How a Multipolar World Reshapes Mining (Michael Willoughby)

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And that's why the mining sector
in the West is capped.

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And that's the underlying
problem for Western markets is

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the incentivisation is not the
same as an emerging market which

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has a much more diverse pool of
capital.

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Fascinating.
I mean, we, we, we did a deep

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dive in the Fortescue and as
well been been reading about

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like sort of Sino gold and that
sort of at the same sort of time

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when that kind of got started.
And yeah, it's crazy.

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It's crazy to to read about, you
know, Jay Klein at the time

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speaking about journeys that
would take 15 hours.

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And by the time he sort of left
the country in that venture,

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it's taking five hours because
there's highways crossing

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valleys, there's, you know,
plane trips going, there's

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airports being built in places
where barely a city before.

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Well, sometimes there's no cars.
So I remember we'd catch a train

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out from Beijing West train
station, like most Thursdays

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nights and we wouldn't even know
where we're going.

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We'd get into third class.
We'd just play poker, eat nuts

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and drink beer in, in the train.
And like all the, all the

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passengers would come and play
with us and talk to us.

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And, and then you'd get just get
off somewhere and, you know, try

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and find a restaurant and
somewhere to stay.

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And, you know, the next day
you'd have 500 people outside of

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wherever you were staying trying
to sell you something.

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You might get a couple of horses
and away you go into that.

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Yeah, it's amazing.
Like you'd knock on the door and

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say, oh, you know, if you've got
dinner and they go, what do you

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want?
Chicken, cow, pig, you know, OK,

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we'll have lamb.
They'd build a fire on the road

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outside of the house and they'll
they'll put the lamb on it, give

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you some beer.
You just sit.

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There's no cars going past.
It's it's crazy.

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What an experience, all right.
JD we're, we're joined by Willow

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today and Willow, you're unlike
any other guest, I think we've

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ever had on our show, not just
because you're an investment

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banker and we, you know, we
usually don't let investment

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bankers on the show, but but
because, I mean, you're one of

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them.
You've got one of the most

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unusual, I guess, stories or
like your, your own journey.

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You grew up in SA, you went to
high school in Japan, Uni in

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China, 27 odd years with JP
Morgan, SCB and HSBC doing

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enormous kind of, you know,
metals and mining M and a

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transactions.
A lot of our listeners would be

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familiar with the likes of, you
know, Dundee for Norman star or

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red Crest for new Crest or
Galaxy aura Cobra, IGO, Tianchi,

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Yanko Rio.
I mean, these were, these were

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big, big deals.
You were a part of them.

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These days you've, you've kicked
off Pacific one, which is, you

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know, a, a business you own and,
and continuing your career.

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I think you've got a pretty
unique lens of the world, not

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only your, your history, your
trajectory, but your insights

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into that, the kind of Asian
capital world, having lived

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there, you know, speaking the,
the language as yourself.

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We're we're delighted that
you're joining us.

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And as we're going to kind of
reflect on the week that's gone

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and and some of the big themes
that as we look ahead, I want to

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money mine.
Great.

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Thank you.
Thank you, guys.

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It's a great service.
I'll listen to you every week

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and I know a lot of other people
do as well.

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It's fantastic.
As flattering Willow, we're

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we're very excited and I think
for the the reasons that Trav

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just outlined, your background
makes you pretty uniquely suited

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for the conversation we're going
to have.

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Although he's going to be cagey
when we ask him about companies,

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mate, because every investment
banker will actually not really

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tell you what they really think
when you ask him about

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companies.
It's just it's good business,

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good business.
Not publicly, yeah.

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On the theme of geopolitics and
cost of capital, where funding

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is coming from in the resources
world, where it might come from

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in five years and 10 years time
though, yeah, you're pretty

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primed.
So I think we should start the

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conversation in that kind of
spot because we caught up a

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little while ago and we spoke
about the big shifts underway as

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well as your positioning in in
Asia and how you sort of see the

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flows as well as your experience
in working in junk bond markets

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in in debt markets.
So I want to, I want to sort of

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start this conversation at a
kind of broad level and

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understand what you think of the
big trends in the cost of

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capital and how miners are
getting financed as we sort of

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see it today.
Yeah.

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So if if you're a Western listed
miner, you've you've always kind

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of done it one way.
You, you get project funding,

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you you go to the equity market
and you raise equity.

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And when emerging markets were
pretty small, you know, that

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was, that was the only way did
it.

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Some of the bigger projects the
Japanese financed, you know,

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along with the majors, iron ore
and coal and and copper and

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other things.
And, and that was very

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effective.
And, you know, over the last 10

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years especially, we've noticed
that a lot of the Western

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countries have really been
hollowed out in terms of their

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industrial capacity.
And that includes mining and

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certainly processing.
And one of the surprising things

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to me is a lot of the Western
politicians don't actually try

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and solve the problem.
They just Band-Aid over it with,

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you know, handouts.
I mean, what it, what is the

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problem?
The problem is that the two

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things Western equity capital
is, is now a lot more expensive

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than emerging market capital.
And I don't really like to call

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it emerging markets because
China, Japan, Korea, they've

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emerged, you know, they're,
they're the industrial

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economies, not, not the West
anymore.

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So it's an average of 66% more
expensive is Western equity

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capital.
When you look at, you know, very

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similar companies and a number
of them over the last 10 years.

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So that's, that's a huge
difference.

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And then debt capital, I mean,
that's very easy to, to

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reference.
You've got Japanese and Chinese

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five year bond rates, which are
below 2%.

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You've got US and most Western
countries about 4 1/2 percent.

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I mean that, that that makes a
huge difference to your IRR on

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a, on a project.
And so if you're just doing it

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with Western capital, you're
competing against companies,

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whether government sponsored or
not, that, that are competing

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with far lower cost of capital
and therefore much higher IRRS.

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And so how do you acquire a, a,
you know, a cop of mine, for

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example, with a much higher cost
of capital relative to your

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competitors?
You can't.

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To to tap into that point
because I think we start talking

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about cost of capital and we're
at real risk of losing the

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people that are not from a, a
finance kind of background.

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So.
It's everything.

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It's everything in a capital
intensive industry.

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Yeah, exactly.
And so if we can really break it

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down to, to the nuts and bolts
and what the ramifications of a

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high cost of capital are or you
know, from say an Australian

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perspective or from a miner's
perspective.

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Yeah.
So if if you're a Zigen, for

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example, and you trade on 12
times EBITDA and you're you're

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buying something at four times
EBITDA, fantastic, because that

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for that EBITDA just goes
straight to your 12 times and

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there's value created.
If you're trading on four times

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EBITDA and you're buying
something for four times EBITDA,

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well, it's pretty hard to create
value off the bat from that.

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And you certainly can't pay what
Zijin can.

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So that that, that's just a
simple example.

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And the same applies to let's
say you're investing a billion

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dollars of capital in into a
project and you need a required

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greater return.
That's very hard when your cost

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of equity is is so low, so, so
high.

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Sorry.
And we've skipped over a little

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bit because the key point is
why, why is that?

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I mean, cost of debt, you can
probably understand, you know,

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the Western countries are in a
higher lever, but why is cost of

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equity so high for Western
companies given that all we hear

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is that I've, you know, the US
market has higher multiples and,

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and it does, it does for other
industries, it does certainly

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for tech and it does for
infrastructure.

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Well, why mining?
Well, if the problem with the

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Western equity markets is that
they're now 85% institutionally

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owned, right?
And what does that mean?

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That means you just crowd
capital into where the LP's or

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the, you know, the ultimate
asset allocators want.

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And what do they want?
Well, they want, they're happy

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to have volatility in
operational cash flows like

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tech, but it has to be capital
light.

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So I have to be able to invest
in like 10 of them to, to have

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two or three of them come off
fantastic.

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And if it's capital heavy, well,
it better not be volatile.

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So infrastructure love that.
In fact, I don't really care

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what I pay for infrastructure is
because I know the return that

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I'm getting.
But mining's in between, isn't

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it?
It's, it's high capital

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intensity and it's very high
volatility.

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And as a generalist, which I
used to be, you know that that's

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the worst of both worlds.
Why, why am I going to bid more

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than four times EBITDA for a
company like that?

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And that's why the mining sector
in the West is capped.

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And that's the underlying
problem for Western markets is

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the incentivization is not the
same as an emerging market,

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which has a much more diverse
pool of capital.

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So retail in China, for example,
is 80% of the stock market

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completely different.
I mean, that's, that's how

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Western markets were 50 years
ago.

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And that therein lies the
difference in capital formation

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and the difference in capital
cost.

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And then that gives an advantage
to those, those companies.

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And it's, it's not just China.
It's it's, it's Korea,

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Indonesia, India, Saudi, Yeah.
So when you think about the, the

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equity markets though the, you
know quite famously the the

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Chinese broader indices, they
haven't performed phenomenally

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well in in recent decades say
that the last 15 years since

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the, the, the GFC Despite that
they have gotten bigger, there

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is more and more companies being
being listed there.

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So the the kind of gross market
cap is growing of the

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performance kind of hasn't.
Is that something you think is

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part of the the natural
evolution and in time we'll do

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well or because of the system
there that that's not going to

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perform in time well?
When it's a retail centric

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market, you know, sometimes you
don't get the valuations that

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you would in the US.
So, you know, if you go back

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seven or eight years, a lot of
the Chinese tech companies

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listed in the US for the higher
valuations that that makes

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sense.
But most of the manufacturing,

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either directly or indirectly
and heavy industrials have all

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gravitated towards those
markets.

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And, and either it's in a
chemicals, I think China is

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twice the size of the US and EU
combined in chemicals output.

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So you look at a hydroxide
plant, you go, well, why can't

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it work in the West?
We you don't have the supply

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chain backing it up.
You don't have the cost of the

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inputs that can compete.
And and if we think about these,

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these sort of holes of money at
kind of traversing those 2 E

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East and West with a specific
example in mind, FMGA little

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while ago announced this,
remember the US $2 billion bond

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bond deal.
How do you think about those

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bits of financing because
they're, they're a relatively,

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you know, unique piece or maybe
the first of that kind of type

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of financing?
Do you think that's something we

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continue to see more of?
So you should be able to get a,

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a lower interest rate because
the underlying government bond

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is a lower interest rate in
China.

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So that's great.
But then because you're

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reporting in Australian dollars
or U.S. dollars and that's your

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functional currency, you you're
going to have to swap it back

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into that Western currency.
And that's expensive.

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And that's the reason why a lot
of people don't do it.

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But in the case of Fortescue,
they sell to China and they can

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sell an RnB and that would
naturally hedge their R&B

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exposure and thereby reduce
their net cost of interest.

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So it can work.
It's not for everyone, but in

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00:11:50,400 --> 00:11:52,760
five years time it'll be a lot
more popular to do that.

225
00:11:53,360 --> 00:11:55,720
Isn't that interesting, right?
So they get, they get a, a 2%.

226
00:11:55,760 --> 00:11:57,920
I mean, it's like, you know, you
look at it and you're like, this

227
00:11:57,920 --> 00:12:00,000
is the lowest cost of capital
you can have as a western minor

228
00:12:00,600 --> 00:12:05,120
to well, lowest cost of debt
oriented a 2% coupon on a, on a

229
00:12:05,120 --> 00:12:07,760
$2 billion loan.
But you know, are they, are

230
00:12:07,760 --> 00:12:11,080
they, are they able to do that?
And because because like China

231
00:12:11,080 --> 00:12:15,760
has a political or will to, you
know, want to, to de de

232
00:12:15,760 --> 00:12:18,800
dollarize as well.
Like if they're selling in R&B,

233
00:12:18,800 --> 00:12:21,600
is that is that is there some
advantage and incentive for for

234
00:12:21,600 --> 00:12:26,560
that?
I think we all overestimate the

235
00:12:26,560 --> 00:12:28,160
government's hand in a lot of
this.

236
00:12:28,760 --> 00:12:31,960
I mean, that is the Chinese
banks wanting to expand outside

237
00:12:31,960 --> 00:12:33,560
of China.
I mean, look at what they've

238
00:12:33,560 --> 00:12:35,880
done in Indonesia.
The Chinese government, the

239
00:12:35,880 --> 00:12:37,680
Indonesian government didn't
have much to do with that

240
00:12:37,680 --> 00:12:39,160
really.
It was zinc Shan and a whole

241
00:12:39,160 --> 00:12:43,920
bunch of very private, very
proud Chinese companies that put

242
00:12:44,640 --> 00:12:48,240
maybe 50 billion in capital now
in Indonesia and nickel to build

243
00:12:48,240 --> 00:12:53,320
up all of that industrial size.
And, and it's only now that the

244
00:12:53,320 --> 00:12:54,880
governments are kind of getting
involved.

245
00:12:55,120 --> 00:12:56,840
The capital came in because of
the the.

246
00:12:56,960 --> 00:12:58,840
Government goal setting.
Yeah, the, I mean the, the

247
00:12:59,400 --> 00:13:02,960
industrial park like tax in tax
breaks for, you know, big, big

248
00:13:02,960 --> 00:13:05,320
windows of time and everything
that was the, the landscape that

249
00:13:05,320 --> 00:13:08,040
allowed capital to to accumulate
though, was it not?

250
00:13:08,120 --> 00:13:10,360
That was that was part of it.
Yeah, part of it.

251
00:13:10,440 --> 00:13:13,680
But you know, the the capital
from Tinxion wasn't government

252
00:13:13,680 --> 00:13:14,720
capital.
Sure.

253
00:13:15,400 --> 00:13:17,920
Like every government, you have
an industrial policy that

254
00:13:18,360 --> 00:13:22,240
encourages lending to certain
sectors, but it doesn't dictate,

255
00:13:22,240 --> 00:13:26,080
oh, we're going to go and spend
forty, $50 billion in Indonesia

256
00:13:26,080 --> 00:13:29,600
and and ruin the nickel market.
Mate, we've just got to jump in

257
00:13:29,600 --> 00:13:31,280
with a quick public service
announcement.

258
00:13:31,280 --> 00:13:34,880
We are one short week away from
Africa Down Under Adu.

259
00:13:35,000 --> 00:13:37,360
Less than less than a week mate.
The conference starts on

260
00:13:37,360 --> 00:13:40,120
Wednesday next week.
Only a few sleeps to go. 3rd to

261
00:13:40,120 --> 00:13:42,800
the 5th so it's a Wednesday to
the Friday we're gonna we're

262
00:13:42,800 --> 00:13:45,240
gonna be there come come come
check like we'll be there

263
00:13:45,240 --> 00:13:46,680
Wednesday morning.
So if you're gonna buy your

264
00:13:46,680 --> 00:13:49,400
tickets to come to Africa Down
Under, now is the time to pull

265
00:13:49,400 --> 00:13:51,480
the trigger.
If you're gonna go, I don't.

266
00:13:51,480 --> 00:13:53,360
I don't even think there's many
tickets left, mate.

267
00:13:53,360 --> 00:13:54,600
The selling like hot cakes.
So you bought?

268
00:13:54,600 --> 00:13:56,360
Cakes.
There's a number of reasons why

269
00:13:56,360 --> 00:13:57,560
you want to get yourself down
there.

270
00:13:57,600 --> 00:13:59,720
You've got the biggest African
miners, you've got the up and

271
00:13:59,720 --> 00:14:02,000
coming ones, you've got the the
juniors that are doing big

272
00:14:02,000 --> 00:14:03,000
things.
We've seen deals.

273
00:14:03,000 --> 00:14:05,080
Don't forget the delegates of
from all of different countries.

274
00:14:05,080 --> 00:14:06,880
Delegates, a lot going on that
front.

275
00:14:06,880 --> 00:14:09,320
When you invest in Africa, you
need to understand the playing

276
00:14:09,320 --> 00:14:10,760
field.
You want to get in front of the

277
00:14:10,760 --> 00:14:12,400
face of these delegates.
You want to speak with them.

278
00:14:12,560 --> 00:14:16,600
The biggest and the biggest
African mining convention

279
00:14:16,600 --> 00:14:18,000
outside of Indaba?
Phenomenal.

280
00:14:18,000 --> 00:14:19,800
That's crazy right here in
Perth.

281
00:14:20,160 --> 00:14:21,680
Get your tickets in the show
notes.

282
00:14:21,920 --> 00:14:23,880
Africa down under September 3rd
to 5th.

283
00:14:24,440 --> 00:14:29,000
Yeah, it, it is a, a fascinating
example in, in terms of more

284
00:14:29,000 --> 00:14:33,160
money that's coming into the
metals and market space traders

285
00:14:33,240 --> 00:14:36,320
and the the commodity traders
with a lot of these guys being,

286
00:14:36,480 --> 00:14:39,920
you know, energy first traders,
they've entered the the space.

287
00:14:39,920 --> 00:14:44,560
We saw another example just
recently with Capuchi, the

288
00:14:44,560 --> 00:14:49,320
Ivanhoe mine and a deal with
Mercuria, who have always been

289
00:14:49,320 --> 00:14:52,280
an energy trader.
Is that another sort of source

290
00:14:52,280 --> 00:14:53,560
of capital?
I mean, they're really muscling

291
00:14:53,560 --> 00:14:56,040
in on one another now.
Do you do you see that trend

292
00:14:56,040 --> 00:14:58,000
continuing?
That's fantastic, isn't it,

293
00:14:58,000 --> 00:15:00,920
Because they go back maybe 7 or
8 years.

294
00:15:00,920 --> 00:15:03,640
There's a few big bankruptcies
in, in trading companies,

295
00:15:03,640 --> 00:15:07,400
particularly in Asia, only on I
think was one of them and there

296
00:15:07,400 --> 00:15:11,800
was a few more.
And so a lot of the banks pulled

297
00:15:11,800 --> 00:15:15,960
back from financing the traders
into particularly metals deals.

298
00:15:17,560 --> 00:15:20,760
And you know, you remember maybe
15 years ago, there was all of

299
00:15:20,760 --> 00:15:25,960
that LME, all of those LME
problems with security over and

300
00:15:25,960 --> 00:15:27,280
then a lot of the banks got out
of it.

301
00:15:27,280 --> 00:15:30,560
So it was very hard for the
traders to get any size and the

302
00:15:30,560 --> 00:15:34,120
metals market is what, 8 to 10
times smaller than oil.

303
00:15:34,120 --> 00:15:37,480
So well, let's just stay in oil
and make money there, which a

304
00:15:37,480 --> 00:15:40,320
lot of them have made huge
amounts of money and now they

305
00:15:40,320 --> 00:15:43,720
need to expand outside of oil.
And so metals is obvious, but

306
00:15:43,720 --> 00:15:47,840
Glencor and TRAF have had the
lion's share of the the best

307
00:15:47,840 --> 00:15:52,000
markets.
So now you've got 8 to 10 others

308
00:15:52,000 --> 00:15:56,000
that are heritage oil, but
coming very, very aggressively

309
00:15:56,520 --> 00:16:00,800
into providing fundings either
off takes or prepaid or hybrid

310
00:16:00,800 --> 00:16:03,080
type structures.
That's different from equity,

311
00:16:04,840 --> 00:16:07,760
can have equity warrants or or
debt and it depends how it's

312
00:16:07,760 --> 00:16:11,320
structured.
But the banks tend to sit behind

313
00:16:11,320 --> 00:16:16,160
those prepaid facilities and
lever it to between 50 and 80%.

314
00:16:16,440 --> 00:16:20,240
So the trading company ends up
not having to put so much equity

315
00:16:20,240 --> 00:16:25,240
into those facilities.
And, and from another sort of

316
00:16:25,240 --> 00:16:27,440
source of capital, you've got
the, the streamers and the

317
00:16:27,440 --> 00:16:30,000
royalty players getting bigger
and bigger.

318
00:16:30,000 --> 00:16:32,320
If if we kind of piece it all
together, what what do you make

319
00:16:32,320 --> 00:16:35,840
of the, the, the statement that
there's a, a shortage of money

320
00:16:35,840 --> 00:16:39,160
for mining companies?
There's definitely a shortage of

321
00:16:39,400 --> 00:16:42,520
capital for mining companies at
certain stages of their

322
00:16:42,520 --> 00:16:46,000
development.
So right now, I mean, and it's

323
00:16:46,000 --> 00:16:49,200
fantastic that the, the Perth
retail brokers and brokers are

324
00:16:49,200 --> 00:16:52,320
raising all this money for, for,
for mining development companies

325
00:16:52,320 --> 00:16:55,560
because that's really hard
capital to, to get.

326
00:16:56,880 --> 00:17:00,400
So the exploration capital is a
bit easier now to get.

327
00:17:00,400 --> 00:17:03,600
But the problem is when you come
to actually funding the, the,

328
00:17:03,720 --> 00:17:06,400
the construction or, or the
bigger capital and you're a $50

329
00:17:06,400 --> 00:17:11,480
million market cap company and
you've got 400 million of CapEx

330
00:17:11,480 --> 00:17:14,359
to spend.
You know, how do I do that?

331
00:17:15,960 --> 00:17:19,680
And there's not necessarily
capital available for that from

332
00:17:19,680 --> 00:17:22,800
traditional sources.
And that's why, you know, we sit

333
00:17:22,800 --> 00:17:25,560
there going, you've got to,
you've got to look at layering

334
00:17:25,560 --> 00:17:27,560
your capital structure.
So how do I get a Japanese

335
00:17:27,560 --> 00:17:30,800
trading house in here?
How do I get a royalty structure

336
00:17:30,800 --> 00:17:33,200
in here?
How do I do off take, how do I

337
00:17:33,400 --> 00:17:38,880
then bring Japanese or Korean or
Exim bank debt in the project

338
00:17:38,880 --> 00:17:42,480
financing level at a lower cost?
And how do I layer all of those

339
00:17:43,560 --> 00:17:46,320
capital structures so that the
equity market understands what

340
00:17:46,320 --> 00:17:48,320
I'm doing?
It's not too complex, which is

341
00:17:48,320 --> 00:17:50,160
very important in an Australian
context.

342
00:17:50,160 --> 00:17:54,320
And and so my cost of capital is
low enough that it justifies me

343
00:17:54,640 --> 00:17:57,400
doing the project.
That HUD Bay example that we

344
00:17:57,400 --> 00:17:59,600
spoke about a couple weeks ago,
that feels like a a prime

345
00:17:59,600 --> 00:18:03,080
example to to, to put forward
in, in unlocking like the first

346
00:18:03,080 --> 00:18:05,560
kind of steps of that with the
Japanese trading houses coming

347
00:18:05,560 --> 00:18:07,600
in.
Right, fantastic.

348
00:18:07,640 --> 00:18:10,280
I mean, what?
What a great result the HUD Bay,

349
00:18:10,440 --> 00:18:13,520
you know, both of them, but, but
HUD Bay into in particular.

350
00:18:13,520 --> 00:18:16,800
So they've basically just taken
all of the capital CapEx needs

351
00:18:16,800 --> 00:18:20,240
away from themselves.
Mitsubishi comes in and and

352
00:18:20,240 --> 00:18:22,120
funds it all.
HUD Bay was trading at, you

353
00:18:22,120 --> 00:18:25,080
know, round numbers, let's say
.7 times they've brought in

354
00:18:25,080 --> 00:18:29,520
capital at 1.1 times MPV, great
value arbitrage.

355
00:18:29,840 --> 00:18:32,240
I mean everyone that can do that
should do that.

356
00:18:32,480 --> 00:18:34,800
Even if you don't even need the
capital, you should be buying

357
00:18:34,800 --> 00:18:37,920
back shares to reduce your your
equity count because you're

358
00:18:37,920 --> 00:18:41,960
replacing expensive equity with
with cheap equity.

359
00:18:42,240 --> 00:18:46,720
The inevitability of of the
world need for these metals.

360
00:18:46,720 --> 00:18:48,880
It's just like it's so
compelling, it's so obvious.

361
00:18:49,600 --> 00:18:52,920
But where is the capital going
to come from to bring, you know,

362
00:18:52,920 --> 00:18:56,800
these new developments online if
it, if it is, you know, scarce?

363
00:18:57,800 --> 00:19:00,560
So it's not going to come from
Western equity markets.

364
00:19:00,640 --> 00:19:01,920
That's where it's not going to
come from.

365
00:19:01,920 --> 00:19:07,200
And where it is coming from is
industrial, IE Korea, Japan,

366
00:19:07,640 --> 00:19:09,960
China, Indonesia and emerging
markets.

367
00:19:09,960 --> 00:19:12,920
I mean the, the capital coming
out of Indonesia now is enormous

368
00:19:13,560 --> 00:19:15,960
and a lot of it we don't see
because they might not be public

369
00:19:15,960 --> 00:19:21,640
companies or they're not listed
on ASX or NYSE, but but that is

370
00:19:21,640 --> 00:19:24,320
huge capital.
Is that because they understand

371
00:19:24,440 --> 00:19:28,160
like the, the need for these
materials because they have the,

372
00:19:28,320 --> 00:19:31,200
the industrial downstream
component in some respects or

373
00:19:31,200 --> 00:19:32,200
they're tied to it in some
respects?

374
00:19:32,200 --> 00:19:34,720
So they're like, they've got the
foresight to think, you know,

375
00:19:34,720 --> 00:19:38,880
20-30 years in the future.
Well, yes, partly because if

376
00:19:38,880 --> 00:19:42,640
you, you know, live in Jakarta
or you live in Shanghai or, or

377
00:19:43,080 --> 00:19:46,760
you live in Riyadh, you see
masses of construction every day

378
00:19:46,760 --> 00:19:51,360
and OK, things are growing.
Let's let's get on board that

379
00:19:51,360 --> 00:19:53,280
train.
But I, I think the, the bigger

380
00:19:53,600 --> 00:19:56,560
issue is, is when you're growing
an economy, those materials are

381
00:19:56,560 --> 00:19:59,280
really important and the
security of those are really

382
00:19:59,400 --> 00:20:01,600
important.
But more than anything, they're

383
00:20:01,600 --> 00:20:05,400
just arbitraging the the.
The higher cost of capital in

384
00:20:05,400 --> 00:20:10,560
the West, so they're saying,
well, this is a gap in Western

385
00:20:10,560 --> 00:20:14,200
markets where where it's too
expensive for them to play with,

386
00:20:14,280 --> 00:20:17,800
you know, and, and maybe the the
processing's too environmentally

387
00:20:17,800 --> 00:20:20,360
unfriendly and, and there's a
whole lot of other issues, but

388
00:20:20,360 --> 00:20:23,560
that's a gap that our capital
can play in that we're not

389
00:20:23,560 --> 00:20:27,760
competing with the West tell.
Me, tell me more about like, you

390
00:20:27,760 --> 00:20:31,120
know what the ways in which
you're seeing this capital, you

391
00:20:31,120 --> 00:20:33,400
know, find it's way into into
Western projects.

392
00:20:35,920 --> 00:20:39,680
Yeah, So it, and this is the
thing, it's not, it's, you can't

393
00:20:39,680 --> 00:20:42,960
just go out to auction and say,
you know, highest bidder wins to

394
00:20:42,960 --> 00:20:44,840
be my partner.
That's not how it works.

395
00:20:44,840 --> 00:20:48,480
I mean, these are big
sophisticated companies usually

396
00:20:48,480 --> 00:20:51,880
that, that have their own checks
and balances and their own

397
00:20:51,880 --> 00:20:55,600
systems and their, you know,
every timetable is different and

398
00:20:55,600 --> 00:20:56,880
they're all looking for a
different thing.

399
00:20:56,880 --> 00:20:59,480
So it's a bit of a challenge,
particularly to a midcap or a

400
00:20:59,480 --> 00:21:04,440
small cap to yeah, you can, you
can go to Japan and have a whole

401
00:21:04,440 --> 00:21:05,920
heap of meetings.
But what does that mean?

402
00:21:06,560 --> 00:21:09,760
And then how do I compare that
to Korea or Indonesia or China

403
00:21:09,760 --> 00:21:15,560
or Saudi or UAE or India?
There's no one you can go to

404
00:21:15,560 --> 00:21:18,280
that's that's going to compare
all of those together and say

405
00:21:18,280 --> 00:21:21,560
that that's what makes sense for
you because most of the service

406
00:21:21,560 --> 00:21:24,880
providers have they either want
you to raise equity or they want

407
00:21:24,880 --> 00:21:26,960
you to do a high yield bond or
they're, you know, they've done

408
00:21:26,960 --> 00:21:28,840
a few deals in Japan.
So that's great.

409
00:21:28,840 --> 00:21:30,760
We want to go there, but they
don't know about the other side

410
00:21:30,760 --> 00:21:31,960
of it.
So it's very, you know, they

411
00:21:31,960 --> 00:21:34,040
don't know about off take
agreements.

412
00:21:34,040 --> 00:21:38,280
So it's very hard to layer that
capital structure efficiently.

413
00:21:40,600 --> 00:21:42,280
That's the opportunity for P1,
isn't it?

414
00:21:43,760 --> 00:21:45,840
I was going to say that's where
that's where a great advisor

415
00:21:45,880 --> 00:21:49,720
sort of how do you how do you
pace in US junk bonds in that in

416
00:21:49,720 --> 00:21:52,520
that kind of market because
they've at an interesting

417
00:21:52,520 --> 00:21:55,400
history financing Aussie
resource projects.

418
00:21:56,440 --> 00:21:59,080
Yeah.
So I, I was at JP Morgan for a

419
00:21:59,080 --> 00:22:04,920
long time and you know, they
have a very powerful US centric

420
00:22:05,520 --> 00:22:08,080
higher bond desk, which is.
I've heard Chris Allison talk

421
00:22:08,080 --> 00:22:13,160
about it, yeah.
Right, So it's a it's a it's a

422
00:22:13,160 --> 00:22:14,920
great market.
You know, it's not not something

423
00:22:14,920 --> 00:22:19,560
to be scared of it because
before you know, you obviously

424
00:22:19,560 --> 00:22:21,560
had Fortescue, right.
And that was that was a

425
00:22:22,320 --> 00:22:26,800
fantastic way of financing what
what they achieved and, and.

426
00:22:27,080 --> 00:22:29,720
What no one else kind of would
have financed.

427
00:22:30,120 --> 00:22:36,120
Right, because because you can
get capital, it's just a it's

428
00:22:36,120 --> 00:22:38,880
just price, right.
And I think, I think actually

429
00:22:38,880 --> 00:22:42,960
Minrose said that on, on the
call it you know, execution risk

430
00:22:42,960 --> 00:22:46,880
is not big, it's just a question
of price and that, and that's

431
00:22:46,880 --> 00:22:48,200
great.
It's bullet finance.

432
00:22:48,200 --> 00:22:50,960
So you, you know, for five years
plus you can sit there and

433
00:22:50,960 --> 00:22:54,480
you've got the finance and the
next five year cycle doesn't

434
00:22:54,960 --> 00:22:59,160
really matter so much.
But then you then you just

435
00:22:59,160 --> 00:23:02,640
simply roll it over and whatever
price you know it is at the

436
00:23:02,640 --> 00:23:04,480
time, that's how you've got to
time it and.

437
00:23:05,760 --> 00:23:09,400
And the, the, you know, with
regards to that priciness, you

438
00:23:09,400 --> 00:23:11,960
know, the, the cost of that, how
do you paste that in with what

439
00:23:11,960 --> 00:23:14,120
it might cost from these Asian
kind of players that you think

440
00:23:14,120 --> 00:23:15,920
about?
Yeah.

441
00:23:15,920 --> 00:23:21,320
So I mean that's purely debt and
usually it, it's a little bit

442
00:23:21,520 --> 00:23:26,080
more costly than a loan, only a
little bit and that changes over

443
00:23:26,080 --> 00:23:30,400
time.
So that's debt from Asian

444
00:23:30,800 --> 00:23:34,160
players and, and you know,
believing RMB loans and debt

445
00:23:34,160 --> 00:23:38,840
aside, you know, a lot of the
capital is equity like.

446
00:23:39,600 --> 00:23:42,520
So you know, I guess the next
step down is, is kind of off

447
00:23:42,520 --> 00:23:44,440
taking prepays with, with
warrants.

448
00:23:44,440 --> 00:23:48,240
So equity warrants to give a bit
more of a return.

449
00:23:48,240 --> 00:23:51,760
And then you go all the way down
to a Lisco equity investment

450
00:23:51,760 --> 00:23:56,000
minority or or an asset level
investment minority, which the

451
00:23:56,240 --> 00:23:59,400
completely different style of of
capital.

452
00:24:00,160 --> 00:24:05,440
Yeah.
And the, the, I suppose like the

453
00:24:05,440 --> 00:24:09,080
growth of the Nordic bonds to,
to finance more spicy types of

454
00:24:09,280 --> 00:24:12,760
projects is, is a, is another
trend that we're kind of pretty

455
00:24:12,760 --> 00:24:15,800
astute to at the moment as well.
Well, I think, I think given

456
00:24:15,800 --> 00:24:20,280
private capital is growing so
fast that that sort of structure

457
00:24:20,400 --> 00:24:24,280
is, is going to make a lot more
sense and open other doors for,

458
00:24:24,280 --> 00:24:26,440
for mining companies.
So the Nordic bond is, you know,

459
00:24:26,440 --> 00:24:30,400
yes, I think it originally it,
you know, it was for Nordic mums

460
00:24:30,400 --> 00:24:33,280
and dads at home, but it's just
a structure that then you can

461
00:24:33,280 --> 00:24:37,920
sell to lots of different credit
funds and, and I think we'll see

462
00:24:37,920 --> 00:24:40,400
more structures like that over
time.

463
00:24:41,000 --> 00:24:43,520
So it like where does the cap
like let's say you know, min

464
00:24:43,520 --> 00:24:47,160
raise raises money in the US
junk bond market.

465
00:24:47,200 --> 00:24:49,440
Are they US investors or are
they, are they, are they

466
00:24:49,480 --> 00:24:52,360
investors that are actually like
Asian centric?

467
00:24:52,880 --> 00:24:56,200
I I didn't set up that question,
but that is a good question.

468
00:24:57,160 --> 00:25:02,560
So that used to be principally
US investors so that a book

469
00:25:02,560 --> 00:25:06,680
would print usually be like
8090% US, very US heavy.

470
00:25:07,440 --> 00:25:10,080
But over time all of those US
funds have established their

471
00:25:10,080 --> 00:25:13,160
offices in Hong Kong and
Singapore and other other parts

472
00:25:13,160 --> 00:25:15,320
of the world.
And so now the book is at least

473
00:25:15,320 --> 00:25:22,360
5050, you know, US, Asia and
sometimes a lot more Asia heavy.

474
00:25:22,360 --> 00:25:25,800
And the reason, the reason for
metals and mining in particular

475
00:25:25,800 --> 00:25:30,720
is that Asian issuance is much
larger in metals and mining than

476
00:25:30,720 --> 00:25:34,800
it is in the US because there's
a lot of companies, there's a

477
00:25:34,800 --> 00:25:37,280
lot of need.
A lot of the Chinese companies

478
00:25:37,280 --> 00:25:41,880
raise short term debt and bonds
from markets and that's the way

479
00:25:41,880 --> 00:25:45,560
they finance themselves.
And so if you're a portfolio

480
00:25:45,560 --> 00:25:47,720
manager sitting in Hong Kong,
you're going, yeah, I've, I've

481
00:25:47,720 --> 00:25:50,600
seen this, this sort of gold
company, you know, 100 times

482
00:25:50,600 --> 00:25:52,280
before.
I've seen this sort of aluminium

483
00:25:52,280 --> 00:25:53,800
company.
I know how the supply chain

484
00:25:53,800 --> 00:25:57,320
works because I already have
investments in bonds in a, in a

485
00:25:57,320 --> 00:26:01,200
bunch of the, the peers.
And that's why for metals and

486
00:26:01,200 --> 00:26:04,400
mining company companies, Asia
is a really important part.

487
00:26:04,400 --> 00:26:08,160
So is the US It's, but it's
important to understand that

488
00:26:08,160 --> 00:26:10,000
they're two different buckets of
capital.

489
00:26:10,880 --> 00:26:15,040
So the way, the way in which
the, the, the, I suppose the

490
00:26:15,040 --> 00:26:18,280
government forces in very recent
history are trying to level the

491
00:26:18,280 --> 00:26:19,800
playing field from a cost of
capital.

492
00:26:19,800 --> 00:26:25,000
It's I, I, I'll get angry kind
of talking about it, but but

493
00:26:25,000 --> 00:26:26,920
it's, it's frustrating in a lot
of ways.

494
00:26:26,920 --> 00:26:30,160
Do you have the same frustration
in, in, in, I suppose the, you

495
00:26:30,240 --> 00:26:32,480
know, the approaches we've seen
today of government to lower the

496
00:26:32,480 --> 00:26:35,280
cost of capital of, of, of
Western mining, you know,

497
00:26:35,480 --> 00:26:37,560
projects and companies.
Yeah.

498
00:26:37,560 --> 00:26:40,960
I mean, look, I mean, and we
could talk about geopolitics for

499
00:26:40,960 --> 00:26:43,800
a long time, but clearly, you
know, the US is not as strong as

500
00:26:43,800 --> 00:26:49,840
it was 10 years ago and China on
every objective measure is a

501
00:26:49,840 --> 00:26:52,720
superpower.
Like it or not it it just is.

502
00:26:54,080 --> 00:26:57,640
I'd say the West band aids some
of these problems, you know,

503
00:26:57,640 --> 00:27:03,120
they're short term sugar hit get
a good headline.

504
00:27:03,680 --> 00:27:06,800
Voters are happy because
something's being done, but no

505
00:27:06,800 --> 00:27:09,280
one really understand.
You know, it doesn't appear that

506
00:27:09,280 --> 00:27:12,440
the government's really are even
bothering to understand what the

507
00:27:12,760 --> 00:27:15,800
underlying problems are, what,
what are the causes for a lot of

508
00:27:15,800 --> 00:27:19,600
these things.
And then I'm I'm sure some in

509
00:27:19,600 --> 00:27:23,680
the government are, but but if
they did, then you would form

510
00:27:23,680 --> 00:27:28,200
policies, underlying policies to
address some of those issues,

511
00:27:28,200 --> 00:27:31,160
not not handouts and band aids
and sugar hits.

512
00:27:32,640 --> 00:27:37,520
And the problem is the more we
sugar hit and the less economic

513
00:27:38,000 --> 00:27:40,240
it becomes.
I mean, in Brea, So I get it,

514
00:27:40,240 --> 00:27:42,960
you, you need security of supply
and, and it's not that bigger

515
00:27:42,960 --> 00:27:44,280
industry.
So it's, you know, it's

516
00:27:44,640 --> 00:27:47,760
relatively easy to solve, but
you've, what have you really

517
00:27:47,760 --> 00:27:50,800
done?
You've now got a structurally

518
00:27:50,800 --> 00:27:57,960
higher cost supply of of inputs
into the industrial complex, you

519
00:27:57,960 --> 00:28:00,240
know, and in the military, I
mean, as we've seen in Ukraine,

520
00:28:00,240 --> 00:28:05,560
you need very cheap production
to to multiply your, your forces

521
00:28:05,560 --> 00:28:07,800
and having Caicos inputs is not
the answer.

522
00:28:08,560 --> 00:28:11,080
You, you said we could kind of
speak for hours about this, this

523
00:28:11,080 --> 00:28:12,960
geopolitical theme and I think
we easily could.

524
00:28:12,960 --> 00:28:17,080
So let's tap into it for for a
bit because it's kind of

525
00:28:17,080 --> 00:28:19,240
implicit in what we were talking
about with with the funding

526
00:28:19,240 --> 00:28:20,720
there.
You know, it's it's, it's the

527
00:28:20,720 --> 00:28:23,200
kind of read through line.
And is it going to be that easy

528
00:28:23,200 --> 00:28:26,600
to have capital flow from from
east to West and all these sorts

529
00:28:26,600 --> 00:28:29,320
of things?
So do you, do you see there

530
00:28:29,320 --> 00:28:32,320
being difficulty in, you know,
countries like Indonesia, for

531
00:28:32,320 --> 00:28:35,280
instance, if we're trying to
have that money come in to

532
00:28:35,320 --> 00:28:38,760
Australia, like they're in a a
kind of funny middle ground

533
00:28:38,760 --> 00:28:43,400
between Asia, China and
Australia and and the US, Do you

534
00:28:43,400 --> 00:28:45,600
see there being blockages on a
geopolitical front to that

535
00:28:45,600 --> 00:28:55,480
capital flowing?
I hope not because what what is

536
00:28:55,480 --> 00:29:00,360
happening now is becoming a
multipolar world and lots of

537
00:29:00,560 --> 00:29:04,120
bilateral negotiations between
countries, which are, you know,

538
00:29:04,160 --> 00:29:07,440
is different to what we've seen
in the last, you know, since

539
00:29:07,440 --> 00:29:11,920
World War 2.
And if you're saying that I

540
00:29:11,920 --> 00:29:16,920
think you've as a company, you
need to start to be multipolar

541
00:29:16,920 --> 00:29:19,200
as well.
So if I'm thinking about my SO

542
00:29:19,200 --> 00:29:22,360
what's the easiest way to
equalize the cost of capital?

543
00:29:22,360 --> 00:29:25,600
Well, it's get a partner in with
a lower cost of capital than I

544
00:29:25,600 --> 00:29:29,200
do and supplement my capital
with that partner.

545
00:29:30,040 --> 00:29:32,680
Now do I just pick one country
and that's the country I want to

546
00:29:32,680 --> 00:29:34,160
go to?
I don't think so.

547
00:29:34,360 --> 00:29:37,960
I think from now on you need to
be multi polar.

548
00:29:37,960 --> 00:29:41,760
You need to have a Japanese
partner, a Korean partner, a

549
00:29:41,760 --> 00:29:45,920
Chinese partner, a Indonesian
partner, a Arab partner, an

550
00:29:45,920 --> 00:29:47,960
Indian partner.
I mean, that would be fantastic.

551
00:29:48,280 --> 00:29:51,480
And then none of them have power
over you, but you have access to

552
00:29:51,480 --> 00:29:54,720
each bucket of capital depending
on what you want to build,

553
00:29:54,720 --> 00:29:57,680
expand, buy.
Because it's all different.

554
00:29:57,680 --> 00:29:59,920
It's all different costs and
it's all different terms and

555
00:29:59,920 --> 00:30:02,840
they're all different cultures.
When you think about the the

556
00:30:02,840 --> 00:30:04,800
mining companies that could
potentially do something like

557
00:30:04,800 --> 00:30:07,680
this, you'd have to be of some
sort of scale.

558
00:30:07,680 --> 00:30:10,560
And at least in the West,
there's really not that many

559
00:30:10,920 --> 00:30:14,800
mining companies that are of
sufficient scale that could have

560
00:30:14,800 --> 00:30:17,480
the bandwidth to set up
relationships in all the

561
00:30:17,480 --> 00:30:20,720
countries you've just mentioned.
Do you think I'm right in saying

562
00:30:20,720 --> 00:30:22,040
that?
Yeah.

563
00:30:22,040 --> 00:30:26,320
So I think Semitomo Metals just
put 5.5 million into Mirador,

564
00:30:26,320 --> 00:30:30,960
for example, in, you know, how,
how does that, how does that

565
00:30:30,960 --> 00:30:32,680
form?
How, how, how was that

566
00:30:32,680 --> 00:30:34,800
originated?
How many counterparties would

567
00:30:34,800 --> 00:30:38,280
have Mirador talked to before
they decided on, on that?

568
00:30:39,600 --> 00:30:41,240
I, I think it's really hard to
navigate.

569
00:30:41,240 --> 00:30:44,480
And then, you know, you go to
the Middle East and you can fly

570
00:30:44,480 --> 00:30:48,040
around for weeks.
And I mean, it's a big place.

571
00:30:48,200 --> 00:30:50,000
There's lots of cities and
they're all different countries.

572
00:30:50,000 --> 00:30:54,760
You know, it's not A and, and,
and you know, Asia's obviously

573
00:30:55,880 --> 00:30:58,000
very different depending on the
countries as well.

574
00:30:58,000 --> 00:31:01,960
And, and it's for a lot of the
companies, they, they, they,

575
00:31:01,960 --> 00:31:05,000
some, some of them will see a
lot of the, the counterparties,

576
00:31:05,000 --> 00:31:07,560
but they'll often be the traders
as opposed to the investment

577
00:31:07,560 --> 00:31:08,360
guys.
And so do you.

578
00:31:08,440 --> 00:31:10,800
Are you really talking to the
people that you need to talk to

579
00:31:10,800 --> 00:31:12,400
to influence an investment
decision?

580
00:31:13,440 --> 00:31:15,720
And and do you think one of the
other sort of ramifications of

581
00:31:15,720 --> 00:31:18,240
this multi polar world is
inflation?

582
00:31:22,080 --> 00:31:24,240
Yeah.
And undoubtedly, you know,

583
00:31:24,600 --> 00:31:28,320
because if we're reducing the
efficiency of the supply chain,

584
00:31:28,320 --> 00:31:31,080
then you're getting cost imposts
at every point.

585
00:31:31,080 --> 00:31:33,560
And the more closed you get, the
higher inflation you're going to

586
00:31:33,560 --> 00:31:37,400
get, particularly if you reduce
interest rates.

587
00:31:39,840 --> 00:31:42,280
You've got, you've got some,
some interesting views to share

588
00:31:42,280 --> 00:31:45,600
with us for me when we got up a
couple weeks ago, mate, just in

589
00:31:45,600 --> 00:31:51,080
relation to to how how people
might choose to combat inflation

590
00:31:51,080 --> 00:31:52,800
and look for store stores of
value.

591
00:31:52,800 --> 00:31:54,200
Do you mind sharing that?
Yeah, right.

592
00:31:54,240 --> 00:31:57,600
I, I'm, I mean, this is
obviously all very personal

593
00:31:59,400 --> 00:32:03,720
opinions, but you know, if I'm a
government anywhere else than

594
00:32:03,720 --> 00:32:06,680
the USII historically have just
looked to U.S.

595
00:32:06,680 --> 00:32:10,840
Treasuries as my store of value.
That's where most of the world

596
00:32:12,200 --> 00:32:15,080
look to store their value.
And, and now that's looking less

597
00:32:15,120 --> 00:32:20,000
certain and, and certainly you
don't want to have most of your

598
00:32:20,000 --> 00:32:22,160
wealth parked in that store of
value.

599
00:32:22,160 --> 00:32:26,440
And so gold and Bitcoin and
maybe silver are the first,

600
00:32:27,360 --> 00:32:30,600
first places to turn to because
there's no real alternative.

601
00:32:30,760 --> 00:32:35,640
Like a digital RnB currency is
not not ready and, and people

602
00:32:35,640 --> 00:32:39,280
aren't ready to accept that
wholesale yet.

603
00:32:39,280 --> 00:32:43,000
So, so where to next?
Because gold's only a certain

604
00:32:43,000 --> 00:32:47,640
size and it's already gone up
Bitcoin, not sure whether that's

605
00:32:47,680 --> 00:32:51,960
a store of value or of a, or a
good way to transfer value.

606
00:32:53,040 --> 00:32:55,880
But if I was a Middle Eastern
government, I would start buying

607
00:32:56,040 --> 00:32:58,280
and storing metals with positive
contango.

608
00:32:58,280 --> 00:33:03,800
So they're, you know, aluminium,
copper, zinc, nickel, and and

609
00:33:03,800 --> 00:33:07,560
that is a store of real wealth.
It can't be taken away from me

610
00:33:07,960 --> 00:33:09,920
because the property laws change
in a country.

611
00:33:09,920 --> 00:33:13,320
It, it, it can't, it's not going
to change because someone

612
00:33:13,320 --> 00:33:16,000
changes interest rates or I
can't move my money from here to

613
00:33:16,000 --> 00:33:17,520
there.
It is a real store of wealth.

614
00:33:17,520 --> 00:33:22,360
And I, I think that's probably
the next leg in in metals as

615
00:33:22,360 --> 00:33:27,520
everyone searches for somewhere
to put to park their reserves.

616
00:33:28,080 --> 00:33:31,840
That that has pretty real
borders to it as well because of

617
00:33:31,840 --> 00:33:35,000
the the physical kind of
constraints of of a lot of these

618
00:33:35,000 --> 00:33:37,280
things.
And you speak about doing it

619
00:33:37,280 --> 00:33:41,240
with gold, but gold being a, a
finite kind of market, it's the

620
00:33:41,240 --> 00:33:42,560
same issue with, with a lot of
these.

621
00:33:42,560 --> 00:33:45,840
So we're not there yet, but
they'll, they'll touch a

622
00:33:45,840 --> 00:33:49,200
boundary.
And if you know a a number of

623
00:33:49,200 --> 00:33:52,360
countries of significant wealth
tried to do this, you touch that

624
00:33:52,360 --> 00:33:54,360
boundary pretty pretty soon as
well, don't you think?

625
00:33:55,680 --> 00:33:57,800
Yeah, I think we're, we're
starting to see it.

626
00:33:57,800 --> 00:34:00,840
I mean, the, the, there's a lot
of economies that are slowing.

627
00:34:01,360 --> 00:34:03,480
You know, the industrial output
of China, for example, has

628
00:34:03,480 --> 00:34:08,120
slowed steels slowing, you know,
and that that naturally feeds

629
00:34:08,120 --> 00:34:11,560
into copper and other metals.
But but we're not necessarily

630
00:34:11,560 --> 00:34:16,000
seeing those metal prices weak,
I think because we are seeing a

631
00:34:16,000 --> 00:34:21,800
bit more storage that's off LME
and off, yeah, not public.

632
00:34:22,440 --> 00:34:26,239
When you say like like storing
the ones with positive contango,

633
00:34:26,239 --> 00:34:29,400
are you, are you talking about
any, any financial trades to, to

634
00:34:29,400 --> 00:34:31,480
go along with just buying the
physical and storing it or

635
00:34:31,480 --> 00:34:33,360
you're just you're just saying
that the ones with positive

636
00:34:33,360 --> 00:34:35,280
contango would be more
attractive in general?

637
00:34:36,159 --> 00:34:38,639
You could do.
I don't think you'd make it that

638
00:34:38,800 --> 00:34:42,080
complex necessarily.
You you just want to store your

639
00:34:42,080 --> 00:34:46,280
wealth in a diverse set of
assets, particularly ones that

640
00:34:46,280 --> 00:34:48,440
can't be taken away or don't
inflate away.

641
00:34:49,080 --> 00:34:51,440
That doesn't really matter what
inflation is when you've got

642
00:34:51,440 --> 00:34:54,800
metals, because that's going to
match or better inflation.

643
00:34:55,679 --> 00:34:58,440
This could have pretty, pretty
severe implications on metal

644
00:34:58,440 --> 00:35:01,160
prices in a in a pretty short
period of time if if you know,

645
00:35:01,160 --> 00:35:05,000
multiple, yeah, like Arab
countries come to a similar

646
00:35:05,000 --> 00:35:08,400
conclusion and a similar point
in time and start doing that.

647
00:35:09,680 --> 00:35:13,120
Yeah.
Even worse than that, if you

648
00:35:13,120 --> 00:35:16,080
think multi polarity could be
bad for inflation, what this

649
00:35:16,080 --> 00:35:20,400
could do to the the price of a a
computer, you know anything, a

650
00:35:20,400 --> 00:35:23,760
fan, an air conditioner be
pretty pretty huge.

651
00:35:24,280 --> 00:35:25,920
Right.
You know, I think we're living

652
00:35:25,920 --> 00:35:30,040
through the start of a of a
massive change in geopolitics,

653
00:35:30,040 --> 00:35:33,760
which is is exciting and
terrifying at the same time.

654
00:35:34,040 --> 00:35:37,440
And I, I tend to think with
these things that people don't

655
00:35:37,440 --> 00:35:40,360
really act until the the problem
is really in their face.

656
00:35:40,360 --> 00:35:41,920
So the problem has started to
happen.

657
00:35:41,920 --> 00:35:45,360
So the we've got.
To lower, we've got to lower

658
00:35:45,360 --> 00:35:47,240
interest rates, right, because
people don't think inflation is

659
00:35:47,240 --> 00:35:49,800
going to be an issue like.
Well, the the value of

660
00:35:50,040 --> 00:35:54,360
treasuries really has to start
deteriorating to a serious

661
00:35:54,360 --> 00:35:56,880
degree before people will act on
on these things.

662
00:35:56,880 --> 00:36:01,520
And maybe they diversify their
measure to euros, yen, Bitcoin,

663
00:36:01,520 --> 00:36:04,400
gold, and then you start to see
the metals kind of move.

664
00:36:04,520 --> 00:36:07,840
Yeah, I, I think it's, I mean,
look, there's a natural status

665
00:36:07,840 --> 00:36:11,440
quo bias that you want things to
remain the same because that's

666
00:36:11,440 --> 00:36:13,280
the easiest way to think about
the future.

667
00:36:13,840 --> 00:36:15,720
But ultimately they, they never
do.

668
00:36:15,720 --> 00:36:21,280
And it's usually long cycles,
but that means when they they

669
00:36:21,280 --> 00:36:26,120
shift, they shift big.
And and for the mining companies

670
00:36:26,120 --> 00:36:29,280
out there, this would in effect
pull up the bridge behind them.

671
00:36:29,280 --> 00:36:33,080
The ones that have built the
project would kind of get to the

672
00:36:33,080 --> 00:36:36,640
promised landish because they
are now receiving higher prices.

673
00:36:37,200 --> 00:36:40,280
But the builds to build a new
mine would go up significantly

674
00:36:40,520 --> 00:36:43,240
because or the input costs go
up.

675
00:36:43,240 --> 00:36:46,880
So it's it's got a kind of
compounding effect.

676
00:36:46,880 --> 00:36:49,840
So how do you think about the
the mining companies in this

677
00:36:49,840 --> 00:36:53,320
world?
So that's right.

678
00:36:53,320 --> 00:36:58,560
So you'd have inflation of
costs, but you'd also have a lot

679
00:36:58,560 --> 00:37:02,560
more M&A where it's not just
countries, it's going to be

680
00:37:02,560 --> 00:37:05,720
families and, and, and big
companies with big reserves,

681
00:37:05,720 --> 00:37:09,240
they want to store that wealth
and the gold in particular, but

682
00:37:09,400 --> 00:37:12,080
also other metals.
Buying metal in the ground is

683
00:37:12,760 --> 00:37:16,600
still metal, just not mine yet.
So that, that's still a hedge

684
00:37:16,600 --> 00:37:19,600
against inflation and
geopolitics.

685
00:37:19,600 --> 00:37:21,200
It's just that you're owning
land.

686
00:37:23,280 --> 00:37:27,040
So I, I think it's got big, big
positive implications.

687
00:37:27,040 --> 00:37:31,320
So, you know, and bringing this
back to maybe a mining company

688
00:37:32,760 --> 00:37:34,040
running a mining company is
hard.

689
00:37:34,560 --> 00:37:37,440
You know, it's, it's not just
the financials and it's, you

690
00:37:37,440 --> 00:37:41,160
know, it is native title, it is
regulatory.

691
00:37:41,160 --> 00:37:47,640
It is, you've got, you've got so
many moving pieces and it, you

692
00:37:47,640 --> 00:37:50,720
know, it's very, very difficult
to go from a explorer and a

693
00:37:50,720 --> 00:37:53,040
developer to actually
constructing a mine.

694
00:37:53,040 --> 00:37:55,680
But but please keep going
because, you know, I think the

695
00:37:55,680 --> 00:38:00,200
rewards will come.
And I, I feel like with all the

696
00:38:00,200 --> 00:38:02,960
topics we've spoken about,
Willow, there's one we need to

697
00:38:02,960 --> 00:38:06,840
piece in here and that's energy.
Because energy, when you think

698
00:38:06,840 --> 00:38:10,920
about like the cost of energy in
China versus the US and where

699
00:38:10,920 --> 00:38:13,200
that's kind of heading in a, in
a world trying to combat

700
00:38:13,520 --> 00:38:16,800
climate.
And it, it is a significantly

701
00:38:16,800 --> 00:38:19,440
moving part, especially if we
pull in the, the Arab states as

702
00:38:19,440 --> 00:38:22,600
well, which have a, a very cheap
cost of, of energy.

703
00:38:22,600 --> 00:38:27,000
So what ramifications do does
the price of energy have on all

704
00:38:27,040 --> 00:38:28,240
these things that you've been
thinking about?

705
00:38:28,320 --> 00:38:31,760
Well, I think it, it, it's so
yes, it's energy, but it's more

706
00:38:32,480 --> 00:38:36,880
using that as a concept.
So, So what the US was really

707
00:38:36,880 --> 00:38:41,000
good at in the 40s, fifties and
60s was underlying productive

708
00:38:41,000 --> 00:38:43,920
infrastructure, right?
And that includes energy.

709
00:38:44,680 --> 00:38:47,920
And so, you know, let's just
take a few of the, the, the

710
00:38:47,920 --> 00:38:51,120
building blocks, so the inputs
into some of these processing

711
00:38:51,680 --> 00:38:54,320
units.
So, you know, China has twice

712
00:38:54,320 --> 00:38:57,760
the electricity capacity of, of
the US that that is amazing.

713
00:38:57,760 --> 00:39:03,080
And building absolutely massive
infrastructure to, to underline

714
00:39:03,080 --> 00:39:08,160
that advantage.
It produces twice the chemical

715
00:39:08,160 --> 00:39:12,920
content that the US and EU does
combined, right?

716
00:39:12,920 --> 00:39:18,320
That that is just such a big
advantage in in unit cost in in

717
00:39:18,320 --> 00:39:23,600
rail freight, it's about twice
as big as the USI mean in mining

718
00:39:23,600 --> 00:39:26,840
engineers, there's 20,000 mining
engineers every year graduating

719
00:39:26,840 --> 00:39:33,640
in China, there's maybe 1000 in
in, you know, in Australia way

720
00:39:33,640 --> 00:39:35,520
less.
Yeah, exactly right.

721
00:39:36,400 --> 00:39:40,880
The scale is just a completely
different size.

722
00:39:40,880 --> 00:39:43,760
And all of that is in productive
capacity.

723
00:39:44,240 --> 00:39:49,000
It's not in super yachts and
it's not in watches and it's not

724
00:39:49,000 --> 00:39:51,680
in handbags anymore.
It is in productive capacity

725
00:39:51,800 --> 00:39:55,200
that is very, very powerful and
it and then it multiplies over

726
00:39:55,200 --> 00:39:59,680
the rest of the economy.
But China you'd imagine would

727
00:39:59,680 --> 00:40:03,480
want to get to that, that high
level where where brand attaches

728
00:40:03,480 --> 00:40:08,160
value and and you can become a a
service type economy like this

729
00:40:08,160 --> 00:40:11,160
is what all these other
countries did a while ago.

730
00:40:12,040 --> 00:40:16,880
So yes, and I guess we all sit
here going, oh, well, labour

731
00:40:16,880 --> 00:40:19,280
cost is cheaper in China.
It's not that much cheaper.

732
00:40:19,280 --> 00:40:23,080
In some ways it's it's more
expensive, but labour's not a

733
00:40:23,080 --> 00:40:26,680
key input into a lot of this
anymore because robotics is kind

734
00:40:26,680 --> 00:40:29,200
of taking out.
So where do we do we care

735
00:40:29,200 --> 00:40:33,800
whether robotics are in China or
the US or any other country?

736
00:40:33,800 --> 00:40:35,680
We don't.
All we really care about is the

737
00:40:35,680 --> 00:40:37,440
input.
The other input costs like

738
00:40:38,040 --> 00:40:42,440
electricity, chemicals, copper.
You know what?

739
00:40:42,480 --> 00:40:44,680
What makes robotics rarest?
Copper.

740
00:40:45,240 --> 00:40:48,520
Aluminium.
You know, where does 60% of the

741
00:40:48,520 --> 00:40:51,280
world's copper go to China. 6%
goes to the US.

742
00:40:54,640 --> 00:40:56,840
Jeez, has a a lot to think about
there.

743
00:40:58,000 --> 00:41:00,800
It man, there's a lot to reflect
on in the whole.

744
00:41:00,920 --> 00:41:04,640
Yeah, that entire bit, you know,
super fascinating.

745
00:41:04,640 --> 00:41:06,600
I feel like those are the themes
that are going to kind of define

746
00:41:06,600 --> 00:41:11,120
the next, next decade in, in our
industry geopolitics for sure.

747
00:41:12,520 --> 00:41:13,640
And yeah, I appreciate you
sharing them.

748
00:41:13,840 --> 00:41:17,960
We're going to pivot to talk
about some some news of the

749
00:41:17,960 --> 00:41:20,080
week.
And this this is like a

750
00:41:20,080 --> 00:41:22,040
relatively new, new thing we've
been doing, Willow.

751
00:41:22,040 --> 00:41:25,840
But grade control is one of the
segments where, you know, give a

752
00:41:25,840 --> 00:41:29,800
letter A to F on a on, on, on a
certain kind of corporate action

753
00:41:29,880 --> 00:41:31,200
of the week.
Are you up for that?

754
00:41:31,200 --> 00:41:33,000
Are you are you actually going
to give grades to companies?

755
00:41:33,000 --> 00:41:35,200
Yeah, because I'll give them all
A's because they're other

756
00:41:35,200 --> 00:41:40,240
clients.
Prospective clients, first up,

757
00:41:40,320 --> 00:41:46,280
BHB have signalled that Nickel W
is up for sale again now to give

758
00:41:46,280 --> 00:41:49,240
you a slight out.
You can yeah, you can get

759
00:41:49,240 --> 00:41:51,720
creative on, on the grading.
I'll, I'll, I'll say I'll leave

760
00:41:51,720 --> 00:41:55,680
it at that.
Well, I think all of the majors

761
00:41:55,680 --> 00:42:00,000
need to simplify like like Rio
just announced as well.

762
00:42:00,000 --> 00:42:05,640
And if they're not going to
productively develop and harness

763
00:42:05,640 --> 00:42:10,120
these assets, then let's try and
maximize value by by working out

764
00:42:10,120 --> 00:42:12,720
who's the best operator and
owner of those assets.

765
00:42:12,720 --> 00:42:16,640
So I think it's a great idea
that you concentrate on your

766
00:42:16,640 --> 00:42:19,320
most productive assets and give
someone else a chance on the

767
00:42:19,320 --> 00:42:23,920
others.
Yeah, I, I, I I'll give them,

768
00:42:23,960 --> 00:42:27,480
I'll give them an, an A when
they actually like transact you.

769
00:42:27,480 --> 00:42:30,480
I think they're going to have to
pay someone to take Nicola W off

770
00:42:30,480 --> 00:42:33,160
of them because of the, the
pretty inordinate rehab

771
00:42:33,160 --> 00:42:36,560
liability associated with, with
what's happened to Cam Ballot

772
00:42:36,560 --> 00:42:39,320
there.
But but I mean, this, you know,

773
00:42:39,600 --> 00:42:42,080
the return on capital they were
getting at in the nickel

774
00:42:42,080 --> 00:42:44,160
business, even in the years
before the nickel market went

775
00:42:44,160 --> 00:42:46,800
to, to ship with, with, with
like atrocious compared to the

776
00:42:47,160 --> 00:42:51,120
other parts of their business.
This, this wasn't like a a game

777
00:42:51,120 --> 00:42:55,040
changer for, for BHP.
It's like a social project to,

778
00:42:55,240 --> 00:42:58,440
to keep big employment in WA And
I think they were kind of stuck

779
00:42:58,440 --> 00:42:59,840
with it.
You know, they're finally going

780
00:42:59,840 --> 00:43:02,400
to part ways with it.
It'll be a a change for West

781
00:43:02,400 --> 00:43:03,920
Australians, but it's kind of
inevitable.

782
00:43:04,720 --> 00:43:08,840
So yeah, So what if no one buys
it and and then the government's

783
00:43:08,840 --> 00:43:11,320
forced to keep it I because why
doesn't BHP just go to the

784
00:43:11,320 --> 00:43:13,680
government, say, well, you gave
a handout to all of these guys

785
00:43:13,840 --> 00:43:15,320
did.
Yeah, they already did, right.

786
00:43:15,320 --> 00:43:18,360
That was like, you know, they,
they put the foot on the on the

787
00:43:18,360 --> 00:43:21,040
government's neck in the lead up
to them actually announcing that

788
00:43:21,040 --> 00:43:22,200
this would go into care
maintenance.

789
00:43:22,200 --> 00:43:24,840
I mean, I think the cost
involved to restart a smelter.

790
00:43:25,120 --> 00:43:28,360
But since, but since then, since
then to your point like near

791
00:43:28,360 --> 00:43:31,360
star and all these guys have
have got handouts and likely

792
00:43:31,360 --> 00:43:34,480
more handouts to kind of come.
So it's a a really sort of

793
00:43:34,480 --> 00:43:37,600
poignant question to to frame
and let's hope we don't get to

794
00:43:37,600 --> 00:43:39,600
that.
So what if the government comes

795
00:43:39,600 --> 00:43:42,280
back and says sorry, what if
there's the only buyer is

796
00:43:42,280 --> 00:43:46,520
Chinese of the smelter, not the
mines, and they've got the tech

797
00:43:46,520 --> 00:43:50,320
and the and the capital to fix
it and and create jobs.

798
00:43:50,320 --> 00:43:52,000
You know what?
You know what very interesting

799
00:43:52,000 --> 00:43:54,200
question is?
This the first big test of Ferb.

800
00:43:55,200 --> 00:43:56,360
That would that.
That'd be a.

801
00:43:56,520 --> 00:43:59,480
That would be a big test.
Yeah, that would be a big test.

802
00:43:59,480 --> 00:44:05,120
What the Chinese did with with
us for 30-40, fifty years was

803
00:44:05,120 --> 00:44:07,840
have joint ventures.
We would go there, there would

804
00:44:07,840 --> 00:44:11,320
be JVS and we would learn and
it's, you know, eating a bit of

805
00:44:11,320 --> 00:44:14,160
your own humble pie.
But bring them in and have it as

806
00:44:14,160 --> 00:44:16,240
a joint venture where we
actually learn why they can do

807
00:44:16,240 --> 00:44:19,680
stuff so much cheaper.
And, you know, maybe some of

808
00:44:19,680 --> 00:44:22,960
those things actually aren't
attainable for us, but there

809
00:44:22,960 --> 00:44:25,680
sure as hell will be a few
things that we can learn from,

810
00:44:25,720 --> 00:44:28,320
and that could potentially be
one way to put forward a

811
00:44:28,320 --> 00:44:30,160
solution.
Can you imagine the car industry

812
00:44:30,160 --> 00:44:34,000
in Australia without Toyota,
Mitsubishi, Nissan, GM and Ford?

813
00:44:35,760 --> 00:44:37,120
They don't have an industry.
Yeah.

814
00:44:37,720 --> 00:44:39,800
So maybe, maybe there's a bit of
that.

815
00:44:41,120 --> 00:44:44,160
Yeah, yeah, we might need to get
creative on a a solution and I'm

816
00:44:44,160 --> 00:44:47,040
sure BHP is already having to.
I'd, I'd actually, I'd actually

817
00:44:47,040 --> 00:44:49,640
prefer, you know, if you ever
prove that then and and see some

818
00:44:49,720 --> 00:44:52,560
other form of like government
handout or bail out here.

819
00:44:52,960 --> 00:44:54,440
That happens.
I'm changing my citizenship,

820
00:44:54,440 --> 00:44:55,920
mate.
I'm I'm done.

821
00:44:56,120 --> 00:45:00,840
Welcome to Singapore.
Does China need any citizen all?

822
00:45:03,360 --> 00:45:05,920
Right.
Next one that I want to talk

823
00:45:05,920 --> 00:45:09,440
about is, Wolf, just very
recently come out with the

824
00:45:10,040 --> 00:45:14,720
trading halt that Burkina wants
to up their stake in Kiaka

825
00:45:14,760 --> 00:45:17,640
subsidiary.
Yeah.

826
00:45:17,680 --> 00:45:21,280
What do you grade this one?
So it just underlines, well,

827
00:45:21,280 --> 00:45:23,560
that's greater than a because,
you know, they might be a client

828
00:45:23,560 --> 00:45:28,360
like, but it just underlines how
dangerous emerging markets are.

829
00:45:28,360 --> 00:45:33,480
I mean, Even so, it's very hard
for a junior to have any kind of

830
00:45:33,480 --> 00:45:36,360
political force in a country
like that.

831
00:45:36,800 --> 00:45:43,120
But even if you look at EGA and
their dispute with Guinea, I

832
00:45:43,120 --> 00:45:46,280
mean, Egas just pulled out and
they've had their license taken

833
00:45:46,280 --> 00:45:48,240
away.
That's 1.4 billion in capital

834
00:45:48,240 --> 00:45:51,760
that the UAE put into Guinea.
But I think someone in the UAE

835
00:45:51,760 --> 00:45:55,640
is going to notice.
And why did Guinea do that?

836
00:45:55,640 --> 00:45:59,040
Well, Gee, there's a few other
countries that have some

837
00:45:59,040 --> 00:46:00,640
influence over the Guinea
government, don't they?

838
00:46:00,640 --> 00:46:02,760
So.
Well, as I, as I understand it,

839
00:46:02,760 --> 00:46:05,360
they, they did fail to, to make
a few promises.

840
00:46:05,360 --> 00:46:09,560
So it's not completely black and
white in, in the Guinea Ghanaian

841
00:46:09,680 --> 00:46:12,040
scenario.
Yeah.

842
00:46:12,080 --> 00:46:15,640
I mean, I, I think you're,
you're bang on, right with, with

843
00:46:15,640 --> 00:46:19,160
regards to, to Wolf, like the,
the AM risk is something we've

844
00:46:19,160 --> 00:46:22,080
all kind of been aware of and
that's why they've traded at, at

845
00:46:22,080 --> 00:46:24,400
such a, a low multiple.
Like, yeah, they've had a great

846
00:46:24,400 --> 00:46:26,800
run the last sort of three
years, but we're they've

847
00:46:26,800 --> 00:46:29,640
executed phenomenally and they
are on the cusp of doubling

848
00:46:30,040 --> 00:46:33,480
their kind of production.
So very, very curious to see

849
00:46:33,480 --> 00:46:37,160
what the outcome is.
You love you love Wolf because

850
00:46:37,160 --> 00:46:40,880
you see the cash flow they make,
but you always like the the true

851
00:46:40,880 --> 00:46:42,760
test.
You talk about the true test

852
00:46:42,760 --> 00:46:44,680
affair, but the true test for
Wolf is like, can they ever get

853
00:46:44,680 --> 00:46:47,560
that money out?
They've had five of these types

854
00:46:47,560 --> 00:46:50,040
of things in the last few years,
and every time they just bounce

855
00:46:50,040 --> 00:46:52,040
back within a within a couple of
days they're.

856
00:46:52,200 --> 00:46:54,560
Like that's the, you know, like
there'll be a government coup,

857
00:46:54,560 --> 00:46:55,200
whatever.
And they do.

858
00:46:55,200 --> 00:46:57,200
You always buy the dip on the
coup coup order.

859
00:46:57,360 --> 00:46:58,480
Yeah, yeah, yeah.
But whatever.

860
00:46:58,480 --> 00:47:01,160
But there were was a change in
mining code, yeah as well.

861
00:47:01,160 --> 00:47:03,680
And this is like an, you know,
hey, yeah, you're not being

862
00:47:03,680 --> 00:47:05,960
grandfathered.
You're jumping on the new code.

863
00:47:05,960 --> 00:47:09,400
And let's see what sort of
valuable consideration turns out

864
00:47:09,400 --> 00:47:10,920
to be.
If they can't, if they can't

865
00:47:10,920 --> 00:47:15,560
spend the money like X like that
they make it at a kiaka and

866
00:47:15,560 --> 00:47:17,760
samrat.
If they can't spend that X

867
00:47:17,800 --> 00:47:22,760
Bikina farso then all they
inevitably do all they can

868
00:47:22,840 --> 00:47:25,600
inevitably do is just like
reinvest in the country, become

869
00:47:25,720 --> 00:47:28,840
a a larger portion of became a
fire associ GDP and become more

870
00:47:28,840 --> 00:47:30,560
beholden to the government in
the process.

871
00:47:30,560 --> 00:47:32,400
Like that's what.
You're.

872
00:47:32,400 --> 00:47:34,760
Yeah, yeah.
Exactly the same, Yeah, until

873
00:47:34,760 --> 00:47:36,800
recently.
Next up, what have we got?

874
00:47:36,880 --> 00:47:39,720
Mining services.
A bit of a slightly change in

875
00:47:39,720 --> 00:47:42,760
tech here, but the mining
services multiples have expanded

876
00:47:42,760 --> 00:47:46,320
dramatically in the last month
to to two months.

877
00:47:46,320 --> 00:47:49,400
Curious to to hear how closely
you pay attention to these ones,

878
00:47:49,400 --> 00:47:51,840
Willow.
Sure.

879
00:47:51,840 --> 00:47:56,680
So I, I think it's a, it's a
wide variety of different

880
00:47:56,880 --> 00:48:00,760
companies, right.
And if you're just doing dry

881
00:48:00,760 --> 00:48:05,280
hire, you know, big trucks that
are capital intensive and you're

882
00:48:05,280 --> 00:48:07,320
a small cap, you're never going
to win.

883
00:48:07,440 --> 00:48:10,320
That is never a win because your
cost of capital is always going

884
00:48:10,320 --> 00:48:13,680
to be too high to compete with
particularly McMahon, which now

885
00:48:13,680 --> 00:48:19,000
get the money from Indonesia,
Burma, Indonesia.

886
00:48:20,440 --> 00:48:25,680
How long will TS be around?
You know, so that, that big dump

887
00:48:25,680 --> 00:48:29,360
truck open pit stuff is, is
difficult and I suspect you'll

888
00:48:29,360 --> 00:48:35,080
see some other capital coming in
to support the existing players

889
00:48:35,080 --> 00:48:40,280
or, or, or form new players.
The, the, the industry leader

890
00:48:40,600 --> 00:48:45,160
is, is probably FLS myth in
which is a Danish company and

891
00:48:45,160 --> 00:48:47,880
that does a lot of the
processing equipment and gavares

892
00:48:47,880 --> 00:48:50,280
and a whole bunch of different
stuff.

893
00:48:50,280 --> 00:48:55,960
They trade on 9 1/2 times EBITDA
and it's 80% services, mining

894
00:48:55,960 --> 00:49:01,200
services mainly, but sorry the
the, the the other bit of that

895
00:49:01,200 --> 00:49:07,440
is that underground services are
completely different and it's

896
00:49:07,440 --> 00:49:12,200
really difficult to find skilled
underground people.

897
00:49:12,680 --> 00:49:16,320
The skill set of being an
underground, you know, mining

898
00:49:16,320 --> 00:49:18,440
service provider versus open pit
is very different.

899
00:49:18,560 --> 00:49:20,960
It's more specialized, being
underground and that

900
00:49:20,960 --> 00:49:24,000
specialization is scarce.
But the people who have that

901
00:49:24,000 --> 00:49:27,160
specialization, JD of
underground service providing or

902
00:49:27,160 --> 00:49:30,080
underground mining, they always
repeat one thing to me whenever

903
00:49:30,080 --> 00:49:33,320
I talk to them.
We use Sandvik ground support.

904
00:49:33,320 --> 00:49:35,960
It's the.
Mandrick Ground Support, Just

905
00:49:35,960 --> 00:49:38,600
like the best people want to
work with the best people, the

906
00:49:38,600 --> 00:49:41,360
best people also want to use the
best equipment in the industry

907
00:49:41,360 --> 00:49:46,160
and that is provided by the team
with the R&D squad at the

908
00:49:46,160 --> 00:49:48,280
cutting edge of technology
Sandwich ground.

909
00:49:48,280 --> 00:49:51,240
Support not just the best, the
best ground support mate, but

910
00:49:51,240 --> 00:49:54,800
the safest ground support, the
most innovative like you talk

911
00:49:54,800 --> 00:49:56,000
about.
And it goes.

912
00:49:56,120 --> 00:49:58,160
They too have the best team.
It's true, and it goes one step

913
00:49:58,160 --> 00:50:00,040
further.
They've also got manufacturing

914
00:50:00,040 --> 00:50:04,120
and distribution hubs in every
corner of the world, so they can

915
00:50:04,240 --> 00:50:06,960
get on the phone with you
quickly, or you can just put

916
00:50:06,960 --> 00:50:09,160
your order in through the new
app that they've got and they

917
00:50:09,160 --> 00:50:12,560
can get that out to you quick,
smart, so that you keep getting

918
00:50:12,560 --> 00:50:15,240
the tons out of the ground and
keep producing that metal that

919
00:50:15,240 --> 00:50:17,360
makes the world go round.
I don't think there's a ground

920
00:50:17,360 --> 00:50:19,520
that can't be supported by Sandy
ground support.

921
00:50:19,560 --> 00:50:25,120
Go Sandy ground support.
And and management teams and

922
00:50:25,800 --> 00:50:30,960
when we're talking to non
Australian capital providers, we

923
00:50:31,200 --> 00:50:35,200
every conversation is stop
looking at just the geology,

924
00:50:35,560 --> 00:50:38,560
start looking at the management
team that is going to produce

925
00:50:38,560 --> 00:50:41,120
the value.
Because a, a really good

926
00:50:41,120 --> 00:50:46,360
management team can produce huge
value out of a average geology.

927
00:50:47,000 --> 00:50:49,560
A bad management team can
destroy any geology.

928
00:50:49,840 --> 00:50:53,720
Is this, yeah, not, not all
mining services companies are

929
00:50:53,720 --> 00:50:55,680
the same.
Not all of them are are capital

930
00:50:55,680 --> 00:50:57,080
intensive.
A lot of them are.

931
00:50:57,080 --> 00:50:58,640
But like some of them, some of
them are capital light.

932
00:50:58,680 --> 00:51:00,160
Osinka, you had Zoomy on the
other day.

933
00:51:00,240 --> 00:51:02,640
Yeah, yeah.
And like, that's a, that's a,

934
00:51:02,840 --> 00:51:05,120
you know, great example of
parallel that is still listed on

935
00:51:05,120 --> 00:51:10,640
the ACX like G&G, like bring up
the chart, 4 bucks 40 trading on

936
00:51:10,640 --> 00:51:14,240
like I saw, I saw one broken
note trading on 24 times FY20, 6

937
00:51:14,240 --> 00:51:16,760
earnings now like kind of
remarkable multiples.

938
00:51:17,000 --> 00:51:19,560
But if you go back in time and
you know, back to us, when the

939
00:51:19,560 --> 00:51:21,760
period that Jimmy was talking
about with the Senko, the

940
00:51:21,760 --> 00:51:24,400
multiples of that he was talking
about with, with the Senko at

941
00:51:24,400 --> 00:51:26,320
one point in time were just
astronomical as well.

942
00:51:26,320 --> 00:51:28,760
Like we we have lived through an
era where mining services

943
00:51:28,760 --> 00:51:31,160
multiples like where we're
crazy.

944
00:51:31,320 --> 00:51:32,640
Where are all the new mine
builds?

945
00:51:32,640 --> 00:51:34,880
Yeah.
And, and, and now we're now

946
00:51:34,880 --> 00:51:37,560
we're seeing like ASX listed
mining services companies, both

947
00:51:37,560 --> 00:51:41,160
Capital Heavy and Capital Light
expanding pretty heavily on the

948
00:51:41,320 --> 00:51:43,200
you can see that on the focus
charts we'll bring up right now

949
00:51:43,200 --> 00:51:45,160
by market tech.
Yeah, I mean, it's great to see

950
00:51:45,160 --> 00:51:47,960
them actually get a bit of love.
So I'll give it an A for, for

951
00:51:47,960 --> 00:51:50,760
that because so many of these
companies, their share prices in

952
00:51:50,760 --> 00:51:53,440
the in the doldrums for years
and years and years.

953
00:51:53,440 --> 00:51:57,560
So you can expand that to
McMahon's like you mentioned MIH

954
00:51:57,560 --> 00:51:59,680
Parenti as well.
They're well north of 2 bucks

955
00:51:59,680 --> 00:52:01,360
now.
So they're all having their kind

956
00:52:01,360 --> 00:52:04,400
of day in the sun and want to
see how they how they capitalize

957
00:52:04,400 --> 00:52:06,280
on this opportunity if they if
they kind of can.

958
00:52:06,480 --> 00:52:11,160
Last, last one to give a grade
to Willow. 2 days ago was the

959
00:52:11,160 --> 00:52:14,640
20th anniversary of a very
interesting kind of corporate,

960
00:52:14,640 --> 00:52:16,520
corporate event in Australian
mining history.

961
00:52:17,120 --> 00:52:21,320
It was the 26th of August. 20
years ago was the the, the day

962
00:52:21,360 --> 00:52:25,400
in which Rio accidentally let
their Shavalana iron ore project

963
00:52:25,400 --> 00:52:29,160
tenements lapse.
This Junior Kazaley picked those

964
00:52:29,160 --> 00:52:30,840
up at the time.
Now then, then there was this

965
00:52:30,840 --> 00:52:32,240
big court battle that played
out.

966
00:52:32,720 --> 00:52:34,360
You know, you were, you're
paying attention to Marcus.

967
00:52:34,360 --> 00:52:36,480
I'm sure you remember this.
We had to learn about it in

968
00:52:36,480 --> 00:52:40,680
history books, but Rio ended up
kind of, you know, arguing about

969
00:52:40,680 --> 00:52:43,680
how this all played out.
Apparently something got like

970
00:52:43,680 --> 00:52:46,720
they wanted to, you know, renew
the tenements, but something got

971
00:52:46,720 --> 00:52:49,560
caught up at A at a post station
in like some remote part of

972
00:52:49,560 --> 00:52:52,840
Australia anyway, but it lapsed.
They did, you know, things in

973
00:52:53,040 --> 00:52:55,480
the and and because they only
picked them up in in short

974
00:52:55,480 --> 00:52:57,720
order.
Now, in the court battle that

975
00:52:57,720 --> 00:53:01,400
kind of played out, what what
Rio did is they argued that it

976
00:53:01,400 --> 00:53:04,680
was in the public interest for
the tenements to be given back

977
00:53:04,920 --> 00:53:07,640
to them, even though they they
lapsed.

978
00:53:08,040 --> 00:53:10,200
And they suggested that they
would, they would develop these

979
00:53:10,200 --> 00:53:13,000
tenements, not themselves, but
they do an asset swap with BHP

980
00:53:13,000 --> 00:53:16,080
because Shavalana is in BHP
territory surrounded by BHP

981
00:53:16,680 --> 00:53:18,400
infrastructure, not Rio's
infrastructure, right?

982
00:53:19,200 --> 00:53:21,000
So OK, we're, we're going to
develop it.

983
00:53:22,000 --> 00:53:26,480
And amazingly, right, the
ministerial decision comes in

984
00:53:26,480 --> 00:53:29,800
the minister, the minister kind
of overrides everything and

985
00:53:29,920 --> 00:53:34,160
gives the tenements back to Rio
Tinto 20 years later.

986
00:53:34,800 --> 00:53:36,600
Well, by the way, because they
only had to pay the Rio, the,

987
00:53:36,640 --> 00:53:39,800
the legal costs for, for Rio. 20
years later, Rio, Rio Tinto's

988
00:53:39,800 --> 00:53:42,240
still not done an asset swap
with BHP.

989
00:53:43,320 --> 00:53:45,720
The, the project is undeveloped
and it's, and it's worthy of

990
00:53:45,720 --> 00:53:48,840
being developed like the grade
this project is, you know, it's,

991
00:53:49,000 --> 00:53:51,320
it's, it's above the average
grade that the majors are

992
00:53:51,320 --> 00:53:53,960
producing today by, you know,
substantial margin and great

993
00:53:53,960 --> 00:53:58,320
impurities and the likes.
So how do you, how do you, how

994
00:53:58,320 --> 00:54:02,080
do you rate Rio Tinto and, and
the government on, on this, on

995
00:54:02,240 --> 00:54:05,280
the decision to actually give
the tenements back to Rio Tinto

996
00:54:05,280 --> 00:54:10,040
A plus?
For Rio, obviously, and special

997
00:54:10,040 --> 00:54:14,320
mention to the lobbyists.
They earned their fees there,

998
00:54:14,560 --> 00:54:16,640
yeah.
And I and I don't think we need

999
00:54:16,640 --> 00:54:19,760
to mark the government, do we?
That's, you know, that's above

1000
00:54:19,760 --> 00:54:22,160
all of that.
We can mark the government here.

1001
00:54:22,160 --> 00:54:25,280
Yeah, that's an F for for the
Australian government that was

1002
00:54:25,800 --> 00:54:28,360
clearly not in the in the
national interest and.

1003
00:54:29,240 --> 00:54:31,520
Joint F.
Because I like to have to pay

1004
00:54:31,520 --> 00:54:34,200
the legal fees for, for just
being smart and on the ball.

1005
00:54:34,800 --> 00:54:35,680
Yeah.
Yeah.

1006
00:54:35,680 --> 00:54:38,720
A fascinating 1.
All right, let's move into sweet

1007
00:54:38,720 --> 00:54:40,800
and sour deal.
We've got a few to to run

1008
00:54:40,800 --> 00:54:43,040
through here.
I want to start with capital

1009
00:54:43,040 --> 00:54:44,800
raises because we've had a few
juicy ones.

1010
00:54:45,160 --> 00:54:49,800
First and foremost, Linus, $750
million.

1011
00:54:50,320 --> 00:54:52,600
These guys are kept at nearly
$14 billion today.

1012
00:54:52,600 --> 00:54:55,160
The share prices run
dramatically.

1013
00:54:55,920 --> 00:54:58,800
I, I, I'm kind of gobsmacked by
this one.

1014
00:54:58,800 --> 00:55:01,920
How do you sort of think about
this sweet or sour deal and and

1015
00:55:01,920 --> 00:55:02,920
what are your thoughts on it,
Willow?

1016
00:55:04,600 --> 00:55:06,240
Great time to raise capital.
So.

1017
00:55:06,600 --> 00:55:08,920
So why not?
Particularly when there's a

1018
00:55:08,920 --> 00:55:11,960
whole bunch of public capital
coming in to help a lot of the

1019
00:55:11,960 --> 00:55:15,200
other potential competitors.
And that's probably not going to

1020
00:55:15,200 --> 00:55:18,720
be positive for Linus's profits,
are they?

1021
00:55:18,720 --> 00:55:22,560
So yeah, let's raise capital.
I, I think you're right.

1022
00:55:22,600 --> 00:55:25,240
I mean, this is just over 5%
dilution that is.

1023
00:55:25,280 --> 00:55:27,840
Right, It's a great deal for
them raise the money while yeah,

1024
00:55:27,920 --> 00:55:29,520
like.
Feed the ducks while they quack.

1025
00:55:29,520 --> 00:55:32,760
What'd you say they were?
They were trading at 24 times

1026
00:55:32,760 --> 00:55:35,040
last 12 months for revenue.
Like.

1027
00:55:35,760 --> 00:55:39,440
Just reported $8 million.
Capital intensive business, it's

1028
00:55:39,440 --> 00:55:41,440
truly, truly remarkable
valuation if you.

1029
00:55:41,720 --> 00:55:43,960
They trade on a big premium to
the Chinese rare earth

1030
00:55:43,960 --> 00:55:45,840
companies, by the way.
So that's fantastic.

1031
00:55:45,840 --> 00:55:47,640
That's.
Yeah, there you go.

1032
00:55:47,840 --> 00:55:51,880
Are they worth it?
I'm I'm not an equity adder.

1033
00:55:53,440 --> 00:55:57,960
Of course, OK, Cyprium, this one
more in your in your wheelhouse

1034
00:55:57,960 --> 00:56:02,560
in the sense that the Tenito
group took a 9.9% shareholding.

1035
00:56:02,560 --> 00:56:05,760
They upsized this from a $60
million raise to an $80 million

1036
00:56:05,760 --> 00:56:08,520
raise.
They were a $60 million market

1037
00:56:08,520 --> 00:56:10,560
cap coming into this raise.
They.

1038
00:56:10,600 --> 00:56:11,880
Did have a fair bit of debt
though.

1039
00:56:11,880 --> 00:56:13,640
There was a combination of the
con notes.

1040
00:56:13,640 --> 00:56:15,040
And they'll pay down some of
that with this.

1041
00:56:15,040 --> 00:56:16,920
Yeah, yeah, yeah.
Sweet or sour deal?

1042
00:56:18,040 --> 00:56:23,160
Sweet, wait for them, raise the
capital, organise the capital

1043
00:56:23,160 --> 00:56:25,640
structure so that they can fight
another day.

1044
00:56:26,800 --> 00:56:32,320
If bringing in a family like
that is is a better way to get a

1045
00:56:32,320 --> 00:56:34,880
better outcome for the equity
raise and lower your cost of

1046
00:56:34,880 --> 00:56:36,760
capital, then that's what you
got to do.

1047
00:56:37,360 --> 00:56:41,000
Do you think, do you think doing
the, the, that you know, the

1048
00:56:41,000 --> 00:56:45,600
equity raise at the corporate
level was you know, and, and the

1049
00:56:45,600 --> 00:56:47,280
dilution involved and everything
like that, Like could they have

1050
00:56:47,280 --> 00:56:50,520
structured something differently
at the asset level or do you

1051
00:56:50,520 --> 00:56:53,440
think you think it's the
structuring is fine as is?

1052
00:56:53,560 --> 00:56:57,760
Maybe, but there's a whole lot
of issues with the capital

1053
00:56:57,760 --> 00:57:01,560
structure already with the
offtake and and other parts of

1054
00:57:01,560 --> 00:57:05,560
how they acquired that asset.
So I, I think they were probably

1055
00:57:06,480 --> 00:57:09,840
their hands were tied and and
equity was the easiest way to

1056
00:57:09,880 --> 00:57:12,160
address it.
Gotcha.

1057
00:57:12,320 --> 00:57:13,600
Fair enough.
I'll give it a yeah, I'll give

1058
00:57:13,600 --> 00:57:15,600
it a good deal as well.
Yeah.

1059
00:57:15,600 --> 00:57:17,840
I mean, it was, it was done at a
pretty tight discount and

1060
00:57:17,960 --> 00:57:21,160
they've raised an enormous
amount of equity relative what

1061
00:57:21,160 --> 00:57:23,840
their market cap like was and
you don't always get to do that

1062
00:57:23,840 --> 00:57:25,640
at a pretty tight discount.
Yeah, good deal.

1063
00:57:25,640 --> 00:57:29,000
Markets are open and take take
the capital and see if the the

1064
00:57:29,000 --> 00:57:30,720
asset can move one step closer
to production.

1065
00:57:32,040 --> 00:57:35,680
I don't even want to mention the
other two really, but some more

1066
00:57:35,680 --> 00:57:38,600
troubled kind of company supreme
historically troubled companies.

1067
00:57:38,600 --> 00:57:40,720
Well, don't worry.
But like Peninsula raising 70

1068
00:57:40,720 --> 00:57:43,200
million bucks, they've just had
a whirlwind of issues in

1069
00:57:43,200 --> 00:57:46,400
relation to production woes
combined with, you know,

1070
00:57:46,400 --> 00:57:51,400
contracted revenue and core if
you they, they raised 50 million

1071
00:57:51,400 --> 00:57:54,880
bucks this week as well.
Any thoughts on on either of

1072
00:57:54,880 --> 00:58:02,320
those 2 Willow?
No, but when the ducks are

1073
00:58:02,320 --> 00:58:04,040
quacking you, you, you raise
equity.

1074
00:58:04,040 --> 00:58:08,800
That's and I, I just question,
you know, so for all of these

1075
00:58:08,800 --> 00:58:11,920
companies that are raising a bit
of equity, but maybe not enough

1076
00:58:11,920 --> 00:58:15,240
to get them to the next step.
I mean, what's, what's the next

1077
00:58:15,240 --> 00:58:16,760
step?
You know, you've raised enough

1078
00:58:16,760 --> 00:58:20,160
to kind of just keep it going.
How do you get to the next step?

1079
00:58:20,160 --> 00:58:25,280
You coming back to the market?
Bit of a hope strategy, right?

1080
00:58:25,280 --> 00:58:28,200
Like they are taking advantage
in the core example that the

1081
00:58:28,200 --> 00:58:31,640
lithium price has has kicked up,
kicked up, but do you just have

1082
00:58:31,640 --> 00:58:34,920
to wait for the next kick up?
Well, maybe you wait for the

1083
00:58:34,920 --> 00:58:36,400
next kick up to raise the
capital.

1084
00:58:36,400 --> 00:58:42,400
You really need to to to to
achieve all all your your plans.

1085
00:58:44,200 --> 00:58:46,800
Yeah, I think on that point
you've kind of got to give them

1086
00:58:46,800 --> 00:58:50,000
credit for taking the hit and
getting the capital on board.

1087
00:58:50,040 --> 00:58:52,400
Yeah, but it does leave you in a
bit of no man's land there.

1088
00:58:52,400 --> 00:58:56,000
In a sense, the Peninsula 1 was
like a, you know, a coalescence

1089
00:58:56,000 --> 00:58:58,880
of various the buckles all come
in head to head.

1090
00:58:58,880 --> 00:59:01,600
So I want to see how they they
move forward from here.

1091
00:59:01,760 --> 00:59:05,600
They've had a few final raises,
but they they they have the

1092
00:59:05,600 --> 00:59:07,840
strategy of keep coming back,
unfortunately.

1093
00:59:08,440 --> 00:59:10,640
So yeah, hopefully this one is
the last one for them.

1094
00:59:11,800 --> 00:59:15,880
I'm going to give, I actually,
I'm going to give these ones a a

1095
00:59:16,120 --> 00:59:21,640
day just because when the ducks
are cracking like you, you raise

1096
00:59:21,640 --> 00:59:23,120
equity.
I get that.

1097
00:59:23,120 --> 00:59:25,600
But I do think when you have the
preponderance of equity raises,

1098
00:59:25,600 --> 00:59:29,480
it actually, it actually dilutes
the total capital.

1099
00:59:29,640 --> 00:59:31,600
Like like there's there's so
much capital willing to

1100
00:59:31,600 --> 00:59:34,000
participate in the space.
What can that capital do?

1101
00:59:34,000 --> 00:59:37,000
It can participate in, in equity
raises of like, I don't know,

1102
00:59:37,000 --> 00:59:41,280
mediocre opportunities or it can
find a home in companies and

1103
00:59:41,280 --> 00:59:43,720
development opportunities that
that have legs.

1104
00:59:43,760 --> 00:59:46,920
And I don't love seeing huge
raises for mediocre projects

1105
00:59:46,920 --> 00:59:52,600
because like it, yeah, it just
kind of cannibalizes long run

1106
00:59:52,600 --> 00:59:54,000
capital availability in my
opinion.

1107
00:59:54,720 --> 00:59:56,000
So I'll give them, I'll give
them AD.

1108
00:59:56,000 --> 00:59:57,240
Controversial.
Yeah.

1109
00:59:58,680 --> 01:00:02,360
All right, projects not yeah.
All righty, let's talk about a

1110
01:00:02,360 --> 01:00:04,240
couple of hidden gems.
I know you've got a few thoughts

1111
01:00:04,240 --> 01:00:07,760
on this front.
Willow books or podcasts or

1112
01:00:08,320 --> 01:00:11,600
places of interest that have
sprung up recently that you you

1113
01:00:11,600 --> 01:00:15,080
want to share?
Perth weather's colder than I

1114
01:00:15,080 --> 01:00:18,320
thought.
We're coming out the back end of

1115
01:00:18,320 --> 01:00:21,400
it, don't worry.
I well, not, not really.

1116
01:00:21,400 --> 01:00:27,160
I, you know, I'm, I'm a big
reader and listen to podcasts a

1117
01:00:27,160 --> 01:00:31,080
lot and, you know, a few books
came to mind that would might be

1118
01:00:31,080 --> 01:00:33,040
helpful that I, I thought were
really good.

1119
01:00:34,160 --> 01:00:36,360
Goliath.
What's that about?

1120
01:00:36,640 --> 01:00:40,880
Goliath is about the history of
antitrust in the US, which

1121
01:00:40,920 --> 01:00:44,800
basically shows the long term
cycles from the mid 1800s

1122
01:00:44,800 --> 01:00:47,040
through to now and how the
governments have kind of

1123
01:00:47,040 --> 01:00:49,400
managed, you know, to break up
Standard Oil and put it back

1124
01:00:49,400 --> 01:00:53,280
together and Busters.
So and, and it goes just beyond

1125
01:00:53,280 --> 01:00:56,920
blue and red, but but to much
longer term cycles.

1126
01:00:56,920 --> 01:01:00,120
And we're in one at the moment.
It's fascinating to them, you

1127
01:01:00,120 --> 01:01:02,960
know, to look at the 30s and
look at now and it's very, very

1128
01:01:02,960 --> 01:01:07,160
similar.
You know, in 1923, Andrew Mellon

1129
01:01:07,160 --> 01:01:09,640
had a monopoly of aluminium.
Well, what's the first thing

1130
01:01:09,640 --> 01:01:12,360
when he became, believe it or
not, Finance Secretary?

1131
01:01:12,360 --> 01:01:14,680
Well, put up tariffs for
aluminium.

1132
01:01:14,680 --> 01:01:16,720
That's easy.
Yeah.

1133
01:01:19,920 --> 01:01:21,520
That is great.
That one's going on the list.

1134
01:01:21,760 --> 01:01:24,840
Any other?
Oh, sorry, history of uranium.

1135
01:01:25,040 --> 01:01:27,360
I might just give me one minute
on this.

1136
01:01:27,360 --> 01:01:30,800
It's fascinating.
So World War Two, biggest

1137
01:01:30,800 --> 01:01:33,200
producer of uranium in the world
is DRC.

1138
01:01:33,600 --> 01:01:35,280
Fine.
It's owned by Belgium.

1139
01:01:36,120 --> 01:01:39,360
Germany invade Belgium, first
thing they do is bring down some

1140
01:01:39,360 --> 01:01:41,880
ships to DRC and go, where's the
uranium?

1141
01:01:42,360 --> 01:01:44,000
And they've gone.
Oh no, they've taken another

1142
01:01:44,000 --> 01:01:45,920
flood on the mines.
It's all all gone.

1143
01:01:46,440 --> 01:01:50,520
And a couple of weeks later the
the Belgian delegation turns up

1144
01:01:50,520 --> 01:01:53,800
in in the US and goes, we've,
we've got something you might

1145
01:01:53,800 --> 01:01:55,440
want.
It's a whole bunch of uranium.

1146
01:01:55,440 --> 01:01:57,240
They go, no, no, we've got
plenty which we don't need any

1147
01:01:57,240 --> 01:01:58,960
of that.
And they go, that's fine, here's

1148
01:01:58,960 --> 01:02:03,120
my card if you need some of it
later, you've got my number.

1149
01:02:03,880 --> 01:02:06,360
About six months later they go,
yeah, OK, we get it.

1150
01:02:06,880 --> 01:02:08,400
We'd like that.
Please, please come in.

1151
01:02:08,400 --> 01:02:11,560
Let's talk about it.
And so he, he comes in and they

1152
01:02:11,720 --> 01:02:14,280
negotiate price, which I, I
figured that maybe it was $20

1153
01:02:14,280 --> 01:02:18,080
billion, the biggest ever
foreign deal that the US had

1154
01:02:18,080 --> 01:02:21,160
done at the time, you know,
confirm that the money has

1155
01:02:21,160 --> 01:02:23,520
changed hands and, you know, the
US has gone right.

1156
01:02:23,520 --> 01:02:24,600
Well, where is it?
Where is it?

1157
01:02:24,600 --> 01:02:27,200
And he's throwing the keys
across the table and goes down

1158
01:02:27,200 --> 01:02:31,160
in dock 46.
That's such a great story.

1159
01:02:31,160 --> 01:02:33,600
Yeah, that one's definitely
going on the list.

1160
01:02:33,640 --> 01:02:34,760
You've you've got a few others
there.

1161
01:02:34,760 --> 01:02:38,680
We that's to get chip wars.
Yeah, well, most people have

1162
01:02:38,680 --> 01:02:42,320
read Chip Wars, which kind of
talks about the, the, the

1163
01:02:42,360 --> 01:02:44,400
semiconductor supply chain,
which is fascinating.

1164
01:02:44,400 --> 01:02:49,960
It has a lot of similarities or
rhymes a lot with a lot of the

1165
01:02:49,960 --> 01:02:53,320
metals supply chains.
Choke Points, which is written

1166
01:02:53,320 --> 01:02:57,000
by the same guy, which talks
about the, the financial or

1167
01:02:57,000 --> 01:03:02,880
economic war that that countries
wage against each other.

1168
01:03:02,880 --> 01:03:06,120
And you know, the US, China
thing's pretty, pretty

1169
01:03:06,120 --> 01:03:10,080
interesting for that at the
moment. 2 that are kind of

1170
01:03:10,080 --> 01:03:15,160
unrelated to mining, the
brilliant abyss, which is all

1171
01:03:15,160 --> 01:03:20,480
about under the sea, which when,
when we think about seabed

1172
01:03:20,480 --> 01:03:23,680
mining, which I'm, I, I think is
a good idea in some

1173
01:03:23,680 --> 01:03:27,640
circumstances.
We've destroyed so much of the

1174
01:03:27,640 --> 01:03:30,680
sea thus far.
It's just important to kind of

1175
01:03:30,680 --> 01:03:33,720
understand what we're destroying
before we just blindly go and do

1176
01:03:33,720 --> 01:03:36,240
it.
I'm not saying seabed mining

1177
01:03:36,240 --> 01:03:38,280
definitely does that because it
doesn't in most cases.

1178
01:03:38,280 --> 01:03:42,760
But the other one is the hidden
life of trees.

1179
01:03:42,760 --> 01:03:47,280
So I love this stuff.
So it's about old growth forests

1180
01:03:47,280 --> 01:03:49,720
and how they communicate over,
over thousands of years.

1181
01:03:49,720 --> 01:03:52,680
You know, they support all just
so that each tree has

1182
01:03:52,680 --> 01:03:56,040
personalities and they support
old stumps that died for, you

1183
01:03:56,040 --> 01:03:59,560
know, sometimes 200 and 5300
years and others that they don't

1184
01:03:59,560 --> 01:04:02,040
like they'll just let die.
It's pretty cool.

1185
01:04:02,800 --> 01:04:05,080
That's remarkable.
I'll have to.

1186
01:04:05,080 --> 01:04:06,600
I'll have to do a bit of reading
myself there.

1187
01:04:06,640 --> 01:04:08,760
You're student of history.
I also love it.

1188
01:04:08,880 --> 01:04:13,480
How how is how's the history
there going to, you know, inform

1189
01:04:13,480 --> 01:04:17,800
any any decisions or oppositions
you make right now?

1190
01:04:19,160 --> 01:04:22,040
Well, the, sorry, the book I
don't have in here is called

1191
01:04:22,040 --> 01:04:26,720
Range, which compares, I'll get
back to Question, which compares

1192
01:04:26,840 --> 01:04:29,280
Federer to Tiger Woods and how
they were brought up.

1193
01:04:29,280 --> 01:04:32,520
So Federer had played, I don't
know, 20 different sports and

1194
01:04:32,520 --> 01:04:35,040
then, you know, just decided, Oh
well, I might as well play

1195
01:04:35,040 --> 01:04:36,720
tennis.
And, and that's why he's so

1196
01:04:36,720 --> 01:04:39,360
naturally skilled.
But Tiger Woods only ever played

1197
01:04:40,480 --> 01:04:43,360
golf.
But I think just all of these

1198
01:04:43,360 --> 01:04:45,720
inputs, so, you know,
understanding equity markets,

1199
01:04:45,720 --> 01:04:48,640
understanding industrials, not
just mining, because a lot of

1200
01:04:48,640 --> 01:04:50,280
people in mining have only ever
done mining.

1201
01:04:50,280 --> 01:04:53,120
They haven't, you know,
understand different languages,

1202
01:04:53,120 --> 01:04:58,000
different countries, different
systems and, and, and read

1203
01:04:58,000 --> 01:05:00,520
broadly.
That gives you a lot more pieces

1204
01:05:00,520 --> 01:05:03,400
of the puzzle that you can put
together to form a solution

1205
01:05:03,400 --> 01:05:05,520
that.
Disciplinary Learning.

1206
01:05:06,120 --> 01:05:09,440
Yeah.
And a couple podcasts to to wrap

1207
01:05:09,440 --> 01:05:12,040
it up.
Oh, the rest is history and an

1208
01:05:12,040 --> 01:05:14,360
empire with great, great
stories.

1209
01:05:14,360 --> 01:05:17,600
But they're running out of
history now. 600 episodes in.

1210
01:05:17,960 --> 01:05:23,480
Yeah, and multipolarity is a
pretty, pretty honest take on on

1211
01:05:23,480 --> 01:05:27,680
China, US relativity and and EU
politics, and that's pretty

1212
01:05:27,680 --> 01:05:29,360
cool.
All right on on the theme of

1213
01:05:29,360 --> 01:05:32,320
podcast, most people have sort
of speaking spoken with.

1214
01:05:32,320 --> 01:05:34,720
I would have rambled about this
one, but founders is a a

1215
01:05:34,720 --> 01:05:39,840
fantastic pod and on the book
front in it recently read the

1216
01:05:39,840 --> 01:05:43,320
big rich on the Texan oil
families, the four families that

1217
01:05:43,320 --> 01:05:46,080
dominated that over the last
hundred 150 years was

1218
01:05:46,680 --> 01:05:49,120
fascinating.
A lot of parallels with with

1219
01:05:49,200 --> 01:05:54,760
resources and with Texas.
There's seemingly a lot of

1220
01:05:54,760 --> 01:05:58,040
relatability to to WA and our
uniqueness, which is was

1221
01:05:58,080 --> 01:06:02,720
fascinating and read over the
weekend, The rise and fall of

1222
01:06:02,720 --> 01:06:04,880
Alan Bond.
An interesting kind of take, but

1223
01:06:05,080 --> 01:06:09,840
awesome to learn about WA in in
the Sixties, 70s and 80s and and

1224
01:06:09,840 --> 01:06:11,880
that kind of era.
So there's a couple in the mix.

1225
01:06:12,360 --> 01:06:14,080
Thank you so much for joining
us, Willow.

1226
01:06:14,200 --> 01:06:17,040
The the way you think and the
experiences you sort of bring to

1227
01:06:17,040 --> 01:06:19,640
the table are, are fascinating
and make for, for such a rich

1228
01:06:19,640 --> 01:06:20,960
conversation.
So appreciate you making the

1229
01:06:20,960 --> 01:06:22,880
time for us.
Yeah, thanks for having me and

1230
01:06:22,960 --> 01:06:24,960
congratulations on a great,
great show.

1231
01:06:24,960 --> 01:06:25,680
Do.
You wanna do?

1232
01:06:25,720 --> 01:06:26,920
You wanna help us?
Thank our partners.

1233
01:06:26,920 --> 01:06:28,000
Willow, you can hang out for
this.

1234
01:06:28,000 --> 01:06:29,520
Our show.
Thank you so much to our

1235
01:06:29,520 --> 01:06:31,400
partners, mate.
We've got our Axis Mineral

1236
01:06:31,400 --> 01:06:33,320
Services.
They're crush rocks from big to

1237
01:06:33,320 --> 01:06:35,360
small.
They do sand bit ground support

1238
01:06:35,360 --> 01:06:37,520
the the only name you need to
know in the ground support

1239
01:06:37,520 --> 01:06:40,440
industry.
Africa down under tickets up for

1240
01:06:40,440 --> 01:06:42,560
sale right now.
Conference is next week from

1241
01:06:42,560 --> 01:06:44,880
September 3rd to 5th.
And last but not least, mate.

1242
01:06:45,080 --> 01:06:48,040
Focused by market deck Uduru
Uduru Uduru.

1243
01:06:48,240 --> 01:06:50,080
I'm an idiot.
JD is an idiot.

1244
01:06:50,440 --> 01:06:52,520
If you thought any of this was
anything other than

1245
01:06:52,520 --> 01:06:55,200
entertainment, you're an idiot
and you need to read out a

1246
01:06:55,200 --> 01:06:55,680
disclaimer.