initial investments have matured
and now it's no longer a trust

394
00:25:38,440 --> 00:25:43,240
me story.
It's a let me show you story.

395
00:25:44,120 --> 00:25:49,320
I will show you what we've done
in the last 5-6 years and the

396
00:25:49,320 --> 00:25:53,040
IRRS for every single one of
those investments.

397
00:25:53,040 --> 00:25:56,160
And all this detail is in my
presentation and you can see it.

398
00:25:56,920 --> 00:26:02,000
But the the lowest IRR, this
doesn't exclude anything.

399
00:26:02,000 --> 00:26:04,800
This is the incomplete list of
convertibles that we've

400
00:26:04,800 --> 00:26:09,120
converted in that pair that have
matured and we've converted the

401
00:26:09,240 --> 00:26:16,200
the lowest IRR is 30%, the
highest IRR is 70% and where

402
00:26:16,200 --> 00:26:25,600
everything in between over a six
year period to get 30 to 40 to

403
00:26:25,600 --> 00:26:30,880
50 to 60% IRRS that and that's
internal rate of annual internal

404
00:26:30,880 --> 00:26:35,640
rate of return on every single
investment there I showed you,

405
00:26:35,640 --> 00:26:38,720
you can't argue with the facts.
Those are the facts.

406
00:26:39,880 --> 00:26:43,080
Then the next element is now
trust me to do it again in the

407
00:26:43,080 --> 00:26:46,520
next six years.
And that's where people are

408
00:26:46,520 --> 00:26:51,520
saying, OK, the billionaires
were right to trust you 6 years

409
00:26:51,520 --> 00:26:55,360
ago.
Now the broader audience is is

410
00:26:55,360 --> 00:27:00,960
saying, OK, we get it, on to the
next six years.

411
00:27:02,280 --> 00:27:05,640
Mark to market now what?
What discount to NAV is is QRC

412
00:27:05,640 --> 00:27:10,800
today?
Man, it's, it's changing because

413
00:27:10,800 --> 00:27:15,520
of the markets are so volatile.
So if you'd asked me that 2 days

414
00:27:15,520 --> 00:27:17,800
ago, I would have said we were
probably flat.

415
00:27:19,600 --> 00:27:23,440
Today we're probably maybe 5%.
But yeah, at the time we

416
00:27:23,440 --> 00:27:29,040
chatted, we were about 25%.
So, so 25% of that increase has

417
00:27:29,040 --> 00:27:30,760
been removing the discount to
NAV.

418
00:27:30,880 --> 00:27:34,440
But that means, you know, as you
say, we've gone up 100%.

419
00:27:34,440 --> 00:27:40,160
So 80% of the increase has just
been acknowledgement of the fact

420
00:27:40,160 --> 00:27:46,320
that some of these investments
that we've made are about to be

421
00:27:46,320 --> 00:27:49,160
transformational.
Obviously, their biggest

422
00:27:49,160 --> 00:27:53,720
investment is next Gen.
Next Gen. getting its permit and

423
00:27:53,720 --> 00:27:58,800
moving to construction is a
transformational event for the

424
00:27:58,800 --> 00:28:06,000
company on so many levels.
And and so that is an immediate

425
00:28:06,400 --> 00:28:13,120
term catalyst for US gold
royalty that we've had a 70% IRR

426
00:28:13,120 --> 00:28:20,280
on that convertible and now own
about $90 million worth of gold

427
00:28:20,280 --> 00:28:24,800
royalty stock while Tether just
keeps buying that stock and

428
00:28:24,800 --> 00:28:28,400
increases and creeps they're up
to 13.7%.

429
00:28:28,800 --> 00:28:31,800
People are wondering what
Tethers ambitions are with

430
00:28:31,800 --> 00:28:35,520
respect to gold royalty, while
we are the second biggest

431
00:28:35,520 --> 00:28:40,560
shareholder after Tether.
So that's an immediate catalyst

432
00:28:40,560 --> 00:28:44,240
for the company.
Mashiko Copper, which is our

433
00:28:44,280 --> 00:28:48,600
second largest investment of 70
million convertible, we have a

434
00:28:48,600 --> 00:28:50,320
70 million convertible in next
Gen.

435
00:28:50,320 --> 00:28:53,720
We also have a 70 million
convertible in Mashiko Copper.

436
00:28:54,080 --> 00:28:58,080
Mashiko Copper is a private
company, so people don't know

437
00:28:58,080 --> 00:29:01,080
much about it and there's very
little disclosure in the public

438
00:29:01,080 --> 00:29:04,400
market about it.
But that will all change a year

439
00:29:04,400 --> 00:29:10,680
from now and a year from now
we'll IPO that company at I

440
00:29:10,680 --> 00:29:14,400
would hazard a guess that
several multiples of the

441
00:29:14,400 --> 00:29:20,360
valuation when we put our money
in two years ago, whether copper

442
00:29:20,360 --> 00:29:23,360
is stronger or weaker at the
time really doesn't matter.

443
00:29:23,520 --> 00:29:28,600
Our cost of production is barely
north of of a $1.00 a pound.

444
00:29:28,800 --> 00:29:34,080
So this is a cash flow machine
and people are starting to

445
00:29:34,080 --> 00:29:39,080
understand that we have all this
optionality that's going to be a

446
00:29:39,080 --> 00:29:42,840
2027 event.
The other events are 2026 event.

447
00:29:42,840 --> 00:29:47,600
So we have catalyst coming in
the next two months, six months,

448
00:29:47,600 --> 00:29:52,480
12 months that are
transformational for the Queens

449
00:29:52,480 --> 00:29:57,400
Rd. valuation and people are
starting to understand that.

450
00:29:59,320 --> 00:30:01,720
I think these catalysts are a
bit existential in some

451
00:30:01,720 --> 00:30:03,840
respects.
Too, they are, they are.

452
00:30:03,840 --> 00:30:07,960
I mean we're not talking about a
a change that'll increase the

453
00:30:07,960 --> 00:30:11,080
share price one or $2.00 a
share.

454
00:30:11,080 --> 00:30:13,560
We, you know, we trade about $15
a share now.

455
00:30:13,880 --> 00:30:16,240
So we're not talking about
something that's going to impact

456
00:30:16,240 --> 00:30:19,360
us by 10 or 20%.
We're talking about something

457
00:30:19,360 --> 00:30:21,560
that's the size of our current
market cap.

458
00:30:24,240 --> 00:30:26,240
You know each one could be that
size.

459
00:30:27,240 --> 00:30:32,280
So these are and these are
existential impacts as you say.

460
00:30:33,600 --> 00:30:36,240
Get a bit of a flavor of why so
many of the the biggest mining

461
00:30:36,240 --> 00:30:38,760
companies in the world trusted
you, Warren, as an advisor that,

462
00:30:39,080 --> 00:30:42,480
that that ability to, to get me
on your side is, is working.

463
00:30:43,080 --> 00:30:47,280
I'm curious to hear you
mentioned Mashiko and their IPO

464
00:30:47,280 --> 00:30:48,560
ambitions.
This is a company I'm really

465
00:30:48,560 --> 00:30:50,280
curious about.
And like you say, there's not

466
00:30:50,280 --> 00:30:54,720
too much out there about them.
But just at a broader level,

467
00:30:54,720 --> 00:30:57,600
when you talk about the IPO, how
do you see valuations when you

468
00:30:57,600 --> 00:31:00,440
compare, you know, your your
neck of the woods up in Canada

469
00:31:00,440 --> 00:31:04,440
versus the ASX versus North
America, which is getting a real

470
00:31:04,440 --> 00:31:07,320
flavor for for mining again and
it's becoming a bigger and

471
00:31:07,320 --> 00:31:09,320
bigger topic there.
How do you think about that

472
00:31:09,600 --> 00:31:12,960
aspect?
Yeah, You know, this is a

473
00:31:12,960 --> 00:31:14,880
pendulum.
It swings back and forth.

474
00:31:15,120 --> 00:31:19,280
You gentlemen will recall the
days when the Aussies weren't

475
00:31:19,280 --> 00:31:23,240
happy with valuations in ounces,
so they were trying to do a list

476
00:31:23,240 --> 00:31:25,960
in Canada because there were
valuations higher there.

477
00:31:27,120 --> 00:31:32,960
And then the whole cannabis boom
occurred and Canada completely

478
00:31:32,960 --> 00:31:34,680
forgot about the mining
industry.

479
00:31:34,680 --> 00:31:39,360
The pendulum swung completely
the other way and Australia

480
00:31:39,360 --> 00:31:43,800
became the leader in valuations.
And then you had Canadians

481
00:31:43,800 --> 00:31:47,960
wanting to do a list on the ASX
because ASX was the leader.

482
00:31:49,680 --> 00:31:52,720
You've noted probably in the
last six months that the

483
00:31:52,720 --> 00:31:58,960
pendulum is now swung back and
valuations in Canada are

484
00:31:58,960 --> 00:32:04,960
starting to lead the charge.
So it, yeah, it's a pendulum

485
00:32:04,960 --> 00:32:11,800
that that swings back and forth
and, and it's, it's, it's a

486
00:32:11,800 --> 00:32:17,960
great friendly rivalry, I think
between the TSX and the ASX to

487
00:32:17,960 --> 00:32:22,000
dominate the, the, the global
mining industry.

488
00:32:22,000 --> 00:32:30,280
But in Mashiko's case, this is
going to be a multi billion

489
00:32:30,280 --> 00:32:32,200
dollar company.
Well, it is.

490
00:32:32,440 --> 00:32:39,040
It is currently a multi billion
dollar company and led by a

491
00:32:40,320 --> 00:32:45,120
fabulous CEO by the name of Alan
Davies storied career in Rio

492
00:32:45,120 --> 00:32:50,320
Tinto, exactly right.
Former CEO of Rio Copper and Rio

493
00:32:50,320 --> 00:32:54,680
Diamonds and Energy and former
CFO of the iron ore business and

494
00:32:54,680 --> 00:32:56,440
so on.
Long history, that's a whole

495
00:32:56,440 --> 00:33:01,720
other story.
But Alan is going to create and

496
00:33:02,960 --> 00:33:07,440
grow a one of the world's
dominant copper companies and

497
00:33:07,440 --> 00:33:12,360
you need to have a New York
listing to access those capital

498
00:33:12,360 --> 00:33:14,680
pools.
And so and, and, and of

499
00:33:14,680 --> 00:33:19,040
significant number of our
shareholders are New York based.

500
00:33:20,200 --> 00:33:24,280
So this will be a New York IPO.
So we talked about ASX, we

501
00:33:24,280 --> 00:33:29,840
talked about TSX, but obviously
the deepest capital pool is

502
00:33:29,840 --> 00:33:32,400
still New York.
So I think I've heard a little

503
00:33:32,560 --> 00:33:34,960
some rumors about some of the
capital pools for Mashiko.

504
00:33:35,080 --> 00:33:40,560
Also big Middle East money no?
The, the great and good of, of

505
00:33:40,600 --> 00:33:45,440
the New York hedge fund
community, those, those names

506
00:33:45,520 --> 00:33:51,680
are, are, you know, many of them
are shareholders.

507
00:33:51,680 --> 00:33:56,480
So there's significant support
for the company, some pretty

508
00:33:56,480 --> 00:34:02,160
deep pools for access to, to
future capital and yes, Middle

509
00:34:02,160 --> 00:34:04,680
East money.
And part of that is, is as a

510
00:34:04,680 --> 00:34:08,760
result of our, you know, we have
two mines, 2 copper mines in

511
00:34:08,760 --> 00:34:18,280
Zambia, but we have a third mine
coming on shortly start, start

512
00:34:18,280 --> 00:34:20,360
construction this year in Saudi
Arabia.

513
00:34:21,520 --> 00:34:26,719
And we were given at this year's
FMF Future Minerals Forum in

514
00:34:26,719 --> 00:34:31,560
Riyadh back in January, we were
granted our mining permit.

515
00:34:31,560 --> 00:34:34,920
So we now have our mine permit
in Saudi and we'll be building a

516
00:34:34,920 --> 00:34:39,040
copper zinc mine in Saudi Arabia
and joint venture with Ajlan

517
00:34:39,040 --> 00:34:44,000
Brothers and and part of our
Middle East shareholder base.

518
00:34:44,000 --> 00:34:49,400
As a result of our activities in
Saudi and the fact that we won

519
00:34:49,480 --> 00:34:53,080
again with against Robert
Friedland, against Robert, the

520
00:34:53,080 --> 00:34:55,520
name we started this
conversation with a few minutes

521
00:34:55,520 --> 00:34:59,720
ago, we beat out Robert who
would go to the all the early

522
00:34:59,720 --> 00:35:03,040
FMFS and win every auction on
every license that the

523
00:35:03,040 --> 00:35:05,920
government put up.
Finally someone beat him at an

524
00:35:05,920 --> 00:35:07,440
auction.
That was the first time that

525
00:35:07,440 --> 00:35:11,320
anyone except Robert hadn't got
a a license and it was us.

526
00:35:11,800 --> 00:35:15,840
And we took this exploration
license and have completed a

527
00:35:15,840 --> 00:35:22,040
feasibility study, defined
highly profitable copper zinc

528
00:35:22,040 --> 00:35:30,160
mine, got the mine permit for
that and about to be financed

529
00:35:30,160 --> 00:35:35,440
100% by the Saudi government in
terms of our our CapEx

530
00:35:35,440 --> 00:35:38,480
requirement.
And so we're a bit of a poster

531
00:35:38,480 --> 00:35:46,360
child for success of the Saudi
vision to build a domestic

532
00:35:46,400 --> 00:35:49,120
metals industry.
We started five years ago

533
00:35:49,480 --> 00:35:53,920
winning an exploration license
auction and now five years later

534
00:35:53,920 --> 00:35:58,760
we're we're start going to start
building a mine in Saudi Arabia,

535
00:35:59,680 --> 00:36:02,760
precisely what the Saudi
government wanted to see happen.

536
00:36:02,880 --> 00:36:06,080
And we're the ones who have done
it, not Robert yet.

537
00:36:08,000 --> 00:36:13,320
And and so and so we have a lot
of support in the in, in, in the

538
00:36:13,320 --> 00:36:17,840
country.
Is something that comes to mind

539
00:36:18,600 --> 00:36:23,000
Warren and and last year JD and
I had the privilege of, of

540
00:36:23,000 --> 00:36:27,200
interviewing a a tremendously
storied geologist by the name of

541
00:36:27,200 --> 00:36:30,160
Ed issues who's who's got
numerous discoveries to his

542
00:36:30,160 --> 00:36:34,040
name.
And and Ed you know, Ed was

543
00:36:34,040 --> 00:36:39,600
running a a listed investment
company called DGO and DGO by

544
00:36:39,600 --> 00:36:43,680
virtue of their stake in Hemi
was degraded with the largest

545
00:36:43,680 --> 00:36:48,160
degrade shareholder for a long
period of time and traded at a

546
00:36:48,160 --> 00:36:52,000
discount to NAV and degrade
obviously being a big takeover

547
00:36:52,000 --> 00:36:55,200
target.
It was the because it traded the

548
00:36:55,200 --> 00:36:57,880
discount to NAV, it was the
logical kind of entry for a, for

549
00:36:57,880 --> 00:37:01,040
a, an acquirer to to get their
their stake.

550
00:37:01,200 --> 00:37:04,360
And so gold Rd. in and up
closing the discount to NAV by

551
00:37:04,520 --> 00:37:08,040
by taking over DGO.
And I think of, I think of you

552
00:37:08,040 --> 00:37:11,280
right now banging the drum on a
discount to NAV at Queens Road

553
00:37:11,280 --> 00:37:14,320
Capital.
I don't think the stake in in in

554
00:37:14,320 --> 00:37:17,280
next Gen. is, is as meaningful
as DT OS was in in degrade.

555
00:37:17,280 --> 00:37:18,680
But there's, there's some
parallels there.

556
00:37:18,680 --> 00:37:20,520
The listed investment company
trading at a discount and

557
00:37:20,520 --> 00:37:24,960
interesting like, like entry
point for for for, you know, a

558
00:37:24,960 --> 00:37:27,920
world class asset that belongs
in the hands of someone else.

559
00:37:28,240 --> 00:37:29,880
Is it?
Am I reading too much into this?

560
00:37:30,480 --> 00:37:34,160
No, no, that that that's.
That is a very great parallel

561
00:37:35,640 --> 00:37:41,920
and and I know Ed from my days
in Perth, as you say, great Geo,

562
00:37:41,920 --> 00:37:48,160
a great thinker and absolutely
tremendous parallel.

563
00:37:49,040 --> 00:37:55,400
The only difference is that you
know, DGO had the exposure to

564
00:37:55,400 --> 00:38:01,400
Degray.
I've got exposure to next Gen.

565
00:38:02,080 --> 00:38:05,360
I've got exposure to Mashiko
copper, I've got exposure to

566
00:38:05,360 --> 00:38:08,880
gold royalty.
I've got, I've got a variety of

567
00:38:08,880 --> 00:38:15,080
levers in great ore bodies and
great management teams in a

568
00:38:15,080 --> 00:38:22,520
variety of commodities in a
variety of geographic places in

569
00:38:22,520 --> 00:38:26,160
the world.
And we haven't talked talked

570
00:38:26,160 --> 00:38:30,040
about Adriatic and takeover of
Dundee precious metals and the

571
00:38:30,040 --> 00:38:34,840
exposure we have there, you know
Los Andes copper and Chile, you

572
00:38:34,960 --> 00:38:40,920
know all these other that are
relevant but smaller investors.

573
00:38:40,920 --> 00:38:45,880
But we've got exposure to all of
these levers, not just one

574
00:38:45,880 --> 00:38:51,200
commodity and one ore deposit.
In the case of of Dundee, when

575
00:38:51,200 --> 00:38:56,960
Adriatic was was acquired, did
your your convertible you, you

576
00:38:56,960 --> 00:38:59,960
converted, you converted to
equity before beforehand, didn't

577
00:38:59,960 --> 00:39:01,360
you?
We did, yeah.

578
00:39:01,560 --> 00:39:07,360
We, we converted our, our, our
Adriatic convert matured before

579
00:39:07,360 --> 00:39:10,280
the Dundee takeover.
So we were an Adriatic

580
00:39:10,280 --> 00:39:15,080
shareholder.
So we benefited from, you know,

581
00:39:15,080 --> 00:39:18,480
Dundee's takeover of Adriatic
through the actual shares.

582
00:39:19,720 --> 00:39:23,560
And we are to this day still a
very significant Dundee Precious

583
00:39:23,560 --> 00:39:27,840
Metal shareholder.
You know, my view was, you know,

584
00:39:27,880 --> 00:39:31,000
Adriatic sold itself a little
too cheaply.

585
00:39:32,040 --> 00:39:36,080
That was the bad news.
The good news was, well, a big

586
00:39:36,080 --> 00:39:38,560
part of the compensation was
Dundee shares.

587
00:39:38,840 --> 00:39:42,360
And so we eventually recouped
the value that I thought was

588
00:39:42,360 --> 00:39:47,520
lost on the valuation of Vera's
deposit through Adriatic on that

589
00:39:47,520 --> 00:39:49,160
takeover.
In other words, Dundee got a

590
00:39:49,160 --> 00:39:53,480
great deal and it was very
quickly reflected in Dundee's

591
00:39:53,480 --> 00:39:57,400
share price over the ensuing 6
months to a year.

592
00:39:57,840 --> 00:40:02,520
So that's all worked out in the
end very, very well.

593
00:40:02,920 --> 00:40:05,720
And have you maintained or have
you since liquidated that

594
00:40:05,720 --> 00:40:08,200
position?
No, no, we've, we are to this

595
00:40:08,200 --> 00:40:11,640
day still a very big shareholder
in Dundee and and we tend to

596
00:40:11,640 --> 00:40:13,520
hold on to a lot of these
things.

597
00:40:14,280 --> 00:40:19,040
You know, ISO energy, our second
investment in the uranium space,

598
00:40:19,360 --> 00:40:23,760
that one matured and it was a
small we, you know, you have to

599
00:40:23,760 --> 00:40:28,800
understand when we started this
company, we were very, very, we

600
00:40:28,800 --> 00:40:31,720
didn't have much money.
You know, in actual fact, I

601
00:40:31,720 --> 00:40:37,440
always like to tell the story.
The predecessor of of Queens

602
00:40:37,440 --> 00:40:41,720
Road was the company that had
failed in the lithium space

603
00:40:41,720 --> 00:40:46,840
through the two prior lithium
booms and was now this moribund

604
00:40:46,840 --> 00:40:52,400
shell with a market cap of
$1,000,000, which I put $300,000

605
00:40:52,400 --> 00:40:56,400
into to get control, change the
board, redomicile it from

606
00:40:56,400 --> 00:40:59,400
British Columbia into the Cayman
so that we don't have to pay

607
00:40:59,400 --> 00:41:02,720
tax.
And, and we started with a

608
00:41:02,720 --> 00:41:05,840
market cap of 1,000,000.
And then I changed the name of

609
00:41:05,840 --> 00:41:10,200
Queens Road.
And that $1 million company

610
00:41:10,200 --> 00:41:16,960
today, a week ago had a market
cap of almost 900 million and

611
00:41:16,960 --> 00:41:22,040
had paid out dividends of 7080
million.

612
00:41:22,040 --> 00:41:27,960
So creation of almost a billion
dollars in value in six years.

613
00:41:29,400 --> 00:41:31,720
So good for us.
Yeah, that was, that's

614
00:41:31,720 --> 00:41:36,840
wonderful.
But we were running, we were, we

615
00:41:36,840 --> 00:41:39,280
were writing small checks
because we started small.

616
00:41:39,400 --> 00:41:44,320
So I in my investment in ISO was
6,000,000 dollars, $6 million

617
00:41:44,320 --> 00:41:47,000
convertible.
Well, we converted that into

618
00:41:47,800 --> 00:41:54,240
shares that are worth 30, five,
$40 million and we hold every

619
00:41:54,240 --> 00:41:59,080
single one of those shares.
So you know, we, we hold every

620
00:41:59,080 --> 00:42:02,080
single share that when we
converted into gold royalty, we

621
00:42:02,080 --> 00:42:04,800
hold every single share.
What's going to happen with

622
00:42:04,800 --> 00:42:07,480
Tether, We hold every single
share of ISO.

623
00:42:07,480 --> 00:42:10,600
We obviously we still hold our
our next Gen.

624
00:42:11,440 --> 00:42:16,760
So it's not unusual for us to
hold on to these things and we

625
00:42:16,760 --> 00:42:21,160
will exit when we think we will
maximize value for Queens Rd.

626
00:42:21,160 --> 00:42:24,760
shareholders.
We don't own all of our Dundee

627
00:42:24,760 --> 00:42:28,400
precious metals.
We have sold some of that and

628
00:42:28,440 --> 00:42:33,800
use of proceeds for that was
100% to buy into Mashiko because

629
00:42:33,800 --> 00:42:36,760
we know we're going to make
multiples more on our Mashiko

630
00:42:36,760 --> 00:42:39,200
investment.
So we have sold some of it down,

631
00:42:39,200 --> 00:42:43,040
but we still own $50 million of
Dundee, something like that.

632
00:42:44,080 --> 00:42:48,560
The, the, the convertible model
that, that you've like thrived

633
00:42:48,560 --> 00:42:51,760
on it.
It feels like an instrument that

634
00:42:52,040 --> 00:42:57,280
that has has a lot more interest
when, when the market is not as

635
00:42:57,280 --> 00:43:00,280
forthcoming with equity capital.
And right right now, maybe not

636
00:43:00,280 --> 00:43:03,600
the last week or so, but but in
general the market has been so

637
00:43:03,600 --> 00:43:05,920
much more forthcoming from an
equity capital perspective.

638
00:43:06,000 --> 00:43:08,920
It is it a lot more difficult to
find opportunities to actually

639
00:43:09,000 --> 00:43:11,560
deploy that instrument.
Yeah, generally speaking, you

640
00:43:11,560 --> 00:43:15,000
know, that's, that's, that's an
accurate observation.

641
00:43:15,240 --> 00:43:21,440
Who are our competitors?
No one seems to do what we do.

642
00:43:21,920 --> 00:43:27,760
No one focuses on convertibles
to the extent that we do.

643
00:43:28,080 --> 00:43:32,080
So we have a unique space so
that we don't have any

644
00:43:32,080 --> 00:43:35,800
convertible competitors.
Our competitors, the equity

645
00:43:35,800 --> 00:43:43,080
market is, is equity capital
available and low cost.

646
00:43:43,480 --> 00:43:49,920
And in times like that, yeah, it
is more difficult for us to

647
00:43:49,920 --> 00:43:53,880
deploy capital and it's easier
for companies just to go out and

648
00:43:53,880 --> 00:43:55,840
whack the market and raise
money.

649
00:43:57,640 --> 00:44:03,240
Well, guess what, the mining
industry is very cyclical.

650
00:44:03,800 --> 00:44:11,240
Mining has hot months and not so
hot months, good years and bad

651
00:44:11,240 --> 00:44:15,040
years.
The when when we go through

652
00:44:15,040 --> 00:44:18,480
periods like we're currently
going through right now where

653
00:44:18,480 --> 00:44:23,960
equity capital is virtually non
existent in this case because of

654
00:44:23,960 --> 00:44:28,480
war, but sometimes just people
lose interest in the sector or

655
00:44:28,480 --> 00:44:32,240
becomes maybe it's available but
becomes very, very costly.

656
00:44:32,760 --> 00:44:35,080
Then it's our time to deploy
capital.

657
00:44:35,200 --> 00:44:41,440
And the great thing about our
model is that when it's our time

658
00:44:41,440 --> 00:44:47,360
to deploy capital, valuations
are down South.

659
00:44:48,400 --> 00:44:56,400
Virtually built into the system
is when we deploy capital, it's

660
00:44:56,400 --> 00:45:00,280
when we're getting a great
valuation for our investors.

661
00:45:00,800 --> 00:45:05,360
Let's let the institutions do
the bot deals at the top of the

662
00:45:05,360 --> 00:45:09,960
market when equity prices are
incredibly high and mining

663
00:45:09,960 --> 00:45:14,040
companies are just, as I say,
whacking the market.

664
00:45:14,040 --> 00:45:18,280
Just feed the ducks while
they're crack quacking, as they

665
00:45:18,280 --> 00:45:21,520
say.
Our model is exact opposite.

666
00:45:21,560 --> 00:45:24,920
Our model is all times are
tough.

667
00:45:25,400 --> 00:45:33,080
I still need money to advance my
excellent project, but either I

668
00:45:33,080 --> 00:45:37,360
can't access the equity markets
or they're ridiculously costly

669
00:45:37,360 --> 00:45:40,000
or I don't want to do a down
round.

670
00:45:40,360 --> 00:45:43,400
Last you know, last year when
markets were hot, I raised money

671
00:45:43,400 --> 00:45:46,680
at 5 bucks.
My stock is now 4.

672
00:45:46,760 --> 00:45:50,480
I don't want to raise more money
at 4:00 because that's a slap in

673
00:45:50,480 --> 00:45:52,560
the face to the guys who came in
at 5:00.

674
00:45:53,000 --> 00:45:56,640
Well, do a convertible with
Queens Road.

675
00:45:56,720 --> 00:46:02,480
We're always at a 30% premium.
So if your stocks at 4 bucks

676
00:46:02,720 --> 00:46:06,600
were convertible at 5:20, well,
guess what, that's an up round

677
00:46:06,600 --> 00:46:12,560
on your $5 raise from last year.
So that's when our phone starts

678
00:46:12,560 --> 00:46:14,320
to ring.
And guys were saying, well,

679
00:46:14,600 --> 00:46:18,560
Warren, I know you wanted in on
the project 6 months ago, equity

680
00:46:18,560 --> 00:46:21,000
markets were hot.
We just did an equity deal.

681
00:46:21,000 --> 00:46:23,840
But are you still interested?
Can we get you in now?

682
00:46:23,840 --> 00:46:28,440
We could use some money and and
so the phone rings when

683
00:46:28,480 --> 00:46:32,800
valuations are attractive to us.
How do you make sure you always

684
00:46:32,800 --> 00:46:34,880
have capital to deploy at those
points in time?

685
00:46:34,880 --> 00:46:37,760
Do you have a philosophy around
carrying capital through through

686
00:46:37,760 --> 00:46:39,560
the cycle?
Otherwise, you know you don't

687
00:46:39,560 --> 00:46:42,080
want to be selling your
positions at those low moments.

688
00:46:42,960 --> 00:46:46,960
Yeah, No, we this, this is
always planning ahead for a

689
00:46:46,960 --> 00:46:52,440
rainy day.
And originally we we didn't have

690
00:46:52,440 --> 00:46:55,640
this issue because as I say, we
started very small.

691
00:46:56,040 --> 00:46:59,440
You know, the first money I
raised six years ago was $85

692
00:46:59,440 --> 00:47:01,960
million.
I spent it in the first six

693
00:47:01,960 --> 00:47:04,440
months on convertibles.
It was all gone.

694
00:47:04,880 --> 00:47:11,400
And after that I had to, you
know, sit on my hands for a

695
00:47:11,400 --> 00:47:14,840
while because I didn't want to
go back to the well too soon.

696
00:47:14,840 --> 00:47:18,000
Then I raised 100 million.
We spent that money in six

697
00:47:18,000 --> 00:47:20,840
months.
So we we've always been to a

698
00:47:20,840 --> 00:47:25,760
certain extent, extent in our
history, capital constrained.

699
00:47:27,320 --> 00:47:31,200
Now we're in for the first time
in our lives, we're in this

700
00:47:31,200 --> 00:47:36,920
position where we've got cash,
we've got an equity portfolio

701
00:47:36,920 --> 00:47:41,320
that our equity portfolio is now
300 million U.S. dollars.

702
00:47:42,200 --> 00:47:44,240
So that's our Piggy Bank, if you
will.

703
00:47:44,240 --> 00:47:48,360
We can raid that and it's and
it's in a variety of

704
00:47:48,360 --> 00:47:51,080
commodities.
There copper names there, there

705
00:47:51,080 --> 00:47:53,840
are uranium names there there
are copper names, there are

706
00:47:53,840 --> 00:48:00,120
silver names, gold names.
So generally speaking, not every

707
00:48:00,120 --> 00:48:04,280
commodity is down that that at
all times.

708
00:48:04,960 --> 00:48:07,920
You know, right now, you know,
uranium prices held up very

709
00:48:08,080 --> 00:48:10,120
nicely while gold price has
fallen off.

710
00:48:11,040 --> 00:48:16,640
So that's our Piggy Bank that we
can use to sell to fund our next

711
00:48:16,640 --> 00:48:19,440
convert.
But that's the first time in six

712
00:48:19,440 --> 00:48:21,360
years we've been in this
wonderful position.

713
00:48:22,080 --> 00:48:24,760
It's a great luxury to have.
Usually, as I say on our

714
00:48:24,760 --> 00:48:28,960
history, we've been, we've been
constrained, but I think those

715
00:48:28,960 --> 00:48:32,240
days are behind us.
There's 11 company you've got to

716
00:48:32,240 --> 00:48:36,240
convert with that we haven't
mentioned yet and Challenger,

717
00:48:36,320 --> 00:48:39,720
Challenger Gold, I see you guys
have some convertibles there

718
00:48:39,720 --> 00:48:41,400
too.
What's the we do?

719
00:48:41,640 --> 00:48:42,320
Yeah.
How do you how do.

720
00:48:42,320 --> 00:48:44,320
You a Ding Ding, Ding here.
We're we're a shareholder of

721
00:48:44,320 --> 00:48:45,280
that one.
How?

722
00:48:45,280 --> 00:48:46,920
Do you OK?
How do you how do you see that

723
00:48:46,920 --> 00:48:51,880
coming together?
Well, it's been a if you're a

724
00:48:51,880 --> 00:48:54,880
shareholder, you're probably,
like us, a long-suffering

725
00:48:54,880 --> 00:48:58,040
shareholder.
More recent shareholder.

726
00:48:58,720 --> 00:49:00,600
Recently.
It could be more recently good.

727
00:49:01,600 --> 00:49:05,800
For you and and you know, we are
ore body driven.

728
00:49:05,800 --> 00:49:08,760
I always say, how do you that
people say how do you how do you

729
00:49:08,760 --> 00:49:11,280
select these things?
I select it because of the ore

730
00:49:11,280 --> 00:49:13,640
body.
And maybe perhaps the reason why

731
00:49:13,640 --> 00:49:15,240
you're a shareholder is your
body.

732
00:49:16,200 --> 00:49:19,560
You know, we have this beautiful
high grade Scarn deposit that's

733
00:49:19,560 --> 00:49:24,000
just sitting there at surface
and then we've got a much

734
00:49:24,000 --> 00:49:30,440
broader but lower grade massive
deposit, you know, regionally

735
00:49:30,440 --> 00:49:33,720
and underlying and, and in the
same areas this the Scarn.

736
00:49:34,120 --> 00:49:38,960
But finally they're coming into
production, They've started

737
00:49:38,960 --> 00:49:43,960
mining, they'll be selling gold
during the course of this year,

738
00:49:44,120 --> 00:49:46,480
starting to get cash flow and so
on.

739
00:49:46,840 --> 00:49:52,080
So I, you know, I have hopes
that that'll start to get

740
00:49:52,080 --> 00:49:56,520
recognized in the share price.
It's, it's, you know, we started

741
00:49:56,520 --> 00:50:03,040
small that that's a $15 million
convert, which is now maybe 2%

742
00:50:03,040 --> 00:50:06,840
of our NAV.
So, so it won't, won't move the

743
00:50:06,840 --> 00:50:12,720
needle for us much.
But I am hopeful that even gold

744
00:50:12,720 --> 00:50:19,440
at $4600 or $5000, that Scarn
deposit is going to make

745
00:50:19,440 --> 00:50:24,160
significant free cash flow.
And when that happens, we all

746
00:50:24,160 --> 00:50:29,240
know, and hopefully it happens
again, the stock price benefits

747
00:50:29,240 --> 00:50:32,920
from cash coming in the door
rather than going out the door

748
00:50:32,920 --> 00:50:35,200
constantly.
And and do you think they

749
00:50:35,440 --> 00:50:39,400
monetize the Ecuadorian asset
that they have as well or you're

750
00:50:39,400 --> 00:50:41,120
not so fixated on that part of
the plan?

751
00:50:41,200 --> 00:50:44,200
No, I I'm very much fixated.
For us, that was part of the

752
00:50:44,200 --> 00:50:50,040
optionality is they've got this
massive, yeah, you know, lowest

753
00:50:50,040 --> 00:50:59,200
grade resource in Ecuador.
Ecuador not the greatest address

754
00:50:59,200 --> 00:51:03,880
in the world obviously, and
wasn't the reason why we made

755
00:51:03,880 --> 00:51:06,960
our initial investment.
You know, the initial investment

756
00:51:06,960 --> 00:51:12,240
was driven by the Scarn deposit,
but Ecuador was always free

757
00:51:12,240 --> 00:51:15,400
optionality for us and there's
no question that they will

758
00:51:15,400 --> 00:51:19,760
eventually monetize that.
You know these lower, these

759
00:51:19,760 --> 00:51:23,920
massive lower grade systems.
When we made our investment in

760
00:51:24,920 --> 00:51:31,480
Challenger 4 years ago, they
were effectively uneconomic.

761
00:51:31,480 --> 00:51:34,000
They were they were very much
long term options.

762
00:51:34,320 --> 00:51:39,520
Today they are massively
economic and those deposits in

763
00:51:39,520 --> 00:51:44,240
Ecuador to me a somewhat of a
parallel to these massive open

764
00:51:44,240 --> 00:51:49,160
pit low grade deposits in the
Yukon in Canada.

765
00:51:50,120 --> 00:51:53,560
You know, where you see the
likes of Banyan and Sitka and so

766
00:51:53,560 --> 00:52:00,280
on, where you have, you know, 10
million oz at somewhere around

767
00:52:00,560 --> 00:52:07,120
.8 to 1g a ton, which four or
five years ago was interesting,

768
00:52:07,120 --> 00:52:14,560
but optionality now you know,
gold at 4500 to 5000, hugely

769
00:52:14,560 --> 00:52:17,960
profitable, hugely profitable,
huge margin businesses.

770
00:52:18,160 --> 00:52:20,160
So they'll all get developed
eventually.

771
00:52:21,240 --> 00:52:23,560
Yeah, the landscape has just
changed so, so much.

772
00:52:23,560 --> 00:52:26,880
We see it here first and
foremost in our native WA with

773
00:52:27,440 --> 00:52:30,000
the sheer number of projects
that are now economic coming

774
00:52:30,000 --> 00:52:31,720
online.
Oh, exactly.

775
00:52:32,080 --> 00:52:34,640
And that's the great thing.
You know, it's sort of the

776
00:52:34,640 --> 00:52:37,480
corollary to your question about
deploying capital.

777
00:52:39,040 --> 00:52:43,160
You know, we talked about the
equity side of that discussion

778
00:52:43,480 --> 00:52:47,360
and the ebbs and flows of equity
being available or not being

779
00:52:47,360 --> 00:52:49,920
available.
What we didn't talk about was

780
00:52:49,920 --> 00:52:52,600
the other side of the equation,
which is commodity prices.

781
00:52:52,920 --> 00:52:56,400
And as commodity prices, we've
seen a dramatic rise in the

782
00:52:56,400 --> 00:52:59,440
price of gold.
We've seen a pretty significant

783
00:52:59,440 --> 00:53:03,040
rise in the price of copper, but
everything is moving up.

784
00:53:04,120 --> 00:53:09,600
As that happens, these projects
that evolve from being

785
00:53:09,960 --> 00:53:15,280
marginally geologically
interesting to massively cash

786
00:53:15,280 --> 00:53:19,720
flow generating, the number of
those opportunities expands

787
00:53:19,720 --> 00:53:23,960
almost exponentially.
So the opportunity set in terms

788
00:53:23,960 --> 00:53:29,040
of very attractive projects that
are frankly mispriced in the

789
00:53:29,040 --> 00:53:32,480
market because the market is
still catching up to the idea

790
00:53:32,480 --> 00:53:37,120
that these things aren't
geological curiosities anymore.

791
00:53:37,280 --> 00:53:40,480
We are the next generation of
minds globally.

792
00:53:42,080 --> 00:53:47,880
That opportunity set has grown
for us and and so it just

793
00:53:47,880 --> 00:53:50,560
provides more and more
opportunity for us to invest in

794
00:53:50,560 --> 00:53:54,920
really high margin projects.
It's a super exciting part of

795
00:53:54,920 --> 00:53:58,320
the cycle, Warren, as always,
it's, it's been phenomenal

796
00:53:58,320 --> 00:53:59,560
chatting.
We always have a blast.

797
00:53:59,560 --> 00:54:02,320
And also to hear some of the
stories and, and your outlook

798
00:54:02,320 --> 00:54:04,400
for the future.
Appreciate you being generous

799
00:54:04,400 --> 00:54:06,920
with your time.
Thanks guys.

800
00:54:06,920 --> 00:54:13,160
Always a pleasure and thanks for
allowing me one lap around the

801
00:54:13,160 --> 00:54:16,160
winner's circle.
It's only, it's only three

802
00:54:16,160 --> 00:54:18,000
months into the year.
So I know you're going to hold

803
00:54:18,000 --> 00:54:21,840
me to task and call me in
December and say, you know, is

804
00:54:21,840 --> 00:54:25,600
Queens Road still been the best
performing stock and did you get

805
00:54:25,600 --> 00:54:29,880
your call right?
But thanks for allowing me an

806
00:54:29,880 --> 00:54:33,480
early Q1 victory lap.
Looking forward to that.

807
00:54:35,960 --> 00:54:37,400
Cheers, Warren.
Thank you so much, Warren.

808
00:54:37,680 --> 00:54:40,600
Big thank you to our fantastic
partners, Sandvik Ground

809
00:54:40,600 --> 00:54:44,560
Support, Interlinks, Focus, The
Platform by Market Tech and Nat

810
00:54:44,560 --> 00:54:45,600
Jen.
Check them out.

811
00:54:45,960 --> 00:54:50,040
Hoodoo, hoodoo.
Now remember, I'm an idiot.

812
00:54:50,320 --> 00:54:52,760
JD is an idiot.
If you thought any of this was

813
00:54:52,760 --> 00:54:55,280
anything other than
entertainment, you're an idiot

814
00:54:55,640 --> 00:54:56,760
and you need to read our
disclaimer.