Fortescue Swings the Axe

1
00:00:00,160 --> 00:00:04,240
Righto buddy mourners.
What a day to be a New South

2
00:00:04,280 --> 00:00:08,920
Welshman Go the Mardy Blues.
First time in 19 years that NSW

3
00:00:08,920 --> 00:00:11,000
won a decider at Suncorp
Stadium.

4
00:00:11,240 --> 00:00:14,640
I was throwing children around
sinking dingoes and what a

5
00:00:14,640 --> 00:00:16,760
bloody night.
Getting death.

6
00:00:16,760 --> 00:00:19,040
Death threats on Twitter from
Queenslanders.

7
00:00:19,640 --> 00:00:21,160
Go the Blues.
Go Australia.

8
00:00:21,160 --> 00:00:24,880
You can all get fucked.
Anyone that wants me to die.

9
00:00:25,200 --> 00:00:27,480
Awesome mate, I'm happy for you.
It's good to see you come in

10
00:00:27,520 --> 00:00:30,480
after State of Origin kind of
game and with a smile on your

11
00:00:30,480 --> 00:00:32,280
face, because ever since I've
known you, you've been just.

12
00:00:32,400 --> 00:00:34,240
Yeah.
Going to dumps about positive,

13
00:00:34,240 --> 00:00:38,480
positive attitude not as pretty
much polar opposite to bloody

14
00:00:38,480 --> 00:00:41,360
the market's attitude towards
Fortescue at the moment.

15
00:00:41,360 --> 00:00:45,000
Jesus, a bit going on there,
which is I guess a lack of

16
00:00:45,000 --> 00:00:47,920
trust, but then that's polar
opposite to the trust in Axis

17
00:00:47,920 --> 00:00:51,600
mining technology that like the
trusted business of core

18
00:00:51,600 --> 00:00:56,000
orientation and gyros and bloody
true hole instrumentation.

19
00:00:56,000 --> 00:00:58,160
Kind of a lot of Blues last
night mate, that just gets the

20
00:00:58,160 --> 00:01:00,800
job done.
I feel that maybe Axis could go

21
00:01:00,800 --> 00:01:03,640
in and save Fortescue.
So I don't know if they're using

22
00:01:03,640 --> 00:01:07,320
their gear, but whether that's a
leading indicator to a lack of

23
00:01:07,320 --> 00:01:10,280
trust, good work access, free
trial.

24
00:01:10,280 --> 00:01:13,480
If you say money of mine, what a
deal, mate.

25
00:01:13,880 --> 00:01:16,800
We've got Fortescue.
We've also got Genesis Quarterly

26
00:01:16,800 --> 00:01:20,640
that come out today.
Evo's big evolution.

27
00:01:21,320 --> 00:01:23,400
Jesus Christ, they've made some
cash.

28
00:01:25,040 --> 00:01:25,640
Come on.
Come on now.

29
00:01:25,720 --> 00:01:27,880
Believe it.
I got, I got to say.

30
00:01:27,880 --> 00:01:31,400
Matter out of cow, Jesus.
I think a lot more of the the

31
00:01:31,400 --> 00:01:34,200
brain power went into to
Fortescue and Genesis today.

32
00:01:34,200 --> 00:01:37,400
I think Evos is a bit of a an
afterthought here, but good to

33
00:01:37,400 --> 00:01:40,000
say they make a bit of cash.
And to be honest, we were

34
00:01:40,000 --> 00:01:42,920
expecting it, weren't we with
copper and gold where they were

35
00:01:42,920 --> 00:01:45,840
the last quarter, Hey.
Ripping in a tear and and I

36
00:01:45,840 --> 00:01:47,880
think what what's at the end?
Something at the end.

37
00:01:48,120 --> 00:01:51,880
Yeah, man, I'm doing a bit of a
a spiel on on the big kind of

38
00:01:51,880 --> 00:01:54,760
like financing deals I've seen
out of the North American listed

39
00:01:54,760 --> 00:01:55,960
companies over the last three
days.

40
00:01:55,960 --> 00:01:58,480
There's some big, big numbers.
There's a theme amongst them.

41
00:01:58,920 --> 00:01:59,960
I think it's worth talking
about.

42
00:02:00,480 --> 00:02:06,200
Very good.
Take it away on Fortescue and

43
00:02:06,600 --> 00:02:09,080
Fortescue or Fortescue.
Fortescue.

44
00:02:09,080 --> 00:02:11,400
Sorry.
Anyway, we'll get we'll get to

45
00:02:11,400 --> 00:02:14,200
that.
There's a bit happening in the

46
00:02:14,200 --> 00:02:16,760
bloody in Twiggy's forest.
You'd say it.

47
00:02:17,800 --> 00:02:21,000
Sure is mate. 700 jobs are being
cut.

48
00:02:21,000 --> 00:02:23,960
That's the that's the headline.
So first and foremost, thoughts

49
00:02:23,960 --> 00:02:26,840
go out with those people.
Oh bloody God, and that's like

50
00:02:26,840 --> 00:02:30,600
that's 700 there and then all
the was it 4 1/2 thousand

51
00:02:30,600 --> 00:02:33,920
potentially with Nicola W Like
fucking hell, that's a lot of

52
00:02:33,920 --> 00:02:36,000
yeah, a lot of pain for a lot of
people.

53
00:02:36,000 --> 00:02:37,600
So we're thinking of his all
there.

54
00:02:37,600 --> 00:02:39,400
We don't.
I know we come in with a bit of

55
00:02:39,400 --> 00:02:45,200
energy, but I do not ever want
to under under appreciate how

56
00:02:45,200 --> 00:02:47,320
tough it is for these workers.
So.

57
00:02:48,120 --> 00:02:51,040
Absolutely, Maddie.
I think that's, that comes first

58
00:02:51,040 --> 00:02:54,640
and foremost and we'll, we'll
chat about that a bit more later

59
00:02:54,640 --> 00:02:57,920
on just to kind of hit the high
notes on what's going on at, at

60
00:02:57,920 --> 00:03:00,440
Fortescue.
So if you like the job cuts,

61
00:03:00,440 --> 00:03:04,920
like we've just said, the, the
revolving door at the executive

62
00:03:04,920 --> 00:03:08,240
level and a bit below the sort
of senior management level

63
00:03:08,240 --> 00:03:11,040
continues.
They've got a, a new permanent

64
00:03:11,040 --> 00:03:16,760
CFOCOO and Cosec, the marketing
director and another energy exec

65
00:03:16,760 --> 00:03:20,720
have both left in the, in the
past couple weeks or so.

66
00:03:21,320 --> 00:03:23,600
They're implementing this big
restructuring.

67
00:03:23,600 --> 00:03:25,400
That's the headline.
That's why the, the jobs have

68
00:03:25,400 --> 00:03:27,120
been removed.
It's called one Fortescue.

69
00:03:27,120 --> 00:03:31,200
They're bringing together the
metals and the energy divisions.

70
00:03:31,200 --> 00:03:34,400
So names people might have heard
of like Fortescue future

71
00:03:34,400 --> 00:03:36,800
industries that was sort of
wrapped in last year.

72
00:03:37,160 --> 00:03:39,240
Essentially that is simplifying
things.

73
00:03:40,160 --> 00:03:42,440
The the quarterly hasn't
actually come out yet.

74
00:03:42,440 --> 00:03:44,440
So this is a bit of a guide to
sort of prep people into it.

75
00:03:44,440 --> 00:03:47,280
That'll come out on July 25th
and then the annual results to

76
00:03:47,280 --> 00:03:50,520
come out in in August.
You've obviously got a lot of

77
00:03:50,520 --> 00:03:52,960
people ripping in.
I think just about every single

78
00:03:52,960 --> 00:03:56,520
media organisation I'd seen in
Australia today at Glaze

79
00:03:56,520 --> 00:04:00,280
commenting if not ripping into
the company and into into

80
00:04:00,280 --> 00:04:03,080
Twiggy.
A few words that he and the

81
00:04:03,080 --> 00:04:06,520
company have said are coming
back to to bite them today.

82
00:04:06,520 --> 00:04:10,640
And I think Twiggy is he's in a
bit of an unenviable, unenviable

83
00:04:10,640 --> 00:04:13,560
position as a WA billionaire who
doesn't actually have an

84
00:04:13,560 --> 00:04:17,160
economic interest in one of the
local media stations, unlike

85
00:04:17,480 --> 00:04:20,360
your Stokes is your Ginas or
your Ellisons.

86
00:04:20,880 --> 00:04:22,760
You can see this headline here.
Forest dump.

87
00:04:22,760 --> 00:04:26,880
That's from the the nightly.
That's obviously a a company he

88
00:04:26,880 --> 00:04:29,560
doesn't have an interest in who
are more than happy to comment

89
00:04:29,560 --> 00:04:35,080
on his doings and you know, not
the doings of of Hancock or BCI

90
00:04:35,080 --> 00:04:37,360
or other companies.
So pretty much the three that

91
00:04:37,360 --> 00:04:40,080
you just mentioned to have the
economic interest in the night.

92
00:04:40,160 --> 00:04:42,720
I I don't think they've, they've
underwritten the advertising for

93
00:04:42,720 --> 00:04:44,920
its launch, but they don't, they
don't experience the upside of

94
00:04:44,920 --> 00:04:47,280
its profitability.
But yeah, it basically gives

95
00:04:47,280 --> 00:04:50,080
about immunity from bloody, you
know, yeah, being lambasted.

96
00:04:51,240 --> 00:04:53,120
Exactly.
I couldn't have said it better

97
00:04:53,120 --> 00:04:54,880
myself.
So I mean, not helping the

98
00:04:54,880 --> 00:04:57,840
'cause you've got the PR team
and the IR team at Fortescue

99
00:04:58,120 --> 00:05:00,080
who've had a pretty torrid past
couple weeks.

100
00:05:00,080 --> 00:05:04,880
Firstly, a week or two ago, they
put up this sort of billboard

101
00:05:05,400 --> 00:05:09,720
headline.
Fortescue 0 does whatever that

102
00:05:09,720 --> 00:05:12,960
means, connecting green hydrogen
a pack for a conference, and

103
00:05:12,960 --> 00:05:14,760
they've spelled their own
company name wrong.

104
00:05:14,800 --> 00:05:17,760
So that's a bit of a shocker.
And then?

105
00:05:18,760 --> 00:05:21,160
Mate, did you, did you see the
one in the announcement

106
00:05:21,400 --> 00:05:24,040
yesterday?
It was like the the last

107
00:05:24,040 --> 00:05:28,080
paragraph at the bottom it said
said the board was compromising

108
00:05:28,080 --> 00:05:31,120
nearly 50% women.
I think they meant comprising

109
00:05:31,120 --> 00:05:35,040
of, but yeah.
Maybe they maybe they meant

110
00:05:35,160 --> 00:05:38,120
compromising based on the amount
couldn't that are leaving there

111
00:05:38,120 --> 00:05:38,880
might not be.
Untrue.

112
00:05:38,880 --> 00:05:42,440
A bit of a a bit of a Freudian
slip there Maddie, that's a bit

113
00:05:42,440 --> 00:05:45,440
naughty.
So, you know, all, all kind of

114
00:05:45,440 --> 00:05:49,320
clangers aside, fellas, we, we
should chat about the business

115
00:05:49,360 --> 00:05:51,720
itself to start with.
The, the market reaction has

116
00:05:51,720 --> 00:05:56,800
been pretty neutral, you know,
on par with what their peers in

117
00:05:56,800 --> 00:06:00,320
Rio and BHB have done today.
That is pretty, pretty much

118
00:06:00,320 --> 00:06:02,440
flat.
And that's kind of interesting

119
00:06:02,640 --> 00:06:05,320
in and of itself to kind of
gauge what the market thinks of

120
00:06:05,320 --> 00:06:06,680
it.
You know, albeit the

121
00:06:06,760 --> 00:06:09,200
announcement was pretty brief,
there weren't a lot of numbers

122
00:06:09,640 --> 00:06:13,480
to to speak about, but I think
this is a pretty significant

123
00:06:13,480 --> 00:06:16,720
change in direction for, you
know, one of one of Australia's

124
00:06:17,120 --> 00:06:19,760
biggest companies.
And despite there not being too

125
00:06:19,760 --> 00:06:21,680
much said in the announcement,
there were bits that we could

126
00:06:21,680 --> 00:06:24,560
sort of glean that was sprinkled
in throughout various media

127
00:06:24,560 --> 00:06:26,200
sources.
Yeah.

128
00:06:26,200 --> 00:06:28,480
What do you, what do you think
of the the new direction here?

129
00:06:28,480 --> 00:06:33,880
And I mean, like like FFI has
kind of been bit of a, you know,

130
00:06:34,040 --> 00:06:36,880
like it's like the brokers that
cover it don't attribute value

131
00:06:36,880 --> 00:06:38,280
to FFI.
They actually, you know,

132
00:06:38,280 --> 00:06:42,080
allocate negative NAV in most
instances instances to that part

133
00:06:42,080 --> 00:06:44,400
of the business.
So, but I mean like now that now

134
00:06:44,400 --> 00:06:46,480
that it's kind of rolling into
the the whole thing, like what

135
00:06:46,480 --> 00:06:49,280
do you think of this, you know,
new slash old direction in some

136
00:06:49,280 --> 00:06:51,640
ways.
Mate, that's a fascinating

137
00:06:51,640 --> 00:06:53,720
point.
So first and foremost, the

138
00:06:53,720 --> 00:06:56,880
chairman's probably got a bit
too much pride to admit that

139
00:06:56,880 --> 00:06:59,960
it's kind of all over on the
hydrogen front.

140
00:06:59,960 --> 00:07:02,840
That's why they use these terms
like deprioritize.

141
00:07:03,120 --> 00:07:04,840
So you can kind of call it what
you will.

142
00:07:05,240 --> 00:07:08,120
So they're just, they're just
bringing it in to hide it in the

143
00:07:08,120 --> 00:07:09,840
business.
Yeah.

144
00:07:09,880 --> 00:07:12,040
I mean, here's what we know,
right?

145
00:07:12,040 --> 00:07:14,360
They've they've got the metals
and energy groups coming

146
00:07:14,360 --> 00:07:17,840
together, the jobs trimmed,
which equates to sort of 5% of

147
00:07:17,840 --> 00:07:19,880
the workforce.
They're slowing the push into

148
00:07:19,880 --> 00:07:23,120
hydrogen.
They've got three projects that

149
00:07:23,120 --> 00:07:25,320
they've already made final
investment decision on.

150
00:07:25,320 --> 00:07:27,920
They're still going ahead.
They've got two under

151
00:07:27,920 --> 00:07:30,440
consideration.
They're going to remain under

152
00:07:30,440 --> 00:07:32,640
consideration.
So a few other bits have kind of

153
00:07:32,640 --> 00:07:35,800
fallen by the wayside there.
There's no info on what this

154
00:07:35,800 --> 00:07:39,400
actually means for CapEx and
perhaps that's the reason why

155
00:07:39,400 --> 00:07:41,960
there's a bit of a a muted
response.

156
00:07:42,720 --> 00:07:45,360
Overall, I think the the company
is more attractive.

157
00:07:45,360 --> 00:07:48,440
This kind of goes to what you
said there, Trav, a lot of

158
00:07:48,440 --> 00:07:51,640
people ascribing, you know, not
much what kind of negative value

159
00:07:51,920 --> 00:07:55,160
because they don't know what the
kind of economic returns were

160
00:07:55,160 --> 00:07:57,600
going to be on any of these
sorts of projects.

161
00:07:57,600 --> 00:08:02,960
So a lot of the the street out
there had underweight or you

162
00:08:02,960 --> 00:08:06,320
know, hold recommendations on
Fortescue.

163
00:08:06,560 --> 00:08:09,960
And this was one of the sort of
core reasons why, you know, back

164
00:08:09,960 --> 00:08:12,400
in the day, it's just a stock
you hold for leverage to iron

165
00:08:12,400 --> 00:08:17,120
ore and leverage to China, to
steel, to China property, to all

166
00:08:17,120 --> 00:08:19,240
these sorts of things.
Economic growth around the

167
00:08:19,760 --> 00:08:24,120
around the world.
Now the media for quite a while

168
00:08:24,120 --> 00:08:27,160
now has really honed in on this
part of the business.

169
00:08:27,160 --> 00:08:30,800
This what was FFI, what is
essentially the, the green

170
00:08:30,800 --> 00:08:33,400
hydrogen and whatnot part of the
business.

171
00:08:33,799 --> 00:08:36,559
So that's that's one thing.
We'll put a pin in that for a

172
00:08:36,559 --> 00:08:40,039
moment to wrap numbers around
what we're talking about here.

173
00:08:40,400 --> 00:08:45,840
They guided to $500 million
CapEx and $700 million OpEx for

174
00:08:45,840 --> 00:08:49,920
this financial year.
Now, a year or so ago or a

175
00:08:49,920 --> 00:08:53,040
couple years ago, what they'd
said was that 10% of the group's

176
00:08:53,040 --> 00:08:59,040
profits would go to funding FFI.
Now like I said, that's since

177
00:08:59,040 --> 00:09:01,200
been wrapped into Fortescue
Metals, but you can kind of use

178
00:09:01,200 --> 00:09:04,080
that as a bit of a proxy for
what they were flowing into it.

179
00:09:04,560 --> 00:09:07,120
To take a step back.
Those three projects that are

180
00:09:07,120 --> 00:09:11,160
said are still going ahead would
cost sort of circa US 850

181
00:09:11,160 --> 00:09:13,440
million.
We're talking about a company in

182
00:09:13,440 --> 00:09:19,440
FY23 that had US 10 billion in
EBITDA and that is, you know,

183
00:09:19,440 --> 00:09:22,440
that went downstream to 5.5
billion in net profit.

184
00:09:22,880 --> 00:09:25,240
This year it's expected to be
even better.

185
00:09:25,240 --> 00:09:27,520
The years obviously done, but we
haven't seen the full financials

186
00:09:27,520 --> 00:09:30,080
yet.
The kind of consensus is in and

187
00:09:30,080 --> 00:09:34,720
around US 11 billion in EBITDA.
And if you just kind of use last

188
00:09:34,720 --> 00:09:38,560
year's net profit margins, we're
talking about kind of $6 billion

189
00:09:38,560 --> 00:09:42,000
in in net profit.
So it's a, it's a slice of it

190
00:09:42,400 --> 00:09:43,600
going.
And then of course if you're

191
00:09:43,600 --> 00:09:47,640
going to do like AADCF kind of
calc, a net asset value calc

192
00:09:47,640 --> 00:09:50,920
like you kind of mentioned Trav,
you're talking about multiple

193
00:09:50,920 --> 00:09:53,280
years in the future, what the
projects are kind of generate.

194
00:09:53,280 --> 00:09:58,120
That's why the core iron ore
operations are 90 odd percent of

195
00:09:58,120 --> 00:10:00,800
the the overall business and
that doesn't really even include

196
00:10:01,120 --> 00:10:03,720
iron bridge yet.
That's kind of its own own

197
00:10:03,720 --> 00:10:07,200
subset.
So FMG missing guidance this

198
00:10:07,200 --> 00:10:09,520
year, which they're kind of
flagged to do for the core

199
00:10:09,520 --> 00:10:13,320
operations is is kind of much
more important in my opinion.

200
00:10:13,720 --> 00:10:16,680
There is one question that's
kind of unanswered and that's to

201
00:10:16,680 --> 00:10:18,840
the the flows of capital.
We're going to joke about it,

202
00:10:18,840 --> 00:10:21,760
but it is kind of serious that
the, the big end of town if a

203
00:10:21,760 --> 00:10:25,200
passive like a Norgis, you know,
I haven't seen them on the on

204
00:10:25,200 --> 00:10:28,040
the Register here.
But if they kind of pull out of

205
00:10:28,040 --> 00:10:32,120
a company like this because they
don't like the, the ESG policies

206
00:10:32,120 --> 00:10:35,000
of the companies, like they've
sort of done with Rio Tinto and

207
00:10:35,000 --> 00:10:38,320
what not in the past, that could
lead to a material effect.

208
00:10:38,320 --> 00:10:42,520
But if you do look at the top 20
at Fortescue, I mean you go

209
00:10:42,520 --> 00:10:46,640
beyond the like Forest family,
you go to the the Chinese

210
00:10:46,640 --> 00:10:48,720
strategic holders who've been
there for ages.

211
00:10:49,160 --> 00:10:52,160
You look at other sorts like the
the Malaysian family emicrom

212
00:10:52,160 --> 00:10:55,560
that have held stocks since you
know, pre, pre 2010.

213
00:10:55,560 --> 00:10:57,800
You do have to go a bit of a way
down to actually get to

214
00:10:57,800 --> 00:11:00,520
significant shareholders that
would actually look at these

215
00:11:00,520 --> 00:11:03,160
sorts of things.
In my opinion, I don't think

216
00:11:03,160 --> 00:11:06,560
anything anyone above a few
billion dollars in a holding

217
00:11:06,560 --> 00:11:09,640
here would actually look at
those sorts of things kind of

218
00:11:09,880 --> 00:11:12,440
too seriously.
So I think we can kind of put a

219
00:11:12,640 --> 00:11:16,800
put a pin in the business
performance side of things for

220
00:11:16,800 --> 00:11:18,080
now.
We'll we'll get into that when

221
00:11:18,080 --> 00:11:21,400
the quarterly comes out and the
full year results come out.

222
00:11:21,800 --> 00:11:24,160
Just to say like you said last
week, Trev, there are a couple

223
00:11:24,160 --> 00:11:27,200
of questions around Iron Bridge,
water challenges there, Gabon

224
00:11:27,200 --> 00:11:30,600
and everything that's happened
in country with the caveat that

225
00:11:30,600 --> 00:11:34,760
that only makes up less than 10%
of the the NAV of the business

226
00:11:34,760 --> 00:11:36,520
here that.
'D be the 10% would be what Iron

227
00:11:36,520 --> 00:11:39,840
Bridge, but the Gabon would be,
I mean, it's like sub 1%.

228
00:11:39,920 --> 00:11:43,360
And yeah, but both have big kind
of question marks on going into

229
00:11:43,360 --> 00:11:45,440
this, this earning season, I'm
sure.

230
00:11:46,000 --> 00:11:47,720
What what, what?
Was there anything else that

231
00:11:47,760 --> 00:11:52,360
kind of stood out to you, JD?
Mate, there, there are a few

232
00:11:52,360 --> 00:11:54,480
things, right.
So one of the questions I kind

233
00:11:54,480 --> 00:11:57,760
of want to start by posing to
you is what, what do you think

234
00:11:57,760 --> 00:12:01,600
about like reading into this too
much and kind of thinking like

235
00:12:01,800 --> 00:12:04,320
the, the frame of thought I had
around this is looking at what

236
00:12:04,320 --> 00:12:07,880
companies do rather than what
they kind of say with the lens

237
00:12:07,880 --> 00:12:10,600
of iron ore prices.
So we know Semandu just got the

238
00:12:10,600 --> 00:12:14,160
go ahead, got W African
production, a substantial amount

239
00:12:14,160 --> 00:12:17,680
of production to come online.
Are we reading into it too much

240
00:12:17,680 --> 00:12:20,880
to say that this company might
have a bearish outlook on iron

241
00:12:20,880 --> 00:12:21,800
ore?
What do you guys reckon?

242
00:12:24,120 --> 00:12:25,960
Where are they going to fill the
void if they do?

243
00:12:26,760 --> 00:12:30,360
I I don't know, they're
basically a pureplay iron ore

244
00:12:30,360 --> 00:12:32,040
company.
And it's not like FFI is like

245
00:12:32,040 --> 00:12:36,720
earnings where like anywhere in
the next decade going to rival

246
00:12:36,960 --> 00:12:39,280
iron ore earnings.
So I don't I don't really.

247
00:12:39,920 --> 00:12:42,200
Yeah, I don't think so.
I just think, yeah, I think

248
00:12:42,200 --> 00:12:45,720
it's, it's, it's just so fucking
hard to predict iron ore price.

249
00:12:45,720 --> 00:12:48,880
And it's proves it proves to be
so much more resilient than than

250
00:12:48,880 --> 00:12:52,040
people ever really think.
Yeah.

251
00:12:52,640 --> 00:12:54,480
I think I think you've nailed it
there.

252
00:12:54,640 --> 00:12:56,360
Yeah.
Do you think that the you know,

253
00:12:56,360 --> 00:12:59,520
obviously the cost cost cutting
and rapidly bringing this bloody

254
00:12:59,520 --> 00:13:03,400
FFI back in is like a indication
that that his whole green

255
00:13:03,400 --> 00:13:07,840
hydrogen bloody vision was
making a lot of people

256
00:13:07,840 --> 00:13:10,600
disgruntled and hence the high
turnover.

257
00:13:10,600 --> 00:13:13,400
And he needs to very simplify
the business to retain

258
00:13:13,480 --> 00:13:17,600
executives because they're
bloody flying out the door flat

259
00:13:17,600 --> 00:13:20,960
out so.
It's a it's a good question,

260
00:13:20,960 --> 00:13:23,920
Maddie.
I even with this, I'm not sure

261
00:13:23,920 --> 00:13:27,280
the, the style of the, the
company that sort of the

262
00:13:27,280 --> 00:13:31,600
culture, if you, if you want to
call it that, changes an awful

263
00:13:31,600 --> 00:13:35,560
lot like is, is management?
I mean, by management, I mean is

264
00:13:35,560 --> 00:13:39,120
the, is the chairman Twiggy
going to really change?

265
00:13:39,680 --> 00:13:41,280
I don't know.
I think he's kind of admitting

266
00:13:41,280 --> 00:13:45,760
defeat on the, on the hydrogen
point, not really going out and

267
00:13:45,760 --> 00:13:50,560
doing this to address the, the
employment at the senior exec

268
00:13:50,560 --> 00:13:52,880
level.
That'd be that'd be my opinion.

269
00:13:52,880 --> 00:13:55,720
I don't think he is the the type
of character that would do

270
00:13:55,720 --> 00:13:58,280
something like that just to
appease a few people.

271
00:13:58,280 --> 00:14:00,800
What do you think?
Who knows?

272
00:14:00,880 --> 00:14:05,160
Be good to get inside his head.
That should be like an amusement

273
00:14:05,160 --> 00:14:09,600
park.
Careful what you wish on I think

274
00:14:10,000 --> 00:14:13,520
it leads to a, a broader
question, you know, beyond the

275
00:14:13,520 --> 00:14:17,320
exact level though, Maddie on,
on labour costs on employment.

276
00:14:17,320 --> 00:14:20,000
So obviously we, we spoke about
the jobs coming off you.

277
00:14:20,000 --> 00:14:24,440
You mentioned BHB Min res yield
gun, that was 800 odd people,

278
00:14:24,440 --> 00:14:28,640
Alcoa Kwinana, another 1000 odd
people, not to mention all the

279
00:14:28,640 --> 00:14:31,920
sort of lithium projects and,
and what not around Maddie.

280
00:14:31,920 --> 00:14:34,000
I know you've said in the past
that, you know, labour costs

281
00:14:34,000 --> 00:14:37,360
they they go upwards and and
they don't tend to come down.

282
00:14:37,360 --> 00:14:41,440
But yeah, I do think that a
point in time comes when they're

283
00:14:41,480 --> 00:14:44,400
it's demand and supply and
there's just simply much more

284
00:14:44,400 --> 00:14:49,560
supply out there, much more
people sort of willing to work

285
00:14:49,560 --> 00:14:53,240
and perhaps work for a slightly
lower salary than they were

286
00:14:53,240 --> 00:14:55,560
because they just want a job.
What do you have you sort of

287
00:14:55,560 --> 00:14:56,640
changed your thinking on that at
all?

288
00:14:56,680 --> 00:15:02,040
I just think it takes a long
time for it to really take

289
00:15:02,040 --> 00:15:07,360
effect on the monetary value
like but you know the all you

290
00:15:07,360 --> 00:15:12,240
know, 5000 people just from two
companies being I know a lot of

291
00:15:12,240 --> 00:15:15,720
the BHP people will either
probably some might get

292
00:15:15,720 --> 00:15:18,520
redundancies that time off, some
will get repositioned within the

293
00:15:18,520 --> 00:15:22,560
company.
But like like say 4 to 5000

294
00:15:22,560 --> 00:15:27,400
people getting reinjected into
the market, it will eventually

295
00:15:27,400 --> 00:15:33,960
have to take effect that they'll
likely companies who won't have

296
00:15:33,960 --> 00:15:38,280
to use yeah, labour hiring
contractors and and stuff like

297
00:15:38,280 --> 00:15:40,680
that as much they'll be like,
right, we can get there's a lot

298
00:15:40,680 --> 00:15:44,560
of people available for full
time employment that we can

299
00:15:44,840 --> 00:15:47,120
probably offer a cheaper right,
because they're in, as you said,

300
00:15:47,120 --> 00:15:49,880
they're in surplus now.
So I'm like, if it's going to

301
00:15:49,880 --> 00:15:53,480
actually start coming down, now
will be the time.

302
00:15:53,880 --> 00:15:56,880
But how long that takes and
whether the bloody what the

303
00:15:56,880 --> 00:16:00,720
stats and data on that, I'm not
sure, but it's definitely back

304
00:16:00,720 --> 00:16:05,280
in the employers court now.
So it has to be yeah, because

305
00:16:05,280 --> 00:16:08,200
there's like, what?
But then it's like they've been

306
00:16:08,200 --> 00:16:10,560
reinjected.
Nickel's going to nickel's going

307
00:16:10,560 --> 00:16:12,560
to shit.
But then we're like, are we

308
00:16:12,560 --> 00:16:16,720
about to see a turn around in
gold, like gold prices tearing?

309
00:16:16,720 --> 00:16:20,840
We're seeing a bit of activity
in the juniors, like how much

310
00:16:20,840 --> 00:16:22,560
that's going to start filling a
void.

311
00:16:22,560 --> 00:16:25,720
So whether that all balances
out, not sure.

312
00:16:26,040 --> 00:16:31,040
Getting real macro here.
Yeah, I, I think you're right.

313
00:16:31,320 --> 00:16:34,480
There's, there's another couple
points of, of debate I think we

314
00:16:34,480 --> 00:16:37,240
should chat about.
So one that was bandied about in

315
00:16:37,240 --> 00:16:41,600
a few of the the publications
was a, a reputational damage,

316
00:16:42,200 --> 00:16:46,200
whether that be to, to Twiggy or
to the company itself.

317
00:16:46,200 --> 00:16:50,200
And I've kind of I've kind of
flip flapped on my opinion on

318
00:16:50,200 --> 00:16:53,880
this to to start with, you know,
Andrew Forrest going and calling

319
00:16:54,480 --> 00:16:57,440
other highly successful and
influential people around the

320
00:16:57,440 --> 00:17:00,960
world Muppets, you know, at
conferences that lots of people

321
00:17:00,960 --> 00:17:02,240
watch.
Elon Musk is that.

322
00:17:02,280 --> 00:17:04,800
Yeah, yeah, that, that was the
one.

323
00:17:04,800 --> 00:17:07,640
And a few other people were sort
of put in into that category

324
00:17:07,880 --> 00:17:11,680
because I think the context was
that they weren't believers that

325
00:17:11,680 --> 00:17:13,160
hydrogen would.
Yeah.

326
00:17:13,160 --> 00:17:18,359
So I think that is absolutely
reputationally damaging to, you

327
00:17:18,359 --> 00:17:20,160
know, Mr Forrest himself.
God I'd hate.

328
00:17:20,280 --> 00:17:24,160
To say what our reputation's
like then, especially yours,

329
00:17:24,160 --> 00:17:26,359
Trav Dash.
Shut up, your Muppet.

330
00:17:27,720 --> 00:17:29,400
Don't ask the questions you
don't want the answers to,

331
00:17:29,440 --> 00:17:33,600
Maddie.
So then the broader point is

332
00:17:33,600 --> 00:17:39,040
reputationally damaging to FMG
and their pursuit of green

333
00:17:39,040 --> 00:17:43,240
hydrogen.
And I mean, since day one, they

334
00:17:43,240 --> 00:17:45,960
have been super outspoken, at
least at a exact level.

335
00:17:45,960 --> 00:17:48,880
They've been super outspoken
about what they want to do and

336
00:17:48,880 --> 00:17:51,560
where they want to get to.
And the, the way they've kind of

337
00:17:51,720 --> 00:17:54,240
gone about that is working
backwards.

338
00:17:54,240 --> 00:17:55,680
They say this is what we want to
do.

339
00:17:56,280 --> 00:17:59,400
This is where we want to be and
just figure it out.

340
00:17:59,440 --> 00:18:02,080
And that's, you know, like
Twiggy's always been that way.

341
00:18:02,080 --> 00:18:05,360
He's been the, the big picture
visionary type of person.

342
00:18:05,360 --> 00:18:08,400
And, you know, perhaps it was,
it was all wrong from the

343
00:18:08,400 --> 00:18:10,920
beginning.
Doing it with, with hydrogen.

344
00:18:10,920 --> 00:18:15,520
I don't think, you know, you
it's reputationally damaging in

345
00:18:15,520 --> 00:18:18,160
and of itself just to fail in a
business venture.

346
00:18:18,160 --> 00:18:20,320
That's kind of what like
capitalism is all about.

347
00:18:20,560 --> 00:18:23,640
And I'm a huge backer of that.
But maybe the, the working

348
00:18:23,640 --> 00:18:26,480
backwards strategy, which is
like what a lot of seriously big

349
00:18:26,480 --> 00:18:29,880
companies do, like Jeff Bezos
and stuff are famed for going

350
00:18:29,880 --> 00:18:32,840
about things that way and just
saying what, what people want.

351
00:18:32,840 --> 00:18:37,840
But I don't know it's it, you
know, it's a kind of question

352
00:18:38,480 --> 00:18:41,560
that is very subjective in its,
in its answer.

353
00:18:41,560 --> 00:18:44,640
There is one other aspect that I
think is super reputationally

354
00:18:44,640 --> 00:18:48,320
damaging and that is you know,
the, the stalking of family

355
00:18:48,320 --> 00:18:51,640
members of people that have left
or competitors businesses or

356
00:18:51,640 --> 00:18:53,400
whatever.
And that that's sort of

357
00:18:53,920 --> 00:18:56,480
coincided in timing.
And I think they've handled that

358
00:18:56,720 --> 00:19:00,080
very ordinarily.
I think throwing the whoever,

359
00:19:00,080 --> 00:19:03,440
the the legal counsel or the
chief general counsel of the

360
00:19:03,440 --> 00:19:07,320
business under the bus and not
at an exact level, just taking

361
00:19:07,320 --> 00:19:09,920
charge for what goes on in your
company isn't the right way to

362
00:19:09,920 --> 00:19:12,280
go about things.
That's just my personal opinion.

363
00:19:12,280 --> 00:19:16,280
Again, I think people will have
different points on how they

364
00:19:16,280 --> 00:19:19,320
think leaders should should
manage a company, but have you

365
00:19:19,320 --> 00:19:22,600
just got any thoughts on
reputationally damaging and this

366
00:19:22,600 --> 00:19:27,880
whole sort of saga of Fortescue?
I In regards to that the private

367
00:19:27,880 --> 00:19:32,240
investigators and everything,
yes I don't agree with it but I

368
00:19:32,360 --> 00:19:36,840
am I do not believe that they
would be the only company that's

369
00:19:36,840 --> 00:19:40,040
done anything like that.
And I feel that he is got the

370
00:19:40,160 --> 00:19:43,360
fucking media spotlight on him
and they are looking for

371
00:19:43,440 --> 00:19:45,080
everything on him because he's
gone.

372
00:19:45,320 --> 00:19:48,200
He's feeding the papers at the
moment and they will keep

373
00:19:48,200 --> 00:19:52,200
finding stuff and but he hasn't
got the ties to give him

374
00:19:52,200 --> 00:19:55,520
anything else.
But I don't think that's the

375
00:19:55,520 --> 00:19:58,040
first time that something like
that's ever happened before, put

376
00:19:58,040 --> 00:19:59,920
it that way, with these high,
powerful people.

377
00:19:59,920 --> 00:20:02,280
Regardless of if it's the first
time it's, it's an appalling

378
00:20:02,280 --> 00:20:02,920
thing to do to.
It.

379
00:20:02,920 --> 00:20:04,600
Yeah, yeah, exactly.
But.

380
00:20:04,600 --> 00:20:06,680
Fucking I'd.
I'd hate it if anyone ever did

381
00:20:06,680 --> 00:20:07,520
that to me.
Yeah, like.

382
00:20:07,760 --> 00:20:08,920
They're probably doing it to us
now.

383
00:20:08,960 --> 00:20:12,440
We don't even know.
I, I just think the, you know,

384
00:20:12,480 --> 00:20:15,440
the, the people at the top
should, should take charge for

385
00:20:15,440 --> 00:20:18,240
what happens in their shop.
That is, that is my opinion.

386
00:20:18,240 --> 00:20:21,480
Whether people down, down, you
did it, you know it is your, it

387
00:20:21,480 --> 00:20:23,960
is your organisation.
Eddie, you came around to my

388
00:20:23,960 --> 00:20:26,960
bloody arm.
My, my thinking on the on the,

389
00:20:27,120 --> 00:20:31,080
on the reputational side, yeah,
but on Yeah.

390
00:20:31,360 --> 00:20:33,960
On on the business front or?
The business front, I mean, like

391
00:20:33,960 --> 00:20:37,480
I said, yeah, I've read what
you'd written up before and

392
00:20:37,480 --> 00:20:39,960
taken it, disagreed with you,
but what you said there, I kind

393
00:20:39,960 --> 00:20:40,840
of do agree with you.
I mean like.

394
00:20:41,960 --> 00:20:45,120
I'd backspace my my writing a
few times while I was tip

395
00:20:45,120 --> 00:20:47,400
tapping between like what I'm
actually thinking but I'm keen

396
00:20:47,400 --> 00:20:50,160
to keen to hear your thoughts
but in the green hydrogen aspect

397
00:20:50,160 --> 00:20:51,240
of it.
Yeah, I mean, like Twiggy's

398
00:20:51,240 --> 00:20:56,000
vision was was bold.
The issue I took was he

399
00:20:56,000 --> 00:20:58,600
predetermined the solution
before understanding the

400
00:20:58,600 --> 00:21:01,640
economics first.
Did FFI ever have a rope to

401
00:21:01,640 --> 00:21:05,760
explore widely all forms of
alternative energy?

402
00:21:05,760 --> 00:21:09,720
I mean, yes, yes, Twiggy's got
squadron and squadron's got his,

403
00:21:09,720 --> 00:21:11,160
you know, renewables plans and
all that.

404
00:21:11,360 --> 00:21:15,920
But did the scope of FFI ever
really look at energy from a

405
00:21:15,920 --> 00:21:18,480
first principles perspective?
Right.

406
00:21:18,960 --> 00:21:22,720
First principles, fundamentals.
You're trying to like optimise

407
00:21:22,720 --> 00:21:25,040
output given your resource
constraints that you've got in

408
00:21:25,040 --> 00:21:26,360
the world and the costs that
they have.

409
00:21:26,360 --> 00:21:27,960
That's fucking first principles,
right?

410
00:21:28,280 --> 00:21:29,920
That's the right question to ask
or.

411
00:21:30,080 --> 00:21:33,120
Were they told the answer and
then had to back solve like you

412
00:21:33,120 --> 00:21:35,480
said?
IE the answer is green hydrogen

413
00:21:35,880 --> 00:21:38,640
because I said it.
Now let's make it work because

414
00:21:38,640 --> 00:21:40,800
one approach is real science and
the other approach is

415
00:21:40,800 --> 00:21:42,680
fantasyland.
And I'll get the impression that

416
00:21:42,680 --> 00:21:45,400
FFI has been back solving the
entire time, and this is just an

417
00:21:45,400 --> 00:21:48,800
inevitable retreatment when you
go about solving a hard problem

418
00:21:49,120 --> 00:21:52,440
with the solution determined by
the most influential person in

419
00:21:52,440 --> 00:21:56,360
the room rather than by science.
And don't get me wrong, it's

420
00:21:56,360 --> 00:21:59,520
that same boldness, tenacity,
and visionary thinking that

421
00:21:59,520 --> 00:22:01,400
created Fortescue in the 1st
place.

422
00:22:01,400 --> 00:22:03,920
And and it was literally an idea
and a shell company.

423
00:22:04,280 --> 00:22:06,680
And now look at it.
And I don't want to take

424
00:22:06,680 --> 00:22:09,120
anything away from the
tremendous economic prosperity

425
00:22:09,120 --> 00:22:11,600
that has been unlocked as a
result of that right?

426
00:22:12,080 --> 00:22:14,640
But I don't think it was the way
to go about things this time

427
00:22:14,640 --> 00:22:18,040
around when it comes to energy,
take take a look at this

428
00:22:18,040 --> 00:22:22,240
screenshot from Fortescue's
website under the green energy

429
00:22:22,240 --> 00:22:24,520
section.
There's a pretty obvious notable

430
00:22:24,520 --> 00:22:27,040
emission from from this list.
You have green hydrogen, green

431
00:22:27,040 --> 00:22:29,520
ammonia, solar power, wind
power, geothermal power,

432
00:22:29,520 --> 00:22:31,680
hydropower.
What's missing gents?

433
00:22:32,880 --> 00:22:36,000
Let me have a guess.
Nuclear, the most dense 1.

434
00:22:37,320 --> 00:22:39,680
The one with the highest energy
return on investment of them all

435
00:22:39,680 --> 00:22:42,720
and 0 carbon emissions.
Yeah, and and I believe this is

436
00:22:42,720 --> 00:22:46,240
all and I remember fucking back
in the life of mine days

437
00:22:46,240 --> 00:22:51,360
interviewing the mining minister
for WA and they were he says now

438
00:22:51,360 --> 00:22:56,560
hydrogen is the answer.
And because Australia is an anti

439
00:22:56,560 --> 00:23:01,600
nuclear country, an anti this
state and other states are anti

440
00:23:01,600 --> 00:23:05,800
uranium mining and everything.
So it's like goes exactly to

441
00:23:05,800 --> 00:23:08,680
your point.
They were given that hydrogen is

442
00:23:08,680 --> 00:23:11,320
the future, right?
I'm building a hydrogen business

443
00:23:11,320 --> 00:23:15,920
then and it's yeah, they've been
back solving ever since.

444
00:23:15,920 --> 00:23:19,480
And I'm thinking, I think it's
very political it.

445
00:23:19,720 --> 00:23:22,480
Was the right strategy when
Twiggy said, you know, this,

446
00:23:22,720 --> 00:23:25,520
we're going to unlock the other,
the Pilbara building a port and

447
00:23:25,520 --> 00:23:27,480
rail and everything like that.
And he didn't even didn't even

448
00:23:27,480 --> 00:23:29,720
have the iron ore to start with.
But it was that was he back

449
00:23:29,720 --> 00:23:31,760
solved, you know, and that was
the right strategy then.

450
00:23:31,800 --> 00:23:33,560
It absolutely wasn't the right
strategy here.

451
00:23:34,800 --> 00:23:36,680
Yeah, I think, I think that's
well said.

452
00:23:36,680 --> 00:23:40,760
And Maddie, your your points on,
on what we do as a country.

453
00:23:41,640 --> 00:23:45,480
Like that's a perfect segue into
one of my last couple comments

454
00:23:45,480 --> 00:23:47,320
on this.
What what does Australia do

455
00:23:47,320 --> 00:23:49,760
next?
The budget came out a month or

456
00:23:49,760 --> 00:23:54,360
two ago and then carved out $6.7
billion for the hydrogen

457
00:23:54,360 --> 00:23:57,120
production tax incentive sort of
scheme.

458
00:23:57,760 --> 00:24:01,240
Another 4 billion was committed
for the Hydrogen Head Start

459
00:24:01,280 --> 00:24:04,120
programme.
FMG have been the biggest and

460
00:24:04,120 --> 00:24:08,000
most vocal proponents of
hydrogen in Australia.

461
00:24:08,000 --> 00:24:12,680
So you know that one leaves the
whole hydrogen in Australia

462
00:24:13,280 --> 00:24:17,520
concept on kind of shaky
foundations in in my opinion.

463
00:24:17,840 --> 00:24:23,920
And the last point to mention in
reading up and getting onto FMG

464
00:24:23,920 --> 00:24:26,320
up to speed with everything
that's kind of gone on.

465
00:24:26,320 --> 00:24:30,080
I listened to the call, they did
the Q&A in February of this

466
00:24:30,080 --> 00:24:31,920
year.
So for the first half year of

467
00:24:31,920 --> 00:24:34,960
the financial results and I want
to play a snippet from the CEO

468
00:24:34,960 --> 00:24:38,800
of the energy parts, now the Co
CEO of the business, Mark

469
00:24:38,800 --> 00:24:40,480
Hutchinson.
Second question is on

470
00:24:40,480 --> 00:24:42,040
electrification.
I was just kind of curious to

471
00:24:42,040 --> 00:24:44,360
see in the rear Tinker
presentation yesterday the end

472
00:24:44,360 --> 00:24:45,720
of results.
They didn't expect any sort of

473
00:24:45,720 --> 00:24:49,360
electrification at their minds
to occur in sort of scale beyond

474
00:24:49,520 --> 00:24:51,880
before 20-30.
Yet I understand that you guys

475
00:24:51,880 --> 00:24:54,520
are still committed to not
burning fossil fuels at all by

476
00:24:54,520 --> 00:24:56,360
that date.
So who's right and who's wrong?

477
00:24:58,080 --> 00:25:02,480
We are totally right.
We're going to make sure we we

478
00:25:02,480 --> 00:25:07,480
are real zero by 20-30 and we're
on track to do that complete

479
00:25:07,520 --> 00:25:10,880
certainty that the business
won't run on fossil fuels by

480
00:25:10,880 --> 00:25:12,960
20-30.
I I admire the.

481
00:25:13,160 --> 00:25:16,000
Not far away.
It is super soon.

482
00:25:16,080 --> 00:25:20,160
I admire the ambition and I
admire the goal, but I find the

483
00:25:20,160 --> 00:25:23,480
confidence just shocking.
And it reminds me of a, a Howard

484
00:25:23,480 --> 00:25:26,280
Marks memo that I listened
literally just this morning to.

485
00:25:26,280 --> 00:25:28,680
And it's called the fallacy of
certainty.

486
00:25:28,680 --> 00:25:31,680
And it's, it's well worth a
listen that that sort of

487
00:25:31,680 --> 00:25:35,280
confidence just raises alarm
bells in me.

488
00:25:35,280 --> 00:25:38,400
But you can, you can listen to
that, that podcast and the call

489
00:25:38,400 --> 00:25:42,040
if you're interested.
I thought it was just a a good

490
00:25:42,040 --> 00:25:44,520
taste for the mindset within the
business.

491
00:25:44,720 --> 00:25:50,440
I wonder how much of Mr
Forest's, Mr Forest and Mrs

492
00:25:50,440 --> 00:25:54,640
Forest's dividend will want to
be sacrificed for potential

493
00:25:54,640 --> 00:25:58,720
production delays for not using
fossil fuels to power

494
00:25:58,720 --> 00:26:03,000
everything, because transitions
like that impact production.

495
00:26:03,560 --> 00:26:05,960
And it would not.
That is a massive, massive

496
00:26:05,960 --> 00:26:10,160
business to commit to that much
of A transition out of fossil

497
00:26:10,160 --> 00:26:11,320
fuels.
Huge.

498
00:26:12,120 --> 00:26:13,200
So.
Huge.

499
00:26:13,520 --> 00:26:18,360
Yeah, that's very interesting.
All of these like targets,

500
00:26:18,360 --> 00:26:22,080
20302030 just gets pushed out to
20402040 gets pushed out to

501
00:26:22,080 --> 00:26:24,160
2050, you know, But it's you.
You.

502
00:26:24,760 --> 00:26:26,760
You can wait for someone else to
do it first and then everyone

503
00:26:26,840 --> 00:26:28,960
says it all at once.
Yeah, Oh look, this whole

504
00:26:28,960 --> 00:26:31,800
hydrogen thematics only, it's
only going to work.

505
00:26:31,800 --> 00:26:35,120
You've mentioned water bloody
problems at on bridge like it's

506
00:26:35,120 --> 00:26:40,120
only going to work if they find
a shit load of water to supply

507
00:26:40,120 --> 00:26:41,840
it.
So it's it's pretty much another

508
00:26:42,840 --> 00:26:46,400
future Australian industry
hinging on WA water balls pretty

509
00:26:46,400 --> 00:26:49,160
much again, solely responsible
for getting it off the ground.

510
00:26:49,200 --> 00:26:52,440
That was I guess the my
conclusion of the whole thing.

511
00:26:52,600 --> 00:26:55,560
Gerard James is the only hope
Fortescue you have I think.

512
00:26:56,160 --> 00:27:00,280
He's doing God's work.
Yeah, yeah, multi read

513
00:27:00,280 --> 00:27:05,040
campaigns, monitoring balls,
ball field set up like just

514
00:27:05,040 --> 00:27:08,240
simply anything to do with
fucking water.

515
00:27:08,320 --> 00:27:10,400
WA water balls.
Like you don't have water in

516
00:27:10,400 --> 00:27:13,920
your name if you don't do
everything to do with freaking

517
00:27:13,920 --> 00:27:17,200
water and might even anything to
do with drilling.

518
00:27:17,200 --> 00:27:19,320
They don't just they can use
those drinks, they can bloody

519
00:27:19,320 --> 00:27:21,400
drill for anything.
You want a hole?

520
00:27:21,640 --> 00:27:24,600
You want a hole that gives you
water?

521
00:27:24,600 --> 00:27:28,840
Just WA water balls.
Fucking the pressure on this

522
00:27:28,840 --> 00:27:32,160
bloke, thinking of the Fortescue
shareholders and the pressure on

523
00:27:32,160 --> 00:27:34,280
Gerald James, it's bloody
phenomenal.

524
00:27:34,920 --> 00:27:37,000
He just deals with it, yeah,
Just gets the job done.

525
00:27:37,000 --> 00:27:38,720
Give him a ring.
Give him a ring.

526
00:27:38,720 --> 00:27:40,560
His number's in the show notes
bloody.

527
00:27:40,560 --> 00:27:42,480
I might call him after.
This yeah, bloody.

528
00:27:42,880 --> 00:27:43,800
No.
Gerald James No.

529
00:27:44,120 --> 00:27:48,680
Gerald James Oh, just did you
see what that wasn't a lack of

530
00:27:48,680 --> 00:27:53,520
energy, but it's like I started
feeling the pressure that James

531
00:27:53,520 --> 00:27:55,800
has, like it's just, it was
weighing on me.

532
00:27:55,800 --> 00:27:58,440
So I can't believe it's what
it's doing to him.

533
00:27:59,640 --> 00:28:03,000
Boys.
Genesis Genesis the The Gold

534
00:28:03,000 --> 00:28:06,480
growth story.
That's run us through it.

535
00:28:06,480 --> 00:28:08,400
Maddie, what's what's going on
here?

536
00:28:08,400 --> 00:28:10,640
How is how is it called Lee?
How the how the full year look?

537
00:28:11,000 --> 00:28:15,440
I'm going to try and talk about
this without mentioning the MD.

538
00:28:16,040 --> 00:28:19,000
You know some companies the MD
gets the name gets mentioned

539
00:28:19,440 --> 00:28:21,960
more than the company.
Good luck to you.

540
00:28:21,960 --> 00:28:25,800
I'm not doing it.
They bet guidance.

541
00:28:25,800 --> 00:28:28,240
Things are looking like they're
moving forward pretty well.

542
00:28:28,240 --> 00:28:33,080
I think from first pass in get
out of Leonora and potentially

543
00:28:33,080 --> 00:28:36,160
live it and soon.
So 36,000 oz for the quarter.

544
00:28:36,520 --> 00:28:40,520
Sustaining capital remained a
bit high, but looks like there's

545
00:28:40,520 --> 00:28:43,840
a bit of money going into the
like the Gualia mill for the

546
00:28:43,840 --> 00:28:46,240
long term.
So I work on like leach tanks,

547
00:28:46,240 --> 00:28:51,640
cyanide tanks, bit of concrete,
but the the pleasing thing to

548
00:28:51,640 --> 00:28:56,760
see is the increase in mill
throughput and also the surface

549
00:28:56,760 --> 00:28:59,240
stockpile inventory because you
know, historically the whole

550
00:28:59,240 --> 00:29:01,880
thing is filling the Gualia
mill.

551
00:29:01,880 --> 00:29:06,840
So they're pretty bloody close
now to that 1.4 million tonne

552
00:29:06,840 --> 00:29:11,480
per annum run rate with the
Admiral Pitt declared commercial

553
00:29:11,480 --> 00:29:17,200
production 1st of May or coming
out of Gualia from the dates

554
00:29:17,320 --> 00:29:20,000
that lifted it back up to around
180,000 tonnes.

555
00:29:20,000 --> 00:29:22,960
So that's the bloody hard stuff
to get out from 1800 metres

556
00:29:22,960 --> 00:29:27,200
deep.
So and surface stockpiles grew

557
00:29:27,200 --> 00:29:30,560
to about 314,000 tonnes, so
pretty much doubled in the

558
00:29:30,560 --> 00:29:33,840
quarter.
So albeit it's 1.1 gramme dirt,

559
00:29:33,840 --> 00:29:37,000
but you've come most that's you
would assume the Admiral stuff

560
00:29:37,000 --> 00:29:40,680
building up the stockpile.
But again, really handy going

561
00:29:40,680 --> 00:29:45,000
forward towards maintaining a
bloody that 1.4 million tonne

562
00:29:45,000 --> 00:29:49,320
throughput, right.
So sitting with 173 bucks in the

563
00:29:49,320 --> 00:29:53,080
bank and no debt, so growth
capital of 32 bucks for the

564
00:29:53,080 --> 00:29:56,560
quarter.
So went backwards 7 1/2 in cash,

565
00:29:56,560 --> 00:30:00,640
but no debt in place there.
And they've they've indicated I

566
00:30:00,640 --> 00:30:03,280
think in that as SPY 400,
they're looking to establish a

567
00:30:03,280 --> 00:30:06,800
corporate debt facility.
So look, there's definitely a

568
00:30:06,800 --> 00:30:12,240
plan in place to grow
organically, incrementally with

569
00:30:12,840 --> 00:30:16,040
operational cash flows, the cash
they've got plus maybe a bit of

570
00:30:16,040 --> 00:30:19,560
debt, Ulysses looking to start
stopping by the end of this

571
00:30:19,560 --> 00:30:22,840
year, starting next year.
So first development or from

572
00:30:22,840 --> 00:30:24,960
that will be arriving in the
September quarter.

573
00:30:25,200 --> 00:30:28,880
So that's obviously going to
really lift the guarantee that

574
00:30:28,880 --> 00:30:32,040
throughput right at the Gualia
mill and lift the grade once

575
00:30:32,040 --> 00:30:34,280
they get stuck in the
underground stuff from there.

576
00:30:35,280 --> 00:30:37,200
So they'll be able to start
smashing it through.

577
00:30:37,200 --> 00:30:42,480
So and yeah, good old Tower Hill
always the that's the kicker

578
00:30:42,480 --> 00:30:47,000
FY20 8, but a lot of Oz actually
being attributed to the restart

579
00:30:47,000 --> 00:30:51,400
of of the Laverton Mill.
So that's looks like they might

580
00:30:51,400 --> 00:30:54,920
be bringing that for they said
hub open pit mining schedule for

581
00:30:54,920 --> 00:30:57,720
September quarter.
A lot of options out that way

582
00:30:57,720 --> 00:31:02,080
with maybe going back into Mount
Morgan's, maybe some M&A out

583
00:31:02,080 --> 00:31:04,120
that way with the likes of
Magnetic or.

584
00:31:04,120 --> 00:31:07,120
Something they didn't say that
no, no, but that's that's a

585
00:31:07,120 --> 00:31:09,040
talking point.
That's an easy set.

586
00:31:09,240 --> 00:31:12,080
That's high grade.
Yeah, it's a sensible 115

587
00:31:12,080 --> 00:31:17,440
kilometres away, like and.
Yeah, I think about what 283

588
00:31:17,440 --> 00:31:20,640
hundred mil market cap I think.
It's, it's, it's a 300 mil,

589
00:31:20,880 --> 00:31:23,040
yeah, yeah, it's $300 million
market cap.

590
00:31:23,280 --> 00:31:26,960
But there's, you know, bloody
real, real oz there at at high

591
00:31:26,960 --> 00:31:30,360
grade that you know, can either
go to Mount Morgan's or, or, or

592
00:31:30,360 --> 00:31:34,040
they can go to to to Goldfields,
you know, 50% cut utilised mil

593
00:31:34,040 --> 00:31:35,320
there too.
Granny Smith one.

594
00:31:35,320 --> 00:31:36,960
Yeah.
So yeah, yeah, I can with, with

595
00:31:37,000 --> 00:31:38,520
with Goldfields kind of moving
on.

596
00:31:38,520 --> 00:31:41,920
Bloody Korora.
Like we know that that happened.

597
00:31:41,920 --> 00:31:44,000
So are they.
They're not gonna, it's not like

598
00:31:44,000 --> 00:31:46,880
Goldfields at this slow behemoth
that aren't gonna do a deal in

599
00:31:46,880 --> 00:31:48,520
WA anymore.
They might actually get their

600
00:31:48,520 --> 00:31:51,960
shit together and do a deal.
So if if like that, but that you

601
00:31:51,960 --> 00:31:54,720
talk about the catalyst being
Tower Hill, I think the catalyst

602
00:31:54,720 --> 00:31:57,600
can also be getting higher grade
through Mount Morgan's for them

603
00:31:57,680 --> 00:32:00,320
that can really materially lift
their their production profile.

604
00:32:00,440 --> 00:32:04,480
Yeah, very much so, because and
like the original plan was for

605
00:32:04,480 --> 00:32:10,800
Tower Hill to go to Laverton,
the dirt, it sounds like that's

606
00:32:10,800 --> 00:32:12,600
changing.
So like because you know Tower

607
00:32:12,600 --> 00:32:16,480
Hills bloody 1.1 KS away from
Koala, it's right bloody there

608
00:32:17,680 --> 00:32:20,720
because there there was talk of
I don't know if they announced

609
00:32:20,720 --> 00:32:23,760
it or saw it in the Argonaut
night light, talk of expanding

610
00:32:23,760 --> 00:32:27,240
the Gualia mill to 4 million
tonne per annum, which would

611
00:32:27,240 --> 00:32:29,960
take the Tower Hill dirt instead
of sending it all the way to

612
00:32:29,960 --> 00:32:33,800
Laverton.
But I just I personally cannot

613
00:32:34,160 --> 00:32:37,240
see it happening.
I might have again, egg on my

614
00:32:37,240 --> 00:32:39,080
face.
They've they've got an organic

615
00:32:39,960 --> 00:32:43,440
pipeline that they could stick
to if they want, but I just

616
00:32:44,320 --> 00:32:49,680
think that Genesis Red 5 tie up
will has to definitely happen.

617
00:32:50,400 --> 00:32:52,680
So no, probably not sooner
rather than later.

618
00:32:52,680 --> 00:32:55,000
Maybe coincide before Tower
Hill.

619
00:32:55,000 --> 00:32:58,360
But yeah, it's I think it's just
a bit complicated.

620
00:32:58,360 --> 00:33:01,720
But like because you're not sure
if like Red 5 have to divest

621
00:33:01,720 --> 00:33:05,760
their all the Silver Lake assets
effectively Mount Manga

622
00:33:05,760 --> 00:33:09,600
Deflector, Ross Sugar Zone, if
they have to divest that to make

623
00:33:09,600 --> 00:33:11,480
it happen.
Or if there will be a similar to

624
00:33:11,480 --> 00:33:15,280
the Genesis St Bob's deal where
it might be a asset sale, a king

625
00:33:15,280 --> 00:33:17,120
of the Hills to get that into
Genesis.

626
00:33:17,120 --> 00:33:20,000
Because those normally in or
assets, all the silver like

627
00:33:20,000 --> 00:33:24,680
ones, I think they belong in the
hands of a a black cat or

628
00:33:24,680 --> 00:33:27,880
someone like that that can when
especially considering all the

629
00:33:27,880 --> 00:33:32,560
management connections between
silver like and black cat,

630
00:33:33,320 --> 00:33:36,520
someone like that like to go
have a crack at these

631
00:33:36,680 --> 00:33:38,480
operations.
Give them a give them a bit of a

632
00:33:38,480 --> 00:33:40,800
rebirth.
You'd say so whether all that

633
00:33:40,800 --> 00:33:43,520
needs to happen first before
genesis and red 5 merge.

634
00:33:43,800 --> 00:33:48,560
But expect instead of expanding
the 1.4 million tonne Gualia

635
00:33:48,560 --> 00:33:52,800
mill, why wouldn't you just take
the five and a half million

636
00:33:52,800 --> 00:33:56,200
tonne plant at King of the
hills, expand that to bloody

637
00:33:56,200 --> 00:33:59,600
take even more and make it an
even lower cost mill.

638
00:33:59,600 --> 00:34:04,880
It's just the logical path for
that Leonora region for that to

639
00:34:04,880 --> 00:34:07,440
tie up.
But I've got my eyes peeled as

640
00:34:07,440 --> 00:34:10,280
usual.
I'll just think, especially with

641
00:34:10,280 --> 00:34:14,800
Genesis script at the moment,
even though I think Red Five's

642
00:34:14,800 --> 00:34:18,080
2.8 billion Genesis is 2.4.
So it's a.

643
00:34:18,960 --> 00:34:20,520
Yeah, you can get around that
one.

644
00:34:20,520 --> 00:34:23,120
I mean, a, Genesis could acquire
Magnetic and then they're a big

645
00:34:23,120 --> 00:34:27,840
company and B if you have a spin
out of any other assets out of

646
00:34:28,199 --> 00:34:30,480
Red 5, then Genesis can still be
the acquirer.

647
00:34:30,520 --> 00:34:32,440
Yeah, yeah.
And that and that's like it

648
00:34:32,440 --> 00:34:35,480
could be a bloody that could be
the phenation phenation could be

649
00:34:35,480 --> 00:34:38,400
all the silver like assets bring
phenation back.

650
00:34:39,600 --> 00:34:41,760
Do they do they rename
themselves who the house then

651
00:34:41,760 --> 00:34:43,480
or?
Oh, who knows though, I'm sure

652
00:34:43,480 --> 00:34:46,719
they're still in the still in
the back pocket if needed.

653
00:34:46,920 --> 00:34:49,520
So yeah, I don't know.
What do you think?

654
00:34:49,600 --> 00:34:53,639
What do you think the pathway
will be The a lot of

655
00:34:53,639 --> 00:34:58,920
permutations it could take?
I think, I think it does happen.

656
00:34:59,080 --> 00:35:05,720
I think the the question is when
I don't know, I mean the MD who

657
00:35:06,200 --> 00:35:09,200
who shall not be named like you
say, Maddie hasn't been, you

658
00:35:09,200 --> 00:35:13,240
know, adverse to to growth by
dilution and just having a

659
00:35:13,960 --> 00:35:17,400
bigger company and having a
smaller, you know, personal

660
00:35:17,680 --> 00:35:19,960
ownership in an in a bigger
business down the track.

661
00:35:19,960 --> 00:35:22,720
You know, perhaps a slightly
different route to what what

662
00:35:22,720 --> 00:35:24,720
Bill has done with with
developed.

663
00:35:24,720 --> 00:35:30,600
Interesting you say that with
the I think I'm going to have to

664
00:35:30,600 --> 00:35:33,880
say his name.
God, I love it.

665
00:35:34,560 --> 00:35:38,920
I think Raoul has about fully
diluted a gross value of about

666
00:35:38,920 --> 00:35:43,120
100 bucks in his shares.
And I think Bill at the current

667
00:35:43,240 --> 00:35:48,080
developed share price fully
diluted gross is about 130.

668
00:35:48,440 --> 00:35:54,000
But Raul's got a bit less than
5% of Genesis Bill's got what's

669
00:35:54,000 --> 00:35:56,960
it I think it ends up 23 or
something like that.

670
00:35:56,960 --> 00:36:02,720
So very different ways to do it.
And the whole journey of develop

671
00:36:02,880 --> 00:36:07,120
going forward is based on not
rising and maybe an asset sale

672
00:36:07,120 --> 00:36:09,720
to, you know, protect that
equity.

673
00:36:09,720 --> 00:36:14,680
Whereas as you said, Raul's,
yeah raised a lot of money

674
00:36:14,680 --> 00:36:17,640
through bloody Aussie super and
everything in the initial deal

675
00:36:17,640 --> 00:36:19,560
and has a lot lower equity
stake.

676
00:36:19,560 --> 00:36:21,920
It looks like going to grow a
lot bigger.

677
00:36:21,920 --> 00:36:24,480
So hey, who wins, who loses?
Not sure.

678
00:36:24,480 --> 00:36:26,480
Yeah, it's.
All about TS what?

679
00:36:26,640 --> 00:36:32,600
Do you reckon Trev?
I I I've really come around to

680
00:36:32,600 --> 00:36:35,560
the idea that magnetic is a big
catalyst for them.

681
00:36:35,560 --> 00:36:38,240
I don't know if it's a, if it's
a, you know, a deal where they

682
00:36:38,240 --> 00:36:40,040
acquire the company.
I don't know if it's you can,

683
00:36:40,080 --> 00:36:42,680
you can just have a deal to get
the get the feed.

684
00:36:42,680 --> 00:36:46,960
But I just, I mean, 15 KS away
and it's nearly two grammes a

685
00:36:46,960 --> 00:36:49,600
tonne.
You know, it's open pit like

686
00:36:49,600 --> 00:36:52,400
it's their bread or butter.
You know, it's, it's it's, yeah,

687
00:36:52,400 --> 00:36:55,680
I think that's that that's a
really interesting proposition

688
00:36:55,680 --> 00:36:58,320
for them.
And yeah, I'd be like, like,

689
00:36:58,320 --> 00:37:00,000
sorry, Mount Morgan's is
restarting.

690
00:37:00,000 --> 00:37:03,000
I think they have some, some Oz
scheduled to come out of that

691
00:37:03,000 --> 00:37:05,120
during FY25 at the back half.
Yeah.

692
00:37:05,240 --> 00:37:07,720
Like what a catalyst if you can
just like transform the

693
00:37:07,720 --> 00:37:11,160
production profile out of that
mill because you've got a sexy,

694
00:37:11,400 --> 00:37:14,480
sexy new ore body that can like
literally feed high grade

695
00:37:14,480 --> 00:37:17,920
through it.
I mean, we've, it's, it's not a

696
00:37:17,920 --> 00:37:21,640
secret that it's been there.
The the consensus has been that

697
00:37:21,800 --> 00:37:25,200
getting a deal done with
Magnetic would be.

698
00:37:25,880 --> 00:37:28,720
Difficult we've I mean, I'm in
the early days, Maddie doing a

699
00:37:28,720 --> 00:37:31,520
deep dive on this company and it
like literally like.

700
00:37:31,520 --> 00:37:33,960
It's like a bloody ponzi's.
Going, yeah, it did like, you

701
00:37:33,960 --> 00:37:37,120
know, $1000 of volume a day.
It was like the investor

702
00:37:37,120 --> 00:37:40,120
presentation hadn't been changed
in like 3 years.

703
00:37:40,120 --> 00:37:43,000
And still the last three years
it said Jeffries was running a,

704
00:37:43,000 --> 00:37:46,360
an advisory strategic review for
them the whole time.

705
00:37:46,360 --> 00:37:47,560
And I don't know if they still
are or not.

706
00:37:47,560 --> 00:37:50,080
But now you look at it, investor
Prezi sexed up, they've got

707
00:37:50,360 --> 00:37:52,640
broker coverage launched.
They've got debt advisors

708
00:37:52,640 --> 00:37:54,240
running a debt process to
finance it.

709
00:37:54,240 --> 00:37:57,520
So they're clearly putting the
pressure on both gold fields, I

710
00:37:57,520 --> 00:38:02,440
reckon and and Genesis to to, to
do some sort of deal there.

711
00:38:02,440 --> 00:38:05,040
But but also around that dual
track stream is saying we'll

712
00:38:05,040 --> 00:38:09,200
find an answer to ourselves if
we if we have to and just to

713
00:38:09,200 --> 00:38:11,600
extract maximum value.
You'd like you.

714
00:38:11,680 --> 00:38:14,280
Yeah, I mean, like just because
we're bloody WA people.

715
00:38:14,280 --> 00:38:17,280
You'd it'd be cool to see that
kind of land in the the Genesis

716
00:38:17,280 --> 00:38:18,920
portfolio.
But who who knows where

717
00:38:18,920 --> 00:38:20,480
Goldfields comes into the mix
and I don't know.

718
00:38:20,640 --> 00:38:25,480
I think it's like, imagine if,
imagine if in friggin 5-10 years

719
00:38:25,480 --> 00:38:29,760
time or five years time you've
got one organisation running the

720
00:38:29,760 --> 00:38:33,240
Murchison and then you've got
another organisation running

721
00:38:33,240 --> 00:38:38,680
this Leonora Laverton region
which you know, could bloody

722
00:38:38,680 --> 00:38:41,520
happen like because you got.
It's far too logical, Maddie.

723
00:38:41,520 --> 00:38:44,000
Oh.
No, I know there's too many, not

724
00:38:44,000 --> 00:38:48,000
enough, too many managers out of
a job like because yeah, whether

725
00:38:48,000 --> 00:38:51,280
bloody you know, or a band is
the other player there that like

726
00:38:51,280 --> 00:38:54,240
in that region with like I think
their market cap's 800 million

727
00:38:54,240 --> 00:38:56,200
now, so there's.
Like they're on a tear.

728
00:38:56,280 --> 00:39:00,120
There's. $0.46 a.
Strip is looking flash, so

729
00:39:00,120 --> 00:39:03,560
whether they start getting
active in that region with some

730
00:39:03,560 --> 00:39:06,360
juniors as well, yeah, don't
know.

731
00:39:06,360 --> 00:39:09,280
It's fucking What a district,
boys.

732
00:39:09,560 --> 00:39:12,800
What a district, what a state.
Oh mate.

733
00:39:12,800 --> 00:39:15,880
Yeah.
Oh, fucking oh, love it.

734
00:39:15,880 --> 00:39:17,640
It's bloody.
It's all the way.

735
00:39:17,640 --> 00:39:20,000
It's going to be shit loads of
work for Silverstein.

736
00:39:20,600 --> 00:39:23,800
Any of these, any of these
bloody deals or expansions or

737
00:39:23,800 --> 00:39:26,600
everything.
Oh, bloody Kenny and the boys

738
00:39:26,600 --> 00:39:28,400
would just be licking their
lips.

739
00:39:28,400 --> 00:39:32,120
I can just see them being the
you got, you got the mining

740
00:39:32,120 --> 00:39:34,000
company of the Laverton Leonora
region.

741
00:39:34,000 --> 00:39:37,320
You've got the turnkey solution
provider of the region being

742
00:39:37,320 --> 00:39:40,200
Silverstein.
Imagine the bloody power they'd

743
00:39:40,200 --> 00:39:42,520
be ripping in there.
The OG power mate.

744
00:39:43,120 --> 00:39:46,360
He's he can, he can do Twiggy
power, he can do diesel power,

745
00:39:46,360 --> 00:39:49,360
he can do whatever he whatever
they bloody want.

746
00:39:49,560 --> 00:39:52,680
Amazing.
Yeah, he's a machine, Kenny.

747
00:39:52,800 --> 00:39:55,200
Oh mate, would you?
I didn't, you didn't probably

748
00:39:55,280 --> 00:39:57,880
realise how much of A machine
they are because we've just

749
00:39:57,880 --> 00:40:00,720
talked power.
But Jesus Christ, the turnkey

750
00:40:01,040 --> 00:40:05,600
offerings, the bloody, the water
infrastructure projects, they,

751
00:40:05,960 --> 00:40:09,000
they will literally, Kenny
literally will get in the trend.

752
00:40:09,080 --> 00:40:11,160
Trenches with them.
I've seen photos of him in the.

753
00:40:11,160 --> 00:40:13,040
Trench.
I've seen him in the trench just

754
00:40:13,040 --> 00:40:14,720
to make sure.
Mate, look on the screen right

755
00:40:14,720 --> 00:40:16,760
now.
Mark that footage, get that.

756
00:40:16,840 --> 00:40:20,200
I think that is Kenny.
That is Kenny right there, mate

757
00:40:20,240 --> 00:40:23,120
and digging him, mate, even
though mate and you know where

758
00:40:23,120 --> 00:40:25,920
you know why they knew that
trench had to go there.

759
00:40:26,160 --> 00:40:29,640
No Silverstone Survey Division.
I didn't know that existed.

760
00:40:29,920 --> 00:40:33,640
Big Johnny Meagus have a have a
look at this black.

761
00:40:33,640 --> 00:40:37,120
Doesn't he look like a surveyor
you can trust?

762
00:40:37,440 --> 00:40:41,080
Like he's just, he's got that
trustworthy face and like I'm

763
00:40:41,160 --> 00:40:43,840
only scratching the bloody
Silverstone surface.

764
00:40:43,840 --> 00:40:46,520
Give him a bloody ring and
they'll do shit for you that you

765
00:40:46,520 --> 00:40:48,440
didn't even know they did or you
needed.

766
00:40:48,560 --> 00:40:53,640
So buddy, go Silverstone, go
Australia and go Island as well.

767
00:40:54,240 --> 00:40:58,200
Go again?
Oh bloody JD Evolution.

768
00:40:58,240 --> 00:41:00,200
Bloody they've made a bit of
cash.

769
00:41:00,720 --> 00:41:03,640
Don't even have I won't even
mention the all in sustaining

770
00:41:03,640 --> 00:41:07,240
costs but bloody they've gone.
Didn't they pump some gold and

771
00:41:07,240 --> 00:41:10,680
cash out of the cow?
Bloody 90 odd 1000 oz out of cow

772
00:41:10,720 --> 00:41:12,880
for the quarter.
I didn't realise how bloody big

773
00:41:12,880 --> 00:41:13,960
that was.
It's big.

774
00:41:14,240 --> 00:41:15,880
Yeah, man, it's bloody big.
It's big.

775
00:41:16,200 --> 00:41:20,280
I mean, it's a bit of sunk, a
bit of capital capital around

776
00:41:20,280 --> 00:41:22,520
the grounds as well.
But yeah, good.

777
00:41:22,520 --> 00:41:26,640
All ran back up over 4 bucks a
share, up 3% today.

778
00:41:26,640 --> 00:41:33,320
So, you know, a big miss on the
initial FY24 guidance, but that

779
00:41:33,320 --> 00:41:35,640
had been sort of flushed through
the market pretty well as you

780
00:41:35,640 --> 00:41:39,840
can see by the reaction today.
So no, no real surprises there.

781
00:41:39,840 --> 00:41:43,640
And like you say Maddie, cash
generation was strong again as

782
00:41:43,640 --> 00:41:47,200
we kind of suspected with what
gold had done and what copper

783
00:41:47,200 --> 00:41:50,840
had done over the past three odd
months.

784
00:41:51,000 --> 00:41:55,160
You know that that Q4 on the
financial year really outshone

785
00:41:55,400 --> 00:41:57,680
all other quarters in the
financial year.

786
00:41:57,680 --> 00:42:00,600
And operationally kind of like
you're talking to there as well,

787
00:42:00,600 --> 00:42:03,080
Maddie up 14% quarter and
quarter.

788
00:42:03,080 --> 00:42:07,120
So it was a pretty good quarter
on on that regard in gold

789
00:42:07,120 --> 00:42:11,480
production and copper also a
smidge higher looking at the the

790
00:42:11,480 --> 00:42:17,000
full financial year capital
spend of a bit under 3/4 of a

791
00:42:17,000 --> 00:42:19,640
billion dollars.
So that's that's chunky, you

792
00:42:19,640 --> 00:42:22,480
know just gives you an
indication of the scale of the

793
00:42:22,480 --> 00:42:24,240
business.
About 200 of that is in

794
00:42:24,240 --> 00:42:28,280
sustaining capital and the the
rest is obviously in growth

795
00:42:28,280 --> 00:42:29,960
capital.
So that kind of exceeded their

796
00:42:29,960 --> 00:42:35,760
guidance of 720 million kind of
question marks around where that

797
00:42:35,760 --> 00:42:40,680
goes in, in the future years
given N parks and what not still

798
00:42:40,680 --> 00:42:42,680
need a bit of capital to go into
the ground.

799
00:42:43,360 --> 00:42:47,480
The the very famous all in
sustaining cost was 12175 bucks.

800
00:42:47,760 --> 00:42:51,480
Expectations are that that ticks
up a bit next year.

801
00:42:51,480 --> 00:42:53,440
Again, the numbers haven't come
out yet.

802
00:42:53,440 --> 00:42:56,720
We're going to get guidance at
their annual results in August,

803
00:42:56,720 --> 00:42:59,680
which is a bit of a funny one
for for Evo's they're kind of

804
00:42:59,680 --> 00:43:04,520
noted for given the the guidance
around about now for the coming

805
00:43:04,520 --> 00:43:07,280
year.
But looking at the the balance

806
00:43:07,280 --> 00:43:10,800
sheet, 400 million in the Kitty,
100 still got to go out the door

807
00:43:10,800 --> 00:43:12,960
for for stamp duty.
So you kind of got to factor

808
00:43:12,960 --> 00:43:15,800
that in and total debt, again,
not something that was

809
00:43:15,800 --> 00:43:19,880
disclosed, but just zooming out
and looking at consensus 1.9

810
00:43:19,880 --> 00:43:22,000
billion.
So they are pretty, pretty

811
00:43:22,000 --> 00:43:24,800
levered business, although it's
trending in the in the right

812
00:43:24,800 --> 00:43:27,360
direction and it's only going to
get better if you know metal

813
00:43:27,360 --> 00:43:30,080
prices stay where they are
today.

814
00:43:30,080 --> 00:43:34,200
So all up a a pretty good
quarter and like I sort of said

815
00:43:34,200 --> 00:43:39,840
back over 4 bucks a share.
That's kind of reflective of the

816
00:43:39,840 --> 00:43:42,560
environment that we're we're now
in and the position and the the

817
00:43:42,560 --> 00:43:45,600
confidence that people are kind
of regaining around the business

818
00:43:45,600 --> 00:43:48,200
and their ability to to pay down
debt.

819
00:43:48,200 --> 00:43:51,320
Although there are kind of
question marks about free cash

820
00:43:51,320 --> 00:43:54,840
flow generation in the in the
coming years, given that like I

821
00:43:54,840 --> 00:43:57,720
said, N Parks and a couple other
assets need a a fair bit of

822
00:43:57,720 --> 00:44:00,720
money to be spent.
Yeah, it's do you, do you find

823
00:44:00,720 --> 00:44:03,960
it weird reading through that
quarterly because it's like at a

824
00:44:03,960 --> 00:44:07,120
first glance, if you didn't know
about the debt, it says they've

825
00:44:07,120 --> 00:44:10,920
just got this undrawn facility
that made this much cash they

826
00:44:10,920 --> 00:44:13,920
paid at 0 debt repayments.
But as you said, they don't

827
00:44:13,920 --> 00:44:18,560
disclose what the total debt is.
It's it's because they're a big

828
00:44:18,560 --> 00:44:21,520
company and they don't have to,
but it's like if you've read it

829
00:44:21,600 --> 00:44:23,960
for the first time, it doesn't.
I don't love it.

830
00:44:24,120 --> 00:44:25,480
It doesn't stick out that
they've.

831
00:44:25,480 --> 00:44:27,440
Got, I don't think they have the
same obligation to put out that

832
00:44:27,440 --> 00:44:29,800
5B cash flow statement like
everyone else.

833
00:44:29,800 --> 00:44:32,880
But yeah, but they do break out
every line item in the in there

834
00:44:33,080 --> 00:44:34,720
and then they're consistent
quarter to quarter.

835
00:44:34,720 --> 00:44:37,480
It's just a bit, a bit, but
versus other companies, yeah.

836
00:44:37,480 --> 00:44:41,320
But could you see where that the
debt, that debt number was not

837
00:44:41,320 --> 00:44:42,600
in there?
Yeah, total.

838
00:44:42,600 --> 00:44:44,200
Debt.
No, that that was that was

839
00:44:44,200 --> 00:44:46,600
pulled out from broker
consensus.

840
00:44:46,720 --> 00:44:48,360
Yeah.
So it just spot on.

841
00:44:48,360 --> 00:44:51,440
It wasn't mentioned.
It's yeah, which is very weird.

842
00:44:52,320 --> 00:44:55,800
They've they've got a revolver
that's untapped as well of a bit

843
00:44:55,800 --> 00:44:59,160
over 500.
The thing I went straight to was

844
00:44:59,160 --> 00:45:04,520
did like did red light make
money and and the answers like

845
00:45:04,520 --> 00:45:07,200
after major capital.
No, no, it it.

846
00:45:07,640 --> 00:45:08,840
Yeah, negative.
But it didn't lose.

847
00:45:08,960 --> 00:45:11,600
Or it didn't lose.
Shit -24 million like they had

848
00:45:11,600 --> 00:45:14,040
they had a weather event in the
in the June quarter from memory.

849
00:45:14,040 --> 00:45:16,840
So it probably it was probably
probably on track to make money.

850
00:45:17,160 --> 00:45:21,560
I just, we all just want to see
Red Lake come good eventually, I

851
00:45:21,560 --> 00:45:22,960
hope.
They like they said they flagged

852
00:45:22,960 --> 00:45:26,600
that one in June and they said
it was going to be a miss of

853
00:45:26,600 --> 00:45:28,480
26,000 oz.
Whatever.

854
00:45:28,800 --> 00:45:30,760
Yeah, whatever they're missing
on, yeah, but.

855
00:45:31,080 --> 00:45:36,680
I'd said they improved the fix
the problems with the materials

856
00:45:36,680 --> 00:45:39,320
handling system.
So yeah, interesting with the

857
00:45:39,320 --> 00:45:41,400
CapEx, the growth capital as
well.

858
00:45:42,240 --> 00:45:46,560
That was an A 25 or a 48.
The PFS that's been completed at

859
00:45:46,560 --> 00:45:49,040
North Parks for a sub level
cave.

860
00:45:49,040 --> 00:45:51,600
So I'll think 'cause I remember
when they first bought it, they

861
00:45:51,600 --> 00:45:54,640
were tossing up a lot of them as
whether they'd be block caves or

862
00:45:54,640 --> 00:45:57,320
sub level caves.
Obviously sub level caves are

863
00:45:57,640 --> 00:46:01,800
less quicker cash flow and less
growth capital.

864
00:46:01,840 --> 00:46:05,400
I think, 'cause everything is
being, it'll be all sustaining

865
00:46:05,400 --> 00:46:08,560
capital, so that'll reduce the
growth capital and bring the

866
00:46:08,720 --> 00:46:10,880
dirt forward a bit quicker if
it's a sub level.

867
00:46:12,560 --> 00:46:16,200
Yeah, that, yeah, I mean that
one in particular, that's going

868
00:46:16,200 --> 00:46:20,320
to be a big sort of drain of
capital, capital that needs to

869
00:46:20,320 --> 00:46:22,280
be spent.
Drain's probably not the right

870
00:46:22,280 --> 00:46:25,040
way to phrase it.
Cash flows in, in future, but

871
00:46:25,520 --> 00:46:27,400
yeah, copper exposure really
there.

872
00:46:27,400 --> 00:46:30,120
So that's one of the reasons
they get marked favourably at

873
00:46:30,120 --> 00:46:33,320
the minute.
Just to, just to wrap up guys, I

874
00:46:33,320 --> 00:46:37,120
want to talk, talk about what,
what we're seeing in the, in the

875
00:46:37,120 --> 00:46:39,320
overseas, yeah, financing
market.

876
00:46:39,760 --> 00:46:43,080
I, I, I think the activity there
in the last few days has been

877
00:46:43,080 --> 00:46:46,280
like much more prevalent over
there than it has been here.

878
00:46:46,280 --> 00:46:50,280
And I want to I want to rattle
off some of the big just just

879
00:46:50,280 --> 00:46:53,560
financings or, or capital
raising deals that I've seen in

880
00:46:53,560 --> 00:46:55,840
the North American market in the
last few days.

881
00:46:56,840 --> 00:47:00,160
Just in case you haven't noticed
Montage Gold Born did a $170

882
00:47:00,160 --> 00:47:03,680
million raise to advance it's
Kony project in Cote d'Ivoire

883
00:47:03,840 --> 00:47:07,640
cornerstone by the gin with a
9.9% stake in the company and

884
00:47:07,640 --> 00:47:10,320
the Lundin family going to to
19.9%.

885
00:47:11,200 --> 00:47:14,560
Arsenal, I don't know what the
name Arsenal made a strategic

886
00:47:14,560 --> 00:47:17,480
investment of of 68,000,000
bucks in Merry Market Copper.

887
00:47:17,480 --> 00:47:20,640
They bought Tenbos $42 million
stake and the balance was was

888
00:47:20,680 --> 00:47:24,520
was new shares issued.
We know we saw like soul gold

889
00:47:24,520 --> 00:47:28,160
them you know, main listing is
on the London exchange, but they

890
00:47:28,160 --> 00:47:30,640
do have TSX listing like and
they entered this syndicated

891
00:47:30,640 --> 00:47:36,200
gold stream with Franco and
Cisco for 750, $1,000,000 US to

892
00:47:36,200 --> 00:47:38,880
the to the, you know, to
potentially go towards Kaskabel

893
00:47:39,400 --> 00:47:41,680
foreign mining.
So they announced a strategic

894
00:47:41,680 --> 00:47:46,720
investment for $315,000,000 with
Fairfax and Agnico Eagle

895
00:47:46,800 --> 00:47:50,240
participating.
Media organisation a different.

896
00:47:50,240 --> 00:47:54,920
Fairfax, yeah, upsizing, you
know, and they also upsized

897
00:47:54,920 --> 00:47:59,400
their existing $150 million
facility to to $250 million,

898
00:47:59,400 --> 00:48:03,440
confirming FID at their Macavana
project.

899
00:48:03,840 --> 00:48:07,840
G2 Goldfields today raised $42
million via replacement for it's

900
00:48:07,880 --> 00:48:11,160
Oko project in Guyana.
Cornerstone by Anglo Goldashanti

901
00:48:11,160 --> 00:48:14,800
has gone to 15% after buying
their first stake in in January.

902
00:48:14,800 --> 00:48:17,560
So there's a big theme there in
those those deals that have all

903
00:48:17,560 --> 00:48:20,960
happened in the last three days
and that the theme is strategic

904
00:48:20,960 --> 00:48:24,640
investments from the majors.
The majors are voting with their

905
00:48:24,640 --> 00:48:27,200
capital right now.
So like, you know, these large

906
00:48:27,200 --> 00:48:30,080
gold or or whatnot, or, or
copper companies, they're,

907
00:48:30,400 --> 00:48:32,560
they're making more cash flow
and they're saying, where's the

908
00:48:32,560 --> 00:48:34,440
best place for me to allocate
that right now?

909
00:48:34,840 --> 00:48:37,400
It's it's in these North
American listed developers.

910
00:48:37,400 --> 00:48:40,440
They think that's.
Copper and gold, yes, 100%, very

911
00:48:40,440 --> 00:48:41,680
consistent.
Totally.

912
00:48:42,680 --> 00:48:44,600
Anyway, it's a theme I'm paying
attention to.

913
00:48:45,760 --> 00:48:48,520
Yeah, I think that's that's
really well sort of picked out

914
00:48:48,520 --> 00:48:50,080
mate.
And there's one more interesting

915
00:48:50,080 --> 00:48:53,840
thing I want to tie into that
Just noticed an article in the

916
00:48:53,840 --> 00:48:57,440
FT overnight saying investment
banking profits around the world

917
00:48:57,640 --> 00:48:59,640
have picked up.
So this is the sort of first

918
00:48:59,640 --> 00:49:02,320
pick up since things really
dropped off a Cliff at the the

919
00:49:02,320 --> 00:49:05,440
beginning of 2022, sort of
giving an indication that the

920
00:49:05,440 --> 00:49:10,400
capital markets more broadly are
kind of opening up and more

921
00:49:10,400 --> 00:49:12,480
deals are being done.
At the end of the day, kind of

922
00:49:12,480 --> 00:49:16,080
an interesting brewing a note.
Oh mate, the restaurants would

923
00:49:16,080 --> 00:49:19,240
be loving it to more deals, more
dinners.

924
00:49:19,240 --> 00:49:20,920
Dinners, lunches, more corporate
credit.

925
00:49:20,920 --> 00:49:25,280
Card activity, bloody love it
Duty right?

926
00:49:25,280 --> 00:49:30,880
Oh good work lads buddy.
Oh, I'll be home day tomorrow

927
00:49:31,000 --> 00:49:33,640
Chuck bloody We've got a good
interview coming up tomorrow.

928
00:49:33,640 --> 00:49:36,800
One of JD's specialities from
over in Melbourne, and it's with

929
00:49:36,800 --> 00:49:42,440
two bloody good fun managers.
Is I'm just share that one mate,

930
00:49:42,440 --> 00:49:43,520
Yeah.
Very good, right?

931
00:49:43,520 --> 00:49:44,640
Thanks.
All the partners.

932
00:49:44,640 --> 00:49:47,560
Axis mining technology top of
the show.

933
00:49:47,560 --> 00:49:51,000
Look at the hat trap.
Fucking brewing mineral mining

934
00:49:51,000 --> 00:49:55,160
services.
Verify get wet solutions DSI

935
00:49:55,160 --> 00:50:00,000
underground Silverstone CRE
insurance, WA waterboards K

936
00:50:00,000 --> 00:50:04,640
drill How good's a spark chart
and how good is NSW?

937
00:50:04,800 --> 00:50:06,520
Hootero, Hootero going.
To the Blues.

938
00:50:06,600 --> 00:50:09,240
Information contained in this
episode of Money of Mine is of

939
00:50:09,240 --> 00:50:11,320
general nature only and does not
take into account the

940
00:50:11,320 --> 00:50:14,920
objectives, financial situation
or needs of any particular

941
00:50:14,920 --> 00:50:16,960
person.
Before making any investment

942
00:50:16,960 --> 00:50:20,000
decision, you should consult
with your financial advisor and

943
00:50:20,000 --> 00:50:23,160
consider how appropriate the
advice is to your objectives,

944
00:50:23,360 --> 00:50:25,320
financial situation and night.