Gold Takes Off, Rates Bite, Miners Rip

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Gold is flying this week.
You're seeing long term rates

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like yields all tick up.
If you look at equity markets,

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it's one of those sort of funny
times right where where bad news

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is interpreted positively
because you think you're going

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to get a rate cut out of the
back of it.

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Alrighty, alrighty, let's let's
do this mate.

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We've got a a bunch to talk
about.

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As always, the mining industry
is kicking off eh It's.

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Another week.
Mining markets keep moving mate.

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And yeah, you and I, we've never
got a shortage of things to talk

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about in this industry.
That's the wonderful part of it

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being so fragmented and diverse.
There's always news flow.

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But especially on a week like
this week, mate, there's things

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are happening.
There's a bit, there's a bit of

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optimism out there.
It's a bit of love for for

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certain types of commodities,
certain stocks.

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I think the goldies might like
this one the people, the people

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in the gold space might get a
bit of enjoyment about the the

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intro and just the week that's
been a.

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It's been a mate, Gold's back,
it's flying as as someone

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messaged us, it never went
anywhere.

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It's never, it never left.
It never left.

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What else have we got, mate?
We've got a few things on the on

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the roster today.
We went to 80 years.

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So we're just going to talk
about what sort of stuck out

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because as valuations get richer
in some parts of the world, they

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look a bit more appealing in in
other parts.

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And then yeah, going to talk
about SAT 32 and Graham Kerr's

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comments going to talk about BH
BS financing, which I think when

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compared to other things
happening around the industry

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is, is actually a bit
interesting.

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Yep, Also got tech and Quadrata
Blanca too.

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Their, their expansion there has
continued to to sort of run

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through troubles and a couple
more bits and pieces.

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Hey.
It's a weekly wrap mate, we're

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going to cover lots, lots of
stuff in there with a bit of

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breadth and hopefully be a bit
dicey in the process.

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No friends joining us this time,
but yeah, yeah, we look forward

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to continuing to bring you some
diversity of opinion on on our

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weekly wraps going ahead.
Let's do it mate.

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Gold is flying this week and
anyone who holds one or maybe

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more gold stocks in their
portfolio will have seen this

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because some of the moves have
been, you know, 15% plus to the

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upside in the in the space of
just a few days.

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So to put it kind of into
context of what we're seeing

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around the world, you're seeing
long term rates like yields for

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the the 10 and up to 30 year
government bonds from the US to

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Japan to France to the UK to
Germany all tick up.

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You know, in the US is sort of
touching 5% in in UK they're

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hitting a a 27 year high I think
I saw.

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So inflation has ebbed its way
down, although it's sort of

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perking up in, in sort of
pockets, bits and piece in bits

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and pieces around the world.
Of course, every country is, is

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a bit different.
And I think we're a bit more

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protected here in Australia than
we than other parts of the world

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might be, say the US where the
the government debt issue is a

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bit more pronounced.
But if you look at equity

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markets, it's one of those sort
of funny times, right?

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Where where bad news is
interpreted positively because

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you think you're going to get a
rate cut out of the back of it,

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IE jobs data that sort of makes
you think that the Fed is going

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to cut their rates.
See stocks go up, which is

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always a bit kind of best to
think about, isn't?

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It mate, it is, it's been funny,
the trend of like I, I, I

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suppose there's like two things
happening at the same time which

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you don't always see.
And that is like, yeah, like

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gold, gold soaring and like
there's still a lot of like

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interest in, in the, the, the
tech end of the spectrum.

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At the same time, both of those
things happening together I find

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intriguing.
I like, I, I, I'm enjoying the,

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the resurgence in the gold
names, mate.

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It gives me, gives me a bit of
what's the right word?

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I don't know, it just makes me
happy.

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To to put it in a bit more
context for what we're seeing in

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Australia, you're seeing the
probability of a rate cut in

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November price down a little bit
to to 90%.

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In the US, it's at 100%.
So they are more or less 100%.

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They're they're pretty firm on
thinking the next rate cut is

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coming in a couple of weeks
time.

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Absurd though.
Yeah.

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And then surely absurd.
Like we're at the point where

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this is, this is good for
governments, right though,

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because they want to eat into
that debt that they've got.

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And there's a lot of pressure
coming from the governments on

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on central banks around the
world.

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I yeah mate, I find it.
I feel like no one gives a damn

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about inflation until it's
clearing you in the eyes And we

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everyone knows how manipulated
all of our various like

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inflation measures are.
Like real people feel the pinch

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of paying more for things.
And yet CPI is non existent.

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So I just think we see, we can
see the green shoots in

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commodity prices.
All of that flows through supply

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chain.
Inflation is going to be back in

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no time.
And as always, like, you know,

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what is consensus from a policy
perspective flips and it flips

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fast.
The biggest determinant of

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inflation is inflation
expectations themselves.

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So the moment people start to
expect inflation, it starts

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showing in the numbers.
Is that like reflexivity to to

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the equation?
It won't take long and the world

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can look like very, very
different from inflation

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perspective.
And then, and then it'll be the

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only thing that we can talk
about.

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And then all of a sudden, oh,
what does the case look like for

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real assets, You know, looks
pretty compelling.

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Totally.
And that's what the the gold

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market is sniffing at right now
as well as the other sort of

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commodities out there.
So gold hit up on 3600 US and

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you can see in that the focus
chart here, we've got the likes

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of Remelius, Northern Star,
Genesis, Capricorn, Pantoro and

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Alkane all having sort of
varying degrees of of success.

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And we spoke about this earlier
in the week in our interview

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with with Greg Orrell where the,
the changing perception of

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consensus gold forecast is, is
moving under our feet.

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And I think that's what's really
kind of driving things despite

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like gold flows, gold ETF flows
still being fairly negligible,

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especially in the face of like
big tech and other things that

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you mentioned earlier.
You're seeing this sort of

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thinking of where gold's going
to be in one and two years time

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changing under our feet.
And even even the brokers are

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sort of starting to to move
their price tags and move the

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the upside on, on their decks.
And then you see it down the

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sort of curve you see it in, in
places like silver and other

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sort of assets that have run
really hard.

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If we zoom out a bit, looking at
the last quarter, looking at the

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last half year, things like the
PGM sort of complex and all

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these sort of real assets that
they're starting to, to kind of

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move.
And we'll talk about a bit a bit

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more later on in the context of
like BHB and, and their

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financing and, and the interest
these sorts of companies are

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getting.
But I think the, the, the prized

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asset that is a mining company
with great management that can

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fight away inflation over the
longer term is looking as

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appealing as it ever has.
And I, I understand the echo

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chamber that, that we live in
here and being a mining podcast

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living in, in Perth sort of
talking about it.

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But I think you're sort of
seeing that reflected in in the

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prices of all these things
recently.

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Yeah, yeah.
I mean record, record, you know,

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records in terms of the ability
to capture margin from a lot of

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these like gold miners.
And that's why that's why

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they're showing the the crazy,
the more the remarkable share

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price movements they have.
Inflation's the thing to keep an

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eye on, right?
Because if you have costs creep

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up, then can they hold on to
the, can they hold on to those,

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those margins?
It's a bit baked into their,

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their, their current share
prices.

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But if you have a a positive
outlook on where the gold market

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is and where it's heading, and
if you have a positive outlook

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on the ability to control costs
in that outlook, then you know,

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then you can have a very
different view at the same time.

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Yeah.
That that management component,

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that premium is in a number of
cases that we'll speak about

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today, sort of it's sort of
worth its weight in gold, I

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find.
Which yeah, and I mean like the

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management can only do so much,
right?

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Like if, if, if state like in if
you have inflation or you have

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wage inflation in particular,
and all of a sudden everyone's

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swapping jobs because they're,
they're getting offered 2025%

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more, 50% more sign on bonus to
go join the PR.

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Then everyone's costs go up all
at the same time and you erode

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your margin pretty damn quickly.
So what was a very like

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profitable error can disappear
super quickly if you have just a

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tight labour market in
particular or high energy costs

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or, you know, a variety of other
input costs that might be

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substantial like reagent costs,
the likes.

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So like, yeah, inflation is the
thing that kind of kills margins

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and it can happen.
Inflation can certainly move

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faster than the gold price when
it gets when it gets going.

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So that's just the thing to keep
an eye on.

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Totally, totally.
And the the wage inflation never

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seems to move quite as quick
mate.

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Yeah, it doesn't move down.
Like, wages are sticky.

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They can move upwards super
quick, but yeah, like you're not

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gonna have someone agree to be
paid less, you know what I mean?

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They totally move the other way.
Totally.

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But I do love that yeah, that
that image of all the charts you

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brought up on the the focus
platform focused by market tech

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mate.
That's I'm actually using focus

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quite a bit.
I really like that platform.

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That's that's a that's a really
quality.

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It's a quality platform that I'm
putting a lot out of super

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clean, easy to use.
You get heaps of like value from

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the various like different like
scans you can you can do on

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there the.
Learning curve isn't massive

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like it is with a heap of these
things either.

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Right, it's super simple to to
to get like a pretty

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institutional grade product at A
at a retail price.

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00:09:12,560 --> 00:09:15,080
So check out, check out focus by
market tech if you haven't yet

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in the show notes, there's you
get a 10 day free trial.

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00:09:18,840 --> 00:09:20,360
If you are, click the link in
the show notes.

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Get on it mate.
Let's let's talk about Adu.

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So African and under We went
yesterday and we had a bunch of

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interesting conversations, so we
thought it might be just

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worthwhile reflecting on the
types of conversations we had,

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what we saw, and what kind of
stuck out.

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So what's top of your list?
Man, well, first, first and

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foremost, like a big, big
Congrats to to pay there for

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putting that that event on.
That was I was, it's the first

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time I've ever been to Africa
down under.

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But I thought it was a very tidy
event.

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Like, I thought it was a really,
really quality, really quality

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conference.
You know, like a quality

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targeted audience's.
Yeah, so super professional,

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super like, super interested,
super engaged.

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Like I yeah, I just thought it
was.

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It's a wicked.
Event that targeted component, I

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think is the the interesting bit
about it, right, yes, there's

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you know, the the bit, the bits
in common that you have there

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and what you're hunting out for.
You can sort of see in very

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quick succession and have a lot
of conversations, which is

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pretty cool.
Yeah, yeah.

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And I thought just like just
thinking of the themes, one of

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the themes that I've come away
from at at the end of the week

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is did you notice there's an A
real abundance of these, these

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small scale near term producers
that like capital markets have

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largely forgotten about.
Maybe they've been around for

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quite a while, but they've just
never like they've been asleep

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or dormant or at least from
people's like eyeballs and

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interest levels because they're
in a part of the world that's

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too spicy and of a scale that is
not relevant until now, right?

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Anyway, I just I noticed a bunch
of them either in my direct

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vision or in my periphery this
week and you're.

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00:10:45,280 --> 00:10:47,520
Like, hang on, they're actually
going to be producing in yes in

225
00:10:47,520 --> 00:10:49,480
that amount of time.
Exactly, exactly.

226
00:10:49,560 --> 00:10:51,520
Yeah.
And you know, take like I'll.

227
00:10:51,600 --> 00:10:53,480
I'll list off a couple here.
Yeah, let's run through them.

228
00:10:54,080 --> 00:10:57,160
So Orion, right, like every,
every young man and the dog is

229
00:10:57,160 --> 00:10:59,680
interested in small cap copper,
right?

230
00:10:59,680 --> 00:11:02,320
Like there's no shortage of
interest in small cap copper.

231
00:11:02,320 --> 00:11:05,280
But when's the last time you
heard anyone talk about Orion?

232
00:11:05,800 --> 00:11:07,160
So the really long time ago,
right?

233
00:11:07,160 --> 00:11:09,320
Like it's just been, yeah.
It's been a little while, so

234
00:11:09,320 --> 00:11:11,400
South African copper for for
people I'm familiar.

235
00:11:11,400 --> 00:11:14,480
South African copper there.
I mean, I think, I think on the

236
00:11:14,480 --> 00:11:19,240
register you see the likes of of
Tembo Delphi, it's got like an

237
00:11:19,240 --> 00:11:23,200
interesting register there.
They, they say that Priesca will

238
00:11:23,200 --> 00:11:28,240
be producing concentrate by
Christmas 2026 and that, that

239
00:11:28,240 --> 00:11:29,480
like they've got, you know, 2
projects.

240
00:11:29,480 --> 00:11:32,360
That's their first focus, which
they say they're gonna build up

241
00:11:32,360 --> 00:11:36,640
to 2222 thousand tonnes of, of
copper in a, in a bit of a

242
00:11:36,640 --> 00:11:39,880
phased approach and only like in
a market cap of only $80

243
00:11:39,880 --> 00:11:42,280
million.
So I was completely asleep to

244
00:11:42,280 --> 00:11:43,720
the fact that they're a near
temp producer.

245
00:11:43,760 --> 00:11:45,760
Had no idea.
Yeah, like because I had a few

246
00:11:45,760 --> 00:11:48,320
sort of moving parts as well.
The exploration angle I think is

247
00:11:48,320 --> 00:11:50,960
what had captured other people's
attention there.

248
00:11:50,960 --> 00:11:53,680
And then you forget they've got
a few sort of different bits and

249
00:11:53,680 --> 00:11:57,000
pieces to it, right?
Another one that's been yeah

250
00:11:57,000 --> 00:12:00,240
just dormant in my mind for
years is West Wicks Mining.

251
00:12:00,800 --> 00:12:05,640
They they show 70,000 oz per
annum gold production from Koala

252
00:12:05,640 --> 00:12:09,680
shallows from only US 44 million
in in funding.

253
00:12:10,280 --> 00:12:12,440
That's because they've got this
toll processing arrangement for

254
00:12:12,440 --> 00:12:16,600
Subarnier Stillwater and they're
targeting first poor in the

255
00:12:16,600 --> 00:12:20,160
first half of next year.
That's that's approaching pretty

256
00:12:20,160 --> 00:12:23,400
fast and again, like was asleep
to the fact that this thing will

257
00:12:23,400 --> 00:12:24,400
be producing gold soon.
So.

258
00:12:24,520 --> 00:12:27,960
It's the first new gold mine in
South Africa in about a decade I

259
00:12:27,960 --> 00:12:29,120
think.
Would you call it new?

260
00:12:29,640 --> 00:12:31,960
Isn't it new?
I'm not sure if that was them

261
00:12:31,960 --> 00:12:33,160
calling it or.
Someone else?

262
00:12:33,840 --> 00:12:37,840
But yeah, yeah, I mean, it's,
it's coming online in in a very

263
00:12:37,840 --> 00:12:40,640
short period of time and.
Yeah, I think I think like the

264
00:12:40,680 --> 00:12:43,160
capital markets are being like
very apprehensive about South

265
00:12:43,520 --> 00:12:45,480
South Africa for a long time as
well.

266
00:12:46,080 --> 00:12:48,680
I think you and I have like a
different view on, on the risk

267
00:12:48,680 --> 00:12:50,480
there.
I do think the risk is like not

268
00:12:50,480 --> 00:12:52,800
something you can ignore, but I
don't, I don't think it's like,

269
00:12:53,400 --> 00:12:56,440
I don't think it's proportionate
to what the real risk is there

270
00:12:56,440 --> 00:12:59,000
suppose capital markets
apprehension to to to touch

271
00:12:59,000 --> 00:13:00,600
things in South Africa.
Yeah, it's interesting because

272
00:13:00,600 --> 00:13:02,800
we went there earlier in the
year and and our perspective

273
00:13:02,800 --> 00:13:05,000
kind of changed a bit.
And obviously we we haven't

274
00:13:05,000 --> 00:13:06,840
operated or anything like that.
But just having a lot of

275
00:13:06,840 --> 00:13:09,720
conversations with people at
Minds and these sorts of things

276
00:13:09,720 --> 00:13:12,640
and just the kind of feeling you
got around there is that you can

277
00:13:12,640 --> 00:13:15,400
kind of get things done.
Yeah, Yep, Yep.

278
00:13:15,600 --> 00:13:17,680
Everything's contextual and
everything has a price.

279
00:13:18,680 --> 00:13:20,920
There's this other other
company, Ariana Mining and so

280
00:13:20,920 --> 00:13:22,440
it's an AIM listed gold
producer.

281
00:13:22,760 --> 00:13:25,200
It's coming to the ASX.
So like another one of those,

282
00:13:25,600 --> 00:13:28,760
you know, foreign listed
companies looking to migrate or

283
00:13:28,840 --> 00:13:31,520
make their way with the jewel
listing to, you know, capitalise

284
00:13:31,520 --> 00:13:32,800
on the higher premiums we've got
over here.

285
00:13:33,520 --> 00:13:35,960
Anyway, this is how kind of
subscale I'm talking about.

286
00:13:36,600 --> 00:13:40,720
So they've got this 23.5%
interest in, in these, in a

287
00:13:40,720 --> 00:13:43,520
couple of gold mines, which
collectively produced 25,000

288
00:13:44,040 --> 00:13:47,880
ounces in 2025.
So that's, that's 6000 ounces of

289
00:13:47,880 --> 00:13:50,960
attributable production.
Like that is so, so small.

290
00:13:50,960 --> 00:13:52,800
But they've got a development
project in Zimbabwe, which I

291
00:13:52,800 --> 00:13:53,760
think they're more excited
about.

292
00:13:53,760 --> 00:13:57,800
All I have to say is like this,
this kind of small subscale

293
00:13:57,800 --> 00:14:00,080
stuff wouldn't have, you
wouldn't have seen an IPO for

294
00:14:00,080 --> 00:14:02,160
that on the ASX like a couple of
years ago.

295
00:14:02,200 --> 00:14:06,080
Like if this is a lot of this
small scale stuff in, in a spicy

296
00:14:06,080 --> 00:14:08,880
jurisdiction or a place like
like South Africa, Zimbabwe or

297
00:14:08,880 --> 00:14:10,360
whatever.
It's the, you know, these are

298
00:14:10,360 --> 00:14:14,000
the sort of projects and
companies which, you know, you

299
00:14:14,000 --> 00:14:16,560
tend to just like forget about
or you're, you're sleeping on

300
00:14:16,560 --> 00:14:17,520
it.
And then all of a sudden there's

301
00:14:17,520 --> 00:14:21,920
like 5% of the cycle.
They're interesting or relevant.

302
00:14:22,080 --> 00:14:25,280
And we're either in that 5% or
we're about to be in that 5%.

303
00:14:25,280 --> 00:14:27,880
Because, you know, these, these
are, these are the kinds of

304
00:14:27,880 --> 00:14:30,160
things which, you know, you
don't want to be in 95% of the

305
00:14:30,160 --> 00:14:31,480
time.
And then 5% of the time they're

306
00:14:31,480 --> 00:14:35,280
super sexy.
And yeah, like I, I, I can't

307
00:14:35,280 --> 00:14:37,560
figure out where we are in that
sexy period of time, but we're,

308
00:14:37,760 --> 00:14:40,000
we're, we're pretty close to it
all.

309
00:14:40,000 --> 00:14:41,920
We're in it.
That's the Super important

310
00:14:41,920 --> 00:14:43,840
detail about everything we're
talking about here.

311
00:14:43,920 --> 00:14:46,200
Yeah, right.
These are not things you you buy

312
00:14:46,200 --> 00:14:49,000
and I want to put put in the
portfolio like you.

313
00:14:49,160 --> 00:14:51,400
You have to, you have to be
switched on to these things

314
00:14:51,400 --> 00:14:54,800
because they work for a very
finite period of time.

315
00:14:54,800 --> 00:14:57,200
Subscale stuff like the whole
thing with mining is you don't

316
00:14:57,760 --> 00:15:00,080
like, you accept whatever price
you get for something.

317
00:15:00,080 --> 00:15:01,440
You're not a price setter,
right?

318
00:15:01,440 --> 00:15:05,080
So yeah, the way you have a
competitive durable advantage is

319
00:15:05,200 --> 00:15:08,080
through scale because scale
gives you economies of scale.

320
00:15:08,080 --> 00:15:10,560
And so whenever you're talking
about small scale production,

321
00:15:10,560 --> 00:15:13,000
you're fighting an uphill battle
from the get go because you

322
00:15:13,000 --> 00:15:15,160
don't have economies of scale on
your on your side.

323
00:15:15,520 --> 00:15:17,880
And unfortunately like those
companies we just talked about,

324
00:15:17,880 --> 00:15:19,720
even though they they've got
something interestingly

325
00:15:19,720 --> 00:15:24,520
approaching production, yada,
yada, it's, it's also they also

326
00:15:24,520 --> 00:15:26,560
haven't had jurisdiction on
their side either for the last

327
00:15:26,560 --> 00:15:28,160
period of time, so.
You just hope they've got a bit

328
00:15:28,160 --> 00:15:30,760
of grade on their side that can
manage the the cost component of

329
00:15:30,760 --> 00:15:31,920
that.
And don't get me wrong, I think

330
00:15:31,920 --> 00:15:34,160
there's like there's plenty of
opportunity and money to be made

331
00:15:34,160 --> 00:15:36,920
when you time like being in
those companies, right?

332
00:15:36,960 --> 00:15:39,400
You just can't fall in love with
them, you know, Like when

333
00:15:39,400 --> 00:15:42,360
you're, when you're when, when,
when, when, when, when things

334
00:15:42,360 --> 00:15:44,560
kind of turn. 100% any others
that stuck out?

335
00:15:46,000 --> 00:15:48,480
Well, I've got another thing for
you.

336
00:15:48,480 --> 00:15:51,000
Enlighten me.
This was, this is another theme

337
00:15:51,000 --> 00:15:54,520
that I noticed and that's I
like, I just, there's, there's

338
00:15:54,520 --> 00:15:57,160
absolutely a bunch of quality
undeveloped projects in, in

339
00:15:57,160 --> 00:16:00,240
Africa that are MNA targets.
And the, the MNA bidding pool

340
00:16:00,240 --> 00:16:03,440
is, is, you know, is wider for
geopolitical reasons in it than

341
00:16:03,440 --> 00:16:06,080
it is elsewhere.
A lot of the time, not all the

342
00:16:06,080 --> 00:16:09,040
time, but a lot, a lot of the
time in the gold space.

343
00:16:09,040 --> 00:16:11,520
Like I think, you know, Taraco
and Predictive are the other

344
00:16:11,520 --> 00:16:14,120
standouts there.
Like I wouldn't be surprised to

345
00:16:14,600 --> 00:16:16,760
to see both of them acquired in
the next 12 months.

346
00:16:17,360 --> 00:16:19,400
Yeah, super, super decent
deposits in.

347
00:16:19,720 --> 00:16:22,440
Yeah, Yeah, I think you're 100%
right.

348
00:16:22,440 --> 00:16:24,360
And the intention that some of
these other names, you know,

349
00:16:24,360 --> 00:16:27,040
many peaks is another one that
we've spoken about in the past.

350
00:16:27,040 --> 00:16:30,120
Like they are getting attention,
like the the results keep coming

351
00:16:30,120 --> 00:16:33,080
out and and things get get
marginally better and better,

352
00:16:33,480 --> 00:16:35,600
but they're being rewarded for
that.

353
00:16:35,960 --> 00:16:40,800
Many peaks is up 360% this year
on the on the on the focus

354
00:16:40,800 --> 00:16:42,160
charts by market.
Check, check it out.

355
00:16:42,160 --> 00:16:46,000
There you go.
And yeah, I suppose even in that

356
00:16:46,080 --> 00:16:48,600
category, like you can look at
where the landings and the

357
00:16:48,600 --> 00:16:52,280
Chinese were were allocating to
with their, you know,

358
00:16:52,280 --> 00:16:55,800
investments earlier in the year.
And for that reason, you can

359
00:16:55,800 --> 00:16:59,480
grip Orem and African gold into
into that category as well.

360
00:16:59,480 --> 00:17:01,400
Both of those are up more than
100% this year.

361
00:17:01,400 --> 00:17:05,480
So I think I think you can throw
to Barney in the mix as well.

362
00:17:05,480 --> 00:17:08,960
Like if you can stomach Mali,
like there's a pretty robust

363
00:17:09,440 --> 00:17:12,040
like production outlook from,
from, from that company.

364
00:17:12,040 --> 00:17:16,480
And now that they've got like a
different funding pathway like

365
00:17:16,480 --> 00:17:19,560
it's, I think it's, I think it's
kind of interesting now as well.

366
00:17:21,119 --> 00:17:23,520
Yeah, thinking about Mali for a
moment there, it is interesting

367
00:17:23,520 --> 00:17:26,000
to look at the likes of
Resolute, who've obviously had a

368
00:17:26,000 --> 00:17:30,360
pretty tumultuous past year and
the gold prices improved

369
00:17:30,520 --> 00:17:33,040
dramatically since what
happened, happened.

370
00:17:33,480 --> 00:17:36,920
But they're nearly at those,
those levels they were at before

371
00:17:36,920 --> 00:17:40,400
they they halved, which is kind
of interesting to to think about

372
00:17:40,400 --> 00:17:43,120
when there was kind of total
despair amongst shareholders out

373
00:17:43,120 --> 00:17:45,440
there.
Relevant to Mali's aerobics,

374
00:17:45,440 --> 00:17:48,040
they they make a little bit of
cash flow from some gold Bonnie

375
00:17:48,040 --> 00:17:50,680
and Mali, but the big story for
them is the development of

376
00:17:50,680 --> 00:17:52,800
Kinney Arrow, which is, you
know, well and truly pretty

377
00:17:52,800 --> 00:17:55,880
advanced.
They're expecting first pour

378
00:17:56,160 --> 00:17:58,400
shortly.
So this is a, you know, an

379
00:17:58,520 --> 00:18:03,040
exciting new mine in, in Guinea,
you know, great kind of oxide

380
00:18:03,040 --> 00:18:07,600
feed to to yeah, hopefully have
some expedited repayment of of

381
00:18:07,600 --> 00:18:10,680
their project finance facility.
I saw that kind of rejected a

382
00:18:10,680 --> 00:18:12,560
couple things with Sprout, but
I'm pretty constructive on

383
00:18:12,560 --> 00:18:16,160
Robex.
I like I I think I think that's

384
00:18:16,160 --> 00:18:18,320
that's it's a backable team.
It's a backable story.

385
00:18:18,320 --> 00:18:21,440
It's going through the right
part of the Lausanne curve.

386
00:18:21,440 --> 00:18:26,320
And if the geopolitics doesn't,
you know, get too rocky, then

387
00:18:26,320 --> 00:18:27,760
like it's it's there for them,
you know?

388
00:18:28,120 --> 00:18:29,680
Yeah, did.
You put your house on it mate.

389
00:18:29,920 --> 00:18:32,720
I would not put I know of I do
know of like you put your house

390
00:18:32,720 --> 00:18:35,200
on it shout out you you know who
you are.

391
00:18:35,680 --> 00:18:39,080
Yeah, Mad Dog, but I absolutely.
I don't have those big balls,

392
00:18:39,080 --> 00:18:41,080
mate.
Nah, awesome.

393
00:18:41,360 --> 00:18:43,880
Great.
And away from gold, I've got a

394
00:18:43,880 --> 00:18:44,920
couple more for you.
OK.

395
00:18:46,120 --> 00:18:48,320
I do think there's like there's
still some decent projects in

396
00:18:48,320 --> 00:18:50,680
other commodities that may find
corporate interest in the future

397
00:18:50,680 --> 00:18:53,480
too.
And, and at least in, in, in

398
00:18:53,800 --> 00:18:58,440
commodities other than gold,
sometimes the issue with, with

399
00:18:59,560 --> 00:19:02,520
M&A activity for undeveloped
projects in gold right now is

400
00:19:02,800 --> 00:19:05,360
the corporates haven't yet
changed their gold price decks,

401
00:19:05,360 --> 00:19:06,560
right?
So if you, if they're running

402
00:19:06,560 --> 00:19:10,480
their long term gold price, they
can't justify paying above the,

403
00:19:10,640 --> 00:19:12,840
the share market prices for any
of these undeveloped projects.

404
00:19:13,240 --> 00:19:16,240
So until you get like the FOMO
from the corporates, like it's

405
00:19:16,320 --> 00:19:20,800
you just struggle to see the,
the, the M&A outcome.

406
00:19:21,240 --> 00:19:24,400
But in the in other commodities,
like maybe the commodities are

407
00:19:24,400 --> 00:19:28,280
more out of favour.
It's a it's a lot easier to have

408
00:19:28,280 --> 00:19:31,160
a an assumption from a corporate
who has a long term price higher

409
00:19:31,160 --> 00:19:33,040
than the current price.
And hence you can do a deal

410
00:19:33,040 --> 00:19:34,880
pretty easy as long as a bit off
spreads it.

411
00:19:35,240 --> 00:19:37,640
And that's that's the that's a
tricky thing.

412
00:19:37,680 --> 00:19:41,240
A look at Atlantic Lithium,
yeah, weigh up project.

413
00:19:41,760 --> 00:19:44,360
It's one of the stand out
undeveloped lithium projects,

414
00:19:44,360 --> 00:19:47,160
right.
We know it has corporate appeal.

415
00:19:47,160 --> 00:19:52,320
Like I remember like 2023 when I
saw made two offers, both at the

416
00:19:52,320 --> 00:19:54,840
same price was 33 pence for the
company.

417
00:19:55,280 --> 00:19:59,880
So Atlantic now trades at 9
pence, that's $0.20 Australian.

418
00:20:00,480 --> 00:20:04,400
I, I think in the right lithium
market, that asset has legs.

419
00:20:04,400 --> 00:20:08,240
I'm just not brave enough myself
to, to get exposed to that one.

420
00:20:08,680 --> 00:20:10,800
And you know, there's a, there's
a, there's a bit to play out as

421
00:20:10,800 --> 00:20:14,720
well from, from the permitting
perspective, but, but it's a,

422
00:20:14,800 --> 00:20:16,960
it's a very worthy asset in the
right lithium market.

423
00:20:17,080 --> 00:20:18,720
There's no doubt.
Like that's a, that's a quality

424
00:20:18,720 --> 00:20:23,040
asset and.
In the uranium space, uranium's

425
00:20:23,040 --> 00:20:27,880
so tricky, man.
Like I'm, I'm not, I'm what's

426
00:20:27,880 --> 00:20:29,440
the right word?
I feel like in the uranium, like

427
00:20:29,520 --> 00:20:32,000
when you're picking uranium
equities, your, the, the, the

428
00:20:32,000 --> 00:20:34,480
question you're trying to answer
a lot of the time is like, which

429
00:20:34,480 --> 00:20:37,400
one of the lot is the least bad?
Because there's, there's,

430
00:20:37,440 --> 00:20:39,480
they've all got warts.
Everything's got warts on it

431
00:20:39,600 --> 00:20:41,320
and.
Especially the restarts.

432
00:20:41,480 --> 00:20:43,960
Restarts have they?
They have obvious warts on them,

433
00:20:43,960 --> 00:20:46,120
and sometimes the warts are kind
of easy to pluck you out.

434
00:20:46,360 --> 00:20:50,240
That's why the development
projects sometimes kind of you

435
00:20:50,480 --> 00:20:53,200
can have blue sky because no one
knows what the warts are yet

436
00:20:53,200 --> 00:20:55,080
sometimes with a with a
development project.

437
00:20:55,920 --> 00:20:57,800
But Aura Energy kind of comes to
mind there.

438
00:20:58,440 --> 00:21:01,200
They they've got the the
undeveloped terrace project in

439
00:21:01,200 --> 00:21:03,400
Mauritania.
You love Mauritania.

440
00:21:03,440 --> 00:21:04,720
Yeah, talking about Mauritania a
bit.

441
00:21:04,840 --> 00:21:06,240
That's the show.
Yeah.

442
00:21:07,120 --> 00:21:09,800
If you can get comfortable with
Mauritania, I actually think

443
00:21:09,800 --> 00:21:13,000
it's a tidy enough project.
It's got, you know, long enough

444
00:21:13,000 --> 00:21:14,960
production like tidy study
numbers.

445
00:21:16,160 --> 00:21:19,160
I, you know, to me it looks like
a team that would will transact

446
00:21:19,160 --> 00:21:21,240
on it.
Like I feel like that's, that's

447
00:21:21,240 --> 00:21:23,600
one that could be prime for M&A
activity in the future as well.

448
00:21:23,840 --> 00:21:26,440
The final one I thought was
worthy of us doing a bit of work

449
00:21:26,440 --> 00:21:28,920
on in the future and we, we
haven't done the work we need to

450
00:21:28,920 --> 00:21:30,880
on this one yet mate is Southern
Palladium.

451
00:21:31,520 --> 00:21:33,640
So they've got the.
Ding, Ding, Ding.

452
00:21:33,920 --> 00:21:35,840
Do you own it?
Do we buy some?

453
00:21:35,840 --> 00:21:40,560
Yeah, I didn't.
Know just small.

454
00:21:40,560 --> 00:21:42,120
Just small.
That's so funny.

455
00:21:42,120 --> 00:21:44,320
Oh jeez, I didn't, I didn't
realise.

456
00:21:45,440 --> 00:21:46,920
We've got to, we've got to do
more work on it.

457
00:21:46,920 --> 00:21:47,880
Now we've got some skin in the
game.

458
00:21:47,880 --> 00:21:51,240
But I mean, that's on the, the
eastern limb of the Bushfeld

459
00:21:51,480 --> 00:21:54,160
complex surrounded by the big
international producers, $70

460
00:21:54,160 --> 00:21:57,520
million market cap.
Like the project, To me it looks

461
00:21:57,520 --> 00:22:00,560
like it stacks up in a, in a in
a, in a bad PGM market.

462
00:22:00,560 --> 00:22:03,880
If they can advance things at
the exact same time as that

463
00:22:03,880 --> 00:22:06,880
market gets healthier, both
those things are uncertain by

464
00:22:06,920 --> 00:22:09,200
the way, then I like I think
they'd benefit.

465
00:22:09,240 --> 00:22:12,680
So a sort of staged approach
they're looking at there as well

466
00:22:12,680 --> 00:22:16,080
as, you know, exploring the
opportunity of, of using someone

467
00:22:16,080 --> 00:22:21,400
else's processing capability,
which comes with challenges as

468
00:22:21,400 --> 00:22:26,640
well as everything's in context
of a weak PGM market and a, you

469
00:22:27,320 --> 00:22:30,240
know, kind of unbecoming market
capitalization of, of the

470
00:22:30,240 --> 00:22:32,120
business.
But it's it's it's an

471
00:22:32,120 --> 00:22:35,880
interesting one to look at if
you can stomach or the above

472
00:22:35,880 --> 00:22:38,360
plus sort of South Africa risk.
Yeah, yeah.

473
00:22:38,920 --> 00:22:41,400
Did you have any other
reflections other than no?

474
00:22:41,560 --> 00:22:43,480
I I think you sort of captured
it really well.

475
00:22:43,480 --> 00:22:45,720
I was just sort of amazed in in
the space of a few hours.

476
00:22:45,720 --> 00:22:48,920
And you know, this isn't like a
plug at all, but like the amount

477
00:22:48,920 --> 00:22:52,760
of conversations we we had in in
the space of a few hours there

478
00:22:52,800 --> 00:22:55,440
was was very kind of cool.
We were able to sort of float

479
00:22:55,680 --> 00:22:58,040
through and get a get a feel for
lots of different parts.

480
00:22:58,040 --> 00:23:00,680
You know, you can't part paint
West Africa with the same brush

481
00:23:00,680 --> 00:23:03,760
as South Africa as pockets in,
in East Africa there.

482
00:23:03,760 --> 00:23:06,240
So there's a lot to kind of get
across.

483
00:23:06,240 --> 00:23:09,240
But I, I feel we were able to
kind of do so having a bunch of

484
00:23:09,240 --> 00:23:12,120
conversations, which was super
helpful for, for our sort of

485
00:23:12,120 --> 00:23:14,200
education.
Totally, mate, totally.

486
00:23:15,160 --> 00:23:16,920
Great control mate.
Great control.

487
00:23:17,400 --> 00:23:18,920
Remind me, remind me about this
segment.

488
00:23:19,240 --> 00:23:23,600
So we give A, a letter like
your, your old high school mark

489
00:23:23,800 --> 00:23:28,520
A to F on a corporate move, a
bit of government policy, a

490
00:23:28,520 --> 00:23:31,560
commodity trend, anything that
sort of happened in the world of

491
00:23:31,640 --> 00:23:33,720
metals and mining in the past
week.

492
00:23:33,720 --> 00:23:37,160
So we've got 3 or 4 topics to
talk through today.

493
00:23:37,160 --> 00:23:40,480
And we're going to start this
one with tech struggles at

494
00:23:40,760 --> 00:23:43,400
Guebrara Blanca, which is in the
north of Chile there.

495
00:23:43,400 --> 00:23:46,760
So that's their big flagship
copper asset.

496
00:23:46,760 --> 00:23:51,560
They made the big move to sell
the Elk Valley assets about a

497
00:23:51,560 --> 00:23:54,920
year and a half ago now, so high
quality METCO projects that they

498
00:23:54,920 --> 00:23:58,520
owned in a sort of circa $9
billion transaction.

499
00:23:58,560 --> 00:24:02,560
So obviously METCO peeled off a
fair bit since then.

500
00:24:02,560 --> 00:24:03,840
So they might be smiling about
that.

501
00:24:03,840 --> 00:24:08,800
But there's still a lot of
critics out there analyzing

502
00:24:08,800 --> 00:24:12,240
their decision to focus on the
battery metals complex,

503
00:24:12,560 --> 00:24:14,320
especially in light of the fact
that they've had a lot of

504
00:24:14,320 --> 00:24:18,280
troubles mining in the battery
metals, specifically in the

505
00:24:18,280 --> 00:24:20,360
copper space.
So they have assets all through

506
00:24:20,360 --> 00:24:23,360
the Americas.
They are one of Canada's biggest

507
00:24:23,360 --> 00:24:27,600
mining names, you know, kind of
thanks to a lot of the take outs

508
00:24:27,600 --> 00:24:29,960
that have happened over the past
few decades in that space.

509
00:24:29,960 --> 00:24:33,560
So for those not familiar here
in Australia, they they kept it

510
00:24:33,560 --> 00:24:35,760
kind of between 15 and 20
billion, depending on how

511
00:24:35,760 --> 00:24:40,000
they're trading dollars.
And what they've done recently

512
00:24:40,000 --> 00:24:43,240
this week is they've they've
paused all major expansion

513
00:24:43,240 --> 00:24:47,360
capital across all their assets
so that they can focus on fixing

514
00:24:47,360 --> 00:24:48,240
QB.
So.

515
00:24:48,640 --> 00:24:51,640
This is their flagship asset.
Absolutely.

516
00:24:51,640 --> 00:24:55,400
So they in I want to say 2018
pressed go on QB 2.

517
00:24:55,400 --> 00:24:57,920
That was the expansion project
that was meant to be done in

518
00:24:57,920 --> 00:25:02,880
2021 that struggled no thanks to
to COVID, but that took them

519
00:25:02,920 --> 00:25:07,720
many years like longer as well
as $4 billion more to complete.

520
00:25:07,720 --> 00:25:12,400
Now this was to to really lift
it up a notch and we're talking

521
00:25:12,400 --> 00:25:17,240
at this point in time kind of
mid 200,000 tons of copper

522
00:25:17,240 --> 00:25:20,040
production per annum.
So earlier this year they

523
00:25:20,040 --> 00:25:25,160
downgraded that by 40,000 tons
for this year and 26 guidance is

524
00:25:25,160 --> 00:25:29,240
in in serious kind of doubt on
on the back of these challenges

525
00:25:29,360 --> 00:25:33,040
specifically they've had issues
with with tailings there as well

526
00:25:33,040 --> 00:25:35,400
as kind of infrastructure
problems.

527
00:25:35,400 --> 00:25:40,200
So they got this operational
review underway now, but that

528
00:25:40,200 --> 00:25:42,680
sort of slow sand drainage
challenge that they're having up

529
00:25:42,680 --> 00:25:45,480
there in the Andes, this this
asset is at 4 1/2 thousand

530
00:25:45,480 --> 00:25:50,360
meters above sea level has, you
know, ultimately kneecapped

531
00:25:50,360 --> 00:25:53,440
production.
And it's given them no, no

532
00:25:53,440 --> 00:25:56,120
shortages of issues.
So what they wanted to do was

533
00:25:56,400 --> 00:25:59,760
mechanically raise that, that
dam wall there so that you can

534
00:25:59,760 --> 00:26:01,960
have more tailings go at the
back end of the plant and

535
00:26:02,640 --> 00:26:04,720
produce more copper.
And it's kind of interesting

536
00:26:04,720 --> 00:26:08,000
when you think about Tech
because they had for for the

537
00:26:08,000 --> 00:26:11,560
longest time a track record as
just phenomenal mine builders.

538
00:26:11,560 --> 00:26:15,080
That was their MO.
They built mines year after year

539
00:26:15,080 --> 00:26:16,840
after year and they did it
really well.

540
00:26:16,840 --> 00:26:21,880
But that has sort of seen a bit
of a, a bit of it sort of armor

541
00:26:21,880 --> 00:26:27,240
chinked at in the past decade or
so with, with challenges like

542
00:26:27,240 --> 00:26:31,360
what we're seeing here.
So QB and QB 2 certainly doesn't

543
00:26:31,360 --> 00:26:34,640
fall into the, the assets that
they've executed marvellously

544
00:26:34,720 --> 00:26:37,080
on.
And if you're going to be a, a

545
00:26:37,080 --> 00:26:39,480
copper focused producer in the
Americas, you've got to be able

546
00:26:39,480 --> 00:26:42,280
to execute this, you know,
understanding that it's, it's

547
00:26:42,280 --> 00:26:46,160
super sort of hard to do.
But as a result of all these

548
00:26:46,160 --> 00:26:51,240
challenges, they're, they're COO
retired in quotation marks has

549
00:26:51,240 --> 00:26:54,840
has sort of moved on because
somebody evidently had to take

550
00:26:54,840 --> 00:26:57,800
the, the brunt and walk the
plank for, for what we've kind

551
00:26:57,800 --> 00:26:58,520
of seen today.
What?

552
00:26:59,160 --> 00:27:01,120
Are you, what are you giving
from a great perspective mate?

553
00:27:01,120 --> 00:27:04,080
I.
Mean it's it's hard to give them

554
00:27:04,400 --> 00:27:07,800
anything other than like AD
right for this one because

555
00:27:08,440 --> 00:27:11,320
again, understanding that mining
is hard and these things are

556
00:27:12,160 --> 00:27:14,080
very common these these types of
challenges.

557
00:27:14,080 --> 00:27:18,200
So you don't want to be overly
critical but in the face of what

558
00:27:18,200 --> 00:27:21,240
they're trying to do and in the
context of having spent, you

559
00:27:21,240 --> 00:27:24,800
know, $4 billion more than they
previously had guided to the

560
00:27:24,800 --> 00:27:27,840
market already on this.
There's got to be a point in

561
00:27:27,840 --> 00:27:30,920
time when when enough's enough
and you've got to kind of pull

562
00:27:30,920 --> 00:27:35,040
through and and make good on it,
especially in the context of the

563
00:27:35,040 --> 00:27:38,000
dual share class structure that
they have there that's protected

564
00:27:38,000 --> 00:27:40,160
them for a long time.
And tech would have been taken

565
00:27:40,160 --> 00:27:42,440
out 20 odd years ago if they
didn't have that share

566
00:27:42,440 --> 00:27:44,080
structure.
So that they're in a sort of

567
00:27:44,360 --> 00:27:46,600
unique position.
But there's a sunset on that,

568
00:27:46,600 --> 00:27:50,440
that that following what the
deal with Elk Valley is going to

569
00:27:50,440 --> 00:27:52,520
ride out and it's going to be
gone by 2029.

570
00:27:52,520 --> 00:27:54,240
But I think there's a lot of
questions in the market now.

571
00:27:54,560 --> 00:27:57,320
Does that have to go sooner so
that you can have a bit more of

572
00:27:57,320 --> 00:28:03,560
a orderly kind of market where
the CEO and the management team

573
00:28:03,560 --> 00:28:08,240
pay pays a bit more of a a
price, where the major owners of

574
00:28:08,240 --> 00:28:11,640
the company have their kind of
rightful say in operations?

575
00:28:11,840 --> 00:28:13,840
I reckon tech disappears in the
fullness of time.

576
00:28:15,400 --> 00:28:17,760
Maybe once that shared class
search is cleaned up?

577
00:28:17,960 --> 00:28:21,840
Exactly.
So who so so Tech owns 60% of of

578
00:28:21,840 --> 00:28:24,320
QB?
That's right, Sumitomo owns 30%

579
00:28:24,320 --> 00:28:27,440
and Cadelco owns 10.
Gotcha, gotcha.

580
00:28:27,560 --> 00:28:30,960
I yeah, I'll give them there's,
there's two things you saw last

581
00:28:30,960 --> 00:28:32,640
to me like and I'll give them AD
as well.

582
00:28:33,120 --> 00:28:38,920
One, one is I think, I think
people like, for whatever

583
00:28:38,920 --> 00:28:42,920
reason, standalone copper
companies command a higher

584
00:28:42,920 --> 00:28:44,560
multiple than the diversified
miners.

585
00:28:44,960 --> 00:28:49,080
I think it's a short sighted
kind of market reality.

586
00:28:49,480 --> 00:28:53,640
And I also think something like
like these, these, these are the

587
00:28:53,640 --> 00:28:56,280
times where it becomes kind of
clear that there was and is a

588
00:28:56,280 --> 00:28:59,280
symbiotic relationship that can
be had between large scale coal

589
00:28:59,280 --> 00:29:02,080
portfolio and your copper,
especially in a period where you

590
00:29:02,400 --> 00:29:05,600
your coal can be a cash cow.
I mean, I understand it hasn't

591
00:29:05,600 --> 00:29:08,640
been very cash generative for
the Glencore so far given where

592
00:29:08,640 --> 00:29:11,680
markets are, but in theory, you
know, that's a tier one asset.

593
00:29:11,680 --> 00:29:13,920
It should be printing out cash
throughout the cycle and in the

594
00:29:13,920 --> 00:29:16,440
fullness of time would have
provided plenty of cash flows

595
00:29:16,440 --> 00:29:21,280
for them for for tech to to
allocate towards like, you know,

596
00:29:21,280 --> 00:29:23,320
the very capital intensive
production growth that they want

597
00:29:23,320 --> 00:29:25,640
to be having in the South
American Cup of portfolio.

598
00:29:26,320 --> 00:29:30,440
The second thing it highlights
to me is I suppose the premium

599
00:29:30,440 --> 00:29:33,400
that you should like that we
should undoubtedly allocate to

600
00:29:33,400 --> 00:29:37,800
the types of mining companies we
have like teams and, and track

601
00:29:37,800 --> 00:29:41,280
record of in house delivery of
capital projects like, like, you

602
00:29:41,280 --> 00:29:43,720
know, on time, on budget in
tricky parts of the world.

603
00:29:43,720 --> 00:29:47,480
Like, and, and, and that's
that's why I, I always, I always

604
00:29:47,480 --> 00:29:50,080
think like first Quantum is just
such an, an impressive company

605
00:29:50,080 --> 00:29:53,080
for the, for the reason for the
reputation that they have in, in

606
00:29:53,080 --> 00:29:55,840
actually like delivering in
house kind of project execution

607
00:29:55,840 --> 00:29:58,200
in tricky parts of the world in
innovative ways.

608
00:29:58,200 --> 00:30:00,400
They're very mindful of not
wasting costs.

609
00:30:00,400 --> 00:30:02,000
They're very conscious of adding
value.

610
00:30:02,360 --> 00:30:04,080
Sometimes they choose
jurisdictions that are a bit,

611
00:30:04,200 --> 00:30:06,320
you know, spicy and there's
cheap political dynamics.

612
00:30:06,320 --> 00:30:10,480
But but yeah, I do think like a
company like First Quantum is,

613
00:30:10,760 --> 00:30:13,400
is worthy of the execution
premium that that you know,

614
00:30:13,440 --> 00:30:15,800
you're not going to get a
shocking surprise like you might

615
00:30:15,800 --> 00:30:18,920
get out of tech here.
Yeah, absolutely.

616
00:30:18,920 --> 00:30:19,680
Right.
Well, well said.

617
00:30:19,680 --> 00:30:23,320
First Quantum is a company that
that deserves a lot of credit

618
00:30:23,320 --> 00:30:26,080
for, for what they've done over
the past sort of 15 or 20 years

619
00:30:26,080 --> 00:30:28,720
in building that company, right?
While we're talking about the

620
00:30:28,720 --> 00:30:31,920
internationals, our next next
point is Anglo American.

621
00:30:31,920 --> 00:30:35,160
They launched an accelerated
book bill to sell their

622
00:30:35,160 --> 00:30:37,880
remaining 19.9% stake in
Valterra.

623
00:30:38,240 --> 00:30:41,960
This previously was Amplat.
So they spun it out it's own

624
00:30:41,960 --> 00:30:43,520
thing, it's called Valterra
Platinum now.

625
00:30:44,720 --> 00:30:48,160
So that amounted to 52,000,000
shares valued at about 2.4

626
00:30:48,160 --> 00:30:51,920
billion U.S. dollars and it will
complete their exit from the

627
00:30:51,920 --> 00:30:54,680
platinum business.
What do you what do you write

628
00:30:54,680 --> 00:30:57,600
this one mate?
You can.

629
00:30:57,680 --> 00:30:59,720
You can slice this one up a
couple different ways, mate.

630
00:30:59,840 --> 00:31:04,720
Oh, I'll give them AC plus like
the, the saving grace is that

631
00:31:04,720 --> 00:31:07,400
they held on to 20%, you know,
selling that the whole thing

632
00:31:07,400 --> 00:31:09,160
would have been difficult.
Obviously it was his own listed

633
00:31:09,160 --> 00:31:11,400
business and brand change and
everything.

634
00:31:11,400 --> 00:31:13,360
But three months later and
they're, they're getting a bit

635
00:31:13,360 --> 00:31:17,240
of an uplift, a few $100
million, which is helpful in

636
00:31:17,240 --> 00:31:20,880
the, in the scheme of things for
Anglo.

637
00:31:21,480 --> 00:31:25,680
You could easily sort of paint a
more negative rush on this one.

638
00:31:25,680 --> 00:31:29,200
But you know, the, the fact of
the matter is that they made the

639
00:31:29,200 --> 00:31:32,800
decision a year ago to split up
everything and, and go down the

640
00:31:32,800 --> 00:31:35,280
route that they've gone down.
And they're kind of living by

641
00:31:35,280 --> 00:31:36,280
that now.
What do you think?

642
00:31:37,520 --> 00:31:41,720
Like you must see as well, I
think, I think like I know a lot

643
00:31:41,720 --> 00:31:44,480
of buy side people who have been
interested in exposure in the,

644
00:31:44,560 --> 00:31:48,360
the platinum trade and they're
like, they're actually waiting

645
00:31:48,360 --> 00:31:51,440
for this event knowing that, you
know, English shares are going

646
00:31:51,440 --> 00:31:54,000
to come to market.
So actually it gets me more

647
00:31:54,000 --> 00:31:58,720
interested in the in the PGM
kind of trade in some respects

648
00:31:58,720 --> 00:32:01,920
because this is the last kind of
liquidity event there.

649
00:32:02,000 --> 00:32:04,040
Now all of a sudden, if people
want exposure to it, they're

650
00:32:04,040 --> 00:32:06,000
going to have to buy on market
as opposed to wait for, you

651
00:32:06,480 --> 00:32:08,200
know, a big stake of something
to come to the market.

652
00:32:09,640 --> 00:32:11,320
So yeah, I find that
interesting.

653
00:32:11,520 --> 00:32:14,760
But but you never you never want
to be selling or divesting

654
00:32:14,760 --> 00:32:17,440
something when that, you know,
commodity is in the doldrums.

655
00:32:17,440 --> 00:32:20,760
And their hand was kind of
forced here thanks to, to to BHP

656
00:32:20,760 --> 00:32:22,960
and how they had to react to
that.

657
00:32:23,400 --> 00:32:26,000
But you never want to be selling
something in the bear market.

658
00:32:26,000 --> 00:32:27,480
You want, always want to be
selling something in the bull

659
00:32:27,480 --> 00:32:30,040
market.
Unfortunately, PGM market is not

660
00:32:30,040 --> 00:32:32,480
in the book market right now.
So, you know, they're doing what

661
00:32:32,480 --> 00:32:33,800
they have to do.
I think it's also kind of just

662
00:32:33,800 --> 00:32:38,400
like reflecting a little bit
again on, I mean, the coal

663
00:32:38,400 --> 00:32:42,160
divestment is, has obviously
become more complex since things

664
00:32:42,160 --> 00:32:45,920
with Peabody of high end up.
They're no closer to divesting

665
00:32:46,320 --> 00:32:48,280
to beers either.
I mean, the government of

666
00:32:48,280 --> 00:32:52,160
Botswana the other day was like
actually made some public

667
00:32:52,160 --> 00:32:54,480
comments that we should be the
ones to take it over.

668
00:32:54,480 --> 00:32:57,320
Like they're really like, you
know, just riling up the the

669
00:32:57,320 --> 00:32:59,440
public commentary in relation to
everything that's going on with

670
00:32:59,440 --> 00:33:03,360
the beers at the moment.
Now that I don't believe that

671
00:33:03,360 --> 00:33:06,160
the government of Botswana is
going to take over the beers, I

672
00:33:06,160 --> 00:33:07,880
think it's kind of far fetched
given the whole financial

673
00:33:08,040 --> 00:33:09,080
position of the government
there.

674
00:33:09,800 --> 00:33:12,600
But the fact there's no trade
sale of that yet and there's no,

675
00:33:12,600 --> 00:33:15,160
there's no rumoured actual kind
of like buyer of that.

676
00:33:15,160 --> 00:33:19,080
And there's clearly a a bit of
spread on there's huge

677
00:33:19,080 --> 00:33:22,640
stockpiles or inventory on the
on the books, which are valued

678
00:33:22,640 --> 00:33:25,800
at diamond prices, which don't
seem like reasonable at all.

679
00:33:26,960 --> 00:33:30,600
The the the hand, like Anglo's
hands are kind of forced to IPO

680
00:33:30,600 --> 00:33:32,040
that one, right.
So what's going to happen if,

681
00:33:32,400 --> 00:33:35,480
when, when Anglo IP OS to be is
like, what does that thing trade

682
00:33:35,480 --> 00:33:39,880
for in public markets?
That's like you wouldn't, I

683
00:33:39,880 --> 00:33:42,440
wouldn't buy shares in to be is
like, I know there's brand

684
00:33:42,440 --> 00:33:44,160
value, but that only counts for
so much.

685
00:33:44,160 --> 00:33:48,440
Like, yeah, I don't know, I'm a
bit, I'm a I'm a bit

686
00:33:48,600 --> 00:33:52,480
trepidatious about how they go
doing some of the the harder

687
00:33:52,560 --> 00:33:54,920
things ahead of them, like
parting ways with De Beers.

688
00:33:55,440 --> 00:33:59,160
I yeah, I struggle to see a
buyer for that one.

689
00:33:59,200 --> 00:34:03,480
Yeah, I, I think your spot on
Anglo is like a, a fascinating

690
00:34:03,480 --> 00:34:05,000
company with such a rich
history.

691
00:34:05,000 --> 00:34:08,880
But you know, in 2025 the, the
value of the company like De

692
00:34:08,880 --> 00:34:12,840
Beers and and so on is, is a bit
harder to sort of conjure up.

693
00:34:12,840 --> 00:34:16,360
So we see what they do on on
that front and we'll see what

694
00:34:16,360 --> 00:34:19,120
the company looks like in in
three years and how they reflect

695
00:34:19,120 --> 00:34:21,920
on spinning off PGMS and and
other assets.

696
00:34:22,760 --> 00:34:28,719
Yeah, mate, the next one, Graham
Kerr, who's yeah, the CEO of S

697
00:34:28,719 --> 00:34:31,800
32, made some punchy comments
about the attractiveness of

698
00:34:31,800 --> 00:34:35,040
investing in America versus
Australia pretty pretty publicly

699
00:34:35,040 --> 00:34:36,480
this week.
Yeah, do you want to grade it,

700
00:34:36,480 --> 00:34:37,080
mate?
What's?

701
00:34:37,440 --> 00:34:39,520
Well, let's say what he said
first and then we'll grade it.

702
00:34:39,520 --> 00:34:42,920
So he goes, He said.
The American process is clear.

703
00:34:42,920 --> 00:34:45,560
They have to find timelines and
they hold everyone accountable.

704
00:34:46,679 --> 00:34:50,080
He said. the US, they, they,
they have both the federal and

705
00:34:50,080 --> 00:34:52,760
state level permitting czar who
coordinates the process and

706
00:34:52,760 --> 00:34:54,040
allows things to run in
parallel.

707
00:34:54,400 --> 00:34:56,520
The total amount of work you
need to do is the same, just

708
00:34:56,520 --> 00:34:58,760
holding people to account on
deadlines and making sure you

709
00:34:58,760 --> 00:35:02,720
have enough resources and can
parallel process the permits.

710
00:35:02,920 --> 00:35:04,720
Everyone talks about the US
being challenging for

711
00:35:04,720 --> 00:35:06,280
permitting.
For us it's been a dream

712
00:35:06,280 --> 00:35:09,280
compared to Australia.
Pretty interesting.

713
00:35:10,680 --> 00:35:15,280
Well, I graded, I graded, I
graded an A for saying it like

714
00:35:15,280 --> 00:35:18,640
he's, if you look at what what
he actually suggests Australia

715
00:35:18,640 --> 00:35:21,800
change.
He says Mr. Kerr wants greater

716
00:35:21,800 --> 00:35:24,400
clarity and clear approval
requirements and timelines as a

717
00:35:24,400 --> 00:35:26,920
starting point.
He wants qualified experts

718
00:35:26,920 --> 00:35:29,720
rather than outsourcing of
decisions to independent panels

719
00:35:29,720 --> 00:35:32,480
involved in assessments and
adequate resources for

720
00:35:32,480 --> 00:35:33,840
government agencies to meet
timelines.

721
00:35:33,840 --> 00:35:36,120
Like I don't think those are
unreasonable expectations to

722
00:35:36,120 --> 00:35:37,720
have.
And I, and I think if you don't

723
00:35:37,720 --> 00:35:39,960
have those things, it's pretty
hard to have international

724
00:35:39,960 --> 00:35:43,000
capital attracted to investing
in a domestic mining industry.

725
00:35:44,360 --> 00:35:46,320
Interesting thing about Graham
Curry's, he's, he's on the way

726
00:35:46,320 --> 00:35:48,200
out, right?
He's got like like a bit more

727
00:35:48,200 --> 00:35:50,880
than 12 months left at S 32.
And when you're 1 foot out of

728
00:35:50,880 --> 00:35:53,160
the door, you kind of just say
things a bit more freely, like

729
00:35:53,160 --> 00:35:55,920
who cares?
You know, it's like you know and

730
00:35:55,920 --> 00:36:01,280
he's and he's like S 32 for a
very long time have have had a

731
00:36:01,280 --> 00:36:04,280
litany of issues in relation to
their their domestic permitting

732
00:36:04,280 --> 00:36:07,680
dynamics, particularly what is
it related towards the Illumina.

733
00:36:07,800 --> 00:36:10,800
Yeah, well, I mean, good on him
for for speaking up and actually

734
00:36:10,800 --> 00:36:12,680
sharing his thoughts.
There were super interesting

735
00:36:12,680 --> 00:36:14,600
comments to to call it sort of
chalk and cheese.

736
00:36:14,840 --> 00:36:17,360
Obviously it's a bit anecdotal
like I'm not sure every company

737
00:36:17,360 --> 00:36:21,840
would exactly echo or reflect
what what he has said there.

738
00:36:21,840 --> 00:36:26,440
So it is interesting the way I
kind of think about rating this

739
00:36:26,440 --> 00:36:31,360
one is rating the US itself.
And I'll give them AB because I

740
00:36:31,360 --> 00:36:35,480
think it is really promising
what they've done.

741
00:36:35,480 --> 00:36:38,560
But I think the the sort of a
mark comes once a mine actually

742
00:36:38,560 --> 00:36:41,440
gets through because we still
see lots of appeals and these

743
00:36:41,440 --> 00:36:43,800
sorts of things.
But it also goes to show like a,

744
00:36:43,800 --> 00:36:45,920
a lot of people wouldn't have
said super positive things about

745
00:36:45,920 --> 00:36:49,360
developing a mine in the US for
the past 20 or 30 years.

746
00:36:49,640 --> 00:36:54,080
So things can kind of change for
the, the more constructive.

747
00:36:54,080 --> 00:36:56,440
And that doesn't mean you sort
of skim through anything.

748
00:36:56,920 --> 00:37:00,120
But like her said, the work is
the same in Australia or the US.

749
00:37:00,120 --> 00:37:02,720
It's just taken seven years in
one spot and four years in

750
00:37:02,720 --> 00:37:04,680
another spot.
So if you can have more

751
00:37:04,680 --> 00:37:07,440
accountability in these sorts of
things and actually make a, a

752
00:37:07,640 --> 00:37:11,240
defined decision, then that's
the ideal kind of outcome for,

753
00:37:11,520 --> 00:37:13,040
for both parties.
And you're not wasting people's

754
00:37:13,040 --> 00:37:15,000
time.
So it's, you know, from a

755
00:37:15,000 --> 00:37:16,400
government perspective, you're
not static.

756
00:37:16,400 --> 00:37:18,000
You, you can run things more
efficiently.

757
00:37:18,000 --> 00:37:21,360
You you can go to 1st principles
and understand what do we need,

758
00:37:21,600 --> 00:37:24,000
who are the right people to make
these decisions and go from

759
00:37:24,000 --> 00:37:26,280
there.
To you know, I gave them an A

760
00:37:26,280 --> 00:37:29,440
for the comments but it's AD for
thinking I might say it's the

761
00:37:29,440 --> 00:37:33,240
best use of capital, maybe an F
even if timelines are better

762
00:37:33,240 --> 00:37:38,240
mate, surely, surely the project
economics matter more.

763
00:37:38,960 --> 00:37:41,560
Call it contrarian, mate.
Very contrarian.

764
00:37:41,640 --> 00:37:44,440
All right, sweet and sour deal.
Sweet, sweet and sour deal time.

765
00:37:44,440 --> 00:37:46,680
OK, So what do we do here?
We rattle through some big deals

766
00:37:46,680 --> 00:37:49,160
of the week, and is it a sweet
deal or a sour deal?

767
00:37:49,160 --> 00:37:51,000
It's kind of, it's kind of
implied by the name, isn't it?

768
00:37:51,920 --> 00:37:55,800
Start us up mate.
Lotus raised 70 bucks earlier

769
00:37:55,800 --> 00:37:57,000
this week.
What are your thoughts?

770
00:37:59,080 --> 00:38:00,760
I don't love, I don't love this
one.

771
00:38:02,600 --> 00:38:04,720
You know my views on restart
uranium projects?

772
00:38:06,120 --> 00:38:07,560
I don't know.
I think I've heard them in the

773
00:38:07,560 --> 00:38:09,640
past.
Yeah, I'm sensing a sour deal.

774
00:38:10,120 --> 00:38:12,440
Yeah, yeah.
I mean the flip side of a sour,

775
00:38:12,440 --> 00:38:14,760
like it's a sweet deal if you're
the company that raised it.

776
00:38:14,760 --> 00:38:17,880
But like, yeah, I don't know, I
find it hard to get excited when

777
00:38:17,960 --> 00:38:19,680
when that's the rationale for it
being a sweet deal.

778
00:38:19,680 --> 00:38:23,680
So I'm a sour deal.
Yeah, I would lean on on your

779
00:38:23,680 --> 00:38:26,960
side of thinking there as well.
We ran through the troubles that

780
00:38:26,960 --> 00:38:30,600
Kayla Carer had some time ago.
I think it was the beginning of

781
00:38:30,600 --> 00:38:32,920
the year when we spoke about
these things and there are a lot

782
00:38:32,920 --> 00:38:36,080
of things.
So the the work that the company

783
00:38:36,080 --> 00:38:39,000
has to do is clear as day in
front of them and they've got no

784
00:38:39,000 --> 00:38:41,360
shortage of capital to unlock
those things.

785
00:38:41,360 --> 00:38:44,320
So I wish them all the best on
on that sort of route.

786
00:38:45,120 --> 00:38:48,840
Elemental Altus royalties, mate,
they did a really interesting

787
00:38:49,560 --> 00:38:53,080
number of deals sort of climb
together, call it 80 million

788
00:38:53,320 --> 00:38:57,240
Aussie, 50 odd million US.
Send it to that is Genesis

789
00:38:57,240 --> 00:38:59,560
Laverton project.
Yeah, we do say our deal.

790
00:38:59,640 --> 00:39:02,520
Yes, they've acquired this
royalty portfolio, the

791
00:39:02,560 --> 00:39:05,720
cornerstone like royalty of, of
that portfolio and the large

792
00:39:05,720 --> 00:39:10,880
value contributor is a 2% gross
revenue royalty over a bunch of

793
00:39:10,880 --> 00:39:15,080
the resources at Laverton, which
which Genesis just acquired from

794
00:39:15,080 --> 00:39:18,840
Focus.
I I find this so interesting,

795
00:39:18,840 --> 00:39:21,240
right?
Like we Elemental artists.

796
00:39:21,240 --> 00:39:24,880
So this is the royalty company
that recently welcomed Tether as

797
00:39:24,880 --> 00:39:27,640
their major shareholder when the
muncher sold out.

798
00:39:28,400 --> 00:39:31,000
That episode was so much Flack
for by the way, if we're not

799
00:39:31,000 --> 00:39:33,520
happy about about, about my
views in that one.

800
00:39:33,520 --> 00:39:36,120
But anyway, they're my views.
I'm happy to share them.

801
00:39:37,560 --> 00:39:40,480
But yeah, a couple couple
comments like like Elemental,

802
00:39:40,480 --> 00:39:42,720
they're not, they're not a small
royalty company.

803
00:39:42,720 --> 00:39:44,440
Like their market caps only 500
million bucks.

804
00:39:44,480 --> 00:39:46,840
This isn't a isn't a Franco or
anything like that.

805
00:39:46,840 --> 00:39:49,600
You know, this is a very small
kind of royalty company, but

806
00:39:49,600 --> 00:39:52,960
this is a big this is a big, big
ticket kind of royalty deal.

807
00:39:53,280 --> 00:39:56,560
And for elemental to to to do
this.

808
00:39:56,560 --> 00:40:00,520
I think it's signals that they
have tethers support in being

809
00:40:00,520 --> 00:40:03,560
acquisitive, like buying more
gold royalties and and often

810
00:40:03,560 --> 00:40:06,800
times being acquisitive as a
royalty company, like to write

811
00:40:06,800 --> 00:40:09,360
big checks means you you can't
have got to have a very

812
00:40:09,360 --> 00:40:12,280
constructive view on on the
valuation.

813
00:40:12,280 --> 00:40:13,840
Sometimes you pay overs in the
process.

814
00:40:13,840 --> 00:40:17,520
But if you've got the support of
Tether, happy to see you writing

815
00:40:17,520 --> 00:40:19,920
big checks and we'll provide
funding support as you endeavour

816
00:40:19,920 --> 00:40:23,280
to do that.
Like I, I feel like that's, that

817
00:40:23,280 --> 00:40:26,920
makes the whole royalty industry
very interesting.

818
00:40:26,920 --> 00:40:30,880
Like prices might continue to
get bit up to pretty high, high

819
00:40:30,880 --> 00:40:32,560
values there.
It's not a bad time to be in the

820
00:40:32,560 --> 00:40:34,760
royalty business if you own a
bunch of royalties.

821
00:40:35,160 --> 00:40:38,280
The other thing it points out to
me, just think of like the huge

822
00:40:38,280 --> 00:40:43,360
catalyst or the value catalyst.
That is a change of ownership of

823
00:40:43,680 --> 00:40:46,680
a, of a mining project like,
well, what what would have this

824
00:40:47,080 --> 00:40:52,000
that royalty sold for when it
was owned by Focus just a year

825
00:40:52,000 --> 00:40:53,240
ago?
Like not very much.

826
00:40:53,240 --> 00:40:54,760
There's no line of sight to
production.

827
00:40:55,240 --> 00:40:58,240
All of a sudden Genesis owner,
they're talking about producing

828
00:40:58,240 --> 00:41:00,880
from, from here in, in due
course, you can be pretty

829
00:41:00,880 --> 00:41:03,200
confident that Genesis is going
to do what they say they're

830
00:41:03,200 --> 00:41:06,280
going to do.
So all of like, I don't think he

831
00:41:06,280 --> 00:41:10,720
would have gotten 20% of the,
the sale price if they sold it a

832
00:41:10,760 --> 00:41:12,200
year ago.
I think I genuinely think the

833
00:41:12,200 --> 00:41:15,040
value of this royalty like does
more than 5X just because you've

834
00:41:15,040 --> 00:41:18,960
now got a, a new operator there.
And I just find that a, a really

835
00:41:18,960 --> 00:41:20,480
interesting dynamic with, with
royalties.

836
00:41:20,480 --> 00:41:23,040
And I Remember Remember Spencer
talking about this as well.

837
00:41:23,040 --> 00:41:25,840
Like if you can identify
royalties that might benefit

838
00:41:25,840 --> 00:41:29,520
from a, a change of control with
a new like operator in a region

839
00:41:29,520 --> 00:41:31,480
or something like that, then
there's that's a big, a big

840
00:41:31,480 --> 00:41:34,640
value catalyst for royalties.
So all up, I kind of rate it

841
00:41:34,640 --> 00:41:38,360
and, and I like I, yeah, just I
find it super exciting.

842
00:41:38,800 --> 00:41:42,080
Yeah, I'm, I'm totally with you.
It never ceases to amaze me the

843
00:41:43,040 --> 00:41:47,360
the value creation and the value
unlock in this industry that can

844
00:41:47,360 --> 00:41:50,400
be brought to the table with a
party that can kind of get

845
00:41:50,400 --> 00:41:52,720
things done in a sense, whether
it kind of be the cost of

846
00:41:52,720 --> 00:41:55,320
capital.
And we spoke about the hard Bay

847
00:41:55,320 --> 00:41:59,200
deal or the, the genesis in this
angle that I just going to move

848
00:41:59,200 --> 00:42:02,400
the project forward.
Things just go from zero to 1.

849
00:42:02,680 --> 00:42:05,480
It's kind of amazing.
So this is absolutely a, a sweet

850
00:42:05,480 --> 00:42:07,960
deal.
And I say that bearing in mind

851
00:42:07,960 --> 00:42:11,520
what you said earlier about the,
the tether kind of backing.

852
00:42:11,520 --> 00:42:14,920
If that is the case, which we're
getting an inkling of, then

853
00:42:14,920 --> 00:42:17,360
that's kind of remarkable in, in
a cost of capital kind of

854
00:42:17,360 --> 00:42:19,840
business that you're in, in
royalties.

855
00:42:20,640 --> 00:42:23,000
It's a a super, super
interesting proposition where

856
00:42:23,000 --> 00:42:26,080
it's not just the Franco's and
the weakness of the world to the

857
00:42:26,080 --> 00:42:28,960
only ones which have a supreme
competitive advantage.

858
00:42:28,960 --> 00:42:30,840
So.
That's that's such a good point.

859
00:42:30,840 --> 00:42:31,760
It's.
Fascinating.

860
00:42:32,160 --> 00:42:36,520
Yeah, yeah.
On that kind of theme, BHB, they

861
00:42:36,520 --> 00:42:40,920
announced AUS 1 1/2 billion
dollar bond offering split over

862
00:42:40,920 --> 00:42:44,800
500 million and a billion dollar
over varying kind of long term

863
00:42:44,800 --> 00:42:47,840
maturity.
So billion was done at 30 in

864
00:42:47,840 --> 00:42:52,520
maturity paying 5.75%.
Really interesting sort of stuff

865
00:42:52,520 --> 00:42:56,760
to speak about in the context of
of gold, of inflation, of what

866
00:42:56,760 --> 00:42:59,760
government bonds are doing.
So what do you rate this one

867
00:42:59,760 --> 00:43:01,480
mate?
I reckon it's wicked.

868
00:43:02,720 --> 00:43:04,160
Yeah.
So what did you say?

869
00:43:04,160 --> 00:43:06,880
This week?
the US 30 year yield on

870
00:43:06,880 --> 00:43:10,800
government bonds went to 5%.
BHP is borrowing 30 years of

871
00:43:10,800 --> 00:43:14,040
5.75%.
That's not much of AA corporate

872
00:43:14,040 --> 00:43:15,800
risk premium, right?
That's that's I think that's

873
00:43:15,800 --> 00:43:16,880
awesome.
Exactly what I wrote.

874
00:43:18,120 --> 00:43:19,480
Mate, it's the obvious take
away.

875
00:43:19,600 --> 00:43:21,400
Yeah, I think it's, I think it's
really cool.

876
00:43:21,760 --> 00:43:23,640
And like, like, like, sign me
up.

877
00:43:23,640 --> 00:43:27,480
If I could borrow for 30 years
at 5.75%, like, yeah, I'm doing

878
00:43:27,480 --> 00:43:28,880
it.
Yeah.

879
00:43:29,200 --> 00:43:30,560
I genuinely, I think I would do
it.

880
00:43:30,560 --> 00:43:34,040
I feel like it's, it's, I feel
like the world is asleep to the

881
00:43:34,040 --> 00:43:36,200
fact that inflation can look
very, very different and

882
00:43:36,200 --> 00:43:38,880
interest rates can be very, very
different in a, in a, in a

883
00:43:38,960 --> 00:43:42,080
relatively short period of time,
like history seen this a lot.

884
00:43:42,080 --> 00:43:44,800
So when you can when you can
borrow at a fixed rate for such

885
00:43:44,800 --> 00:43:47,760
a long duration like that, What
what a, what a, what a

886
00:43:47,760 --> 00:43:52,080
tremendous ability to do like
these sorts of loans or, you

887
00:43:52,280 --> 00:43:54,760
know, you think of a bond, it
can literally turn from a

888
00:43:54,760 --> 00:43:57,880
liability on your balance sheet
to an asset because the ability

889
00:43:57,880 --> 00:44:00,800
to borrow is actually like a,
you know, lower quotation mark.

890
00:44:00,800 --> 00:44:03,840
Interest rate for that duration
can look very different if the

891
00:44:03,840 --> 00:44:08,240
world suddenly, you know, moves
to one of an A high inflation

892
00:44:08,240 --> 00:44:09,920
expectation.
Yeah, like.

893
00:44:10,040 --> 00:44:13,000
Regime and to be super, super
clear in this example, obviously

894
00:44:13,000 --> 00:44:15,720
you've spelled it out, but
you're talking from BH BS

895
00:44:15,720 --> 00:44:19,160
perspective, borrowing for 30
years at 5.75%.

896
00:44:19,160 --> 00:44:21,720
Because sometimes we sort of
flip over, you know, the

897
00:44:21,720 --> 00:44:24,080
perspective we take when we,
when we write these things.

898
00:44:24,080 --> 00:44:26,600
But if you were to sit in the
other shoe, would you be giving

899
00:44:26,600 --> 00:44:30,520
them money at 5.75% / 30 years?
No, no, no, no.

900
00:44:30,520 --> 00:44:31,880
Exactly.
That's that's what makes it

901
00:44:31,880 --> 00:44:33,560
really interesting.
Yeah, yeah.

902
00:44:33,560 --> 00:44:37,880
Well that and that's just the
that's thanks to distorted

903
00:44:37,880 --> 00:44:40,680
markets like that's that's you
know, QA for you.

904
00:44:41,080 --> 00:44:44,560
You have, you have an
indiscriminate bidder of bonds,

905
00:44:45,120 --> 00:44:48,480
you know, beating, beating bonds
to added nauseam, like what is

906
00:44:48,480 --> 00:44:51,840
QEQE is the indiscriminate
buying of government bonds so

907
00:44:51,840 --> 00:44:55,200
that the, the yield curve is, is
irrationally low.

908
00:44:55,200 --> 00:44:57,880
Like you have low interest rate
for a very long tenant.

909
00:44:57,880 --> 00:45:00,200
That's, that's, that's part of
QE.

910
00:45:01,400 --> 00:45:02,960
Take advantage of that.
If you're a corporate and you

911
00:45:02,960 --> 00:45:06,080
have the ability to borrow out
for a long 1010 yard, I reckon,

912
00:45:06,080 --> 00:45:08,560
I reckon it'll be a very
fruitful decision for BHP in the

913
00:45:08,560 --> 00:45:09,760
long run.
I don't think there's something

914
00:45:09,760 --> 00:45:13,160
else to be said for BHP's
appetite for, for the debt too.

915
00:45:13,680 --> 00:45:17,000
I did notice in their earnings
like they've, they've actually

916
00:45:17,000 --> 00:45:19,400
changed what their target net
debt range is now.

917
00:45:19,400 --> 00:45:23,520
So you go back a year, their
target net debt range was, it

918
00:45:23,520 --> 00:45:28,040
was 5 to 15 billion US and
they've now lifted that to

919
00:45:28,160 --> 00:45:31,360
between 10 and 20 billion US.
So they've got more appetite for

920
00:45:31,360 --> 00:45:33,840
more net debt.
Their, their net target net debt

921
00:45:33,840 --> 00:45:36,240
range is, is lifted.
You know what, what's that

922
00:45:36,240 --> 00:45:37,480
signalling?
Will they, they're comfortable

923
00:45:37,480 --> 00:45:39,200
with more debt.
They have more uses for that

924
00:45:39,200 --> 00:45:43,120
capital.
Those uses are not iron ore very

925
00:45:43,120 --> 00:45:45,560
much.
Those uses are copper growth

926
00:45:45,560 --> 00:45:49,280
and, and their potash expansion
with, with Jansen, I think BHP

927
00:45:49,280 --> 00:45:52,440
has tremendously resilient
earnings through the cycle given

928
00:45:52,920 --> 00:45:55,400
the phenomenal nature of the,
the Pilbara operations, right?

929
00:45:55,400 --> 00:45:57,560
And they're, when they brought
out the capital allocation

930
00:45:57,560 --> 00:46:01,200
framework in 2018, They've got
runs on the board with that now,

931
00:46:01,480 --> 00:46:04,840
you know, the, the, the market
really trusts well, gives them,

932
00:46:04,840 --> 00:46:08,400
gives them leeway.
I, I think, I think, I think

933
00:46:08,400 --> 00:46:10,080
adding it a bit more modest,
that is totally OK.

934
00:46:10,080 --> 00:46:12,240
And, and they're the sort of
company that can withstand it.

935
00:46:12,640 --> 00:46:15,280
Not every company can as long as
the crazy days don't come back

936
00:46:15,280 --> 00:46:18,120
with, with big debt fueled
acquisitions like you know,

937
00:46:18,200 --> 00:46:19,360
we're a long way from that.
So.

938
00:46:19,360 --> 00:46:25,440
Yeah, most companies can't
caveat but BHB low, low cost

939
00:46:25,440 --> 00:46:27,760
curve assets.
If we could borrow for 30 years,

940
00:46:27,880 --> 00:46:32,280
5.75% would you do it?
Yes, yeah, yeah.

941
00:46:32,720 --> 00:46:34,160
Yeah, every day of the week.
You take that?

942
00:46:34,320 --> 00:46:36,120
Yeah, totally.
So you just want to give us a

943
00:46:36,120 --> 00:46:38,680
bond?
Let's see what we can make

944
00:46:38,680 --> 00:46:40,680
happen, mate.
OK mate, hidden hidden gems.

945
00:46:40,680 --> 00:46:43,880
So have you got you got
something of value to to share

946
00:46:43,880 --> 00:46:45,120
with the audience?
I think I do, mate.

947
00:46:45,120 --> 00:46:46,560
I've got a couple to to share
here.

948
00:46:46,600 --> 00:46:48,640
First of all, those are a bit
left field.

949
00:46:48,640 --> 00:46:50,840
So for people that don't know
what we're talking about, just

950
00:46:50,840 --> 00:46:54,120
something that stands out to us,
doesn't have to be related to

951
00:46:54,120 --> 00:46:56,520
mining at all, but something in
in our kind of life.

952
00:46:56,520 --> 00:46:59,920
So first of all, speechify,
mate, Speechify is wicked for

953
00:46:59,920 --> 00:47:02,840
anyone that that battles or just
loves listening as opposed to

954
00:47:02,840 --> 00:47:04,960
just reading heaps.
Get on.

955
00:47:04,960 --> 00:47:06,560
It costs like a couple 100 bucks
a year.

956
00:47:06,560 --> 00:47:09,800
And this is like, this is where
AI is doing really good things

957
00:47:09,800 --> 00:47:12,720
because it, it gets better by
the week and it's, it's really

958
00:47:12,720 --> 00:47:14,200
cool to have used for a number
of years.

959
00:47:14,200 --> 00:47:16,120
You read more than anyone I
know, but you don't actually

960
00:47:16,120 --> 00:47:17,720
read.
You just you have you have the

961
00:47:17,720 --> 00:47:19,600
computer reader to.
You just just can't read.

962
00:47:19,640 --> 00:47:23,800
Yeah.
And another one is a specific

963
00:47:23,800 --> 00:47:26,840
podcast episode.
So the acquired podcast did one

964
00:47:26,840 --> 00:47:28,960
on Standard Oil, which I've
listened to a couple times.

965
00:47:29,240 --> 00:47:33,800
Standard Oil is an incredible
business in the, in the the

966
00:47:33,800 --> 00:47:36,880
whole history of capitalism.
So that's an episode that is, I

967
00:47:36,880 --> 00:47:39,200
think it's a 2 parter.
It's absolutely A2 parter.

968
00:47:39,200 --> 00:47:41,280
That's well worth listening to,
despite it being pretty long.

969
00:47:41,560 --> 00:47:43,920
So for those that love a
podcast, there's one.

970
00:47:44,480 --> 00:47:45,520
How about you mate?
What have you got?

971
00:47:45,920 --> 00:47:48,760
Yeah, I think on the on the
topic of pumping the tires of

972
00:47:48,760 --> 00:47:53,840
an, of an app or a product, like
if the money mind is if you've

973
00:47:53,840 --> 00:47:56,480
never downloaded the an app
called quarter before, it's so

974
00:47:56,480 --> 00:47:59,800
worthwhile quarter is it's just
like a, it's a free, easy to

975
00:47:59,800 --> 00:48:04,440
use, simple UI way to listen to
earnings calls and and and and

976
00:48:04,440 --> 00:48:06,440
transcripts.
Well, it's like you're listening

977
00:48:06,440 --> 00:48:07,760
to the earnings call.
It's recorded.

978
00:48:07,760 --> 00:48:09,160
You can go back in time, you can
search.

979
00:48:09,720 --> 00:48:12,520
I think there's so much to be
learned from just listening to

980
00:48:12,520 --> 00:48:15,760
earnings calls of companies like
and don't just stick with the

981
00:48:15,840 --> 00:48:17,320
companies you're interested in
investing in.

982
00:48:17,320 --> 00:48:20,840
Go to the market leaders of that
commodity and you'll get very

983
00:48:20,840 --> 00:48:23,960
valuable insights on like the
things impacting that whole kind

984
00:48:23,960 --> 00:48:27,080
of, you know, supply chain
commodity related thing.

985
00:48:27,080 --> 00:48:29,600
Just by listening to the the
analyst calls.

986
00:48:29,880 --> 00:48:31,880
You can usually skip the star,
go straight to the Q&A.

987
00:48:32,560 --> 00:48:33,560
You'll learn heaps.
Yeah.

988
00:48:33,680 --> 00:48:35,520
Super well said mate.
Awesome.

989
00:48:35,560 --> 00:48:38,760
Well, a massive thank you to our
partners Focus, the platform

990
00:48:39,040 --> 00:48:42,760
brought to you by Market Tech,
Sandvik Ground Support and get

991
00:48:42,760 --> 00:48:47,120
your tickets to imark going to
be in October, Sydney, 21st to

992
00:48:47,200 --> 00:48:52,080
23rd Huduru, Huduru.
Now remember, I'm an idiot.

993
00:48:52,320 --> 00:48:54,800
JD is an idiot.
If you thought any of this was

994
00:48:54,800 --> 00:48:57,400
anything other than
entertainment, you're an idiot

995
00:48:57,680 --> 00:48:58,880
and you need to read out a
disclaimer.