Iron Ore Top Dogs Argue About Who is #1

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All right, money miners, it has
been a big week here at Money of

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Mine and we've got heaps to chat
about.

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Mate.
There's a few questions that

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have been whirling around in our
head over the past week.

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I'm going to rattle a couple of
them off.

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Whose costs are really lower
mate?

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FMG or BH BS?
Is the Pilbara really going to

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become a wasteland as Andrew
Forest told us?

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And lastly, is the government
going to manipulate commodity

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markets with this new strategic
reserve?

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I'm intrigued mate, I'm
intrigued.

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But we're not only going to talk
about the AFLS Mining Summit,

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which we did go to on Wednesday,
I was going to peel into

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Adriatic's bid from, well, big
rumour from Dundee Precious

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metals confirmed interest by
both parties.

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What does it mean?
What's next?

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Just a rumour at this point.
All right, let's let's start off

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with the AF Rs Mining Summit.
We were fortunate enough and a

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big thank you to our mate Pete
Kerr and the team at the Finn

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for giving us the call up the
AFR Mining Summit.

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Now this one, this one's a bit
different to some of the other

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conferences folks out there
might have been too.

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It's not like you, you once RI
used down in Freo all your

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diggers.
It's not companies presenting so

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much and given the spiel on why
you should be invested, but it's

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down at the Ritz.
It's quite flashy.

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There's a lot of Hotshots, big
wigs, that sort of type of

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characters coming down.
You know, Andrew Forrest leading

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the lineup.
You've got Roger Cook, Madeleine

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King, our resources minister,
Amanda Lacars, a whole rough

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more of these types of people,
pretty preeminent in our

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industry.
And they pick apart all the big

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themes, right.
So they are showing us what

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they're thinking about.
They're showing us what they

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want government to be thinking
about.

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Government is kind of leading on
the line.

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They're they're praising the
industry on why we're all so

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important and all that sort of
stuff.

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And they're also given a bit of
direction, a bit of guidance on

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where they're going to take the
industry.

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And of course, that was
particularly prominent this year

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because we've just come on the
back of AWA election and as well

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as that federal election here in
Australia.

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But I think the importance of
what we're going to talk about

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expands well beyond our borders
here.

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I think a lot of these themes
are consistent across the world.

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So whether you're tuning in from
Canada, from the UK, from in

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Africa, these, these issues and
these themes transcend the

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borders.
So I'm pretty keen to to pick

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them apart mate.
So am I, JD very much so.

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And yeah, there's there's
there's a reality of our

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industry at the moment.
Mining industry is kind of

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coming front on face home with a
lot of politics.

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All of that's kind of playing
out.

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This is a a forum that could
kind of brought brought a lot of

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that together.
It felt like, yeah, it felt like

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a lot of the a lot of the money
that really does move this

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country, but you know,
billionaires money or whatnot.

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You kind of see where the big
ideas are leaning and and

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whatnot at at a place like this.
There are.

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Yeah, absolutely.
Very.

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Interesting.
I think the panel format is a is

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a wicked way to kind of do it as
opposed to just giving the

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company each very different type
of conference in that sense.

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And it's interesting to get lots
of different views on the same

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panel discussing and, and
preferably, you know, fighting

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over and getting a bit hated on,
on what people are passionate

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about.
Totally mate.

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Speaking of passion, today's
Friday and I'm very passionate

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about doing this on Friday.
Got a surprise Adam again.

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Hi Tom, moving house, I'm about
to go into a meeting.

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Today is not a good day.
What if I have three very quick

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questions for you?
Oh.

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My God, yes.
You guys provide recruit

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recruitment services, right?
Which means you've got to find

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good candidates.
That must be tricky, right?

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It is, and you're going to run
through a list of things you

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might see on a resume.
I just need to know if these are

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deal Breakers or you can work
around them.

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OK, available for work, but not
Mondays or mornings they're.

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Definitely deal Breakers.
Past experience once helped a

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mate move house.
Yeah, that's not going to cut

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it.
Either looking for a FIFO roll

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with daily flight time.
No, I don't think we're hiring

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anyone off these ones.
Yeah, No, I if we were doing an

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interview or or a phone screen
with a candidate on those based

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on that resume, we probably
would be hiring and wouldn't

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think.
That's probably why you're

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trusted by the, you know, the
most serious people in the

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industry to provide them with
talented labour.

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Because it's your filter.
It's your, the Adam Wilson

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filter.
The Adam Wilson filter, I don't

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know about the that that filter.
I think, yeah, the point of

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difference is the mining
background that we have where we

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can see potential good
candidates as well, while the

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recruiters have been there, done
it.

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I look I look forward to to
surprising you again with

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another phone call next Friday,
all.

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Right, I'll be, I'll be on
notice this time.

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All right.
Just call Casey.

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All right, mate.
Let's move into the big themes

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of the, the, the mining summit.
There was some funny stuff,

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funny stuff, especially in
relation to iron ore.

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You put the heads of, you know,
the, the iron ore divisions of

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the big iron ore producers all
on the same stage and poke the

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bear a little bit.
And we got, we got the, we got

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some funny, we got a funny
moment.

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We're going.
To play it, bear with us, the

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sound quality might not be
perfect, but here is the head of

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BHPS iron ore kind of division
and his counterpart at

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Fortescue.
Both BHP and Fortescue claim to

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be the lowest cost producer in
the Pilbara.

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Who's lying?
It's in two horse race.

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There's a calculation, I think
there's a roundabout and I think

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your boy is always going to
support that position and and

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you don't always get a a smooth
transition through the year.

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We saw a really good quarter
that we just had from the third

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quarter.
It's come down with our one and

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quarter one and two and we'll
actually maintain that for this.

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I.
Don't know.

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I ain't seeing Tim's books.
He doesn't show me Mark.

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I think it's.
Just put them to context in it.

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So we we're willing to live in
the lead and it's slot on the

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start.
But there's no doubt that you're

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all the numbers.
You just, you just catch up.

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It's you just check it in and be
like.

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And I think the the way to think
about it is we and there's a

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reason.
There's three reasons for that.

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Check any numbers you like.
Said with authority.

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I I love it, it's awesome.
BHB can can be accused of many

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things.
They can be accused of being a

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bit stayed and a bit stodgy
given the size, you know, the,

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the bureaucracy within the
business.

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But full marks to Tim for his
competitiveness and his sort of

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passion there.
I love that one that that was a

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Ripper.
That was that was wicked.

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I did find it very strange when
I've I've heard Fortescue call

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themselves a lot of cost
producer.

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I'm scratching my head trying to
think anyway.

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There's a reason those tenements
were left over 20 years ago.

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Yeah, yeah, that's ignored grade
or something like.

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Nevertheless, let's move on to
our next one mate.

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This one comes from none other
than John Welborn.

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And the broader thing we're
going to talk about here is

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jurisdictional risks and said in
other words, we're going to talk

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about the odds of being taken
hostage.

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So John Welborn runs Phoenix.
This is a company he's admitted

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in his in the the panel
discussion that is a high cost

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iron ore producer.
Now with all due respect to to

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Phoenix, it was a bit surprising
to see them on the same stage in

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a discussion with the heads of
FMG and BHB, like we just said.

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For that matter, it wasn't even
the most odd one out.

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For that matter, I haven't.
Held the producer in.

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The same breath.
Anyway, they more than held

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their own and they, they added
value to the, the discussion.

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And, you know, a lot of that
came on the back of John's large

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personality.
But I thought we'd be remiss if

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we didn't include a snippet from
the man himself, so here we go.

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When I first went to Africa and
built and operated gold mines

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and Mali and Senegal and Ghana,
all three of those jurisdictions

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were incredibly friendly and
seen as very good.

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It was easy to attract foreign
capital to invest.

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In those you weren't held
hostage for two weeks in a host

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well.
No, no, I was I.

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Was actually told by a hostage
consultant that's very unlikely

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I'd ever be taken hostage
because I eat too much and I

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can't fit in the blue of the
car.

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Which is good news until he said
do that.

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Just shoot.
So that was wicked.

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There we go.
He's a he's a phenomenal

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speaker.
John Wellborn, Well done.

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It's a good one, mate.
So yeah, had someone come up to

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him and said you can just
imagine what a dinner with John

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would be like.
Let your imagination go.

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I think there is a a bit of a
more serious point being touched

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upon here and that is
geopolitical risk.

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Like I mentioned before, now the
likelihood that we see goal

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posts being shifted to an extent
this increases with commodity

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price movements and increases in
commodity prices.

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So West Africa specifically as
was being touched upon in that

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segment exports a lot of gold as
we all know.

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And we've seen the mining code
change in Mali, We've seen

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changes had in Kenafaso.
We've seen some changes recently

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in Ghana as well.
And just in the last week,

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Guinea has made some, some
tweaks as well, not so much as

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to the, the mining code, but
they've come down pretty hard

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on, on some miners who in their
mind weren't holding up their

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end of the bargain.
So this unsettles punters is, is

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what I'm kind of getting at,
right?

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And I'm not just talking about
your everyday punter on the

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street, although they are more
than aware that, you know, a

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place like Mali might not be
the, the 1st place on their,

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their holiday checklist, but it
can unsettle big movers of

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institutional capital around the
world.

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And even in the last couple
weeks, mate, we've, we've heard

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it a few times speaking with
fundies, saying things to the

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effect of, you know, I could
never buy this in my fund, but

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maybe PA will have a punt on it.
And it's, it's kind of something

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funny to, to take into account.
But that just magnifies or you

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know, highlights for me that the
risk in a lot of these

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jurisdictions and that, you
know, the risk that you could

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wake up 1 morning and your asset
or assets have been stripped

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away is just off the table for,
for a lot of these.

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Institutions, I think in general
this stuff's just reflected in

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risk premiums like you, you
know, you, yeah, it's all about

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capital, real capital like like
flow towards these areas when

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you have this jurisdictional
risk, I'm just thinking it

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evolves in risk premiums.
You'll pay high risk premium

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over time or not.
So the the return you get for

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any given investment has to, you
know, more than compensate for

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any enhanced risk premium that
is associated with any

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jurisdiction.
These things are cyclical.

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I don't think there's any, yeah,
big, big, big difference to this

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period in time to other periods
of time.

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I think this is just the, the,
the nature of investing in

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Africa over the duration of the
last like 30-40 years.

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It's been pretty, pretty
difficult of things like this.

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That is the key point, that
these things don't stay the

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same.
They change, and if you're

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invested in one of these
jurisdictions, you need to be

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aware of that.
It's pretty hard to predict, but

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you just need to be aware that
they tide rises and falls and be

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cotton on to that.
It's not like you put your money

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there and you move on to that.
Yeah, diversification with with

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anyone African jurisdiction
makes a lot of sense in my mind.

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00:10:53,240 --> 00:10:56,520
One of the absolute yeah,
gentleman of the industry, Jack

227
00:10:56,520 --> 00:10:58,280
Klein, I could listen to him
all, all day.

228
00:10:58,280 --> 00:11:02,400
He he, he got asked a question
by by pet care on M&A, Should we

229
00:11:02,400 --> 00:11:03,760
play it?
Let's play it, mate.

230
00:11:04,280 --> 00:11:06,880
I reckon my gold price is a
signal to you that I'm buying

231
00:11:06,880 --> 00:11:11,480
since no, that'll be honest.
This is cyclical.

232
00:11:11,480 --> 00:11:13,320
Business.
We're all operating in cyclical

233
00:11:13,320 --> 00:11:17,120
businesses and the time to buy
is when the prices are down and

234
00:11:17,120 --> 00:11:20,520
there's a motivated seller.
I don't see any motivated

235
00:11:20,520 --> 00:11:24,000
sellers in gold industries, but
I see people finding out and

236
00:11:24,080 --> 00:11:27,600
finding restaurants.
Now Kerry set them up with a

237
00:11:27,880 --> 00:11:31,240
with a good one here.
This was right in Jake's sweet

238
00:11:31,240 --> 00:11:32,640
spot to just knock it out the
park.

239
00:11:33,120 --> 00:11:35,640
That phrase the time to buy is
when prices are down and there's

240
00:11:35,640 --> 00:11:38,160
a motivated seller.
I think, you know, there's

241
00:11:38,160 --> 00:11:41,040
there's investors or there's
companies out there, self sort

242
00:11:41,040 --> 00:11:43,560
of included that need that
written on the wall.

243
00:11:43,560 --> 00:11:45,040
They need to recite that every
morning.

244
00:11:45,040 --> 00:11:46,400
That is such a powerful
statement.

245
00:11:46,760 --> 00:11:49,280
It's such an informative
statement into the journey of

246
00:11:49,280 --> 00:11:52,520
how evolution mining has gotten
to where it is.

247
00:11:52,520 --> 00:11:57,240
And I think Jake just captured
the audience in a way quite

248
00:11:57,240 --> 00:11:58,520
different to some of the other
speakers.

249
00:11:58,520 --> 00:12:01,280
There was a few speakers that
really stood out on the day.

250
00:12:01,680 --> 00:12:04,120
And it wasn't like John through
these kind of hilarious

251
00:12:04,480 --> 00:12:08,120
anecdotes, but it was by the
insight from a man who's grown a

252
00:12:08,120 --> 00:12:11,360
business to pretty remarkable
heights and serially successful.

253
00:12:11,560 --> 00:12:12,760
Don't forget Son of Gold, you
know.

254
00:12:12,920 --> 00:12:14,840
Exactly.
And we said it to ourselves.

255
00:12:14,840 --> 00:12:17,040
You said it just then.
You could listen to him for

256
00:12:17,040 --> 00:12:18,480
hours.
You could listen to this for

257
00:12:18,480 --> 00:12:21,200
hours.
And I know I'm very much at risk

258
00:12:21,200 --> 00:12:24,120
of being within that kind of
reality distortion field that

259
00:12:24,120 --> 00:12:26,800
Friedland and Steve Jobs are
notorious for sucking people

260
00:12:26,800 --> 00:12:28,720
into.
So I won't be going near

261
00:12:28,720 --> 00:12:30,400
evolution stop for a hot minute.
Yeah.

262
00:12:30,400 --> 00:12:33,040
No.
But there is a lot of wisdom in

263
00:12:33,040 --> 00:12:35,560
in the way Jake speaks and I
think it's worth everyone tuning

264
00:12:35,560 --> 00:12:36,920
into.
Yeah.

265
00:12:36,920 --> 00:12:39,680
On, on the theme of M&A mate.
I think there was a different,

266
00:12:39,680 --> 00:12:40,800
there was a different view out
there it.

267
00:12:40,960 --> 00:12:43,000
Was.
Unsurprisingly, came from an

268
00:12:43,000 --> 00:12:45,240
investment banker.
Who would have thought that it's

269
00:12:45,240 --> 00:12:47,960
a good time to to for more deals
from an investment banker?

270
00:12:48,160 --> 00:12:51,520
Full credit to Rowan, who runs
the Metals and Mining team at

271
00:12:51,520 --> 00:12:53,520
Citibank.
His comments got us thinking, so

272
00:12:53,520 --> 00:12:55,080
we'll play the first of two
snippets here.

273
00:12:55,240 --> 00:12:59,800
Comment around it being curious
that it's a strange time at the

274
00:12:59,800 --> 00:13:03,400
top of the cycle to be doing
deals well there there is an

275
00:13:03,400 --> 00:13:07,000
argument for those that are
leveraged operationally to the

276
00:13:07,200 --> 00:13:10,880
to the gold price to be using
that opportunity to improve

277
00:13:10,880 --> 00:13:16,640
their portfolios and either
extend life or buy a higher

278
00:13:16,640 --> 00:13:19,840
quality, you know lower.
Cost assets in the context of

279
00:13:19,840 --> 00:13:21,280
what's happened this week, I
thought it was quite

280
00:13:21,280 --> 00:13:23,000
interesting, right?
So Catalyst went out to raise

281
00:13:23,000 --> 00:13:28,280
130 bucks, came back with 150,
and they underscored the

282
00:13:28,280 --> 00:13:29,560
potential that they might go
shopping.

283
00:13:29,560 --> 00:13:32,280
Now, obviously, Yeah, you're
clumping together here, all the

284
00:13:32,280 --> 00:13:34,280
things you might do.
And just just in case you you

285
00:13:34,280 --> 00:13:39,680
were thinking about it, but
talking about the cyclicality in

286
00:13:39,680 --> 00:13:42,360
our industry, what Jake spoke
to, what Roland touched on there

287
00:13:42,880 --> 00:13:46,080
is super, super important.
And I think Catalyst is a great

288
00:13:46,080 --> 00:13:47,480
example.
So this is a company that was

289
00:13:47,480 --> 00:13:50,200
super leveraged operationally to
the gold.

290
00:13:50,200 --> 00:13:52,600
Price 10 bagger in a year thanks
to that leverage, yeah.

291
00:13:52,600 --> 00:13:54,840
Phenomenal.
If we go back exactly 1 year

292
00:13:55,080 --> 00:13:59,400
today mate, the stock was at
$1.06 now it's in the mid 6

293
00:13:59,400 --> 00:14:02,960
bucks.
They raised 150 bucks at $6

294
00:14:02,960 --> 00:14:05,320
apiece.
So if you'd have said that to

295
00:14:05,320 --> 00:14:07,040
them a year ago, they would have
bitten off your hand.

296
00:14:07,040 --> 00:14:09,680
And quite rightly, they've taken
that opportunity.

297
00:14:09,680 --> 00:14:14,640
They have executed really well
on this upswing in the cycle.

298
00:14:14,640 --> 00:14:17,760
Now obviously you need to write
companies on the UPS and the

299
00:14:17,760 --> 00:14:18,920
downs.
So we'll see how the company

300
00:14:18,920 --> 00:14:21,920
goes, but it is an opportunity
and and we'll see.

301
00:14:22,480 --> 00:14:25,200
Yeah.
I think the report card still

302
00:14:25,600 --> 00:14:27,720
like, yeah, you can't, you can't
fault the share price

303
00:14:27,720 --> 00:14:28,680
performance, everything like
that.

304
00:14:28,680 --> 00:14:31,360
I think the raise may have
caught some people off guard who

305
00:14:31,640 --> 00:14:34,040
thought that the the cash flow
was a reflection of steady state

306
00:14:34,040 --> 00:14:35,600
operations.
And I think what some people

307
00:14:35,600 --> 00:14:38,440
might be pondering or reflecting
now is like how much did they

308
00:14:39,800 --> 00:14:43,000
with, you know, maybe dial back
development CapEx in order to

309
00:14:43,000 --> 00:14:45,320
have higher cash flow.
And now, I mean, kudos to them.

310
00:14:45,320 --> 00:14:47,320
They've been able to raise a
phenomenal kind of share price

311
00:14:47,320 --> 00:14:49,160
with with relatively minimal
dilution.

312
00:14:49,160 --> 00:14:52,320
They've got a tremendous kind of
or chest of cash now which they

313
00:14:52,320 --> 00:14:53,800
can deploy as a result of that
strategy.

314
00:14:53,800 --> 00:14:57,320
But maybe, maybe people were
were not as clued on as to the

315
00:14:57,320 --> 00:15:00,480
nature of some of that free,
free cash generation and the

316
00:15:00,480 --> 00:15:02,480
implications for the
sustainableness of that

317
00:15:02,480 --> 00:15:03,320
business.
For sure.

318
00:15:03,320 --> 00:15:05,600
I make that comment from the
perspective of if you're inside

319
00:15:05,600 --> 00:15:08,680
the company and how you navigate
it and how you look after your

320
00:15:08,680 --> 00:15:13,280
own fortunes.
And you know that they, yeah, I

321
00:15:13,280 --> 00:15:17,480
think, I think they're doing the
the right kind of stuff to kind

322
00:15:17,480 --> 00:15:19,800
of be be a company that ensures
they're looking after the

323
00:15:19,800 --> 00:15:21,880
balance sheet and raising cash
when the stock price is really

324
00:15:21,880 --> 00:15:25,040
high as opposed to the opposite.
To Ron's point, right, like

325
00:15:25,040 --> 00:15:27,640
they're, you know, they, they
fit the bill there.

326
00:15:27,880 --> 00:15:32,000
This is a a high cost producer,
very operationally leveraged.

327
00:15:32,360 --> 00:15:36,280
They're gonna I imagine be
pretty, pretty determined to

328
00:15:36,280 --> 00:15:38,560
improve the quality of their
portfolio in times like this

329
00:15:38,560 --> 00:15:41,480
when the scripts are high, you
know, the rates will help them

330
00:15:41,480 --> 00:15:44,400
do that to some endeavor.
I think you know what we see

331
00:15:44,400 --> 00:15:47,520
them actually do TVI, you kind
of everyone wants to buy

332
00:15:47,520 --> 00:15:49,160
something right now.
So it's, it's kind of hard to be

333
00:15:49,160 --> 00:15:53,320
competitive in this sort of
environment, but creativity

334
00:15:53,320 --> 00:15:55,800
might get them somewhere.
There's a few opportunities out

335
00:15:55,800 --> 00:15:57,760
there.
It's just about finding the most

336
00:15:57,760 --> 00:16:00,040
value.
You know, there's Yeah, we, we,

337
00:16:00,040 --> 00:16:02,720
we reported in the director
special that maybe they'll have

338
00:16:02,720 --> 00:16:05,720
interest in Bellevue.
So yeah, I mean, they're, it'll

339
00:16:05,720 --> 00:16:08,640
be remarkable kind of deal.
They're relatively similar

340
00:16:08,640 --> 00:16:11,200
market caps now.
Managed to pull that one off but

341
00:16:11,200 --> 00:16:12,960
yeah.
I look forward to the day we

342
00:16:12,960 --> 00:16:16,240
see, you know, a smaller player
taken out a much bigger 1.

343
00:16:16,240 --> 00:16:17,920
You know, you don't see them too
often, but they're they're

344
00:16:18,040 --> 00:16:19,760
entertaining when they happen,
mate.

345
00:16:19,760 --> 00:16:21,760
Let's let's roll into the second
snippet from Roland.

346
00:16:21,760 --> 00:16:25,000
And this one focuses on the
theme that everyone wants copper

347
00:16:25,000 --> 00:16:27,520
and the thing that hasn't gone
away in in some time, No.

348
00:16:27,640 --> 00:16:31,840
Matter what point of of any
cycle green is everyone wants

349
00:16:31,840 --> 00:16:34,400
copper, lithium guys want
copper.

350
00:16:34,480 --> 00:16:37,840
Diversified, it's 1 copper,
Copper guys want copper, gold

351
00:16:37,960 --> 00:16:41,480
guys want copper.
And one of the, one of the

352
00:16:42,320 --> 00:16:47,200
thematics we're seeing right now
is the copper gold ratio, which

353
00:16:47,200 --> 00:16:51,440
not everyone's that interested
in, but we are is is at all time

354
00:16:51,440 --> 00:16:53,160
lows.
So what does that mean?

355
00:16:53,160 --> 00:16:57,120
Well, it means gold companies
are best positioned to be buying

356
00:16:57,400 --> 00:16:59,600
copper.
What do you, I know, I know you

357
00:16:59,720 --> 00:17:02,960
are, I know you have some issues
with the certain ratio that

358
00:17:03,120 --> 00:17:06,720
we've never heard of before, JD.
But the copper gold ratio, now

359
00:17:07,119 --> 00:17:10,240
the trust and investment bankers
get creative on on how to sell

360
00:17:10,319 --> 00:17:11,440
right.
That's, that's the job.

361
00:17:12,160 --> 00:17:14,960
I, I will admit, mate, I don't
get out the out of bed in the

362
00:17:14,960 --> 00:17:16,839
morning and check the copper
gold ratio first thing.

363
00:17:16,839 --> 00:17:20,119
It's, it's not the top one on,
on my sort of go to list to feel

364
00:17:20,119 --> 00:17:23,400
the temperature of the market.
But I take his point.

365
00:17:23,400 --> 00:17:27,079
I take Rowan's point here.
And in other words, what he's

366
00:17:27,079 --> 00:17:29,840
saying is there is cyclicality,
like I interpret it that way.

367
00:17:29,840 --> 00:17:32,160
There is cyclicality through,
through commodities.

368
00:17:32,160 --> 00:17:37,560
They don't all go in, in tandem.
And I think, you know, you

369
00:17:37,560 --> 00:17:39,480
could, you could make the
argument quite well.

370
00:17:39,480 --> 00:17:41,080
And it's something we spoke
about actually earlier in the

371
00:17:41,080 --> 00:17:45,560
week about we reflect on one
year ago on two years ago and

372
00:17:45,920 --> 00:17:47,880
all these goldies were were
looking at copper.

373
00:17:48,680 --> 00:17:50,920
Now the cash flows have come
through that they're starting to

374
00:17:50,920 --> 00:17:53,640
come in real strong.
The share prices have run quite

375
00:17:53,640 --> 00:17:57,280
hard if you compare all the the
gold mid caps and and the bigger

376
00:17:57,280 --> 00:18:01,200
ones to you know that sort of
time frame 12 and 24 months ago.

377
00:18:01,440 --> 00:18:04,360
Copper equities appealed a bit.
Yeah, they have some exceptions,

378
00:18:04,360 --> 00:18:06,000
but they largely appealed.
Yeah.

379
00:18:06,000 --> 00:18:09,440
Now the big question is if one
of these gold companies were to

380
00:18:09,440 --> 00:18:14,280
go and buy a copper miner now,
would their shareholders crucify

381
00:18:14,280 --> 00:18:15,600
them for that?
How would they take that?

382
00:18:15,600 --> 00:18:18,960
How can management navigate that
and say, hey, this is part of

383
00:18:18,960 --> 00:18:21,880
the risk, you know, this is part
of the journey rather that we've

384
00:18:21,880 --> 00:18:25,600
been on that we wanted to do to
diversify our set of assets.

385
00:18:26,360 --> 00:18:29,800
The the companies with that
mandate to to do M&A, they'll

386
00:18:29,800 --> 00:18:31,600
have a bit more leeway in these
type things.

387
00:18:31,600 --> 00:18:35,560
But to Rowan's point, the the
argument is way more enticing

388
00:18:35,560 --> 00:18:39,120
now for those gold companies
than it was a year or two ago.

389
00:18:39,240 --> 00:18:41,920
So.
Yeah, I I think we're even

390
00:18:41,920 --> 00:18:44,440
saying that in some of the deals
this week.

391
00:18:44,440 --> 00:18:49,320
So 22 you know, copied copied
juniors on the ASX have been

392
00:18:49,560 --> 00:18:53,440
like effectively gobbled up new
World resources, their Ambler

393
00:18:53,440 --> 00:18:57,600
deposit and and done it Saturday
mines and their.

394
00:18:57,760 --> 00:18:59,120
Ding, Ding, Ding marks on that
one, Yeah.

395
00:18:59,440 --> 00:19:06,560
Ding yeah, like 2-2 top Coppet
copper developers gobbled up

396
00:19:06,720 --> 00:19:09,280
share prices are not, are not
near all time highs for for

397
00:19:09,280 --> 00:19:12,320
either of them.
And but big premiums paid by,

398
00:19:12,320 --> 00:19:15,680
you know, the two different
parties at play here.

399
00:19:15,800 --> 00:19:19,800
I think that that's just why can
you pay a 6070% premium or in

400
00:19:19,800 --> 00:19:21,680
New World's case it was like a
90 odd percent premium.

401
00:19:23,160 --> 00:19:25,160
Well, it's because the equities
are, you know, there's there's

402
00:19:25,160 --> 00:19:26,520
relative value there at this
point in time.

403
00:19:26,520 --> 00:19:31,040
They're not, they're not baking
in the, you know, phenomenal

404
00:19:31,040 --> 00:19:33,840
kind of copper outlook that was
being baked in, you know, a

405
00:19:33,840 --> 00:19:36,360
brief period ago.
Yeah, copper price isn't even

406
00:19:36,360 --> 00:19:39,760
bad, you know, and it's not the
same case for the bigger players

407
00:19:39,760 --> 00:19:43,120
in the world, but these, you
know, pre production development

408
00:19:43,200 --> 00:19:46,160
and the smaller players in
general, they're looking a whole

409
00:19:46,160 --> 00:19:48,800
lot more enticing than they were
just a short while ago in that

410
00:19:48,800 --> 00:19:50,560
copper space, I think.
So I think we've got to do some

411
00:19:50,560 --> 00:19:54,240
work there again, JD.
I think you're bang on, mate.

412
00:19:54,400 --> 00:19:58,160
Yeah, next one, Amanda Lacars.
Oh, this was, this was good.

413
00:19:58,520 --> 00:19:59,720
I'll, I'll play it.
I'll play what she said.

414
00:20:00,000 --> 00:20:02,960
With the production of
Disposing, we have now broken

415
00:20:03,040 --> 00:20:08,760
the Chinese monopoly on heavy
wearers processing and I would

416
00:20:08,760 --> 00:20:14,240
like everybody to look at our
YouTube video on this because it

417
00:20:14,240 --> 00:20:18,880
shows our Malaysian team and it
shows their excitement was doing

418
00:20:18,880 --> 00:20:21,040
this.
They made the video themselves.

419
00:20:21,040 --> 00:20:23,800
We got so excited we thought
we'd put it up on YouTube.

420
00:20:24,400 --> 00:20:25,360
So, so why?
Why don't we?

421
00:20:26,400 --> 00:20:27,440
Let's do it.
We'll have a look why.

422
00:20:27,520 --> 00:20:28,800
Don't we check it out, Chatty?
I'll.

423
00:20:29,440 --> 00:20:30,840
I'll just have a search man have
a search.

424
00:20:31,840 --> 00:20:35,640
Linus Malaysia, let's see what
comes up.

425
00:20:37,960 --> 00:20:40,480
Must be this one here.
First video, right?

426
00:20:40,760 --> 00:20:48,240
Yeah.
Joe, when we in Guantan we'll.

427
00:20:48,240 --> 00:20:50,400
See.
Our Commonwealth.

428
00:20:50,400 --> 00:20:52,440
Friend, I mean that is that is
Malaysia.

429
00:20:54,080 --> 00:21:02,120
What?
Oh man, I can't be this one.

430
00:21:02,520 --> 00:21:04,320
I think we're on the wrong.
One got the wrong one.

431
00:21:04,840 --> 00:21:05,920
Oh, my gosh.
All right, hang on.

432
00:21:05,920 --> 00:21:06,680
Hang on.
Take it off.

433
00:21:06,760 --> 00:21:08,360
Hang on.
Let me turn this off.

434
00:21:08,640 --> 00:21:10,920
Let's turn this off.
Back, back.

435
00:21:11,280 --> 00:21:12,280
Hang on.
Sorry.

436
00:21:12,560 --> 00:21:14,080
Here we go.
I think I found the right one.

437
00:21:14,520 --> 00:21:16,120
This looks better we.
Have found our way.

438
00:21:17,320 --> 00:21:22,880
Get some.
Brand new day.

439
00:21:22,880 --> 00:21:23,760
Awesome.
That's pretty cool.

440
00:21:23,920 --> 00:21:28,360
Look at that.
That's dysprosium oxide, DY

441
00:21:28,400 --> 00:21:30,400
oxide.
Yeah, that's, that's impressive

442
00:21:30,400 --> 00:21:33,720
mate.
Mate, producing heavy rare

443
00:21:33,720 --> 00:21:37,320
earths is bloody, bloody bloody
hard.

444
00:21:37,360 --> 00:21:41,080
We you know there is a reason
why I have previously said it's

445
00:21:41,080 --> 00:21:44,520
in the too hard basket.
I've listened to numerous people

446
00:21:44,520 --> 00:21:47,800
on our show talk about the
process from getting it from A

447
00:21:47,920 --> 00:21:52,360
to B to C to D to A, you know,
through those that rafter steps

448
00:21:52,360 --> 00:21:56,240
and it is seriously impressive.
I think the the team should be

449
00:21:56,240 --> 00:21:59,280
commended in Malaysia and I'm
pretty proud actually that an

450
00:21:59,280 --> 00:22:01,560
Aussie company has, has a, a big
role in this one, you know,

451
00:22:01,600 --> 00:22:04,760
leading the charge on this one
because it's as we all know,

452
00:22:04,760 --> 00:22:08,560
pretty relevant in our world.
Today, so cracking a monopoly,

453
00:22:08,560 --> 00:22:11,080
yeah, big, big, big.
Right on to to the team.

454
00:22:11,400 --> 00:22:12,360
There.
Yeah, Yeah.

455
00:22:12,560 --> 00:22:14,440
All right, mate.
There was two more things I

456
00:22:14,440 --> 00:22:17,200
wanted to give quick mention to.
Now I'm just going to touch on

457
00:22:17,200 --> 00:22:21,120
them pretty briefly because I
think they are worthy of a whole

458
00:22:21,120 --> 00:22:24,560
podcast on their own.
And there's also like quite

459
00:22:24,560 --> 00:22:27,000
little information out on one of
these ones.

460
00:22:27,000 --> 00:22:32,840
So first up, Roger Cook, the WA
Premier, spoke about having a

461
00:22:32,840 --> 00:22:36,120
plugging and play in quotation
marks type of industrial hub

462
00:22:36,480 --> 00:22:38,640
here in the state.
The gist is that we need to

463
00:22:38,640 --> 00:22:42,560
capture more value in WA.
We've heard this before.

464
00:22:43,400 --> 00:22:45,880
The real question that I think
needs to be addressed here is

465
00:22:45,880 --> 00:22:49,080
how do we ensure that we have
cheap energy to do this?

466
00:22:49,080 --> 00:22:52,880
Now, it's very simple.
Without cheap energy, you don't

467
00:22:52,880 --> 00:22:55,440
have a chance in hell.
Now you need more than just

468
00:22:55,440 --> 00:22:58,720
cheap energy to do this.
But that is that is your your

469
00:22:58,720 --> 00:23:01,840
right to to play.
You know, look at Germany.

470
00:23:01,840 --> 00:23:04,520
Look at what happened over the
past three years, like

471
00:23:04,520 --> 00:23:08,080
specifically in 2022 when energy
prices just rocketed.

472
00:23:08,840 --> 00:23:11,160
The damage that that caused
there for these industries that

473
00:23:11,160 --> 00:23:13,280
were around in their industrial
businesses, they don't have

474
00:23:13,360 --> 00:23:14,800
generally super high margin.
Yeah, I.

475
00:23:14,960 --> 00:23:16,640
Completely agree.
I think there was like a, an

476
00:23:16,640 --> 00:23:20,880
underlying theme across the
entire event by the way, that of

477
00:23:20,880 --> 00:23:23,760
a, I've used the word
acknowledgement.

478
00:23:23,760 --> 00:23:25,320
It was certainly an
acknowledgement, but it could

479
00:23:25,320 --> 00:23:27,320
have even been more than just an
acknowledgement.

480
00:23:27,320 --> 00:23:32,960
It was this contemplation of the
increasing uncompetitiveness of

481
00:23:33,400 --> 00:23:36,240
like Western Australian mining
operations by three factors, one

482
00:23:36,240 --> 00:23:39,160
energy, the other one labour.
And thirdly and still very

483
00:23:39,160 --> 00:23:41,720
importantly is approvals,
timelines blowing out.

484
00:23:42,200 --> 00:23:44,680
You know, the three, three, like
2 of them rise costs like

485
00:23:44,680 --> 00:23:47,240
directly.
The third one like timelines

486
00:23:47,600 --> 00:23:49,720
people, maybe some people aren't
cleared on to the impact that

487
00:23:49,720 --> 00:23:52,320
that has on cost.
But, you know, impact the MPV is

488
00:23:52,720 --> 00:23:56,080
even kind of crazier.
Those are, those are really big

489
00:23:56,080 --> 00:23:58,000
things that are, that are
hindering the, you know, the,

490
00:23:58,720 --> 00:24:00,800
the, the, the, you know, the
competitiveness of that has been

491
00:24:00,840 --> 00:24:02,440
a big benefit to West Australian
mining.

492
00:24:02,640 --> 00:24:03,800
Yeah.
Absolutely mate.

493
00:24:03,800 --> 00:24:06,040
It's not the sexiest thing to to
run a podcast about or

494
00:24:06,040 --> 00:24:07,880
necessarily to chat about
because you're not talking about

495
00:24:07,880 --> 00:24:11,760
a stock just ripping and flying.
But it is what all the people in

496
00:24:11,760 --> 00:24:13,120
the room are talking about,
right?

497
00:24:13,240 --> 00:24:16,280
So it, it needs to be aired.
I think the second point I

498
00:24:16,280 --> 00:24:19,760
wanted to talk about on that
sort of policy orientation and

499
00:24:20,040 --> 00:24:23,440
again, just another sort of
teaser is that plenty of people

500
00:24:23,440 --> 00:24:26,960
would have heard this strategic
critical minerals reserve idea

501
00:24:26,960 --> 00:24:29,560
being floated.
And in my mind, this is huge

502
00:24:29,560 --> 00:24:31,640
news.
This is massive, massive news.

503
00:24:32,000 --> 00:24:34,920
And like I said, the reason I
don't want to talk about it

504
00:24:34,920 --> 00:24:37,080
massively is because we're so
scant on information here.

505
00:24:37,080 --> 00:24:39,360
We don't know what size it's
going to take and all that.

506
00:24:39,360 --> 00:24:44,080
But to capture it in a nutshell,
why it's interesting is that if

507
00:24:44,080 --> 00:24:47,480
you're if you're a punter on the
street, think about a stock you

508
00:24:47,480 --> 00:24:50,000
might have that's battling away,
going through the motions,

509
00:24:50,200 --> 00:24:52,480
right?
1/2 decent project that could

510
00:24:52,480 --> 00:24:56,200
get up in a positive commodity
price environment.

511
00:24:57,320 --> 00:25:00,280
And imagine they just sign this
favourable off take deal with

512
00:25:00,280 --> 00:25:02,200
the government.
The thing would fly right.

513
00:25:03,120 --> 00:25:06,200
On the flip side, as Miss King,
our resources minister here in

514
00:25:06,200 --> 00:25:10,560
Australia put it, when asked
sort of why and you know,

515
00:25:10,560 --> 00:25:12,960
whether they would be kind of
manipulating markets in having

516
00:25:12,960 --> 00:25:16,800
this reserve, they just pointed
quite bluntly to the market that

517
00:25:16,800 --> 00:25:19,360
we see right now.
And what she sort of said was

518
00:25:19,360 --> 00:25:22,880
that we don't live in a globally
open and free trade world.

519
00:25:23,440 --> 00:25:26,880
The market is being manipulated.
You know, the thing I guess that

520
00:25:26,880 --> 00:25:32,360
wasn't said was that by China,
biggest refiner, smelter,

521
00:25:32,600 --> 00:25:35,960
downstream user of pick a metal,
you name it, right.

522
00:25:36,120 --> 00:25:39,120
So that is something I just want
to put a pin in for now, but I

523
00:25:39,120 --> 00:25:43,520
think we need to discuss in
future because it affects every

524
00:25:43,520 --> 00:25:45,720
single company, you know, by the
Goldies, all the companies we

525
00:25:45,720 --> 00:25:49,560
talk about so, so much.
Can't can't wait for more detail

526
00:25:49,680 --> 00:25:52,920
on that one, JD.
I'm not filling myself with

527
00:25:52,920 --> 00:25:55,400
optimism that I'm going to love
the detail when I get to see it,

528
00:25:55,400 --> 00:25:57,560
but can't wait.
Can't wait for it nonetheless.

529
00:25:57,560 --> 00:25:58,720
Yeah.
The the retric around it was,

530
00:25:58,840 --> 00:26:02,040
yeah, it was relatively positive
actually, Yeah.

531
00:26:02,040 --> 00:26:05,200
So, but that was just like an
observation in the whole there's

532
00:26:05,200 --> 00:26:07,280
a lot of like miners there that
are kind of kissing the ring of

533
00:26:07,280 --> 00:26:09,920
government, even though it kind
of was a head scratcher, but it

534
00:26:09,920 --> 00:26:11,120
makes.
Sense if you're underwater.

535
00:26:11,160 --> 00:26:14,360
They're so like interwoven,
like, you know, it's like it was

536
00:26:14,360 --> 00:26:17,080
an event of major miners in
critical minerals companies who

537
00:26:17,080 --> 00:26:20,920
like some of them depend on
like, you know, government

538
00:26:21,240 --> 00:26:23,200
subsidies or handouts to be
economic in the future.

539
00:26:23,200 --> 00:26:26,880
And some of them don't ever want
to annoy government because they

540
00:26:27,360 --> 00:26:30,720
like government can really
inhibit the, the efficiency of

541
00:26:30,720 --> 00:26:33,120
their operations.
So I just, I don't know, I think

542
00:26:33,120 --> 00:26:35,680
it was, I think I think there's
a bias towards like positivity

543
00:26:35,680 --> 00:26:38,760
to government from that crowd
when it might not always be

544
00:26:38,760 --> 00:26:41,080
warranted.
I think I think we got a glimpse

545
00:26:41,080 --> 00:26:43,480
into how the sausage is made.
Yes, yes.

546
00:26:44,000 --> 00:26:47,160
Before we talk about some major
deal Goss, we've got a shout out

547
00:26:47,160 --> 00:26:48,960
to make.
I'm going to make a shout out to

548
00:26:48,960 --> 00:26:51,880
all the mine managers out there
tuning in to all the drill and

549
00:26:51,880 --> 00:26:54,720
blast supervisors, the
procurement managers, and the

550
00:26:54,720 --> 00:26:56,600
folks running the tech services
teams.

551
00:26:57,080 --> 00:26:59,000
Whether you're running an
exploration program, an

552
00:26:59,000 --> 00:27:01,720
underground drilling program,
whether you're running a drill

553
00:27:01,720 --> 00:27:05,840
and blast program, BD Drill is
the drill consumables partner

554
00:27:06,160 --> 00:27:09,560
you want for the job.
Mate, tell me why companies

555
00:27:09,600 --> 00:27:12,280
should be using BD drill for
their drilling consumables.

556
00:27:12,280 --> 00:27:14,240
I'm going to lay it out very
simply.

557
00:27:14,280 --> 00:27:16,640
I'm not just going to tell you
the fact that they've got teams

558
00:27:16,640 --> 00:27:20,440
in Perth, in Cal, in Sudbury and
distribution all over the world.

559
00:27:20,480 --> 00:27:22,800
I'm not just going to tell you
mate, the fact that they have

560
00:27:22,800 --> 00:27:26,000
worked with everyone from the
majors in our industry to the

561
00:27:26,000 --> 00:27:28,600
small explorers out there.
And I'm not even going to tell

562
00:27:28,600 --> 00:27:32,320
you that they make every single
bit of drill consumable.

563
00:27:32,360 --> 00:27:36,280
You can imagine everything under
the sun from RC to diamond to

564
00:27:36,280 --> 00:27:39,360
top hammer tools to drill pipes
and even rigs.

565
00:27:39,560 --> 00:27:43,880
But here's why you should really
pick up the phone and call BD

566
00:27:43,880 --> 00:27:47,400
Drill.
It'll save you money and that is

567
00:27:47,400 --> 00:27:48,920
what matters.
You'll be able to drill more

568
00:27:48,920 --> 00:27:50,120
meters.
Speaking to me now.

569
00:27:50,640 --> 00:27:55,720
They have got countless examples
of their equipment performing in

570
00:27:55,720 --> 00:27:57,800
the real world, getting results
in the real world.

571
00:27:57,800 --> 00:28:00,120
That's all that matters, right?
QC tested QA QC mate.

572
00:28:00,400 --> 00:28:01,600
Mate, check it out on their
website.

573
00:28:01,600 --> 00:28:04,800
Their kit will work in below -30
in Siberia.

574
00:28:05,000 --> 00:28:09,280
It'll go down below a kilometre
drilling water wells in Tibet of

575
00:28:09,280 --> 00:28:11,320
all places.
They've got Rotary bits that

576
00:28:11,320 --> 00:28:14,160
have lasted nearly 14 kilometres
in the Pilbara.

577
00:28:14,160 --> 00:28:17,520
And they've delivered proven 50
plus percent savings to uranium

578
00:28:17,520 --> 00:28:21,640
miners in Namibia.
Choose consumables that are

579
00:28:21,640 --> 00:28:23,920
proven to save you cash mate
speaking.

580
00:28:23,920 --> 00:28:27,000
To me mate, save cash equals
better returns, maybe even a

581
00:28:27,000 --> 00:28:28,560
better bonus.
The details in the show notes

582
00:28:28,560 --> 00:28:31,280
reach out to Dave and the team.
Thank you, BD Drill Go.

583
00:28:31,280 --> 00:28:33,440
BD drill.
All right, mate, Let's talk

584
00:28:33,440 --> 00:28:36,720
about Adriatic and some hot, hot
M&A Goss.

585
00:28:36,760 --> 00:28:39,400
We can't stop.
Actually on the deal theme this

586
00:28:39,400 --> 00:28:41,600
week.
It's been a pretty eventful week

587
00:28:41,600 --> 00:28:44,840
for everyone.
On Wednesday, Adriatic stock

588
00:28:44,840 --> 00:28:49,480
surged up, so they came out and
confirmed that they were having

589
00:28:49,480 --> 00:28:51,600
a chat with Dundee Precious
Metals.

590
00:28:51,600 --> 00:28:54,480
So let's RIP into why this one
is super interesting.

591
00:28:54,600 --> 00:28:59,320
Well intriguingly mate, this
deal rumour first emerged in Sky

592
00:28:59,320 --> 00:29:01,960
News of all places.
One of the more unlikely sources

593
00:29:01,960 --> 00:29:04,720
for mining M and a rumour,
although I think they've come up

594
00:29:04,720 --> 00:29:06,120
once before.
I can't remember what deal it

595
00:29:06,120 --> 00:29:10,160
was.
This story explicitly references

596
00:29:10,160 --> 00:29:14,320
in the Sky News article at £700
million price tag for for

597
00:29:14,320 --> 00:29:18,080
Adriatic in Australian dollars,
that's 1.5 billion Aussie for

598
00:29:18,440 --> 00:29:20,320
Adriatic.
Ruin that weak Aussie dollar at

599
00:29:20,320 --> 00:29:22,560
the minute.
Yeah, holidays are expensive.

600
00:29:22,760 --> 00:29:25,640
So shortly after this Sky News
article goes up, Adriatic puts

601
00:29:25,640 --> 00:29:28,240
out a release.
They promptly confirm

602
00:29:28,600 --> 00:29:30,640
discussions that they're having
with Dundee precious metals.

603
00:29:30,640 --> 00:29:34,200
And and I'm no expert on UK
takeover law, but Adriatic

604
00:29:34,200 --> 00:29:37,480
explicitly mentions in in their
acknowledgement that Dundee has

605
00:29:37,480 --> 00:29:41,040
until 5:00 PM on the 17th of
June to make a firm offer.

606
00:29:41,040 --> 00:29:44,520
Now this is, you know, U KS
famous put up or shut up rules

607
00:29:44,520 --> 00:29:47,120
in in M&A, which we came across
with BHP Anglo of course.

608
00:29:47,160 --> 00:29:49,480
I might, I might jump in real
quick mate, because I think a

609
00:29:49,480 --> 00:29:52,440
lot of the audience might not
know who on earth Dundee

610
00:29:52,440 --> 00:29:55,640
Precious metals is.
So just just quickly, the TSX

611
00:29:55,640 --> 00:29:59,680
listed copper gold miner they
produced from 2 mines, both in

612
00:29:59,800 --> 00:30:01,800
Bulgaria.
So they're in the ballpark of

613
00:30:02,160 --> 00:30:06,200
Bosnia and Herzegovina and
they've also got a Serbian asset

614
00:30:06,200 --> 00:30:08,720
that's due to come online in
2028.

615
00:30:08,720 --> 00:30:13,040
So you know 3.4 billion market
cap in Canadian dollars and a

616
00:30:13,040 --> 00:30:15,280
fair bit in cash, so 800 million
in cash.

617
00:30:15,280 --> 00:30:17,480
They've been doing returns
recently.

618
00:30:17,520 --> 00:30:21,520
So they seem to be a pretty well
respected and well run business,

619
00:30:21,520 --> 00:30:22,840
but by the accounts that we
heard.

620
00:30:23,760 --> 00:30:27,680
Interestingly, it it took Dundee
a few more hours and it took

621
00:30:27,680 --> 00:30:31,120
Adriatic to to get their own
statement up on the matter.

622
00:30:31,280 --> 00:30:32,960
In in a nutshell, what does
Dundee do?

623
00:30:32,960 --> 00:30:36,400
They they confirm that they are
in discussions with Adriatic.

624
00:30:36,400 --> 00:30:38,280
They say there's no guarantee of
a deal.

625
00:30:38,320 --> 00:30:40,360
They also acknowledge the time
frame that comes from the UK

626
00:30:40,360 --> 00:30:42,640
takeover laws.
So so far, typical deal like

627
00:30:42,640 --> 00:30:44,480
behavior, right?
Or is it?

628
00:30:44,920 --> 00:30:48,440
Tell me, mate, tell me.
I know you mentioned that Dundee

629
00:30:48,560 --> 00:30:53,400
has what like like 800 million
Canadian cash, even though they

630
00:30:53,400 --> 00:30:56,640
have about 60% of the cash
needed to pay up for Adriatic

631
00:30:56,680 --> 00:31:00,840
based on that sort of Sky News
price tag, they they might and

632
00:31:00,840 --> 00:31:03,640
they might be able to debt fund
the the balance, you know, given

633
00:31:03,640 --> 00:31:05,240
their existing operations.
I don't, I don't think the

634
00:31:05,240 --> 00:31:07,720
market here is actually thinking
that Dundee plans on doing a

635
00:31:07,720 --> 00:31:09,800
cash deal.
I, I think all parts of the

636
00:31:09,800 --> 00:31:11,720
market actually expect a script
deal.

637
00:31:12,280 --> 00:31:15,880
You can even see that former
Adriatic managing director Paul

638
00:31:15,880 --> 00:31:19,480
Cronin, he's got a tweet, it
says if it was DPM, I'd take

639
00:31:19,480 --> 00:31:21,720
stock.
This is an extremely well run

640
00:31:21,720 --> 00:31:23,760
company.
Their work at all previous

641
00:31:23,760 --> 00:31:25,080
operations is quite frankly
second to none.

642
00:31:25,080 --> 00:31:27,880
So I'm speaking to an
expectation of taking script.

643
00:31:28,200 --> 00:31:31,000
So when the market expects a
script offer, you'd usually

644
00:31:31,000 --> 00:31:34,200
expect to see the share price of
the target shoot up and the

645
00:31:34,200 --> 00:31:36,560
share price of the acquirer full
kind of, you know, it's the

646
00:31:36,920 --> 00:31:39,720
natural M and ARB dynamic.
Admittedly, there's no like

647
00:31:39,720 --> 00:31:41,120
disclosed merger ratio revealed
here.

648
00:31:41,200 --> 00:31:43,480
You could back one out if you
expected a normal script one.

649
00:31:43,480 --> 00:31:47,280
But but it's been fascinating to
watch Dundee's share price

650
00:31:47,280 --> 00:31:50,760
actually much higher on the news
to the times.

651
00:31:50,760 --> 00:31:52,040
Instead.
You don't always see you don't

652
00:31:52,040 --> 00:31:54,240
always see that it's it's kind
of rare.

653
00:31:54,480 --> 00:31:56,560
Clearly Dundee shareholders,
right?

654
00:31:56,560 --> 00:31:58,640
Dundee's in in country
expertise.

655
00:31:58,640 --> 00:32:00,520
They think there's plenty of
value to be had by applying that

656
00:32:00,520 --> 00:32:04,200
to Adriatic.
Importantly, Dundee would be

657
00:32:04,200 --> 00:32:06,760
better capitalized and this is
a, you know a big, a big point

658
00:32:06,760 --> 00:32:09,960
of where you might get some
synergies better capitalized to

659
00:32:09,960 --> 00:32:13,400
whether you know any, any ramp
up kind of things that happened

660
00:32:13,400 --> 00:32:16,120
during ramp up, which which is
always a big risk for a single

661
00:32:16,120 --> 00:32:18,360
asset company.
Yeah, absolutely matters, as

662
00:32:18,360 --> 00:32:20,160
we've kind of discussed in the
past.

663
00:32:20,920 --> 00:32:22,240
Who do you think revealed this
one?

664
00:32:23,920 --> 00:32:27,640
I don't know, and you never find
out an answer to that question

665
00:32:27,920 --> 00:32:29,400
either.
By the way, you can suspect

666
00:32:29,400 --> 00:32:31,200
things.
Give us something punchy, mate.

667
00:32:32,040 --> 00:32:36,440
I I think I think I could come
up with a few reasons why a leak

668
00:32:36,440 --> 00:32:39,640
could theoretically make sense
from the Adriatic side of things

669
00:32:39,640 --> 00:32:43,560
here.
Like firstly, leaking making

670
00:32:43,560 --> 00:32:46,960
discussions would would in
theory be a a pretty neat or

671
00:32:46,960 --> 00:32:49,200
clever way to flush out any
potential rival bidders have

672
00:32:49,200 --> 00:32:51,480
been a bit soft, so leak can
force the hand of other

673
00:32:51,480 --> 00:32:54,120
potential acquirers who may have
been considering a bit.

674
00:32:54,320 --> 00:32:58,080
But we're moving slowly.
Public knowledge of a deal in

675
00:32:58,080 --> 00:33:00,760
the worst can spark bit of a
competitive, you know, bidding

676
00:33:00,760 --> 00:33:02,160
process.
You get your act together, you,

677
00:33:02,600 --> 00:33:04,760
you know, you put put something
in rather than let things drag

678
00:33:04,760 --> 00:33:07,240
out.
I think it also can work to put

679
00:33:07,320 --> 00:33:09,640
pressure on the current, you
know, that you're in discussions

680
00:33:09,640 --> 00:33:12,200
with like who knows how far
progressed during discussions or

681
00:33:12,200 --> 00:33:14,920
if prices, you know, determined.
They just said that that

682
00:33:14,920 --> 00:33:17,520
preliminary kind of DD had been
shared, not full DD.

683
00:33:17,520 --> 00:33:21,840
So I don't know if don't know if
a price is put on that or or if

684
00:33:21,880 --> 00:33:23,840
or if what had been shared was
just to come up with a price.

685
00:33:23,840 --> 00:33:26,640
But but the moment it's
disclosed, you know, if Dundee

686
00:33:26,640 --> 00:33:30,920
was dragging their feet or low
balling an offer, a leak could

687
00:33:31,000 --> 00:33:33,440
in theory, you know, force them
to firm up or improve their

688
00:33:33,440 --> 00:33:37,280
proposal before others in theory
could step in too.

689
00:33:37,600 --> 00:33:41,360
In any case, before the deadline
of the UK takeover.

690
00:33:41,360 --> 00:33:43,960
Laws.
So if it is to flush out rival

691
00:33:43,960 --> 00:33:46,400
bidders, who is top of your
mind?

692
00:33:47,560 --> 00:33:50,720
It's, it's worth pointing out,
like Adriatic is right now

693
00:33:50,720 --> 00:33:54,480
trading above the implied terms
from the Sky News, like above

694
00:33:54,480 --> 00:33:57,320
that $700 million, seven, £100
million level, right.

695
00:33:57,640 --> 00:34:00,680
And and that's a little bit
unusual, especially when there's

696
00:34:00,680 --> 00:34:02,600
no actual firm deal on the table
yet.

697
00:34:02,600 --> 00:34:06,240
So clearly the market's pricing
in some probability of a higher

698
00:34:06,240 --> 00:34:09,960
price deal to come, be it from
Dundee precious metals

699
00:34:09,960 --> 00:34:14,800
themselves or or someone else.
To your point on, on who, if you

700
00:34:14,800 --> 00:34:18,760
could just look at the active
MNA, you know, the active

701
00:34:18,760 --> 00:34:22,080
acquirers in the, in the silver
dominant landscape of the, of

702
00:34:22,080 --> 00:34:24,239
the listed companies out there.
In recent history, in the last

703
00:34:24,239 --> 00:34:26,760
year, we've seen acquisitions
from first Majestic, from coal

704
00:34:26,760 --> 00:34:28,840
mining from and very recently
Pan American.

705
00:34:29,199 --> 00:34:31,320
They're all America's focused
and, and Pan American.

706
00:34:31,320 --> 00:34:33,159
And I think they have their
hands full with the acquisition

707
00:34:33,159 --> 00:34:37,120
of of Mag earlier this month.
But you know, I I wouldn't rule

708
00:34:37,400 --> 00:34:40,320
the others out.
Ultimately though, if this if

709
00:34:40,320 --> 00:34:44,080
this was a tactic to shake out a
bid from a party keeping the

710
00:34:44,080 --> 00:34:47,480
cards close to their chest, I'd
bet that party is a djinn.

711
00:34:48,199 --> 00:34:51,440
Friends of the Show.
Friends of the show Adriatic is

712
00:34:51,920 --> 00:34:54,920
yeah, Bosnia and her Slovenia.
I'm saying that wrong probably.

713
00:34:55,120 --> 00:34:59,160
But ain't in mate.
They they have an interesting

714
00:34:59,240 --> 00:35:02,680
project across the border in
Serbia Toots and Serbia's kind

715
00:35:02,680 --> 00:35:05,000
of a Gin's home home ground
there from a mining perspective.

716
00:35:05,000 --> 00:35:06,640
Here's here's a map bit of
context.

717
00:35:07,000 --> 00:35:11,000
You can see Vargas there in
across the board and then in

718
00:35:11,000 --> 00:35:14,280
Serbia you've got a bunch of
decision operations in Bulgaria

719
00:35:14,280 --> 00:35:16,920
like you point to Mate.
You can see Dundee's operations

720
00:35:16,920 --> 00:35:19,360
too.
So Seijin's a big operation, big

721
00:35:19,360 --> 00:35:21,720
company, obviously, yes.
What do you think the odds of

722
00:35:21,760 --> 00:35:26,040
two, you know goes at it in the
M&A world in a week?

723
00:35:26,400 --> 00:35:28,840
Seijin hasn't had to do anything
in Eden, but what I find

724
00:35:28,840 --> 00:35:32,880
interesting is in the exact same
week, there's potentially been

725
00:35:32,880 --> 00:35:37,840
two tactics from, you know,
companies or other parties in a

726
00:35:37,840 --> 00:35:41,440
transaction to try and squeeze a
bit out of Zijin, right?

727
00:35:41,440 --> 00:35:43,320
In the case of Xanadu, it was
Bastian.

728
00:35:43,640 --> 00:35:46,400
And in this case, like if, if it
like came from Adriatic, then

729
00:35:46,400 --> 00:35:49,280
maybe it was in theory, it could
have been to really force Zijin

730
00:35:49,280 --> 00:35:51,760
to put up a a fair, a fair
moffer and be competitive.

731
00:35:52,160 --> 00:35:54,000
I find that really interesting.
The whole mining world is going

732
00:35:54,000 --> 00:35:56,160
to be paying attention.
If there's a, a playbook that

733
00:35:56,160 --> 00:36:00,520
might be useful to actually
incite A Zijin bid here because

734
00:36:00,520 --> 00:36:02,960
of, you know, how prominent they
are in many different parts of

735
00:36:02,960 --> 00:36:04,680
the world in many commodities.
Yeah.

736
00:36:04,680 --> 00:36:07,040
But I, I've, I pose a question
to you mate, Crystal ball time.

737
00:36:08,040 --> 00:36:14,800
What do you think will happen?
I think, I think we we will see

738
00:36:14,800 --> 00:36:17,920
an offer put forward.
By Dundee, Yeah, yeah.

739
00:36:18,120 --> 00:36:21,040
And anyone else?
No, I agree.

740
00:36:21,160 --> 00:36:24,640
Yeah, actually I was hoping to
disagree with you, but yeah, I

741
00:36:24,640 --> 00:36:25,920
think this is, I think this will
be Dundee.

742
00:36:25,920 --> 00:36:28,560
'S like like you mentioned with
those those other players

743
00:36:28,560 --> 00:36:32,880
they've got their hands
relatively full like Zajan

744
00:36:32,920 --> 00:36:35,640
putting Zajan aside I don't
think you know a deal they

745
00:36:35,640 --> 00:36:38,120
haven't even done keeps them too
occupied for a company of that

746
00:36:38,120 --> 00:36:41,960
scale but the other ones the the
more relevant silver dominant

747
00:36:41,960 --> 00:36:44,120
miners I just think they've
they've got their hands full

748
00:36:44,120 --> 00:36:47,320
Bosnia is a it's a different
jurisdiction for them yeah these

749
00:36:47,320 --> 00:36:50,600
guys have operations in Bulgaria
Serbia in which they overlap

750
00:36:51,040 --> 00:36:55,400
that that makes a bit more sense
to me and yeah like like we sort

751
00:36:55,400 --> 00:36:57,480
of said that the it'd.
Be hard for anyone to have the

752
00:36:57,480 --> 00:36:59,920
same synergies as Dundee
excision you know.

753
00:37:00,560 --> 00:37:02,560
Yeah, exactly.
And Dundee have been performing

754
00:37:02,560 --> 00:37:04,920
well.
Mining companies want to go and

755
00:37:04,920 --> 00:37:07,480
buy stuff when they, when they
do well, you know, generally.

756
00:37:07,600 --> 00:37:09,880
So we'll see.
The clock is ticking.

757
00:37:09,880 --> 00:37:12,320
It is, yeah.
Like you said, June 17.

758
00:37:12,360 --> 00:37:13,920
We should see something prior to
then.

759
00:37:15,320 --> 00:37:17,280
We'll be paying attention mate.
Awesome.

760
00:37:17,560 --> 00:37:19,840
All right.
Well, a big thank you to our

761
00:37:20,160 --> 00:37:22,440
great partners.
To wrap up the show, Mineral

762
00:37:22,440 --> 00:37:25,240
Mining Services, Grounded
Sandvik Ground Support, CRE

763
00:37:25,240 --> 00:37:28,600
Insurance, K Drill, KCA Site
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764
00:37:28,600 --> 00:37:30,200
Services and Cross Boundary
Energy.