Has the mining industry lost the plot? With Mike Christie

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Righto buddy miners, we've got
another another Indarba episode,

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The bloody.
The fruits are flying off the

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tree out of Indarba and we're
heading into first quantum

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territory.
Yeah, mate, this is a a really a

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really awesome chat that we've
got to have with with Mike

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Christie.
Mike Christie heads up the the

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geology work streams director of
geology.

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Their first quantum are a
company we should spend more

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time following because they are
they're entrepreneurial.

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They they, they, they build
stuff themselves.

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The geology team works across
all of the company.

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Whenever they look at an asset,
they've created serious value by

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by buying assets, you know, that
are undervalued, like, you know,

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developing minds in places that
are usually too risky, sometimes

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losing their social license
along the way.

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But it's a really impressive
company, and I come around, come

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out of that conversation with
Mike, just feeling grateful for

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having it.
Yeah, absolutely.

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Mike is, he's written some
punchy sort of thought pieces, I

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guess you could call them on, on
LinkedIn and the like.

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He's spent a lot of time, you
know, boots on the ground in

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like you say, tribe riskier
parts of the world from the DRC

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to Zambia to Panama.
But you know, by and large,

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they've got a lot of stuff done.
And yeah, a real, a real wealth

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of knowledge from the
exploration front to, you know,

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the just the geology sense in a,
in a much broader perspective.

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So yeah, grateful that we had
the chance to pick his brain for

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a good 30 or 40 minutes.
Yeah, well, you can tell why

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they go overseas to the risky
jurisdictions.

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They understand the risk because
they know people like CRO

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Insurance are there to manage
the risk for it.

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Really.
It's just take the risk off your

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hands.
It goes hand in hand, the bloody

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ass Percy or some waffle.
Bloody good.

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They manage risk, they're
they're even doing western NSW

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mining risk now with their
orange office.

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Piece of cake after you've done
Western New South.

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Wales has never felt safer,
never felt that risk mitigated.

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First Quantum had a few hiccups
in the in the DRC, but you know,

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these days they're very, very
comfortable and established in

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Zambia.
In fact, you, you speak to

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Zambians, they think First
Quantum is a Zambian company.

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But but you know, if they had
CRE around back in the DRC days,

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I think that I think things
would be similar.

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They wouldn't have had to to
leave when they did.

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Well, like it rhymes, DRCCRE,
like it's just a match made in

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heaven.
So bloody keep a share, go say

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good eye to him in orange and
let's get into first Quantum.

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All right, money miners.
We've got a special guest in

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Mike Christie here at in Daba.
I guess we've been thinking

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about getting on the show for
for quite some time.

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So we're excited we can make it
happen.

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Mike works at First Quantum, has
got a wealth of experience in

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exploration geologist background
and has done a phenomenal amount

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for the the sort of geosciences
in in Australia and in the broad

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exploration industry.
So we're planning to get you on,

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Mike, and we want to start the
conversation going back to a

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LinkedIn post you wrote a few
months ago about Western miners

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and sort of posed the question
to you, Have Western mining

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companies lost the plot when it
comes to exploration?

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Yeah, look, thanks, JD Travis,
it's great to be with you guys.

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It's strange.
We came all the way here to Cape

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Town to do it rather than doing
it in Perth.

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Yeah, that that post is really
energized.

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Quite a lot of responses from a
variety of people.

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And I think I started writing it
just as an e-mail to a

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colleague.
And then I sort of started the

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thought process and ended up
thinking, oh, I might post this

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and see what sort of reaction I
got.

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Because it was spurred by
looking at a, a recent report

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from S&P, who do a lot of data
analysis for exploration and

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cost of development and and so
forth in the, in the copper

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world.
And of course, copper in the

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last few years has been very
much the, the, the metal du jour

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in terms of, you know, we're
going to need more and more of

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it for the electrical
transition.

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And yet the the discovery rate
of what we would call world

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class copper deposits has been
inexorably declining.

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And so I wanted to really look
at that in the context of what

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the both the junior sector and
the major sector were going

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through in terms of the the
change in dynamics, particularly

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in the last 10 years or so.
And what we've seen is, is a

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whole new source of capital
coming into the markets from the

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Middle East from and from China.
And we've seen the the Chinese

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being very smart in the way that
they have capitalized on new

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discoveries, particularly in
here in Africa, but throughout

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South Americans since as well.
And that hasn't necessarily

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translated into the exploration
space.

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So that capital is not
necessarily flowing into the

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traditional TSX or ASX juniors
and and the majors seem to be

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gun shy of developing deposits.
So they're waiting for the

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juniors to make those
discoveries in the remote parts

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of the world that sometimes
they're afraid to go to.

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And it just hasn't been
happening.

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And you look at the the graph of
discovery success in the last 10

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years and it's miserable.
I mean, Kumail Kakula was really

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the last big one and other than
that, a handful in the last 20

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years of what we would call
world class copper discoveries,

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things capable of producing 250,
three, 100,000 tons of copper a

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year.
So that's really what spurred my

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post.
How much of this sort of comes

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to the point of permitting and
approvals and that whole process

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taking longer and longer being a
disincentive for majors So the

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capital gets push towards
brownfield expansion, exploring

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around the mine you've already
got the permits for and set up.

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Do you do you think about that
sort of balance match?

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Yeah, no, the balance is
certainly an important one and

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undoubtedly the permitting and
the the social stories

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surrounding modern developments
is pushing out the timeline.

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In some cases, it will stop the
timeline and there will just be

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places we can't develop mines.
But in many places, it really is

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about taking a discovery from
those first few drill holes into

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a feasibility study.
And then how long does it take

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from that stage where you know
you've got an economic project

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through to actually building the
mine?

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And that seems to be the phase
that has been really pushed out.

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And typically in the copper
industry, I think it's now

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running at about 17 years.
So people say we need to double

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the amount of copper we're
mining in the next sort of 20

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years.
How are we going to do that?

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Because we can't develop the the
quantity of minds if it takes 17

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years to to to do that.
We needed to discover them

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several years ago and that's not
happening.

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So yeah, it is.
I mean, big companies generally

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like stable jurisdictions, but
it's interesting to see how even

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they are now extending into
places like Argentina and of

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course into Mongolia and to
other countries whereby

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previously they would have been
seen as probably off the radar

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in some of those countries.
Like Argentina is now, you know,

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really on a good path and, and
we're very comfortable there.

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So I think that the real gap at
the moment is the funding into

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the junior sector.
And so those discoveries are few

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and far between.
And, and you saw how BHP Lepton

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Filo in, in South America.
And I'm sure if there's a

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similar discovery here in in
Africa, we'll see the same

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thing.
You, you know, you, you hit up

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first quantum exploration
efforts and, and had for a long

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time.
And when, when you think about

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who like, who is most likely to
discover, you know, new new

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deposits, new ore bodies?
The, the does it make more sense

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that it would be a major who has
like, you know, far better

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balance sheet and capability and
ability to pay, pay geologists

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and use the best, the best data,
etcetera?

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Or is it just much more
naturally fit into the junior

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who has more risk tolerance?
It depends very much.

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I don't actually think it's a
junior major thing anymore.

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I think it's more about the the
thought processes of what's

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going on.
I mean, there's some wonderful

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juniors who are prepared to take
risks.

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And what we've migrated through
in the last 10 or 15 years is a

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transformation from geochemical
surface exploration, which found

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an awful lot of ore bodies, as
did prospecting before it, to

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more conceptual and heavy
geophysics based exploration.

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That's expensive.
It's got a longer timeline and

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it needs a real commitment.
And I think that's where people

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like Ivanhoe have really won
because Robert Frieden was

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prepared to bankroll deep
exploration drilling in the

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Congo in the way that probably
very few juniors would have been

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able to to do.
So it's more about having that

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funding flow.
So this combination of a junior

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working together in partnership
with a, a major or a funding

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group, whether that be out of
the Middle East, the Far East or

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wherever, that combination can
work really well.

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But this combination of having
to go back to the market every

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few months and raise the next
$1,000,000, the next $2,000,000

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just to fund the the next draw
hole.

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That is where, you know, we're
really seeing things come

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unstuck.
Because unless the market gets

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the results every every quarter,
your share price dives and and

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you have to dilute the heck out
of it.

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You mentioned Chinese
competitors in there, and we

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often see them pop up at the end
stage.

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Buying the project, buying the
mine.

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Are the things the Western
miners can learn from actually

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how they approach geology?
Maybe in Africa?

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Other parts of the world?
Yeah.

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Look, I think we've seen a a big
change there in the last decade

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as well.
Generally the the Chinese

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companies were picking up
established assets with a

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feasibility study.
You know the sort of what we do,

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we call the low risk investment.
I think that's changed now where

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they are putting in money at an
earlier stage.

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But to date we haven't seen that
in terms of bankrolling junior

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exploration.
I think there are some moves in

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that direction now, but the
partnership that Ivanhoe made in

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the in the Congo was a very
logical one in that it was not a

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project they could afford to
fund themselves.

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It was perhaps not perceived to
be the safest investment

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destination in the world.
So splitting that risk is

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somewhere where the market's
definitely going to hit, even

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between major companies.
You're going to see a lot more

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in terms of major companies
working together in destinations

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where, you know, to build a
reasonable sized copper mine.

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Now you're talking about things
in the multiple billions of

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dollars and if you've got to
spend $10 billion building the

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mine somewhere in a remote part
of the jungle of South America,

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then sharing that risk with
someone is is going to be on.

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So I think that's where the the
Chinese investment is, is being

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particularly smart.
In the last 10 years, they've,

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they've started moving further
down the curve in terms of the

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investment risk and they're
looking at projects that are

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probably pre feasibility stage.
And there are a number of those

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in particularly in the northern
part of Latin America through

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the Ecuador, Colombia area.
And and indeed in, in parts of

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Africa in the DRC, they've
basically wiped the floor.

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I mean they've, they've really
managed to to dominate the scene

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there.
And we've seen the Dr. CS copper

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production treble in the last
last decade.

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So there's a lot to be said for
that.

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Thank God DRC copper production
travelled because that's bloody.

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You see it's cross boundary
energy.

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You're demanding a lot of copper
wire for these hybrid power

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plants they're putting in all
around the world.

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It is like that is going to be
full of copper, DRC copper,

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Australian copper, bloody every
copper known to man so.

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It's a circular reference.
We're in the DRC.

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We're seeing some copper mines.
You would see the power station

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supplying the power to the to
the copper mine.

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Exactly, exactly all.
And look, they are absolute

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global experts as independent
power producers and we're

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talking wind, solar, batteries,
thermal base load, light, the

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rigid digit power.
Energy, they do it all.

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And to penetrate the Australian
market, they have made the first

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big decision they make to do
that was higher the most

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exclusive business development
person in Australia, and that's

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00:12:27,720 --> 00:12:30,560
Tim Taylor.
So you can tell this company is

227
00:12:30,560 --> 00:12:32,960
serious because Timmy doesn't
come cheap.

228
00:12:33,240 --> 00:12:36,560
So I get in touch with Timmy
Taylor and the CBA team for how

229
00:12:36,560 --> 00:12:38,920
they can give you some hybrid
power.

230
00:12:39,000 --> 00:12:40,600
Go CVA.
Tim knows power.

231
00:12:42,080 --> 00:12:45,600
So I think they are making smart
decisions and one wonders

232
00:12:45,600 --> 00:12:48,840
whether the Western companies
have sort of fallen behind that

233
00:12:48,840 --> 00:12:53,080
in a sense that in some cases
they have not invested in until

234
00:12:53,080 --> 00:12:57,040
almost it's too late.
In other cases they've probably

235
00:12:57,040 --> 00:13:01,560
made some poor decisions.
And other than some quite

236
00:13:01,560 --> 00:13:05,520
inspired stories like the BHP
Explorer program, which I I

237
00:13:05,840 --> 00:13:10,080
fully acknowledge as as being a
wonderful incentive for junior

238
00:13:10,080 --> 00:13:16,960
explorers, there's very little
major support for juniors at

239
00:13:16,960 --> 00:13:19,480
that first sort of exploratory
stage.

240
00:13:21,280 --> 00:13:26,600
You refer to a bit of a change
in approach to exploration and I

241
00:13:26,600 --> 00:13:30,440
hate to bring up AI and machine
learning as it's a, you know,

242
00:13:30,840 --> 00:13:33,800
overused phrase these days.
But I think it's particularly

243
00:13:34,160 --> 00:13:36,760
relevant here because there's
people in the Copper Belt that

244
00:13:36,760 --> 00:13:41,680
have been, you know, quite
loudly using this approach in

245
00:13:41,680 --> 00:13:45,080
how they, you know, that they've
bought assets, but how they

246
00:13:45,400 --> 00:13:47,480
expand the assets and how they
go about things.

247
00:13:47,480 --> 00:13:52,000
And I'm came to learn from you
how the average kind of investor

248
00:13:52,000 --> 00:13:56,440
can think about a company that
promotes their use of AI in

249
00:13:56,440 --> 00:14:01,240
exploration broadly.
Yeah, AI.

250
00:14:02,640 --> 00:14:04,960
There's a lot of hot air about
AI these days.

251
00:14:06,640 --> 00:14:12,560
It is a fantastic tool for
speeding up the process, whether

252
00:14:12,560 --> 00:14:16,320
that be the exploration process
or all sorts of other things

253
00:14:16,320 --> 00:14:20,160
around the mining.
I've got two people on my team

254
00:14:20,160 --> 00:14:24,120
who've got PhDs in in machine
learning and and AI and we're

255
00:14:24,120 --> 00:14:25,680
applying those in very different
ways.

256
00:14:27,640 --> 00:14:33,200
And to my knowledge, to date,
there's been no great

257
00:14:33,200 --> 00:14:37,520
discoveries by AI.
Undoubtedly some companies are

258
00:14:37,520 --> 00:14:40,720
employing the technology
extremely effectively in terms

259
00:14:40,720 --> 00:14:44,080
of processing geophysics, in
terms of accumulating enormous

260
00:14:44,080 --> 00:14:47,880
data sets and making much more
of them than we could through

261
00:14:47,880 --> 00:14:50,960
manual or analog ways in the
past.

262
00:14:51,680 --> 00:14:53,720
So that to me is where the key
comes in.

263
00:14:55,360 --> 00:14:58,480
And certainly we're beginning to
employ that technology and I'm

264
00:14:58,480 --> 00:15:02,520
seeing a lot of a lot of
companies do that more recently.

265
00:15:03,520 --> 00:15:06,360
But I don't think at this stage
it's not a silver bullet.

266
00:15:06,560 --> 00:15:10,400
It's not going to produce the X
marks the spot drill here that

267
00:15:10,400 --> 00:15:12,800
people are talking about.
Unfortunately, a lot of

268
00:15:13,160 --> 00:15:17,400
politicians, particularly here
in Africa, have sort of assumed

269
00:15:17,400 --> 00:15:20,280
that this is going to be the the
manner from heaven and they're

270
00:15:20,280 --> 00:15:22,560
suddenly going to be able to
find every mineral deposit in

271
00:15:22,560 --> 00:15:25,080
their country.
And we've been involved in

272
00:15:26,520 --> 00:15:30,200
sponsoring a, a large airborne
survey in Zambia.

273
00:15:30,200 --> 00:15:33,080
It's a gravity magnetic survey
over the traditional copper

274
00:15:33,080 --> 00:15:34,400
belt.
It's actually the first time

275
00:15:34,400 --> 00:15:38,560
that whole area's been flown for
50 years, partly because of the

276
00:15:38,640 --> 00:15:42,360
sort of mesh of, of small
tenements and, and speculative

277
00:15:42,920 --> 00:15:45,520
landholders.
So what we were able to do was

278
00:15:45,520 --> 00:15:50,400
fly the whole copper belt with
modern, the, the best resolution

279
00:15:51,040 --> 00:15:54,600
you can basically do and come up
with a holistic model.

280
00:15:55,160 --> 00:15:59,320
So, you know, sadly a lot of
people then take that as, ah,

281
00:15:59,360 --> 00:16:00,920
you must know where the copper
deposits are.

282
00:16:01,240 --> 00:16:04,960
It's not that easy.
There's a whole process after

283
00:16:04,960 --> 00:16:08,760
that of building A3 dimensional,
sometimes 4 dimensional model

284
00:16:08,760 --> 00:16:11,760
of, of that geological history
of copper belt, trying to

285
00:16:11,760 --> 00:16:13,720
understand what the
relationships are between all

286
00:16:13,720 --> 00:16:16,440
the rocks before you can then
start to get predictive about

287
00:16:16,440 --> 00:16:19,080
drilling deep holes.
And we need to drill deep holes

288
00:16:19,080 --> 00:16:22,000
now because the, the big deposit
serves have all been found.

289
00:16:23,320 --> 00:16:26,560
So you've, you've got to
translate that information into

290
00:16:26,880 --> 00:16:29,640
exploration targeting.
And that's where I think the AI

291
00:16:29,640 --> 00:16:31,840
really starts to come into into
play.

292
00:16:34,040 --> 00:16:38,080
The we've been, we've been
thinking a lot about, you know,

293
00:16:38,080 --> 00:16:41,480
where are the, where are the
remaining like big, big deposits

294
00:16:41,480 --> 00:16:45,320
still still to be found?
And it's not a very commercial

295
00:16:45,320 --> 00:16:48,000
question to ask.
And, you know, but, but if, if

296
00:16:48,000 --> 00:16:51,640
the entire world was you could,
you could mine equally.

297
00:16:52,560 --> 00:16:55,760
The governments are all the
same, you know, drilling costs

298
00:16:55,760 --> 00:16:57,600
were all kind of equal.
Where?

299
00:16:57,640 --> 00:17:02,160
Where would you look for the you
know the best the Lightning best

300
00:17:02,320 --> 00:17:04,640
undeveloped deposits?
Well, it sort of depends what

301
00:17:04,760 --> 00:17:08,240
you want to look for.
Yeah.

302
00:17:08,560 --> 00:17:11,440
And you want big or small and
you want it an open pit or do

303
00:17:11,440 --> 00:17:14,520
you want it underground?
And, and at the end of the day,

304
00:17:14,520 --> 00:17:16,880
of course, what you want is
something that's going to pay

305
00:17:16,880 --> 00:17:24,000
back money.
And in, in my view, really if

306
00:17:24,000 --> 00:17:30,040
you want an open pit large scale
copper mine, then the places in

307
00:17:30,040 --> 00:17:34,120
the world where you can find
that near surface are

308
00:17:34,240 --> 00:17:36,560
diminishingly small.
And it's basically it's come

309
00:17:36,560 --> 00:17:40,320
down to the jungle clad parts of
the Andes in the in the northern

310
00:17:40,320 --> 00:17:45,640
part of South America, perhaps
Central America and perhaps Far

311
00:17:45,640 --> 00:17:47,120
East Russia if you're really
keen.

312
00:17:48,800 --> 00:17:50,920
And I think those are really the
only two parts of the world

313
00:17:51,080 --> 00:17:55,680
where you're likely to see that.
I think there are very good

314
00:17:55,680 --> 00:17:57,960
prospects perhaps in Central
Asia as well.

315
00:17:58,920 --> 00:18:01,960
We've recently started an
initiative in Kazakhstan which

316
00:18:02,120 --> 00:18:06,240
which I'm very bullish about.
Most of the porphyries there are

317
00:18:06,240 --> 00:18:10,680
relatively low grade, but it's a
good destination.

318
00:18:10,720 --> 00:18:12,400
The cost structure is very low
there.

319
00:18:12,400 --> 00:18:14,480
The infrastructure is just
fantastic.

320
00:18:14,880 --> 00:18:18,560
So the there's the ability there
to make lower grade mines work.

321
00:18:18,560 --> 00:18:23,880
I think the, I guess the other
part of the the response is that

322
00:18:24,640 --> 00:18:26,760
what are you looking for and are
you looking for copper

323
00:18:26,760 --> 00:18:28,840
porphyries Because we all know
that the story of copper

324
00:18:28,840 --> 00:18:32,160
porphyries has been 1 of
declining grade over the last 10

325
00:18:32,160 --> 00:18:35,800
or 15 years.
So now there is a litany of

326
00:18:35,800 --> 00:18:39,880
porphyry projects out there in
the world at .2 to .3% copper

327
00:18:40,200 --> 00:18:41,320
and most of them are going
nowhere.

328
00:18:42,640 --> 00:18:46,440
It needs a complete step change
in the terms of the copper price

329
00:18:47,920 --> 00:18:51,280
and or the operating costs of
that mine, whether it's through

330
00:18:51,280 --> 00:18:55,960
new technology, employing all of
the new tech that we like to use

331
00:18:56,000 --> 00:18:58,280
in some of our minds that
trolley assist, all of the

332
00:18:58,280 --> 00:19:00,920
electrical drills, electrical
trucks, all of that.

333
00:19:00,920 --> 00:19:02,640
And that will bring the cost
structure down.

334
00:19:03,080 --> 00:19:06,040
And I, I see more of a
incremental change.

335
00:19:06,320 --> 00:19:09,600
So I'm not sure that we're ever
going to really get down to the

336
00:19:09,800 --> 00:19:16,160
point 2% copper porphyry mining
unless there is a really quite

337
00:19:16,160 --> 00:19:19,200
significant uptick in in the
copper price because nobody's

338
00:19:19,200 --> 00:19:22,480
prepared to make that big
decision to go in to invest in

339
00:19:22,480 --> 00:19:25,880
those at the moment.
So one of our big focuses is to

340
00:19:25,880 --> 00:19:30,080
look for sediment hosted copper,
which has typically a much more

341
00:19:30,880 --> 00:19:36,000
higher grade profile.
Kamala's the best example and

342
00:19:37,320 --> 00:19:38,920
they're more restricted around
the world.

343
00:19:39,680 --> 00:19:43,920
Certainly the Central African
copper belt is the main example,

344
00:19:43,920 --> 00:19:48,600
but all the deposits through
Poland and the Kuppu Shifa and

345
00:19:48,600 --> 00:19:51,720
indeed in Central Kazakhstan are
other good examples.

346
00:19:51,720 --> 00:19:54,160
So that's where we're putting a
lot of our effort is to try to

347
00:19:54,160 --> 00:19:56,840
find those higher grade deposits
because still today great is

348
00:19:56,840 --> 00:19:59,120
king.
And if you want to develop a

349
00:19:59,120 --> 00:20:04,640
mine of of as Ivanhoe very well
proven, if you've got 3 to 5%

350
00:20:04,640 --> 00:20:07,760
copper in an underground, you
can develop that for much lower

351
00:20:07,760 --> 00:20:11,000
capital costs than you can with
other with these big porphyries,

352
00:20:11,000 --> 00:20:13,560
which really is starting to cost
10s of billions.

353
00:20:14,880 --> 00:20:18,080
A bit of a different end of the
mining spectrum, but on the

354
00:20:18,080 --> 00:20:22,080
plant side with the tech
advancements in processing and

355
00:20:22,080 --> 00:20:25,400
just extracting more and more
out of what you've you've kind

356
00:20:25,400 --> 00:20:27,840
of got, are you bullish on that
front at all?

357
00:20:28,080 --> 00:20:29,640
Yeah.
Look, as I said, I think they

358
00:20:30,520 --> 00:20:32,400
they're more incremental at this
stage.

359
00:20:33,440 --> 00:20:37,120
I think if we get to the point
where a sulfide leach technique

360
00:20:37,720 --> 00:20:40,320
is actually proven to work and
there's lots of people working

361
00:20:40,320 --> 00:20:46,640
on it, then then you could see a
step change in costs in the way

362
00:20:46,640 --> 00:20:50,760
that we saw with SXCW sort of 30
years ago where suddenly all of

363
00:20:50,760 --> 00:20:53,880
these oxide deposits became
economic that weren't before.

364
00:20:54,720 --> 00:20:58,360
And really that, that then COP
kept the copper price down at

365
00:20:58,360 --> 00:21:02,200
about $0.60 for years and years
and years because there were

366
00:21:02,200 --> 00:21:06,160
major discoveries all through
South America of these oxide cap

367
00:21:06,320 --> 00:21:09,760
deposits and SXCW could process
them at a very low cost.

368
00:21:10,240 --> 00:21:13,440
So if if sulfide leach
technology started to work and

369
00:21:13,440 --> 00:21:16,440
we didn't have to mill the
bejesus out of, you know,

370
00:21:17,120 --> 00:21:19,480
hundreds of millions of tons of
rock every year, then yes, that

371
00:21:19,480 --> 00:21:23,480
could make a step change.
I'd love to hear a bit about the

372
00:21:23,760 --> 00:21:26,080
the relationship.
This is a sort of question

373
00:21:26,080 --> 00:21:29,200
that's been inspired from a
mutual friend Ahmed of your

374
00:21:29,200 --> 00:21:32,240
exploration team and the the
broader company itself.

375
00:21:32,440 --> 00:21:36,360
First, Quantum came to hear
about perhaps what other miners

376
00:21:36,360 --> 00:21:40,320
can learn as it can improve
exploration and discoveries

377
00:21:40,680 --> 00:21:43,720
across the industry and how you
guys sort of go about leveraging

378
00:21:43,720 --> 00:21:46,760
your expertise to sort of
maximum potential.

379
00:21:48,160 --> 00:21:50,000
Sure.
I guess there's several parts to

380
00:21:50,000 --> 00:21:53,680
that.
Exploration has been very

381
00:21:53,680 --> 00:21:59,760
complementary to the history of
First Quantum which really has a

382
00:22:00,200 --> 00:22:04,960
bit over a 20 year lifetime, a
company that grew very rapidly,

383
00:22:04,960 --> 00:22:09,520
but it actually originally grew
out of building reprocessing

384
00:22:09,520 --> 00:22:12,520
plant in Zambia, a small deposit
called Bonner and Kubwa.

385
00:22:14,160 --> 00:22:18,200
And and then exploration added
to that by finding some deposits

386
00:22:18,200 --> 00:22:22,000
nearby First Launchee and then
Frontier on the DRC side of the

387
00:22:22,000 --> 00:22:25,960
border.
And it was a rapidly exploding

388
00:22:25,960 --> 00:22:29,240
story and that and the cash flow
from that allowed them to to

389
00:22:29,240 --> 00:22:31,720
purchase Consenti, which was
sort of the deal of the century.

390
00:22:32,760 --> 00:22:36,200
So it's been very complementary.
And if you look at the history

391
00:22:36,200 --> 00:22:41,640
of of the company, exploration
has found about about 5 million

392
00:22:41,640 --> 00:22:46,480
tons of contained copper.
But brownfields do exploration

393
00:22:46,480 --> 00:22:49,120
and and essentially incremental
additions to our deposits has

394
00:22:49,160 --> 00:22:52,040
added something in the order of
12 to 15,000,000 tons of

395
00:22:52,040 --> 00:22:56,680
contained copper.
So it's, it's horses for courses

396
00:22:56,680 --> 00:22:59,840
and that's what we're seeing
around the world is that actual

397
00:22:59,840 --> 00:23:04,440
greenfields discoveries are
diminishingly small and compared

398
00:23:04,440 --> 00:23:09,600
to these enormous brownfields
developments and redevelopments

399
00:23:09,600 --> 00:23:12,600
as we're seeing particularly in
in Chilean places at the moment.

400
00:23:12,960 --> 00:23:18,960
So for First Quantum, our job
throughout that period as an

401
00:23:18,960 --> 00:23:23,560
exploration group has really
been been threefold 1 to go out

402
00:23:23,560 --> 00:23:26,200
and try and you know, look for
the Holy Grail, the big new

403
00:23:27,360 --> 00:23:30,080
development, 10 million tons of
copper or more.

404
00:23:30,200 --> 00:23:33,280
Those are very, very rare
discoveries and we know that.

405
00:23:33,640 --> 00:23:37,760
So in the meantime, we spend a
lot of time trying to add value

406
00:23:37,760 --> 00:23:40,800
to our existing deposits.
We've had a lot of success in

407
00:23:40,800 --> 00:23:43,280
that area.
Just a recent discovery near our

408
00:23:43,280 --> 00:23:46,720
little Chili mine in Turkey,
which is going to add 10 years

409
00:23:46,720 --> 00:23:48,040
to the my life.
It's fantastic.

410
00:23:48,040 --> 00:23:50,440
And the guys there who were
looking at basically finishing

411
00:23:50,440 --> 00:23:52,640
up this year suddenly got a
whole new future ahead of them.

412
00:23:53,960 --> 00:23:58,920
And, and we've added a lot of
life to places like Concentri

413
00:23:58,920 --> 00:24:02,000
and, and, and we're working very
hard now at Sentinel and Zambia

414
00:24:02,000 --> 00:24:06,560
to, to increase those brownfield
tons, which once you build a

415
00:24:06,560 --> 00:24:08,000
plant, it's where all the value
is.

416
00:24:09,520 --> 00:24:14,480
The the third part is, is really
about assisting our business

417
00:24:14,480 --> 00:24:16,920
development team.
And 1st Quantum has acquired a

418
00:24:16,920 --> 00:24:19,560
lot of copper through M&A over
the years.

419
00:24:19,840 --> 00:24:22,120
I think it's something in the
order of 60 million tons of

420
00:24:22,120 --> 00:24:24,640
contained copper have been
acquired through that period.

421
00:24:25,920 --> 00:24:29,720
And we don't have geologists in
a specialist M and A-Team like

422
00:24:30,320 --> 00:24:34,000
some of the bigger companies do
We basically my guys, the

423
00:24:34,000 --> 00:24:36,520
exploration guys get pulled out
of the Bush to suddenly go and

424
00:24:36,520 --> 00:24:39,800
rush in to look at a project in
Brazil or Kazakhstan or wherever

425
00:24:39,800 --> 00:24:42,800
it happens to be.
So we're a very integrated part

426
00:24:42,840 --> 00:24:46,920
of the corporate development,
the business development side of

427
00:24:46,920 --> 00:24:50,760
the company, which is not
something I've seen very much in

428
00:24:50,760 --> 00:24:52,640
other companies.
They tend to have these silos of

429
00:24:52,640 --> 00:24:55,040
different, different groups who
don't always talk to each other.

430
00:24:56,040 --> 00:24:59,120
And that I think that's one of
one of our successes.

431
00:24:59,280 --> 00:25:03,480
We've we've been able to to
manage that process and be able

432
00:25:03,480 --> 00:25:09,080
to really understand the risks
involved for pretty early stage

433
00:25:09,080 --> 00:25:12,560
projects in some cases.
Sentinel in Zambia was a good

434
00:25:12,560 --> 00:25:14,920
example where it had a handful
of holes in it.

435
00:25:15,520 --> 00:25:18,800
We went in and looked at it and
thought, wow, this looks like

436
00:25:18,800 --> 00:25:20,760
this actually could be quite
substantial.

437
00:25:21,840 --> 00:25:24,720
And I was all in favor for a, a
joint venture.

438
00:25:25,360 --> 00:25:27,280
I went back, talked to my boss
and he said, Nah, bugger it,

439
00:25:27,280 --> 00:25:31,200
we'll buy it.
And we paid $240 million about 3

440
00:25:31,200 --> 00:25:34,680
weeks later and bought this
thing with no real resource on

441
00:25:34,680 --> 00:25:37,400
it.
And we built a $2 billion mine

442
00:25:37,400 --> 00:25:41,480
on top of it within two years.
So that sort of quick decision

443
00:25:41,480 --> 00:25:44,600
making and the ability to act
really fast on the technical

444
00:25:44,600 --> 00:25:48,840
advice of the geology team and
the engineering team has I think

445
00:25:48,840 --> 00:25:50,920
stood us very well over the
years compared to the

446
00:25:50,920 --> 00:25:53,040
bureaucratic process in a lot of
the majors.

447
00:25:54,200 --> 00:25:58,000
It's it's really interesting you
talk to, you talk to geologists

448
00:25:58,000 --> 00:26:01,840
and you, you ask them, you know,
yeah, which of the producers,

449
00:26:01,840 --> 00:26:05,320
like major producers would like,
would you actually want to work

450
00:26:05,320 --> 00:26:07,800
at, would you, you know, feel
like you're maximizing or

451
00:26:07,800 --> 00:26:11,160
utilizing your skills and having
a crack, maybe find something

452
00:26:11,520 --> 00:26:14,280
and 1st quantum always comes up
as opposed to the others where,

453
00:26:14,280 --> 00:26:16,400
yeah, maybe you'll be that's
iron ore.

454
00:26:16,400 --> 00:26:18,360
That's not if you were as a
geologist for a major or

455
00:26:18,360 --> 00:26:20,680
anything like that, but it's the
the propensity to take a risk

456
00:26:20,680 --> 00:26:23,040
that kind of keeps popping up in
a recurring way.

457
00:26:23,040 --> 00:26:25,440
That propensity to take risk
that's kind of inherent to 1st

458
00:26:25,440 --> 00:26:30,000
quantum has also led to some
like challenging times as well.

459
00:26:31,840 --> 00:26:34,360
Not just the Cobra Panama like
black issue, which is like

460
00:26:34,440 --> 00:26:39,840
super, super recent, but front
frontier in the was no, it

461
00:26:39,840 --> 00:26:42,560
wasn't frontier in the DRC.
It was, it was Frontier, yeah,

462
00:26:42,680 --> 00:26:45,680
where the, the license was
revoked back in 2009.

463
00:26:45,800 --> 00:26:47,280
Yeah.
Yeah.

464
00:26:47,280 --> 00:26:52,680
So yes, we take a lot of risks
and if you don't take risks, you

465
00:26:52,680 --> 00:26:55,920
go nowhere.
And I was having the

466
00:26:55,920 --> 00:26:57,840
conversation with some of the
juniors here at the conference

467
00:26:57,840 --> 00:27:00,360
in the last few days and and
they're some of them spending

468
00:27:00,360 --> 00:27:02,520
their last dollar to drill the
last hole.

469
00:27:02,600 --> 00:27:05,200
But it's like, well, they could
choose to spin that out over a

470
00:27:05,200 --> 00:27:08,480
year or two.
So, so first Quantum has grown

471
00:27:08,480 --> 00:27:10,880
out of taking risks, going where
others fear to trade.

472
00:27:11,000 --> 00:27:18,200
And I think going into the DRC
in 99 two thousand when it was

473
00:27:18,200 --> 00:27:20,520
just recovering from a civil war
and everything else, that was a

474
00:27:20,520 --> 00:27:23,320
really gutsy move.
And people sort of said, well,

475
00:27:23,360 --> 00:27:25,720
we we built 2 mines there.
We were in the process of

476
00:27:25,720 --> 00:27:28,720
building a third.
And people say, oh jeez, I bet

477
00:27:28,720 --> 00:27:31,000
you wish you'd never been there
because you'd lost the assets

478
00:27:31,000 --> 00:27:33,120
and everything else.
Well, if we hadn't done that, we

479
00:27:33,120 --> 00:27:35,240
wouldn't have had the cash flow
to build a company in the way we

480
00:27:35,240 --> 00:27:41,080
did.
So it's, yeah, it's, it's a 2

481
00:27:41,080 --> 00:27:44,960
edged sword that you take the
risks and certainly building a,

482
00:27:44,960 --> 00:27:48,040
a $10 billion mine in, in Panama
is a significant risk.

483
00:27:49,360 --> 00:27:51,840
We're optimistic that, that
situation will get resolved.

484
00:27:52,960 --> 00:27:56,160
But in the meantime, the, the
company has this ability to pick

485
00:27:56,160 --> 00:27:59,320
itself back up off the floor,
dust itself off and go look for

486
00:27:59,320 --> 00:28:01,320
the next great thing.
And we're in a very lucky

487
00:28:01,320 --> 00:28:05,760
situation that we've got three
potential substantial copper

488
00:28:05,760 --> 00:28:09,200
deposits to, to build between
the attack attacker and

489
00:28:09,200 --> 00:28:11,720
Argentina, which is probably the
next one off the off the rank

490
00:28:12,320 --> 00:28:17,080
Hikira in Peru, which we've had
for a number of years and and

491
00:28:17,160 --> 00:28:19,000
now a joint venture with Rio and
Lagranga.

492
00:28:19,320 --> 00:28:23,480
So not many companies have that
sort of pipeline projects to to

493
00:28:23,480 --> 00:28:27,840
back them up, but spreading that
risk into different

494
00:28:27,840 --> 00:28:30,320
jurisdictions and now through
partnerships with people like

495
00:28:30,320 --> 00:28:33,040
Rio, that's, that's going to
become an increasingly important

496
00:28:33,040 --> 00:28:34,600
part of the the equation, I
think.

497
00:28:35,640 --> 00:28:38,040
Mike, you've got years more
experience on us.

498
00:28:38,040 --> 00:28:42,480
I'm very interested to hear your
view on that boldness you speak

499
00:28:42,480 --> 00:28:46,120
to in the mining industry.
The the industry, particularly

500
00:28:46,120 --> 00:28:49,400
in Australia, I think prides
itself on the the characters and

501
00:28:49,400 --> 00:28:53,480
these sorts of people who took a
lot of risk and were successful.

502
00:28:53,480 --> 00:28:56,200
You know, you don't talk so much
about the ones that weren't, but

503
00:28:56,680 --> 00:28:58,160
has that changed over your
career?

504
00:28:58,160 --> 00:28:59,600
Do you think that boldness is
missing?

505
00:29:01,720 --> 00:29:03,080
Yeah.
Look, I can only speak from my

506
00:29:03,080 --> 00:29:05,600
personal experience.
I, I started out my career with

507
00:29:05,600 --> 00:29:08,040
Rio Tinto and, and on a
technical level, it was

508
00:29:08,080 --> 00:29:10,160
fantastic.
I mean, I learned so much in 10

509
00:29:10,160 --> 00:29:14,960
years with Rio.
But then I worked in several

510
00:29:14,960 --> 00:29:18,600
companies after that which had a
real risk aversion.

511
00:29:19,520 --> 00:29:21,680
And I was working at
increasingly senior levels in

512
00:29:21,680 --> 00:29:27,440
companies, working with a board
who I would present multiple

513
00:29:28,000 --> 00:29:30,480
opportunities to that I really
thought were a slam dunk.

514
00:29:32,080 --> 00:29:35,560
They just weren't prepared to go
that last mile to to make the

515
00:29:35,560 --> 00:29:38,520
investment.
And yeah, you don't win them

516
00:29:38,520 --> 00:29:39,640
all.
You can't win them all.

517
00:29:41,080 --> 00:29:44,600
But I think now we're in this
situation, as I mentioned

518
00:29:44,600 --> 00:29:47,800
before, where I think a lot of
the majors are really gunshot to

519
00:29:47,800 --> 00:29:49,680
go out and do these big
developments.

520
00:29:50,720 --> 00:29:55,280
And so, you know, they're much
more comfortable about putting

521
00:29:55,280 --> 00:29:59,280
their money into Brownfield's
expansions that Escondider or

522
00:29:59,280 --> 00:30:01,520
where, but I mean, Escondider
can't expand forever.

523
00:30:01,520 --> 00:30:06,760
I mean, it's there is a limit I
think to that equation and the

524
00:30:06,760 --> 00:30:09,360
grades are getting lower and
lower and power cuts costs are

525
00:30:09,360 --> 00:30:13,800
going through the roof.
And it's, I think people just

526
00:30:14,000 --> 00:30:18,880
really have to look now at
balancing that equation with

527
00:30:19,720 --> 00:30:22,320
probably what is going to be a
lot of deep drilling in new

528
00:30:22,320 --> 00:30:26,200
environments to try and
understand where these the

529
00:30:26,200 --> 00:30:32,440
deeper deposits are because and,
and how to mine them more

530
00:30:32,440 --> 00:30:34,000
effectively.
You know, I mean, we've got

531
00:30:34,160 --> 00:30:36,360
really only two or three
companies in the world who are

532
00:30:36,360 --> 00:30:38,760
really good bulk underground
miners.

533
00:30:39,840 --> 00:30:43,160
And that was that IP was in
Newcrest and they're wrapped up

534
00:30:43,160 --> 00:30:45,080
in Newmont and I'm sure they
will do well with it.

535
00:30:45,960 --> 00:30:48,200
Rio's busy trying to develop
that at a togroy.

536
00:30:49,480 --> 00:30:53,560
So, so I think that's, that's
the area technical

537
00:30:54,160 --> 00:30:58,440
technologically where we really
need to be looking at because I,

538
00:30:58,440 --> 00:31:02,120
I think the days of finding
these big multi billion ton open

539
00:31:02,120 --> 00:31:04,280
pits in your surface are
disappearing fast.

540
00:31:07,560 --> 00:31:10,680
Block caves that are deep and
with little little surface

541
00:31:10,680 --> 00:31:13,920
mineralization.
It's a different payoff profile

542
00:31:13,920 --> 00:31:15,200
as well, right?
Absolutely.

543
00:31:15,640 --> 00:31:19,280
And, you know, I remember the
early days of, of Soul Gold and

544
00:31:19,280 --> 00:31:22,000
talking to Nick Mather at the
time when he was drilling some

545
00:31:22,000 --> 00:31:25,600
of the the first holes there at
Alcala.

546
00:31:25,600 --> 00:31:28,680
And it was like fantastic holes,
like well done, you know?

547
00:31:29,200 --> 00:31:31,080
And he was saying, yeah, but
nobody's taking any notice.

548
00:31:31,880 --> 00:31:34,240
And of course, eventually the
the world cottoned onto that

549
00:31:34,240 --> 00:31:37,800
story and the share price went
ballistic for a while.

550
00:31:37,800 --> 00:31:42,640
It's come a bit down to, to
earth now because of the reality

551
00:31:42,640 --> 00:31:45,120
of, of developing something like
that.

552
00:31:45,160 --> 00:31:49,000
And it's one thing doing it in
South Australia.

553
00:31:49,000 --> 00:31:51,960
It's another thing trying to do
it in the in the high Andes of

554
00:31:51,960 --> 00:31:55,560
Ecuador and there's there's a
lot of sensitivities,

555
00:31:55,960 --> 00:31:58,680
sensitivities around that.
And you've seen how Rio

556
00:31:58,680 --> 00:32:01,760
struggled in the early days of
IU target to make make that

557
00:32:01,760 --> 00:32:03,960
block cave work.
They had to redesign the whole

558
00:32:03,960 --> 00:32:08,480
thing, as I understand it.
So it's not a simple equation.

559
00:32:09,840 --> 00:32:13,120
And you look at projects like
Pebble and and resolution and

560
00:32:13,120 --> 00:32:17,200
and some of those and sat there
for 30 years or more without

561
00:32:17,200 --> 00:32:19,880
being developed.
So they will happen ultimately,

562
00:32:20,480 --> 00:32:24,880
but the risk profile in that
versus going out looking for new

563
00:32:24,880 --> 00:32:27,040
higher grade underground
deposits is what people need to

564
00:32:27,040 --> 00:32:30,960
be thinking about.
And I don't know that people are

565
00:32:30,960 --> 00:32:33,000
really appreciating that that
equation.

566
00:32:33,400 --> 00:32:37,240
So hence our push into sediment
hosted copper territory.

567
00:32:37,240 --> 00:32:39,720
It's a, it's a very different
exploration model to a porphyry.

568
00:32:40,120 --> 00:32:43,080
Instead of looking for a nice
bright magnetic BLOB in an

569
00:32:43,080 --> 00:32:46,560
image, you're basically having
to build a whole geological

570
00:32:46,560 --> 00:32:50,320
framework picture of a
sedimentary basin and try and

571
00:32:50,320 --> 00:32:52,400
understand what the fluid flow
was in that basin.

572
00:32:52,400 --> 00:32:55,880
It's more like oil exploration
in a sense than than the

573
00:32:56,200 --> 00:32:58,200
traditional copper exploration
for porphyries.

574
00:32:58,600 --> 00:33:02,640
So, So it's a very different
equation in that you've got to,

575
00:33:04,120 --> 00:33:07,400
it's a long time frame, it's a
lot of deep drilling and a lot

576
00:33:07,400 --> 00:33:11,200
of dust is on the way, but you
use that to build your

577
00:33:11,200 --> 00:33:15,800
geological picture.
So yeah, hopefully we can find

578
00:33:15,800 --> 00:33:19,240
more sediment hosted copper,
which in an underground mining

579
00:33:19,240 --> 00:33:21,480
perspective is a far easier
proposition.

580
00:33:21,480 --> 00:33:24,160
And we've seen that from from
the the really quite wonderful

581
00:33:24,160 --> 00:33:28,640
development at Kamala, which I
think Ivanhoe and Zejian really

582
00:33:28,960 --> 00:33:30,720
deserve some pretty good credit
for.

583
00:33:30,720 --> 00:33:34,680
They they have done that at a
minimum cost for the amount of

584
00:33:34,680 --> 00:33:37,640
copper production coming out of
that and it's about grade and

585
00:33:37,640 --> 00:33:39,160
it's about a very slick
development.

586
00:33:41,480 --> 00:33:45,400
What's the the the best thing
that the the industry could do

587
00:33:45,400 --> 00:33:47,720
to improve the probability of
success with exploration?

588
00:33:50,400 --> 00:33:58,480
Take some risks and better risks
and really focus on science.

589
00:33:58,640 --> 00:34:05,400
You know, I, I see many, many
junior proposals come over my

590
00:34:05,400 --> 00:34:10,040
desk and my team goes and
investigates them all over the

591
00:34:10,040 --> 00:34:14,000
world.
And a surprisingly small number

592
00:34:14,000 --> 00:34:18,560
of them are really using top
class geoscience to to

593
00:34:18,600 --> 00:34:20,360
understand what they're what
they're looking at.

594
00:34:20,840 --> 00:34:24,320
They're rehashing old data.
They're taking soil samples or

595
00:34:24,320 --> 00:34:27,120
rock chip samples in an area
that's been well sampled before.

596
00:34:27,360 --> 00:34:30,040
They're drilling shallow holes.
They're not really

597
00:34:30,040 --> 00:34:33,480
conceptualizing what could be.
And they're desperate just to

598
00:34:33,480 --> 00:34:35,760
get that next drilling stepped
out into the market.

599
00:34:35,760 --> 00:34:41,320
So it's, it's not really, and I,
I blame the market for that in a

600
00:34:41,320 --> 00:34:44,600
sense that it's, it's just
driving this short term news

601
00:34:44,600 --> 00:34:48,760
flow rather than trying to
encourage a company like Filo to

602
00:34:48,760 --> 00:34:51,960
go and drill their 1 1/2
kilometre deep hole to look for

603
00:34:51,960 --> 00:34:55,320
the the next best thing.
So I think since that discovery,

604
00:34:55,320 --> 00:34:58,360
everybody with a, a dud Porfrey
in the Andes is drilling a lot

605
00:34:58,360 --> 00:35:00,560
of deep holes underneath, trying
to find out if there's a mother

606
00:35:00,560 --> 00:35:03,440
lode there.
So that's good and, and

607
00:35:03,440 --> 00:35:05,440
hopefully there will be some
more discoveries like that.

608
00:35:06,920 --> 00:35:10,120
I still think that project is
going to be decades away before

609
00:35:10,160 --> 00:35:13,040
it actually produces any copper,
but it, it will be a world class

610
00:35:13,080 --> 00:35:17,400
deposit for sure.
So I do think that some enhanced

611
00:35:17,400 --> 00:35:19,280
geoscience and I think that's
where the majors have a really

612
00:35:19,280 --> 00:35:22,920
big part to play.
You know, we, we pride ourselves

613
00:35:22,920 --> 00:35:26,200
and I know Rio and BHP and
others do as well on having top

614
00:35:26,200 --> 00:35:28,200
class teams.
We, we really try to have the

615
00:35:28,200 --> 00:35:31,720
best structural geologists,
geochemists, and now

616
00:35:31,720 --> 00:35:36,040
increasingly people with AI and
programming skills to, to

617
00:35:36,040 --> 00:35:39,040
synthesize data and make the
best predictive models we can.

618
00:35:40,640 --> 00:35:43,920
But you know, there's a limited
amount of crossover between them

619
00:35:43,920 --> 00:35:45,200
and the juniors that have the
ground.

620
00:35:46,240 --> 00:35:47,960
So we've got to make that
process work better.

621
00:35:49,000 --> 00:35:53,280
Last one from me, Mike, coming
at it from a financial lens, is

622
00:35:53,280 --> 00:35:59,600
there an over reliance on NPV
analysis and IRS?

623
00:35:59,600 --> 00:36:05,520
Does that forget the optionality
that's inherent in long life

624
00:36:05,560 --> 00:36:07,880
projects?
Yeah.

625
00:36:07,880 --> 00:36:10,000
And it's a question we ask
ourselves and I think

626
00:36:10,000 --> 00:36:12,880
particularly people like BHP
must ask themselves at all the

627
00:36:12,880 --> 00:36:16,280
time because, you know, they're
looking at assets that, that

628
00:36:16,440 --> 00:36:19,480
they want multi generational
assets that we're there for 50

629
00:36:19,480 --> 00:36:22,360
years.
And, and so do we.

630
00:36:23,720 --> 00:36:28,840
But when you calculate those
things on an MPV, the, the

631
00:36:28,880 --> 00:36:32,080
future returns more than 1020
years away, they diminish to the

632
00:36:32,080 --> 00:36:36,200
point of not being very useful.
So you've really got to get

633
00:36:36,200 --> 00:36:39,160
your, your capital back.
I think that's where the, the

634
00:36:39,200 --> 00:36:42,560
Chinese have won because they've
been looking at it in terms of,

635
00:36:42,920 --> 00:36:46,520
of, of copper production and
revenue rather than an MPV

636
00:36:46,520 --> 00:36:48,360
basis.
Everything is driven by revenue

637
00:36:48,360 --> 00:36:51,440
in China.
And that's just a function of

638
00:36:51,560 --> 00:36:57,160
the way the politics works.
So they will, they will build an

639
00:36:57,160 --> 00:37:02,480
asset that will have a long
future cash flow without really

640
00:37:02,480 --> 00:37:05,480
worrying too much about the the
payback on, on that.

641
00:37:05,600 --> 00:37:08,840
And that's that's the
difference.

642
00:37:08,840 --> 00:37:10,960
And I think that's where they've
been able to take some risks

643
00:37:10,960 --> 00:37:17,920
that that we haven't.
So yeah, it's, it's, it's a hard

644
00:37:17,920 --> 00:37:19,600
one.
I think the real restriction at

645
00:37:19,600 --> 00:37:24,800
the moment, it's clearly not a
lack of corporate deposits.

646
00:37:24,800 --> 00:37:30,720
The world has lots of them.
It is the really rapidly

647
00:37:30,720 --> 00:37:37,040
escalating cost of the capital.
And if we look at it over the

648
00:37:37,040 --> 00:37:42,240
last sort of 15 years or so,
we've seen the the cost of

649
00:37:42,240 --> 00:37:48,440
capital treble or quadruple for
an equivalent development where

650
00:37:48,480 --> 00:37:50,560
operational costs might have
doubled in that time.

651
00:37:51,040 --> 00:37:52,720
The price of copper has doubled
in that time.

652
00:37:53,040 --> 00:37:56,080
But the cost of building these
big deposits, partly because

653
00:37:56,080 --> 00:37:58,440
they're low grade and partly
because they're in pretty

654
00:37:58,440 --> 00:38:01,280
difficult parts of the world,
has has gone up by three to four

655
00:38:01,280 --> 00:38:03,120
times.
So we're now talking about

656
00:38:03,760 --> 00:38:08,480
$30,000 per tonne of copper
production a year, whereas when

657
00:38:08,480 --> 00:38:11,640
we built Sentinel, it was around
7 or $8000 a tonne.

658
00:38:12,000 --> 00:38:15,560
So your payback was, you know,
copper price at the time was

659
00:38:15,560 --> 00:38:18,400
probably 4 1/2 or five.
Your payback was a couple of

660
00:38:18,400 --> 00:38:20,920
years away.
Now you're talking about not

661
00:38:20,920 --> 00:38:24,200
getting a payback for, you know,
really quite a long time.

662
00:38:24,440 --> 00:38:26,360
And that applies to the
brownfields developments.

663
00:38:26,360 --> 00:38:30,160
You've seen some of the the
announcements recently by BHP

664
00:38:30,160 --> 00:38:34,320
and Cudelco in South America and
the vast 10s of billions of

665
00:38:34,320 --> 00:38:39,320
dollars going in basically just
to keep level production going

666
00:38:39,320 --> 00:38:44,440
over the next 10 years.
So it's, it's a diminishing

667
00:38:44,440 --> 00:38:48,080
equation where you're having to
spend more and more capital to

668
00:38:48,160 --> 00:38:51,840
get that production even to keep
it going, but certainly on a

669
00:38:51,840 --> 00:38:56,840
Greenfield's development and and
that's then stopping companies

670
00:38:56,840 --> 00:38:59,840
going ahead to to build them.
So they're just investing the

671
00:38:59,840 --> 00:39:02,000
capital in, in expanding what
they've got.

672
00:39:03,520 --> 00:39:08,280
So, yeah, it's it, it really,
I'm not a great believer in the

673
00:39:08,640 --> 00:39:11,560
the Copper Cliff because I've
been in the copper game long

674
00:39:11,560 --> 00:39:15,840
enough to have been shown these
diagrams of, of peaking copper a

675
00:39:15,840 --> 00:39:18,760
few years away and how it's all
going to fall off a Cliff and it

676
00:39:18,840 --> 00:39:21,080
actually never happens.
I could show you something from

677
00:39:21,120 --> 00:39:26,720
15 years ago that said it was by
2025 would be have have, you

678
00:39:26,720 --> 00:39:28,720
know, a really diminishing
profile.

679
00:39:28,720 --> 00:39:31,520
But we continue to grow that
that copper production every

680
00:39:31,520 --> 00:39:38,640
year by two to 3%, but it's
largely around discovery of near

681
00:39:38,640 --> 00:39:41,680
mine resources and and expanding
those operations not through

682
00:39:41,680 --> 00:39:43,800
Greenfields.
Greenfields is making a a really

683
00:39:43,800 --> 00:39:47,360
small contribution to that.
Fantastic, Mike.

684
00:39:47,360 --> 00:39:50,120
We're pretty pumped we could
finally get you on the show, so

685
00:39:50,120 --> 00:39:51,120
thanks for making the time for
us.

686
00:39:51,280 --> 00:39:52,640
Yeah, pleasure.
Great to be here.

687
00:39:53,400 --> 00:39:56,240
Very, very good.
Bloody fancy background there.

688
00:39:56,360 --> 00:40:00,000
Love the love the oh here.
That background may have been

689
00:40:00,000 --> 00:40:04,080
used on other publications.
Yeah, I'm grateful we got to use

690
00:40:04,080 --> 00:40:06,480
it once, Yeah.
Yeah, yeah, I've can't.

691
00:40:06,480 --> 00:40:09,560
I'm curious to see where it's
popped up, but a few other

692
00:40:09,560 --> 00:40:11,080
people use that.
There's a lot of interviews in

693
00:40:11,080 --> 00:40:12,960
front of it.
Credit to the Edin Arbor team

694
00:40:12,960 --> 00:40:15,960
for putting it there for us.
But yeah, maybe you might see it

695
00:40:15,960 --> 00:40:17,880
in a CNBC interview sometime.
Oh.

696
00:40:18,280 --> 00:40:20,240
Babe, I love.
So how good's Jim Cramer?

697
00:40:21,080 --> 00:40:22,880
It's funny.
I've been all I'm CNBC.

698
00:40:23,120 --> 00:40:24,440
I can picture.
That'd be me.

699
00:40:24,440 --> 00:40:26,520
What a mother.
Yeah, I didn't see him there,

700
00:40:26,520 --> 00:40:28,120
but you know, same, same home.
He.

701
00:40:28,600 --> 00:40:30,360
Might have saw you but JD.
It's true.

702
00:40:30,520 --> 00:40:31,840
It's true.
Right.

703
00:40:31,840 --> 00:40:33,680
Oh, thanks to all the bloody
partners.

704
00:40:34,120 --> 00:40:37,240
Mineral mining services,
grounded Sandvik ground support,

705
00:40:37,240 --> 00:40:42,360
CRA insurance, K drill, Saltbush
Contracting, SWEC, Watro Energy

706
00:40:42,640 --> 00:40:44,280
and at Watro.
Project Engineering.

707
00:40:44,880 --> 00:40:47,520
Fuck.
That'll do energy 8.

708
00:40:47,520 --> 00:40:50,560
It could be an offshoot.
My mind was moving already ahead

709
00:40:50,560 --> 00:40:52,480
to who we had in the show cross
boundary.

710
00:40:52,480 --> 00:40:55,560
Energy an 100 bucks off your
Aussie MMM underground operators

711
00:40:55,560 --> 00:41:00,640
tickets used card MOM 100 it's
$300.00 hoodoo money miners.

712
00:41:00,880 --> 00:41:02,920
Hoodoo.
Righto money miners, Little

713
00:41:02,920 --> 00:41:07,600
special trade at the back end of
the show here for in the lead up

714
00:41:07,600 --> 00:41:09,520
of Underground Operators
Conference.

715
00:41:09,600 --> 00:41:15,000
Aussie MMM Adelaide April 7th to
9th and we've got one of the big

716
00:41:15,000 --> 00:41:19,480
dogs, one of the, you know, one
of the best friends of Oz I MMM,

717
00:41:19,480 --> 00:41:24,080
you'd say Epirock now.
And representing Epirock today,

718
00:41:24,080 --> 00:41:27,640
Martin Wallman, the global
portfolio manager for

719
00:41:27,680 --> 00:41:32,240
underground trucks dialing in
from the northern hemisphere.

720
00:41:32,240 --> 00:41:33,760
Welcome to money of mine,
copper.

721
00:41:35,360 --> 00:41:37,680
Thank you very much and thank
you for inviting.

722
00:41:38,320 --> 00:41:40,320
Me.
Oh absolute pleasure.

723
00:41:40,320 --> 00:41:44,920
Thank Oz I MMM for that mate.
Mate said last underground

724
00:41:44,920 --> 00:41:46,440
operators conference a couple of
years ago.

725
00:41:47,400 --> 00:41:50,400
I guess the feel of the industry
in terms of automation,

726
00:41:50,400 --> 00:41:53,280
electrification, haulage and
everything has probably changed

727
00:41:53,280 --> 00:41:55,720
a lot.
How much has it changed from the

728
00:41:55,720 --> 00:41:57,560
epiroxide?
What are you seeing the big

729
00:41:57,560 --> 00:42:01,160
ticket items at the moment?
I would say, I mean the, the

730
00:42:01,160 --> 00:42:05,960
main focus is still
electrification and automation.

731
00:42:05,960 --> 00:42:07,840
That's still the, the big, the
big thing.

732
00:42:07,920 --> 00:42:11,320
And of course the we have
continued to continue to develop

733
00:42:11,320 --> 00:42:14,920
our machines, our customers, I
would say they have also started

734
00:42:14,920 --> 00:42:20,520
to get more and more used to
operating electrified machines.

735
00:42:21,400 --> 00:42:27,200
So that's small, small step
forwards around for both us and

736
00:42:27,200 --> 00:42:29,160
and our customers.
Yeah, right.

737
00:42:29,160 --> 00:42:31,640
So what specific machinery are
we going to see?

738
00:42:31,640 --> 00:42:36,400
What normally you guys have just
a big, some big like I don't

739
00:42:36,400 --> 00:42:38,000
know how you get the machines in
there.

740
00:42:38,760 --> 00:42:41,280
What is going to be the showcase
item?

741
00:42:42,800 --> 00:42:45,560
For for the mine, starting with
the mine tracks, we will not

742
00:42:45,560 --> 00:42:46,760
have, we will not have the
machine.

743
00:42:46,760 --> 00:42:49,320
That machine will be shifting
straight later on the spring.

744
00:42:49,680 --> 00:42:55,240
But that is a completely new
mine track with a new new frame,

745
00:42:55,360 --> 00:42:58,640
new basically a new cab.
But the big thing is a complete

746
00:42:58,640 --> 00:43:01,200
new drivetrain.
We have removed all the

747
00:43:02,040 --> 00:43:05,040
basically all the moving
components such as shafts,

748
00:43:05,120 --> 00:43:08,640
transmissions, axles and those
things that are placed with

749
00:43:08,640 --> 00:43:11,120
electrical motors.
So we still, we start with the

750
00:43:11,120 --> 00:43:13,920
diesel engine, but that's kind
of the only thing that the

751
00:43:13,920 --> 00:43:16,960
component that is the same as
previous model, but the rest is,

752
00:43:17,040 --> 00:43:19,960
is new.
And then we do, we do similar

753
00:43:19,960 --> 00:43:23,480
things for the for the loaders,
but then we're still keeping

754
00:43:23,640 --> 00:43:26,600
transmission.
So that's a big thing within the

755
00:43:26,600 --> 00:43:29,040
material handling.
And of course we're doing

756
00:43:29,040 --> 00:43:32,400
similar.
I shouldn't say similar because

757
00:43:32,400 --> 00:43:33,720
it's not, it's not the same
thing.

758
00:43:33,720 --> 00:43:36,760
But we we already like to find
the drill rigs of course, and

759
00:43:36,760 --> 00:43:39,720
that is what we would display at
the show.

760
00:43:40,840 --> 00:43:44,200
Are we offering any discounts in
Adelaide for purchase of this

761
00:43:44,200 --> 00:43:47,680
equipment?
It's like 2020% off or

762
00:43:47,680 --> 00:43:50,880
something.
Usually you've got everything on

763
00:43:50,880 --> 00:43:53,440
show you wanna serve you.
Wanna welcome to come and talk

764
00:43:53,440 --> 00:43:56,280
doesn't We will see.
Right, alright, I'll, I'll bring

765
00:43:56,280 --> 00:43:57,320
him.
I'll bring him to you.

766
00:43:57,800 --> 00:44:00,200
Right mate?
Well, I look forward to seeing

767
00:44:00,200 --> 00:44:02,040
you in Adelaide.
April 7th, 9th.

768
00:44:02,040 --> 00:44:04,120
Cannot bloody wait.
Have you been to every

769
00:44:04,120 --> 00:44:07,320
underground operators?
No, so this would be my first

770
00:44:07,320 --> 00:44:08,920
time we.
Would have a big group of.

771
00:44:09,560 --> 00:44:12,400
People coming over from Sweden,
so everybody's more than welcome

772
00:44:12,400 --> 00:44:14,200
to join us.
Mate, you have a good.

773
00:44:14,200 --> 00:44:16,760
Discussion hang around me.
I'll give you the God.

774
00:44:16,760 --> 00:44:19,080
Absolutely have a great time.
Absolutely right.

775
00:44:19,080 --> 00:44:20,960
Thanks very much, mate.
Look forward to seeing you.

776
00:44:21,080 --> 00:44:26,000
Thank you.
The information contained in

777
00:44:26,000 --> 00:44:28,800
this episode of Money of Mine is
of general nature only and does

778
00:44:28,800 --> 00:44:31,600
not take into account the
objectives, financial situation

779
00:44:31,640 --> 00:44:33,680
or needs of any particular
person.

780
00:44:33,960 --> 00:44:36,960
Before making any investment
decision, you should consult

781
00:44:37,000 --> 00:44:40,040
with your financial advisor and
consider how appropriate the

782
00:44:40,040 --> 00:44:43,720
advice is to your objectives,
financial situation and needs.