How Low Will MinRes Go?

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Righto buddy Miners is I tipped
all the bloody MD's out there

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today 'cause it's right across
the screen.

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I'd start drinking.
You'll feel you'll feel better.

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Oh, I feel better every time I
talk.

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Just say the word axis mine and
technology, the trusted advisor

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and drill all survey
instrumentation.

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But you can't.
Oh, we'll be selling them an

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idea too, right?
Everyone's gone to idea Special

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Special mentioned coming.
The one company that doesn't

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have a bad day.
Access, Access never just NE all

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day long, right?
We're getting to the end of

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earnings and holy snap and duck
shit, there's some, there's red

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on the screen even for people
that didn't have bad

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announcements, but and there's a
few that we're going to go

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through that just aren't really
hitting the mark.

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You'd say, unfortunately, we've
got Trav.

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You're going to no doubt do min
Reds.

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Mate, I'd call it a lot worse
than not hitting the mark.

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I call it a reckoning.
JD you got CR 32.

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Yeah, a bit, a bit lighter on
and then I think Ali's going to

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get into the Goldies.
Very good.

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Bitter red and bitter West gold.
I'm I'm a light start today, so

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I'll just be here cracking
jacks.

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And we've got a bit of a copper
chat coming out tomorrow, which

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actually is.
Yeah, it was.

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It was good fun with former
guest Ahmad.

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So that was a good one.
Look out for that.

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He's an easy ring in, isn't he?
Like love you.

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Love your bloody work, Ahmed.
Absolutely.

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Later away, Trav min raise.
You got up early for the call

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this morning and she's down,
what, 10% on the Spark chart?

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Mate, it's.
That's a fucking lot of money.

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It's brutal.
It's, it's a, it's a horrible

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intraday move for a company that
big on it, on it, you know,

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results, you know, and keep in
mind results will come a month

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after a quarterly.
You, you hope a lot of the, the

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bad news, you sort of cleansed
and then you deliver your

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results and you're down 10%
more.

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So there's a few wrinkles today.
And it's, I think it's, it's a

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big evolving story.
What's what's going on at

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Minres?
And I'm keen to unpack it in the

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best way possible, Maddie.
But you know, I don't want to, I

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don't want to kind of understate
the significance either because

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I just think this is, yeah, this
is, this is a big deal.

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Maybe a quick caveat on like
the, the differences between the

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the quarterlies and just about
and the earnings because you,

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you might notice the, the
majors, the the BHBS of the

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world, they'll come out with
the, the annual and the half

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year.
They're not under the same

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basket as a lot of the juniors
that we see who are required to

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come out with these
announcements, which is kind of

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specific for oil and gas and
Hard Rock mining exploration

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businesses.
They come out with the

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quarterlies, but you know, you
get a much deeper look into the

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financials of the business when
the the annual results and the

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half year results come out.
And then of course like a min

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res, we'll do quarterly numbers
and you'll get the update on the

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the broader strokes.
What happened on a financial

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front.
Do you know the, the operating

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costs these sorts of things as
well as the, the production

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numbers for the, the yeah
commodities?

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And guidance is a big one too.
The market's forward looking.

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Guidance and more clarity on
debt more than phone.

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Yeah, exactly.
Way more deep, yeah.

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Yeah, exactly.
You get the balance.

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Sheet and you get cashless trade
payables and stuff matters.

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Yeah, right now what's paint
picture, mate?

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I'm a Ding Ding on a mini Oh.
Allergy.

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So allergy so.
So I've got a red red.

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That's why I've got a red wine
today.

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I mean they, they, they reported
the full year results

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aftermarket yesterday.
They let analysts kind of digest

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them overnight and then they
held a webcast in Sydney where

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presumably you know, the team
are fronting institutions.

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They're in stock over E there.
We like we we saw how kind of

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grim the numbers were in the in
the results and we were, we were

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looking on screen to see where
the share price opened this

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morning.
JD was it was brutal in the

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spark chart, down 10% in no time
at all.

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Share price made its way into
the 30s.

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It's floating just north of 40
bucks as we record at the

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moment.
If you, if you zoom out on the,

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on the, you know, longer term
chart, the stock is down about

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50% since May.
And like you and I both listened

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to the call JD, we, you know,
we've both looked at the numbers

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and we both agreed that that the
sell off's probably justified.

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It was.
I actually liked that they came

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out with the numbers.
You know you get a bit more time

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to digest.
They did that with the quarterly

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as well.
They have done this in.

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Yeah.
And look, I've, you know,

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privately between US and sort of
you know, some somewhat publicly

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a little bit too.
I've just been kind of getting a

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bit louder about how nervous I'm
getting with with Minres and as

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Chris would call it being a
nervous Nelly 100%.

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I'm 100% nervous about the
company.

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And and it's because like
there's a lot worth being

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nervous about if, if you're a
shareholder in this business as

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they advance over the next 18
months in particular, I want to

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talk about the most important
things.

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So I think the the balance sheet
would be the the place to kind

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of start that, right.
Number one, balance sheet 100%

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despite what, what, what Chris
kind of speaks to in the call

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and you know, like Minres is a
cyclical business.

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Like it's, you know, I mean he,
he often talks about having,

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having durability through the
cycle because the mining

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services business has these like
long term contracts with low

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cost clients in Reagento
etcetera, etcetera.

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But it, it's a sick Minarez is a
cyclical business.

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They're exposed to the commodity
cycle and I don't think there's

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any kind of skirting around
that.

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And being a cyclical business,
they found themselves in the

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unfortunate position of getting
the cycle wrong from an

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investment perspective.
In, in a, in a, in a cyclical

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industry, you want to be counter
cyclical with your investment.

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You want to be spending money in
CapEx in the, in the downturn

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the, the extent you can, you can
fund it and then you know,

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reaping the rewards in the, in
the good times.

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Because to put it simply,
they've, they've loaded up about

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a billion dollars in other
lithium investments at at the

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height of the lithium, the
lithium boom to put it simply.

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And that's just all lithium is
just unwound as everyone knows.

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And they are, as you said,
extremely exposed to that at the

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moment.
Yeah, it's it's, it's probably

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more than just the specky like
lithium investment stuff that

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they did.
I mean that, you know, I mean

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Onslow kind of it's like $3.3
billion in CapEx there.

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There was, there was a lot of
CapEx into their existing

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lithium operations as well to
you know enhance and improve and

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expand, you know.
I don't.

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I don't think that billion
counts what we don't know was

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paid for Bald Hill either.
Yeah, it's north of a billion, I

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think.
Yeah, yeah, yeah, yeah.

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And I mean, look, they've,
they've, they've like, because

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the, the, the prices of the two
commodities that they produce

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iron ore and lithium, they have
come off tremendously a long

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way, leaving them with a giant
level of, of debt and

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increasingly challenged task of
servicing that debt under the

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kind of status quo scenario that
the company exists today.

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Specifically, let's, let's talk
about some of the, the numbers

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relating to the balance sheet,
right?

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The quarterly announced last
month, they stated the net debt

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was 4.4 billion US.
Now like I know the, the

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accounting technicality, but the
like the $600 million prepaid

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like was, was not classified as
as debt, But if it, if it walks

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like a dark and it cracks like a
dark, it's debt.

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So call it $5 billion net debt.
Now net off the cash and the,

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you know, and, and, and the
statements today break it down a

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bit.
There's, there's this 5.4

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billion in drawn gross debt at
the moment, $500 million of that

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is, is asset financing kind of
which popped up a bit out of

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nowhere, but hadn't heard
anything reported anyone had.

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And to kind of put it into
perspective, like that's a $5.4

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billion of drawn gross debt.
That's, that's literally the

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same as the, the equity value of
men's market cap today in U.S.

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dollar terms.
So exact same amount of debt is

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the got equity right now.
If you just kind of think and

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like when, when you, when you
think of comparable like mining

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companies, how often do you ever
kind of see that, that ratio

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for, for a miner this big?
It's a, it's a pretty kind of,

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you know, rare, rare occurrence,
especially in modern history is

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like a lot of the larger miners
have have wanted to, you know,

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maintain lower, lower debt
levels.

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So the, the big thing investors
are looking for, you know, what,

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what cash flow can actually be
used to service that debt

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because you've got to pay that
down eventually.

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Sure you might, you know, sure
you can kick the can down the

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road and and of course they
don't have any, any principal

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repayments or whatever until
like FY20 7.

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But even if you refi it, you've
still got to pay the interest.

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So the big question is like do
they have the the free cash flow

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or are they going to have the
free cash flow available to pay

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the interest expense on the
debt, right?

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Is that is that all they have to
pay the interest?

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Is any of that interest
capitalised?

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These are these are bonds like
you know you've got a yes it.

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Does not.
Not capitalised, Yeah.

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Yeah.
I think, I think when you say it

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like if they did not have the
mining services division, that'd

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be completely bloody rooted like
that's.

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Mining services is the is the
driver of this business, yeah

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And like I actually kind of have
the thing I want to

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contextualise is like where's
the free cash flow in FY24?

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Because if you, if you just look
at the, the, you know, the, the,

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what they report as kind of
operating cash flow, they, they

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report sort of 1.3 or $1.4
billion of, of operating cash

187
00:09:12,720 --> 00:09:16,800
flow, right?
But included in that for FY24

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00:09:16,800 --> 00:09:20,880
was a build up of $1.3 billion
in, in working capital.

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Basically trade payables growth
right now.

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That's, that's not, that's like
you got, you know that that

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stuff unwinds over time.
You got, you should net that off

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sort of really think about kind
of thing.

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So if you net that off like
where's where's the operating

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free cash flow in this business
in FY24, it was basically non

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existent.
I'm not talking about any money

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00:09:38,080 --> 00:09:39,520
spent on financing on cash
flows.

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00:09:39,520 --> 00:09:42,440
I'm not talking about any money
spent on CapEx or investment.

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00:09:42,440 --> 00:09:46,240
This is operating cash flow.
It's quite simple to think about

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00:09:46,240 --> 00:09:49,200
in the context you know, of iron
ore and then breaking down

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lithium.
Yogan doesn't make money at the

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current prices.
They're shutting it down.

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00:09:53,800 --> 00:09:57,000
The Pilbara hub, you know, isn't
really making money.

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00:09:57,240 --> 00:10:00,720
And then you can just see from
the numbers they put out on Bald

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00:10:00,720 --> 00:10:04,400
Hill, Mount Marion and Wagner,
they are just not making money

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00:10:04,400 --> 00:10:06,440
at these prices.
And Chris said it himself, you

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know, he said I didn't think
lithium would fall below 1000

207
00:10:10,320 --> 00:10:14,920
U.S. dollars for spot 6%.
That would speak to EBITDAR and

208
00:10:15,400 --> 00:10:18,920
and PAT, but those are you don't
pay, you don't repay debt with

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00:10:18,920 --> 00:10:21,560
EBITDAR and PAT, you repay your
debt with free cash flow.

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00:10:21,880 --> 00:10:23,960
So, you know, we're going to
talk about real numbers here,

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00:10:23,960 --> 00:10:27,240
not the other numbers,
accounting numbers.

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00:10:27,240 --> 00:10:30,920
So yeah, I just, I just think
it's, you know, it's kind of, if

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00:10:30,920 --> 00:10:33,760
you think about FY24 as well.
So you've got a year where like,

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00:10:33,840 --> 00:10:36,640
you know, after I make that
deduction, where was the free

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00:10:36,640 --> 00:10:37,360
cash flow?
I don't know.

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00:10:37,880 --> 00:10:41,280
Now since FY24 have commodity
prices going up or down for

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00:10:41,280 --> 00:10:42,800
their commodities.
They've they've come

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00:10:42,800 --> 00:10:45,400
substantially lower for the
commodities that they're exposed

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00:10:45,400 --> 00:10:47,480
to what they would have realised
in FY24.

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00:10:47,480 --> 00:10:51,040
So just adds a big shut like,
you know, a big, a big amount of

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uncertainty on the on the
durability of their business to

222
00:10:54,120 --> 00:10:56,000
actually generate free cash flow
to service their debt.

223
00:10:56,080 --> 00:10:58,960
It's not just the the free cash
flow you're specifically honing

224
00:10:58,960 --> 00:11:02,720
on in FI 24 as well, because
it's no surprise that free cash

225
00:11:02,720 --> 00:11:04,160
flow was hugely negative last
year.

226
00:11:04,160 --> 00:11:06,520
They sunk a phenomenal amount of
money into Onslow.

227
00:11:06,920 --> 00:11:09,680
It's you know, so it's no
surprise that cash went back

228
00:11:09,920 --> 00:11:12,680
massively.
But even operational cash flow,

229
00:11:12,680 --> 00:11:15,840
if you're not taking into
account the money spent on

230
00:11:16,120 --> 00:11:18,320
investing, you know, in that
section of the cash flow

231
00:11:18,320 --> 00:11:21,160
statement, you're still kind of
scratching your head a little

232
00:11:21,160 --> 00:11:23,240
bit.
You know like it like we've sort

233
00:11:23,240 --> 00:11:26,880
of said he'll point to mining
services being AI think $550

234
00:11:26,880 --> 00:11:30,960
million EBITDA business, but you
know the the lithium and the

235
00:11:30,960 --> 00:11:33,360
iron ore assets are are very
much struggling.

236
00:11:34,000 --> 00:11:37,200
I've got sort of probably four
other big talking points.

237
00:11:37,520 --> 00:11:40,400
What second one is that no
dividend.

238
00:11:40,400 --> 00:11:43,880
That's kind of unexpected
because just, you know, you

239
00:11:43,880 --> 00:11:47,920
always just sort of expect,
yeah, it's run by a founder that

240
00:11:47,920 --> 00:11:50,960
owns 11% who likes a dividend.
You know, you kind of expected

241
00:11:50,960 --> 00:11:52,600
to be even even a minor
dividend, but.

242
00:11:52,760 --> 00:11:55,320
And then the other major
shareholder, which is what the

243
00:11:55,360 --> 00:11:57,600
other founder lot the, I
remember in the last call, he

244
00:11:57,600 --> 00:12:00,640
says we're not stopping paying
the dividend 'cause we like

245
00:12:00,640 --> 00:12:01,600
that.
Yeah.

246
00:12:02,400 --> 00:12:03,640
That's a.
That's a big call.

247
00:12:03,640 --> 00:12:06,920
It's look like I commended in
the circumstances for sure

248
00:12:06,920 --> 00:12:08,520
'cause I think like, you know,
what we're seeing here is a

249
00:12:08,520 --> 00:12:11,440
theme of basically austerity at
the moment, which is, you know,

250
00:12:11,720 --> 00:12:14,800
the right move.
It might be like come, come

251
00:12:14,800 --> 00:12:16,640
later than we that should have,
but it's the right move.

252
00:12:17,720 --> 00:12:21,160
And So what else we got .3.
I think there's a theme of cost

253
00:12:21,160 --> 00:12:24,760
cutting, but, but you know,
pretty bulky chunky CapEx ahead,

254
00:12:24,760 --> 00:12:28,080
which makes you kind of a bit
more have a nervous nally on the

255
00:12:28,360 --> 00:12:30,280
on the on the, on the debt
front.

256
00:12:30,280 --> 00:12:32,920
So like, you know, Chris in the
call, he's pretty emphatic about

257
00:12:32,920 --> 00:12:36,400
the cost minimization wording,
you know, around the business.

258
00:12:37,200 --> 00:12:39,880
I think the, the fact remains
though, that CapEx guidance for

259
00:12:39,880 --> 00:12:44,200
FY25 is a staggering U.S.
dollars 1.95 billion.

260
00:12:45,120 --> 00:12:48,520
That's a hell of a lot more
money that still needs to be

261
00:12:48,520 --> 00:12:51,040
spent.
So, you know, your net net debt

262
00:12:51,040 --> 00:12:53,400
kind of is going to grow even
further and kind of get even

263
00:12:53,400 --> 00:12:56,480
more out of whack and it's going
to require even more, you know,

264
00:12:57,680 --> 00:13:01,800
free operating cash flow like
to, to, to service it over time,

265
00:13:01,800 --> 00:13:04,640
which that's where the fragility
kind of lies, right?

266
00:13:05,760 --> 00:13:10,360
So, and I, I think that kind of
leads into, you know, point,

267
00:13:10,360 --> 00:13:14,720
point #4 and that's that the,
the Onslow ramp up sort of seems

268
00:13:14,720 --> 00:13:19,080
to be readjusting there's.
And I think this goes to the

269
00:13:19,080 --> 00:13:20,760
point of my guidance changing
and everything like that.

270
00:13:20,760 --> 00:13:25,640
FY25 guidance for, for Onslow
tonnes on a, you know, 100%

271
00:13:25,640 --> 00:13:27,480
basis is now about 80 million
tonnes.

272
00:13:27,760 --> 00:13:29,600
Previously that number was 20
million tonnes.

273
00:13:29,600 --> 00:13:33,160
So so there's a readjustment in
what what Onslow is going to do,

274
00:13:33,400 --> 00:13:37,440
you know, FY25 now that's a
downgrade a month ago.

275
00:13:37,440 --> 00:13:40,760
They they actually even spoke on
the yeah, a month ago on the

276
00:13:40,760 --> 00:13:43,800
call about accelerating to 50
million tonnes per annum

277
00:13:44,000 --> 00:13:46,840
nameplate, you know, faster at
Onslow and that that's

278
00:13:46,840 --> 00:13:50,360
completely on ice now, but it's
on ice after having put these

279
00:13:50,360 --> 00:13:52,520
down payments and pre orders in
for more transshippers to

280
00:13:52,520 --> 00:13:54,520
service it.
So, you know, don't know what

281
00:13:54,560 --> 00:13:59,640
what happens to that money now.
And I, I just like, you know,

282
00:13:59,640 --> 00:14:02,440
with this, with this
readjustment of, of Onslow's

283
00:14:02,440 --> 00:14:04,400
ramp up, that's kind of the
fragility.

284
00:14:04,400 --> 00:14:07,160
What's, what's the cause of it?
Why, why the downgrade?

285
00:14:07,360 --> 00:14:11,080
You know, these things that that
might actually, you know,

286
00:14:11,320 --> 00:14:14,160
inhibit nameplate to some
extent.

287
00:14:14,320 --> 00:14:17,400
And and because the ability to
service that debt all depends on

288
00:14:17,400 --> 00:14:20,920
Onslow kind of coming online and
and ramping up the plan.

289
00:14:20,920 --> 00:14:23,000
In fact, there's not much room
for error.

290
00:14:23,200 --> 00:14:25,560
There's so there's so many
moving parts with it, like with

291
00:14:25,560 --> 00:14:29,160
the with the haulage and the
shipping outside of the just the

292
00:14:29,160 --> 00:14:33,960
mining, there's a lot, a lot of
party that's that whole Rd like

293
00:14:33,960 --> 00:14:35,520
that has to be humming.
Yeah.

294
00:14:35,520 --> 00:14:38,160
And it's I think it's important
to to note like the whole roads

295
00:14:38,160 --> 00:14:39,680
not finished.
Yeah.

296
00:14:39,680 --> 00:14:42,840
So they're what they're, you
know, trucking and shipping at

297
00:14:42,840 --> 00:14:46,760
the moment is because they're
using this this service road and

298
00:14:46,920 --> 00:14:49,320
and that presents it's own kind
of challenges.

299
00:14:50,280 --> 00:14:52,360
Like you can see this kind of
awful picture here.

300
00:14:52,360 --> 00:14:55,640
If if one of their their trucks
is sort of, you know, tipped

301
00:14:55,640 --> 00:14:58,680
over on the on the service Rd.
Fucking the drum was all right.

302
00:14:59,640 --> 00:15:03,360
So I mean, there's this, yeah,
you obviously are faced with an

303
00:15:03,560 --> 00:15:06,040
enormous amount of limitations
when you're when you, you know,

304
00:15:06,080 --> 00:15:09,520
you're trying to reach crazy
kind of tonnage rates using,

305
00:15:09,520 --> 00:15:12,800
using a road like that instead
of, you know, the proper built

306
00:15:12,800 --> 00:15:15,320
road.
And then if you, if you just

307
00:15:15,320 --> 00:15:17,000
like think of, OK, how much do
you need it?

308
00:15:17,200 --> 00:15:19,520
How much does min res need to
produce to sort of service that.

309
00:15:19,520 --> 00:15:24,840
Now Chris likes to talk about a
$25 margin on on Onslow tonnes.

310
00:15:25,840 --> 00:15:28,440
Personally, I think that's going
to be pretty hard to achieve.

311
00:15:28,440 --> 00:15:30,280
But like, let's take his his
word for it.

312
00:15:30,280 --> 00:15:34,880
So $25 margin on Onslow tonnes,
assume it's a real number like

313
00:15:35,360 --> 00:15:39,000
then it's it's spot prices, you
know, min needs at least kind of

314
00:15:39,000 --> 00:15:40,880
15,000,000 tonnes coming out of
Onslow to pay the interest

315
00:15:40,880 --> 00:15:44,800
expense on the debt.
And if final prices compress

316
00:15:44,800 --> 00:15:49,000
even more than you know.
And if, if you kind of, if you,

317
00:15:49,080 --> 00:15:51,040
if you take some of his numbers
with a bit more of a grain of

318
00:15:51,040 --> 00:15:55,200
salt, like how much, how much
fat do you kind of have in

319
00:15:55,200 --> 00:15:56,920
there?
You know, how like how fragile

320
00:15:56,920 --> 00:16:00,520
is is the the the the ability to
service this debt kind of

321
00:16:00,680 --> 00:16:02,840
especially when you think you've
had challenging it is to bring a

322
00:16:02,840 --> 00:16:04,680
new mine online.
Like we've just seen so many

323
00:16:04,680 --> 00:16:07,200
instances where you know, things
aren't as novel or as

324
00:16:07,200 --> 00:16:09,920
straightforward as our kind of
Excel spreadsheet suggests.

325
00:16:09,920 --> 00:16:14,160
And, and when you have just a
very high, very large debt

326
00:16:14,160 --> 00:16:16,520
quantum, it puts a lot of
pressure on the equity.

327
00:16:16,800 --> 00:16:19,280
So, you know, they need
everything to go perfectly from

328
00:16:19,280 --> 00:16:20,960
here.
And, and, and there's the risk.

329
00:16:21,040 --> 00:16:23,080
What what if there's a cyclone
this wet season?

330
00:16:23,080 --> 00:16:25,000
What if, you know, they get a
bunch of rain up there?

331
00:16:25,680 --> 00:16:28,080
Usually it's a cyclone Every
Yeah, wet size.

332
00:16:28,160 --> 00:16:31,520
And I think we've had a few
decent like yeah, seasons

333
00:16:31,520 --> 00:16:35,560
lately, you know, might be true.
For one, they're just fragility,

334
00:16:35,560 --> 00:16:37,720
right?
And and and it makes equity

335
00:16:37,720 --> 00:16:40,080
holders nervous.
Now these which brings me the

336
00:16:40,080 --> 00:16:43,120
the fifth point, like you
touched on, Maddie, I think

337
00:16:43,120 --> 00:16:45,320
they're just a lithium
reckoning, you know, like, and

338
00:16:45,320 --> 00:16:48,760
this was a pretty sombre part of
the part of the coal jetty he

339
00:16:48,760 --> 00:16:51,040
opened talking about like the
lithium market.

340
00:16:53,040 --> 00:16:56,280
Personally, I think Minres has a
lot of explaining to do to

341
00:16:56,280 --> 00:16:58,000
justify their market behaviour
here.

342
00:16:58,520 --> 00:17:03,280
You know, we were talking about
like the lithium market with

343
00:17:04,480 --> 00:17:07,720
last year as as sort of Minres
was kind of, you know, aping

344
00:17:07,720 --> 00:17:11,400
into all of these kind of hot
copper lithium stocks, like at

345
00:17:11,400 --> 00:17:15,280
the top of the market and
lithium prices were were far off

346
00:17:15,280 --> 00:17:17,640
the top then.
But I mean it was min res and

347
00:17:17,960 --> 00:17:21,520
you know, and Gina in some
instances that were kind of, you

348
00:17:21,520 --> 00:17:24,200
know, buoying up the the WA
lithium.

349
00:17:24,480 --> 00:17:26,640
Yeah, the the.
Equities didn't pull back

350
00:17:26,640 --> 00:17:28,800
proportional to the lithium.
Because there was this, there

351
00:17:28,800 --> 00:17:31,480
was this M&A, yeah.
Like there was AM and a bloody

352
00:17:31,480 --> 00:17:32,960
premium on it all.
So like what?

353
00:17:33,000 --> 00:17:35,360
Why?
Like why was there FOMO at the

354
00:17:35,360 --> 00:17:37,840
top?
You know, it just, it's very

355
00:17:38,000 --> 00:17:41,440
strange capital allocation like
in it just, I think it just

356
00:17:42,080 --> 00:17:44,840
requires some introspection and
A and A and a bit of an

357
00:17:44,840 --> 00:17:47,600
explanation to shareholders.
But I think if you look at it

358
00:17:47,840 --> 00:17:49,760
like, yes, it's, it's, it's shit
now.

359
00:17:49,760 --> 00:17:54,440
But if they're if they've got
this fundamental long, long term

360
00:17:54,440 --> 00:17:58,320
view on lithium, like might be
something in five years time, we

361
00:17:58,320 --> 00:18:01,480
come back and discuss and say,
look, they fuck about they they

362
00:18:01,560 --> 00:18:03,400
they struggled like fuck after
it.

363
00:18:03,400 --> 00:18:06,680
They paid a lot of money for
these assets, but they did get

364
00:18:06,680 --> 00:18:10,120
their foot on them and they
whether they'll reap benefits if

365
00:18:10,120 --> 00:18:13,160
the lithium does rebound in the
future, we don't know yet.

366
00:18:13,160 --> 00:18:16,400
It's like might be a lot of
short term pain for long term

367
00:18:16,400 --> 00:18:19,680
gain, but we just don't know.
But it's survival during this

368
00:18:19,680 --> 00:18:23,240
short term, as you said, just to
be able to service debt that is

369
00:18:23,240 --> 00:18:24,920
the is the biggest risk.
Big time.

370
00:18:24,960 --> 00:18:30,120
And I would argue that it's not
appropriate to, to make those

371
00:18:30,120 --> 00:18:34,160
sort of bets when you're, if
you're, if it means you're

372
00:18:34,160 --> 00:18:36,800
adding like further unnecessary
pressure to your balance sheet

373
00:18:36,800 --> 00:18:41,240
that could, you know, I just, I
just think like, you know, could

374
00:18:41,240 --> 00:18:43,880
a BHP do that?
Because it's just a fuck, it's a

375
00:18:43,880 --> 00:18:46,080
rounding error.
It's not going to actually move

376
00:18:46,080 --> 00:18:48,920
the needle to the equity.
I just think it's a yeah, I

377
00:18:48,920 --> 00:18:51,920
think there's a a different kind
of mentality you need to have

378
00:18:51,920 --> 00:18:54,280
when you're forecasting.
At the time they were

379
00:18:54,280 --> 00:18:57,000
forecasting their, you know,
peak net debt to kind of be this

380
00:18:57,040 --> 00:18:58,600
this half year we're in right
now.

381
00:18:59,040 --> 00:19:00,400
And you know, what have they
done?

382
00:19:00,400 --> 00:19:02,240
They've just kind of amplified
that made everything more

383
00:19:02,240 --> 00:19:04,360
fragile.
And you know, because iron ore

384
00:19:04,360 --> 00:19:07,960
prices have, have, have come
down, then all all of a sudden

385
00:19:07,960 --> 00:19:10,560
everything looks pretty grim and
they can't couldn't sell what

386
00:19:10,560 --> 00:19:12,520
they all that lithium stuff,
what they paid for it.

387
00:19:13,040 --> 00:19:18,600
I'd argue his mentality is
possibly not saying he doesn't

388
00:19:18,600 --> 00:19:21,080
care about the debt, but he just
knows he can either get more

389
00:19:21,080 --> 00:19:24,440
debt or raise money or he'll do
whatever it takes to get his

390
00:19:24,440 --> 00:19:27,400
hold on, get his foot on as much
things as possible for the long

391
00:19:27,400 --> 00:19:32,400
term plan for min rez.
And it's yeah, I don't think he

392
00:19:32,400 --> 00:19:36,440
lies when he goes off about his
view of what others are saying

393
00:19:36,440 --> 00:19:38,600
about his debt.
I think he's like, I Will

394
00:19:38,600 --> 00:19:40,120
Survive.
Although honestly, I think he

395
00:19:40,120 --> 00:19:42,320
thinks that.
Yeah, I think you're probably

396
00:19:42,320 --> 00:19:43,400
right.
He probably does have a few.

397
00:19:43,600 --> 00:19:48,880
It's just, it's just not, it's
not like it's not sound capital

398
00:19:48,880 --> 00:19:54,000
allocation, you know, it's like,
yeah, that that.

399
00:19:54,000 --> 00:19:57,000
Reminds me of Ford.
It's Fortescue early 20 tens.

400
00:19:57,640 --> 00:19:59,160
They're in sort of the same
position.

401
00:19:59,440 --> 00:20:01,280
Like they'll fucking levelled up
way more than.

402
00:20:01,280 --> 00:20:04,880
This they were but but the
difference is like Fortescue

403
00:20:06,040 --> 00:20:08,960
kind of built in a, in a in a
down market and they reaped the

404
00:20:08,960 --> 00:20:13,960
rewards over time.
You know, they, the, the, the

405
00:20:13,960 --> 00:20:16,360
Onslow expansion and, and the
other thing too is like

406
00:20:16,360 --> 00:20:20,840
Fortescue actually built rail,
which like obviously produced at

407
00:20:20,840 --> 00:20:22,800
a much lower cost than, you
know, road.

408
00:20:24,640 --> 00:20:27,080
And, but they had, they had the
commodity cycle on their side.

409
00:20:27,080 --> 00:20:30,760
They had, they expanded and, and
grew into the, the growth of

410
00:20:30,760 --> 00:20:35,320
China.
And like these, these companies,

411
00:20:35,480 --> 00:20:36,880
our industry timings,
everything.

412
00:20:36,960 --> 00:20:38,240
You know, you can't get the
cycle wrong.

413
00:20:38,240 --> 00:20:41,520
And if you get the cycle wrong
with a, with a bunch of debt,

414
00:20:42,360 --> 00:20:45,680
it's, it's a really challenging
outlook for the equity like,

415
00:20:46,440 --> 00:20:51,360
which is interesting because you
hear this is one of the more

416
00:20:51,360 --> 00:20:55,000
fascinating kind of snippets.
I think this was, you know,

417
00:20:55,000 --> 00:20:56,920
Speaking of the difference
between the, the debt and

418
00:20:56,920 --> 00:20:59,360
equity.
I think, you know, Chris had

419
00:20:59,360 --> 00:21:01,960
something to say about the, the
different mentality between his

420
00:21:01,960 --> 00:21:03,200
shareholders and his
bondholders.

421
00:21:03,320 --> 00:21:07,080
Have a listen to this guys.
The time I get to this time next

422
00:21:07,080 --> 00:21:09,520
year, you'll go.
You'll be like my bondholders in

423
00:21:09,520 --> 00:21:11,760
the US.
They go, what's the problem?

424
00:21:11,840 --> 00:21:15,280
What are these guys not getting?
And I go, you need to go talk to

425
00:21:15,280 --> 00:21:18,360
them.
I mean, when I go to the US and

426
00:21:18,360 --> 00:21:20,600
go to the bondholders, we just
sit around and talk about

427
00:21:20,600 --> 00:21:23,800
fishing and they go, we love the
business, it's amazing.

428
00:21:23,800 --> 00:21:27,160
Can we lend you some more money?
And all right now I've got a

429
00:21:27,200 --> 00:21:29,040
nervous bunch of money in
Australia.

430
00:21:29,880 --> 00:21:31,080
Count me one of those nervous
numbers.

431
00:21:32,920 --> 00:21:34,160
So good.
What a legend.

432
00:21:35,280 --> 00:21:39,800
Talking about fishing.
But that but that's where the

433
00:21:40,000 --> 00:21:42,600
the whole the Min Reds thing,
the story and the belief and

434
00:21:42,600 --> 00:21:44,880
everything, it's because he's
like he gets on there and says

435
00:21:44,880 --> 00:21:49,520
like that he's he's relatable.
Like he's, he's, he's got such a

436
00:21:49,640 --> 00:21:53,320
fucking brand behind him.
I think that buys you time, but

437
00:21:53,320 --> 00:21:55,760
it, it doesn't help you run away
from an inability to service

438
00:21:55,760 --> 00:21:59,240
debt, you know, like it.
You know, he's, he's, you looked

439
00:21:59,240 --> 00:22:01,960
at the share price sort of like
5 months ago and tremendously

440
00:22:01,960 --> 00:22:03,760
resilient.
It did the face of kind of, you

441
00:22:03,920 --> 00:22:05,440
know, challenging kind of
commodity markets.

442
00:22:05,440 --> 00:22:09,640
And I think a bit of that is
just like this, this, this real

443
00:22:09,640 --> 00:22:12,440
vehement belief that kind of
Chris will figure it all out.

444
00:22:12,480 --> 00:22:16,800
And I don't know, I just, I
just, I sense, I sense a bit of

445
00:22:16,840 --> 00:22:20,600
a, a, a change in sentiment
there as well, you know, broadly

446
00:22:20,600 --> 00:22:23,960
in the market.
What else you got from the call?

447
00:22:24,160 --> 00:22:29,240
I I think it's worth just kind
of pondering about about end

448
00:22:29,240 --> 00:22:33,200
game a little bit like like, how
do they, how do they navigate

449
00:22:33,200 --> 00:22:36,440
out of this situation?
And like how do they deliver the

450
00:22:36,440 --> 00:22:38,800
balance sheet further right?
Because like, you know, so well

451
00:22:38,800 --> 00:22:42,440
and could to say in hindsight,
but like, fuck it, 90 bucks a

452
00:22:42,680 --> 00:22:43,880
share.
They should have raised equity

453
00:22:43,880 --> 00:22:46,360
and, you know, put the balance
sheet question to bed and just,

454
00:22:46,440 --> 00:22:49,760
you know, wrote out the cycle
kind of without the worry of the

455
00:22:49,760 --> 00:22:52,160
debt.
But you know, that didn't happen

456
00:22:52,160 --> 00:22:54,360
And, and we're here, but what
are their what are their

457
00:22:54,360 --> 00:22:56,960
options, right?
Because like, personally, I

458
00:22:56,960 --> 00:23:01,600
don't think like status quo or
hoping commodity prices sort of

459
00:23:01,600 --> 00:23:07,080
just rebound from here is like
a, a, a corporately appropriate

460
00:23:07,080 --> 00:23:09,440
plan.
AI think like, you know, we, we

461
00:23:09,440 --> 00:23:12,560
have to talk about the, the
levers that they have to, to,

462
00:23:12,840 --> 00:23:15,400
you know, at that their disposal
to actually address the, the

463
00:23:15,400 --> 00:23:19,560
balance sheet issue.
First one asset sell down.

464
00:23:19,560 --> 00:23:21,000
That's right.
Like they sold down half of the

465
00:23:21,000 --> 00:23:22,480
whole Rd.
Like what else could they could

466
00:23:22,480 --> 00:23:24,200
they do?
And I want to play a bit of a, a

467
00:23:24,200 --> 00:23:26,720
snippet here that kind of Chris
had at the beginning of his arm

468
00:23:27,240 --> 00:23:30,040
of his of his of his chat today
when we get a.

469
00:23:30,040 --> 00:23:36,880
Project like Onslow Iron or
Mount Marion, we own the mining

470
00:23:36,880 --> 00:23:40,840
services on those projects.
At any given time, if we choose

471
00:23:40,840 --> 00:23:43,720
to, we can go and sell our
shareholding in the in the iron

472
00:23:43,720 --> 00:23:46,480
or the lithium.
But those projects that we got

473
00:23:46,480 --> 00:23:48,560
for mining services are life and
mines.

474
00:23:48,560 --> 00:23:51,920
So Onslow Iron, it's probably
around 50 years plus.

475
00:23:52,440 --> 00:23:54,080
So it's kind of.
Like a sub point to what he was

476
00:23:54,080 --> 00:23:56,760
sort of saying, but to me it
felt like he sort of slipped out

477
00:23:56,760 --> 00:23:59,760
that there is this, you know,
potential that they're looking

478
00:23:59,760 --> 00:24:02,800
at.
Yeah, just retaining the mining

479
00:24:02,800 --> 00:24:05,200
services contract at at Mount
Marion or Onslow.

480
00:24:05,520 --> 00:24:07,520
Never said anything.
Like that before, I don't think,

481
00:24:07,520 --> 00:24:09,800
I know he's always said he's got
a lot of levers to pull, but I

482
00:24:09,800 --> 00:24:13,680
don't think he's ever mentioned
selling down parts of projects.

483
00:24:14,160 --> 00:24:15,480
Yeah, specifically.
To my.

484
00:24:15,480 --> 00:24:16,560
Memory.
Yeah, well.

485
00:24:16,960 --> 00:24:20,760
He has talked about the fact
that their their mining services

486
00:24:20,760 --> 00:24:23,320
contract's a life of mine and
they stay even if they they

487
00:24:23,320 --> 00:24:25,520
don't withhold it.
But that the wording that time

488
00:24:25,520 --> 00:24:29,040
just felt a bit more like, you
know, a realistic labour that we

489
00:24:29,040 --> 00:24:32,360
could pull is actually yeah,
like, like like selling the so,

490
00:24:32,480 --> 00:24:35,840
so I just, if you just think
about their portfolio of assets,

491
00:24:35,840 --> 00:24:38,360
like what, what could they sell
and what could they get for

492
00:24:38,360 --> 00:24:41,200
them, right?
Like you think Wodgina, that's

493
00:24:41,200 --> 00:24:44,440
their best asset, right?
No, no, no, no denying.

494
00:24:44,440 --> 00:24:48,360
I think that like if who would
buy that they'd be bidders?

495
00:24:48,360 --> 00:24:50,880
Like I'm sure Pilgrim would
would love to have it.

496
00:24:50,880 --> 00:24:55,600
And I mean, I mean, heck,
Albemarle might even might even

497
00:24:55,600 --> 00:24:57,480
have to sell their stake as
well, the way things are going

498
00:24:57,480 --> 00:24:59,440
for them.
So 100% of it might be.

499
00:24:59,760 --> 00:25:00,960
Yeah, I'd be.
I'd be.

500
00:25:00,960 --> 00:25:04,440
Interested to know if like if
Wodgina is the best asset on a

501
00:25:04,440 --> 00:25:06,960
mining front.
I'd like to know if if it is the

502
00:25:06,960 --> 00:25:09,720
best asset asset on cash flow
for them.

503
00:25:09,720 --> 00:25:14,200
Like the fact that with Mount
Marion, just what they earn from

504
00:25:14,200 --> 00:25:17,480
the mining services Afghan
thing, even though it's a the

505
00:25:17,480 --> 00:25:20,080
mining, the mining and the
product isn't as good.

506
00:25:20,080 --> 00:25:23,120
I'd be interested to know if
that is sort of a better asset

507
00:25:23,120 --> 00:25:24,400
for them.
Yeah, well.

508
00:25:24,400 --> 00:25:27,200
Let's think of the the
perspective of a buyer who's

509
00:25:27,200 --> 00:25:29,720
going to have to buy an asset
with min as the mining

510
00:25:29,720 --> 00:25:31,400
contractor.
So you're kind of left with

511
00:25:31,400 --> 00:25:34,080
whatever economic upside there
is that min don't take for

512
00:25:34,080 --> 00:25:38,240
themselves as contractor.
In that case, you know, wasn't

513
00:25:38,240 --> 00:25:39,760
it probably be the pick of the
bunch?

514
00:25:41,080 --> 00:25:43,600
And I'm sure like wasn't it
would be worth a fair bit in the

515
00:25:43,600 --> 00:25:47,000
portfolio of Pilbara because
they traded a pretty hefty kind

516
00:25:47,040 --> 00:25:49,720
of sum themselves for, for what?
For what their cash flow is.

517
00:25:49,720 --> 00:25:52,760
But yeah, so like that's a
lever, but he didn't say Wodgina

518
00:25:53,080 --> 00:25:54,920
on on the call.
Then he mentioned Mount Marion

519
00:25:54,920 --> 00:25:57,440
and he mentioned Onslow.
And if you think of Mount

520
00:25:57,440 --> 00:26:01,440
Marion, like, yeah, when you
when you remove like I don't

521
00:26:01,440 --> 00:26:03,920
think Ganthang can buy anymore
like this, you know, fair.

522
00:26:03,920 --> 00:26:07,480
But get in the way of that.
Would you would you want to own

523
00:26:07,840 --> 00:26:12,360
half of Mount Marion?
Like if, if, if Min was a mining

524
00:26:12,360 --> 00:26:14,680
services contractor?
I don't know, just, you know,

525
00:26:15,000 --> 00:26:17,520
you might just be a bit worried
about what's kind of left for

526
00:26:17,520 --> 00:26:22,960
you in that scenario.
Onslow it's just the value of of

527
00:26:22,960 --> 00:26:25,600
that if they were to sell down
for that like what are they on

528
00:26:25,640 --> 00:26:29,960
is this kind?
Of TV 70. 57. 57 yeah so ish.

529
00:26:30,960 --> 00:26:33,760
And it all hinges on the the
performance of the whole Rd,

530
00:26:33,760 --> 00:26:35,240
which is, which is currently
unproven.

531
00:26:35,240 --> 00:26:37,760
We need to wait for that.
There's just kind of contingent

532
00:26:37,760 --> 00:26:40,520
value that is a little bit
unproven until we see how the

533
00:26:40,520 --> 00:26:43,160
whole Rd holds up because some
people are uncertain about that.

534
00:26:44,440 --> 00:26:47,360
The gas like I don't I don't see
how they could kind of get more

535
00:26:47,360 --> 00:26:51,080
than 500 million bucks for for,
you know, from a partner for 50%

536
00:26:52,320 --> 00:26:55,040
yeah, like 50% of the gas asset.
That could be wrong.

537
00:26:55,040 --> 00:26:57,360
But you know, I'd like to be
wrong, but it's just my gut feel

538
00:26:57,360 --> 00:27:00,320
on that one.
So other options maybe they

539
00:27:00,320 --> 00:27:04,000
could, they could, they could
actually do a sell down of

540
00:27:04,000 --> 00:27:06,360
certain business units.
Like I could see a world where

541
00:27:07,400 --> 00:27:11,120
they they, yeah, brought,
brought in a, a shareholder who

542
00:27:11,120 --> 00:27:14,760
bought, let's say a 20% interest
in just their mining services

543
00:27:14,760 --> 00:27:15,440
business, right?
Yeah.

544
00:27:15,680 --> 00:27:20,680
And they've added and that.
Would be pretty easy one to do

545
00:27:20,760 --> 00:27:23,560
like, like there'd be some
competition for that because

546
00:27:23,560 --> 00:27:25,560
it's obviously it's a very
proven business.

547
00:27:25,560 --> 00:27:28,160
Yeah, yeah, yeah.
And that's an interesting thing.

548
00:27:28,160 --> 00:27:30,480
Maybe like, you know, someone
mentioned to me that could spin

549
00:27:30,480 --> 00:27:31,680
out their mining services
business.

550
00:27:31,680 --> 00:27:33,600
I think that's just a
challenging thing to do, like in

551
00:27:33,680 --> 00:27:35,440
a bit of a cash grab or whatever
along the way.

552
00:27:35,440 --> 00:27:37,360
But I just think that's too
challenging because you leave

553
00:27:37,360 --> 00:27:41,600
this strange miner with menace
with a, you know, just, yeah, I

554
00:27:41,640 --> 00:27:44,160
just don't think the pro forma
quite works out if you did that.

555
00:27:45,400 --> 00:27:47,800
But you know, they could even
like, let's say they bundled all

556
00:27:47,800 --> 00:27:49,920
their lithium business unit
together and again, did it

557
00:27:49,920 --> 00:27:52,640
didn't minor like maybe they
could sell sell the entire

558
00:27:52,640 --> 00:27:56,560
business unit or they could
simply just sell, you know, 49%

559
00:27:57,000 --> 00:27:59,320
of it.
But they were, they were they

560
00:27:59,320 --> 00:28:01,320
keep the rest.
You know, I think those are

561
00:28:01,480 --> 00:28:04,800
those eruptions and they might
they might be explored in the

562
00:28:04,800 --> 00:28:06,360
kind of the asset sell down
space.

563
00:28:07,200 --> 00:28:09,400
The glaring other one is, is
raising equity.

564
00:28:09,400 --> 00:28:12,120
What most kind of, you know,
companies do is they, they have

565
00:28:12,120 --> 00:28:13,560
sort of balance, balance sheet
stress.

566
00:28:15,320 --> 00:28:17,160
There's, there's a couple ways
they could raise equity, right?

567
00:28:17,160 --> 00:28:21,600
One is typical capital raise.
You see them all the time at a

568
00:28:21,600 --> 00:28:24,400
discount.
I mean, they're in the 40s

569
00:28:24,400 --> 00:28:25,440
today.
Like I don't know when they,

570
00:28:25,440 --> 00:28:28,440
when, when they pulled the
trigger on that because, yeah,

571
00:28:28,440 --> 00:28:32,000
there's like a lot of to, to
admit you've got to raise equity

572
00:28:32,000 --> 00:28:33,520
is a, is a challenging thing to
do.

573
00:28:33,520 --> 00:28:35,320
And especially if you've, if
you've talked about not

574
00:28:35,320 --> 00:28:37,800
diluting.
So I I just don't know if if

575
00:28:37,800 --> 00:28:41,320
they'd be as kind of sensible
about the, the timing to do that

576
00:28:41,320 --> 00:28:45,840
as as you might might see
otherwise he'd he'd only.

577
00:28:45,840 --> 00:28:48,520
Have to if they raised a
billion, he'd only have to tip

578
00:28:48,520 --> 00:28:50,880
in 100 himself to keep you
prior.

579
00:28:50,880 --> 00:28:52,560
Rather, he's probably he's.
Probably.

580
00:28:52,560 --> 00:28:58,440
Got 100 Yeah, I.
Don't know, but the, the yeah, I

581
00:28:58,440 --> 00:29:00,840
think he'd probably just get
deluded to be fair, because I

582
00:29:00,840 --> 00:29:03,520
don't if he runs his business
that levered, I don't know.

583
00:29:03,800 --> 00:29:06,680
Anyway, the, the, the other
thing I think of though is

584
00:29:07,320 --> 00:29:10,800
instead of doing a raise at a
discount and, and, and in stores

585
00:29:10,800 --> 00:29:13,360
and all that sort of stuff is,
you know, there's, there's a

586
00:29:13,360 --> 00:29:16,160
strategic kind of come come to
the rescue a little bit.

587
00:29:16,160 --> 00:29:20,440
And maybe, yeah, maybe end up
owning 20% of min res or

588
00:29:20,440 --> 00:29:22,760
something like that with a with
a big cash injection.

589
00:29:23,360 --> 00:29:27,000
And I'm thinking of like like a
Gena, something like that.

590
00:29:27,040 --> 00:29:28,800
You know, I wouldn't, I
wouldn't, I wouldn't rule it

591
00:29:28,800 --> 00:29:29,920
out.
I think you'd just never quite

592
00:29:29,920 --> 00:29:32,720
rule out Gena.
Yeah, yeah.

593
00:29:33,000 --> 00:29:37,200
And and with that, a lot of the
project sell downs and it's,

594
00:29:37,480 --> 00:29:39,640
it's just like this.
It's all part of this long term

595
00:29:39,640 --> 00:29:40,840
plan.
It's like it's all there,

596
00:29:40,840 --> 00:29:44,440
everything's there for a reason
and it's like up to the position

597
00:29:44,440 --> 00:29:48,280
now where they have to possibly
alter the long term plan just to

598
00:29:48,280 --> 00:29:52,080
pay service debt.
But yeah, I, I just, I think

599
00:29:52,280 --> 00:29:55,400
one, you probably didn't mention
you'll, you'll just get more

600
00:29:55,400 --> 00:29:56,800
debt.
I.

601
00:29:56,960 --> 00:29:59,480
I think the upper bound of that
is pretty stretched.

602
00:29:59,480 --> 00:30:04,600
Like I, yeah, like, like it's a
good point you make, but I just,

603
00:30:04,600 --> 00:30:06,840
I like, you can't just leave her
up forever.

604
00:30:06,840 --> 00:30:09,400
You know, like the, the more
debt you have to capital

605
00:30:09,400 --> 00:30:11,960
structure, the more fragility
you add, especially if you don't

606
00:30:11,960 --> 00:30:14,800
have the cash flows.
I'm personally surprised that

607
00:30:14,800 --> 00:30:18,080
the, the bonds that they've got
in the US aren't trading

608
00:30:18,160 --> 00:30:20,400
impaired yet.
You know, like, like I'm, it'd

609
00:30:21,280 --> 00:30:24,080
be interesting to see when the
US market opens, but they're

610
00:30:24,080 --> 00:30:26,360
still kind of trading like as if
they're going to be kind of, you

611
00:30:26,360 --> 00:30:28,760
know, repaid entirely on the
whole and everything like that.

612
00:30:28,760 --> 00:30:30,360
They're not, they're not trading
like they're impaired yet.

613
00:30:30,360 --> 00:30:32,320
So that that's one to watch,
right?

614
00:30:32,320 --> 00:30:36,320
Because the moment that happens
comes a increasingly challenging

615
00:30:36,320 --> 00:30:38,920
to add add any more debt to
capital structure and the

616
00:30:38,920 --> 00:30:41,120
incremental amount of more debt
you add, you have to pay higher

617
00:30:41,120 --> 00:30:44,320
and higher interest rates on
that and becomes increasingly

618
00:30:44,320 --> 00:30:48,080
challenging to ever generate a
return sufficient to ever pay

619
00:30:48,320 --> 00:30:49,640
higher and higher interest rates
off.

620
00:30:51,120 --> 00:30:52,880
So because they're not.
Like they're not like knocking

621
00:30:52,880 --> 00:30:56,240
out assets a lot, a lot of them
like the the the onslide thing,

622
00:30:56,240 --> 00:31:00,040
the value lot, the Onslow on to
be yeah, that's we'll hopefully

623
00:31:00,040 --> 00:31:01,760
make cash once the price goes
up.

624
00:31:01,760 --> 00:31:06,000
But it's if that area that
district expands and they click

625
00:31:06,000 --> 00:31:08,920
the ticket on every person using
that haul ride, whether they can

626
00:31:09,160 --> 00:31:12,400
get enough, there's enough time
to get the trucks on there

627
00:31:12,600 --> 00:31:15,000
because it's going to be that
flat out anyway there.

628
00:31:15,000 --> 00:31:17,200
There's so much value in that
for them in the future.

629
00:31:19,000 --> 00:31:22,640
So it's, yeah, I think it's
obviously under underappreciated

630
00:31:22,640 --> 00:31:25,200
how bloody valuable that
services division is.

631
00:31:25,360 --> 00:31:27,200
And they're little
infrastructure jobbies.

632
00:31:27,440 --> 00:31:31,480
I think that strategic.
Equity investment at the Headco

633
00:31:32,400 --> 00:31:39,200
makes a lot of sense and I think
most would probably say from a

634
00:31:39,200 --> 00:31:44,000
shareholder perspective might
find that more palatable than

635
00:31:44,000 --> 00:31:48,680
sort of divesting or selling
down assets and it'd have to be

636
00:31:48,680 --> 00:31:51,000
a placement.
Yeah, like it's a so it's a

637
00:31:51,000 --> 00:31:53,880
placement to a new cornerstone.
Yeah, Yeah.

638
00:31:53,920 --> 00:31:56,520
I don't know if the interest.
Is there to be honest, like, but

639
00:31:56,640 --> 00:31:59,360
you know, it's, it's, it's an
option for sure.

640
00:32:00,040 --> 00:32:01,440
I doubt he'd want to lose
control.

641
00:32:02,560 --> 00:32:04,800
Or have that, have that in that
influence.

642
00:32:05,120 --> 00:32:07,120
Yeah, that'd be a big one.
Totally it.

643
00:32:07,160 --> 00:32:10,360
I mean, there's.
None of these options are good

644
00:32:10,360 --> 00:32:12,760
options, right?
There's nothing you're like, oh,

645
00:32:12,760 --> 00:32:15,640
this is great, but you know,
it's it's a predicament that

646
00:32:15,640 --> 00:32:19,640
they're in because of pro
cyclical investment, not counter

647
00:32:19,640 --> 00:32:22,400
cyclical investment.
And that to me is like corporate

648
00:32:22,400 --> 00:32:25,480
finance one O 1 in cyclical
businesses.

649
00:32:25,640 --> 00:32:27,280
Yeah, that was summed up really
well.

650
00:32:27,280 --> 00:32:31,640
By Glenn Lawcock the question he
sort of asked and I think the

651
00:32:31,720 --> 00:32:34,200
the response from Chris was kind
of telling how he.

652
00:32:35,880 --> 00:32:37,920
You know he sort of without.
Saying it, he kind of

653
00:32:38,040 --> 00:32:40,960
acknowledged that they'd
missteps perhaps in in the past

654
00:32:41,160 --> 00:32:45,120
year or so and they've found
themselves in or, you know, in

655
00:32:45,120 --> 00:32:47,480
between a rock and a very hard
place and that that

656
00:32:47,480 --> 00:32:49,320
acknowledgement.
Was important, you know, like I

657
00:32:49,320 --> 00:32:52,920
think it was the first call that
I've listened to where the tone

658
00:32:52,920 --> 00:32:58,280
had changed to, you know, there
was a recognition that austerity

659
00:32:58,280 --> 00:33:01,000
is required now.
Whereas beforehand, every kind

660
00:33:01,000 --> 00:33:03,440
of call where Chris has been a
part of it's been we're going to

661
00:33:03,440 --> 00:33:04,440
do this, we're going to grow
this.

662
00:33:04,440 --> 00:33:06,240
We're we're adding this, we're
adding this where, you know,

663
00:33:06,680 --> 00:33:11,120
everything was kind of, you
know, we're going as fast and

664
00:33:11,120 --> 00:33:13,560
hard as we can.
And I think this time was the

665
00:33:13,560 --> 00:33:16,280
first call where it was there
was an ounce of introspection

666
00:33:16,280 --> 00:33:21,200
and acknowledgement that like,
like you just need to trim all

667
00:33:21,200 --> 00:33:23,280
costs and see things through
right now.

668
00:33:23,280 --> 00:33:26,800
Not yeah, strangle costs.
Yeah, wonder if he'll.

669
00:33:27,560 --> 00:33:30,240
Not that you get much money for
him now, but he might like

670
00:33:30,280 --> 00:33:35,280
whether he'll start unwinding
somehow those all those minority

671
00:33:35,280 --> 00:33:38,200
stakes in the lithium companies,
yeah.

672
00:33:38,440 --> 00:33:40,400
I mean, and that's you're not
going to get those forum.

673
00:33:40,400 --> 00:33:43,120
But like.
Might have to.

674
00:33:43,520 --> 00:33:45,720
And the optics is a.
Challenge as well, sort of

675
00:33:45,800 --> 00:33:49,000
having only, you know, invested
in them a year ago and then

676
00:33:49,000 --> 00:33:52,520
having to unwind them so quickly
without sort of realising the

677
00:33:52,960 --> 00:33:56,200
probably the full potential that
they they wanted all those

678
00:33:56,200 --> 00:33:58,560
assets and companies if you
bought the optics of an equity.

679
00:33:58,560 --> 00:34:00,840
Race is way worse though.
Yeah, well I get them and get

680
00:34:00,840 --> 00:34:02,800
the cash, but yeah, heck can you
find a buyer?

681
00:34:02,800 --> 00:34:04,760
You know, it's not like you can
just sell these things on market

682
00:34:04,760 --> 00:34:06,760
considering you bought Delta.
At $0.90.

683
00:34:08,480 --> 00:34:11,600
Kelly Metals at 70 like you
know, what do you so you could

684
00:34:11,600 --> 00:34:16,080
you could group those stakes and
all of your your ownership in

685
00:34:16,080 --> 00:34:18,639
your lithium assets kind of
together and call it, you know,

686
00:34:18,679 --> 00:34:22,199
your min res lithium business
and do a do a 49% sell down of

687
00:34:22,199 --> 00:34:23,239
that.
So someone could have an

688
00:34:23,520 --> 00:34:27,320
indirect 49% interest in those
shares potentially, but yeah.

689
00:34:28,800 --> 00:34:31,400
Yeah, we're white non lithium.
We're white non lithium.

690
00:34:31,800 --> 00:34:34,840
That's that's the I think got a.
Kicker.

691
00:34:34,880 --> 00:34:35,679
You're right.
What do you reckon?

692
00:34:35,679 --> 00:34:39,719
'S more sensitive lithium price
or on oil price to them, so I

693
00:34:39,719 --> 00:34:42,080
think.
Iron ore just, it's just like a

694
00:34:42,080 --> 00:34:45,960
volumes thing.
I think the, the, the biggest

695
00:34:45,960 --> 00:34:49,360
sensitivity then price is a big
deal.

696
00:34:49,360 --> 00:34:51,880
Like your final goes to 150 and
stays there for the next three

697
00:34:51,880 --> 00:34:53,480
years.
Like things will be OK, right.

698
00:34:53,840 --> 00:34:57,640
But but the biggest sensitivity
is actually just, it's just

699
00:34:57,640 --> 00:35:01,160
going to be that the time
dependency of, of Onslow, like

700
00:35:01,720 --> 00:35:05,400
we've had a recalibration now
of, of tonnes and and meanwhile

701
00:35:05,840 --> 00:35:08,400
they've already the pre selling
future production at the same

702
00:35:08,400 --> 00:35:11,280
time.
So think things in the next sort

703
00:35:11,280 --> 00:35:13,920
of 18 months, especially sort
of, you know, 2-2 year, three

704
00:35:13,920 --> 00:35:16,480
year period.
That's that's kind of that's

705
00:35:16,480 --> 00:35:18,040
kind of peak, peak risk in my
opinion.

706
00:35:18,680 --> 00:35:21,600
Because, because if, if if
anything goes wrong at Onslow,

707
00:35:21,760 --> 00:35:25,920
like it just yeah, leverage
amplifies the upside and the

708
00:35:25,920 --> 00:35:28,960
downside in in ways that, you
know, can be wonderful and and

709
00:35:28,960 --> 00:35:30,400
horrible.
But as he said in the.

710
00:35:30,400 --> 00:35:34,440
Paper It's a shitty time to be
an MD, shitty time to be in

711
00:35:34,440 --> 00:35:36,080
business.
And like.

712
00:35:36,160 --> 00:35:38,120
Especially what they've done to,
you know, I don't know, the

713
00:35:38,120 --> 00:35:40,360
whole rise's not finished yet,
but all that trend, the trend

714
00:35:40,360 --> 00:35:43,080
shipping stuff and like getting
that online, that's pretty

715
00:35:43,080 --> 00:35:45,720
bloody impressive.
But just to come out the back

716
00:35:45,720 --> 00:35:49,840
end with, yeah, prices dropping,
it's hard work.

717
00:35:49,840 --> 00:35:50,680
It's freaking.
Hard.

718
00:35:50,800 --> 00:35:53,200
Work.
Fuck, of that I think stories A.

719
00:35:53,200 --> 00:35:56,760
Lot a long way from finished and
I'm very interested to see how

720
00:35:56,760 --> 00:36:01,240
the next yeah little period goes
because I, I think this could be

721
00:36:01,240 --> 00:36:04,200
the corporate story of our
generation, you know, like yeah,

722
00:36:04,240 --> 00:36:06,960
I, I, I, I know I say that sure,
I sure hope it isn't.

723
00:36:07,040 --> 00:36:08,200
Yeah, like it?
No it.

724
00:36:08,200 --> 00:36:09,360
Could be.
It could be either way.

725
00:36:09,360 --> 00:36:11,040
It could be the corporate story
of our generation.

726
00:36:11,040 --> 00:36:12,320
Either way.
You know, like, people have had

727
00:36:12,640 --> 00:36:15,240
very similar, like, sentiment
about Fortescue, like you said,

728
00:36:15,240 --> 00:36:16,280
Maddie.
And they come out the other

729
00:36:16,280 --> 00:36:19,640
side, you know, could, but it's,
you know, time before that it

730
00:36:19,640 --> 00:36:22,400
was Sons of Gwalia, you know,
like this is the story of our

731
00:36:22,400 --> 00:36:25,480
generation, in my opinion.
And I'm just I'm hooked.

732
00:36:25,800 --> 00:36:26,680
Yeah.
Yeah.

733
00:36:26,800 --> 00:36:30,280
All bloody rooting for them
because all the bloody people

734
00:36:30,280 --> 00:36:34,440
that work there, yeah, just want
to see you just just fuck it.

735
00:36:34,440 --> 00:36:36,320
Just want everything up,
everything.

736
00:36:36,320 --> 00:36:37,480
As if I miss.
Billionaire.

737
00:36:37,480 --> 00:36:41,040
Said alright.
Good work Trav.

738
00:36:41,040 --> 00:36:43,400
Sensational dissection there
mate.

739
00:36:43,880 --> 00:36:49,640
S 32 JD Yeah bloody we'll be a.
Bit lighter on here but I mean S

740
00:36:49,640 --> 00:36:52,560
32 are not.
Going to be the corporate story

741
00:36:52,560 --> 00:36:54,880
of this generation, Gara tell
you that.

742
00:36:55,920 --> 00:37:01,120
Maybe well, the crux of today's
announcement is that you know,

743
00:37:01,160 --> 00:37:03,400
you can see it in the share
price versus the share price of

744
00:37:03,480 --> 00:37:06,960
in res S 32 was kind of flat,
marginally up.

745
00:37:07,280 --> 00:37:12,360
It wasn't a massive change on
expectations, no massive misses

746
00:37:12,440 --> 00:37:15,600
or anything like that.
I still think it's it's

747
00:37:15,600 --> 00:37:18,640
interesting to see the decision
making for this this kind of

748
00:37:18,640 --> 00:37:21,600
company, what they've done in
selling Illawarra and how that

749
00:37:21,600 --> 00:37:25,440
kind of plays out over time.
I mean, essentially all the

750
00:37:25,440 --> 00:37:28,040
money they're getting upfront
for selling Illawarra like US

751
00:37:28,040 --> 00:37:32,160
roughly a billion has been sunk
in the past year and through

752
00:37:32,160 --> 00:37:37,160
FY25 into MOSA.
So that is just kind of

753
00:37:37,240 --> 00:37:40,720
astounding to to think about the
the kind of bit they're they're

754
00:37:40,720 --> 00:37:44,600
putting on on that one.
Obviously it's not quite a, an

755
00:37:44,600 --> 00:37:48,600
Allison or Minres scale of bit,
but it's, it's a big decision.

756
00:37:48,600 --> 00:37:52,480
So, yeah, I mean, let's get into
the the numbers today and sort

757
00:37:52,480 --> 00:37:55,760
of see where this business is,
is kind of that they did

758
00:37:55,760 --> 00:37:58,320
revenue.
This is taking, you know,

759
00:37:58,320 --> 00:38:00,280
underlying numbers here.
So taking into account the

760
00:38:00,280 --> 00:38:03,360
period that in which they owned
Illawarra because the sale

761
00:38:03,360 --> 00:38:08,120
completed today, but 8.3 billion
in revenue, underlying EBITDA,

762
00:38:08,120 --> 00:38:12,680
1.8 billion and underlying EBIT
of $890 million.

763
00:38:13,200 --> 00:38:16,040
Now Illawarra made up 50% of
that that.

764
00:38:16,040 --> 00:38:18,000
So that's that's pretty
fascinating and it wasn't

765
00:38:18,000 --> 00:38:21,360
without its problems.
It needed a heap of capital to

766
00:38:21,360 --> 00:38:25,160
be sunk into it, you know, last
year and in the foreseeable

767
00:38:25,240 --> 00:38:29,520
future, you know, so we've sort
of spoken from a stance of, you

768
00:38:29,520 --> 00:38:32,920
know, a positive outlook on the
commodity met coal.

769
00:38:33,360 --> 00:38:35,840
But Illawarra wasn't, you know,
without faults.

770
00:38:35,840 --> 00:38:38,440
It it needed a lot of capital
would be sunk into it.

771
00:38:38,440 --> 00:38:42,360
There was a long one move that
was done in the past year, but

772
00:38:42,400 --> 00:38:46,240
its contributions.
Were sort of like heavier in

773
00:38:46,240 --> 00:38:49,360
that year kind of as a result of
the aluminium aluminium market

774
00:38:49,360 --> 00:38:51,640
kind of being pretty soft right
exactly so if.

775
00:38:51,640 --> 00:38:55,040
You're, if you want to take a
snapshot in time from FY24,

776
00:38:55,240 --> 00:38:57,800
ignoring Illawarra to get a feel
for what the business is looking

777
00:38:57,800 --> 00:38:59,720
like.
We're talking about, you know,

778
00:38:59,720 --> 00:39:03,400
top line revenues, 60% coming
from alumina slash aluminium,

779
00:39:03,720 --> 00:39:08,200
10% copper, 10% zinc, 10%
nickel, 10% manganese.

780
00:39:08,200 --> 00:39:11,360
They're all rough numbers, just
to kind of simplify how to think

781
00:39:11,360 --> 00:39:15,000
about South 32 and weird that
it's not.

782
00:39:15,000 --> 00:39:17,880
Silver anymore, you know,
Cannington used to be the

783
00:39:17,880 --> 00:39:19,480
highest grade silver mine in the
world.

784
00:39:20,560 --> 00:39:22,800
Obviously doesn't contribute
much now.

785
00:39:23,200 --> 00:39:25,960
Yeah, I mean, I think.
Zinc.

786
00:39:26,600 --> 00:39:28,960
Zinc is you know that attribute
is.

787
00:39:29,600 --> 00:39:31,400
Why is that zinc?
Like a zinc equivalent?

788
00:39:32,160 --> 00:39:34,280
Yeah, so in hang.
On.

789
00:39:35,080 --> 00:39:39,680
I think they produce a lot of
silver at that KGHM, the the

790
00:39:39,680 --> 00:39:41,760
Polish line that they've got as
well.

791
00:39:41,760 --> 00:39:44,320
There's a lot of silver there.
How's the how's the balance

792
00:39:44,320 --> 00:39:46,360
sheet right mate?
It's looking a whole lot better.

793
00:39:46,360 --> 00:39:48,600
Than than min res is, but you've
got to kind of take it with a

794
00:39:48,600 --> 00:39:51,280
huge pinch of salt given that
they've sold Illawarra and

795
00:39:51,280 --> 00:39:52,600
they're getting all the cash in
the door.

796
00:39:52,600 --> 00:39:58,320
So they announced a dividend US
140 million in divvies as well

797
00:39:58,320 --> 00:40:02,440
as AUS $200 million buyback.
So obviously having the.

798
00:40:03,120 --> 00:40:05,880
The sale of the asset changes
their balance sheet massively.

799
00:40:05,880 --> 00:40:10,640
They were June 30th before the
asset sale had gone through in a

800
00:40:10,640 --> 00:40:12,960
net debt position to the tune of
760 million.

801
00:40:13,360 --> 00:40:17,400
But that is on a sort of pro
forma basis roughly US 100

802
00:40:17,400 --> 00:40:20,600
million in net debt taking into
account the cash as well as the

803
00:40:20,600 --> 00:40:24,440
dividend and the buyback.
So the business is in, you know,

804
00:40:25,200 --> 00:40:27,320
great health if you if you kind
of call it that.

805
00:40:27,480 --> 00:40:30,960
But they've foregone a lot of
future earnings.

806
00:40:30,960 --> 00:40:34,800
And, you know, you can kind of
look at that with the context of

807
00:40:34,800 --> 00:40:37,600
Min Reyes, who we've just spoken
about, and imagine what things

808
00:40:37,600 --> 00:40:40,360
could kind of look like if if
they had, or maybe if they do

809
00:40:40,560 --> 00:40:44,120
have to sell an asset and they
can get a decent price for it.

810
00:40:44,520 --> 00:40:46,920
You know, yeah, things will all
of a sudden look a whole lot

811
00:40:46,920 --> 00:40:48,520
better.
But you've sold a a decent

812
00:40:48,880 --> 00:40:51,160
amount of what your future
earnings are.

813
00:40:51,960 --> 00:40:54,600
So the next thing I was pretty
keen to zoom in on was

814
00:40:54,800 --> 00:40:57,640
Australian manganese, given
everything that's kind of gone

815
00:40:57,640 --> 00:41:02,040
on there in the past six months
or so, and that that had some

816
00:41:02,040 --> 00:41:04,640
pretty positive announcements.
So they got some insurance money

817
00:41:04,640 --> 00:41:06,720
coming in.
Oh, does that come in?

818
00:41:06,720 --> 00:41:08,600
Pretty quick.
That has come in very.

819
00:41:08,600 --> 00:41:12,280
Quick quicker than 29 metals.
Must have been ACRA Jobby has

820
00:41:12,480 --> 00:41:13,960
has to.
Must have been if it's that

821
00:41:13,960 --> 00:41:15,080
quick.
I don't.

822
00:41:15,280 --> 00:41:17,720
Yeah, well, I don't know who
else actually helps out with

823
00:41:17,720 --> 00:41:19,400
mining insurance these days,
mate.

824
00:41:19,400 --> 00:41:21,600
I was.
I was a standard A. $125 million

825
00:41:21,600 --> 00:41:23,560
just like that.
Yeah, that's Dave.

826
00:41:23,560 --> 00:41:26,080
That's got Dave Harrison's name
written all over it.

827
00:41:26,080 --> 00:41:26,840
So do you.
Yeah.

828
00:41:26,840 --> 00:41:28,400
If there, if there's other
people doing insurance, they're

829
00:41:28,400 --> 00:41:31,360
probably not getting me.
He calls today or is CRE is the

830
00:41:31,360 --> 00:41:35,560
phone is off the hook, mate.
Morning insurance only done by

831
00:41:35,560 --> 00:41:38,160
one company these days.
Yeah, Yeah.

832
00:41:38,160 --> 00:41:40,440
Good job on that CRE.
I'll assume it was you.

833
00:41:41,840 --> 00:41:45,400
Well said so.
They, you know, there's two

834
00:41:45,400 --> 00:41:48,560
parts to it actually.
There's the CapEx, 125 million

835
00:41:48,800 --> 00:41:52,240
is the CapEx, they're 60% that
they have to sink in.

836
00:41:52,640 --> 00:41:54,720
And then yet you know you're
still working on getting the

837
00:41:54,720 --> 00:41:56,960
cash back for the the lost
revenue.

838
00:41:57,120 --> 00:42:00,640
Again, this is held within
Chemco, which they own 60% of,

839
00:42:00,640 --> 00:42:02,920
but essentially that's going to
be spent over the next few

840
00:42:02,920 --> 00:42:05,800
quarters.
And, you know, they just submit

841
00:42:05,800 --> 00:42:09,280
the thing and CRE pays him out.
So pretty, pretty easy down

842
00:42:09,280 --> 00:42:11,520
there.
But you know, of, of note,

843
00:42:11,520 --> 00:42:14,360
there's the, the Wharf that
needs to be fixed.

844
00:42:14,360 --> 00:42:17,520
We've seen the, the photos and
everything at the time, but they

845
00:42:17,520 --> 00:42:20,160
actually stressed themselves
that it's not just the Wharf

846
00:42:20,160 --> 00:42:23,080
that needs to be fixed.
You've got bridges on, on Groot

847
00:42:23,080 --> 00:42:25,600
Island there that need to be
fixed as well as dewatering.

848
00:42:25,600 --> 00:42:28,360
And they were, you know, showing
off a few photos that that's not

849
00:42:28,360 --> 00:42:30,800
a, you know, a super simple
task.

850
00:42:30,800 --> 00:42:34,280
There's a a lot of water.
They spoke about the number was

851
00:42:34,280 --> 00:42:37,720
36 gigaliters.
Interesting to put that into

852
00:42:37,720 --> 00:42:40,440
context.
They say they get 10 gigaliters

853
00:42:40,760 --> 00:42:43,680
annually on average.
So it is a place again like

854
00:42:43,680 --> 00:42:46,200
we're saying with minres that
gets a lot of downfall.

855
00:42:46,200 --> 00:42:50,000
It gets, you know, cyclones
coming through every year and

856
00:42:50,360 --> 00:42:52,720
you know, that's, that's just
part and parcel of operating in,

857
00:42:53,320 --> 00:42:57,200
in that part of the world.
So in terms of guidance and

858
00:42:57,200 --> 00:43:00,760
getting this one back online,
they got it to 1,000,000 wet

859
00:43:00,760 --> 00:43:06,920
metric tonnes which is under 30%
or roughly 30% of what your pre

860
00:43:06,920 --> 00:43:11,080
cyclone operating levels were
and that's FY25.

861
00:43:11,720 --> 00:43:16,080
They reiterated that it'd come
online in Q3 of this financial

862
00:43:16,080 --> 00:43:19,080
year.
And interestingly, they will

863
00:43:19,080 --> 00:43:22,560
pose the question, given
everything going on at, at Anglo

864
00:43:22,560 --> 00:43:25,400
and the trouble that they're
kind of in, which became to kind

865
00:43:25,400 --> 00:43:31,880
of scoop up their 40% of Gemco.
And yeah, the, the answer was,

866
00:43:31,920 --> 00:43:34,080
yeah, we'd we'd have a look,
we'd be interested.

867
00:43:34,080 --> 00:43:35,760
So nothing's happened on that
front.

868
00:43:35,760 --> 00:43:39,440
And they, you know, being a
being the kind of organisation

869
00:43:39,440 --> 00:43:43,120
they are, they were very, you
know, they spoke very positively

870
00:43:43,120 --> 00:43:45,680
of Anglo, said they'd been great
partners, yada, yada, yada.

871
00:43:45,680 --> 00:43:48,600
But I think they would be
interested in, you know, talking

872
00:43:48,600 --> 00:43:51,480
about kind of forced sellers.
Anglo's another one that kind of

873
00:43:51,640 --> 00:43:53,840
falls in that basket, I'd love
to say on an earnings.

874
00:43:53,840 --> 00:43:58,640
Call where they say they've got
a shit partner, Is that ever

875
00:43:58,640 --> 00:44:00,480
been?
Said Chris Ellison.

876
00:44:00,480 --> 00:44:05,200
He said it about.
Albemarle, you know it, he he

877
00:44:05,200 --> 00:44:08,200
said kind of, you know, that
they're not a complete shit

878
00:44:08,200 --> 00:44:11,880
partner, but this was a, a
specific example where he was

879
00:44:12,280 --> 00:44:14,840
pissed off and he, you know, he
said it on the the earning

880
00:44:14,840 --> 00:44:16,360
school and he said, oh, the one
today talking.

881
00:44:16,360 --> 00:44:18,760
About how they turned, stopped,
turned off a trial.

882
00:44:18,760 --> 00:44:21,640
I was back back in.
Yeah, last cycle, kind of.

883
00:44:21,760 --> 00:44:23,120
Yeah, that's what I said.
I didn't agree.

884
00:44:23,160 --> 00:44:24,200
With that.
But he said don't put that in

885
00:44:24,200 --> 00:44:25,640
the.
Papers so we, you know, just

886
00:44:26,000 --> 00:44:27,400
this didn't it didn't happen.
It didn't happen.

887
00:44:28,480 --> 00:44:30,560
This was one from.
Yeah, he was talking about the

888
00:44:30,560 --> 00:44:33,400
same issue, but when he'd spoken
about it at the time maybe 3/4

889
00:44:33,400 --> 00:44:37,800
ago, if I take, he was a bit
more worked up about about

890
00:44:37,800 --> 00:44:41,200
things and about their kind of
execution capability I guess.

891
00:44:41,240 --> 00:44:44,160
And how's how's Worsley?
Going JD, that's a really

892
00:44:44,160 --> 00:44:45,440
interesting.
One, and there were a lot of

893
00:44:45,440 --> 00:44:47,080
questions on this.
This was one of the big

894
00:44:47,080 --> 00:44:49,960
takeaways we had coming out of
Diggers, just how hard getting

895
00:44:49,960 --> 00:44:53,480
things permitted is in this day
and age in Australia.

896
00:44:53,480 --> 00:44:57,320
And you know, this is, this is
WA with a lot of people kind of

897
00:44:57,320 --> 00:45:01,480
throwing stones at NSW and, and
Victoria, but this is very much

898
00:45:01,480 --> 00:45:04,440
in our backyard here.
And he had a few interesting

899
00:45:04,440 --> 00:45:09,120
things to say to, to kind of sum
it up, the, the take away, my

900
00:45:09,120 --> 00:45:13,120
kind of gut feel was that they,
they get a positive outcome to,

901
00:45:13,120 --> 00:45:14,880
to give people a bit of a
reminder.

902
00:45:14,880 --> 00:45:19,240
There were a lot of conditions
put on the approval that they

903
00:45:19,240 --> 00:45:23,000
got given, and essentially they
said that they're shackled by

904
00:45:23,000 --> 00:45:26,520
those conditions and they just
can't operate effectively with

905
00:45:26,520 --> 00:45:30,720
them.
So yeah, he he was alarmed about

906
00:45:30,720 --> 00:45:33,520
a lot of things that were kind
of pointed out, but things are

907
00:45:33,680 --> 00:45:36,600
being kind of worked out.
They spoke about getting a

908
00:45:36,600 --> 00:45:39,720
result in early November and,
you know, they were very

909
00:45:39,720 --> 00:45:42,600
explicit in saying that we need
a timeline by the end of this

910
00:45:42,600 --> 00:45:44,480
calendar year to to make a
decision.

911
00:45:44,480 --> 00:45:47,360
So it does sound like things are
progressing on that front.

912
00:45:47,560 --> 00:45:50,560
Why I kind of say my inclination
was that there would be

913
00:45:50,560 --> 00:45:53,840
something positive that comes
out about it is you put it in

914
00:45:53,840 --> 00:45:57,360
the context of everything that's
happened in WA about the lithium

915
00:45:57,360 --> 00:46:01,280
industry, the nickel industry.
You know, Yogan, a lot of jobs

916
00:46:01,280 --> 00:46:06,240
are being rolled off and there's
an election in WA next year.

917
00:46:07,120 --> 00:46:10,360
You know, job losses aren't good
for political, you know, the

918
00:46:10,560 --> 00:46:14,520
incumbent political party.
And I think with a sort of

919
00:46:14,720 --> 00:46:16,560
veiled threat of we don't want
to lay off.

920
00:46:16,960 --> 00:46:21,480
I think 1800 people was was the
number that they can come to an

921
00:46:21,480 --> 00:46:24,360
agreement.
And yeah, there's a few phases

922
00:46:24,360 --> 00:46:25,800
to this.
There's, there's always a nuance

923
00:46:25,800 --> 00:46:29,360
with these things, but hopefully
things get get worked out in a

924
00:46:29,400 --> 00:46:34,560
sort of appropriate
environmental front as well as a

925
00:46:34,880 --> 00:46:37,160
appropriate kind of business
front and they can kind of find

926
00:46:37,160 --> 00:46:39,640
common ground that that works
for everyone.

927
00:46:41,040 --> 00:46:43,680
And that's S 30.
Two, good on your JD.

928
00:46:44,240 --> 00:46:45,640
The election.
Remember, we're a liberal

929
00:46:45,640 --> 00:46:48,400
podcast, JC.
Now you're working, you've got

930
00:46:48,400 --> 00:46:49,960
to like Liberal, but we're an
apolitical.

931
00:46:49,960 --> 00:46:53,960
Podcast.
Ally JC.

932
00:46:53,960 --> 00:46:55,480
You're back.
Oh, all the.

933
00:46:55,480 --> 00:46:57,920
Bloody YouTube.
Fans will be very happy.

934
00:46:57,960 --> 00:46:59,840
Oh, very.
Where's GC?

935
00:46:59,840 --> 00:47:02,640
Where is GC?
Oh, she's back.

936
00:47:02,640 --> 00:47:07,400
So no, I'll just finish off the
day with a couple of the the

937
00:47:07,400 --> 00:47:12,320
Goldie's annual annual results.
So starting with West Gold.

938
00:47:12,320 --> 00:47:18,400
So FY24 is yeah, bit of a what's
been described by some as a

939
00:47:18,400 --> 00:47:21,560
watershed year for them.
Big transformation from

940
00:47:21,560 --> 00:47:23,480
probably, you know, one to two
years ago.

941
00:47:24,160 --> 00:47:29,680
Everything up financially,
notably free cash of 86 mil

942
00:47:30,000 --> 00:47:34,280
versus you know only based
basically break even last year

943
00:47:35,040 --> 00:47:38,240
they achieved the revised
production and cost guidance

944
00:47:38,240 --> 00:47:44,320
sort of producing 227,000 odd oz
at just shy of 2200 an ounce

945
00:47:44,400 --> 00:47:48,640
Aussie and they're now
completely unhedged and and debt

946
00:47:48,640 --> 00:47:51,720
free.
Interestingly, they had a slide

947
00:47:51,720 --> 00:47:57,720
on the fact that total all in
sustaining costs had reduced

948
00:47:57,720 --> 00:48:01,520
year on year.
But actually on and per oz basis

949
00:48:02,480 --> 00:48:06,640
those costs are higher, about
almost $200.00 an ounce higher,

950
00:48:07,480 --> 00:48:11,600
larger because due to lower
production with mining suspended

951
00:48:11,600 --> 00:48:16,200
at Paddy's flat and they're
paying out a 2.25 cents per

952
00:48:16,200 --> 00:48:18,040
share dividend which was
previously flagged.

953
00:48:18,480 --> 00:48:23,080
I think the interesting one to
look at which was raised on the

954
00:48:23,200 --> 00:48:27,360
earnings call today is, is the
cash build and the net credited

955
00:48:27,360 --> 00:48:30,440
position.
So cash and bullion went up from

956
00:48:30,440 --> 00:48:37,240
192 million in FY23 to $263
million this year, so up about

957
00:48:37,240 --> 00:48:40,800
37%.
Interestingly, net creditors

958
00:48:41,040 --> 00:48:45,120
doubled from 72 million to $141
million.

959
00:48:45,480 --> 00:48:48,000
So the increase in the cash is
almost equivalent to the

960
00:48:48,000 --> 00:48:52,800
increase in the net creditors.
Now note this is 3 merging with

961
00:48:52,800 --> 00:48:56,920
Corolla, so this doesn't.
Include what Corolla's payables

962
00:48:57,000 --> 00:48:59,480
will be as well.
Because that transaction

963
00:48:59,920 --> 00:49:02,600
completed after the the year
end, Yeah.

964
00:49:02,880 --> 00:49:06,600
And look, admittedly they had
quite a big growth CapEx year.

965
00:49:06,600 --> 00:49:12,080
They spent $157 million so that
you know, sort of cheques out

966
00:49:12,080 --> 00:49:15,520
with the higher sort of little
level of net creditors to to

967
00:49:15,520 --> 00:49:17,840
some extent.
Here's here's what they said on

968
00:49:17,920 --> 00:49:22,040
the call.
And he is asking a question

969
00:49:22,040 --> 00:49:26,520
about trade payables.
He's noticed an increase from 78

970
00:49:26,520 --> 00:49:30,280
to 148 million.
Tommy, would you like to comment

971
00:49:30,280 --> 00:49:33,400
at all on trade payables and,
and the reason for the increase?

972
00:49:33,840 --> 00:49:34,800
Absolutely.
Thanks.

973
00:49:34,880 --> 00:49:37,680
Shane and thanks, Mark for the
question.

974
00:49:38,640 --> 00:49:43,520
Essentially as you see in FY24,
it has been a heavy investment

975
00:49:43,520 --> 00:49:47,320
year on our growth projects in
Great Fingal Fender and the Big

976
00:49:47,320 --> 00:49:50,760
Bell long haul open slope.
Naturally, the creditors and

977
00:49:50,760 --> 00:49:54,000
payments will increase as a
result of that investment.

978
00:49:55,520 --> 00:49:58,080
So as.
We said, you know, totally fair

979
00:49:58,080 --> 00:50:00,880
comment on the growth CapEx.
It's, it was much higher than

980
00:50:00,960 --> 00:50:03,560
our previous years.
But surely higher CapEx would

981
00:50:03,560 --> 00:50:07,560
just mean your cash build
wouldn't be say as much or

982
00:50:07,560 --> 00:50:11,600
perhaps neutral during this
period however, and the whole

983
00:50:11,600 --> 00:50:15,640
cash build thing's been quite a
big selling point for West Gold

984
00:50:15,640 --> 00:50:18,320
the last few quarters.
They're really, really

985
00:50:18,320 --> 00:50:22,080
emphasised on the call and sort
of previous presentations that

986
00:50:22,080 --> 00:50:26,800
that built, built net cash every
quarter for the last six

987
00:50:26,800 --> 00:50:28,680
quarters and the assumption in
the market.

988
00:50:28,680 --> 00:50:31,440
'S been and that's driven by
operational efficiencies and and

989
00:50:31,440 --> 00:50:34,440
high margin on your high gold
price and all that sort of

990
00:50:34,440 --> 00:50:36,640
stuff.
But if it's if, if one of the

991
00:50:36,960 --> 00:50:39,640
drivers is actually just, you
know, delaying payment if you

992
00:50:39,640 --> 00:50:42,920
have your creditors and that's,
that's not as admirable.

993
00:50:43,120 --> 00:50:44,240
Yeah.
So I think.

994
00:50:44,240 --> 00:50:47,520
One of the main reasons you
know, for this reported, you

995
00:50:47,520 --> 00:50:50,840
know, net cash field for you
know, the last half a dozen

996
00:50:50,840 --> 00:50:54,960
quarters, you know, a, a
potential main driver of that is

997
00:50:54,960 --> 00:50:58,320
actually because the payment of
the trade payables is being

998
00:50:58,320 --> 00:51:01,040
stretched out.
Now why would you know, you

999
00:51:01,360 --> 00:51:05,760
might want to do that?
They have to pay or if they

1000
00:51:05,760 --> 00:51:08,960
have, they probably already paid
it actually the cash component

1001
00:51:08,960 --> 00:51:14,040
of the KORA transaction.
So that's like $125 million.

1002
00:51:14,640 --> 00:51:17,920
They've got the dividend that
they've just, or they've

1003
00:51:17,920 --> 00:51:20,760
previously flagged that's worth
around 20 million bucks and

1004
00:51:20,760 --> 00:51:22,760
they've obviously still got to
run the business as well.

1005
00:51:22,760 --> 00:51:28,680
So I'm thinking perhaps they may
have sort of gone about it that

1006
00:51:28,680 --> 00:51:31,840
way to make sure they've got
enough cash to sort of tickle

1007
00:51:31,840 --> 00:51:36,200
those things off without having
to draw on their corporate, you

1008
00:51:36,200 --> 00:51:38,920
know, revolver facility.
So it'll be interesting to say

1009
00:51:38,920 --> 00:51:42,160
how this sort of washes through
the next periods financials with

1010
00:51:42,800 --> 00:51:47,120
which would now incorporate, you
know, Korora, perhaps it's just

1011
00:51:47,120 --> 00:51:51,240
a blip in time.
And it'll be interesting to say

1012
00:51:51,240 --> 00:51:54,760
whether they sort of can ride
through, especially with, you

1013
00:51:54,760 --> 00:51:56,680
know, rising gold prices and
things like that.

1014
00:51:57,880 --> 00:52:01,520
And that will tie them over.
But just an interesting one

1015
00:52:01,520 --> 00:52:02,720
there.
I thought.

1016
00:52:02,960 --> 00:52:05,160
You think God with?
God, with where it's at at the

1017
00:52:05,160 --> 00:52:08,400
moment and then being unhedged
there, you couldn't ask for a

1018
00:52:08,400 --> 00:52:10,720
better set up in terms of, oh,
absolutely got the.

1019
00:52:10,760 --> 00:52:12,800
Opposite of Min Rez.
Yeah, no, they've got.

1020
00:52:12,800 --> 00:52:17,960
The the, the balance sheet there
is as far as the hedge, no

1021
00:52:17,960 --> 00:52:21,760
hedging and no debt certainly
helps a lot on that front and

1022
00:52:21,760 --> 00:52:24,920
the drill, drill hits.
Coming out of Fletcher looked

1023
00:52:24,920 --> 00:52:26,800
pretty, pretty promising as
well.

1024
00:52:26,800 --> 00:52:30,320
So if they can get that up and
gown, you know, hopefully

1025
00:52:30,320 --> 00:52:32,560
compliment the other ones when
great fingers gown.

1026
00:52:32,560 --> 00:52:34,440
That's yeah, you can say the
path they're on.

1027
00:52:34,440 --> 00:52:36,000
But yeah, exactly.
Yeah.

1028
00:52:36,640 --> 00:52:40,440
And as far as FY25 guidance
goes, we haven't seen anything

1029
00:52:40,440 --> 00:52:43,000
just yet.
They did comment on the call

1030
00:52:43,000 --> 00:52:46,840
that they're updating all their
sort of reserves and resources

1031
00:52:46,840 --> 00:52:50,880
sort of corporate Carora and you
know, just general updates in

1032
00:52:50,880 --> 00:52:54,920
early September, which is
literally a week away, which

1033
00:52:54,920 --> 00:52:58,920
will be should shortly followed
by the FY25 guidance.

1034
00:52:59,520 --> 00:53:02,160
But I mean, we've all seen in
the presentations, you know,

1035
00:53:02,160 --> 00:53:05,200
they talk about themselves now
as a, you know, plus 400,000 oz

1036
00:53:05,200 --> 00:53:07,640
producer.
But as far as what that means in

1037
00:53:07,680 --> 00:53:11,560
a sort of exact terms and costs,
that'll be interesting.

1038
00:53:12,040 --> 00:53:14,840
The other interesting thing will
be to see at their maker

1039
00:53:14,840 --> 00:53:18,720
operations net because of the
absence of Paddy's flat, how

1040
00:53:18,720 --> 00:53:22,280
that's sort of offset with more
ore from Blue Bed S Junction,

1041
00:53:22,280 --> 00:53:25,080
which they just sort of put out
a reserve and everything for

1042
00:53:25,080 --> 00:53:28,400
those sort of talked about
having, you know, targeting at

1043
00:53:28,400 --> 00:53:31,480
least 1.2 million tonnes per
annum by the end of this year

1044
00:53:31,480 --> 00:53:34,960
from there, you know, sort of
displacing ore that they were

1045
00:53:34,960 --> 00:53:38,920
previously getting from Q.
So they should definitely save

1046
00:53:38,920 --> 00:53:42,000
on some costs there.
And then the other thing as

1047
00:53:42,000 --> 00:53:45,760
well, they'll be should be
fitting in some ore from ore

1048
00:53:45,760 --> 00:53:48,640
Gold's nearby Crown Prince,
which they're currently

1049
00:53:48,640 --> 00:53:53,200
negotiating an OPA for, which is
pretty high grade open pit dirt.

1050
00:53:53,200 --> 00:53:55,400
And I'm a Ding Ding on that 10
that's in the allergy.

1051
00:53:55,480 --> 00:53:56,160
So.
Small cap.

1052
00:53:56,200 --> 00:53:59,440
That's small cap, yeah.
That's small cap OTF.

1053
00:54:00,320 --> 00:54:02,960
And.
So between those extra all

1054
00:54:02,960 --> 00:54:07,280
sources in and around Maker that
will allow them to expand the

1055
00:54:07,280 --> 00:54:11,000
capacity of Bluebird from what's
currently 1.6 million times

1056
00:54:11,000 --> 00:54:15,520
round up to 2.2 without sort of
spending too much money at all.

1057
00:54:16,520 --> 00:54:20,240
And that's larger because it's
just easier with softer open pit

1058
00:54:20,240 --> 00:54:24,120
or.
And he, Wayne and the team also

1059
00:54:24,120 --> 00:54:28,080
sort of talked about increasing
the utilisation of the Corolla

1060
00:54:28,080 --> 00:54:31,960
mills and upgrades in hybrid
power Higginsville to reduce

1061
00:54:31,960 --> 00:54:34,880
operating costs as well.
So definitely a few different

1062
00:54:34,880 --> 00:54:40,040
leaves there they can pull from
sort of a all source and sort of

1063
00:54:40,040 --> 00:54:42,880
cost basis as well.
Yeah, I love these annual.

1064
00:54:42,880 --> 00:54:44,320
Reports because they're so
bloody long.

1065
00:54:44,320 --> 00:54:48,840
So I like a good control F and
the term I was looking for in

1066
00:54:48,840 --> 00:54:51,760
the West Gold one which none of
these come up or couldn't have

1067
00:54:51,760 --> 00:54:54,360
believed it.
Smack, variable speed, secondary

1068
00:54:54,360 --> 00:54:57,040
ventilation or VSDS weren't in
the annual report.

1069
00:54:57,120 --> 00:55:00,480
Couldn't bloody believe the
electrical partner of West Gold

1070
00:55:00,480 --> 00:55:04,960
saving them millions, millions,
bloody millions staying in the

1071
00:55:04,960 --> 00:55:07,760
door from the bloody power
savings from the VSDS.

1072
00:55:07,920 --> 00:55:09,160
They didn't shout them out.
Isn't it?

1073
00:55:10,040 --> 00:55:12,440
I remember.
When, when we visited Marty Law

1074
00:55:12,440 --> 00:55:16,640
at, you know, at his, you know,
marvellous buddy, great, great

1075
00:55:16,640 --> 00:55:18,040
warehouse.
He's got everything going on.

1076
00:55:18,320 --> 00:55:22,480
He said to me, I am certain that
these will be adopted in the

1077
00:55:22,480 --> 00:55:24,520
industry over time.
It's just a matter of time.

1078
00:55:24,680 --> 00:55:28,320
And like, you know, the, the,
the reputation that the, the

1079
00:55:28,360 --> 00:55:31,120
1000 Volt ones have, you know,
he's like, he's got a solution

1080
00:55:31,120 --> 00:55:33,360
to overcome that.
So it's kind of like you just,

1081
00:55:34,640 --> 00:55:36,680
you've got to try it out.
I think it's kind of like if you

1082
00:55:36,680 --> 00:55:39,120
if you know what I think it is.
It's like, I don't think it is.

1083
00:55:39,360 --> 00:55:41,240
Just put it on.
They've just done this.

1084
00:55:41,240 --> 00:55:44,040
Merger with Corolla, right?
They've got these new assets

1085
00:55:44,040 --> 00:55:47,040
that don't have the VSDS in them
yet and they want first dibs.

1086
00:55:47,800 --> 00:55:49,320
They want it.
They want to fill out all, you

1087
00:55:49,320 --> 00:55:51,640
know, Beta hunt and the like
down there 1st and that's why

1088
00:55:51,840 --> 00:55:53,560
they don't want to call them out
because they know everyone else

1089
00:55:53,560 --> 00:55:55,360
in WA will be on to it just like
that.

1090
00:55:55,520 --> 00:55:57,240
Oh no.
The como factor.

1091
00:55:57,240 --> 00:55:59,720
Well, you do have to pay for.
Them upfront but the amount of

1092
00:55:59,720 --> 00:56:02,760
cost savings like SMEC are
effectively giving you money

1093
00:56:03,360 --> 00:56:05,600
they might even.
They might even give you a buddy

1094
00:56:06,080 --> 00:56:09,000
an upfront and they can actually
they could do a financing model

1095
00:56:09,000 --> 00:56:12,000
where they just give it to you
and then with the cost savings

1096
00:56:12,000 --> 00:56:15,240
get repaid over time maybe.
That's a wonder if Marty will do

1097
00:56:15,240 --> 00:56:18,760
that.
You don't know if you don't ask.

1098
00:56:18,840 --> 00:56:23,720
You don't know if you don't ask.
Red 5 Bloody vault.

1099
00:56:23,720 --> 00:56:26,080
Sorry.
Yes, good old vault.

1100
00:56:26,960 --> 00:56:31,600
Bloody vault with AV but he off
12% today.

1101
00:56:31,840 --> 00:56:33,680
Yeah, scraping duck.
Shit, so we'll.

1102
00:56:33,680 --> 00:56:36,480
Probably get into.
The reasoning for that to say a

1103
00:56:36,480 --> 00:56:38,240
lot of things.
Are fucking off today, but this

1104
00:56:38,240 --> 00:56:40,160
is an awful lot particularly
off.

1105
00:56:40,160 --> 00:56:42,640
Yeah, so.
So what were the highlights?

1106
00:56:42,640 --> 00:56:46,360
From the financial year gone to
to start with Ellie so their

1107
00:56:46,360 --> 00:56:48,960
underlying.
EBITDA was just shy of 200

1108
00:56:48,960 --> 00:56:52,800
million bucks and underlying
profit of around 50 million

1109
00:56:52,800 --> 00:56:55,160
bucks.
Production costs were pretty in

1110
00:56:55,160 --> 00:57:00,240
line with guidance, so 223,000
oz at around just over 2000

1111
00:57:00,240 --> 00:57:03,640
bucks now all sustaining which
was already previously flagged.

1112
00:57:04,200 --> 00:57:09,280
The net creditors were up a fair
bid, but but essentially that

1113
00:57:09,280 --> 00:57:12,760
reflects the business basically
doubling with the the

1114
00:57:12,800 --> 00:57:14,760
Silverlight merger complaining
in June.

1115
00:57:15,360 --> 00:57:20,320
They closed the year with cash
and bullying of around 450

1116
00:57:20,320 --> 00:57:24,400
million bucks.
But post year end they paid off

1117
00:57:24,400 --> 00:57:28,840
all the remaining debt from the,
you know, the Red 5 original

1118
00:57:28,840 --> 00:57:32,520
days.
And also they received proceeds

1119
00:57:32,520 --> 00:57:36,800
from the block trade they did of
their own shares, which, you

1120
00:57:37,000 --> 00:57:41,360
know, silver like acquired, you
know, the strategic stake in Red

1121
00:57:41,360 --> 00:57:44,200
when prior to that merger.
So by the time you sort of

1122
00:57:44,200 --> 00:57:47,080
figure that all out, they
basically have just shot $500

1123
00:57:47,080 --> 00:57:49,760
million cash and bullying and no
debt.

1124
00:57:50,560 --> 00:57:54,040
Something I thought was appears
small, but I thought it was just

1125
00:57:54,040 --> 00:57:58,720
interesting of more so the
location of this statement, a

1126
00:57:58,720 --> 00:58:01,560
statement of basically what
their tax losses were on the

1127
00:58:01,560 --> 00:58:04,320
front page and one of the key
highlight, you know, bullet

1128
00:58:04,320 --> 00:58:06,080
points.
So they've said they've got

1129
00:58:06,600 --> 00:58:10,920
Aussie tax losses of 381,000,000
and Canadian tax losses of

1130
00:58:11,280 --> 00:58:14,680
Canadian 255,000,000.
I mean the Aussie ones will

1131
00:58:14,680 --> 00:58:17,880
certainly come in pretty handy
as they go into sort of cash

1132
00:58:17,880 --> 00:58:19,760
harvest mode at King of the
Hills.

1133
00:58:20,800 --> 00:58:23,640
Not sure how much those tax
losses will be getting.

1134
00:58:23,640 --> 00:58:26,480
Utilise it, you know, sugar zone
anytime soon.

1135
00:58:26,760 --> 00:58:27,880
Maybe it signals they're going
to buy.

1136
00:58:27,880 --> 00:58:29,800
Something in Canada or it or
they?

1137
00:58:29,800 --> 00:58:31,680
Might be buying something.
Oh, you know, either

1138
00:58:31,680 --> 00:58:32,560
jurisdiction.
Really.

1139
00:58:32,560 --> 00:58:36,480
I just thought that was a really
strange thing to put on the

1140
00:58:36,800 --> 00:58:40,440
front page of your annual annual
results.

1141
00:58:40,920 --> 00:58:43,360
God bloody.
Jeez, you'd have to have some

1142
00:58:43,360 --> 00:58:44,840
balls to buy something in
Canada.

1143
00:58:45,240 --> 00:58:46,720
The market reaction to an
Aussie.

1144
00:58:46,760 --> 00:58:50,440
Another Aussie gold miner bought
in North American asset as a

1145
00:58:50,440 --> 00:58:54,920
producer or like that's a big
gamble that's.

1146
00:58:55,240 --> 00:58:58,080
Yeah, they're Speaking of cash.
You know, and we we spoke about

1147
00:58:58,080 --> 00:59:00,440
this a couple episodes ago, you
know, what are they going to do

1148
00:59:00,440 --> 00:59:04,880
with, you know, half a billion
dollars cash, no buybacks,

1149
00:59:04,880 --> 00:59:08,800
dividends or a hedge book
cleanup or sugar zone race that

1150
00:59:08,880 --> 00:59:12,120
has been flagged just as yet.
You know, those are all

1151
00:59:12,120 --> 00:59:14,280
potential options.
Maybe it's a that's.

1152
00:59:14,280 --> 00:59:16,360
Why it's called a vault?
Like it stays in there, it

1153
00:59:16,360 --> 00:59:19,520
doesn't come out for dividends
or buybacks like the cash just

1154
00:59:19,520 --> 00:59:21,640
stays in the vault.
They can keep some in the vault,

1155
00:59:21,640 --> 00:59:22,920
but they've.
Got to let a little bit.

1156
00:59:23,400 --> 00:59:27,960
Every now and then.
But the the financial year 25

1157
00:59:27,960 --> 00:59:32,280
guidance does give us some sort
of initial clues and this is

1158
00:59:32,280 --> 00:59:38,160
arguably probably the reason why
the stock is off so much today.

1159
00:59:38,800 --> 00:59:42,440
So they actually released FY25
guidance for the first time

1160
00:59:43,600 --> 00:59:49,680
midpoints 410,000 oz at 2350
announce all the sustaining

1161
00:59:50,560 --> 00:59:54,880
mixed reviews from the Street,
particularly on or more so

1162
00:59:54,880 --> 00:59:59,800
negative views on the higher
OpEx compared to FY24, which

1163
00:59:59,800 --> 01:00:04,080
was, you know, about 300 bucks
an ounce lower and higher than

1164
01:00:04,080 --> 01:00:06,520
expected CapEx.
So what's that CapEx?

1165
01:00:06,640 --> 01:00:07,560
Yeah.
So they.

1166
01:00:08,240 --> 01:00:09,960
I'll put up the screen grab
here.

1167
01:00:09,960 --> 01:00:12,440
You can sort of see how that's
distributed across the

1168
01:00:12,800 --> 01:00:16,720
portfolio, but the main piece is
sort of an accelerated waste

1169
01:00:17,240 --> 01:00:20,240
stripping at at cost than Matt
Munger expected to be around

1170
01:00:20,240 --> 01:00:24,680
$105 million in addition to the
all in sustaining costs.

1171
01:00:25,040 --> 01:00:27,600
And then there's $25 million of
growth CapEx.

1172
01:00:27,840 --> 01:00:30,920
They're also doing studies on
cough mill expansion, which is

1173
01:00:30,920 --> 01:00:33,920
again one of those things that
we flagged as an area where they

1174
01:00:33,920 --> 01:00:36,720
might redirect that cash, still
spending a bit of money.

1175
01:00:36,720 --> 01:00:38,560
Sugar zone as well, that's
pretty elevated.

1176
01:00:38,680 --> 01:00:42,160
That's the one I was
particularly surprised about 33

1177
01:00:42,160 --> 01:00:47,320
to $35 million to maintain
operational readiness and

1178
01:00:47,320 --> 01:00:50,240
includes follow up, you know,
follow up drilling to you know

1179
01:00:50,240 --> 01:00:52,280
update the the mineral resource
there.

1180
01:00:52,880 --> 01:00:54,560
There wasn't.
If they updated that, it's.

1181
01:00:54,800 --> 01:00:58,760
Putting like 100 kilometres,
Well, however many I think

1182
01:00:58,760 --> 01:01:01,400
they're doing.
More follow up drilling based on

1183
01:01:01,640 --> 01:01:04,480
the results of that drilling to
then sort of culminated in one

1184
01:01:04,480 --> 01:01:07,200
big sort of updated resource.
Yeah, to do.

1185
01:01:07,240 --> 01:01:09,240
It not not updated, yeah.
So that.

1186
01:01:09,720 --> 01:01:12,320
Out, yeah.
So and there wasn't much

1187
01:01:12,320 --> 01:01:17,760
indication in the in the results
today about when or if that'll

1188
01:01:17,760 --> 01:01:20,680
get restarted.
But I just felt that was, look,

1189
01:01:20,680 --> 01:01:25,280
I'm not a minor, but 30, three,
$35 million to basically sort of

1190
01:01:25,280 --> 01:01:27,800
have an asset and care and
maintenance is, is is pretty

1191
01:01:27,800 --> 01:01:29,760
chunky.
Yeah, I think.

1192
01:01:30,640 --> 01:01:34,280
It rates of the old silver like
a bit like how people have

1193
01:01:34,280 --> 01:01:36,240
explained the history lot.
They're they're all in

1194
01:01:36,240 --> 01:01:39,720
sustaining cost guidance and
whatever was always higher than

1195
01:01:39,720 --> 01:01:42,880
most, but they just seem to
always deliver into.

1196
01:01:43,240 --> 01:01:45,640
It seem to always.
Deliver and always hoard more

1197
01:01:45,640 --> 01:01:48,880
cash than most companies.
Like they're obviously good cash

1198
01:01:48,880 --> 01:01:51,080
generator.
So it'd be simple interesting to

1199
01:01:51,080 --> 01:01:53,760
see if that's going to be red 5
as well.

1200
01:01:54,000 --> 01:01:57,320
Yeah, as you said, the cost all
in stone so spooked everyone,

1201
01:01:57,320 --> 01:02:01,600
but I just wonder in a years
time if it all won't be that

1202
01:02:01,600 --> 01:02:02,640
sort of come together.
Yeah.

1203
01:02:03,360 --> 01:02:05,840
And look and they'll be
spending, you know, up to $20

1204
01:02:05,840 --> 01:02:09,720
million in expiration as well.
So look from now getting into

1205
01:02:09,720 --> 01:02:13,000
that cash harvesting mode,
particularly at cough.

1206
01:02:13,000 --> 01:02:19,240
So I I'm really keen to say
them, you know, do something

1207
01:02:19,280 --> 01:02:22,160
with all this cash, not keep it
all in the vault as we said.

1208
01:02:22,160 --> 01:02:26,520
So I mean, you know, Perseus is
pack perhaps an example to look

1209
01:02:26,520 --> 01:02:29,120
at.
You know, they've got US $587

1210
01:02:29,120 --> 01:02:31,640
million in cash.
They're making lots of cash.

1211
01:02:31,680 --> 01:02:35,520
They they did a strategic stake
in predictive that it doing $100

1212
01:02:35,520 --> 01:02:37,680
million buy back.
They're doing a $0.05 per share

1213
01:02:37,680 --> 01:02:41,240
dividend and they're investing
CapEx into developing the Yori

1214
01:02:41,240 --> 01:02:45,760
underground and, and Nanzaga.
So obviously, you know, it's got

1215
01:02:45,760 --> 01:02:47,440
to make sense.
You shouldn't just spend that

1216
01:02:47,440 --> 01:02:51,400
money just just because.
But I feel like they, you know,

1217
01:02:51,400 --> 01:02:54,120
there's probably some labours
they could pull there for sure

1218
01:02:54,520 --> 01:02:57,240
before this podcast.
Ever finishes in history.

1219
01:02:58,280 --> 01:03:02,240
I want a guest request for Luke
Tonkin to do an investor call.

1220
01:03:02,680 --> 01:03:03,560
I'd love.
I'll just.

1221
01:03:03,880 --> 01:03:06,080
I'll wait.
That'll make my day.

1222
01:03:06,360 --> 01:03:08,320
Come on, Tonks.
We want to hear from you.

1223
01:03:09,360 --> 01:03:10,040
Oh, goodness.
So.

1224
01:03:10,520 --> 01:03:14,560
I think that's some.
I'm saying.

1225
01:03:15,160 --> 01:03:18,320
I'm keen to, yeah, say keen to
say what they do with that cash.

1226
01:03:18,320 --> 01:03:20,880
And so we'll be keeping our eyes
peeled.

1227
01:03:21,080 --> 01:03:23,280
I've got another final.
One for the Goldie's just I

1228
01:03:23,280 --> 01:03:29,720
found this this radio segment
that's what I was looking for

1229
01:03:29,720 --> 01:03:34,960
radio segment from in regards to
Mcfillimy's Ben Fordham on 2GB

1230
01:03:35,280 --> 01:03:38,440
last week regarding the Tanya
Plibersek's decision regarding

1231
01:03:38,800 --> 01:03:41,600
Regis's goldmine over there.
Have a listen to this.

1232
01:03:41,600 --> 01:03:44,280
This is.
I found this very interesting.

1233
01:03:44,960 --> 01:03:47,200
Tanya Plibersek.
The Federal environment minister

1234
01:03:47,200 --> 01:03:51,320
says she cancelled the mine to
protect Indigenous heritage as

1235
01:03:51,320 --> 01:03:53,440
requested by the Warajiri
people.

1236
01:03:53,440 --> 01:03:57,600
In secret conversations, it
turns out that only a tiny

1237
01:03:57,600 --> 01:04:01,160
Aboriginal group made up of only
18 people are against it.

1238
01:04:01,520 --> 01:04:05,160
It's led by an artist called
Nyree Reynolds, who calls

1239
01:04:05,160 --> 01:04:09,160
herself a proud Weragerie elder.
But here's where it gets

1240
01:04:09,160 --> 01:04:12,280
interesting.
We've called around members of

1241
01:04:12,280 --> 01:04:14,880
the Indigenous community and
spoken to a lot of Weragerie

1242
01:04:14,880 --> 01:04:17,920
figures and elders.
And the ones we've spoken to

1243
01:04:17,920 --> 01:04:21,400
have never heard of Nyree
Reynolds, who calls herself a

1244
01:04:21,760 --> 01:04:24,600
Weragerie elder.
For example.

1245
01:04:24,600 --> 01:04:28,320
We've spoken to Uncle Graham, a
Weragerie elder, he's never

1246
01:04:28,320 --> 01:04:31,560
heard of her.
We've spoken to Auntie Chris, a

1247
01:04:31,640 --> 01:04:36,200
Weragerie woman, she's never
heard of Nyree Reynolds either.

1248
01:04:36,560 --> 01:04:40,280
We've spoken to James, a local
Weragerie man, he's never heard

1249
01:04:40,280 --> 01:04:43,200
of her.
And we've spoken to Roy RCA,

1250
01:04:43,920 --> 01:04:47,440
Weragerie elder and the former
chairperson of the NSW

1251
01:04:47,440 --> 01:04:52,080
Aboriginal Land Council.
And you'll never guess Roy has

1252
01:04:52,080 --> 01:04:54,240
never heard of Nyree Reynolds,
too.

1253
01:04:55,240 --> 01:04:58,280
And Roy's on the line right now.
Who is Nyree Reynolds?

1254
01:05:00,040 --> 01:05:02,560
I asked the minister.
Because I don't, I don't know.

1255
01:05:02,680 --> 01:05:05,880
I, I was born and bred on the
banks of Macquarie River.

1256
01:05:06,360 --> 01:05:09,920
I'm a Radri traditional owner.
And we've never heard of this

1257
01:05:09,920 --> 01:05:11,200
lady.
I'm sorry.

1258
01:05:11,200 --> 01:05:13,760
I just, I'm just being truthful
and I'm being honest.

1259
01:05:14,080 --> 01:05:15,800
We've never heard.
I've never heard of her.

1260
01:05:15,800 --> 01:05:19,320
Sorry, Roy.
Can I just say this having seen

1261
01:05:19,320 --> 01:05:22,840
the video of Nyree Reynolds on
Tanya Plibersek's Instagram

1262
01:05:22,840 --> 01:05:25,480
page, and I don't know whether
you've seen the video, but she

1263
01:05:25,480 --> 01:05:28,800
looks white.
Nyree Reynolds says that she's

1264
01:05:28,800 --> 01:05:33,480
heard the voices of Aboriginal
ancestors asking her to help

1265
01:05:33,480 --> 01:05:36,400
cancel the mine.
Oh, come on.

1266
01:05:36,400 --> 01:05:37,960
Like, you know, say you didn't
commit.

1267
01:05:38,360 --> 01:05:39,640
And you know what this does,
Ben?

1268
01:05:39,960 --> 01:05:43,920
This makes a mockery of my
people, my old people that

1269
01:05:43,920 --> 01:05:46,400
fought, fought for.
Rights in this country.

1270
01:05:46,640 --> 01:05:49,520
And now it's about economic
empowerment for us as Aboriginal

1271
01:05:49,520 --> 01:05:51,520
people.
Right, there you go.

1272
01:05:52,120 --> 01:05:55,920
I found that fascinating.
Good digging.

1273
01:05:56,040 --> 01:05:58,000
Benny Fordham what a time to be
alive.

1274
01:05:58,480 --> 01:06:01,440
Yeah, yeah.
Oh, we're like we'll finish off

1275
01:06:01,440 --> 01:06:03,320
bloody.
We haven't even covered ERA yet.

1276
01:06:03,680 --> 01:06:06,120
We'll just the the did we cover
that?

1277
01:06:06,120 --> 01:06:07,680
I think they're coming out on
their day off.

1278
01:06:07,720 --> 01:06:11,080
You said they're going.
Ahead with that big .002 cents

1279
01:06:11,080 --> 01:06:12,040
I.
Hope you didn't buy shares

1280
01:06:12,040 --> 01:06:14,920
before that party.
Hell we've got our eyes peeled

1281
01:06:14,920 --> 01:06:17,320
there.
Interested to see with the

1282
01:06:17,320 --> 01:06:21,200
pending court case.
If real putting the foot down

1283
01:06:21,200 --> 01:06:26,040
now and forcing people to tip
money in into something with a

1284
01:06:26,040 --> 01:06:30,560
pending court case.
So see Go Corporate Australia.

1285
01:06:30,640 --> 01:06:32,840
Oh, corporate Australia.
As far, yeah, we'll keep you

1286
01:06:32,840 --> 01:06:35,040
posted on that one, right?
Oh, good work.

1287
01:06:35,040 --> 01:06:38,280
Bloody team, sensational
dissection lot going on.

1288
01:06:38,360 --> 01:06:41,920
Happy to contribute nothing and.
We we, we skipped that many

1289
01:06:41,920 --> 01:06:43,560
companies today because it was
too much.

1290
01:06:43,920 --> 01:06:45,960
Same for my IGO cost much others
anyway.

1291
01:06:45,960 --> 01:06:49,840
Oh yeah, I think.
There's a possibly a correction

1292
01:06:49,840 --> 01:06:52,840
to the director's special this
morning.

1293
01:06:52,840 --> 01:06:58,040
I got informed of I think the
IGO net debt wasn't 80 850, it

1294
01:06:58,040 --> 01:07:02,360
was 797,000,000 I think.
Got that?

1295
01:07:02,360 --> 01:07:05,080
Got a bit of mail in Roger from
the Big.

1296
01:07:05,080 --> 01:07:08,320
Dog all.
Righty guys, right?

1297
01:07:08,480 --> 01:07:10,720
Oh, thanks to.
Someone we didn't skip and we're

1298
01:07:10,720 --> 01:07:14,520
never going to bloody skip.
Is Axis mining Technology the

1299
01:07:14,520 --> 01:07:17,360
trusted advisor who asked you a
lot?

1300
01:07:17,360 --> 01:07:19,080
Do you reckon people are saying
that in their head?

1301
01:07:19,400 --> 01:07:22,280
Trusted Advisor Drill survey You
saw the the.

1302
01:07:22,280 --> 01:07:24,720
Email from the the fellow I
walked past in car.

1303
01:07:26,480 --> 01:07:28,120
What did he say?
He.

1304
01:07:28,360 --> 01:07:31,320
He.
Mentioned three of our sponsors

1305
01:07:31,640 --> 01:07:33,560
in an email legend.
Oh, good idea.

1306
01:07:33,840 --> 01:07:36,960
Did he mention MMS?
He would've verified.

1307
01:07:36,960 --> 01:07:38,320
He would've mentioned three of
these did.

1308
01:07:38,320 --> 01:07:40,280
Yep Yep.
Verify spec power and

1309
01:07:40,280 --> 01:07:44,240
technology, DSI underground,
Silverstone, CRE insurance,

1310
01:07:44,240 --> 01:07:48,120
Greylands equipment, K drill and
get a spark chart up here.

1311
01:07:48,640 --> 01:07:51,200
The information contained in
this episode of Money of Mine is

1312
01:07:51,200 --> 01:07:53,400
of general nature only and does
not take into account the

1313
01:07:53,400 --> 01:07:57,000
objectives, financial situation
or needs of any particular

1314
01:07:57,000 --> 01:07:59,040
person.
Before making any investment

1315
01:07:59,040 --> 01:08:02,080
decision, you should consult
with your financial advisor and

1316
01:08:02,080 --> 01:08:05,240
consider how appropriate the
advice is to your objectives,

1317
01:08:05,440 --> 01:08:07,440
financial situation and needs.