Moz' Special Sits Playbook: MIN, SMR, 29M

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This is a coal mining state.
Did anybody in the Department of

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Mines and Industry or Premier
cabinet have a look at an

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updated cost curve?
These things that are that are

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not indexed to anything, which
means that the top tier kicks in

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below the current incentive
pricing.

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Backed by popular demand.
Backed by popular demand?

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You mean JD?
Backed by my popular demand

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because I'm Moz's biggest.
I have had people ask in the

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street when are we going to get
Moz 2 point O actually.

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You know, the funniest is when
we went to the Munoz AGM and

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Chongi turns around and goes,
where's Moz?

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Who, who, Who was that?
He's the guy that runs the IR,

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IR Chris Chung, he's quite good.
Oh yeah, yeah, yeah, yeah.

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I think I've spoken with him on.
We had a terse conversation via

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e-mail.
Yeah.

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Yeah, yeah, asks the questions
at the AGM as well.

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Oh yeah, yeah, and.
You're hearing on the quarterly

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calls.
Yeah, yeah, yeah, yeah.

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If anyone Speaking of quarterly,
quarterly calls, what are we

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going to say?
Well, I'm just going to say for,

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you know, for anyone the
background who might not know

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you.
Yeah.

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I mean, like, I feel like you're
a bit of a find mate.

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You're just a a a really a
really thoughtful person who

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sometimes goes deep on esoteric
stocks, which sometimes are

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mining stocks.
Recently a wonderfully non

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consensus and correct call on on
Minrez.

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So.
Hence the name Moz as well

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Esoteric knowledge.
Moz.

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Yeah, that.
Well, that comes from one of you

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2.
I think Ozzy can claim naming

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naming Moz, but but yeah, I'll
I'm just going to be so sad he's

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not part of this call.
So we're talking.

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About you, you, you, you.
You do have to be.

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You have to be careful that
beneath the the facade of a well

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informed speculator is just a a
bleeding idiot who got very

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lucky on a on a terribly sized
trade.

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I'm pretty sure, I'm pretty sure
we had a bet mate that if if

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Minra's share price got to
$60.00 you would get you would

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get a certain tattoo on on your
butt, your butt cheek.

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Yeah.
Well, a tattoo of Chris Ellison

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on the.
I mean, there's a couple of

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examples, a couple of examples
of irony coming back to bite me

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and that that's going to come
into pole position, I think.

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At least you can afford it.
Oh good.

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It's funny you comment about
smart people and, and you know

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deep down being blithering
idiots.

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I think the, the, the opposite
is true.

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People, you know, you can have
smart people that are idiots

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behind the scenes or idiots that
that have done a tremendous

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amount of research behind the
scenes.

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So.
Yeah, well, one of them, one of

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them's in charge of the
Queensland Government at the

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moment.
Is that is that where we want to

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start the conversation?
I like it, so I.

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Think I think we're going to
have to.

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Well, do we, do we should we do
the min res recap kind of first

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and then and then get into a
either 29-M or or Stanmore and

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and see with the conversation.
I'm sure we want to talk a bit

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about energy along the way too.
But Minres, it's been maybe

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what's it been 10 months since
we spoke?

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Was it August last year?
Something like that?

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Yeah, better.
Better.

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Yeah, yeah, yeah.
Yeah, a lot of a lot of water

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has gone under the bridge there.
It's been a pretty was.

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That supposed to be a part.
A lot of water has flowed on the

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road, but it's been a good, it's
been a fantastic year for for

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the company or at least past
past 3/4.

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They've gone from strength to
the strength.

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Commodity prices have been
pretty supportive.

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They've had the sale down of a
part of the lithium business

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3030% of their their part.
They haven't actually seen that

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the cash for that.
And then maybe most importantly,

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refinancing of the debts quite
recently.

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I mean, we could have a whole
other conversation, Trev, we

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touched on this last week on
the, the, the world of debt, the

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world of corporate debt.
I, I could talk endlessly about

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the, the, the spreads between,
you know, credit spreads between

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government and, and corporates
right now.

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But Long story short, Long story
short, min raise is paying 6% on

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their 222032 notes, I think, and
6.25% on their 2034 notes, which

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is awesome.
It's going to save them.

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That alone, I think nearly 100
million bucks a a year, which is

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pretty knockout.
So Moz, how are you taking it

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all on board?
Yeah.

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Do you remember, do you remember
in on Liberation Day, carnage

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day where the spreads blew out
and the bonds started trading

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the min res bonds at the time
started trading, trading way

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down.
Yeah, I remember it.

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Well, imagine if I, yeah,
imagine if, imagine if somebody

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said to you at the time that
nine months later and then sort

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of 12 months later again, Minras
is going to be refinancing these

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bonds at at 6%, raising 1 1/2
billion in U.S. markets with,

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with, you know, with
overwhelming the oversubscribed

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offerings.
I mean, it's just incredible the

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the way they've maintained their
access to to favourable credit

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over the last 12 years.
There is so much money looking

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for places to go.
We should, we should flash up an

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announcement of, of Fortescue
going and buying back their own,

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their own bonds 10 / 1010 years
ago because nobody wanted them.

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And then, yeah, I don't think it
happened in quite as short a

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period as what we've seen just
now, but markets can change

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quite, quite quickly.
And on, on the whole, apart from

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that blip, the the bondholders,
like Ellison always said were,

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were, were supportive and they
didn't, they didn't flinch too

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much through the pressure.
Yeah, yeah, they never really

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the only from memory, the only
time they tried to blow par was

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for about a week during when the
when the when the clown wearing

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orange face paint decided to
take down the take down the

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world economy.
Other than that, I think that

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the the yeah, yeah, yeah, yeah.
Well, the markets don't seem to

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think so, but but.
There was a blip, seems a blip,

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but the last couple weeks have
been outstandingly strong.

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Yeah, but the, but the, but the
weird thing was, I mean, he

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clearly did back down on
Liberation Day.

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But but the, the underlying, the
underlying cause of, of the

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market implosion a month ago is
still is still.

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I mean, if anything, it's gotten
worse.

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So yeah, I mean, I, I feel like
everything's been held together

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by duct tape at the moment.
The, the, the strength, the

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strength, the strength almost
everywhere really is because

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it's not just, you know,
there's, yeah, energy's

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performing well, but so is so is
tech, so is consumer

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discretionary.
I mean, how is consumer

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discretionary performing as well
as is as well as it is in an

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environment where central bank,
where the forecast for central

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bank ranks has flipped from from
easing across the world to to

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to, you know, 3 rate rises by
the end of the year, at least in

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Australia because.
Everyone's buying Lululemon

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pants, mate.
Yeah, yeah, Lululemon.

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We should do a whole podcast on
Lululemon.

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I'm sure we'll get there.
Before we get there cost

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pressure is pretty real like
there the the inference from

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from what you're saying there
and mins use a lot of diesel

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they they have to truck a fair
bit.

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So any any kind of expectations
or?

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Yeah, yeah.
So I think what we'll get, we'll

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get something about this on
Thursday.

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I think it's hard to think of
any any mining group more

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exposed to diesel in Australia
than min res.

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Phoenix.
Yeah, Yeah, maybe but but and

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minerals doesn't, they don't
hedge.

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I mean they don't have any, you
know, they're just paying what

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they're paying them out for
diesel.

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I don't think there's any danger
of or at least any short term

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danger of diesel supply issues.
I think that we're sort of front

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of the queue anywhere in, in our
half of the world for diesel.

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So and, and that seems to be the
commentary coming out of all of

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the, the mining companies that
I've listened in on over the

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last week or so.
But but the cost, the cost

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pressure is there.
They're going to be, they're

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going to be wearing a lot of
this cost.

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Some of it will flow through I
suppose to the at Onslow, some

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of it will flow through to the
JV when the CSI you know the the

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inflation linked pricing comes
through.

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But but otherwise, yeah, I think
I think there's going to be a

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lot of a lot of additional costs
for minerals over the next six

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months.
On the other hand, I think that

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I think that if if PLS is
quarterly is anything to go by

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that will be probably
outshadowed a little bit by by

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the lithium side of things.
I think they're probably going

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to report a really strong result
and I think the market will like

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it.
I think, I think it's hard to

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see what could be in there on
Thursday that would cause the

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market to would cause the the
stock to sell off.

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Yeah, yeah, the the ambiguities
with like min Reds are are

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diminishing over time, aren't
they?

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Like it's becoming like a more a
more boring stock to follow for

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all the.
Right reasons there's like.

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Less uncertainty and and if
anything, there's there's

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positive catalyst namely like.
A free option.

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Which was lithium.
Now looks like, you know, we're

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very in the money option.
Yeah.

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Well, well, sort of.
I mean, although I, I said at

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the time that I didn't
understand the, the sale they

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did to POSCO.
I mean, I don't follow discuss

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anymore, but you know, the sale
they did probably was it

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November last year?
Yeah, roughly, yeah.

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I was at AI was I was at AI was
at a formal hall at my College

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in Oxford.
And my phone started blowing up

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and I was in the middle of this
conversation with a, with a guy

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with like a, like an Admiral in
full uniform.

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And my phone starts blowing up.
And I, it just, I mean, it was

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truly shameful.
And I'm having this conversation

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with him.
And then I just, at one point I

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just said, look, can you just
give me a second?

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And I'm opening up my COMSEC
thing and I'm just scanning

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through this thing because this
is at like 9:00 PM at night for

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Australia.
And then I sort of put my phone

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away and continued on and
permanently burned that bridge.

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But but, but yeah, so at the
time, I so the market like that,

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I told you like that you thought
that they got a really good

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price out of it, but I just
didn't understand.

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I, I didn't think it was
necessary.

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But I mean, they did that
because the market was worried

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about the balance sheet.
But I don't think it was

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necessary.
I think, I think Chris, I mean,

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there's no way Chris likes that,
likes that Now he'll be kicking

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himself.
It just, yeah, just strikes me

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as yet another example of of,
you know, capital decisions at

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the wrong point in the cycle.
You know, why not?

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Why not do that when when spod's
up at 3000 if you really want

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to?
Well, to flip the conversation,

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they've got bald heels.
Steel.

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Which is, yeah, I mean, I think
like, OK, who knew that?

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Who knew lithium would turn as
fast and as sharp as it did,

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right.
But if if lithium prices have

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stayed where they were for
another six months at the time

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when they pulled the trigger on
the deal with Posco, another 12

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months, like then all of a
sudden it you know, yeah, you

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don't want to get to a point
where the market is pricing in

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more like, you know, leverage
for longer.

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So I just think I think the the
easy singles were to to address

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that front on and then convince
the story that this is this is

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like the turn around is on.
This is a deleveraging story.

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Show that by both the the the
the actual cash generation of

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Onslow and also show it through
some portfolio rationalization.

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Yeah, and that's what they said.
But but the the market had

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already decided that the
delevering story was on by that

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time.
I mean, the stock was trading at

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about 50 bucks a share when they
did it yeah.

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So yeah, I.
Don't know.

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Yeah, but but.
Those things have a lead time

224
00:11:20,200 --> 00:11:22,480
like by the time you're.
Yeah, yeah, yeah, yeah.

225
00:11:22,640 --> 00:11:24,280
Yeah, yeah.
You make that decision like

226
00:11:24,800 --> 00:11:27,520
4:00-ish months in.
Advance and and there was a lot

227
00:11:27,520 --> 00:11:30,000
of pressure there's a lot of
pressure I think I think

228
00:11:30,000 --> 00:11:31,640
actually even internally, I
think there's a lot of pressure

229
00:11:31,640 --> 00:11:34,840
from the chair to to do this.
Yeah.

230
00:11:36,120 --> 00:11:40,680
Speaking of Speaking of that, of
that building in, you know, long

231
00:11:40,680 --> 00:11:46,120
term optimistic expectations for
lithium price minerals is very

232
00:11:46,120 --> 00:11:49,920
interesting right now if you put
it up against PLS Yeah, that's

233
00:11:49,920 --> 00:11:54,000
the, the, the, the the companies
have been seem to be being

234
00:11:54,000 --> 00:11:57,240
valued on the basis of 2
completely different assumptions

235
00:11:57,240 --> 00:11:59,320
about about where lithium's
going.

236
00:12:00,320 --> 00:12:06,960
Yeah, yeah, I, I, I do.
I do agree that the C3 values is

237
00:12:06,960 --> 00:12:09,920
pretty different but I yeah but
you can say that about PLS and

238
00:12:09,920 --> 00:12:12,200
any other PR.
Yeah, you need to, you need to

239
00:12:12,200 --> 00:12:14,800
benchmark them against the the
the group set.

240
00:12:14,800 --> 00:12:19,480
They've also got 2 assets as
opposed to one bigger asset if

241
00:12:19,480 --> 00:12:21,120
you're just comparing tons for
tons.

242
00:12:21,480 --> 00:12:25,840
I am curious to to think given
that counter cyclical approach,

243
00:12:26,320 --> 00:12:28,000
lithium price now is pretty
healthy.

244
00:12:28,520 --> 00:12:32,160
The market is super buoyant,
super optimistic about the

245
00:12:32,160 --> 00:12:34,600
outlook again.
Would you be inclined for them

246
00:12:34,600 --> 00:12:38,480
to sell Bald Hill now?
Oh, I was going to say, I

247
00:12:38,480 --> 00:12:39,920
thought you were going to say
would have been inclined for

248
00:12:39,920 --> 00:12:43,840
them to try, try spin it out,
try spin the lithium out again.

249
00:12:44,200 --> 00:12:49,600
Answer that as well if you.
Want sell Bald Hill?

250
00:12:49,600 --> 00:12:50,640
Yeah.
I mean, I suppose they could put

251
00:12:50,640 --> 00:12:51,760
that.
I mean, I'm sure they'd find

252
00:12:51,760 --> 00:12:53,600
somebody.
I'm sure they'd find somebody in

253
00:12:54,440 --> 00:12:56,720
some, some Southeast Asian group
would be willing to some, you

254
00:12:56,720 --> 00:12:59,240
know, Korean, Korean group or
Japanese group would be willing

255
00:12:59,240 --> 00:13:01,320
to buy Bald Hill.
Bald Hill has always been a bit

256
00:13:01,320 --> 00:13:02,840
of a stinker.
I thought it just as a matter of

257
00:13:02,840 --> 00:13:08,000
geology, it it would be classic,
it would be classic min res to

258
00:13:08,000 --> 00:13:10,920
sell Bald Hill now and make a,
you know, make a crazy return on

259
00:13:10,920 --> 00:13:12,080
what they pay.
They paid.

260
00:13:12,360 --> 00:13:14,200
They paid next to nothing for
Ball deal from memory.

261
00:13:14,200 --> 00:13:18,160
I'm not so sure.
You're not so sure that someone

262
00:13:18,160 --> 00:13:19,120
would buy it.
No, no, no.

263
00:13:19,120 --> 00:13:21,440
They paid next to nothing that
they paid next to nothing.

264
00:13:21,440 --> 00:13:23,400
I think there's a yeah, a few
question marks about.

265
00:13:23,400 --> 00:13:25,760
It depends how you handle the
the tax liability that they

266
00:13:25,880 --> 00:13:27,480
assumed.
And yeah, yeah, not to.

267
00:13:27,480 --> 00:13:29,160
Not to pay, but.
Yeah.

268
00:13:29,160 --> 00:13:31,440
Not to say that they couldn't
net a good, good return.

269
00:13:31,440 --> 00:13:32,800
It's not been that long a
holding.

270
00:13:32,800 --> 00:13:34,680
Period.
But you either kind of start

271
00:13:34,680 --> 00:13:36,600
thinking about turning it back
on or start thinking about

272
00:13:36,600 --> 00:13:37,960
selling it now.
Yeah.

273
00:13:37,960 --> 00:13:39,560
Well, So what are they?
What are they?

274
00:13:39,560 --> 00:13:41,960
They've been deliberately
ambiguous about what's actually

275
00:13:41,960 --> 00:13:43,920
going on with Bald Hill.
It was, it was obviously always

276
00:13:43,920 --> 00:13:46,120
going to take it take months and
months to turn back on.

277
00:13:46,120 --> 00:13:48,760
Not the six weeks, not the not
the four weeks.

278
00:13:48,800 --> 00:13:51,160
Oh, was it for the 6/4 to 6/4 to
six?

279
00:13:51,280 --> 00:13:54,640
Yeah, four to six weeks.
That was so funny because that

280
00:13:54,640 --> 00:13:57,440
was like that was he just can't
help himself.

281
00:13:57,480 --> 00:14:00,920
This was after all of this
governance explosion, after his

282
00:14:01,000 --> 00:14:03,960
his job is hanging by the thread
and he comes down and says

283
00:14:03,960 --> 00:14:05,760
something, you know, why not
take four days?

284
00:14:05,840 --> 00:14:07,920
You know, why not just say,
yeah, why not say it's already

285
00:14:07,920 --> 00:14:10,160
turned back on, You know?
So like we actually, we put in

286
00:14:10,160 --> 00:14:11,560
care manage and then we turn it
back on just.

287
00:14:12,320 --> 00:14:13,720
Oh yeah.
Anyway, habits.

288
00:14:13,720 --> 00:14:15,520
Yeah.
Yeah.

289
00:14:16,880 --> 00:14:19,160
So what?
So, so realistically half a year

290
00:14:19,160 --> 00:14:22,240
to turn it back on.
I think it's neither here nor

291
00:14:22,280 --> 00:14:25,160
there.
Like it's such a a minor part of

292
00:14:26,000 --> 00:14:27,200
the part of the puzzle for them
now.

293
00:14:27,600 --> 00:14:29,440
Yeah, well, they probably will
just try to sell it then.

294
00:14:29,680 --> 00:14:35,520
Yeah, Yeah, there, there.
And there might be like better,

295
00:14:35,560 --> 00:14:38,320
better synergies for that with
with someone else's portfolio as

296
00:14:38,320 --> 00:14:40,320
well.
Like yeah.

297
00:14:41,600 --> 00:14:45,000
In terms of spinning out the
the, the main, the main 2 that

298
00:14:45,000 --> 00:14:47,720
well, I mean really, really just
what you know is the is where

299
00:14:47,720 --> 00:14:51,480
the value is, but it's not as
easy.

300
00:14:51,480 --> 00:14:54,120
I don't think it's as easy now
to spin it out.

301
00:14:54,480 --> 00:14:57,720
The first question would be
where did, where does that like

302
00:14:57,720 --> 00:14:59,400
does it take, does some of the
debt go with it?

303
00:15:01,920 --> 00:15:05,960
Because so I mean, their, their
plan was to was to list it on,

304
00:15:06,800 --> 00:15:08,640
to spin it out listed on in
America.

305
00:15:08,640 --> 00:15:14,360
But also at the time I think you
know get some get some added

306
00:15:14,360 --> 00:15:17,720
value for the the processing.
Yeah, they they thought they

307
00:15:17,720 --> 00:15:19,840
could get a chemicals multiple
if they're listed on the NYSE

308
00:15:19,880 --> 00:15:21,440
was the.
The rationale?

309
00:15:22,360 --> 00:15:25,000
I mean, they had the downstream
sort of stuff going on at that

310
00:15:25,000 --> 00:15:27,520
point in time.
And there was the yeah, yeah.

311
00:15:27,880 --> 00:15:30,160
But that, that's gone, that's
gone nowhere since so.

312
00:15:30,360 --> 00:15:34,200
The world changed and yeah, the
the market changed, the

313
00:15:34,440 --> 00:15:38,320
multiples compressed interest is
balance sheet expanded.

314
00:15:38,320 --> 00:15:41,240
But I still think that that
could be that actually could

315
00:15:41,600 --> 00:15:42,560
return like.
I wouldn't.

316
00:15:42,560 --> 00:15:43,640
I wouldn't completely rule it
out.

317
00:15:44,320 --> 00:15:46,440
I think the, I think the only
reason it could return, or at

318
00:15:46,440 --> 00:15:48,520
least the only reason they might
start talking about it is just

319
00:15:48,520 --> 00:15:51,120
because the, you know, as as has
always been the case with min

320
00:15:51,120 --> 00:15:55,400
res, the sum of the parts, it
just produces a crazy, a crazy

321
00:15:55,400 --> 00:15:58,320
delta between what, what, what
the current market cap of the

322
00:15:58,320 --> 00:16:01,640
company is.
And, and there was this over

323
00:16:01,640 --> 00:16:06,360
the, the, the EV versus market
cap was a bigger story 12 months

324
00:16:06,360 --> 00:16:09,120
ago when they had all this debt
and everything looked, looked,

325
00:16:09,360 --> 00:16:10,560
looked like it was going pear
shaped.

326
00:16:10,560 --> 00:16:13,040
But nowadays I think that I
don't think anyone gives anyone

327
00:16:13,040 --> 00:16:15,200
cares about the debt anymore.
I think they've shown that they

328
00:16:15,200 --> 00:16:17,600
can just kick this can down the
road and they've got very

329
00:16:17,600 --> 00:16:20,000
supportive holders.
They'll continue to refi bring

330
00:16:20,000 --> 00:16:22,200
down their cost of capital.
So I think, I think now you look

331
00:16:22,200 --> 00:16:25,240
at it more as a more as a, you
value it more on the basis of

332
00:16:25,600 --> 00:16:29,640
market cap than you do EV.
And so, you know, the valuation

333
00:16:29,640 --> 00:16:34,040
still doesn't make any sense.
So I think there might be

334
00:16:34,040 --> 00:16:35,280
something.
And they're probably also aware

335
00:16:35,280 --> 00:16:39,920
of the fact that Minray steel
trades like a, like a

336
00:16:39,920 --> 00:16:45,520
speculithium producer like you.
You put up a, you put up a, a

337
00:16:46,480 --> 00:16:49,800
graph of put, just put up a
chart of, of PLS and, and the

338
00:16:49,800 --> 00:16:54,040
Minray share price over the last
year, It's got a correlation

339
00:16:54,040 --> 00:16:56,800
coefficient of one.
Yeah, it's, it's it's.

340
00:16:57,920 --> 00:17:02,000
It's not at all though.
Yeah, reflective of the

341
00:17:02,000 --> 00:17:05,280
composition of their earnings.
No, no, no, no, no.

342
00:17:06,119 --> 00:17:08,160
This is the iron ore.
This is the iron ore problem.

343
00:17:09,440 --> 00:17:12,960
It's not sexy.
I don't know about that.

344
00:17:13,599 --> 00:17:15,440
It's one thing to call it not
sexy, but then it's like, you

345
00:17:15,440 --> 00:17:18,160
know all of the great mining
fortunes that have ever been

346
00:17:18,160 --> 00:17:21,640
created, Orion or fortunes.
Oh, yeah, I know, I know.

347
00:17:21,960 --> 00:17:23,800
I mean, it's Chris Ellison
thinks it's the sexiest thing in

348
00:17:23,800 --> 00:17:26,240
the world.
But the market, the market

349
00:17:26,240 --> 00:17:28,280
doesn't agree.
Yeah, I know.

350
00:17:28,280 --> 00:17:30,000
It's been super resilient.
Super.

351
00:17:30,200 --> 00:17:32,560
Yeah, Yeah, I know, I know.
It's tight, isn't it?

352
00:17:32,560 --> 00:17:34,880
It's real tight.
I think.

353
00:17:34,880 --> 00:17:38,040
I think another thing you'll see
probably on Thursday is that I'd

354
00:17:38,040 --> 00:17:41,240
be very surprised if they've
been putting more hedges on.

355
00:17:41,840 --> 00:17:43,840
I think that I think Chris hates
hedging.

356
00:17:43,840 --> 00:17:45,480
I think he views it just a waste
of money.

357
00:17:46,160 --> 00:17:50,280
And I think that they, they did
that to try and calm down the

358
00:17:50,280 --> 00:17:52,160
market a little bit, you know, a
year ago.

359
00:17:52,160 --> 00:17:54,960
But I'd be very surprised if
they're if they're hedging any

360
00:17:54,960 --> 00:17:57,680
further out.
What do you think of expansion

361
00:17:57,920 --> 00:18:02,040
like any anymore?
Any more language that effective

362
00:18:02,320 --> 00:18:04,720
of intended, you know,
expansion?

363
00:18:04,720 --> 00:18:07,960
I'm sorry.
Yeah, I haven't heard anything

364
00:18:07,960 --> 00:18:11,320
about actual infrastructure
work, which is a bit

365
00:18:11,320 --> 00:18:13,240
disappointing.
But obviously there's more

366
00:18:13,240 --> 00:18:17,680
transshippers coming in.
They'll probably be pushing

367
00:18:17,680 --> 00:18:19,440
that.
You know, they'll be, they'll be

368
00:18:19,520 --> 00:18:22,520
when they arrive.
The next one should arrive

369
00:18:22,520 --> 00:18:26,400
really, really shortly.
Actually, they'll probably be

370
00:18:26,400 --> 00:18:30,360
able to push a bit more, you
know, forty, 40 million tons per

371
00:18:30,360 --> 00:18:33,920
annum, probably realistic.
I think 50 is probably a little

372
00:18:34,280 --> 00:18:38,760
bit a little bit far off.
But yeah, I mean, 40 million

373
00:18:38,760 --> 00:18:41,920
tons per annum at iron ore at
110 is a, is a damn good, damn

374
00:18:41,920 --> 00:18:43,720
good project from Micros's
perspective.

375
00:18:43,720 --> 00:18:43,880
Yeah.
I.

376
00:18:46,400 --> 00:18:50,400
I reckon they're like maybe six
months away from from starting

377
00:18:50,400 --> 00:18:54,280
to press on growth again,
starting to to vocally press,

378
00:18:54,400 --> 00:18:57,840
press on growth maybe maybe
after the next, next quarterly,

379
00:18:58,600 --> 00:19:00,200
second-half of this calendar
year.

380
00:19:00,480 --> 00:19:05,320
I think when they actually get
the cash from from POSCO.

381
00:19:05,440 --> 00:19:10,800
And the refi, the refi is like.
They settle they even in the

382
00:19:10,800 --> 00:19:14,960
half yearly they started to to
whisper the words growth, growth

383
00:19:14,960 --> 00:19:18,240
again.
I wouldn't be surprised if I

384
00:19:18,240 --> 00:19:20,440
mean that's the that's the
enduring mindset of that

385
00:19:20,440 --> 00:19:22,160
business.
So you can you can only subdue

386
00:19:22,160 --> 00:19:25,400
that for two for so long.
And, and, and you're talking

387
00:19:25,440 --> 00:19:28,320
Onslow growth.
I, I reckon that's where the the

388
00:19:28,320 --> 00:19:31,640
capital, I I think like
brownfields in general.

389
00:19:32,200 --> 00:19:35,480
I think all of the above, like,
yeah, I mean the secret sauce of

390
00:19:35,480 --> 00:19:39,400
their model is the the ability
to to bring online projects

391
00:19:39,400 --> 00:19:43,960
that, you know, that that seem
seem a little bit marginal to

392
00:19:43,960 --> 00:19:45,640
other people.
And then they'll bring in a

393
00:19:45,640 --> 00:19:48,760
partner who has some interest in
in the actual product as opposed

394
00:19:48,760 --> 00:19:51,080
to the economics of the.
Mind I'll I'll wrap the.

395
00:19:51,080 --> 00:19:54,360
Mining services contract around
it and yeah, have some equity

396
00:19:54,360 --> 00:19:56,480
stake in that, but this, this,
this, there's a bunch of

397
00:19:56,480 --> 00:20:00,000
projects like that around there
and I think they'll they, they

398
00:20:00,000 --> 00:20:03,160
have a, you know, a good grasp
of what those projects are.

399
00:20:03,160 --> 00:20:06,640
There's like a prior a pecking
order for them and importantly

400
00:20:07,320 --> 00:20:11,000
the partners that that.
You know, either you have the

401
00:20:11,000 --> 00:20:14,240
existing claim or, or looking at
a lot of those projects they do

402
00:20:14,240 --> 00:20:17,320
want, they do want Minrez to be
their partner to bring them

403
00:20:17,320 --> 00:20:23,320
online at the right time too.
Yep, Yep, I see, I see this.

404
00:20:23,440 --> 00:20:24,840
This port dispute is still
happening.

405
00:20:25,240 --> 00:20:27,800
At their time.
But.

406
00:20:28,000 --> 00:20:29,760
Mate there's such a learning
there, like like.

407
00:20:31,040 --> 00:20:33,280
There's such a what?
A learning there just so you

408
00:20:33,280 --> 00:20:35,160
don't have to pay things and you
don't have to pay things, yeah.

409
00:20:36,480 --> 00:20:39,960
Yeah, Yeah, yeah, yeah.
I mean, I think, I think, I

410
00:20:39,960 --> 00:20:44,440
think that's, that's, I think, I
think there's almost no chance

411
00:20:44,440 --> 00:20:46,960
they, they win the actual trial
when it goes to trial.

412
00:20:50,720 --> 00:20:52,840
I, I don't really think it
matters as much as as everyone

413
00:20:52,840 --> 00:20:55,960
seems to think it does, though.
It's the media have to throw

414
00:20:55,960 --> 00:20:57,760
around this like seven $800
million number.

415
00:20:57,760 --> 00:21:00,440
But that's, that's, that's over
the, you know, that's 30 years.

416
00:21:00,520 --> 00:21:03,920
I mean, 30 years from now, $800
million won't buy you a won't

417
00:21:03,920 --> 00:21:06,600
buy you a nice, a nice chicken
roll at your local bakery, let

418
00:21:06,600 --> 00:21:10,240
alone, you know, let alone make
a difference to Minrez.

419
00:21:10,360 --> 00:21:13,000
I think it's probably 20 million
a year when they lose, I think

420
00:21:13,000 --> 00:21:14,360
there is a chance they actually
win.

421
00:21:15,000 --> 00:21:16,680
I haven't looked into the matter
very carefully.

422
00:21:16,680 --> 00:21:19,040
And I actually used to be a
government for the lawyer for

423
00:21:19,040 --> 00:21:20,880
the state government.
So, you know, I can't really say

424
00:21:20,880 --> 00:21:25,280
too much about it, but I think
that even if they do win, it's

425
00:21:25,280 --> 00:21:27,080
not going to be a matter of
that.

426
00:21:27,080 --> 00:21:30,320
They might win on some admin law
technicality and and the port

427
00:21:30,360 --> 00:21:32,160
might have to remake the
decision, but they're not going

428
00:21:32,160 --> 00:21:34,320
to win on the basis that these
tolls are just completely

429
00:21:34,320 --> 00:21:36,560
unlawful and they'll never, they
can't be imposed again.

430
00:21:36,560 --> 00:21:38,360
So I think one way or another,
they're going to pay for this

431
00:21:38,360 --> 00:21:43,080
unless, unless, unless Chevron,
unless they do some, some dodgy

432
00:21:43,080 --> 00:21:45,520
deal with Chevron.
Yeah.

433
00:21:45,520 --> 00:21:46,920
I don't think it makes a big
difference.

434
00:21:48,160 --> 00:21:50,720
I think I think it's just more
of a pride thing for, for CE

435
00:21:50,720 --> 00:21:52,040
now.
I think he's just pissed off.

436
00:21:52,240 --> 00:21:54,600
Yeah.
Do you, do you, do you still

437
00:21:54,600 --> 00:21:59,240
have any shares?
I do a little bit, yeah, but but

438
00:21:59,640 --> 00:22:02,520
I just thought that there were
more interesting opportunities

439
00:22:02,520 --> 00:22:05,960
out there when it ran from, I
mean it ran from, it ran from 16

440
00:22:05,960 --> 00:22:08,280
to 60.
I didn't, I didn't.

441
00:22:08,280 --> 00:22:10,840
I didn't time that perfectly,
but I was there for most of that

442
00:22:10,840 --> 00:22:12,520
so.
Greg, do you know what iron ore

443
00:22:12,520 --> 00:22:15,960
is used for?
Iron ore, the most abundant

444
00:22:16,040 --> 00:22:18,640
mineral on Earth's grass, used
to make steel.

445
00:22:19,360 --> 00:22:22,240
It is, it is and Australian iron
ore.

446
00:22:23,080 --> 00:22:26,320
We know Sandy Ground Support use
Australian steel in their

447
00:22:26,320 --> 00:22:28,080
factories.
We've seen the factories in

448
00:22:28,080 --> 00:22:31,840
Kewdale out in Newcastle as
well, supporting the great

449
00:22:31,840 --> 00:22:33,840
Australian mining industry.
Supporting.

450
00:22:33,840 --> 00:22:36,840
I see what you did there, mate.
Sandy Ground Support, it is the

451
00:22:36,840 --> 00:22:38,760
only name you ever need to know
whenever you think of ground

452
00:22:38,760 --> 00:22:40,000
support.
And I know this mate, when

453
00:22:40,000 --> 00:22:42,120
you're at mines, they think
about ground support all the

454
00:22:42,120 --> 00:22:45,600
time because mines only get
deeper with the assistance of

455
00:22:45,600 --> 00:22:47,680
Sandy Ground Support and Sandy
Ground Support.

456
00:22:48,280 --> 00:22:51,520
That business only gets deeper
through the wonderful people

457
00:22:51,520 --> 00:22:53,840
that lead that organization and
work of that organization,

458
00:22:53,840 --> 00:22:56,200
including none other than the
billion dollar man, Derek Hurd.

459
00:22:56,480 --> 00:22:58,360
Go Derek Hurd, go Sandvik Ground
support.

460
00:22:58,360 --> 00:23:01,120
Check your order in today or
should we talk?

461
00:23:01,120 --> 00:23:04,080
About some of those other
opportunities, we'll talk about

462
00:23:04,080 --> 00:23:05,640
the mining ones.
I know you've been interested in

463
00:23:05,640 --> 00:23:07,200
a lot of different
opportunities, but the mining

464
00:23:07,200 --> 00:23:11,120
ones are the ones we're
naturally the most interested

465
00:23:11,120 --> 00:23:14,480
in.
And like our caveat, I don't, I

466
00:23:14,760 --> 00:23:16,720
don't know if you actually have
position, you've got positions

467
00:23:16,720 --> 00:23:17,920
in one of these.
And like some of them, we're

468
00:23:17,920 --> 00:23:20,480
just going to talk series and
like, Yep, try and hash out the,

469
00:23:20,480 --> 00:23:24,040
the thesis and, and exchange of
ideas and the, the, the risks,

470
00:23:24,040 --> 00:23:26,520
etcetera of some of these, which
are maybe in, in progress or in

471
00:23:26,520 --> 00:23:28,600
the works.
But where do you where do you

472
00:23:28,600 --> 00:23:32,560
want to start with with Stan?
I know more about Stanmore than

473
00:23:32,560 --> 00:23:35,680
29 M You're going to have to do
most of the talking between 9:00

474
00:23:35,680 --> 00:23:39,200
and MI think.
Let's start with Stanmore.

475
00:23:39,440 --> 00:23:42,280
How did you how did you discover
this one, mate?

476
00:23:42,800 --> 00:23:46,920
Well, so I followed it for a
while, but but now it's turned

477
00:23:46,920 --> 00:23:50,560
into AI mean I think it's turned
really into a into a special

478
00:23:50,560 --> 00:23:53,800
situation more than it has a a
cyclical mining place.

479
00:23:53,800 --> 00:23:56,440
So this is like a common.
Theme of your, I think a lot of

480
00:23:56,440 --> 00:23:57,760
your interests.
Yeah, there's a.

481
00:23:57,960 --> 00:24:00,480
There's a binary outcome.
You think you think you think

482
00:24:00,480 --> 00:24:02,600
there's asymmetry and that the
downsides are not as bad.

483
00:24:02,600 --> 00:24:04,800
And it's also very, very
probable that you get the other

484
00:24:04,880 --> 00:24:06,440
the other way.
And I think, I think 29 M is

485
00:24:06,440 --> 00:24:09,520
that too, to be honest.
Still there?

486
00:24:09,640 --> 00:24:14,920
Yeah, yeah.
Edit that out this one, this is

487
00:24:14,920 --> 00:24:17,960
less this is less obvious.
This is less of a slam dunk than

488
00:24:17,960 --> 00:24:20,000
than Munro's was because I think
there's more ways that this can

489
00:24:20,000 --> 00:24:22,840
go.
But the the special situation

490
00:24:22,840 --> 00:24:27,760
concerns what's going on with
Anglo's sale of of of its

491
00:24:27,760 --> 00:24:30,480
assets.
I suppose really Miranda North

492
00:24:30,480 --> 00:24:35,800
and and Grovenor of the Grovenor
of the main 2.

493
00:24:38,120 --> 00:24:39,800
And so, so what's going to
happen there?

494
00:24:39,800 --> 00:24:42,600
So I know you guys have talked
about it a little bit, but but

495
00:24:42,600 --> 00:24:45,920
Anglo's getting out.
They had agreed to sell these

496
00:24:45,920 --> 00:24:48,920
assets to Peabody for they're
probably close to, I can't

497
00:24:49,560 --> 00:24:50,920
remember the exact specifics of
the deal.

498
00:24:50,920 --> 00:24:52,600
I've got it written down
somewhere, but it was about 5

499
00:24:52,600 --> 00:24:55,600
billion Aussie in total, but
not, not, not 5 billion cash

500
00:24:55,600 --> 00:24:59,320
upfront, you know, probably
maybe 1.7 upfront or something

501
00:24:59,320 --> 00:25:00,920
like that.
And then some contingent, some

502
00:25:00,920 --> 00:25:03,520
deferred blah, blah, blah, that
fell through.

503
00:25:05,560 --> 00:25:09,720
Peabody got very, very lucky
with the with the fire because

504
00:25:10,520 --> 00:25:13,920
and because, you know, there's
no way that they use that as an

505
00:25:13,920 --> 00:25:15,760
excuse to get out of it.
But that was just that was

506
00:25:15,760 --> 00:25:17,440
obviously bullshit.
What they really wanted to get

507
00:25:17,440 --> 00:25:20,200
out of was a was a deal whose
economics didn't make any more

508
00:25:20,200 --> 00:25:23,520
sense, didn't make sense anymore
with the fall in the yeah, the

509
00:25:23,520 --> 00:25:25,800
price of Kirk and coal.
And and the fall in their share

510
00:25:25,800 --> 00:25:29,400
price and and unfunded future
payment.

511
00:25:30,200 --> 00:25:31,640
They saw how.
Yeah, Exactly.

512
00:25:31,640 --> 00:25:32,280
Exactly.
Yeah.

513
00:25:35,080 --> 00:25:40,400
And so the, the reporting now in
the media is that that there's

514
00:25:40,400 --> 00:25:43,240
sort of three or four parties
who want these assets and the

515
00:25:43,240 --> 00:25:45,640
the party that wants them the
most, I think is Stanmore.

516
00:25:47,200 --> 00:25:50,960
And then there's also, there's
also Boomer.

517
00:25:54,520 --> 00:25:56,400
I think that's right, isn't it?
Yeah, Boomers, Boomer wants

518
00:25:56,400 --> 00:25:58,800
them.
Bloomberg is reporting that

519
00:25:58,800 --> 00:26:00,720
Mitsubishi wants them.
Yep.

520
00:26:00,720 --> 00:26:03,240
Which maybe we should talk about
because that that was completely

521
00:26:03,240 --> 00:26:05,440
out of left field for me.
I didn't have the memorator at

522
00:26:05,440 --> 00:26:07,640
all.
And then also some some

523
00:26:07,640 --> 00:26:09,640
Indonesian mob that I've never
heard of.

524
00:26:11,120 --> 00:26:12,600
So what's going on there?
I don't know.

525
00:26:12,600 --> 00:26:14,280
They're not an established
operator at all.

526
00:26:14,280 --> 00:26:16,080
As far as I can tell.
They don't, they don't do any

527
00:26:16,080 --> 00:26:21,240
coal mining, first of all, is
that right?

528
00:26:21,240 --> 00:26:23,840
Are you familiar with the this
Indonesian mob and also with

529
00:26:23,960 --> 00:26:25,840
Mitsubishi's interest in?
I remember.

530
00:26:25,880 --> 00:26:29,160
So yes, to both of those like I,
well, I, I do remember reading

531
00:26:29,160 --> 00:26:33,880
the Mitsubishi so that the
Indonesian firm's name and I, I

532
00:26:33,880 --> 00:26:36,360
just always assume that there's
some connection to an existing

533
00:26:36,440 --> 00:26:40,400
like Indonesian capital source
mining outfit or something like

534
00:26:40,520 --> 00:26:43,760
is it, you know, select number
of these incredibly well endowed

535
00:26:44,080 --> 00:26:46,920
pools of capital from that
originate in Indonesia.

536
00:26:46,920 --> 00:26:48,920
And I assume it's connected to
one of them, but I just haven't

537
00:26:48,920 --> 00:26:50,200
done the research to figure out
which one.

538
00:26:51,360 --> 00:26:54,840
But boomer they they mine in
Australia as a as a contract.

539
00:26:55,040 --> 00:26:56,360
Boomer is obviously well
established.

540
00:26:56,400 --> 00:26:59,600
This is the yellow one.
And then and then Mitsubishi.

541
00:26:59,800 --> 00:27:03,280
That was also news to me in the
Bloomberg article.

542
00:27:04,600 --> 00:27:07,520
What importantly there, like if
you read something in Bloomberg,

543
00:27:07,680 --> 00:27:10,000
you know it's true because they
have to have two sources for

544
00:27:10,000 --> 00:27:12,000
every single thing that they
ever make.

545
00:27:12,000 --> 00:27:15,280
Like there's no guesswork going
into a Bloomberg article.

546
00:27:15,480 --> 00:27:20,320
So Mitsubishi not BMA being
listed, but Mitsubishi on their

547
00:27:20,320 --> 00:27:24,680
own speaks to, I mean speaks to
your opening comments on on the

548
00:27:24,680 --> 00:27:28,080
state of of royalties and
whatnot in the great state of

549
00:27:28,080 --> 00:27:28,800
Queensland.
But.

550
00:27:28,840 --> 00:27:31,080
Isn't that interesting?
I mean, Mitsubishi, they are the

551
00:27:31,080 --> 00:27:35,800
JV partners with BHP and BMA and
BHP is clearly like signaling

552
00:27:35,800 --> 00:27:39,040
loud and clearly, yeah, we're,
we're getting out of this by the

553
00:27:39,040 --> 00:27:42,600
end of the year and well, almost
certainly unless things like

554
00:27:42,800 --> 00:27:45,440
completely change entirely.
Yeah.

555
00:27:45,440 --> 00:27:49,680
And, and like, OK, so Mitsubishi
has a lot more truck with the

556
00:27:49,680 --> 00:27:51,440
Australian government,
especially with the Commonwealth

557
00:27:51,440 --> 00:27:54,080
government than Stanmore.
There's someone like Stanmore

558
00:27:54,080 --> 00:27:58,240
does.
But BHP presumably has even more

559
00:27:58,240 --> 00:28:00,200
sway with the Australian
government and with the

560
00:28:00,200 --> 00:28:02,200
Queensland government than than
Mitsubishi would.

561
00:28:02,480 --> 00:28:07,680
So if Mitsubishi has some
positive view about about the

562
00:28:07,680 --> 00:28:11,720
future of of coal mining in
Queensland that that BHP doesn't

563
00:28:11,720 --> 00:28:13,200
that, that just doesn't make any
sense to me.

564
00:28:13,200 --> 00:28:15,920
I mean, the Japanese have
obviously over the last five to

565
00:28:15,920 --> 00:28:20,040
10 years come around to the view
that energy and and same with

566
00:28:20,040 --> 00:28:24,400
Korea and cooking coal and and
all these commodities are they

567
00:28:24,400 --> 00:28:26,960
had been under appreciating for
years the strategic importance

568
00:28:26,960 --> 00:28:29,040
of them so that they've got
money to throw.

569
00:28:29,520 --> 00:28:34,360
But yeah, the the disconnect
between Mitsubishi and and what

570
00:28:34,360 --> 00:28:38,000
B and and and what BHP wants to
do doesn't really make sense to

571
00:28:38,000 --> 00:28:39,640
me.
Do you think that this

572
00:28:39,640 --> 00:28:42,440
Mitsubishi story is still, I
mean, the Bloomberg story was

573
00:28:42,440 --> 00:28:44,240
only last week, I think.
But do you think this is the

574
00:28:44,240 --> 00:28:45,880
right the Mitsubishi is really
in this?

575
00:28:47,200 --> 00:28:53,160
I don't my my read is that they
are, they're more likely they're

576
00:28:53,160 --> 00:28:56,600
not out of the process, but
whether or not that is like a

577
00:28:56,600 --> 00:28:59,200
genuine out of the process and
we'll kind of come back at the

578
00:28:59,200 --> 00:29:02,040
last minute, I don't know.
But my read is that they're not

579
00:29:02,040 --> 00:29:06,480
in the process anymore.
Weird, because the Bloomberg

580
00:29:06,480 --> 00:29:08,200
article wasn't it wasn't a long
time ago.

581
00:29:08,320 --> 00:29:12,040
Yes, yeah, new development.
Yeah.

582
00:29:12,520 --> 00:29:14,200
Weird.
Yeah.

583
00:29:14,440 --> 00:29:16,960
But I do think like, I just
think it's yeah, I don't think

584
00:29:16,960 --> 00:29:22,240
you ever read the the statement
that came out of Nippon Steel

585
00:29:22,240 --> 00:29:26,760
when they they bought the
minority stake in in in

586
00:29:27,160 --> 00:29:31,320
Blackwater.
And just like how how high

587
00:29:31,320 --> 00:29:34,840
conviction they were in securing
a portion of this asset in the

588
00:29:34,840 --> 00:29:38,520
metcall market and and that over
like you know, the the future

589
00:29:39,480 --> 00:29:43,040
and obviously.
I I read, I read into that, I

590
00:29:43,040 --> 00:29:46,600
read into that a view they had
about the future of the royalty

591
00:29:46,600 --> 00:29:52,080
regime.
I, yeah, I, I see it, I probably

592
00:29:52,080 --> 00:29:55,360
see it more as a, as a read
through on how fundamentally

593
00:29:55,360 --> 00:29:59,760
critical these specific assets
are to their best steel

594
00:29:59,760 --> 00:30:03,040
industry.
And yeah, like, like, you know,

595
00:30:03,040 --> 00:30:06,280
the, the, the, the high quality
met coal that comes out of

596
00:30:06,280 --> 00:30:10,280
Queensland is like, you know,
this established very industrial

597
00:30:10,280 --> 00:30:14,720
economy is like hyper, hyper
tailored towards the very spec

598
00:30:14,720 --> 00:30:17,240
kind of steel that you get out
of the select few assets in

599
00:30:17,240 --> 00:30:19,800
Queensland.
So I don't know.

600
00:30:19,800 --> 00:30:23,040
I think there's like there's
dual rationales like.

601
00:30:23,720 --> 00:30:26,720
Like these guys, it's not as if
they've only done like deals

602
00:30:26,720 --> 00:30:29,560
here, they've wanted to be
involved up in in Canada as

603
00:30:29,560 --> 00:30:30,720
well.
They've just got a

604
00:30:30,720 --> 00:30:33,400
fundamentally, yeah.
Different a long.

605
00:30:33,520 --> 00:30:37,080
Term outlook on on met coal.
Their revenues, their their

606
00:30:37,080 --> 00:30:38,800
revenues for energy, their
revenues for met coal.

607
00:30:38,920 --> 00:30:42,920
Yeah, it's, it's the same with
the the deal we saw with the

608
00:30:43,240 --> 00:30:47,200
iron on the iron ore side of
things with Mitsui and the the

609
00:30:47,200 --> 00:30:50,200
Bennett family and, and these
sorts of things here that just

610
00:30:50,200 --> 00:30:54,120
tremendously long term.
And yeah, some people took the

611
00:30:54,120 --> 00:30:55,320
other side of that straight
away.

612
00:30:55,320 --> 00:30:57,640
But these guys, these guys have
a view.

613
00:30:58,240 --> 00:31:00,400
So to hash out the the special
sit.

614
00:31:00,840 --> 00:31:08,160
Opportunity in yeah yeah yeah.
So the situation is that so

615
00:31:08,520 --> 00:31:11,280
there's a lot of there's a lot
of sort of angst amongst the

616
00:31:11,280 --> 00:31:15,120
Australian sort of broking stop
broking in an investment

617
00:31:15,120 --> 00:31:18,640
community around what's going on
here with with SMR and with

618
00:31:18,640 --> 00:31:20,560
Boomer.
And I mean all all you have to

619
00:31:20,560 --> 00:31:22,280
do is look at I don't know you
and I have talked about this

620
00:31:22,280 --> 00:31:24,840
Trevor but all you have to do is
look about look at the recent

621
00:31:24,840 --> 00:31:28,680
media coverage in the Australian
where on on on a Wednesday.

622
00:31:28,680 --> 00:31:31,560
There was a story about how
there's no way Stanmore's going

623
00:31:31,560 --> 00:31:33,160
to be able to get these assets.
They're going to have to do a

624
00:31:33,160 --> 00:31:35,200
massive cap raise Stanmore don't
know what they're doing the

625
00:31:35,200 --> 00:31:38,800
share price is stuffed.
And then a day later there was

626
00:31:39,040 --> 00:31:42,120
an article in the same column
saying Stanmore are the best

627
00:31:42,120 --> 00:31:43,760
operators in Australia.
They won't have to raise a

628
00:31:43,760 --> 00:31:45,800
single cent of equity
everything's going to be fine

629
00:31:45,960 --> 00:31:50,360
and buy shares in buy shares in
Stanmore if you've got any spare

630
00:31:50,360 --> 00:31:54,240
cash.
So, so you know, clearly and and

631
00:31:54,240 --> 00:31:55,920
you know, that's not coming
from, that's not coming from the

632
00:31:55,920 --> 00:31:58,240
Australian, that's coming from,
from brokers or from the

633
00:31:58,240 --> 00:32:00,400
companies themselves, I think.
Yeah, yeah.

634
00:32:00,680 --> 00:32:03,760
Deal Advisors.
But, but so what's happened with

635
00:32:03,760 --> 00:32:06,280
Stanmore over the last month is
that it's been it's been sold

636
00:32:06,280 --> 00:32:08,600
down really heavily.
I think it's come down from I

637
00:32:08,640 --> 00:32:12,320
just, I remember looking at SMR
what feels like a few weeks ago

638
00:32:12,320 --> 00:32:16,120
and it was at about 3 bucks and
now it's cruising down towards 2

639
00:32:16,120 --> 00:32:17,040
bucks.
So.

640
00:32:17,240 --> 00:32:19,120
That's amazing.
Yeah.

641
00:32:19,120 --> 00:32:22,280
So a lot, a lot of the, a lot of
the prices come out of it and I

642
00:32:22,280 --> 00:32:24,480
think it's got a really and it's
not a function of what's

643
00:32:24,480 --> 00:32:28,080
happened to, to peel to to the
met coal price.

644
00:32:28,080 --> 00:32:33,160
So, so I think all this relates
to uncertainty about about

645
00:32:34,160 --> 00:32:37,160
what's going to happen with with
the Anglo assets.

646
00:32:37,680 --> 00:32:40,320
Just to push back on that like
slightly, I'm pretty sure all

647
00:32:40,320 --> 00:32:42,760
the code names are down as well
I think.

648
00:32:42,920 --> 00:32:45,920
Like not as much, not like well,
Coronado, Coronado.

649
00:32:45,920 --> 00:32:48,800
There were days when Coronado
was was in the green and and SMR

650
00:32:48,800 --> 00:32:52,280
was was down so.
Coronado is a unique animal, but

651
00:32:52,280 --> 00:32:59,080
if you look at like like Yanko,
Whitehaven, the you know,

652
00:32:59,080 --> 00:33:02,840
Whitehaven from memory down from
10:00-ish bucks to the sevens.

653
00:33:03,400 --> 00:33:06,360
Yeah, I I think that the, the
thermal coal side of things is

654
00:33:06,360 --> 00:33:10,360
more directly connected to to a
cool off intentions in the

655
00:33:10,360 --> 00:33:12,160
Middle East.
At least that was my read.

656
00:33:12,760 --> 00:33:14,400
I mean, they got ahead of
themselves a little bit.

657
00:33:15,600 --> 00:33:17,200
I mean, maybe you're right,
maybe there is some sector

658
00:33:17,200 --> 00:33:22,600
specific stuff going on, but but
put it this way that that would

659
00:33:22,600 --> 00:33:26,360
be a massive, you know, say
Stemmer wins this one way or

660
00:33:26,360 --> 00:33:29,720
another that is going to affect
the the stock big, big time.

661
00:33:29,920 --> 00:33:31,720
It's going to go down or it's
going to go up.

662
00:33:31,720 --> 00:33:33,960
This is a huge deal.
These are assets worth billions

663
00:33:33,960 --> 00:33:35,920
of dollars.
The company's capitalized it at

664
00:33:36,400 --> 00:33:38,520
at the moment.
Why is it under 2 billion?

665
00:33:38,520 --> 00:33:40,560
I think it's just.
About two on the dot.

666
00:33:41,320 --> 00:33:43,840
Yeah, Yeah.
So it moves the needle.

667
00:33:43,880 --> 00:33:45,080
It moves the needle one way or
another.

668
00:33:46,160 --> 00:33:49,600
Yeah.
The question then is, and so the

669
00:33:49,600 --> 00:33:53,320
way I'm looking at it is that
there's there's a number of

670
00:33:53,320 --> 00:33:57,280
different outcomes and I think I
think most of them are positive

671
00:33:57,280 --> 00:34:00,600
for somebody invest somebody
buying, buying stem on now.

672
00:34:01,160 --> 00:34:03,680
So I think first of all, they
could they could just straight

673
00:34:03,680 --> 00:34:06,120
up loot.
They they might just not win.

674
00:34:06,160 --> 00:34:08,480
They might not win the option.
You know, let's say Mitsubishi

675
00:34:08,480 --> 00:34:11,400
gets back in and they just flood
the zone with cash or let's say

676
00:34:12,320 --> 00:34:16,040
boomer find some money despite
despite what's happened with

677
00:34:16,040 --> 00:34:21,679
their 29 M investment.
Then I think that's positive

678
00:34:21,679 --> 00:34:25,880
for, for SMRI think that's
positive for the positive for

679
00:34:25,880 --> 00:34:33,800
the share price at least because
I think at the moment the

680
00:34:33,800 --> 00:34:36,320
registry, you know, people like
people are investing in this

681
00:34:36,320 --> 00:34:37,880
stuff.
People invest in a company like

682
00:34:37,880 --> 00:34:42,280
SMR for, for, you know, for
dividends, for just sort of a

683
00:34:42,280 --> 00:34:45,239
steady stream of production.
They're not buying SMR because

684
00:34:45,239 --> 00:34:48,360
they're looking for some massive
empire building growth project.

685
00:34:49,280 --> 00:34:51,560
So I think I think a lot of
that, that would unwind.

686
00:34:51,560 --> 00:34:53,600
A lot of what's happened in the
last few weeks would unwind if

687
00:34:53,600 --> 00:34:59,240
they if they didn't win.
So then there's what happens if

688
00:34:59,240 --> 00:35:02,320
they do win.
And a lot of that will turn on

689
00:35:02,320 --> 00:35:04,960
the specifics I think of, of, of
the deal.

690
00:35:04,960 --> 00:35:11,720
But I, I think it's very
unlikely that they win and then

691
00:35:11,720 --> 00:35:15,840
do a massive cap raise and then
and then pay, you know, 2

692
00:35:15,840 --> 00:35:17,640
billion or 3 billion Aussie
upfront.

693
00:35:18,360 --> 00:35:20,560
I think that's, I think we can
basically rule that out.

694
00:35:21,800 --> 00:35:23,600
And so then it comes to how they
structure the deal.

695
00:35:23,600 --> 00:35:28,080
And I think, I think
realistically, I, I think, you

696
00:35:28,080 --> 00:35:31,600
know who I think wants this deal
more than Stanmore, I think.

697
00:35:32,320 --> 00:35:33,480
Matt.
Yeah, go ahead.

698
00:35:33,680 --> 00:35:35,360
Yeah, but yeah, Matt Lattimore.
But I.

699
00:35:35,480 --> 00:35:39,720
Think like, I think there's a
consortium like BID that's on

700
00:35:39,720 --> 00:35:42,160
the table here too.
You know, a lot of more Stanmore

701
00:35:42,160 --> 00:35:44,440
Consortium.
Yeah, yeah, yeah, Exactly,

702
00:35:44,560 --> 00:35:47,760
exactly, exactly.
And so I think that could

703
00:35:47,760 --> 00:35:49,800
probably get over the line.
And I think that'd be, I mean,

704
00:35:49,800 --> 00:35:51,920
Groven is not, Groven is still
not up and running.

705
00:35:51,920 --> 00:35:55,600
So there'd be a vision.
But you can put away, I don't

706
00:35:55,600 --> 00:35:58,120
know, you could put away
probably a billion Aussie in a

707
00:35:58,480 --> 00:36:01,480
contingent, contingent on a
restart maybe or at least

708
00:36:01,560 --> 00:36:04,480
deferred.
Yeah, that's the key piece

709
00:36:04,480 --> 00:36:07,440
there.
Is that like the value here is

710
00:36:07,440 --> 00:36:09,360
contingent on an outcome and
when you're like deal

711
00:36:09,360 --> 00:36:11,880
structuring on a contingent
outcome, you don't pay upfront

712
00:36:11,880 --> 00:36:14,120
cash for a contingent outcome
and there's like lots of

713
00:36:14,120 --> 00:36:18,640
uncertainty there and so.
Yeah, unless you're Mitsubishi,

714
00:36:19,080 --> 00:36:22,360
right?
Like Mitsubishi could just come

715
00:36:22,360 --> 00:36:25,360
in over the top and just say it
would take a much longer term

716
00:36:25,360 --> 00:36:28,080
view of it and, and, and throw
in a better offer.

717
00:36:28,080 --> 00:36:30,520
That's what what.
So my thesis sort of started to

718
00:36:30,520 --> 00:36:32,960
break when I saw this Mitsubishi
article.

719
00:36:32,960 --> 00:36:36,560
So why would Mitsubishi do that
when they've probably got a

720
00:36:36,560 --> 00:36:42,120
roofer on BHP's exit of BMA?
And then you're going to have.

721
00:36:42,160 --> 00:36:44,640
A better, a better, you know, a
better outcome there, I would

722
00:36:44,640 --> 00:36:46,400
imagine, just by virtue of
having that right.

723
00:36:48,680 --> 00:36:53,640
Yeah, good question.
Yeah, I mean, but if that's the

724
00:36:53,640 --> 00:36:56,040
case you you'd expect, you'd
expect this to have already

725
00:36:56,040 --> 00:36:57,600
happened.
I would have expect Mitsubishi

726
00:36:57,600 --> 00:37:00,520
to just to to work something out
with BHP I.

727
00:37:01,880 --> 00:37:04,960
Think these things just take a
long time like like BHP has to

728
00:37:04,960 --> 00:37:08,960
walk the dance and signal for a
long time and and lobby and then

729
00:37:09,080 --> 00:37:11,000
say we we did everything we
absolutely could.

730
00:37:11,000 --> 00:37:13,720
We're not you know, yeah, please
still think of us in high regard

731
00:37:13,720 --> 00:37:15,880
etcetera, etcetera.
But also interesting like all of

732
00:37:15,880 --> 00:37:20,960
the the sell downs that Anglo
did other than Morinbah and

733
00:37:20,960 --> 00:37:24,920
Grobner, there were like 6 or 7
coal mines and a bunch of them

734
00:37:24,920 --> 00:37:26,840
went to different parties and
those deals did complete.

735
00:37:26,840 --> 00:37:29,320
And I do think a bunch of them
that were that were interesting

736
00:37:29,320 --> 00:37:32,080
mines where where there was a
minority kind of Japanese

737
00:37:32,080 --> 00:37:34,600
partner in the mine.
And there were, there were on in

738
00:37:34,600 --> 00:37:39,560
some occasions these Rofas that
could be could be executed but

739
00:37:39,560 --> 00:37:42,760
but weren't.
So, yeah, yeah.

740
00:37:43,120 --> 00:37:46,960
So that just So what you're
saying is you think, you think

741
00:37:46,960 --> 00:37:49,680
this Mitsubishi story is
probably not, not, not something

742
00:37:49,680 --> 00:37:52,240
to worry about?
I don't think, I don't think so

743
00:37:52,320 --> 00:37:57,480
like I think I think that it's
more likely than not the

744
00:37:57,480 --> 00:38:02,320
Mitsubishi is not is not no
longer a a contender in this in

745
00:38:02,320 --> 00:38:04,840
this process.
Yeah, yeah.

746
00:38:05,040 --> 00:38:10,320
Which leaves.
Yeah, well, well, I think yeah,

747
00:38:10,320 --> 00:38:12,640
yeah, two.
Well, yeah, yeah, two or three

748
00:38:12,640 --> 00:38:16,000
parties are, who knows.
Mate, we spend heaps of time

749
00:38:16,000 --> 00:38:17,280
talking about the miners right
now.

750
00:38:17,280 --> 00:38:18,840
The miners produce something and
then they sell it.

751
00:38:18,840 --> 00:38:20,960
But who are they selling it to?
You got to think about the

752
00:38:20,960 --> 00:38:23,800
parties on the other side of the
trade, the biggest steel mills,

753
00:38:23,800 --> 00:38:26,840
the foundries, the refractory
producers, and when they're

754
00:38:26,840 --> 00:38:29,520
buying the matter, they're
completely changing the way that

755
00:38:29,520 --> 00:38:31,680
they source it these days.
Trev, I know this because they

756
00:38:31,680 --> 00:38:34,080
have to change the way they
source, they need to move into

757
00:38:34,080 --> 00:38:36,040
2026.
If you look at massive groups

758
00:38:36,080 --> 00:38:39,800
like Order Compu or RHR Mag, you
can't be chasing supplies.

759
00:38:39,800 --> 00:38:42,880
You can't be going through these
endless e-mail chains anymore.

760
00:38:43,120 --> 00:38:45,920
All these guys are jumping on
Metals Hub and digitizing the

761
00:38:45,920 --> 00:38:48,560
way they operate.
They're tapping in to a global

762
00:38:48,560 --> 00:38:51,840
network of suppliers.
It's, it's, it's remarkable

763
00:38:51,840 --> 00:38:53,640
mate, because the proof's in the
pudding.

764
00:38:54,240 --> 00:38:58,640
The buyers are on average saving
2.3% in, in their buying cost

765
00:38:58,640 --> 00:39:00,120
Huge.
That's remarkable.

766
00:39:00,120 --> 00:39:03,440
And that's by just moving to a,
a structured and competitive and

767
00:39:03,440 --> 00:39:07,160
transparent digital model.
I mean, it just makes so much

768
00:39:07,160 --> 00:39:10,120
more sense for procurement.
You are leaving money on the

769
00:39:10,120 --> 00:39:13,920
table by not using Metals Hub,
the digital platform to buy and

770
00:39:13,920 --> 00:39:16,120
sell Meadow is.
You're paying a manual labor

771
00:39:16,120 --> 00:39:18,520
tax.
You're giving money away for

772
00:39:18,520 --> 00:39:21,160
free.
So jump into 2026 and use the

773
00:39:21,160 --> 00:39:25,440
Medals Hub platform today.
Head to medalshub.com/moneymine.

774
00:39:25,720 --> 00:39:28,320
Is it even two or three?
Could it not be Stanmore

775
00:39:28,320 --> 00:39:32,160
Lattimore and Indonesians or
Stanmore Lattimore and JSW are?

776
00:39:34,120 --> 00:39:36,760
You saying Stanmore Lattimore
separately or are you saying

777
00:39:36,760 --> 00:39:39,200
Stanmore and Lattimore?
I'm saying all all all three.

778
00:39:42,600 --> 00:39:44,640
I mean, I think, I mean Gia
doesn't have any money.

779
00:39:45,040 --> 00:39:49,600
So Gia doesn't have any money
and we know well, I mean like

780
00:39:50,240 --> 00:39:53,120
why is STEM or paying out $120
million dividend in the middle

781
00:39:53,120 --> 00:39:55,960
of negotiating for a deal that's
presumably going to require some

782
00:39:55,960 --> 00:39:58,200
sort of cap rates or debt.
I mean that makes that makes no

783
00:39:58,200 --> 00:39:59,800
sense at all.
The only reason that makes any

784
00:39:59,800 --> 00:40:04,480
sense is if Gia needs money so.
Yeah, I, yeah, I can.

785
00:40:04,560 --> 00:40:09,080
I can see that logic.
I, I do think there's a bunch of

786
00:40:09,080 --> 00:40:12,680
leverage in, in, in what's all
behind the scenes there.

787
00:40:12,680 --> 00:40:14,960
But I, but I wouldn't
underestimate the ability to

788
00:40:14,960 --> 00:40:19,600
just again, like refi find new
sources of capital, you know,

789
00:40:19,960 --> 00:40:21,600
recapitalize that code,
etcetera, etcetera.

790
00:40:21,600 --> 00:40:24,840
But you're probably right.
Like reality is, I don't know.

791
00:40:25,680 --> 00:40:28,800
I mean that dividend that
remember this dividend was paid

792
00:40:28,800 --> 00:40:30,160
4 weeks ago, yeah.
Yeah.

793
00:40:30,560 --> 00:40:34,000
Yeah, or six weeks ago.
I mean, when I saw that, I felt

794
00:40:34,000 --> 00:40:36,240
like I thought I was looking at
the wrong Company Announcement.

795
00:40:36,240 --> 00:40:40,400
I just don't.
I just don't understand the the

796
00:40:40,400 --> 00:40:42,840
only reason that the only way
that makes any sense to me is if

797
00:40:42,920 --> 00:40:46,160
is if Gia says, look, you know,
you're paying this, paying us

798
00:40:46,160 --> 00:40:51,560
this dividend.
And therefore therefore,

799
00:40:52,040 --> 00:40:54,480
therefore, you know, stem was
either going to have to do this

800
00:40:54,480 --> 00:40:58,840
with debt or with, you know,
within resources some sort of

801
00:40:58,840 --> 00:41:01,920
sell down or, or sell or buy,
but then sell, you know, agree

802
00:41:01,920 --> 00:41:03,400
to sell down something to
somebody else.

803
00:41:04,040 --> 00:41:06,880
I can't see.
I'd be very surprised to see if

804
00:41:06,880 --> 00:41:10,240
Gia gets involved.
Yeah.

805
00:41:10,920 --> 00:41:16,160
You know, even in a cat raise.
So, so I don't know if you were

806
00:41:16,440 --> 00:41:22,120
were like paying attention to
mining markets like 23, but this

807
00:41:22,120 --> 00:41:25,200
whole setup has so many like
White Haven parallels to it.

808
00:41:26,200 --> 00:41:29,200
You know, the, the, the relative
underperformance in the lead up

809
00:41:29,200 --> 00:41:33,200
to a deal, the, the, the noise
and murmurs about an equity

810
00:41:33,200 --> 00:41:34,840
raise in anticipation of that
deal.

811
00:41:35,240 --> 00:41:38,120
I mean, in, in White Havens
case, they even had a bit of

812
00:41:38,120 --> 00:41:40,320
shareholder activism really,
really trying to prevent them

813
00:41:40,320 --> 00:41:42,360
from, from doing the deal quite
publicly as well.

814
00:41:42,360 --> 00:41:47,440
And ultimately the day that they
announced the deal, there was no

815
00:41:47,440 --> 00:41:48,920
associated equity raise
involved.

816
00:41:48,920 --> 00:41:51,280
It was financed, you know, you
know, really innovative way.

817
00:41:51,280 --> 00:41:55,520
They, the stock jumped like
1617% immediately intraday on an

818
00:41:55,520 --> 00:41:57,280
announcement.
So that's, I think that's where

819
00:41:57,280 --> 00:41:59,120
the special situation part come
comes from.

820
00:41:59,120 --> 00:42:02,000
It's like if, if Stammore
announced a deal here, there's

821
00:42:02,080 --> 00:42:05,080
it's a, it's a neat deal and
they they don't have to fund it

822
00:42:05,080 --> 00:42:07,160
with equity.
It's a combination of debt and

823
00:42:07,240 --> 00:42:10,320
deferred and contingent.
Then then the stock jumps.

824
00:42:10,320 --> 00:42:11,640
Oh yeah, the, the stock will
explode.

825
00:42:11,640 --> 00:42:13,840
Yeah, yeah.
And that's, that's, that was the

826
00:42:13,840 --> 00:42:15,920
sort of 4th outcome.
I, I, I had a Twitter post, you

827
00:42:15,920 --> 00:42:18,240
probably didn't see it, where I
sort of worked out what I

828
00:42:18,240 --> 00:42:20,360
thought the four outcome 4
realistic outcomes were.

829
00:42:20,360 --> 00:42:23,680
And I think three of them were,
were sort of positive or super

830
00:42:23,680 --> 00:42:25,760
positive.
And one of them was was probably

831
00:42:25,760 --> 00:42:29,000
negative.
But yeah, I mean, that's how I

832
00:42:29,000 --> 00:42:35,080
see it.
I think there's also, yeah, I

833
00:42:35,080 --> 00:42:38,800
mean, it's a weird situation
because, because Stanmore, so

834
00:42:38,800 --> 00:42:41,160
the CEO of Stanmore is a Matt is
a Matt Lettimore guy.

835
00:42:41,160 --> 00:42:46,040
He was the CEO of M Resources, I
think at one point, of course,

836
00:42:46,040 --> 00:42:50,880
but now gear owns 60%.
But but gear and and M Resources

837
00:42:51,080 --> 00:42:53,320
are very, very closely
connected.

838
00:42:54,880 --> 00:42:59,240
I think that I think that the
management, the Stanmore

839
00:42:59,240 --> 00:43:02,920
management view is that that
they want to build a, they want

840
00:43:02,920 --> 00:43:05,240
to become the sort of the number
one MEC call operator in

841
00:43:05,240 --> 00:43:06,280
Australia.
They want to build something

842
00:43:06,280 --> 00:43:09,360
big.
So I think I think they're going

843
00:43:09,360 --> 00:43:11,440
to push for this deal very hard.
And they were right up there in

844
00:43:11,440 --> 00:43:13,840
the first in the, in the
bidding, the Peabody one

845
00:43:14,800 --> 00:43:18,840
Stanmore was right up there.
I think they were, they were in

846
00:43:18,840 --> 00:43:21,120
terms of gross sum, in terms of
the actual overall sum, I think

847
00:43:21,120 --> 00:43:24,560
they were right up there close
to 5 billion Aussie so.

848
00:43:24,760 --> 00:43:27,360
Yeah, I do think that that was a
consortium with Lattimore and I

849
00:43:27,360 --> 00:43:30,680
do think that they thought that
they had the deal as well.

850
00:43:31,160 --> 00:43:35,480
We're on the decline and yeah,
we're surprised to to to

851
00:43:35,520 --> 00:43:37,200
ultimately turn out to be the
underbidders.

852
00:43:38,600 --> 00:43:43,080
And that may actually mean that
the assumption that the the

853
00:43:43,160 --> 00:43:46,760
total price this time around is
going to be the assumption that

854
00:43:46,760 --> 00:43:48,840
there is out there market that
the total price this time around

855
00:43:48,840 --> 00:43:51,560
is going to be, you know, 2030%
less than what it was back then.

856
00:43:51,960 --> 00:43:54,560
I actually think there's a
chance it's, it's much closer to

857
00:43:54,560 --> 00:43:57,240
a 5 billion Aussie than than
people are expecting.

858
00:43:57,360 --> 00:44:02,840
No way it won't be 5 billion,
but but it's not going to be 3

859
00:44:02,840 --> 00:44:04,120
billion.
I mean somebody tried to

860
00:44:04,120 --> 00:44:06,000
convince me, they thought
realistically and based upon,

861
00:44:06,000 --> 00:44:07,840
they went back and looked at
what analysts were saying the

862
00:44:07,840 --> 00:44:13,240
assets were worth in 20/20/24
and they thought that now you

863
00:44:13,240 --> 00:44:15,200
apply a bit of a discount that
might come in at 3 billion.

864
00:44:15,240 --> 00:44:17,800
I mean, I think there's a zero
chance it comes in below say 4

865
00:44:17,800 --> 00:44:20,920
billion.
The question is just the mix,

866
00:44:20,920 --> 00:44:21,720
right?
Well.

867
00:44:22,400 --> 00:44:24,680
Yeah, OK.
If it's contingent that doesn't

868
00:44:24,680 --> 00:44:26,880
eventuate, then sure.
Like what's your headline?

869
00:44:26,880 --> 00:44:30,600
Yeah, yeah, yeah, yeah, yeah.
Because the the.

870
00:44:31,720 --> 00:44:35,440
The best case scenario for Anglo
would have been to actually like

871
00:44:35,520 --> 00:44:39,160
run a cell process at a point in
time when they've been able to,

872
00:44:39,240 --> 00:44:42,960
to restart the mine and and that
just hasn't happened.

873
00:44:42,960 --> 00:44:46,520
So that they know that they're
sacrificing some degree of, of

874
00:44:46,520 --> 00:44:50,280
potential like outcome here just
because they're, they're, you

875
00:44:50,280 --> 00:44:51,760
know, they've, they've told the
market what they're going to do,

876
00:44:51,760 --> 00:44:53,600
they're going to sell this
stream on the portfolio, merger

877
00:44:53,600 --> 00:44:55,880
tech, etcetera, etcetera.
So they're kind of like corner

878
00:44:55,880 --> 00:44:58,600
there, but they definitely
wanted to only relaunch this at

879
00:44:58,600 --> 00:45:00,680
a point in time where they could
do that and they haven't been

880
00:45:00,680 --> 00:45:02,840
able to do that.
So there's definitely some

881
00:45:02,840 --> 00:45:06,680
ambiguity around like a your
restart timelines would be

882
00:45:06,680 --> 00:45:10,040
what's your, what's your funding
situation in the in the period

883
00:45:10,320 --> 00:45:12,920
like from when you assume this
asset to actually having a

884
00:45:12,920 --> 00:45:14,560
restart scenario.
And there'll be some scenario in

885
00:45:14,560 --> 00:45:18,680
the model and that model will
probably be very optimistic

886
00:45:18,680 --> 00:45:24,400
about the realities of what that
funding gap to free cash flow

887
00:45:24,400 --> 00:45:27,200
that asset is.
But that's a big driver of value

888
00:45:27,200 --> 00:45:29,320
here, hence why you tie it to a
contingent outcome.

889
00:45:30,760 --> 00:45:33,640
Yeah, Grosvenor should be
getting pretty close to being

890
00:45:33,640 --> 00:45:37,000
able to restart though.
Do you what do you know?

891
00:45:37,000 --> 00:45:38,640
Do you have any inside info on
that?

892
00:45:38,760 --> 00:45:42,000
No, don't know, don't know.
They want to pay 4 1/2 billion

893
00:45:42,160 --> 00:45:45,080
out in a special divvy before
they merge with tech as well, so

894
00:45:45,080 --> 00:45:49,680
they'd be keen to keen to get a
few dollars in the door and it

895
00:45:49,680 --> 00:45:51,760
to be a sale to take the cake as
well.

896
00:45:56,840 --> 00:46:02,680
Yeah, I think just on the
valuation of of Stan Moore, but

897
00:46:02,680 --> 00:46:05,120
people so, so it is cheap and
that's one of the reasons why

898
00:46:05,120 --> 00:46:07,240
there's you, you have some
downside prediction a moment,

899
00:46:07,240 --> 00:46:09,200
but it's not as cheap as people
think.

900
00:46:09,200 --> 00:46:14,080
I think that like it screens on
an EV EBITDA basis as like you

901
00:46:14,080 --> 00:46:16,480
get some insane number, like I
think you get like 3 or

902
00:46:16,480 --> 00:46:19,520
something.
It's not that cheap.

903
00:46:19,840 --> 00:46:22,720
That's just not there's there's
a lot of stuff that that comes

904
00:46:22,720 --> 00:46:25,160
out after EBITDA.
Unfortunately.

905
00:46:25,160 --> 00:46:27,640
If you, if you look at, I mean
if you just look last year, you

906
00:46:27,640 --> 00:46:29,440
look at the interesting, the
operating cash flow and their

907
00:46:29,440 --> 00:46:33,600
free cash flow, their operating
cash flow was it was half a bill

908
00:46:33,720 --> 00:46:36,080
Aussie.
What was their free cash flow?

909
00:46:36,840 --> 00:46:40,720
Well, it wasn't, it wasn't half
a bill Aussie, but let me tell

910
00:46:40,720 --> 00:46:44,240
you that much.
So, so it is cheap.

911
00:46:44,480 --> 00:46:50,000
It is cheap, but it's not.
It's not ludicrously cheap, just

912
00:46:50,000 --> 00:46:51,960
public public service
announcement from Moz there to

913
00:46:51,960 --> 00:46:54,520
any any any retail investors
looking at this thinking my God

914
00:46:54,520 --> 00:46:55,640
this is the cheapest thing in
the world.

915
00:46:56,240 --> 00:47:00,120
I just to just to that point,
those numbers are a lot starker

916
00:47:00,120 --> 00:47:01,680
when you look at min res as
well.

917
00:47:01,720 --> 00:47:05,520
So I think min res was what 1.2
billion in operating cash and

918
00:47:05,520 --> 00:47:09,200
like 300 in in free cash,
whereas we're talking half a

919
00:47:09,200 --> 00:47:14,840
billion to I think 300 both both
US figures for Stanmore, but

920
00:47:15,040 --> 00:47:19,400
your point is well taken.
I think, yeah, I mean, that's

921
00:47:19,400 --> 00:47:22,520
been a the, the, the there's one
number that matters whenever

922
00:47:22,520 --> 00:47:24,880
Mendores reports it's cash
balance.

923
00:47:25,360 --> 00:47:28,200
Cash on hand, I'd extend.
That to those mining companies

924
00:47:28,560 --> 00:47:30,920
if not.
All, Yeah, yeah, yeah.

925
00:47:31,280 --> 00:47:32,480
Everything else you can throw in
the bin.

926
00:47:34,440 --> 00:47:36,400
But now they're, well, but now
they're an iron ore company.

927
00:47:36,400 --> 00:47:38,920
It's going to that's going to be
the, that number's going to look

928
00:47:38,920 --> 00:47:40,720
fantastic.
It's going to be the FMG

929
00:47:40,720 --> 00:47:43,920
situation where the cash just
just every number other than the

930
00:47:43,920 --> 00:47:46,960
cash balance on a quarterly on
quality basis looks terrible and

931
00:47:46,960 --> 00:47:48,200
yet the cash just keeps going
up.

932
00:47:48,920 --> 00:47:52,880
Got that little B at?
The end So Stanmore not not that

933
00:47:52,880 --> 00:47:56,040
cheap as people think now.
No, but it is cheap.

934
00:47:56,040 --> 00:47:59,000
It is cheap, but like on a price
to free cash flow basis, I think

935
00:47:59,000 --> 00:48:03,080
it's so when I did the maths, it
was trading a bit higher than it

936
00:48:03,080 --> 00:48:07,600
is now.
And I used 250 for, you know,

937
00:48:07,600 --> 00:48:09,520
premium low Volt hard cooking
coal.

938
00:48:10,200 --> 00:48:14,080
And I came out at like a price
to free cash flow of like 6 or

939
00:48:14,080 --> 00:48:17,120
7.
So that's, that's pretty cheap.

940
00:48:18,600 --> 00:48:21,720
That's, that's, that's certainly
the cheapest in the metcall

941
00:48:21,760 --> 00:48:26,360
space in Australia.
Good operators, really good

942
00:48:26,360 --> 00:48:28,800
operators.
I think they've squeezed those

943
00:48:28,800 --> 00:48:31,200
assets for more than most people
would have got out of them in

944
00:48:31,200 --> 00:48:35,320
the last 1218 months.
I like Machelo.

945
00:48:36,640 --> 00:48:39,960
I've, I've broken my, my rule of
never trusting A Spaniard to

946
00:48:39,960 --> 00:48:46,120
invest in to invest in the first
in SMR. What do you think about

947
00:48:46,200 --> 00:48:48,160
you?
Like have you, I mean, do you

948
00:48:48,160 --> 00:48:49,720
share what you invest in on the
show?

949
00:48:49,760 --> 00:48:51,640
I mean, you never really invest
in the stuff you talk about, do

950
00:48:51,640 --> 00:48:53,320
you?
Yeah, yeah, yeah, yeah, I do.

951
00:48:54,360 --> 00:48:56,560
I actually own some Stanmore in
my super.

952
00:48:56,680 --> 00:48:59,360
So yeah, Ding, Ding, Ding.
I should have said that up

953
00:48:59,360 --> 00:49:03,000
front.
Yeah, I, I, I'm just bullish

954
00:49:03,640 --> 00:49:07,200
coal in general.
And I do share a similar

955
00:49:07,200 --> 00:49:11,800
asymmetric feature you as, as
you know in relation to the,

956
00:49:12,520 --> 00:49:16,040
the, the, the likely likelihood
of potential outcomes.

957
00:49:16,040 --> 00:49:19,080
And like you say, you what you
mapped out four, four different

958
00:49:19,080 --> 00:49:21,560
scenarios and one of them is one
of them is not good, but the

959
00:49:21,560 --> 00:49:24,600
other three are.
So I think it's important to

960
00:49:24,600 --> 00:49:27,200
know that there's like there's
definitely a scenario where

961
00:49:27,200 --> 00:49:30,560
things are not good, but.
Yeah, there are two things that

962
00:49:30,560 --> 00:49:33,400
I will say which I think maybe
account for why the stock is a

963
00:49:33,400 --> 00:49:37,120
little bit cheaper than other
than other sort of equivalents

964
00:49:37,120 --> 00:49:40,360
or other other players.
The 1st is that I can't help but

965
00:49:40,360 --> 00:49:43,640
shake this feeling that despite
the fact that the company's very

966
00:49:43,640 --> 00:49:45,200
well.
And so this is I need to be

967
00:49:45,200 --> 00:49:48,840
clear, I've, I've, I've made
similar criticisms of Minres,

968
00:49:48,840 --> 00:49:50,640
but, but this is a much more
nuanced criticism.

969
00:49:50,640 --> 00:49:53,400
It doesn't apply in the same way
that it is to Minres, But I

970
00:49:53,400 --> 00:49:58,360
can't help but shake the feeling
that say, say they do a deal

971
00:49:58,800 --> 00:50:01,480
and, and get these assets.
I think it'll be a good deal for

972
00:50:01,480 --> 00:50:04,360
Stanmore, But I, I, you know who
I think the real winner will be?

973
00:50:04,360 --> 00:50:10,120
I think it will be, I think it
will be M resources and there's

974
00:50:10,120 --> 00:50:12,960
just this lurking feeling in the
back of my mind that this it's

975
00:50:12,960 --> 00:50:14,560
not a lifestyle company.
It's run very well.

976
00:50:14,560 --> 00:50:16,680
It's produced, you know,
impressive returns over the last

977
00:50:16,680 --> 00:50:19,360
five, you know, dramatically
outperformed the any index you

978
00:50:19,360 --> 00:50:22,560
can find any mining index, any
equity market index generally.

979
00:50:22,560 --> 00:50:27,840
But I do feel like that the, the
person who gets who gets that

980
00:50:27,840 --> 00:50:30,200
even better than the average
shareholder is, is seems to

981
00:50:30,200 --> 00:50:33,600
always be M resources and, and
Kia, you know, the M resources

982
00:50:33,600 --> 00:50:35,520
makes a killing on the related
party transactions.

983
00:50:35,800 --> 00:50:38,240
Are they are they at arm's
length commercial terms?

984
00:50:39,080 --> 00:50:41,520
They, you know, they seem to be,
there's no, certainly not.

985
00:50:41,560 --> 00:50:44,320
You know, they're not supplying
lobster at 400 bucks or crayfish

986
00:50:44,320 --> 00:50:47,480
at 400 bucks a fish to the head
office like like Chris Ellison

987
00:50:47,480 --> 00:50:51,520
was doing.
But you know, it's just whenever

988
00:50:51,520 --> 00:50:53,960
you have a massive shareholder
on the registry and then a

989
00:50:54,040 --> 00:50:57,240
second shareholder who has an
outsized sway over the over the

990
00:50:57,240 --> 00:51:01,280
management, it's just, it just
gives you that icky feeling as a

991
00:51:01,280 --> 00:51:04,600
minority shareholder that that
you weren't, I mean, we saw what

992
00:51:04,600 --> 00:51:05,880
happened with gear.
Did you follow what happened

993
00:51:05,880 --> 00:51:07,080
with Gear when they went
private?

994
00:51:08,040 --> 00:51:12,040
No.
When gear, gear, so when SAMO

995
00:51:12,040 --> 00:51:17,920
provided gear their books sort
of off off the record in order

996
00:51:18,000 --> 00:51:21,280
to, but then didn't didn't tell
the market about what they

997
00:51:21,280 --> 00:51:23,680
didn't give any guidance to the
market while gear was trying to

998
00:51:23,720 --> 00:51:25,000
go private.
No, I'm not.

999
00:51:25,120 --> 00:51:25,840
I'm not saying.
Yeah.

1000
00:51:25,840 --> 00:51:29,360
And yeah, it was a big deal.
Jeremy Raper was all over it at

1001
00:51:29,360 --> 00:51:33,000
the time and.
That does ring a bell, yeah.

1002
00:51:33,600 --> 00:51:36,200
Yeah.
And so, so basically it allowed

1003
00:51:36,200 --> 00:51:40,520
gear to to take to take their
company private at a, at a, at a

1004
00:51:40,520 --> 00:51:46,400
criminal under valuation, you
know, but given that one of

1005
00:51:46,400 --> 00:51:50,960
their main assets was their
shareholding in Stanmore and and

1006
00:51:50,960 --> 00:51:54,160
that that left a reading about
that leaves a pretty sour taste

1007
00:51:54,160 --> 00:51:56,000
in my mouth.
But I don't know, it's, it's

1008
00:51:56,000 --> 00:51:58,920
hard to criticize a company that
has performed as well as as

1009
00:51:58,920 --> 00:52:02,240
Stanmore has over the last sort
of 2436 months.

1010
00:52:02,240 --> 00:52:05,000
They've done a really good job.
I think they've they've got more

1011
00:52:05,000 --> 00:52:06,960
out of the assets than I think
people thought they were going

1012
00:52:06,960 --> 00:52:10,200
to get out of it.
Yeah.

1013
00:52:11,280 --> 00:52:14,320
Yeah, yeah.
By the way, Marcello's

1014
00:52:14,320 --> 00:52:16,320
Brazilian, not, not Spanish.
Yeah, you have to.

1015
00:52:16,320 --> 00:52:17,960
You have to update your rule.
There.

1016
00:52:18,040 --> 00:52:20,920
Oh, thank God.
Slagging off a whole kind of I.

1017
00:52:21,960 --> 00:52:23,480
I scratch it.
I trust him.

1018
00:52:23,840 --> 00:52:25,120
I trust him implicitly.
Cool.

1019
00:52:27,680 --> 00:52:30,200
And so the other point is so
obviously the other point is

1020
00:52:30,200 --> 00:52:37,800
the, is the Queensland royalty
regime, which is, which is

1021
00:52:39,720 --> 00:52:44,040
probably it, it strikes me as
one of the most abominable,

1022
00:52:44,040 --> 00:52:48,720
immoral extractive resource
industry policies that that any

1023
00:52:48,720 --> 00:52:50,800
Australian government has come
up with in the last few years.

1024
00:52:50,800 --> 00:52:52,920
And, and the more I look at
this, the more it makes me want

1025
00:52:52,920 --> 00:52:54,800
to scream.
So I, I know you've covered this

1026
00:52:54,800 --> 00:52:58,720
in a bit on the, on the pod, but
I just, I feel like, I feel like

1027
00:52:58,720 --> 00:53:00,480
I need to just do a quick little
monologue about this.

1028
00:53:00,480 --> 00:53:03,240
So as I'm sure viewers know,
coal royalties in Queensland,

1029
00:53:03,600 --> 00:53:06,720
they the previous government put
in this tiered system which

1030
00:53:08,240 --> 00:53:12,640
which ran it's, it's a standard
royalty structure, except it's

1031
00:53:12,760 --> 00:53:18,680
tiered and it rises up to to
40%, a 40% marginal royalty rate

1032
00:53:19,720 --> 00:53:25,880
for each ton real for each ton
of coal sold at a realized price

1033
00:53:25,880 --> 00:53:32,120
of 300 bucks or more.
And it's 30% from 225 to 300.

1034
00:53:32,480 --> 00:53:35,200
Just imagine you, you sort of
standard income tax brackets

1035
00:53:35,680 --> 00:53:39,440
applied in a royalty context,
although of course applied on on

1036
00:53:39,440 --> 00:53:44,080
revenue, not on on profit.
And this is in Australian

1037
00:53:44,080 --> 00:53:47,640
dollars.
So the, the top tier, the, the

1038
00:53:47,800 --> 00:53:53,040
the 40% tier comes in at about
200 and using a $0.70 exchange

1039
00:53:53,040 --> 00:54:03,000
rate comes in AT210US right at
the moment METCO is at about

1040
00:54:03,000 --> 00:54:08,160
2:30.
So the, the top tier is below

1041
00:54:08,160 --> 00:54:10,720
what we're currently trading at.
Now obviously they're not

1042
00:54:10,720 --> 00:54:12,960
realizing 100% of that.
You know, Stanmore doesn't

1043
00:54:12,960 --> 00:54:15,960
realise 100% of that, that index
because the, you know, it's some

1044
00:54:15,960 --> 00:54:18,760
of it's PCI and there's great
differentials, but they realise

1045
00:54:18,760 --> 00:54:20,160
pretty, you know, they realise
up there.

1046
00:54:22,480 --> 00:54:28,560
The current price, 230 is so far
as I can tell, beneath the

1047
00:54:28,560 --> 00:54:33,240
incentive price to bring metcall
projects online across the

1048
00:54:33,240 --> 00:54:38,280
world.
So the 40% royalty tier is below

1049
00:54:38,280 --> 00:54:41,840
the current price, the current
price is below the incentive

1050
00:54:41,840 --> 00:54:44,600
price for met coal mining
worldwide.

1051
00:54:45,840 --> 00:54:48,160
And Australia is already
competing with jurisdictions

1052
00:54:48,160 --> 00:54:50,800
that have much more.
You know, compare the labour

1053
00:54:50,800 --> 00:54:53,520
laws in America to labour laws
in Australia.

1054
00:54:56,600 --> 00:55:01,760
That that to me is just the most
impossibly unjustifiable

1055
00:55:04,560 --> 00:55:06,040
resources policy one can think
of.

1056
00:55:06,520 --> 00:55:10,520
This is a coal mining state, you
know, did did anybody in the

1057
00:55:10,520 --> 00:55:13,560
Department of Mines and Industry
or, or Premier cabinet have a

1058
00:55:13,560 --> 00:55:16,080
look at an updated cost curve
when they set these things,

1059
00:55:16,720 --> 00:55:19,200
these things that are, that are
not indexed to anything, you

1060
00:55:19,200 --> 00:55:20,400
know, there's no these things
are set.

1061
00:55:20,680 --> 00:55:23,840
It's well, but I know it's crazy
that it's not indexed.

1062
00:55:23,880 --> 00:55:25,160
It's like and then.
They're not indexed.

1063
00:55:25,240 --> 00:55:27,360
To anything, it's a Ghana oil.
So this is literally what Ghana

1064
00:55:27,360 --> 00:55:29,440
does.
I was about to say, I was about

1065
00:55:29,440 --> 00:55:31,440
to say this is like something
you'd see in some sort of

1066
00:55:31,440 --> 00:55:33,880
sub-saharan.
It's a. 100%, this is a Ghana

1067
00:55:33,880 --> 00:55:35,720
gold royalty.
We have a sliding scale fixed

1068
00:55:35,720 --> 00:55:39,760
price up to 5000 an ounce and it
it's 12% NSR.

1069
00:55:39,920 --> 00:55:43,120
But but but but not index to
anything, which means that the

1070
00:55:43,200 --> 00:55:47,080
top tier kicks in below the
current incentive pricing.

1071
00:55:47,400 --> 00:55:50,280
I know is the word immoral which
really like stuck out to me.

1072
00:55:52,120 --> 00:55:54,040
Yeah, yeah, I think it's, I
think it's utterly immoral.

1073
00:55:54,040 --> 00:55:55,160
I think it's, I think it's
unjust.

1074
00:55:55,280 --> 00:55:57,000
So I mean, there's so many
different ways in which it's

1075
00:55:57,000 --> 00:55:59,400
unjust.
About the first is that that

1076
00:55:59,400 --> 00:56:02,640
it's, you know, Pete, Pete,
David Pocock's banging on about

1077
00:56:02,640 --> 00:56:06,200
how Norway does their, you know,
how Norway taxes their gas,

1078
00:56:06,920 --> 00:56:10,080
their, their gas, their
extraction industry in, you

1079
00:56:10,320 --> 00:56:14,200
know, Norway's oil and gas.
But what what people in favour

1080
00:56:14,200 --> 00:56:18,720
of this sort of, you know,
windfall profit, taxing or, or

1081
00:56:18,720 --> 00:56:23,320
recovery failed to realize is
that that countries like Norway,

1082
00:56:23,960 --> 00:56:26,640
they're not just socializing the
upside, they're socializing the

1083
00:56:26,640 --> 00:56:28,720
downside too.
So they're saying, look, you

1084
00:56:28,720 --> 00:56:30,760
know, we're going to take a
bigger slice of the pie once

1085
00:56:30,760 --> 00:56:32,200
this is up and running and
you're making money.

1086
00:56:32,400 --> 00:56:34,040
But we're going to, we're going
to get involved.

1087
00:56:34,040 --> 00:56:35,080
We're going to pay for
exploration.

1088
00:56:35,080 --> 00:56:37,640
We're going to, we're going to
give you, you know, royalty or

1089
00:56:37,640 --> 00:56:41,560
tax refunds on on costs incurred
in exploration that fails.

1090
00:56:41,720 --> 00:56:43,640
And I don't just mean, I don't
just mean something they can

1091
00:56:43,640 --> 00:56:46,600
offset, I mean, cash refunds,
you know, you go out, drill a

1092
00:56:46,600 --> 00:56:49,160
bunch of holes, they don't work.
It's not the project's not going

1093
00:56:49,160 --> 00:56:52,520
to be economical always will pay
you that they will give you

1094
00:56:52,520 --> 00:56:56,920
money to account for your your
costs incurred in doing that in

1095
00:56:56,920 --> 00:57:00,640
that failed drilling.
So, so whereas in Australia, you

1096
00:57:00,800 --> 00:57:03,080
know, think about, think about
the position of somebody who

1097
00:57:03,080 --> 00:57:05,440
wants to come in and set up a
new, a brand new venture, you

1098
00:57:05,440 --> 00:57:09,440
know, organic growth, they're
going to have to put 10s of

1099
00:57:09,440 --> 00:57:11,920
millions, if not hundreds of
millions into, into tenements,

1100
00:57:11,960 --> 00:57:13,640
into drilling tenements, getting
ready.

1101
00:57:13,760 --> 00:57:15,880
If they proceed with a final
investment decision, they're

1102
00:57:15,880 --> 00:57:18,440
going to have to spend billions
of dollars in initial CapEx and

1103
00:57:18,520 --> 00:57:20,520
then they're going to have to
spend hundreds of $1,000,000,

1104
00:57:20,560 --> 00:57:23,560
hundreds of millions of dollars
in ongoing OpEx, right?

1105
00:57:25,920 --> 00:57:29,560
Then they're going to pay, you
know, a blended rate given where

1106
00:57:29,600 --> 00:57:34,440
Metcall is at the moment of 30%
maybe on their, you know, maybe

1107
00:57:34,440 --> 00:57:38,640
25 percent, 30% if Metco
continues to go up 35% on the

1108
00:57:39,080 --> 00:57:41,360
revenue.
And then if there's anything

1109
00:57:41,360 --> 00:57:44,120
leftover, they're going to pay
30% tax on those profits.

1110
00:57:45,000 --> 00:57:47,720
That is, that is completely
insane.

1111
00:57:48,640 --> 00:57:50,600
And and even if you're even if
you can come up with some

1112
00:57:50,600 --> 00:57:53,080
cockamamie philosophical
justification for it, this

1113
00:57:53,080 --> 00:57:55,680
policy's intention with the
labour law.

1114
00:57:55,680 --> 00:57:58,320
So the other reason that
investment in mining in

1115
00:57:58,320 --> 00:58:00,080
Australia is becoming
increasingly difficult is our

1116
00:58:00,080 --> 00:58:01,680
really strong labour laws.
And the point of our really

1117
00:58:01,680 --> 00:58:04,200
strong labour laws is to ensure
that the guys working at the

1118
00:58:04,200 --> 00:58:07,920
coalface, at the coalface see
that little see that little

1119
00:58:08,360 --> 00:58:11,960
double up under there at the at
the coalface earning, earning

1120
00:58:11,960 --> 00:58:14,880
good salaries.
This is totally in tension with

1121
00:58:14,880 --> 00:58:17,600
that goal.
You're, you're constraining

1122
00:58:17,600 --> 00:58:21,360
investment in projects that went
up and running are going to be

1123
00:58:21,360 --> 00:58:25,160
paying their workers high wages
because of the labour laws

1124
00:58:25,160 --> 00:58:28,160
you've put in place.
So it's just, it doesn't, no

1125
00:58:28,160 --> 00:58:30,880
matter how you look at it, you
can't make any of this make any

1126
00:58:30,880 --> 00:58:34,760
sense.
And, and I, I, I mean, yeah, I

1127
00:58:34,760 --> 00:58:37,360
think it's, I think it's
shameful what Christopher, how

1128
00:58:37,360 --> 00:58:38,960
Christopher Lee is refusing to
back down on this.

1129
00:58:39,360 --> 00:58:42,000
And I also think it's, you know,
I mean, I don't know if you've

1130
00:58:42,000 --> 00:58:45,280
done much driving around.
So I'm a, I'm actually born in

1131
00:58:45,280 --> 00:58:48,560
Brisbane.
I'm a Queenslander at at heart.

1132
00:58:48,560 --> 00:58:50,560
And I've done, I've driven
through, I've done a lot of Rd.

1133
00:58:50,560 --> 00:58:51,920
trips out out back in
Queensland.

1134
00:58:51,920 --> 00:58:54,880
And it, it strikes me that
there's like, it's almost like

1135
00:58:54,880 --> 00:58:57,760
there's a population cut off
where, where Brisbane just

1136
00:58:57,760 --> 00:59:00,040
doesn't give a fuck anymore.
It's like, you know, Townsville,

1137
00:59:00,040 --> 00:59:01,640
yeah, they're big enough,
they're good enough people.

1138
00:59:01,640 --> 00:59:03,760
If they get flooded, we're going
to send in the tanks, we're

1139
00:59:03,760 --> 00:59:05,440
going to send in lots of money.
We're going to look after them.

1140
00:59:05,440 --> 00:59:09,720
But if you're Miramba or, or,
you know, Emerald or Blackwater

1141
00:59:09,720 --> 00:59:13,440
or Clermont or Middlemount or
any of these little 5000 person

1142
00:59:13,440 --> 00:59:16,440
mining towns, yeah, bug air,
you're on your own.

1143
00:59:16,920 --> 00:59:20,240
You know, we, we need to prop
up, we need to prop up all the

1144
00:59:20,240 --> 00:59:23,440
spending we're doing for the
benefit of people living in

1145
00:59:23,440 --> 00:59:25,240
Brisbane and, and, and the Gold
Coast.

1146
00:59:26,160 --> 00:59:28,640
I just think it's, yeah, I mean,
I, I.

1147
00:59:29,080 --> 00:59:32,000
I that's the most astounding
part of it is like the explosion

1148
00:59:32,000 --> 00:59:34,600
in government debt.
Irrespective of this, you know,

1149
00:59:34,760 --> 00:59:37,200
royalty rape.
It's like there's, there's,

1150
00:59:38,080 --> 00:59:41,480
there's, there's no way out of,
there's no way out of the

1151
00:59:41,480 --> 00:59:44,640
situation without any like
austerity measures which, you

1152
00:59:44,920 --> 00:59:47,560
know, no government ever
introduces because it's the hard

1153
00:59:47,560 --> 00:59:48,960
thing to do.
It's politically untenable.

1154
00:59:49,600 --> 00:59:51,040
No.
And, and of course, as a

1155
00:59:51,040 --> 00:59:53,000
consequence of their improved
budget position, they're not

1156
00:59:53,000 --> 00:59:55,400
getting us back much on the GS,
on the, you know, they're not

1157
00:59:55,400 --> 00:59:57,880
getting as much DST share, which
has undermined the entire bloody

1158
00:59:57,880 --> 01:00:01,200
thing.
And and as we say, these things

1159
01:00:01,200 --> 01:00:04,160
aren't inflation index.
So, so they, they, it's like,

1160
01:00:04,160 --> 01:00:07,840
it's like somebody pulled up a
cost curve from 2010 and and set

1161
01:00:07,840 --> 01:00:10,040
these things and then went,
yeah, that makes sense.

1162
01:00:10,680 --> 01:00:14,360
At at at the moment, you know,
2022 met calls it 700 bucks.

1163
01:00:14,360 --> 01:00:18,840
So surely this will be fine.
But you know, just just think,

1164
01:00:18,960 --> 01:00:21,120
just think a little bit more
about it, right?

1165
01:00:23,920 --> 01:00:32,040
The top the top rate, 210 US, is
not even close to to windfall

1166
01:00:32,040 --> 01:00:34,880
profits, whatever that means.
Just.

1167
01:00:35,880 --> 01:00:38,200
I can't believe this has been
allowed to go on this far and I

1168
01:00:38,200 --> 01:00:41,120
I just can't believe the the
resource industry in Queensland

1169
01:00:41,120 --> 01:00:44,000
is, is not doing more.
I mean, I suppose the tracks as

1170
01:00:44,040 --> 01:00:46,520
I can, but yeah, I'm, I'm just
bewildered.

1171
01:00:46,520 --> 01:00:50,560
I'm bewildered by by by the the
short sighted nature of it.

1172
01:00:50,560 --> 01:00:51,840
You know that it's just, it's,
it really is.

1173
01:00:51,840 --> 01:00:56,080
It's rank populism, which which
I just can't stand, at least in

1174
01:00:56,080 --> 01:01:00,040
this context.
BHP are are voting by walking it

1175
01:01:00,040 --> 01:01:03,400
seems well.
And how much success has that?

1176
01:01:03,880 --> 01:01:05,280
How much success has that had so
far?

1177
01:01:05,880 --> 01:01:07,280
They need to pick and choose
their fights.

1178
01:01:07,520 --> 01:01:12,600
Yeah, like in, in, in their
heuristic, like if you know

1179
01:01:12,600 --> 01:01:14,960
they'll they'll give, they'll
give warning, they'll give time.

1180
01:01:14,960 --> 01:01:17,360
And if nothing changes like they
will, they will walk because

1181
01:01:17,600 --> 01:01:21,280
yeah, like capital, capital goes
to where it's welcome capital

1182
01:01:21,640 --> 01:01:25,760
like and and it's BHP's own
Capital Management framework to

1183
01:01:25,760 --> 01:01:29,200
throw capital where it's are
most welcome, the maximizing.

1184
01:01:29,200 --> 01:01:35,400
WWA.
Yeah, and and the capital is not

1185
01:01:35,400 --> 01:01:37,440
welcomed in Queensland on the
current regime.

1186
01:01:37,600 --> 01:01:43,240
That's like, that's certain.
Yeah, but, but, but, but no

1187
01:01:43,240 --> 01:01:45,680
matter how you look at that,
like there's no, it's not like

1188
01:01:45,680 --> 01:01:48,120
it's a trade off.
It's not like, well, yeah, OK,

1189
01:01:48,280 --> 01:01:50,120
we're gonna lose capital
investment, but at least we're

1190
01:01:50,120 --> 01:01:52,440
gonna get this.
As I said, this thing backfired

1191
01:01:52,440 --> 01:01:53,760
anyway because they're not
getting anything.

1192
01:01:53,760 --> 01:01:56,360
They're getting less back in as
a matter of GST share.

1193
01:01:56,360 --> 01:01:58,640
So it has not.
It has unlimited.

1194
01:01:58,640 --> 01:02:01,440
It has nothing but downside and
no obvious upside.

1195
01:02:03,600 --> 01:02:06,920
Well, I mean, it did have, it
did have short term upside when

1196
01:02:06,920 --> 01:02:09,240
they put it in place when coal
prices were.

1197
01:02:09,280 --> 01:02:10,880
Yeah, when?
Yeah, yeah, yeah, yeah, yeah.

1198
01:02:11,120 --> 01:02:14,480
So the trade off is is something
for the next, the next

1199
01:02:14,480 --> 01:02:17,800
government to to to handle.
Yeah, yeah, kicking the can down

1200
01:02:17,800 --> 01:02:19,960
the road, but but.
Shockingly short sighted.

1201
01:02:21,000 --> 01:02:21,560
Yeah, it is.
Sure.

1202
01:02:21,560 --> 01:02:24,240
I think sure so and as I said,
the the numbers weren't set

1203
01:02:24,240 --> 01:02:27,840
having any regard to to even the
prevailing coal prices at the

1204
01:02:27,840 --> 01:02:29,240
time.
What did what did it get up to

1205
01:02:29,520 --> 01:02:32,760
800?
Did it get up to 800 post

1206
01:02:32,760 --> 01:02:33,760
Russia?
I don't.

1207
01:02:34,480 --> 01:02:35,840
I don't think it quite got
there.

1208
01:02:35,880 --> 01:02:37,880
I've got.
I remember like. 5 or 6 in my.

1209
01:02:37,920 --> 01:02:39,880
Yeah, like maybe 6 in my.
Yeah.

1210
01:02:40,360 --> 01:02:42,000
I thought it got up to about 700
anyway.

1211
01:02:42,400 --> 01:02:43,600
There's about a million.
Different coal.

1212
01:02:43,600 --> 01:02:46,600
Prices so.
Yeah, Yeah, yeah, yeah, yeah,

1213
01:02:47,520 --> 01:02:48,240
yeah.
Anyway.

1214
01:02:48,360 --> 01:02:50,240
We could.
We could go on at length, but

1215
01:02:50,240 --> 01:02:53,560
should we?
Shameful scenes.

1216
01:02:53,560 --> 01:02:56,560
Shameful scenes in QLD.
Should we?

1217
01:02:56,560 --> 01:02:59,440
Well, we don't actually have to
leave Queensland for for the

1218
01:02:59,440 --> 01:03:02,640
next conversation. 29 medals,
Capricorn Copper, one of their

1219
01:03:02,640 --> 01:03:07,480
assets in in Queensland.
But how did you come across this

1220
01:03:07,480 --> 01:03:08,480
one?
Kick us off, mate.

1221
01:03:09,000 --> 01:03:12,440
Well, everyone in Australia,
everyone on everyone on the ASX

1222
01:03:12,440 --> 01:03:15,800
came across this one about two
weeks ago when when it fell what

1223
01:03:15,800 --> 01:03:20,960
40%, 40 for 40% in one day.
That was that was like Chris,

1224
01:03:20,960 --> 01:03:22,640
that was like Minrez.
Yeah.

1225
01:03:22,880 --> 01:03:26,240
You remember that this is not
really different in our name,

1226
01:03:26,240 --> 01:03:28,720
but do you remember that Minrez
quarterly where that when he got

1227
01:03:28,720 --> 01:03:32,960
the question about is there any
comebacks on the road and Oh

1228
01:03:32,960 --> 01:03:34,040
yeah, do.
You remember that?

1229
01:03:34,040 --> 01:03:34,720
Yeah.
Yeah, yeah.

1230
01:03:34,720 --> 01:03:37,200
And the stock had opened the day
down like 8 or 9%.

1231
01:03:37,240 --> 01:03:39,120
And I was sitting there watching
this thing and he gets that

1232
01:03:39,120 --> 01:03:42,440
question and he says I can, I
can answer that very clearly for

1233
01:03:42,480 --> 01:03:43,240
you.
No, there's not.

1234
01:03:43,800 --> 01:03:46,440
And then Mark and the CFO, the
CFO.

1235
01:03:47,000 --> 01:03:50,480
Starts to try.
The CFO starts to try to answer

1236
01:03:50,480 --> 01:03:55,080
the question properly and Chris
goes, that's enough and you

1237
01:03:55,080 --> 01:03:58,560
should have seen the size of the
of the red candle the gap down

1238
01:03:58,560 --> 01:04:00,800
as that happened.
It was biblical.

1239
01:04:03,080 --> 01:04:05,320
And anyway, so something super
happened to 29 MA couple of

1240
01:04:05,320 --> 01:04:08,000
weeks ago.
So my, so I don't know anything

1241
01:04:08,000 --> 01:04:10,000
about these projects like
really, I know, I know almost

1242
01:04:10,000 --> 01:04:15,160
something about this project,
but what I'm interested in is,

1243
01:04:16,320 --> 01:04:19,920
is funding.
So, so the, the catalyst for

1244
01:04:19,920 --> 01:04:24,280
changes in share prices over the
next six months is funding,

1245
01:04:25,320 --> 01:04:26,680
right?
That that's all that really

1246
01:04:26,680 --> 01:04:28,440
matters.
I think what's going to what,

1247
01:04:28,440 --> 01:04:32,200
what are they going to do about
the hole in their balance sheet?

1248
01:04:32,200 --> 01:04:34,720
And my numbers are, I was
chatting to re speculator about

1249
01:04:34,720 --> 01:04:38,160
this this morning.
Big shout out to re speculator

1250
01:04:38,360 --> 01:04:41,360
better, better with numbers and
better with sort of economics

1251
01:04:41,360 --> 01:04:43,280
and mining products than anyone,
anyone I know.

1252
01:04:44,640 --> 01:04:46,640
And he so I was initially
thinking they're going to be

1253
01:04:46,640 --> 01:04:49,560
burning about 50 mil 1/4 now
going forward.

1254
01:04:50,120 --> 01:04:51,400
And he reckons it's a bit lower
than that.

1255
01:04:51,400 --> 01:04:54,480
He thinks it's, I think he
thinks it's maybe 30 to 40 mil

1256
01:04:54,480 --> 01:04:58,920
1/4.
But either way, for a company

1257
01:04:58,920 --> 01:05:05,360
that just did a big cat raise in
January, I think, I think, I

1258
01:05:05,360 --> 01:05:07,840
think something's going to have
to happen now, right?

1259
01:05:08,680 --> 01:05:17,760
So I think that drop was a that,
that big share price for was the

1260
01:05:17,760 --> 01:05:20,600
market saying, OK, they're doing
another cap raise, right?

1261
01:05:21,160 --> 01:05:23,440
That's the that's the best way I
can explain it.

1262
01:05:23,520 --> 01:05:27,000
But so, so the question then is,
OK, do they need to do another

1263
01:05:27,000 --> 01:05:29,120
cap raise over the next six
months or what?

1264
01:05:29,120 --> 01:05:31,000
So do they need to do something
over the next six months?

1265
01:05:31,000 --> 01:05:33,760
Yes, obviously.
Is it going to be a cap raise?

1266
01:05:34,960 --> 01:05:38,360
I think if they get out of a cap
raise, I think they'll be, I

1267
01:05:38,360 --> 01:05:42,400
think the stock will pop, right.
So then the question is, what

1268
01:05:42,400 --> 01:05:45,400
can they do?
Well, so first thing to us, do

1269
01:05:45,400 --> 01:05:47,720
you guys think, do you think
there's a likelihood of a cap

1270
01:05:47,720 --> 01:05:51,760
raise?
That's six months uncertain.

1271
01:05:51,800 --> 01:05:56,240
I think the the shareholder
dynamics, yeah, like play a big

1272
01:05:56,240 --> 01:05:59,280
part of that and also the the
potential signal sell down play

1273
01:05:59,280 --> 01:06:01,720
a big part of that.
So you should just refresh for

1274
01:06:01,720 --> 01:06:04,840
people that aren't totally up to
speed the what the register.

1275
01:06:04,840 --> 01:06:13,520
So Aussie Super 12%, EMR 20 ish
give or take a few and then

1276
01:06:13,600 --> 01:06:16,520
Boomer just over 22, I want to
say.

1277
01:06:17,520 --> 01:06:21,600
So that right there is call it
55% of the register.

1278
01:06:24,200 --> 01:06:27,800
Yeah, yeah.
So, so I was going to come to

1279
01:06:27,800 --> 01:06:33,480
this later, but but so 11
potential outcome here is an

1280
01:06:33,480 --> 01:06:36,560
attempt to to take take the
entire thing private.

1281
01:06:37,400 --> 01:06:40,040
So you and I, we we spoke about
this a little bit off air and,

1282
01:06:40,040 --> 01:06:44,200
and I haven't really thought
this through fully, but I think

1283
01:06:44,200 --> 01:06:46,440
there's there's money, there's a
lot of money in those

1284
01:06:46,440 --> 01:06:52,160
shareholders and there's a lot
of unreal, there's a lot of, you

1285
01:06:52,160 --> 01:06:54,880
know, consternation about the
current valuation amongst their

1286
01:06:54,880 --> 01:06:57,760
shareholders.
So I think, I think that, you

1287
01:06:57,760 --> 01:07:00,560
know, there's, there's a non
zero chance they try to take

1288
01:07:00,560 --> 01:07:06,600
this thing private.
What that means for somebody

1289
01:07:06,600 --> 01:07:08,280
trying to make money on it, and
I'm not really sure.

1290
01:07:08,280 --> 01:07:10,600
I mean, you could, you know, it
eventually would come back to

1291
01:07:10,600 --> 01:07:12,040
the market.
I think almost certainly.

1292
01:07:12,600 --> 01:07:15,400
So there could be a, a sort of
complicated way to try to make

1293
01:07:15,400 --> 01:07:17,840
some money out of that.
If they don't try to take it

1294
01:07:17,840 --> 01:07:26,440
private, the options are cap
rows or something else such as

1295
01:07:27,480 --> 01:07:29,640
some sort of, you know, some
sort of deal with one of the

1296
01:07:29,640 --> 01:07:33,000
shareholders or just a sell
downs, you know, sell, sell

1297
01:07:33,000 --> 01:07:35,600
future streams out of some of
their assets.

1298
01:07:38,680 --> 01:07:49,600
As to the latter, I think did
you guys see I've lost my notes,

1299
01:07:49,600 --> 01:07:52,560
but I had there was recently
there was a there was a deal at

1300
01:07:52,560 --> 01:07:54,520
KGL.
Yeah, yeah, yeah.

1301
01:07:54,520 --> 01:07:58,680
So 21 M's talking about
potential potential stream on

1302
01:07:58,680 --> 01:08:03,640
the on the gold at cap copper
now because because of KGL

1303
01:08:03,960 --> 01:08:08,040
knocking it out of the park on
their on their stream and the

1304
01:08:08,040 --> 01:08:11,640
stock popped there.
If you look at that KGL deal,

1305
01:08:11,640 --> 01:08:16,200
like that's actually that is a
project that has like a big

1306
01:08:16,200 --> 01:08:19,279
weighting of of the the revenue
content is associated with the

1307
01:08:19,279 --> 01:08:23,399
gold and silver and and they are
giving away like a lot of the

1308
01:08:23,399 --> 01:08:25,279
project economics and what is
already a pretty marginal

1309
01:08:25,279 --> 01:08:28,040
project on that stream.
Even though it answered a big

1310
01:08:28,040 --> 01:08:30,279
question mark over that project
at that point in time, which is

1311
01:08:30,279 --> 01:08:32,240
is this going to actually be
funded to become a mine.

1312
01:08:32,240 --> 01:08:36,800
Now the answer is yes, however,
is that mine going to deliver

1313
01:08:36,800 --> 01:08:37,960
positive economics for
shareholders.

1314
01:08:37,960 --> 01:08:40,200
That's still to play out.
But but undoubtedly, like

1315
01:08:40,200 --> 01:08:43,120
there's all of these examples of
these, these streams that seem

1316
01:08:43,120 --> 01:08:47,200
to be above what anyone kind of
has as, yeah, the, the NPV at

1317
01:08:47,200 --> 01:08:50,279
consensus prices because the
stream is, you know, notably

1318
01:08:51,080 --> 01:08:54,720
like Wheaton's leading the way
here is, yeah, like A, they've

1319
01:08:54,840 --> 01:08:57,520
got a little cost of capital and
B, like they're clearly using a,

1320
01:08:58,000 --> 01:09:00,520
a, particularly a silver price
deck that is that is north of

1321
01:09:00,520 --> 01:09:02,319
where, where anyone else can
justify.

1322
01:09:03,439 --> 01:09:08,960
Yeah, yeah.
And so does it so.

1323
01:09:09,120 --> 01:09:11,359
So Capricorn's costing them a
fortune at the moment in care

1324
01:09:11,359 --> 01:09:18,960
and maintenance, Yes.
What happens then if things

1325
01:09:18,960 --> 01:09:20,439
don't pan out with the copper
price?

1326
01:09:21,479 --> 01:09:25,960
So I think, you know, like this
is a very crowded trade and and

1327
01:09:26,399 --> 01:09:28,080
there's some stuffs coming back
online.

1328
01:09:28,439 --> 01:09:34,040
So copper price is far less
important here than than simply

1329
01:09:34,040 --> 01:09:37,840
just like like approvals and
timelines associated with

1330
01:09:37,840 --> 01:09:40,240
actually bringing Capcom.
Back.

1331
01:09:41,560 --> 01:09:45,120
So I think their latest like
wording and, and, and guidance

1332
01:09:45,120 --> 01:09:48,520
is, you know, there's, there's
some things outstanding with

1333
01:09:48,520 --> 01:09:52,319
Debtsy there.
And interestingly, they're not

1334
01:09:52,479 --> 01:09:56,920
being like super specific about
like, you know, how, how many

1335
01:09:56,920 --> 01:09:58,600
items, how many Rfis they have,
right?

1336
01:09:58,600 --> 01:10:00,680
Like sometimes you'll, you'll
see a company and they'll say

1337
01:10:00,920 --> 01:10:04,000
we've got like, you know, 1015
RFI is outstanding.

1338
01:10:04,000 --> 01:10:05,640
Maybe that's not, not a big
concern.

1339
01:10:05,640 --> 01:10:10,680
But if it's, you know, like I
call it 40 or 50, then then the

1340
01:10:10,680 --> 01:10:14,000
question mark is like how many
of those RF is would actually

1341
01:10:14,280 --> 01:10:17,600
require additional test work?
Because if there's more test

1342
01:10:17,600 --> 01:10:21,040
work that has to be done in
order to, to get the, you know,

1343
01:10:21,040 --> 01:10:24,720
the approval in the TSF, then
then that's data collection.

1344
01:10:24,720 --> 01:10:26,640
That's that's another 6 to 12
month delay.

1345
01:10:28,160 --> 01:10:29,280
Yeah.
Or, but if it's just more

1346
01:10:29,280 --> 01:10:32,240
fulsome responses then then OK,
you're still on track for that

1347
01:10:32,280 --> 01:10:35,520
two year, 2 year, 2 year
approval.

1348
01:10:35,960 --> 01:10:39,880
So I think, I think the fact
that maybe they haven't been a

1349
01:10:39,880 --> 01:10:43,360
super specific about like what
the number of Rfis and

1350
01:10:43,360 --> 01:10:46,360
everything like that, you know,
you're my initial read is like

1351
01:10:46,360 --> 01:10:50,320
maybe maybe it's maybe it's more
negative than positive, but I

1352
01:10:50,320 --> 01:10:52,080
don't know.
The reality is I just don't know

1353
01:10:52,080 --> 01:10:57,040
because they haven't kind of
broken that down and on the

1354
01:10:57,400 --> 01:11:00,520
like, on the cap, the like the
CapEx to restart there.

1355
01:11:02,200 --> 01:11:04,960
Yeah.
Like it's, it's, it's no, it's

1356
01:11:04,960 --> 01:11:06,840
probably going to be 200, three,
100 million.

1357
01:11:07,800 --> 01:11:11,320
Yeah, yeah, yeah.
Well, and the current what's

1358
01:11:11,320 --> 01:11:14,000
the, what's the, what's 29 even
capitalized that at the moment?

1359
01:11:14,800 --> 01:11:21,360
400. 0400 million, yeah, it's
not so the KGL this.

1360
01:11:21,360 --> 01:11:24,440
Is like, you know, like you said
at the end there over over three

1361
01:11:24,440 --> 01:11:26,040
years, like that's not something
that's going to.

1362
01:11:26,040 --> 01:11:27,560
Happen.
Yeah, yeah, yeah, yeah, yeah.

1363
01:11:27,560 --> 01:11:30,720
But so KGL, they got what, 400
million upfront?

1364
01:11:31,320 --> 01:11:37,720
400 No, no it wasn't. 400I don't
think that was right.

1365
01:11:39,120 --> 01:11:42,880
US What was it?
US something, US three, US 300.

1366
01:11:43,200 --> 01:11:45,200
Oh my gosh, I have to look.
Yeah, OK.

1367
01:11:45,480 --> 01:11:48,440
I got, I got US 300 upfront.
I capped the company's capped

1368
01:11:48,480 --> 01:11:48,880
it.
Yeah.

1369
01:11:48,880 --> 01:11:52,360
Wow.
US 375 upfront and then US 25

1370
01:11:52,360 --> 01:11:57,960
contingent cost around, Yeah.
So that's, you know, that's a

1371
01:11:58,320 --> 01:12:04,920
for for what, 6?
So 60% eighty mil per annum.

1372
01:12:05,480 --> 01:12:09,560
What's the mine life?
10 years.

1373
01:12:09,600 --> 01:12:12,640
Yeah.
So like 17% of project revenue

1374
01:12:12,760 --> 01:12:14,440
is what they've given away at
spot.

1375
01:12:14,960 --> 01:12:17,120
You know, that's what the stream
is 17% of project revenue.

1376
01:12:17,120 --> 01:12:19,200
Like, you know, we just talked
about how egregious these,

1377
01:12:20,160 --> 01:12:23,120
these, these royalties are to,
to the, to the government, like

1378
01:12:23,120 --> 01:12:26,680
70% of your, your revenue in
stage 1 is, is, is a fair bit

1379
01:12:26,680 --> 01:12:27,840
of.
Spots, it's a it's a mental

1380
01:12:27,840 --> 01:12:29,880
value.
So it's not, it's not like it

1381
01:12:29,880 --> 01:12:30,440
wasn't.
Free money.

1382
01:12:30,440 --> 01:12:32,320
It kills the economics Really I
I would have thought.

1383
01:12:32,680 --> 01:12:37,320
Yeah, it reduces to to 8% at
stage 2 they say.

1384
01:12:37,320 --> 01:12:40,480
But you know your your project
revenue at stage 1, it's a fair

1385
01:12:40,480 --> 01:12:43,800
bit of money at spot prices.
And you're pulling in more than

1386
01:12:43,800 --> 01:12:49,560
double your market cap in cash.
Isn't isn't the worst the worst

1387
01:12:49,560 --> 01:12:51,560
way of thinking about it?
I think like at the end of the

1388
01:12:51,560 --> 01:12:54,520
day, with Capricorn Copper, if
they can get, you know, someone

1389
01:12:54,560 --> 01:12:58,400
in the data room and somebody
that gets clarity on when

1390
01:12:58,880 --> 01:13:01,040
Capricorn copper is going to
come back online, they can get

1391
01:13:01,040 --> 01:13:04,640
comfort there.
They can continue to softly

1392
01:13:04,640 --> 01:13:08,680
sound a 30% sell down or
whatever or the prepayment of

1393
01:13:08,840 --> 01:13:13,280
sorts streaming, then the
picture can change quite, quite

1394
01:13:13,320 --> 01:13:15,560
quickly.
But standing from the outside

1395
01:13:15,560 --> 01:13:19,040
looking at that right now, like
you said, we don't know how much

1396
01:13:19,040 --> 01:13:21,880
is on their plate in terms of
enviros and work they need to do

1397
01:13:21,880 --> 01:13:26,600
to get that to a point.
It doesn't look very appeasing,

1398
01:13:26,600 --> 01:13:29,080
but things could change there.
Not that I.

1399
01:13:29,280 --> 01:13:31,040
Yeah.
And like that's, that's the

1400
01:13:31,040 --> 01:13:35,240
thing too is like it when it
gets in, like you can run an NPV

1401
01:13:35,240 --> 01:13:37,280
on it, even with my like, you
know, bearish take in it.

1402
01:13:37,280 --> 01:13:40,680
And, and it's still the P NAV
even at, you know, like modest

1403
01:13:40,680 --> 01:13:42,960
commodity price outlooks, it'll
still be below NAV.

1404
01:13:42,960 --> 01:13:45,200
It'll be like .7 Times Now or
something like that, right.

1405
01:13:45,200 --> 01:13:47,920
And, and why, why is it like .7
Times Now?

1406
01:13:47,960 --> 01:13:50,920
It's because because of the
uncertainty around the, the

1407
01:13:50,920 --> 01:13:52,480
funding to get to that point in
time.

1408
01:13:52,960 --> 01:13:56,200
Now that funding piece can be
solved if someone takes a more

1409
01:13:56,200 --> 01:13:59,280
longer term and patient view
than Mr. Market does, who thinks

1410
01:13:59,280 --> 01:14:00,720
it might get diluted and who can
do that?

1411
01:14:00,720 --> 01:14:03,040
A strategic and you look at that
register there, OK, there's 3

1412
01:14:03,320 --> 01:14:04,880
three parties constitute a hell
of a lot of it.

1413
01:14:04,880 --> 01:14:07,560
Two of them like either leaving
or or want to leave.

1414
01:14:07,560 --> 01:14:10,280
So they're not going to get in
the way of a potential deal if

1415
01:14:10,280 --> 01:14:13,000
boom is there.
But but you know, boomer, like

1416
01:14:13,000 --> 01:14:15,160
a, how much do they know about
the asset and, and be like,

1417
01:14:15,240 --> 01:14:17,320
like, would they be willing to
do it now or would they wait

1418
01:14:17,320 --> 01:14:19,400
longer?
But there's an opportunity

1419
01:14:19,400 --> 01:14:20,240
there.
I totally like.

1420
01:14:20,240 --> 01:14:22,520
And that's why I think if it's
in that special sits category as

1421
01:14:22,520 --> 01:14:24,240
well, because you know, the
market's either going to

1422
01:14:24,240 --> 01:14:27,680
continue to price in a funding
gap or, or you know, the

1423
01:14:27,680 --> 01:14:30,360
strategic's going to come in
here and say, hang on, this is

1424
01:14:30,360 --> 01:14:32,680
trading below NAV and I can be
patient with capital and I'll,

1425
01:14:32,680 --> 01:14:36,040
I'll read the accretion.
Yeah, yeah.

1426
01:14:36,400 --> 01:14:39,720
I don't know if you notice it
opened last night was a bizarre

1427
01:14:39,720 --> 01:14:43,040
night on market for me.
So I woke up at 2:00 AM and I

1428
01:14:43,040 --> 01:14:47,640
noticed that 29 AM was up
something like I think it was up

1429
01:14:47,640 --> 01:14:51,240
almost 10%.
So that was that was 2:00 AM

1430
01:14:51,760 --> 01:14:53,560
English time.
So that's just after the ASX

1431
01:14:53,560 --> 01:14:57,760
opens went back to sleep, woke
up at market closed it closed

1432
01:14:57,760 --> 01:15:03,720
down 2 1/2%.
So there's the intraday swing of

1433
01:15:04,120 --> 01:15:06,120
more than 10%.
Coronado had the same thing

1434
01:15:06,120 --> 01:15:09,840
happened.
There's a lot of there's a lot

1435
01:15:09,840 --> 01:15:12,080
of of jitteriness in the market
at the moment.

1436
01:15:12,080 --> 01:15:14,960
I think about this, I think no,
nobody can really work out where

1437
01:15:14,960 --> 01:15:18,480
it's going.
You know, if I actually expected

1438
01:15:19,160 --> 01:15:22,640
the day after the big fall or
sort of the week after the, the

1439
01:15:22,640 --> 01:15:25,480
big fall, I expected a sort of
steady stream of accumulation

1440
01:15:26,440 --> 01:15:28,560
that didn't that didn't that
didn't transpire.

1441
01:15:29,680 --> 01:15:32,760
No doubt Oz super still selling.
I mean, I'm sure we'll see an

1442
01:15:32,760 --> 01:15:37,400
updated, updated notice soon.
So I, I don't think OS super

1443
01:15:37,400 --> 01:15:41,280
selling actually means anything
about, about funding or about

1444
01:15:41,280 --> 01:15:45,280
what they're going to do.
I think that's just, Oh yeah, I

1445
01:15:45,320 --> 01:15:48,040
mean, I don't know, I think, I
think OS super just makes, makes

1446
01:15:48,040 --> 01:15:50,320
sort of very simple decisions
like, you know, does did the

1447
01:15:50,320 --> 01:15:52,320
thesis change?
Yes, we're selling.

1448
01:15:52,560 --> 01:15:54,640
I mean, the The thing is,
they're too big to like, you

1449
01:15:54,640 --> 01:15:56,680
know, heaps of big people build
a stake and they change their

1450
01:15:56,680 --> 01:15:58,200
mind, they sell.
But like OS super's too big

1451
01:15:58,200 --> 01:16:02,360
where it's like, yeah, yeah,
they become 20% shareholders in

1452
01:16:02,360 --> 01:16:03,280
these things.
And yeah.

1453
01:16:03,880 --> 01:16:08,360
Yeah, yeah, yeah, yeah, yeah.
I think it's one to keep an eye

1454
01:16:08,360 --> 01:16:12,040
on.
I think this is, I don't think

1455
01:16:12,040 --> 01:16:16,280
the risk reward is worse than
Stanmore if you can work out

1456
01:16:16,280 --> 01:16:17,200
what you think's going to
happen.

1457
01:16:17,200 --> 01:16:20,680
But there's just a lot more
uncertainty as to to as to what

1458
01:16:20,680 --> 01:16:22,720
is likely to happen here than
than with Stanmore.

1459
01:16:22,720 --> 01:16:25,600
I think Stanmore, you can have a
pretty high confidence bet as to

1460
01:16:26,360 --> 01:16:29,680
what's going to happen if they
do win the option for for

1461
01:16:29,680 --> 01:16:32,240
anglers assets.
Whereas this, this, I don't

1462
01:16:32,240 --> 01:16:36,400
know, I mean another cap raise,
another cap raise is I mean you

1463
01:16:36,400 --> 01:16:38,760
have to hope that another cap
raise is off the table, another

1464
01:16:38,760 --> 01:16:40,840
big cap raise of these, but.
Yeah.

1465
01:16:41,240 --> 01:16:44,000
There's there's challenges we
haven't even spoken about, like

1466
01:16:44,000 --> 01:16:46,280
Golden Grove, they've had
seismic issues.

1467
01:16:46,280 --> 01:16:47,880
Yeah, yeah, yeah, yeah, for
some.

1468
01:16:47,880 --> 01:16:53,120
Time that yeah, there's there's
a bit to contend with if you're

1469
01:16:53,120 --> 01:16:54,840
if you're considering that one
well, there's.

1470
01:16:55,200 --> 01:17:00,800
There's, there's also these like
this legacy, legacy traffic year

1471
01:17:00,800 --> 01:17:05,920
stream, which you know, in
essence, like they call it price

1472
01:17:05,920 --> 01:17:07,840
participation.
So they're not getting like full

1473
01:17:07,840 --> 01:17:11,000
market price.
You know, even when that rolls

1474
01:17:11,000 --> 01:17:14,240
off like, you know, still still
a question mark because it's

1475
01:17:14,240 --> 01:17:16,440
been extended in the past
already.

1476
01:17:17,240 --> 01:17:19,200
But yeah, like, like commodity
prices, boom.

1477
01:17:19,200 --> 01:17:21,560
They don't get the full upside
of that because of, you know,

1478
01:17:21,560 --> 01:17:23,160
the instruments that are in the
cap structure here.

1479
01:17:23,160 --> 01:17:27,000
They put out this announcement
on the 16th of April.

1480
01:17:27,640 --> 01:17:29,840
So what was that like like 2
weeks ago?

1481
01:17:29,960 --> 01:17:33,360
And it's it's full of a bunch of
kind of, you know, gibblety

1482
01:17:33,360 --> 01:17:36,120
goose language.
But there's a really important

1483
01:17:36,240 --> 01:17:39,640
diagram in there.
We'll bring it up on screen for

1484
01:17:39,680 --> 01:17:41,080
for the money miners to be able
to see.

1485
01:17:41,080 --> 01:17:46,040
But what like what you can see,
like what you can see there in

1486
01:17:46,040 --> 01:17:49,440
the blue is the what they call
the additional works.

1487
01:17:49,520 --> 01:17:54,640
So that's, that's if I were to
like translate what's, what's

1488
01:17:54,640 --> 01:17:56,600
going there.
The blue development is

1489
01:17:56,600 --> 01:18:01,120
effectively moving the decline
infrastructure towards the

1490
01:18:01,120 --> 01:18:02,720
viewer when you're looking at
that page.

1491
01:18:03,160 --> 01:18:06,840
So you can you can effectively
see that they put the decline in

1492
01:18:06,840 --> 01:18:10,520
the wrong place and you can just
see how much of that Brown

1493
01:18:10,800 --> 01:18:14,520
development, the historical
development is now being made

1494
01:18:14,520 --> 01:18:17,520
redundant.
So, you know, they put the

1495
01:18:17,520 --> 01:18:22,440
decline in the wrong spot.
And and hence Xantho Extended

1496
01:18:22,520 --> 01:18:26,480
has has, yeah, there's, there's
just, there's just been extra,

1497
01:18:26,640 --> 01:18:30,000
extra frustrations there from
what could have been a yeah, a

1498
01:18:30,000 --> 01:18:32,880
nice, a nice sugar hit.
Is is clearly, yeah, it's

1499
01:18:32,880 --> 01:18:35,120
clearly not, not not turning out
to to be what?

1500
01:18:35,120 --> 01:18:36,840
That'll cost.
That'll cost the fortune.

1501
01:18:37,080 --> 01:18:39,920
That that that was the day that
the share price tanked for.

1502
01:18:40,200 --> 01:18:42,400
Yeah, for those without the the
chart in front of them.

1503
01:18:43,280 --> 01:18:48,800
Yeah.
Yeah, well, want to want to keep

1504
01:18:48,800 --> 01:18:51,440
an eye on I think.
Yeah, I agree.

1505
01:18:51,440 --> 01:18:55,040
I think it, I think, I think it
could go either way.

1506
01:18:55,040 --> 01:18:58,720
It's just gonna it's hard to
actually have an asymmetric view

1507
01:18:58,760 --> 01:19:01,960
unless you knew the intentions
of like one specific

1508
01:19:01,960 --> 01:19:03,840
shareholder.
Right, right.

1509
01:19:03,840 --> 01:19:06,400
And the difference between this
and the SMR situation is that I

1510
01:19:06,400 --> 01:19:11,360
think that if this, you know,
part of the, the available

1511
01:19:11,360 --> 01:19:15,320
options, some of some of them
will, will be, will be a, a

1512
01:19:15,320 --> 01:19:16,480
negative for the, for the share
price.

1513
01:19:16,480 --> 01:19:18,720
You know, if they, if they need
to raise $200 million in a cab

1514
01:19:18,720 --> 01:19:20,640
raise, I mean, I, I just can't
see that.

1515
01:19:21,160 --> 01:19:23,040
I can't see that going through
and then supporting the share

1516
01:19:23,040 --> 01:19:24,440
price.
I think, you know, that'd be

1517
01:19:24,440 --> 01:19:29,000
raised at a 20% discount.
Some, you know, in some

1518
01:19:29,000 --> 01:19:31,520
circumstances, the security
funding will then 'cause

1519
01:19:31,520 --> 01:19:32,840
investors to pile in and it'll
RIP.

1520
01:19:32,840 --> 01:19:34,160
I don't think that would happen
in this case.

1521
01:19:34,440 --> 01:19:38,080
Where is the the SMR situation?
I think, I think it's a much

1522
01:19:38,080 --> 01:19:42,680
more, much more clear that the
path to an upside is much more

1523
01:19:42,680 --> 01:19:45,040
clear.
I think it would have to be

1524
01:19:45,640 --> 01:19:48,760
something would have to be quite
a they'd have to really mess it

1525
01:19:48,760 --> 01:19:51,800
up for this to to further hurt
them at what they're currently

1526
01:19:51,800 --> 01:19:53,440
trading at.
Yeah.

1527
01:19:53,560 --> 01:19:57,440
Well, having said all that, like
there, there has just been a

1528
01:19:58,320 --> 01:20:01,720
history of, you know, like
copper, copper deals being done

1529
01:20:01,720 --> 01:20:04,760
at premium to nabs and this this
obviously trades like discount

1530
01:20:04,760 --> 01:20:06,520
to nabs.
So like, you know, there is a

1531
01:20:06,520 --> 01:20:10,360
world where where foreign money,
gold money, like whatever money

1532
01:20:10,360 --> 01:20:12,440
comes in takes a longer term
more patient for you.

1533
01:20:12,440 --> 01:20:14,800
Like there's so many precedent
deals that have that have done

1534
01:20:14,800 --> 01:20:18,840
that on lesser advanced projects
or or you know.

1535
01:20:20,080 --> 01:20:22,360
At at not too dissimilar a
premium multiples didn't have

1536
01:20:22,360 --> 01:20:24,640
them on 29 M trades right now.
So it's not like it's not hard

1537
01:20:24,640 --> 01:20:27,160
to see the upside case and a
corporate can be the price

1538
01:20:27,160 --> 01:20:31,480
setter and and EMR is not going
to get in the way because like

1539
01:20:31,480 --> 01:20:34,280
that fund is no, no, no like
that it needs to close.

1540
01:20:34,280 --> 01:20:38,040
So will boom get in the way?
I don't I don't think so, but I

1541
01:20:38,040 --> 01:20:40,320
don't know like they could if
they if they actually just want

1542
01:20:40,320 --> 01:20:42,520
the whole thing cheaper then it
gets competitive.

1543
01:20:42,520 --> 01:20:46,600
But yeah, I just yeah, I can see
that I can see the asymmetric

1544
01:20:46,600 --> 01:20:50,120
case.
I can also see the the IT feels

1545
01:20:50,120 --> 01:20:52,520
more symmetric than asymmetric,
but yeah.

1546
01:20:53,440 --> 01:20:56,320
Yeah, yeah.
Very good all.

1547
01:20:56,360 --> 01:20:58,920
Righty, my energy.
Thank you for.

1548
01:20:58,960 --> 01:21:00,400
Oh, are you getting?
You're getting rid of me.

1549
01:21:02,640 --> 01:21:03,680
What do you got for US Energy?
Do you?

1550
01:21:03,880 --> 01:21:05,240
Want to go into energy?
Let's do it.

1551
01:21:05,320 --> 01:21:06,560
No, not much.
Not much.

1552
01:21:07,120 --> 01:21:11,440
Another spot of interest.
Oh, it was, it was.

1553
01:21:12,320 --> 01:21:14,360
The problem is it's very
difficult to be an any investor

1554
01:21:14,360 --> 01:21:19,960
at the moment because, because
one tweet from one tweet, one

1555
01:21:19,960 --> 01:21:22,240
tweet from the big man and, and
you're going to get wiped out.

1556
01:21:22,240 --> 01:21:28,240
But I do think that I do think
that over the next year, I

1557
01:21:28,240 --> 01:21:32,000
think, I think it's very
unlikely we return to the same,

1558
01:21:32,200 --> 01:21:34,800
to the same environment we were
in in December and January.

1559
01:21:35,480 --> 01:21:39,800
I think that I think oil prices
are going to be, you know, the

1560
01:21:39,800 --> 01:21:43,960
baseline is not going to be, you
know, 58 for Brent crew, which

1561
01:21:43,960 --> 01:21:47,720
is what we were sort of trending
toward over the next six, 912

1562
01:21:47,720 --> 01:21:49,240
months.
That's not to say that they

1563
01:21:49,240 --> 01:21:52,480
won't come back down.
I think that I think some of the

1564
01:21:52,480 --> 01:21:56,040
supply deficits are being are
being exaggerated.

1565
01:21:56,040 --> 01:21:58,720
And I think I think some of the
demand destruction that's

1566
01:21:58,720 --> 01:22:02,200
already occurring in in parts of
Asia is being underestimated.

1567
01:22:02,960 --> 01:22:08,280
But I think that, yeah, I think
that there's probably, if you

1568
01:22:08,280 --> 01:22:10,960
can find a, if you can find a
cheap producer like I wouldn't

1569
01:22:10,960 --> 01:22:13,640
be, I wouldn't be planning into
something like Woodside or or

1570
01:22:13,640 --> 01:22:17,280
Korean or, or, or you know, the
Australian listed ones.

1571
01:22:17,280 --> 01:22:24,600
But, but cheap sort of upstream
producers I think are I think

1572
01:22:24,600 --> 01:22:26,920
are probably an OK bet over the
next 12 months.

1573
01:22:29,240 --> 01:22:31,520
And JD, you were, you were
looking into this stuff for a

1574
01:22:31,520 --> 01:22:33,200
bit, weren't you?
Yeah, yeah.

1575
01:22:33,320 --> 01:22:37,880
I mean we 6 odd months ago
started looking quite, quite

1576
01:22:37,880 --> 01:22:41,440
hard and in hindsight didn't,
didn't go anywhere near as hard

1577
01:22:41,440 --> 01:22:44,120
as as we wanted.
But to your exact point there,

1578
01:22:44,120 --> 01:22:47,520
the opportunities predominantly
weren't in in Australia that

1579
01:22:47,520 --> 01:22:50,720
were in in other next to the
wood a bit closer to where you

1580
01:22:50,720 --> 01:22:52,720
are.
Some in the North Sea were, were

1581
01:22:52,720 --> 01:22:57,320
were quite interesting despite
onerous tax environments, they

1582
01:22:57,360 --> 01:23:01,640
they just traded so, so cheaply.
But I mean, you, you clearly

1583
01:23:01,640 --> 01:23:05,560
have an attraction to the the
event driven slash Special

1584
01:23:05,560 --> 01:23:08,080
Situations type type
opportunity.

1585
01:23:08,080 --> 01:23:12,080
But I definitely agree with the
the notion that we're not going

1586
01:23:12,120 --> 01:23:15,680
back to the way it was, at least
not for quite some time.

1587
01:23:15,680 --> 01:23:19,760
Like everything we've kind of
taken on board, even if things

1588
01:23:19,760 --> 01:23:25,520
were to magically kind of heal
up, it would take months to work

1589
01:23:25,520 --> 01:23:27,960
its way through.
That said, there, if you go

1590
01:23:27,960 --> 01:23:33,840
down, down, down the curve in
Australia, there are some kind

1591
01:23:33,840 --> 01:23:38,600
of option play type type stocks
if you like that.

1592
01:23:39,680 --> 01:23:41,440
I haven't really moved all that
much.

1593
01:23:42,400 --> 01:23:46,520
I've hardly moved at all.
And I would think their odds of

1594
01:23:46,520 --> 01:23:50,720
success, you know, are better
than what they were 3-4 months

1595
01:23:50,720 --> 01:23:54,200
ago.
Yeah, I mean, I'll throw one out

1596
01:23:54,200 --> 01:23:55,640
there right now.
That sort of stuff like.

1597
01:23:55,640 --> 01:23:59,080
Canarvon is one right now and I
think just if you compare it

1598
01:23:59,080 --> 01:24:02,480
with where where it was 5-6
months ago, it's got a somewhat

1599
01:24:02,480 --> 01:24:06,520
brighter future and it still
trades at like 10 cents or

1600
01:24:06,520 --> 01:24:07,760
whatever.
Yeah, yeah.

1601
01:24:07,760 --> 01:24:10,200
So, so, but the thing that
Australia lacks is they lack.

1602
01:24:10,200 --> 01:24:14,040
So the stuff that I was looking
at in the in the the American

1603
01:24:14,040 --> 01:24:18,480
stuff and the English stuff is
that they have a they have

1604
01:24:18,480 --> 01:24:20,680
companies which are big enough
that they don't have the like

1605
01:24:20,680 --> 01:24:24,880
the drill risk.
But they they were still trading

1606
01:24:24,880 --> 01:24:28,360
at these crazy distress prices,
whereas, you know, Carnarvon is

1607
01:24:29,080 --> 01:24:32,240
Canarvan is still small enough
that that one thing goes wrong

1608
01:24:32,240 --> 01:24:34,760
and you can get wiped out no
matter what the the price of oil

1609
01:24:34,760 --> 01:24:35,960
is.
Very good.

1610
01:24:35,960 --> 01:24:38,880
Thank you, Moz, always great to
chat and love the ideas.

1611
01:24:39,840 --> 01:24:42,320
No worries.
And that is a wrap mate.

1612
01:24:42,760 --> 01:24:45,520
Always great to speak with Moz.
Big thank you to Sandy Ground

1613
01:24:45,520 --> 01:24:48,680
Support and Metals Hub in the
show as well as interlinks

1614
01:24:49,000 --> 01:24:51,560
exceed capital and focus the
platform by Market Tech.

1615
01:24:51,720 --> 01:24:55,800
Hoodoo money minus hoodoo.
Now remember, I'm an idiot.

1616
01:24:56,080 --> 01:24:58,560
JD is an idiot.
If you thought any of this was

1617
01:24:58,560 --> 01:25:01,080
anything other than
entertainment, you're an idiot

1618
01:25:01,440 --> 01:25:02,560
and you need to read out
disclaimer.