Is $85/lb the new Uranium Floor?

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It's the 37th week of the year
guys, and there's some some real

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optimism in the uranium market.
You know, I'm hearing all of

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these rumours surfacing around
Twitter everywhere that, you

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know, there's, there's four
prices as high as 85 bucks per

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pound being thrown around, you
know, post sort of WNA and, and

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big lofty ceiling prices in
that, in that term market as

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well.
I'm so keen to get into that.

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And we're also going to look
under the hood at the the

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Palladium and platinum markets.
Thanks to Sibanya, Stillwater

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stumbling and China mate,
they're sending us some mixed

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messages in the rare earth
market as well.

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Maybe as usual, I can't wait to
bring you all of that today as

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Maddie's over East.
But first we got a funny voice

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memo sent through to us the
other day, didn't we team?

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Oh, we did we.
Did indeed?

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Let's RIP it, I reckon.
Let's have a listen.

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Let's.
Play this one for the money

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miners Zai.
I'm out in lock and fold, belt

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man in RC rig trying to work out
the world underneath me from the

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scale of a piece of grapple.
And what do you know what pops

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up in front of me but a tablet
with Axis mining technology and

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displaying the surveys that the
drillers have just completed.

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While dust is flying, the chips
are being washed and by God the

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hole is bending like a banana.
Straight from the mouth of one

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of Australia's best geos, hey?
Mate, that's bogan owe you a

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carton for that wonderful bit of
promo in the absence of Maddie.

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Didn't have to RIP it out
ourselves team, but go to hell.

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What is going on in the uranium
world?

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Yeah.
So as we know the West nail for

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those who don't know, the World
Nuclear Association conference

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was held a few weeks ago.
Big anticipation this year with

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you being obviously a fair bit
higher than previous years when

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the conference has been held
that this is where you have all

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the uranium companies, fuel
buyers and all the like having

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to talks, you know everything
you and nuclear.

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And there was a great article
that come up over the weekend

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from Kuppi called you need to
focus on term.

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So this is from Kuppi's Corner
and it had some interesting

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takeaways from the conference
and sort of looking at you and

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nuclear going forward.
Puppy is Harris Cooperman.

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Isn't that right?
JD?

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If.
Yeah, he's a a fundy over in the

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States who put a couple feelers
out to to get on the show.

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But for those that aren't
familiar, he's a fund manager

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who's been watching the uranium
space for for quite some time,

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as well as a few of the other
commodities that we that we like

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to like to follow.
Mate I.

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Remember looking at his funds
performance and just being like.

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That real?
That was my first thoughts as

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well mate.
That's.

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A pretty good, pretty good
performance, but yeah.

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So what were those takeaways,
Ally?

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So first one which I think to be
honest you could apply this to.

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A lot of.
Commodities.

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No pun intended to a few
different commodities, but he

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highlighted sort of again that
investors are very fixated on

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the most recent data points, you
know, sort of bit like goldfish

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and a bit I'll pick at times.
So, you know, we saw uranium

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spot price, you know, peak over
100 bucks a pound early in the

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year.
It's since fall back from then

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and this pull back seems like
investors are sort of obsessing

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and catastrophizing over and
it's sort of been amplified by a

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bit of a misunderstanding of
uranium market and how it

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operates, which sort of
naturally leads to take away

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too, which is the spot price is
a price, it isn't the price.

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And I think, I think we we all
know Ali to to what you're

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saying there, what the spot
price is, what the term price

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is.
But reading through the article,

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I thought it was, it was pretty
sort of funny and interesting.

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So I'll just read out a a couple
of sentences.

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Firstly, talking about the the
spot price.

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So to start with, it's where
miners choose to sell their

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pounds or purchase pounds when
they can't meet contractual

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obligations.
It's also a market where

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momentum based hedge funds go to
express a view in another sort

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of sentence, he says it's a a
market where enriches dump their

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excess pounds from under
feeding.

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So what you can essentially take
from that is it's it's the place

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where hedge funds carry traders,
producers, utilities,

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speculators all go, go.
And you know, he, he summed it

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up quite well with it being the
most quoted price out there, but

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also largely the most, well, the
most effectively irrelevant

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price that you see out there.
Any he put some numbers to that.

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It only makes up 10% roughly of
the pounds that utilities get.

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And then on the flip side of
that, you've obviously got the,

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the term price, which in simple
terms for people that haven't

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followed uranium for, for some
time is where the, the utilities

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go and lock in the longer term
contracts.

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These are, you know, executed
over many years and they've got

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prices that reference ceilings,
they're reference floors.

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They're not just flat prices,
they involve periodic deliveries

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as well.
I.

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Always thought that, you know,
the difference between the, you

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know, the focus on the spot
price and then you look at the

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the, the term price and you
know, the term price is the one

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that matters.
But you know, like maybe a

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misconception that that I and,
and even and other investors out

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there kind of had is I always
sort of thought the spot price

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might have been like the tail
that wags the dog kind of thing.

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But yeah, I think this article
kind of questions that that

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interpretation as well.
I was gonna say this meme Tuppy

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had in his cool trap probably
very accurately sums that up,

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right?
Yeah, that's, that's a good one.

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I also, you know, find it kind
of funny, right?

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Because I'm sure this is where a
bit of Cappy's kind of edge

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comes from being able to take
the differentiated longer term

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view.
So maybe it's a bit tongue in

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cheek that he calls it out or
he's, he's obviously, you know,

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disclosed at the bottom of the
the piece that he's got an

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interest in uranium at the
moment.

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But I'm sure this shorter term
focus which is commonplace in in

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markets today and I think it has
been for us as long as time is

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where he actually makes a bit of
his alpha.

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Absolutely, and I'll quite like
this other quote from his

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article as well.
He says if the vast majority of

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the total transaction volume
takes place in the term market,

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then it seems odd that so many
investors use the most recent

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spot trade to guide the
sentiment.

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Instead, they should be focused
on the term market.

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But unfortunately there are a
number of problems with using

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the term market as a benchmark
because a lot of those contracts

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as, as you sort of highlighted
JD, they're, they're bespoke and

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sort of quite unique to
particular situations, mines,

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fuel buys, etcetera.
They're often, you know, the

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terms of that are pretty
confidential.

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The actual volume of these
transactions is a bit on the

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lower side as well.
So there's sort of the pros and

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cons, but again, just just
highlighting that focus on this

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is where the majority of pricing
is determined over here, not,

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not the not necessarily the spot
price what's.

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Actually happened to the term
market over like the last six

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months when you know spot's been
under pressure and and equities

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have certainly been under
pressure like the term market's

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actually each tier, right.
Yeah, I think, I think the

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important thing that that people
are picking up on and clearly

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that's what Cappy's honing in on
here is that you see a a gradual

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rise in the floors and the
ceilings.

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And obviously they've got
they've got features in them

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that can allow that to rise
going forward in time as well.

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But when they're sort of priced
today, what he's talking about

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floors of 85 bucks, ceilings of
135 that that's not throughout

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the rest of the life of the
contract that can, you know,

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elevate over time.
Again, if that's the way in

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which the uranium price trends.
But the broader trend of having

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those floors being set higher
and the ceiling set higher is

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the positive trend that people
are sort of fixing on, right?

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Yeah.
And probably the the final take

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away from this piece is from
Cuppy's piece is that utilities

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are increasingly hungry to
contract for uranium.

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You know, supposedly utilities
are submitting, you know, to

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market RFP's requests for
proposal in the next few weeks

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sort of post WNA mining
companies have sort of sensed

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this change in sentiment and you
know raising pricing and

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anecdotally sort of as you sort
of mentioned, JD heard that

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miners are now quoting $85
floors and $135 ceilings.

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That's wild, right?
Which is $85 floor when your

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spot's 80 thereabouts.
It's kind of kind of weird.

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Yeah, no, it's, it's, it's
pretty huge, right.

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But I guess the question to ask
is that's all good from the

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mining company side, but are
utilities actually willing to

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transact at these sort of
elevated prices that are, you

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know, especially from the
ceilings as far as the ceilings

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concerned well above current
spot prices?

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And is the lack of transaction
volume on these term contracts,

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is it due to this Mexican
standoff between the the miners

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and the fuel buys?
Or is it because there's a bit

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of a dearth of miners with
uncontracted new term

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production?
You know, perhaps it's a bit of

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both.
And I guess that dynamic can

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really only last so long given
there's already pretty low

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uranium inventories.
We're coming into the Northern

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hemisphere winter.
So they'll start getting chewed

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up.
You know, there's been guidance

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cuts, as we've seen recently
from the world's biggest

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producer.
So there's a lot of, you know,

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things sort of have played out
and are playing out now and

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imagine some of that pricing for
the term market will, you know

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begin to crystallise soon can.
You point the alley on bit of a

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stand off.
Gosh, I, I, I would have always

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thought like the initial kind
of, you know, interactional

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interest in, in securing supply.
Like it's the it's the, you

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know, the nuclear buyer that
kind of has that power to begin

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with to actually, you know,
initiate, discuss discussions to

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lock in supply because they're
trying to whatever they're, you

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know, they've got to meet their
like contractual obligations and

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they've got like they're doing
the power forecast.

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But then it's the setting, the
actual price is sort of where

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where some degree of leverage
might come to the come to the

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miners.
But yeah, I'm the, the, the

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rhetoric on Twitter would be
that that Mexican standoff is in

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some part just due to the, the
cyclical nature and actually

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these contracting cycles.
And you know, rather than kind

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of seeing this, this homogeneous
flow of contracting kind of

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happening throughout the year,
it's actually, you know, these

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these multi year kind of cycles.
And you know there can be a

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Stampede of everyone trying to
do at the same time at all,

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which you know people with the
bull thesis will point to.

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Yeah, I think you've, you've
framed the, the discussion

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really well there, Ally, with
the the two sides.

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I mean, we've, I've personally
got no, no great insight into

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it, although I'm pretty
interested because one way or

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another it seems like we'll find
out in the, you know, the

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relative near future what the
outcome is going to be.

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And that would sort of imply a
movement one way or another.

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A sort of line that really stood
out from, from the article was

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that the uranium market moves at
glacial pace their utilities,

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after all.
And I think that's firmly what

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we're kind of seeing here.
I just sort of caveat the, the

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article, if people go and read
it themselves, you sort of

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finish reading that and you've,
you've got a bit of an

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optimistic view, You've got a
really bullish view.

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And you see the, the sort of
downtrodden sentiment in the

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uranium stocks and more broadly
across the, the nuclear kind of

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universe at the moment.
And that that's a sign that kind

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of gets me excited.
But anecdotally, we'd heard from

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other people as well out there
that, you know, it wasn't quite

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as as bullish as the article
might have you believe.

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There were people with different
points of view saying the, the

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utilities out there, they're
pretty content.

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They're not feeling the need to
rush in.

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But, you know, who knows?
Maybe that's a broader disregard

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that they've had for the uranium
producers out there for a while

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00:12:13,600 --> 00:12:16,360
to come, and maybe that comes
and bites them in the ass in the

224
00:12:16,360 --> 00:12:17,560
future.
Who kind of knows?

225
00:12:18,120 --> 00:12:22,560
Yeah, another, another piece of,
you know, feedback we'd received

226
00:12:22,560 --> 00:12:26,640
is it it seemed like the mining
of uranium was a bit of an

227
00:12:26,640 --> 00:12:30,760
afterthought for fuel buyers,
which to be honest could be a a

228
00:12:30,920 --> 00:12:35,160
blessing and a curse for them.
Sort of think thinking in that

229
00:12:35,160 --> 00:12:38,600
way.
You know, some people believe

230
00:12:38,600 --> 00:12:41,160
that because that a problem is
sort of addressed the next 12

231
00:12:41,160 --> 00:12:44,280
months of the sulfuric acid
shortfall, which has been quite

232
00:12:44,280 --> 00:12:46,080
a topical issue the last few
months.

233
00:12:46,080 --> 00:12:51,280
So it seemed like a lot of the
finance guys and gals reckon

234
00:12:51,280 --> 00:12:54,400
yous going to the moon, but
then, you know, you had nuclear

235
00:12:54,800 --> 00:12:58,320
insiders sort of a bit more
muted on that front.

236
00:12:58,800 --> 00:13:01,760
So yeah, definitely a bit of a
range of anecdotes and

237
00:13:01,800 --> 00:13:05,720
perspectives coming out from the
conference, sort of depending on

238
00:13:05,720 --> 00:13:09,280
the on the party I guess.
Yeah, Speaking of conferences,

239
00:13:09,280 --> 00:13:12,280
Ali.
Oh, Speaking of conferences, we

240
00:13:12,280 --> 00:13:17,960
have to talk about AUS big next
event coming up, Drill 24, only

241
00:13:17,960 --> 00:13:21,640
29 sleeps away guys.
Oh, wait, wait, we're.

242
00:13:22,080 --> 00:13:24,200
Going to be there.
And we're going to be there too.

243
00:13:24,200 --> 00:13:27,040
So look, if you haven't got your
tickets yet, links in the show

244
00:13:27,040 --> 00:13:31,320
notes, get your tickets sorted.
It's October 15th to 17th in

245
00:13:31,320 --> 00:13:34,520
Perth at the Convention Centre.
It's as simple as that.

246
00:13:35,000 --> 00:13:38,080
We've got, you know, they'll be
showcasing all the latest and

247
00:13:38,080 --> 00:13:41,920
greatest in drilling tech and
equipment and drillers take note

248
00:13:41,920 --> 00:13:45,200
because reps from the major
modern companies based here in

249
00:13:45,200 --> 00:13:48,040
Perth will be there.
So get yourself there.

250
00:13:48,160 --> 00:13:49,600
That's the mining tech mate.
Will help you.

251
00:13:49,600 --> 00:13:51,560
Will help you drill more
efficiently and cheaply.

252
00:13:51,840 --> 00:13:56,200
Yes, Oh, if if anything in this
cost inflationary environment

253
00:13:56,200 --> 00:13:58,760
that's all you can ask for.
And like Trev said, we're all

254
00:13:58,760 --> 00:14:00,880
going to be there.
Maddie's going to be doing a bit

255
00:14:00,880 --> 00:14:04,800
of M saying it is all happening
at drill 24.

256
00:14:04,920 --> 00:14:06,920
That's.
The real selling point did

257
00:14:07,000 --> 00:14:09,320
Maddie M saying the show big
tickets.

258
00:14:09,520 --> 00:14:10,440
They're in the show notes.
To.

259
00:14:12,120 --> 00:14:17,000
A another, another commodity
market, JD, where, you know,

260
00:14:17,000 --> 00:14:21,520
we're seeing a good chunk of
supply curtailment maybe not

261
00:14:21,720 --> 00:14:24,760
coming in the uranium space, but
this is, this is five years ago

262
00:14:24,760 --> 00:14:26,480
you saw plenty of curtailment in
the uranium space.

263
00:14:27,720 --> 00:14:30,880
But yeah, the the Palladium made
Palladium surging.

264
00:14:31,480 --> 00:14:34,760
Wasn't that, wasn't that uranium
curtailment a sign of things to

265
00:14:34,760 --> 00:14:37,040
come?
For the patient investors out

266
00:14:37,040 --> 00:14:40,800
there, it's almost like this.
It's very cyclical nature of

267
00:14:40,800 --> 00:14:44,840
commodities where you have over
investment and then lag time and

268
00:14:44,840 --> 00:14:46,920
construction and then
commodities.

269
00:14:46,920 --> 00:14:48,520
It's kind of, it's kind of funny
if you zoom out.

270
00:14:49,960 --> 00:14:53,720
So we, we both listened to this
one mate and I, you know, we, we

271
00:14:53,720 --> 00:14:55,760
spoke about it this morning.
It was, it was really

272
00:14:55,760 --> 00:15:01,080
interesting and it's a basket of
commodities PGMS that are just

273
00:15:01,080 --> 00:15:02,680
really interesting.
I think the, the first time we

274
00:15:02,680 --> 00:15:05,920
spoke about it was a good three
or four months ago and we

275
00:15:06,760 --> 00:15:10,680
described the, the hated
environment that I think perks

276
00:15:10,680 --> 00:15:14,680
all of us up and really stands
out to those, those investors

277
00:15:14,680 --> 00:15:17,720
that love trolling for, for
beating up stuff, right.

278
00:15:17,880 --> 00:15:20,920
Mate, I think it's the only like
if you're interested in a

279
00:15:20,920 --> 00:15:25,680
commodity sector to like, you
know, have positive PNL, it's

280
00:15:26,120 --> 00:15:31,120
the only way to to do that
effectively over time is to look

281
00:15:31,120 --> 00:15:33,800
for the look.
Look for when the the commodity

282
00:15:33,800 --> 00:15:36,000
is absolutely in the in the
doldrums.

283
00:15:36,920 --> 00:15:39,040
That's when. 100%.
Excited as opposed to follow

284
00:15:39,040 --> 00:15:41,000
the, you know, the whims of
human emotion, which is follow

285
00:15:41,000 --> 00:15:43,560
the thing that's going up.
Yeah.

286
00:15:43,560 --> 00:15:47,320
So I mean that that is the
perfect segue to Subarnay

287
00:15:47,320 --> 00:15:49,680
Stillwater.
So to to simplify the business

288
00:15:49,680 --> 00:15:52,760
real quick for people that
aren't familiar, they are,

289
00:15:52,760 --> 00:15:55,480
they're not obviously listed in
Australia.

290
00:15:55,480 --> 00:15:58,680
They're to NYSE and a Joburg
listing.

291
00:15:59,160 --> 00:16:02,360
I'll flash up their guidance to
give you a a flavour of what

292
00:16:02,360 --> 00:16:04,280
they kind of produce for people
listening in.

293
00:16:04,720 --> 00:16:08,120
It's PGMS across the the US and
South Africa.

294
00:16:08,120 --> 00:16:09,920
There's also gold in South
Africa.

295
00:16:10,360 --> 00:16:15,600
In Europe, you've got a nickel
refinery and a lithium project

296
00:16:15,600 --> 00:16:17,400
that they've sunk a fair bit of
money in.

297
00:16:17,880 --> 00:16:21,520
Bizarrely, you've also got the
Century Zinc operations as well

298
00:16:21,520 --> 00:16:24,240
as Mount Lyell here, both in
Australia.

299
00:16:24,560 --> 00:16:28,600
And then there's also a uranium
project which is earmarked to be

300
00:16:28,600 --> 00:16:30,560
sold.
But in, in revenue terms, just

301
00:16:30,720 --> 00:16:36,200
kind of think 1/3 gold, 2/3 PGMS
in you know kind of simplified

302
00:16:36,880 --> 00:16:39,080
terms.
And what did you guys sort of

303
00:16:39,120 --> 00:16:41,360
get out of the the call that
happened?

304
00:16:42,160 --> 00:16:43,640
The call was really interesting
Ally.

305
00:16:43,640 --> 00:16:46,960
So it was two hours long, a big,
a big presentation because there

306
00:16:46,960 --> 00:16:49,680
was a bit to kind of chew on
what they'd kind of done on an

307
00:16:49,960 --> 00:16:53,960
operational management balance
sheet kind of front and then AAQ

308
00:16:53,960 --> 00:16:56,280
and A at the end.
So the, the features that stood

309
00:16:56,280 --> 00:17:02,360
out are the the losses at an
income statement level as well

310
00:17:02,360 --> 00:17:06,520
as in sort of free cash terms.
The income statement losses come

311
00:17:06,520 --> 00:17:09,800
broadly off the back of a bunch
of impairments that they had to

312
00:17:09,800 --> 00:17:11,640
do.
That is because like Trev said,

313
00:17:11,640 --> 00:17:16,599
they're curtailing production in
the US Unfortunately, that also

314
00:17:16,599 --> 00:17:21,280
leads to roughly 800 job losses
at in Montana where they have

315
00:17:21,280 --> 00:17:24,079
their operations.
And then like I sort of said,

316
00:17:24,920 --> 00:17:28,240
the the, the sort of underlying
theme of saying our balance

317
00:17:28,240 --> 00:17:30,360
sheet is OK.
You know if you if you do listen

318
00:17:30,360 --> 00:17:33,080
to the call, it might remind you
a little bit of min res out

319
00:17:33,080 --> 00:17:35,600
there, although there are some
sort of key differences which

320
00:17:35,600 --> 00:17:38,520
will kind of hone in when we get
to the more broader Platts

321
00:17:38,520 --> 00:17:40,600
Palladium market near the end.
So it's.

322
00:17:40,600 --> 00:17:44,320
Pretty interesting, right,
because there was a lot of yeah

323
00:17:44,800 --> 00:17:47,800
market rhetoric in the lead up
for this like earnings event.

324
00:17:47,800 --> 00:17:52,280
And I think in some ways like
there was an expectation that

325
00:17:52,280 --> 00:17:55,640
they would, you know, completely
curtail production from the

326
00:17:55,640 --> 00:17:59,200
Stillwater OPS in Montana there
they sort of, you know, half

327
00:17:59,360 --> 00:18:02,760
curtailed them and stock
basically shut up.

328
00:18:02,760 --> 00:18:06,720
I think on expectation that
we've like that that'll, that's

329
00:18:06,720 --> 00:18:10,800
basically kind of the, the, the,
the bottoming of the, you know,

330
00:18:10,960 --> 00:18:13,520
Palladium market price sort of
downturn.

331
00:18:14,120 --> 00:18:16,040
Yeah.
And I mean also sort of playing

332
00:18:16,040 --> 00:18:17,960
in perhaps that's the the
bottoming of the the

333
00:18:17,960 --> 00:18:19,560
restructuring that kind of have
to do.

334
00:18:19,840 --> 00:18:23,240
I mean it, it sounds like it
might sort of save money and all

335
00:18:23,240 --> 00:18:25,880
this sort of stuff, but just
shutting off a mine is expensive

336
00:18:25,880 --> 00:18:27,800
as well, which they kind of
pointed out, you know, running

337
00:18:27,800 --> 00:18:29,960
things on care and maintenance
everything.

338
00:18:29,960 --> 00:18:31,880
And then there's but they'll.
Lose the money from there like

339
00:18:32,080 --> 00:18:34,960
that operation was, yeah.
Yeah, that they, they were

340
00:18:34,960 --> 00:18:37,880
losing money.
So interestingly they talk about

341
00:18:38,040 --> 00:18:40,680
chalking off 200,000 ounces of 2
E production.

342
00:18:40,680 --> 00:18:43,640
That's about a halving of what
they're producing out of there

343
00:18:43,640 --> 00:18:47,280
whilst trying to get the oil in
sustaining costs down to about

344
00:18:47,400 --> 00:18:50,680
US 1000, which is not the
easiest thing when we always

345
00:18:50,680 --> 00:18:54,480
sort of think of logistics and
economies of scale in mining.

346
00:18:54,800 --> 00:18:58,560
On the balance sheet front, they
were talking up seeking

347
00:18:58,560 --> 00:19:00,920
prepayments.
That's kind of their their final

348
00:19:00,920 --> 00:19:02,800
piece of looking after the the
balance sheet.

349
00:19:02,800 --> 00:19:04,400
So they've done a whole bunch of
other things.

350
00:19:04,400 --> 00:19:07,760
They've, you know, renegotiated
their their debt covenants to

351
00:19:07,760 --> 00:19:09,280
buy them a bit more breathing
room.

352
00:19:09,280 --> 00:19:13,480
They've already got $100 million
prepayment for the gold that

353
00:19:13,480 --> 00:19:16,000
they're going to produce in the
near term, but they want to get

354
00:19:16,000 --> 00:19:20,720
this UUS $700 million prepayment
over the line.

355
00:19:21,040 --> 00:19:24,160
Now the the language around this
is kind of interesting because

356
00:19:24,160 --> 00:19:27,080
the question came in, aren't you
just kind of giving away your,

357
00:19:27,080 --> 00:19:29,840
your future upside?
So the response was that they're

358
00:19:29,840 --> 00:19:34,400
very much focused on, you know,
settling out streams and

359
00:19:34,400 --> 00:19:36,360
whatever other sort of
premayment, prepayment

360
00:19:36,360 --> 00:19:39,160
structures you can think of for
their secondary products.

361
00:19:39,360 --> 00:19:41,480
And they pretty much said
analysts don't care about

362
00:19:41,480 --> 00:19:42,920
whatever your secondary product
is.

363
00:19:43,160 --> 00:19:46,200
So you may as well just kind of
prepaid it, which is.

364
00:19:47,200 --> 00:19:49,880
Then then why did they invest in
lithium and fucking you've?

365
00:19:51,960 --> 00:19:53,960
Been in that one, Trevor, we'll
get there.

366
00:19:54,600 --> 00:19:58,600
So they they looked to really
address the the equity raise

367
00:19:58,600 --> 00:20:00,400
concerns.
You know, this is I guess the

368
00:20:00,440 --> 00:20:04,080
the min raise kind of comparison
in, in my head again, they

369
00:20:04,280 --> 00:20:05,840
referenced it plenty in the
call.

370
00:20:05,840 --> 00:20:09,440
They referenced it in the
presentations in the in the half

371
00:20:09,440 --> 00:20:12,160
year docs.
So they pretty much said the the

372
00:20:12,160 --> 00:20:15,280
perception should now be moot
that we need to capital raise

373
00:20:15,280 --> 00:20:17,800
so.
I'm not sure if it's completely

374
00:20:17,960 --> 00:20:23,000
done and dusted, but I think
they have gone a long way to to

375
00:20:23,000 --> 00:20:26,040
assuring investors by Catalian
production, I mean, what we

376
00:20:26,040 --> 00:20:28,440
mentioned here today is a kind
of almost a drop in the ocean.

377
00:20:28,440 --> 00:20:31,800
They've done a lot of this over
2023 in the first half of this

378
00:20:31,800 --> 00:20:36,520
year already.
So lithium Trav, the the Calibre

379
00:20:36,520 --> 00:20:39,400
lithium project is 1.
I think you might be referencing

380
00:20:39,400 --> 00:20:42,400
they got €500 million in
financing for this.

381
00:20:42,400 --> 00:20:45,640
I want first production in 2026.
It's up in in Finland.

382
00:20:46,360 --> 00:20:50,480
I mean, putting aside for a
moment the idea that they've got

383
00:20:50,480 --> 00:20:54,520
lithium in amongst the portfolio
with zinc and undeveloped

384
00:20:54,520 --> 00:20:59,720
uranium and copper project PGMS,
goldmine in the US in South

385
00:20:59,720 --> 00:21:03,840
Africa, that they're very
adamant that with regional

386
00:21:03,840 --> 00:21:05,920
managers they can manage this
all.

387
00:21:06,360 --> 00:21:10,000
But I kind of think for, you
know, poor old investors, it's a

388
00:21:10,000 --> 00:21:11,840
bit too much to to kind of take
on.

389
00:21:11,840 --> 00:21:14,080
There's stuff kind of
everywhere.

390
00:21:14,680 --> 00:21:19,160
I'm very concerned that, you
know, hydroxide production who

391
00:21:19,160 --> 00:21:24,040
has done that well in the in the
last few years of the kind of

392
00:21:24,160 --> 00:21:28,720
western miners.
I'm sorry, no one really.

393
00:21:28,720 --> 00:21:30,040
I just, I just think it's very
hard.

394
00:21:30,040 --> 00:21:31,880
I think that could be a
potential money sink.

395
00:21:32,280 --> 00:21:34,640
They've got rhyolite Ridge eye
knees project.

396
00:21:34,800 --> 00:21:40,440
That was, you know, a big sort
of announcement in back in 2021.

397
00:21:40,600 --> 00:21:43,680
A new century as well.
Yeah.

398
00:21:44,040 --> 00:21:46,720
There has been some sort of
confusing, Yeah, there's been

399
00:21:46,760 --> 00:21:49,400
some confusing, confusing
acquisitions, right?

400
00:21:49,880 --> 00:21:54,360
Yeah, yeah, real confusing
capital allocation at certain

401
00:21:54,360 --> 00:21:58,560
points, but yeah, I actually
think, I think when, you know,

402
00:21:58,560 --> 00:22:00,760
Once Upon a time this was a gold
company, it was a buying a gold

403
00:22:00,760 --> 00:22:05,600
and yeah, they acquired the PGM
business in South Africa, which

404
00:22:06,280 --> 00:22:07,840
was like a phenomenal
acquisition.

405
00:22:07,960 --> 00:22:12,400
Actually I kind of delivered
some brilliant free cash flow,

406
00:22:12,960 --> 00:22:17,280
especially especially during
the, the big PGM kind of spike

407
00:22:17,280 --> 00:22:21,240
that happened in kind of
2021-2022 around that Russia,

408
00:22:21,240 --> 00:22:25,440
Ukraine invasion period.
And it, it was so like

409
00:22:25,880 --> 00:22:30,280
remarkable the free cash flow
that came in that like if you,

410
00:22:30,440 --> 00:22:35,360
if you look at Sibanya's market
cap today in U.S. dollars, it's

411
00:22:35,680 --> 00:22:41,720
about 2.5 billion US in in
market, sorry, 2.7 billion U.S.

412
00:22:41,720 --> 00:22:45,240
market cap today.
Well, in 2021 financial year,

413
00:22:45,320 --> 00:22:49,680
Subarnier generated 3.4 billion
operating cash flow, which kind

414
00:22:49,680 --> 00:22:52,360
of converted to US 2.5 billion
in unlevered free cash flow.

415
00:22:52,360 --> 00:22:56,760
So like that's the kind of
capability the business has to,

416
00:22:56,760 --> 00:23:00,280
you know, spit out free cash
flow in the good times.

417
00:23:00,400 --> 00:23:03,360
But when you Chuck in the debt
and the pretty average capital

418
00:23:03,360 --> 00:23:06,840
allocation that that's sort of,
you know, happened since it

419
00:23:06,880 --> 00:23:09,960
probably explains some of the
substantial selling off the

420
00:23:09,960 --> 00:23:12,920
stock has had, but also the
interesting kind of part to some

421
00:23:12,960 --> 00:23:15,080
some investors.
So we're really trying to, you

422
00:23:15,080 --> 00:23:18,120
know, get, get, get talk if
they're, if they're predicting a

423
00:23:18,120 --> 00:23:20,440
turn around too.
Yeah.

424
00:23:20,440 --> 00:23:25,720
I mean, they were a $15 billion
market cap companies a few years

425
00:23:25,720 --> 00:23:26,600
ago.
It's kind of wild.

426
00:23:26,600 --> 00:23:28,600
And it is interesting what you
kind of touched on there, Trav,

427
00:23:28,600 --> 00:23:30,080
how the company kind of came
together.

428
00:23:30,360 --> 00:23:34,600
You got the PGM acquisitions and
I think 2016 and then Stillwater

429
00:23:34,600 --> 00:23:37,240
2017.
And you know, a few years later,

430
00:23:37,720 --> 00:23:40,480
you know, after you've had a few
years of just Ripper cash flows,

431
00:23:40,840 --> 00:23:43,360
you end up with a good bit of it
just being spent on all these

432
00:23:43,360 --> 00:23:46,040
kind of random things.
But I mean, at the end of the

433
00:23:46,040 --> 00:23:48,000
day, right now, they're a
company that is, you know,

434
00:23:48,080 --> 00:23:52,080
financially leveraged and
operationally leveraged to PGMS

435
00:23:52,400 --> 00:23:53,800
and gold.
That's where they are kind of

436
00:23:53,800 --> 00:23:55,120
right now.
They're super beaten up.

437
00:23:55,560 --> 00:24:00,600
They've got a bit of optionality
slash cash sinks in, in lithium

438
00:24:00,760 --> 00:24:03,600
and uranium.
But it's a it's an interesting

439
00:24:03,600 --> 00:24:08,840
company to kind of look at to,
to round out on the, I mean to

440
00:24:08,880 --> 00:24:11,240
kind of find our way into what's
happened in Palladium and Platts

441
00:24:11,240 --> 00:24:13,960
markets rather.
It was interesting to note that

442
00:24:14,520 --> 00:24:18,280
straight away on the back of
them having to unfortunately lay

443
00:24:18,280 --> 00:24:23,680
off people in Montana, you see
these senators from Matana jump

444
00:24:23,680 --> 00:24:28,480
on and say, hey, we should ban
all imports into the US of

445
00:24:28,880 --> 00:24:31,520
Palladium.
And then you got the the company

446
00:24:31,520 --> 00:24:35,280
kind of playing into this saying
Italy's Russia is inundating the

447
00:24:35,280 --> 00:24:40,240
Palladium market to tank its
prices and the responsible and

448
00:24:40,240 --> 00:24:44,760
sustainable mining and metals
processing that Sibanye does is

449
00:24:44,800 --> 00:24:48,160
just going to be much, much more
expensive than Russian

450
00:24:48,160 --> 00:24:50,120
competition.
So it's eerily similar to what

451
00:24:50,120 --> 00:24:53,880
we spoke about about six months
ago in the nickel market, right?

452
00:24:54,880 --> 00:24:59,600
Yeah, it's funny, right?
Because there's this like line

453
00:24:59,640 --> 00:25:04,400
of argument, they often say the,
the big talking points are that

454
00:25:04,400 --> 00:25:07,480
there's no, there's no like this
is the, the only strategic kind

455
00:25:07,480 --> 00:25:11,680
of production of PGMS outside of
Russia and South Africa.

456
00:25:11,840 --> 00:25:13,400
That's like a big talking point,
right?

457
00:25:13,400 --> 00:25:16,680
But I'm not sure that's right.
I'm pretty sure there's a lot

458
00:25:16,680 --> 00:25:20,440
that comes out of Zimbabwe.
They're forgetting the good

459
00:25:20,440 --> 00:25:24,040
people of Zimbabwe.
No, you're spot on.

460
00:25:24,040 --> 00:25:26,840
I do.
I, I see where they're coming

461
00:25:26,840 --> 00:25:29,200
from.
Although if I, I just sort of

462
00:25:29,200 --> 00:25:32,560
thought, you know, history kind
of teaches us that putting these

463
00:25:32,560 --> 00:25:36,960
bands and stuff just isn't a, a
kind of long term solution.

464
00:25:37,400 --> 00:25:40,120
You know, maybe it kind of helps
people in, in the short term.

465
00:25:40,480 --> 00:25:44,160
And I, you know, I fully
appreciate the, the difficulties

466
00:25:44,160 --> 00:25:45,760
there.
But I think there's got to be

467
00:25:45,760 --> 00:25:48,400
some other sort of solutions and
some thinking that kind of needs

468
00:25:48,400 --> 00:25:54,160
to be done to build a bit more
resiliency into the into the

469
00:25:54,160 --> 00:25:57,640
supply chain as opposed to just
once people have already been

470
00:25:57,640 --> 00:25:59,680
laid off banning production.
I think it's.

471
00:25:59,880 --> 00:26:01,520
It's not too late then, isn't
it?

472
00:26:02,280 --> 00:26:04,880
Yeah, Yeah.
So I don't think it's the kind

473
00:26:04,880 --> 00:26:07,800
of right way, but it's a
difficult kind of situation.

474
00:26:08,160 --> 00:26:10,880
I think it's worth just a quick
chat as well about the

475
00:26:10,880 --> 00:26:14,440
restructuring and maybe just
sharing a couple of comments

476
00:26:14,440 --> 00:26:16,720
whether we think they're kind of
done given everything that's

477
00:26:16,720 --> 00:26:18,600
gone on the last year and a
half.

478
00:26:18,600 --> 00:26:22,480
So we spoke about all the assets
they've accumulated over the

479
00:26:22,480 --> 00:26:26,040
past few years and I wonder if
it's kind of worth selling or

480
00:26:26,040 --> 00:26:29,400
spinning any of the other
remaining kind of assets out to

481
00:26:29,400 --> 00:26:31,520
get a more simplified kind of
structure.

482
00:26:31,520 --> 00:26:34,240
The company was, you know,
uranium was the one that they

483
00:26:34,240 --> 00:26:35,880
said, yeah, we're happy to kind
of sell that.

484
00:26:36,200 --> 00:26:39,640
But the rest they said they kind
of want to hold on to or maybe

485
00:26:39,640 --> 00:26:43,720
they're not able to sell, but
uranium assets, Centuries Inc,

486
00:26:43,720 --> 00:26:48,200
Mount Lyell, Gallican, that's
this sort of pecan nickel

487
00:26:48,200 --> 00:26:52,920
refinery in France, Rhylite
Ridge, Calibre, the the lithium

488
00:26:52,920 --> 00:26:54,920
project.
And then you've of course got

489
00:26:55,320 --> 00:26:58,040
South Africa and USPGMS and
gold.

490
00:26:58,640 --> 00:27:00,440
I think there's just a bit too
much in there, right?

491
00:27:01,040 --> 00:27:05,120
Like so if you if you got rid of
century zinc and Mount Lyell, so

492
00:27:05,120 --> 00:27:08,760
they they picked both of them up
by acquiring century now, Yep, I

493
00:27:08,760 --> 00:27:12,920
think there's no way in hell
that they would be able to sell

494
00:27:13,400 --> 00:27:15,560
that those assets for what they
they paid for it.

495
00:27:15,560 --> 00:27:19,240
And it just requires like a bit
of, you know, a bit of eating

496
00:27:19,240 --> 00:27:22,760
someone's going to eat their own
shorts, you know, to because of

497
00:27:22,760 --> 00:27:24,480
those acquisitions at the price
they did.

498
00:27:24,480 --> 00:27:27,200
And then yeah, yeah.
The other ones I'm not sure of

499
00:27:27,200 --> 00:27:28,560
maybe what are you going to get
for them?

500
00:27:28,560 --> 00:27:31,920
Like probably, probably like,
well, yeah, every last dollar

501
00:27:31,960 --> 00:27:34,600
kind of helps.
But if, if they think that their

502
00:27:35,840 --> 00:27:38,120
their cash flow is OK and
they'll see it through.

503
00:27:38,120 --> 00:27:42,520
And especially if these PGM
prices kind of re rebound

504
00:27:42,520 --> 00:27:45,040
relatively quickly here, it'll
probably just go to the back

505
00:27:45,040 --> 00:27:47,720
burner.
Yeah, I, I think you're right.

506
00:27:47,720 --> 00:27:49,960
I'm, I'm kind of curious about
how much of their sort of

507
00:27:50,440 --> 00:27:54,320
capacity, it's kind of taken up
the, you know, calibre's the one

508
00:27:54,320 --> 00:27:56,800
that's requires a, a fair bit of
cash.

509
00:27:56,800 --> 00:28:01,080
There's €300 million earmarked
for that one for this year.

510
00:28:01,080 --> 00:28:04,360
But they've got a a sort of
green funding line that as they

511
00:28:04,360 --> 00:28:07,520
call it to, to see them through
on that one.

512
00:28:07,520 --> 00:28:10,280
But I can see, you know, I don't
think they're really going to

513
00:28:10,280 --> 00:28:12,920
get rid of anything else.
That uranium asset is in South

514
00:28:12,920 --> 00:28:15,080
Africa.
So even that one I think might

515
00:28:15,080 --> 00:28:18,200
be quite hard to to kind of pass
on or sell.

516
00:28:18,480 --> 00:28:23,200
I just, yeah.
Yeah, I sort of agree with you

517
00:28:23,200 --> 00:28:28,720
JD, as far as you know that that
there's a lot of in amongst

518
00:28:28,720 --> 00:28:31,720
their main operations and then
all the ones that you've just

519
00:28:31,720 --> 00:28:34,520
listed there.
Like you know, how can you

520
00:28:34,520 --> 00:28:38,480
spread all your not just from a
money perspective, but as far as

521
00:28:38,720 --> 00:28:42,120
people, resources, IP spreading
across all of these different

522
00:28:42,120 --> 00:28:43,520
projects.
Like what's actually more

523
00:28:43,520 --> 00:28:48,520
important where, where's the
best use of time and human

524
00:28:48,520 --> 00:28:51,920
capital?
Where is that best spent?

525
00:28:52,640 --> 00:28:55,400
Now there was one more bit that
we have to quickly quote from

526
00:28:55,440 --> 00:28:58,240
from the call you pointed this
one out I.

527
00:28:58,320 --> 00:28:59,600
Did want to play this one.
Yeah.

528
00:28:59,960 --> 00:29:04,880
I also read much around the
issue, issues of diversity with

529
00:29:05,320 --> 00:29:09,080
suggestions that if you go work,
you go broke and, and again, I

530
00:29:09,080 --> 00:29:12,360
think that's such nonsense.
We will continue to drive

531
00:29:12,360 --> 00:29:16,800
inclusivity, diversity and
belonging as we believe it

532
00:29:16,800 --> 00:29:21,160
creates a competitive advantage
for a company like ourselves.

533
00:29:23,920 --> 00:29:25,560
Go away, go broke.
What do you reckon, Janie?

534
00:29:27,760 --> 00:29:31,480
I do love that it got to mention
it's pretty funny, yeah.

535
00:29:31,480 --> 00:29:33,400
I mean.
Looking they do go broke now

536
00:29:33,400 --> 00:29:37,560
though.
That would be particularly bad.

537
00:29:37,560 --> 00:29:39,880
Although, I mean, you know, on
a, on a kind of serious note,

538
00:29:39,880 --> 00:29:44,400
looking into Sibanye's safety
record, it is, you know, pretty,

539
00:29:44,400 --> 00:29:46,680
pretty awful reading.
So there's definitely stuff on

540
00:29:46,680 --> 00:29:49,240
that front that needs to be
addressed.

541
00:29:49,240 --> 00:29:51,640
Like unfortunately, a couple of
the the miners out there.

542
00:29:51,640 --> 00:29:54,000
Hey, oh.
Mate, they're like these South

543
00:29:54,000 --> 00:29:56,520
African PGM miners are
particularly like atrocious on

544
00:29:56,520 --> 00:29:57,880
the safety front.
But I think a lot of that's to

545
00:29:57,880 --> 00:30:02,680
do with the, the, the union
workforce and all that sort of

546
00:30:02,680 --> 00:30:05,520
stuff out that way.
But yeah, yeah, this whole like

547
00:30:05,680 --> 00:30:09,480
topic of, you know, mining
companies going woke is, yeah,

548
00:30:09,720 --> 00:30:14,000
big, a big theme out there.
A lot of discussion, a lot of

549
00:30:14,000 --> 00:30:17,480
like rediscussion around DI kind
of policies that have been

550
00:30:17,480 --> 00:30:19,240
adopted by some of the, you
know, the largest mining

551
00:30:19,240 --> 00:30:22,000
companies out there and and
question marks on their

552
00:30:22,000 --> 00:30:23,920
effectiveness.
And then, you know, on the other

553
00:30:23,920 --> 00:30:27,720
side, you're going to have the,
the like, you know, the boards

554
00:30:27,720 --> 00:30:29,920
and CEOs defending them like you
see, you see here.

555
00:30:30,360 --> 00:30:33,000
Do you think, yeah, the
diversity and inclusivity was

556
00:30:33,000 --> 00:30:35,200
around commodities 'cause it
feels like they're trying to

557
00:30:35,200 --> 00:30:38,840
include everybody commodity in
the in the company.

558
00:30:38,840 --> 00:30:40,920
Like that's the way I took to
interpret it.

559
00:30:40,920 --> 00:30:41,680
Like Jesus.
Christ.

560
00:30:42,840 --> 00:30:46,640
Well played, well played.
So, so why did the PGMS price

561
00:30:47,240 --> 00:30:50,800
surge so recently, JD, after
this, you know, sort of

562
00:30:50,800 --> 00:30:52,800
production cuts that Sabania put
out?

563
00:30:53,640 --> 00:30:56,320
Well, this is the the kind of
point that really perked up our

564
00:30:56,360 --> 00:30:57,360
interest.
There's a, there's a few

565
00:30:57,360 --> 00:31:00,320
different kind of factors at
play, but one of them was

566
00:31:00,320 --> 00:31:05,040
undoubtedly Putin's comments
that we touched on on Thursday

567
00:31:05,120 --> 00:31:09,520
of last week.
So you saw a good kick up in on

568
00:31:09,520 --> 00:31:14,360
Thursday, on Friday as well.
Obviously we mentioned Sibanye

569
00:31:14,360 --> 00:31:16,360
jumping up 11% on the back of
it.

570
00:31:16,360 --> 00:31:19,640
They obviously curtailed a bit.
It all kind of plays into it

571
00:31:20,200 --> 00:31:22,440
more broadly.
You've got stocks that have been

572
00:31:22,960 --> 00:31:26,840
built up and they're now kind of
unwinding and stuff.

573
00:31:27,840 --> 00:31:31,560
And I think there's a, another
feature of the, the Palladium

574
00:31:31,560 --> 00:31:34,520
market specifically, not not as
prominent in the Platts market,

575
00:31:34,520 --> 00:31:38,680
but there is a huge like a
record short position out there.

576
00:31:38,880 --> 00:31:40,400
Now.
If you think back to what we

577
00:31:40,400 --> 00:31:43,200
spoke about in the lithium
market last week, it just makes

578
00:31:43,200 --> 00:31:45,240
those, those turnarounds quite
jumpy.

579
00:31:45,440 --> 00:31:48,760
When you have a a large short
interest in the stock, you kind

580
00:31:48,760 --> 00:31:51,920
of have covering and all these
things which lead it a bit, you

581
00:31:51,920 --> 00:31:55,840
know a bit sprung or tightly
wound to sort of spring to the

582
00:31:55,840 --> 00:32:01,640
upside when it does kind of go.
There was also a an interesting

583
00:32:01,640 --> 00:32:04,840
question in talking about like
where does Platts, where does

584
00:32:04,840 --> 00:32:08,120
Palladium kind of go?
And to be clear, like Sebania

585
00:32:08,120 --> 00:32:11,000
talk about very much like a A2 E
way of thinking because they

586
00:32:11,480 --> 00:32:14,040
think firmly that Platts and
Palladium are interchangeable.

587
00:32:14,360 --> 00:32:16,400
The question was relating to to
loading.

588
00:32:16,600 --> 00:32:19,600
What this kind of means is how
much of either, you know, the

589
00:32:19,600 --> 00:32:23,120
two E is required in the hybrid
vehicles going forward.

590
00:32:23,120 --> 00:32:27,160
And the question was kind of
angled at has PGM demand been

591
00:32:27,160 --> 00:32:30,360
overstated because the Chinese
have developed new technology

592
00:32:30,360 --> 00:32:34,800
where they don't quite need as
much PGMS in a hybrid or an ICE

593
00:32:35,560 --> 00:32:38,040
vehicle.
And you know, Sibanya battered

594
00:32:38,040 --> 00:32:42,440
the the question off quite well.
They kind of said that they are

595
00:32:42,440 --> 00:32:46,920
totally aware of this and they
have forecast into their models

596
00:32:47,240 --> 00:32:52,040
these reduced amounts of PGMS
that are needed in the in the

597
00:32:52,040 --> 00:32:53,200
new cars.
But I thought that was a

598
00:32:53,200 --> 00:32:56,120
different way of thinking about
where this market could

599
00:32:56,120 --> 00:32:58,360
potentially go and who's kind of
modelling it, right?

600
00:32:58,480 --> 00:33:03,600
But I remember it's been a
while, but I remember back, back

601
00:33:03,600 --> 00:33:07,920
when I was at Macquarie there
there's this like commodities, I

602
00:33:07,920 --> 00:33:11,000
remember what it's called, but
like this kind of big

603
00:33:11,000 --> 00:33:13,160
commodities write up and like
the commodity strategists would

604
00:33:13,440 --> 00:33:15,800
would put out their thought
pieces on like all of the

605
00:33:15,800 --> 00:33:17,760
commodities and which one are
five year coming?

606
00:33:17,760 --> 00:33:20,040
If it was a five year or ten
year outlook, they were doing a

607
00:33:20,040 --> 00:33:22,520
10 year outlook.
They were most like bullish on

608
00:33:22,520 --> 00:33:25,080
and most bearish on.
And I remember clearly most

609
00:33:25,400 --> 00:33:28,960
bullish was carbon of all
commodities, most bearish

610
00:33:29,280 --> 00:33:31,120
Palladium.
Yeah, right.

611
00:33:31,600 --> 00:33:34,200
So yeah, in terms of like sort.
Of 2022 time.

612
00:33:34,600 --> 00:33:39,600
Yeah, this, this was, this was
like, yeah, like 2022 when this

613
00:33:39,600 --> 00:33:41,840
way.
But yeah, I just, yeah, things

614
00:33:41,840 --> 00:33:46,840
have changed a little bit and
sometimes you kind of hit the

615
00:33:46,840 --> 00:33:48,400
Contra.
Yeah.

616
00:33:48,400 --> 00:33:51,800
Well, I just think that the, you
know, taking the contrarian view

617
00:33:51,800 --> 00:33:53,480
is where the opportunity kind of
lies.

618
00:33:53,760 --> 00:33:55,120
And that's not to say it's
right.

619
00:33:55,440 --> 00:33:57,880
I just think that's the the
place where you kind of need to

620
00:33:57,880 --> 00:34:03,360
look.
Mate, I'd love to see if you're

621
00:34:03,360 --> 00:34:05,320
you want to be a contrarian in
this market which you've

622
00:34:05,320 --> 00:34:09,199
historically called too hard.
Definitely China.

623
00:34:09,199 --> 00:34:10,880
Rare earths, eh?
Rare earths in general.

624
00:34:10,880 --> 00:34:13,800
Yeah, I just want to give this
story a quick will, mostly

625
00:34:13,800 --> 00:34:19,000
because I I'm trying to get
people to see if they'll send in

626
00:34:19,000 --> 00:34:21,199
information that they know about
it because I've found it

627
00:34:21,199 --> 00:34:23,679
particularly hard to get
information on this story.

628
00:34:24,000 --> 00:34:26,040
But I saw this this headline, I
think it was the bottom of the

629
00:34:26,040 --> 00:34:27,800
UBS note.
I had to do some Googling to

630
00:34:27,800 --> 00:34:30,480
even substantiate the story
before I put a link in the

631
00:34:30,480 --> 00:34:33,360
director special this morning.
So there's this news from from

632
00:34:33,639 --> 00:34:37,880
China that China Rare Earth
Group has had an exploration

633
00:34:37,880 --> 00:34:40,280
breakthrough and that would
result in it producing an

634
00:34:40,280 --> 00:34:45,440
additional 5 million tonnes of
rare earth oxides. 5 million

635
00:34:45,440 --> 00:34:48,120
tonnes is a lot in that market.
I don't know, I assume it can't

636
00:34:48,120 --> 00:34:49,880
be paramount, but an exploration
breakthrough.

637
00:34:50,760 --> 00:34:53,520
Look, So what interesting
wording it's, it's, I mean, I'm

638
00:34:53,560 --> 00:34:57,360
sure it's been translated, but
so yeah, my first thoughts too.

639
00:34:58,640 --> 00:35:00,400
Just take it all with with a bit
of a.

640
00:35:01,000 --> 00:35:03,680
It's full of salt.
Some little Chinese whispers to

641
00:35:03,680 --> 00:35:05,840
this one so why is it
interesting There's a few

642
00:35:05,840 --> 00:35:08,960
reasons right first of all, let
me just give a bit of context

643
00:35:08,960 --> 00:35:11,680
about this state owned
enterprise trying to rare earth

644
00:35:11,680 --> 00:35:14,640
group from what I can find
online, this state owned entity

645
00:35:14,760 --> 00:35:17,440
actually formed because China
merged sort of these three

646
00:35:17,440 --> 00:35:22,800
separate state owned entities in
late 2021 to in quotation marks

647
00:35:22,800 --> 00:35:24,680
increased pricing power and
efficiency.

648
00:35:25,240 --> 00:35:28,880
So forget antitrust I suppose,
because it's OK if you're just

649
00:35:28,880 --> 00:35:31,240
making W more anti competitive
that's OK.

650
00:35:31,240 --> 00:35:37,360
I I I read some reports that
this kind of like mega code of

651
00:35:37,400 --> 00:35:39,720
of rare earth production sort of
just captured just you know

652
00:35:39,760 --> 00:35:42,440
stupid majority of heavy rare
earths.

653
00:35:42,440 --> 00:35:45,960
So the first question, what the
hell is an exploration

654
00:35:46,080 --> 00:35:49,000
breakthrough that can like
definitively lead to a

655
00:35:49,000 --> 00:35:52,280
quantifiable increase in
production?

656
00:35:52,280 --> 00:35:53,640
Like what does that, what does
that even mean?

657
00:35:53,640 --> 00:35:56,040
It seems pretty wild to to state
that, right?

658
00:35:56,040 --> 00:35:59,840
What do you what do you think?
I think that is mixed in

659
00:35:59,840 --> 00:36:02,800
translation to be honest, and
I'd be curious what was meant by

660
00:36:02,800 --> 00:36:04,120
the writer.
Yeah.

661
00:36:04,120 --> 00:36:08,640
And I mean, if there's going to
be a breakthrough that leads in

662
00:36:09,200 --> 00:36:11,640
to more production, I would have
thought that might have been

663
00:36:11,640 --> 00:36:15,960
more the processing part of the
supply chain to sort of get

664
00:36:15,960 --> 00:36:19,760
more, you know, out of the rock.
But you know, put simply, I'm

665
00:36:19,760 --> 00:36:24,840
not sure how doing that front
end, but I'm just yeah, I'm, I'm

666
00:36:24,840 --> 00:36:25,400
confused.
I.

667
00:36:25,520 --> 00:36:28,000
Don't mean unless it's an actual
discovery, yeah.

668
00:36:28,120 --> 00:36:30,680
Yeah, unless it's.
But yeah, it must be or or

669
00:36:30,680 --> 00:36:33,080
unless it's a discovery.
That's all very possible, but

670
00:36:33,080 --> 00:36:36,720
then I had the thought could
China's state owned enterprise

671
00:36:36,720 --> 00:36:40,720
potentially have just discovered
verifies AI capability?

672
00:36:40,720 --> 00:36:43,120
Because I think it's possible,
right?

673
00:36:43,120 --> 00:36:46,760
I actually, I actually put the
question to rock, which is if

674
00:36:46,760 --> 00:36:49,560
you didn't know, is the the AI
chat insider Twitter.

675
00:36:50,160 --> 00:36:56,320
And yes, I used AI to ask about
AI and, and look like rock stood

676
00:36:56,320 --> 00:36:58,040
back from giving me a, a
definitive answer.

677
00:36:58,040 --> 00:37:01,200
But I said is verify an
expiration breakthrough for

678
00:37:01,200 --> 00:37:04,080
China and I'll just, I'll read
out this little bit of response.

679
00:37:04,520 --> 00:37:08,680
Rock says Verify AI focuses on
using AI for mineral expiration,

680
00:37:08,680 --> 00:37:10,440
which could potentially
revolutionise how mineral

681
00:37:10,440 --> 00:37:13,760
deposits are identified and
explored China or globally.

682
00:37:13,840 --> 00:37:17,360
Its technology aims to integrate
and analyse vast amounts of

683
00:37:17,360 --> 00:37:19,880
geological data to pinpoint
prospective mineral deposits

684
00:37:19,880 --> 00:37:22,000
with greater accuracy than
traditional methods.

685
00:37:22,240 --> 00:37:24,280
This could be considered a
technological breakthrough in

686
00:37:24,280 --> 00:37:26,600
exploration methodology.
But kind of, you know, stood

687
00:37:26,600 --> 00:37:28,720
back from definitively answering
my question.

688
00:37:28,720 --> 00:37:32,920
But, you know, I, I must say
I'm, I'm pretty suspicious that

689
00:37:32,920 --> 00:37:35,120
this is actually the, the real
explanation for China's

690
00:37:35,120 --> 00:37:37,720
exploration breakthrough now.
And last I heard, there's a fat

691
00:37:37,720 --> 00:37:40,800
waste waiting list for
verifiers, AI technology.

692
00:37:40,800 --> 00:37:43,240
But the, the 3D models that help
you communicate, yeah, your

693
00:37:43,240 --> 00:37:45,080
deposit, they've been
gangbusters.

694
00:37:45,080 --> 00:37:48,720
And apparently there were 47 of
them on display at 47 Beaver

695
00:37:48,720 --> 00:37:50,320
Creek last week.
They're they're also on the

696
00:37:50,320 --> 00:37:53,000
ground at Denver Gold Forum too,
and they're even an AIMIC

697
00:37:53,000 --> 00:37:54,360
member.
So getting amongst the other

698
00:37:54,400 --> 00:37:56,680
mining community.
So hit up grant to verify.com or

699
00:37:56,680 --> 00:37:59,480
Nathan at verify.com.
Nathan's Perth based.

700
00:37:59,480 --> 00:38:01,680
So righto.
Anyway, back to back to the rare

701
00:38:01,680 --> 00:38:03,240
earths in China.
Guys.

702
00:38:04,280 --> 00:38:07,720
Last time we, we had a chin wag
on the topic of of rare earths.

703
00:38:08,040 --> 00:38:10,080
I think we pointed to what
looked like it could be, you

704
00:38:10,240 --> 00:38:13,440
know, bottoming out of the, the
NDPR prices.

705
00:38:13,440 --> 00:38:15,840
In fact, the state owned
enterprise China Northern Rare

706
00:38:15,840 --> 00:38:20,320
Earth actually recently raised
their list prices by 5% as their

707
00:38:20,360 --> 00:38:21,960
you know second quarter earnings
were zilch.

708
00:38:23,200 --> 00:38:27,120
And that triggered basically
these magnet makers to rush

709
00:38:27,120 --> 00:38:30,840
their seasonal restocking
apparently which sent like NDPR

710
00:38:30,840 --> 00:38:34,680
spot prices to $62.00 US per
kilogramme last week.

711
00:38:35,120 --> 00:38:39,240
And to China Northern Rare Earth
they they raised their list

712
00:38:39,240 --> 00:38:42,160
prices, magnet producers flare
to restock NDPR spot price

713
00:38:42,160 --> 00:38:44,520
climbs.
And now magically, China

714
00:38:44,520 --> 00:38:46,280
Northern Rare Earth have had an
exploration breakthrough

715
00:38:46,280 --> 00:38:49,600
allowing them to produce 5
million tonnes more oxide.

716
00:38:50,000 --> 00:38:52,040
Call me a conspiracy theorist on
the timing of it all.

717
00:38:54,280 --> 00:38:58,160
Might have to.
And look, throw this one into

718
00:38:58,160 --> 00:39:00,560
the timing mix.
Northern Minerals, the listed

719
00:39:00,560 --> 00:39:03,680
hairy, heavy rare earth
developer on the ASXER.

720
00:39:04,200 --> 00:39:06,120
They've been the subject of a
lot of, you know, geopolitical

721
00:39:06,120 --> 00:39:08,040
archibaldy.
They raised a whopping $43

722
00:39:08,080 --> 00:39:13,240
million Australian via 2 tranche
placement just announced the

723
00:39:13,240 --> 00:39:16,480
details today.
That's about a third of its free

724
00:39:16,480 --> 00:39:18,760
raise market cap, which is
chunky.

725
00:39:19,240 --> 00:39:23,640
And in a raise where I look at
the the uses of funds in the

726
00:39:23,640 --> 00:39:28,960
raise and mate how's this $23.5
million is in that use of funds

727
00:39:28,960 --> 00:39:31,680
table for working capital site
and corporate costs?

728
00:39:31,680 --> 00:39:35,000
Nah, that's more than half.
Yeah.

729
00:39:35,320 --> 00:39:36,520
What?
No, you can't.

730
00:39:36,920 --> 00:39:40,040
Yeah, no matter how you cut it,
it seems bizarre.

731
00:39:41,200 --> 00:39:44,120
So look, something strange is
going on in the in the rare

732
00:39:44,120 --> 00:39:46,920
earth market right now.
You can you can connect a few

733
00:39:46,920 --> 00:39:49,200
dots and come up with some
theories, but I'll let the money

734
00:39:49,200 --> 00:39:52,040
miners do that themselves.
And if you happen to have some

735
00:39:52,040 --> 00:39:56,000
Intel, end it in.
Very curious, how do you how do

736
00:39:56,000 --> 00:39:58,760
you listen to something like
that and not just think it stays

737
00:39:58,760 --> 00:40:03,000
in the too hard basket?
I'm with you, JD.

738
00:40:03,280 --> 00:40:04,800
Once Upon a time, uranium was
too hard.

739
00:40:08,520 --> 00:40:11,000
Uranium, you can do a bit of
digging it, it just doesn't have

740
00:40:11,000 --> 00:40:15,560
that monopolistic, you know,
Chinese grip all over it.

741
00:40:15,560 --> 00:40:18,880
It's obviously concentrated in,
in some markets and you know,

742
00:40:19,120 --> 00:40:21,680
with regard to where uranium
comes from and where things

743
00:40:21,680 --> 00:40:24,600
happen.
But I I don't know how you can

744
00:40:24,600 --> 00:40:26,880
be filled with confidence
listening to that, even if there

745
00:40:26,880 --> 00:40:31,080
was a conspiratorial tone.
But this?

746
00:40:31,080 --> 00:40:34,640
Is why I like gold.
JD Not in a too hard basket.

747
00:40:34,680 --> 00:40:36,920
Back, back to gold.
Let's go to Denver, Ali.

748
00:40:37,520 --> 00:40:39,360
Oh, sorry.
Honestly, this has been quite

749
00:40:39,360 --> 00:40:42,920
the week.
I mean, but for LE GS say I mean

750
00:40:42,920 --> 00:40:47,880
like gold is at record highs.
Bloody Oscar piastres run the F1

751
00:40:48,200 --> 00:40:51,640
GPA over the weekend like it's
it's just been a great start to

752
00:40:51,640 --> 00:40:54,240
the week.
So and what a week literally to

753
00:40:54,240 --> 00:40:57,240
kick off the world's oldest and
largest precious metals

754
00:40:57,240 --> 00:40:59,680
conference.
So this is the Denver gold forum

755
00:40:59,680 --> 00:41:04,600
in Colorado.
So as, as we said, sort of, you

756
00:41:04,600 --> 00:41:07,520
know, gold prices hit bloody
record highs over the weekend.

757
00:41:07,520 --> 00:41:11,800
Gold equities are on a tear.
So the the G DX, which is

758
00:41:12,120 --> 00:41:18,600
basically a VANIC gold ETF is up
9%, then the GDXJ up 40% in the

759
00:41:18,600 --> 00:41:20,360
last five days.
Deals.

760
00:41:20,360 --> 00:41:22,440
More importantly, I think the
the L e.g.

761
00:41:22,440 --> 00:41:25,560
CETF must be great.
She's doing all right.

762
00:41:27,120 --> 00:41:29,680
And then you know this this.
Is bumping up off a low base.

763
00:41:29,720 --> 00:41:32,880
Oh yeah.
Yes, yeah, that, that is the

764
00:41:32,880 --> 00:41:34,360
caveat that needs to be made
there.

765
00:41:34,360 --> 00:41:38,360
Just just a lot of talk and
buddy, you know, deals are being

766
00:41:38,360 --> 00:41:40,600
done left front and centre.
So, you know, we had great Land

767
00:41:40,600 --> 00:41:44,120
and Telfer last week, Anglo Gold
and Cinnamon last week,

768
00:41:44,120 --> 00:41:46,400
Goldfields and a Cisco not too
much earlier than that.

769
00:41:46,400 --> 00:41:49,840
You know, Perseus getting into
predictive, you know, it's all

770
00:41:49,840 --> 00:41:51,960
happening.
Great time to be a gold ball.

771
00:41:52,880 --> 00:41:55,960
I was almost tempted to join our
our favourite gold price

772
00:41:56,200 --> 00:41:59,360
reporters on LinkedIn, Simon
Lawson and Alex Scanlon, but I

773
00:41:59,360 --> 00:42:01,400
thought I'd best leave that to
the experts.

774
00:42:02,480 --> 00:42:05,960
So the conference actually
officially kicks off later our

775
00:42:05,960 --> 00:42:09,360
time tonight.
And I thought, you know what,

776
00:42:09,440 --> 00:42:12,320
where, where is this bloody
hotel that they have this

777
00:42:12,320 --> 00:42:14,360
conference?
And look at this, this is the

778
00:42:14,360 --> 00:42:18,040
Broadmoor Hotel in Colorado
Springs where the, the, the

779
00:42:18,040 --> 00:42:19,480
Denver Gulf War is all
happening.

780
00:42:19,720 --> 00:42:22,960
Look at that.
Stunning, that is.

781
00:42:22,960 --> 00:42:26,600
Just gorgeous.
Straight out of like Succession

782
00:42:26,600 --> 00:42:28,320
or something.
Oh, I actually love that.

783
00:42:28,720 --> 00:42:30,040
Great.
Place to get a lot of work done.

784
00:42:30,200 --> 00:42:32,400
Oh yeah, lots of work, JD.
Good place.

785
00:42:32,400 --> 00:42:37,240
To spend shareholder money.
Look at it but so.

786
00:42:37,760 --> 00:42:39,560
You've been to the place where
this is what you're funding,

787
00:42:39,680 --> 00:42:41,600
yeah.
Have a look here.

788
00:42:41,600 --> 00:42:44,760
Could you investors don't forget
that picture?

789
00:42:45,760 --> 00:42:49,760
But no, look, there's already
been some news flow coming out

790
00:42:49,760 --> 00:42:52,920
in and around the conference.
So Endeavour mining commercial

791
00:42:52,920 --> 00:42:57,240
production at their bikes
expansion and La Figuay growth

792
00:42:57,240 --> 00:42:59,640
projects.
Apologies for sort of announce

793
00:42:59,640 --> 00:43:03,960
it incorrectly and West Gold put
out the FY25 guidance and some

794
00:43:04,200 --> 00:43:07,440
you know reserve resources
updates and is used as well as

795
00:43:07,440 --> 00:43:10,320
the usual Schmidt, you know
corporate comments preso so.

796
00:43:10,760 --> 00:43:12,920
And the exploration target, Ali?
Forget.

797
00:43:12,960 --> 00:43:14,520
Yeah, sorry.
Don't forget the exploration

798
00:43:14,520 --> 00:43:18,160
target as well.
So no super keen to say what are

799
00:43:18,160 --> 00:43:21,360
the now that the conference sort
of officially kicking off later

800
00:43:21,360 --> 00:43:24,360
tonight, what are the news flows
sort of comes out in the next

801
00:43:24,360 --> 00:43:28,040
few days and we'll be certainly
keeping our eyes healed.

802
00:43:28,400 --> 00:43:30,520
Well, you know, you're an ASX
company.

803
00:43:30,520 --> 00:43:32,360
Yep.
You're supposed to not time your

804
00:43:32,360 --> 00:43:35,840
news flow with a conference.
You you've got a an obligation

805
00:43:35,880 --> 00:43:39,280
to disclose anything material.
As it becomes material, it's

806
00:43:39,800 --> 00:43:40,920
continuous.
Like that?

807
00:43:42,240 --> 00:43:43,720
It's it's all part of the
process.

808
00:43:44,920 --> 00:43:48,480
At least there's A1 commodity
out there at least getting a bit

809
00:43:48,480 --> 00:43:51,160
of love.
It's been pretty, pretty bare

810
00:43:51,160 --> 00:43:54,920
and the the kind of sentiment's
been a bit beaten up across the

811
00:43:55,360 --> 00:43:58,680
across the space, but came to
have a few a few chats with

812
00:43:58,680 --> 00:44:01,920
people from from China and the
ones looking at the industrial

813
00:44:01,920 --> 00:44:04,960
metals in the in the coming
weeks to get a a bit more of a

814
00:44:04,960 --> 00:44:07,320
better feel for everything going
on out there.

815
00:44:07,320 --> 00:44:08,960
Hey.
Absolutely.

816
00:44:09,360 --> 00:44:11,400
All right, let's wrap it up
there guys.

817
00:44:11,920 --> 00:44:14,320
Got to thank the partners Axis
Mining Technology.

818
00:44:14,960 --> 00:44:18,640
During the show we had good on
verify and ADR get get amongst

819
00:44:18,640 --> 00:44:23,200
them Mineral mining services,
MMS get get amongst DSI,

820
00:44:23,200 --> 00:44:25,760
underground, Silverstone, CRE
Insurance, Greenland's

821
00:44:25,760 --> 00:44:28,760
equipment, K drill and spark use
a spark shop.

822
00:44:29,480 --> 00:44:32,520
Where are you guys?
Information contained in this

823
00:44:32,520 --> 00:44:35,280
episode of Money of Mine is of
general nature only and does not

824
00:44:35,280 --> 00:44:37,920
take into account the
objectives, financial situation

825
00:44:37,960 --> 00:44:39,960
or needs of any particular
person.

826
00:44:40,280 --> 00:44:43,320
Before making any investment
decision, you should consult

827
00:44:43,320 --> 00:44:46,360
with your financial advisor and
consider how appropriate the

828
00:44:46,360 --> 00:44:50,080
advice is to your objectives,
financial situation and needs.