Mt Cattlin: The Next Domino Falls

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Righto buddy Miners Thursday,
nearly the bloody weekend it's.

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The last day of the week.
And for?

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US nearly nearly the time that
new shits coming out for Axis

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mine and technology exciting.
Ohh, within the month I can feel

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it.
I could feel it and I'm excited.

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And you'll be hearing it about
here first.

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No, probably other people have
heard it, but like Jesus Christ,

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I can't wait.
Axis, get on it.

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Trusted advisor still on survey
instrumentation.

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Getting a bit.
Sleepless at night, Maddie.

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Oh, I'm so excited.
No, oh not.

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I'll need to get an MMS JV so
I'll get 8 hours sleep.

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People will.
Understand that tomorrow.

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You'll understand that tomorrow,
right?

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What do we got where revisited
min Reds a bit.

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They've poor bastards continue
to get hammered on the share

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price. 31 bucks today.
Far out bloody times can.

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The tide can turn very quickly.
Coronado also hammered today.

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Yeah, a bit more of their their
own kind of doing there did get

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whacked around by some weather
events.

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So it's come off the back of a
production downgrade.

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Yeah, Jay, say you're getting
into the world of bauxite.

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Go Honda Queensland.
Maddie.

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Maddie Metro Mining get going on
mate.

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You are diversifying away from
the merchants and I love it.

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Diversifying.
I love it.

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That's a diversified ATF.
And mount Catlin use out of

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mount.
Catlin proposed care and

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maintenance next year.
So right, let's lay her away.

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Me and Rez bring up the bring up
the Spark chart.

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I think we've got a spark replay
of I guess what's happened to

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the stock.
But yeah, 31 bucks today.

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Yeah, poor Jesus Christ,
considering the highs of 80 odd

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last year, yeah.
I think it I think it touched

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90.
Yeah, it was, it was pretty

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pretty.
It's fall from grace, but that's

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it's leverage, right?
I was just going to have a bit

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more of a chinwag because I just
think it's the most captivating

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mining stock at the moment.
Like, you know, this is yeah,

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like, I mean, we're watching in
real time sort of, you know,

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billions of dollars of market
cap kind of just continue to

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kind of come off, you know, each
seemingly each day or whatever,

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but.
Yeah, the poor Mr Ellison yeah

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on Piper is I think going from
yeah one and a bit billion down

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to 600 million the.
Equity of the.

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Equity value of mid raise a lot
are just huge movements yeah it

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hasn't sold any salts doesn't
matter till you sell it but but

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just on Piper yeah yeah big.
Move and I think a few things

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have happened since we didn't
episode last week on Thursday

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because that was the the day
that they had their earnings

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call and earnings results sort
of went out the evening before

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the the things that have
happened since namely share

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price pelted like 30% lower
since the the pre earnings close

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spark charts pretty you know
that was that was a story there.

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Second thing, I think that that
that's happened since then.

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If if you were reading Bloomberg
last night, you would have seen

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Bloomberg run this story.
It says traffic euro struck $400

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million cash for iron ore deal
with Minrez.

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Now it's it's not often we're
actually onto a scoop before the

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excellent business journals of
Bloomberg, but in this case, the

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readers of our daily email that
director special would have read

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about this eight days before
Bloomberg, because we put the

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rumour in our word on the
decline section in the directors

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special.
So just a reminder to, you know,

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any of the the listeners out
there or viewers out there that

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haven't yet done so if you want
to get big scoops while there's

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still rumours before their
Bloomberg News articles and

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pause the podcast right now,
head to moneyofmine.com.

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Put your email in there, click
the confirmation email that that

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that comes your way and and
you'll get our rumours in your

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inbox every single morning
before they unused.

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I'll still love Bloomberg just
in case they want to buy us

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later.
Relationship.

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Good, you know.
The other thing that's happened

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in the last week is I, I always
sort of brief bounces on way and

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it's, it's you know down US $10
a tonne in kind of no time at

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all.
It's you know about US $92.00 a

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tonne for the 62% fines spot
market on the on the index

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there.
Because it cracked.

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It briefly cracked 100 again,
didn't it?

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But not for frigging long.
And you had the there's even

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like Chinese media describing
the the bounce as irrational.

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That's kind of how it's
interesting to see that sort of

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sort of commentary come out.
And I think like it's, you know,

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it's important that there's a
couple of things got to set the

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record straight on from last
weeks episode number 1.

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I made the unforgivable error of
fucking up my currencies

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fireable error in in banking
that one.

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So if my numbers were a bit off
to those who are really in the

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details because they were off
some.

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And like, for example, one of
the claims I made was the gross

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drawn debt was equal to min
versus market cap in, in, in,

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in, in equity sense.
So which which is not right

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because I, I had in my head the
debt was U.S. dollar denominated

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and scratched that, that was
oddly denominated well in their,

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in their financials.
But kind of interestingly, since

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the, the, you know, since last
week's episode and as, as the

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share prices continue to, to, to
fall off, that claims not too

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far from the truth.
Now, if you, if you, if you

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throw in the, the $1.8 billion
payables into that kind of gross

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debt mix, which is a bit cheeky,
then then yeah, you, you kind of

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that claim kind of stacks up
now, which yeah, kind of didn't,

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didn't a week ago.
But the far more important thing

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though, is than than just, you
know, that silly kind of ratio

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is just, is just min res's
ability to service their debt,

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right?
Like that's what kind of that's

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what the market kind of cares
about is they're going to be

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able to are they going to be
able to service their debt and

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they're going to be able to
generate the free cash flow to

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to, you know, to to pay this
big, big growth kind of mining

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stock story that, you know, that
they that they sort of envisage

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for themselves.
And, and I suspect the share

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price movement of the last week
has has had a lot to do with

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with recalibrations in this
respect, sort of estimations

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from my side in the street.
Just just in in relation to

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this.
I think, I think, you know,

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everyone seems to to be so
bearish.

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I and all kind of all of a
sudden too and and you know and

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that's just that's just kind of
everywhere you look people

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everyone just talking about how
bearish they are and all kind of

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sort of all all happened at once
pretty quickly there.

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And I've seen some numbers in
the street forecasting means

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peak net debt to EBITDA reach
6.8 times in in FY25.

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It's pretty pretty hefty.
But you can imagine just how

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sensitive like that ratio is to
any changes in commodity price

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because that that hits you, you
actually, but during the day.

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And I think finally, I thought
it'd be worth just sharing a

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couple of tweets I've seen the
last few days.

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As you know, there's a few kind
of doing the rounds.

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You've got Emmanuel debt he
posted today.

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Never underestimate how quickly
the market can rage quit and

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over leveraged cyclical when the
tide goes out.

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So is is that sound?
Like when it is when it turns,

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it turns freaking quickly and
like, yeah, destructively.

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Yeah, it's and I mean his point
there is an over leverage

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cyclical and like I think that's
a fair characterization because

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yeah, like because they're the
the the leverage is, is what it

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is, you know, picking up
whatever 6.8 times if that

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numbers are out or whatever.
Like it just because there's so

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much dead in there.
Like we we know leverage

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amplifies the upside when the
times are good, but also

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amplifies the downside.
It's and that and that point's

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kind of teased out in this this
next week from David Beth and

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Jones.
He goes what it looks like when

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the balance sheet is, is more
your problem rather than just

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the commodity price moving
around.

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And this is a really interesting
chart because sort of indexes,

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you know, Rio BHP Champion 9 FMG
to Terra Min Res all to the 62%

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kind of fines price.
And you know, you can in the

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kind of indexes the most in sort
of 2022 and it's it's pretty

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stark what you can see there is
like this just absolutely kind

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of amplified downside response
in the latest kind of trend

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downwards in the in, in on oil
price and that's just that's

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leverage to the downside.
Yeah.

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How much do you reckon is what
are you, what are you

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attributing to the the thoughts
that they might have to capital

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rise to get themselves out of it
being?

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Is there a bit of that being
attributed to the sell down as

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well or what?
What's the talk on the street?

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I mean, maybe like I don't, I, I
don't know if they, if you, if

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your first protocol is, is a cap
raise, you'd probably look to,

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you know, address some of those
sell down opportunities that we

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discussed last week as opposed
to to cap raise straight away.

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So I don't necessarily, I just
think it's, it's really like

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everyone's, everyone's looked at
the, the earnings numbers and

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everyone's got got me thrown off
guard.

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No one kind of all the operating
cash flow was basically just

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trade payables build up to like
the, the, the, you know, there

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was a lot to be said for, for
the, for the, for the lithium

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kind of real, real production
numbers and all that sort of

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stuff.
And, and how that's unfolding.

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I think 3 the real the real is
the realisations on the

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production at at Onslow was
probably lower than people were

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expecting.
Just like what what realisation

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were they getting on the, on the
index compared to what people

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are factoring in and kind of
how's all that, that flow in?

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But you know, more than any of
that, it's just your final price

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goes down by 10% in the week
like it did well, someone that's

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like, you know, got six times
like net debt ratio peak

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whatever it's gonna it's gonna
go down by a lot more than 10%

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like because you leveraged.
I think you should add .4 was

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the the CapEx number.
What they still need to spend,

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you know, 1.95 billion Aussie
over the FY25 was also

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substantially higher than what
people had estimated.

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Yes, yeah, yeah.
And there's, yeah, there's,

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there's, there's like a bunch of
other considerations too, Like

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they're not immune from kind of
fluctuations in, in FX as well.

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I mean, the debt's denominated
in a lot of its denominated U.S.

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dollars.
What happens if if demand for

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and all kind of rolls off a bit,
then what does that do to the

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Aussie dollar and what, you
know, when their cost is

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denominated Aussie dollars?
What does that, what does that

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mean for, for men's as well?
They can kind of cop it up from

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a few different angles.
If, Yeah, final demand sort of

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Peters out for for extended
period of time.

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Yeah.
So look all eyes on them that

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this is maintain the most
interesting corporate.

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Story would it have to this
would have to be the one of the

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more critical points of their
whole not too up on the min rest

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long term history, but this
would have have to be one of the

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most critical times in their
their existence.

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While they've been the size they
they are for sure.

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Well, you think of just the,
what is it plus 20% return on

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capital invested capital for so
long.

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They've obviously grown, grown,
grown, grown.

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But yeah, this is a point where
it's just really flipped.

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I'd love to know if there was
any other time in history of min

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res when, when they're under
this sort of pressure relative

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to the size they are.
This would have to be up there

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there.
Yeah, they've never really been

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been of this scale as a company
sort of grows.

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So if you frame it like that,
definitely, I'm sure any company

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over a, you know, 30 year
history is going to have points

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that are touching go, especially
in a cyclical industry in which

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we're in.
You know, you're gonna but

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they've become more and more the
the owner of mines rather than

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just the the person with the
contract to operate them.

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So that puts them at, you know,
more of the whims of the

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cyclical prices.
What do you think's their first?

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Besides selling down those
lithium stakes that are doing

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nothing?
What about on the project level?

222
00:11:39,040 --> 00:11:43,720
What do you think their first
port to call to potentially sell

223
00:11:43,720 --> 00:11:47,840
some to get something?
What do you think that first

224
00:11:47,880 --> 00:11:50,480
bits are if I mentioned it in
the call?

225
00:11:50,480 --> 00:11:52,200
Yeah.
If I were them like I wouldn't,

226
00:11:52,280 --> 00:11:55,760
I'd actually, I actually think
I'd get Max value by packaging

227
00:11:55,760 --> 00:11:59,040
all the lithium together and
selling down 49% of that.

228
00:11:59,040 --> 00:12:00,480
That's what I'd do.
Like the whole lot.

229
00:12:01,520 --> 00:12:03,800
As opposed to an, you know an at
an individual.

230
00:12:03,840 --> 00:12:05,720
Asset level exactly.
Yeah, just call it.

231
00:12:05,880 --> 00:12:09,240
And then it kind of sets you up
to the ability to down the track

232
00:12:09,240 --> 00:12:12,560
even sort of spin out your your
remaining kind of controlling

233
00:12:12,560 --> 00:12:14,760
interest in that lithium
business and things like that

234
00:12:14,760 --> 00:12:17,000
where you could get a a rewrite
on, on, on that.

235
00:12:17,000 --> 00:12:20,520
But yeah, I would, I would do a
minority sell down of the entire

236
00:12:20,520 --> 00:12:21,880
lithium business.
I think that would get Max

237
00:12:21,880 --> 00:12:25,960
value.
Is that is that easy enough done

238
00:12:25,960 --> 00:12:31,520
when you've got JV's with
Albemarle and gang fan and then

239
00:12:31,520 --> 00:12:33,720
you get into JV on your side as
well?

240
00:12:33,720 --> 00:12:34,840
It's.
Not easy, but.

241
00:12:34,840 --> 00:12:36,560
Make it a bit complex I would
assume.

242
00:12:36,560 --> 00:12:38,440
It's not easy, but it's happened
before like.

243
00:12:38,600 --> 00:12:41,360
You'd be the teleson, You'd be
the Tianchi.

244
00:12:41,360 --> 00:12:44,200
Sorry, exactly.
And Teleson with the 26%.

245
00:12:44,240 --> 00:12:46,560
You'd be the tlar become the
tlar.

246
00:12:46,560 --> 00:12:48,600
Yeah, you could.
Dominant party partner in that,

247
00:12:48,600 --> 00:12:50,280
though, yeah, as we've learned
is important.

248
00:12:50,360 --> 00:12:52,200
Yeah.
Yeah, yeah.

249
00:12:53,160 --> 00:12:57,520
TLEA becomes, you know what, Min
Well Min Res, lithium, Australia

250
00:12:57,520 --> 00:13:00,640
tie and then yeah, min res are
in 51% of that.

251
00:13:01,080 --> 00:13:05,240
Yeah, but the very way they the
the random one to lift the

252
00:13:05,240 --> 00:13:08,760
bloody market gap for them is a
bloody big humdinger of an

253
00:13:08,760 --> 00:13:12,400
exploration discovery that had
that had changed the bloody

254
00:13:12,400 --> 00:13:16,440
thematic probably just need to
bloody get drilling and every

255
00:13:16,440 --> 00:13:21,240
driller that's could do it.
It's going to be at the 80th

256
00:13:21,240 --> 00:13:24,480
Drill 24 conference.
Let's bloody get put a bit more

257
00:13:24,480 --> 00:13:29,680
positivity into it.
Perth 15th to 17th of October,

258
00:13:30,040 --> 00:13:30,680
but not.
Far.

259
00:13:31,280 --> 00:13:35,320
Away oh mate, I cannot wait to
be in a room full of drillers.

260
00:13:35,320 --> 00:13:38,840
I'm going to get a full sleeve
tap when I when I rock up mate,

261
00:13:39,000 --> 00:13:42,840
you want to see the latest and
most exciting drilling

262
00:13:42,840 --> 00:13:45,440
technology going around.
You want to know who the who's

263
00:13:45,440 --> 00:13:48,720
who are in the drilling industry
mate, all going to be in run one

264
00:13:48,720 --> 00:13:50,120
room.
We're going to be there.

265
00:13:50,200 --> 00:13:53,000
We're all gonna be there.
This is gonna be there K drills

266
00:13:53,000 --> 00:13:55,640
gonna be there.
You can meet rhino and druba

267
00:13:56,000 --> 00:13:58,560
mate.
Bloody CRE insurance is gonna be

268
00:13:58,560 --> 00:14:01,280
there like it's like a bloody
sponsor field day for.

269
00:14:01,280 --> 00:14:04,240
US Money Mine Festival I.
Think I'm.

270
00:14:04,440 --> 00:14:08,360
I think I'm even doing like a
pre start in the morning on the

271
00:14:08,360 --> 00:14:10,320
mic and maybe some panels after
lunch.

272
00:14:10,320 --> 00:14:13,040
The lunchtime post post
lunchtime panels might be

273
00:14:13,040 --> 00:14:15,040
interesting after.
I've had a few points with Druba

274
00:14:15,920 --> 00:14:17,840
but mate link is in the show
notes.

275
00:14:17,840 --> 00:14:21,720
Get your tickets 15th to 17th of
October and it is going to be a

276
00:14:21,720 --> 00:14:23,680
Corker.
Can't wait.

277
00:14:23,800 --> 00:14:26,640
It's bloody.
Oh, it's very exciting.

278
00:14:26,640 --> 00:14:29,400
Cheers idea.
I love a good, I love a good

279
00:14:29,400 --> 00:14:32,120
conference.
I'd rather the conference not to

280
00:14:32,120 --> 00:14:36,040
be in Perth maybe, but.
Anyway, who knows, and I'm a as

281
00:14:36,040 --> 00:14:38,240
we know, Ding Ding on on Mens as
well.

282
00:14:38,240 --> 00:14:40,680
But moving, moving right on from
that bit of I.

283
00:14:40,800 --> 00:14:42,080
Thought you're going to say
idea.

284
00:14:42,200 --> 00:14:45,280
No.
All righty, all right.

285
00:14:46,640 --> 00:14:49,160
Unfortunately not.
More positive news, but so.

286
00:14:49,200 --> 00:14:51,600
We need ads to make it like just
to lift.

287
00:14:51,720 --> 00:14:53,960
The lift the spirits there's.
Just the energy shit.

288
00:14:54,040 --> 00:14:56,840
Ally will be talking about
something a bit more positive in

289
00:14:56,840 --> 00:14:59,080
a moment, but we're going to
talk about Arcadia and Lithium

290
00:14:59,240 --> 00:15:03,600
first, obviously owners of Mount
Catlin following the.

291
00:15:04,520 --> 00:15:05,640
Merger.
Merger of mergers.

292
00:15:05,800 --> 00:15:07,120
Exactly.
Well, said Maddie.

293
00:15:07,120 --> 00:15:11,040
So yeah, unfortunately Mount
Catlin is going on care and

294
00:15:11,040 --> 00:15:12,360
maintenance.
I think the writing was kind of

295
00:15:12,360 --> 00:15:14,600
on the wall.
After what Paul Graves, the boss

296
00:15:14,600 --> 00:15:18,200
there said around about the time
of diggers, just sort of

297
00:15:18,200 --> 00:15:21,600
indicating that these these
lithium prices really hurt.

298
00:15:21,600 --> 00:15:26,600
So the the timing of care and
maintenance is after they've

299
00:15:26,600 --> 00:15:29,440
completed stage 3 mining and oil
processing, which will come in

300
00:15:29,440 --> 00:15:31,680
the first half of next calendar
year.

301
00:15:31,680 --> 00:15:35,440
So there's no word on how many
jobs are going to go.

302
00:15:35,440 --> 00:15:38,120
They've they've sort of said
that they don't intend to close

303
00:15:38,440 --> 00:15:40,560
Mount Catlin.
This is care and maintenance.

304
00:15:40,560 --> 00:15:43,440
There will be more details
coming at the Investor Day on

305
00:15:43,440 --> 00:15:45,360
the 19th of September, I
believe.

306
00:15:45,360 --> 00:15:48,400
But just, you know, we send our
thoughts out to to all those

307
00:15:48,400 --> 00:15:51,880
affected by this obviously a
pretty tough time for for

308
00:15:51,880 --> 00:15:54,880
Ravensthorpe and the obviously
the the broader mining community

309
00:15:55,280 --> 00:15:58,440
right now, but.
Yeah, especially Raven saw

310
00:15:58,440 --> 00:16:00,800
considering first quantum shut
as well.

311
00:16:00,960 --> 00:16:03,760
Yeah, now this one.
And like, you know, this was how

312
00:16:03,760 --> 00:16:05,920
quick it can turn like they were
considering like doing

313
00:16:05,920 --> 00:16:09,040
underground feasibility studies
or starting to look down that

314
00:16:09,040 --> 00:16:12,160
road for Mount Catlin.
So and it goes from potentially

315
00:16:12,160 --> 00:16:14,800
going deeper to care and
maintenance.

316
00:16:14,800 --> 00:16:16,520
It's fuck.
Jesus Christ.

317
00:16:16,520 --> 00:16:18,840
Maybe look at how much the
independent expert valued Mount

318
00:16:18,840 --> 00:16:20,640
Catlin on when they did the the
deal.

319
00:16:21,960 --> 00:16:24,840
It was something like US 600
million bucks or something like

320
00:16:24,920 --> 00:16:25,480
that.
Wow.

321
00:16:26,000 --> 00:16:27,600
It's wild because what did it
have?

322
00:16:27,640 --> 00:16:29,720
4-4 odd years of mine life,
something like.

323
00:16:29,800 --> 00:16:32,920
That, yeah, plus the, you know,
potential to go deeper.

324
00:16:32,960 --> 00:16:34,920
Yeah, of course.
So I think they're actually

325
00:16:35,000 --> 00:16:37,360
they're going to continue to do
that sort of stuff in the

326
00:16:37,360 --> 00:16:39,560
background, but that's not
helping anyone right now.

327
00:16:39,560 --> 00:16:41,120
They did wrap a couple numbers
around it.

328
00:16:41,120 --> 00:16:45,320
They said this expects to
increase net expected cash flow

329
00:16:45,320 --> 00:16:50,080
over 24 and 25 by cumulative
approximate US 75 to 100.

330
00:16:50,080 --> 00:16:51,920
So I guess that kind of gives
you an indication of how much

331
00:16:51,920 --> 00:16:55,320
money was going out the other
way prior to this decision.

332
00:16:55,400 --> 00:16:58,080
I think it you know, taking a
step back from Arcadium and

333
00:16:58,080 --> 00:17:01,920
looking at the at the leaf
industry more broadly, it is

334
00:17:01,920 --> 00:17:05,920
interesting we're seeing a bit
of a supply response now across

335
00:17:05,920 --> 00:17:08,960
the industry.
So the numbers were very up and

336
00:17:08,960 --> 00:17:11,599
down at Mount Catlin, you know,
over the calendar year 23 is

337
00:17:11,599 --> 00:17:17,880
240,000 tonnes, 5.3% spod.
FY24 was sort of circa 130,000.

338
00:17:18,480 --> 00:17:21,800
You know, we've seen I mean res
we were talking about just

339
00:17:21,800 --> 00:17:26,760
before Matt Marion that their
50% is going to come down from

340
00:17:26,760 --> 00:17:32,200
220,000 tonnes to 160,000.
So there's a step down there.

341
00:17:32,200 --> 00:17:35,680
But on the other hand we've seen
pill Gangora that's going up to

342
00:17:35,720 --> 00:17:39,720
825.2% stuff.
So that's at 120,000 tonne

343
00:17:40,240 --> 00:17:42,840
increase in the market.
Green bushes were talking about

344
00:17:42,840 --> 00:17:46,400
another sort of roughly 100,000
said those ones.

345
00:17:46,400 --> 00:17:48,520
You know, in WA they kind of
sound like they're, they're

346
00:17:48,520 --> 00:17:51,240
netting themselves off, but
you've got also Mount Holland

347
00:17:51,680 --> 00:17:54,240
adding a few more as they they
ramp up.

348
00:17:54,240 --> 00:17:58,720
So things are kind of happening.
You know, there are, you know, a

349
00:17:58,760 --> 00:18:01,440
supply response, but it's
definitely not even across the

350
00:18:01,440 --> 00:18:05,000
board and it's definitely not
what I would have expected to

351
00:18:05,000 --> 00:18:07,800
happen with prices coming off
over 90%.

352
00:18:07,800 --> 00:18:10,520
I think there's unfortunately
still a bit more to come.

353
00:18:10,520 --> 00:18:12,600
You've got, you know, we haven't
even mentioned Kathleen Dowley

354
00:18:12,600 --> 00:18:14,880
still still coming online, you
know.

355
00:18:14,880 --> 00:18:16,240
Yes.
They haven't even started

356
00:18:16,400 --> 00:18:18,600
stopping yet a lot.
I think they've got their open

357
00:18:18,600 --> 00:18:20,760
pit or they're running through
at the moment.

358
00:18:20,760 --> 00:18:22,800
I think that they produce
10,000.

359
00:18:22,880 --> 00:18:24,440
First shipment that's going to
go out next month.

360
00:18:24,440 --> 00:18:26,480
That's just got announced
yesterday, yeah.

361
00:18:27,040 --> 00:18:30,120
I reckon look at that bloody
tent there, that the stockpile

362
00:18:30,120 --> 00:18:35,040
of spot it just for when you
think about the whole thing,

363
00:18:35,040 --> 00:18:36,840
what they would have went
through to get that fucking

364
00:18:36,840 --> 00:18:40,400
flotation working and just
everything, just to see that

365
00:18:40,400 --> 00:18:45,960
pile of dirt, you'd be like, oh
thank fuck it worked like good

366
00:18:46,000 --> 00:18:47,720
on.
It's a bit of a win worth, worth

367
00:18:47,720 --> 00:18:49,840
sort of celebrating, but they've
got a lot of work ahead of them

368
00:18:49,840 --> 00:18:52,320
obviously and they need a few
things to to go in their favour.

369
00:18:52,320 --> 00:18:56,880
So that's the well 130,000 tonne
here, but not really moving the

370
00:18:56,880 --> 00:19:00,520
needle in terms of what's coming
out of the market.

371
00:19:00,840 --> 00:19:04,080
As you said, I think there's if
there's going to be a the supply

372
00:19:04,240 --> 00:19:06,560
response and curtailing, there'd
be a lot more to come to

373
00:19:06,560 --> 00:19:09,720
actually affect things from pure
supply.

374
00:19:10,000 --> 00:19:11,680
Absolutely.
And as we'll get into the

375
00:19:11,680 --> 00:19:13,400
fortunately.
Then there's the demand side

376
00:19:13,400 --> 00:19:16,360
too, right and and like it's
easy when things are dire, it's

377
00:19:16,360 --> 00:19:19,040
kind of easy to forget that the
the demand story for lithium is

378
00:19:19,040 --> 00:19:22,200
still like like as far as
comparing all the commodities,

379
00:19:22,200 --> 00:19:25,080
it's still like really freaking
like got a tremendous a serious

380
00:19:25,080 --> 00:19:26,240
forecast growth right which.
Is.

381
00:19:26,320 --> 00:19:26,960
Oh yeah.
Shit.

382
00:19:26,960 --> 00:19:29,320
So, you know, the demand can
catch up the supply and catch

383
00:19:29,320 --> 00:19:31,080
people off guard on the other
side of things, but it doesn't

384
00:19:31,080 --> 00:19:32,640
look like it's in the short
term.

385
00:19:32,840 --> 00:19:34,880
Yeah, yeah.
And it's like who can survive?

386
00:19:35,160 --> 00:19:39,200
It's about surviving like to
because as soon as you go into

387
00:19:39,200 --> 00:19:43,000
care and maintenance like you're
it's the the race start.

388
00:19:43,000 --> 00:19:44,400
Like you can't just turn it back
on.

389
00:19:44,680 --> 00:19:47,400
Yeah, and you got to retrench
people then you got to re

390
00:19:47,400 --> 00:19:50,440
recruit.
And it is such a fucking hard,

391
00:19:50,440 --> 00:19:53,720
like a big decision to make.
I reckon Arjun Murdi, who we

392
00:19:53,720 --> 00:19:56,480
spoke with a couple weeks ago,
he sort of, you know, put it in

393
00:19:56,480 --> 00:19:58,280
the best words.
I really loved how he sort of

394
00:19:58,280 --> 00:20:00,360
expressed obviously talking
about oil and gas companies, but

395
00:20:00,760 --> 00:20:03,880
just the contract concept.
Of fortress balance sheet and

396
00:20:03,880 --> 00:20:06,480
you want that defensibility when
you're in a cyclical industry

397
00:20:06,480 --> 00:20:09,760
and that really, really stood
out as a takeaway from that one.

398
00:20:09,760 --> 00:20:11,960
And you know Pilgrim Minerals,
yeah.

399
00:20:12,040 --> 00:20:15,360
And for people, yeah, I mean, W
farmers have got a big balance

400
00:20:15,360 --> 00:20:17,000
sheet as well for yeah, for
Mount Holland.

401
00:20:17,000 --> 00:20:20,840
Silver minerals, is that good?
They're still expanding without

402
00:20:20,840 --> 00:20:21,920
dilution.
Yeah.

403
00:20:22,040 --> 00:20:23,840
Yeah, exactly.
So I'm sure that.

404
00:20:23,840 --> 00:20:27,720
Picture as well or that the
graph rather in that the the

405
00:20:27,760 --> 00:20:30,760
city report that came up the
other day as well basically

406
00:20:30,760 --> 00:20:35,520
saying yeah, basically saying at
current spot pluses only green

407
00:20:35,520 --> 00:20:39,760
bushes kind of marginally makes
a bit of money and no one else

408
00:20:39,760 --> 00:20:42,400
does.
Yeah, yeah, that's crazy.

409
00:20:42,640 --> 00:20:43,800
That's such a Flack.
Oh skirt.

410
00:20:43,840 --> 00:20:46,160
Now if you'd have what?
What's making money?

411
00:20:46,160 --> 00:20:51,960
Green bushes and yeah, stuff out
of the out of karma like so I

412
00:20:52,000 --> 00:20:53,720
think.
I think people will be keen to

413
00:20:53,720 --> 00:20:56,080
hear a bit more and we actually
spoke a lot about it in a

414
00:20:56,120 --> 00:20:58,480
interview that we're going to
check up tomorrow.

415
00:20:58,480 --> 00:21:01,440
And yeah, one of the the key
elephants in the room that we

416
00:21:01,440 --> 00:21:03,880
haven't spoken about is what
happens to lipid light

417
00:21:03,880 --> 00:21:07,640
production out of China.
And that, you know, we don't

418
00:21:07,640 --> 00:21:10,760
know, but something could happen
on that front and it speaks for

419
00:21:10,760 --> 00:21:14,680
a large portion of supply.
And you know, as Minarez again,

420
00:21:14,680 --> 00:21:16,960
case in point, things can move
bloody quickly in in

421
00:21:16,960 --> 00:21:19,280
commodities.
Well, and the consensus was it's

422
00:21:20,120 --> 00:21:23,560
still gone a little bit, a lot
of production, yeah, still shit

423
00:21:23,560 --> 00:21:25,360
load of it.
Yeah, be surprised.

424
00:21:25,360 --> 00:21:28,040
Like who would have thought that
one a year ago that they'd still

425
00:21:28,040 --> 00:21:30,720
be churning out at 700 roughly
bucks.

426
00:21:30,920 --> 00:21:32,680
Yeah, that's crazy.
I think there's a, there's a

427
00:21:32,680 --> 00:21:35,320
couple other takeaways that are
kind of interesting as well.

428
00:21:35,640 --> 00:21:39,640
One perhaps a bit of a smaller
one, but NWH or that's the

429
00:21:39,760 --> 00:21:42,840
that's the tick over NRW the the
contractor they signed just a

430
00:21:42,840 --> 00:21:47,680
year ago a $332 million three
year contract there.

431
00:21:47,680 --> 00:21:51,560
So if you do just a bit of rough
maths on their EBIT, EBITDA

432
00:21:51,600 --> 00:21:57,320
margin, that is a $7.5 million
loss for the calendar year, a

433
00:21:57,560 --> 00:21:59,480
bit more given not too far into
it.

434
00:21:59,480 --> 00:22:04,960
So that kind of is roughly a bit
under 5% of their EBITDA for if

435
00:22:04,960 --> 00:22:08,160
you look at the FY24 numbers.
So it's a bit of a hit.

436
00:22:08,160 --> 00:22:10,360
They actually haven't mentioned
anything about it.

437
00:22:10,360 --> 00:22:12,760
I guess they kind of deem it
immaterial at this point in

438
00:22:12,760 --> 00:22:15,640
time.
And the other point that I

439
00:22:15,640 --> 00:22:19,640
wanted to talk about is wage
pressures, wage inflation or

440
00:22:19,640 --> 00:22:22,560
deflation now across the, the
mining industry.

441
00:22:22,560 --> 00:22:24,880
And we'll pick up a chart here
that I, that I came across that

442
00:22:24,880 --> 00:22:27,840
I think is really interesting.
You can really see that wages

443
00:22:27,840 --> 00:22:28,960
are starting to go the other
way.

444
00:22:29,360 --> 00:22:31,760
You know, it's a trend that's
really turned since sort of

445
00:22:32,240 --> 00:22:36,000
2020-2021 period.
It was, it was only going up and

446
00:22:36,000 --> 00:22:38,960
then very sharply it's, it's
pulled the other way.

447
00:22:38,960 --> 00:22:42,760
And I think there's a, a few 2nd
order effects of this that we

448
00:22:43,160 --> 00:22:45,040
will see.
But you know, first and

449
00:22:45,040 --> 00:22:47,840
foremost, hopefully that allows
the the mining companies to have

450
00:22:47,840 --> 00:22:50,880
a bit more breathing room and
see themselves through the the

451
00:22:50,880 --> 00:22:53,680
downturn.
I think I was speaking to some,

452
00:22:53,680 --> 00:22:56,400
I was speaking to a project
manager for a mining contractor

453
00:22:56,400 --> 00:22:59,000
actually the other week and
asked this specific question.

454
00:22:59,000 --> 00:23:02,280
I said, have you as there is the
ball getting back in your court

455
00:23:02,280 --> 00:23:09,240
yet for wages, because you know,
when there was that deficit of

456
00:23:09,400 --> 00:23:12,080
workers and you know, people and
it was happening.

457
00:23:12,360 --> 00:23:16,680
I think when I left, like before
I left and then it kept going

458
00:23:17,040 --> 00:23:19,720
where, you know, people are
getting paid and seen in amounts

459
00:23:19,720 --> 00:23:22,400
of money to go to a new job.
And just that was how you

460
00:23:22,400 --> 00:23:25,080
attracted people was buying more
to get them from somewhere else.

461
00:23:25,520 --> 00:23:27,920
And once you're at that level,
it's hard.

462
00:23:27,920 --> 00:23:30,600
It's very hard for the companies
to just say we're just cutting

463
00:23:30,600 --> 00:23:34,000
wages across the board and takes
a because then you just people

464
00:23:34,000 --> 00:23:37,960
might leave for somewhere else.
But it's at the point now where

465
00:23:37,960 --> 00:23:41,840
you know, people are coming into
it's like, look, you're, you're

466
00:23:41,840 --> 00:23:45,600
not as financially important as
you once thought you were

467
00:23:45,600 --> 00:23:48,480
sunshine.
So you're going to be going back

468
00:23:48,480 --> 00:23:51,440
down to here because you're
getting paid this, but you're

469
00:23:52,200 --> 00:23:56,840
performing at this level.
So, And so the power has gone

470
00:23:56,840 --> 00:24:01,600
back to the the contractors in
the companies, not the actual

471
00:24:01,920 --> 00:24:06,400
workers, which is just a a cycle
that will go on for the forever

472
00:24:06,400 --> 00:24:10,600
in time in mining.
But that will, yeah, as you

473
00:24:10,600 --> 00:24:13,480
said, there's usually a bit of a
delayed response, but then it's

474
00:24:13,480 --> 00:24:17,040
sort of, but it can happen just
so quickly when it turns the

475
00:24:17,040 --> 00:24:19,800
other way, so.
Yeah, but, and it can be, you

476
00:24:19,800 --> 00:24:23,040
know, it's a bit grim to think
about, but it can be wage cuts

477
00:24:23,040 --> 00:24:24,920
across the border, it can be a
lot of job cuts.

478
00:24:24,920 --> 00:24:27,760
So there's a few ways to kind of
frame it and.

479
00:24:27,760 --> 00:24:30,800
Yeah.
And then, but then the when

480
00:24:30,800 --> 00:24:32,760
you've got the job cuts and
you've got more people applying

481
00:24:32,760 --> 00:24:37,160
for jobs, you've usually got the
you can get them for cheaper.

482
00:24:37,200 --> 00:24:39,280
Yeah, exactly.
And pick the cream of the cop

483
00:24:39,280 --> 00:24:40,680
too.
Yeah, exactly it.

484
00:24:40,760 --> 00:24:42,600
Was one of the one of the
takeaways I had even listening

485
00:24:42,600 --> 00:24:46,320
to the mid race call this week
was like, you know, hearing the

486
00:24:46,320 --> 00:24:50,120
apprehension that that Chris has
in, in laying off like, you

487
00:24:50,120 --> 00:24:54,520
know, skilled labour because
it's the it's the consistency of

488
00:24:54,520 --> 00:24:57,400
the same person rocking up to
the same site over a long period

489
00:24:57,400 --> 00:24:58,840
of time that drives the
efficiencies.

490
00:24:59,400 --> 00:25:02,960
And so, you know, yeah, I think
that just speaks to the more

491
00:25:02,960 --> 00:25:05,480
friction that there is when it
comes to putting putting an

492
00:25:05,480 --> 00:25:06,920
asset on care and maintenance
things like.

493
00:25:07,040 --> 00:25:09,840
That oh shit, yeah and I and I
think a lot of the mid minres

494
00:25:10,720 --> 00:25:13,840
looking from the outside and I
think minres is like it's a it's

495
00:25:13,840 --> 00:25:16,480
a bit of a go getter culture a
lot there's a certain people

496
00:25:16,480 --> 00:25:20,080
that work there.
It's not a bloody, I think it's

497
00:25:20,080 --> 00:25:22,720
a bit different to BHP law.
You expected to go there and

498
00:25:22,720 --> 00:25:25,680
bloody work.
So when you you lose those

499
00:25:25,680 --> 00:25:28,000
people and then you have to ramp
up again if you can't get those

500
00:25:28,000 --> 00:25:30,880
people.
And it's retaining that quality

501
00:25:31,200 --> 00:25:36,920
is so important for longevity.
But when you're in the not, not

502
00:25:36,920 --> 00:25:41,000
survival mode, but like really
austerity sensitive times like

503
00:25:41,000 --> 00:25:44,280
this when you're fucking like,
yeah, what do you do?

504
00:25:44,640 --> 00:25:46,200
So.
Yeah.

505
00:25:46,520 --> 00:25:48,760
The decision gets made.
Bloody morning contractor.

506
00:25:48,800 --> 00:25:50,880
Jeez, that's even worse than
bloody iron in the morning, I

507
00:25:50,880 --> 00:25:54,920
reckon.
Oh I can't bloody do.

508
00:25:54,920 --> 00:25:59,040
You reckon Mount Catlin would
get snapped up?

509
00:25:59,120 --> 00:26:00,200
It's going to ask you that one,
Maddie.

510
00:26:00,200 --> 00:26:02,360
What do you reckon?
No.

511
00:26:04,000 --> 00:26:06,160
Would they pivot?
Would they pivot?

512
00:26:06,600 --> 00:26:08,600
Yeah, that's probably not a bad
idea actually.

513
00:26:08,600 --> 00:26:12,400
Rivo bit of infrastructure.
There you can repurpose

514
00:26:12,400 --> 00:26:14,160
infrastructure.
How would you go about?

515
00:26:14,160 --> 00:26:16,960
It no shame in pivoting the gold
or uranium.

516
00:26:17,800 --> 00:26:21,400
Or antimity.
Or antimity right well that well

517
00:26:21,400 --> 00:26:25,560
OK, if you're going to go across
all niobium or you could go

518
00:26:25,800 --> 00:26:28,000
fucking everyone's chucking a
resource of that out at the

519
00:26:28,000 --> 00:26:31,840
moment.
Bloody get K drill to start

520
00:26:31,840 --> 00:26:34,680
pepper and holes down there
assay for everything.

521
00:26:34,880 --> 00:26:36,920
I think that's the best chance
to revive the.

522
00:26:37,000 --> 00:26:39,480
Full elemental.
Chart full elemental bloody

523
00:26:39,480 --> 00:26:42,440
analysis.
Just bloody assay and diamonds.

524
00:26:42,440 --> 00:26:45,600
Kaydrill ripping them in there
the right that'll I reckon.

525
00:26:45,800 --> 00:26:49,880
Kaydrill could be integral for
the rebirth of Ravensault, I

526
00:26:49,880 --> 00:26:52,040
think.
Go bloody and pinch first

527
00:26:52,040 --> 00:26:56,440
quantum What pinch bloody first?
Quantums one down there too, but

528
00:26:56,440 --> 00:26:58,520
nickel usually gold around
nickel.

529
00:26:58,800 --> 00:27:01,720
Just start peppering the joint.
I think the only way for us to

530
00:27:01,720 --> 00:27:06,320
get out of this glut is K drill
expiration.

531
00:27:07,120 --> 00:27:09,840
The money you'd save employing
get K drill down there.

532
00:27:10,240 --> 00:27:11,880
You can you pick up man,
Caitlin.

533
00:27:11,920 --> 00:27:13,040
Yeah.
Exactly.

534
00:27:13,040 --> 00:27:15,880
Go bloody.
They're at drill 24 as well.

535
00:27:15,880 --> 00:27:18,840
Go bloody, go mate.
And we're actually selling free

536
00:27:18,840 --> 00:27:22,040
tickets.
Come have a pint with me.

537
00:27:22,040 --> 00:27:25,080
Druber and Ryan O'Sullivan.
We got I'm doing an event.

538
00:27:25,480 --> 00:27:28,240
What a bloody honour.
Come back, come meet the guns.

539
00:27:28,240 --> 00:27:31,640
Absolute JC's are blacks.
Arsene Diamond drilling experts.

540
00:27:31,800 --> 00:27:33,360
OK, get them down at Ravo.
Ravo.

541
00:27:33,360 --> 00:27:37,400
We're trying to get the bloody
the ads to keep some positive.

542
00:27:38,040 --> 00:27:40,560
Yeah, it's.
Slowly increasing as the show

543
00:27:40,600 --> 00:27:45,600
goes.
JC Bauxite.

544
00:27:46,080 --> 00:27:51,000
She's I love bauxite.
So this bauxite in Queensland,

545
00:27:51,000 --> 00:27:56,880
So Metro Mining put out a
operational update early today

546
00:27:57,120 --> 00:28:03,200
saying they achieved a monthly
record of around 700,000 wet

547
00:28:03,200 --> 00:28:06,080
metric tonnes of bauxite shipped
last month.

548
00:28:06,080 --> 00:28:11,440
So for the context, Metro is a
book site producer in literally

549
00:28:11,440 --> 00:28:16,160
the most far North Point of QLD
possible.

550
00:28:16,600 --> 00:28:18,600
What, near like Cape York
Peninsula is it?

551
00:28:18,600 --> 00:28:21,760
Yeah, yeah, right.
Yeah, so right up there.

552
00:28:21,800 --> 00:28:26,800
And they started mining their
their Bauxite Hills mine back in

553
00:28:26,800 --> 00:28:30,080
2018, about six years ago, so.
Even the bauxite's probably

554
00:28:30,080 --> 00:28:32,000
dehydrated up there, they'd be
sweating that.

555
00:28:32,000 --> 00:28:33,520
Much.
Yeah, probably Jesus.

556
00:28:33,920 --> 00:28:35,800
Christ.
Oh jeez, they get a bit of rain

557
00:28:35,800 --> 00:28:38,320
here and there up there as well.
Yeah, they get a pretty, pretty

558
00:28:38,320 --> 00:28:41,240
mean wet season up there.
So and the.

559
00:28:41,400 --> 00:28:45,160
So this increase is largely a
result of the fact that they've

560
00:28:46,320 --> 00:28:50,720
expanded the operations there.
So now that a lot of this has

561
00:28:50,720 --> 00:28:53,600
been put in place, all these
sort of key expansion components

562
00:28:53,600 --> 00:28:57,720
around screening capacity and
transshipping capacity, this has

563
00:28:57,800 --> 00:28:59,920
resulted in this increased
production capacity.

564
00:28:59,920 --> 00:29:05,560
So August was 13% higher than
last month and 29% higher than,

565
00:29:05,640 --> 00:29:07,120
you know, at the same time last
year.

566
00:29:07,680 --> 00:29:11,480
And so far they've sort of
shipped just shy of 3 million

567
00:29:11,840 --> 00:29:17,120
wet metric tonnes for the year
and all those expansion

568
00:29:17,120 --> 00:29:20,360
components I've, I've put into
sort of operated at 7 million

569
00:29:20,640 --> 00:29:23,920
tonne per annum, right.
Essentially, they've been fully

570
00:29:23,920 --> 00:29:27,600
integrated now and are the
operating at or very, very close

571
00:29:27,600 --> 00:29:34,160
to a name plate, which I mean
the timing of this is pretty

572
00:29:34,160 --> 00:29:36,960
great.
As far as the commodity price is

573
00:29:36,960 --> 00:29:41,680
concerned, I mean bulk site
prices, the Aussie benchmark

574
00:29:41,680 --> 00:29:44,920
price is up 48% since January
22.

575
00:29:45,560 --> 00:29:49,560
And you can see here this is
sort of a bit of a chart looking

576
00:29:49,560 --> 00:29:54,440
at their daily shipment sort of
rates from 22 and 23 in those

577
00:29:54,440 --> 00:29:58,920
sort of grey lines and then now
this calendar year 24 in the

578
00:29:58,920 --> 00:30:01,520
orange sort of as they've been
moving up there.

579
00:30:01,880 --> 00:30:04,600
Ali, give us a bit of the, the,
the back story because Metro's

580
00:30:04,600 --> 00:30:07,160
really interesting one.
They had a, you know, as we've

581
00:30:07,160 --> 00:30:08,880
kind of said in the past,
they've had leverage on both

582
00:30:08,880 --> 00:30:11,520
fronts, you know, and it's been,
it's been quite a journey, but

583
00:30:11,520 --> 00:30:14,200
things have really started to
swing in their favour lately,

584
00:30:14,200 --> 00:30:15,680
hey.
Yeah, 100%.

585
00:30:15,680 --> 00:30:20,000
So during COVID they had an
absolute shocker over time

586
00:30:20,720 --> 00:30:24,000
because as we remember, all the
shipping rates, ocean freight

587
00:30:24,000 --> 00:30:28,400
rates were just going through
the roof, almost doubling in

588
00:30:28,400 --> 00:30:31,680
some cases.
But then you had Australian

589
00:30:31,680 --> 00:30:36,600
bauxite prices essentially flat
for, you know, 20/20/21.

590
00:30:37,000 --> 00:30:39,600
They had a pretty, you know,
leverage balance sheet.

591
00:30:39,600 --> 00:30:44,040
They had to do a few save raises
and dead extensions and, you

592
00:30:44,040 --> 00:30:45,960
know, convert this and that to
equity.

593
00:30:45,960 --> 00:30:48,800
It was just pretty full on.
I mean, look at the spark chart

594
00:30:48,800 --> 00:30:50,200
here.
You know, they went from sort of

595
00:30:50,480 --> 00:30:55,600
as high as $0.12 to mid ones
very, very quickly.

596
00:30:56,120 --> 00:31:00,760
But things started to turn
around from about last year.

597
00:31:01,480 --> 00:31:04,960
The ocean freight prices really
come off.

598
00:31:04,960 --> 00:31:08,880
They've sort of stabilised now.
And as we sort of said before,

599
00:31:08,880 --> 00:31:13,320
bauxite prices have have
increased a fair bit since two

600
00:31:13,320 --> 00:31:15,120
years ago as well.
The.

601
00:31:15,160 --> 00:31:18,240
Market's really tightened there
and, and you know, the, the, the

602
00:31:18,240 --> 00:31:22,800
story when you talk to the, the
very few bauxite experts out

603
00:31:22,800 --> 00:31:25,440
there and illuminate experts is
that, you know, a lot of, a lot

604
00:31:25,440 --> 00:31:29,640
of what, what China had brought
online when, when they, you

605
00:31:29,640 --> 00:31:31,960
know, became kind of superpowers
in the whole alumina complex,

606
00:31:32,240 --> 00:31:33,640
sort of depleted.
And that's why I kind of had to

607
00:31:33,640 --> 00:31:37,160
go to Guinea and, and, and, and,
you know, even go out there to

608
00:31:37,160 --> 00:31:40,120
start bringing in, in bauxite
was because they're, they're,

609
00:31:40,200 --> 00:31:43,440
you know, domestic reserves are,
you know, becoming higher and

610
00:31:43,440 --> 00:31:45,280
higher cost and, and fewer and
fewer of them.

611
00:31:45,440 --> 00:31:46,280
No 100.
Percent.

612
00:31:46,280 --> 00:31:47,440
Hence the fragility in the
system now.

613
00:31:47,640 --> 00:31:49,400
Yeah.
And I mean even in in this graph

614
00:31:49,400 --> 00:31:52,600
here you can see the the Guinea
sort of benchmark process for

615
00:31:52,600 --> 00:31:55,800
bauxite sort of experiencing,
you know pretty similar hefty

616
00:31:55,800 --> 00:31:58,840
gains as well.
And then even as far as Metro

617
00:31:58,920 --> 00:32:01,200
was concerned, I mean they, they
actually achieved their, their

618
00:32:01,200 --> 00:32:06,000
guidance last year or just shot
4.6 million tonnes shipped.

619
00:32:06,520 --> 00:32:11,000
They announced FID final
investment decision on the 7

620
00:32:11,000 --> 00:32:15,400
million tonne expansion, as we
said, sort of through expanding

621
00:32:15,400 --> 00:32:18,200
this sort of trend shipping and,
and, and screening capacity

622
00:32:18,840 --> 00:32:21,040
that's all sort of fully
commissioned and ramping up.

623
00:32:21,040 --> 00:32:27,680
Well, now they have a revised
shipment guidance for, for this

624
00:32:27,680 --> 00:32:32,640
calendar year for six to 6.4
million tonnes and that was sort

625
00:32:32,640 --> 00:32:35,480
of reduced down a little bit due
to sort of bit of an extended

626
00:32:35,480 --> 00:32:37,040
wet season at the start of the
year.

627
00:32:37,920 --> 00:32:41,040
Their balance sheet has sort of
been progressively cleaned up.

628
00:32:41,080 --> 00:32:47,360
I mean they raised $45,000,000
in May earlier this year to it

629
00:32:47,360 --> 00:32:50,640
was essentially called equity
for debt rise.

630
00:32:52,200 --> 00:32:57,440
So now they've got about 13 a
bit million cash total debt, 88

631
00:32:57,440 --> 00:33:01,320
million as at the sort of 30
June call in that's made up of

632
00:33:01,640 --> 00:33:06,600
Nabari debt, sort of shareholder
loans and also an Abari royalty

633
00:33:06,600 --> 00:33:09,960
as well.
And metros sort of indicated a

634
00:33:09,960 --> 00:33:13,320
lot in their sort of quarterlies
and recent presentations that in

635
00:33:13,440 --> 00:33:17,800
expects to reduce net debt by
another sort of $22 million this

636
00:33:17,800 --> 00:33:22,800
half from operational cash flow.
And that sort of made me

637
00:33:22,800 --> 00:33:25,600
actually sort of go back and
look at the numbers sort of how

638
00:33:25,600 --> 00:33:30,600
they've been going recently.
So make they've been making a

639
00:33:30,600 --> 00:33:38,040
small site EBITDA the last few
quarters and the the last half

640
00:33:38,040 --> 00:33:41,280
yearly they just put out for 30
June shows they're not

641
00:33:41,280 --> 00:33:44,080
operationally cash flow just
yet.

642
00:33:44,760 --> 00:33:48,320
And you can see here this is an
extract from the call as far as

643
00:33:50,440 --> 00:33:54,440
the pricing costs, site EBITDA
and things like that.

644
00:33:55,960 --> 00:33:58,760
And then the half year report
also shows sort of in the notes

645
00:33:58,760 --> 00:34:02,800
section there contractual
maturities of non derivative

646
00:34:02,800 --> 00:34:06,080
financial liabilities.
Basically what do they have to

647
00:34:06,080 --> 00:34:09,639
pay, what liabilities do they
have to pay within the next

648
00:34:09,639 --> 00:34:11,440
year?
And they've included sort of

649
00:34:11,440 --> 00:34:16,360
payables in that as well.
And they're saying that they

650
00:34:16,360 --> 00:34:21,199
expect $109 million to go out
the door within the next year,

651
00:34:21,199 --> 00:34:26,880
so to 30, June 25, which is a
lot of money for a company

652
00:34:26,880 --> 00:34:30,080
that's not yet operationally
cash flow positive.

653
00:34:31,000 --> 00:34:35,800
So that's super important for
them the next couple of quarters

654
00:34:36,400 --> 00:34:39,000
sort of to make those, those
requirements that they've

655
00:34:39,080 --> 00:34:42,920
outlined in their half yearly,
the expansion CapEx side of

656
00:34:42,920 --> 00:34:44,639
things.
I mean that's sort of pretty

657
00:34:44,639 --> 00:34:46,520
much all spent now.
So they should have a pretty

658
00:34:46,520 --> 00:34:50,199
clear runway as far as
investing, you know, sort of

659
00:34:50,199 --> 00:34:55,239
cash outflows and metro sort of
reckon, you know, they're at a

660
00:34:55,239 --> 00:34:57,880
cash generation sort of
Inflexion point now and they're

661
00:34:57,880 --> 00:35:04,680
sort of targeting a like a 15
Aussie buck a tonne site EBITDA

662
00:35:04,680 --> 00:35:08,640
for for this calendar year or
$18.00 for next year.

663
00:35:09,400 --> 00:35:12,120
For context, the last few
quarters just on the the rough

664
00:35:12,120 --> 00:35:14,720
numbers saying they're
generating around 4 bucks a

665
00:35:14,720 --> 00:35:20,200
tonne of site EBITDA.
So is it similar to like it's a

666
00:35:20,200 --> 00:35:22,720
bit of a sentiment play at the
moment, like similar to an aura

667
00:35:22,720 --> 00:35:25,720
Banda?
Like it's like that hasn't

668
00:35:25,720 --> 00:35:29,480
really hit the mark yet, but
it's like if all the ducks line

669
00:35:29,720 --> 00:35:34,800
end up in a row, it should.
I I feel it's very much yeah, as

670
00:35:34,800 --> 00:35:38,520
it's a sort of a sentiment and a
bit of a, a bit of obviously,

671
00:35:38,640 --> 00:35:43,000
you know, leverage, leverage to
the commodity price sort of play

672
00:35:43,000 --> 00:35:45,000
as well, I mean.
And reducing their costs.

673
00:35:45,000 --> 00:35:48,960
And reducing, reducing their,
their costs as well, you know,

674
00:35:48,960 --> 00:35:53,200
with the expansion too.
So my takeaways from it is, I

675
00:35:53,200 --> 00:35:56,040
don't think they're out of the
woods yet, but production's

676
00:35:56,040 --> 00:35:59,600
going the right way, box up,
pricing's going the right way.

677
00:36:00,040 --> 00:36:04,720
The balance sheet is better, but
it still makes me a little bit

678
00:36:05,160 --> 00:36:08,520
nervous.
But the next two quarters are so

679
00:36:08,520 --> 00:36:12,920
critical from a cash flow
perspective, which will go such

680
00:36:12,920 --> 00:36:18,200
a huge way to sort of show
people how well the the the

681
00:36:18,200 --> 00:36:20,760
expansion to 7 million tonnes is
working.

682
00:36:20,760 --> 00:36:23,440
And also from obviously a cash
flow perspective to sort of

683
00:36:23,440 --> 00:36:28,600
really get that net debt a fair
bit lower because, you know, we

684
00:36:28,600 --> 00:36:31,520
certainly don't want to see
another, you know, equity for

685
00:36:31,520 --> 00:36:33,320
debt rise like they did earlier
this year.

686
00:36:33,320 --> 00:36:37,760
So it is very much a still, you
know, at an Inflexion point.

687
00:36:37,760 --> 00:36:41,920
So yeah, keen to see them get it
underway.

688
00:36:41,920 --> 00:36:45,760
Yeah, good, good in the woods,
JC, but you're venturing out of

689
00:36:45,760 --> 00:36:48,040
the comfort zone.
Take it on bulk site.

690
00:36:48,720 --> 00:36:50,560
That's out of the Manchester so.
Proud.

691
00:36:51,160 --> 00:36:53,360
Oh good buddy.
There might be some up there,

692
00:36:54,240 --> 00:36:56,800
who knows.
Any bulks hot in the merchants

693
00:36:56,800 --> 00:36:58,080
in You didn't.
I wouldn't.

694
00:36:58,160 --> 00:37:00,120
You've been on.
I'll check on one XR, check on

695
00:37:00,240 --> 00:37:01,880
waggons.
Think you'd want it much closer

696
00:37:01,880 --> 00:37:03,440
to the port?
Get that logistics.

697
00:37:03,440 --> 00:37:05,800
Oh yes.
True, companies like Metro are

698
00:37:05,800 --> 00:37:10,720
the sort of like, yeah, the,
the, the, the type of company

699
00:37:10,720 --> 00:37:14,640
that, you know, some people can,
who are really good kind of

700
00:37:14,720 --> 00:37:17,120
resources stock because they,
they look for companies like

701
00:37:17,120 --> 00:37:20,440
Metro where they're, they've got
a busted up balance sheet, you

702
00:37:20,440 --> 00:37:23,800
know, kind of poor operational
like like delivery history and

703
00:37:24,000 --> 00:37:26,400
all, all that sort of stuff.
But then if they get the

704
00:37:26,400 --> 00:37:28,520
commodity cycle right, also if
they're reducing costs at the

705
00:37:28,520 --> 00:37:32,200
same time, you know, via some
expansion and those, those can

706
00:37:32,200 --> 00:37:35,520
be pretty transformative kind of
moments. 100% and even.

707
00:37:35,520 --> 00:37:37,960
It's like look at look at what
Metro is off its base, off its

708
00:37:37,960 --> 00:37:39,280
low.
It's just kind of phenomenal.

709
00:37:39,280 --> 00:37:41,400
And some people are really good
at picking that those sort of

710
00:37:41,400 --> 00:37:43,200
moments and they're kind of some
of the lowest risk kind of,

711
00:37:43,520 --> 00:37:45,960
well, lowest risk in quotation
marks sort of, yeah, returns

712
00:37:45,960 --> 00:37:47,080
that you can make in our
industry.

713
00:37:47,240 --> 00:37:50,000
Yeah, because it's really, I
mean like exactly like you say,

714
00:37:50,040 --> 00:37:51,720
Trevor.
I mean from from the mid ones

715
00:37:51,720 --> 00:37:55,960
where it was or low twos where
it was for for a while.

716
00:37:55,960 --> 00:37:59,560
It sort of got up to the, you
know, fours, fives and sixes in,

717
00:37:59,560 --> 00:38:03,080
you know, in the last last few
months, which I mean, that's

718
00:38:03,080 --> 00:38:05,240
that's pretty good in a few
months if you're looking at it

719
00:38:05,240 --> 00:38:07,520
from a returns perspective.
And you know, they've still got

720
00:38:07,520 --> 00:38:08,960
a bit of a journey to go as
well.

721
00:38:08,960 --> 00:38:11,800
So it could be, you know,
potentially even more assuming

722
00:38:11,800 --> 00:38:15,000
things you know go well and as
as planned, so.

723
00:38:15,160 --> 00:38:17,440
It's pretty fortunate, right?
A lot of people were starting to

724
00:38:17,440 --> 00:38:18,400
anticipate that.
Yeah.

725
00:38:18,400 --> 00:38:19,760
Hey, I think we're at the woods
here.

726
00:38:20,960 --> 00:38:23,320
Sort of, yeah.
It reminds me of Saint Barbara

727
00:38:23,320 --> 00:38:26,360
back in the day when I think
they went down to about $0.05.

728
00:38:26,360 --> 00:38:29,840
That's great.
When they had the Solomon's and

729
00:38:31,200 --> 00:38:33,960
there's another one and like,
but it was like, they've still

730
00:38:33,960 --> 00:38:36,400
got Gwalia.
And once they flogged all that

731
00:38:36,400 --> 00:38:38,640
off it went.
There was some, there was a

732
00:38:38,640 --> 00:38:42,560
truckie that dipped in like a
good chunk of money and became a

733
00:38:42,560 --> 00:38:45,040
millionaire, bought at 5-5 or
eight cents.

734
00:38:45,040 --> 00:38:48,560
And then it went back up into
the 2 bucks and then became St

735
00:38:48,560 --> 00:38:51,240
Barbara again after that.
But like had that honey period

736
00:38:51,240 --> 00:38:55,120
where it was just had Gwalia and
it fucking ripped.

737
00:38:55,800 --> 00:38:56,440
Yeah.
It's.

738
00:38:56,760 --> 00:38:58,160
A great analogy.
I should have been on it.

739
00:39:00,440 --> 00:39:01,760
All right.
We're going to finish one day.

740
00:39:01,960 --> 00:39:04,160
I'll go to get one one day, one
day we're.

741
00:39:05,320 --> 00:39:08,000
Going to finish on a, you know,
a bit more of a downer note

742
00:39:08,000 --> 00:39:11,160
after Metro, which is much more
of a a positive story.

743
00:39:11,160 --> 00:39:14,760
But Coronado was a, you know,
fairly big news out today that

744
00:39:14,760 --> 00:39:19,200
the stock got hammered on the
open 15 or 16% down straight

745
00:39:19,200 --> 00:39:21,240
away.
And, you know, again, it's, it's

746
00:39:21,240 --> 00:39:24,720
more problems at at Cara.
It's been a, you know, a bit of

747
00:39:24,720 --> 00:39:27,600
a, a problem child for for a
while now and it was, it was a

748
00:39:27,600 --> 00:39:29,360
downgrade.
So they downgraded production, I

749
00:39:29,360 --> 00:39:35,480
think 7 odd percent to 15.4
million to 16,000,000 metric

750
00:39:35,480 --> 00:39:38,080
tonnes of production.
And then of course on the back

751
00:39:38,080 --> 00:39:42,480
of that you see costs jump up.
So costs jump up from one O 5 to

752
00:39:42,560 --> 00:39:45,320
110 bucks.
You know, that's mining costs.

753
00:39:45,320 --> 00:39:48,320
Obviously you Chuck on all your
royalties and everything else on

754
00:39:48,320 --> 00:39:51,280
top of that, but that's a 10%
jump on that front.

755
00:39:51,280 --> 00:39:55,480
So I think if you were to do a
bit of a, you know, relative or

756
00:39:55,480 --> 00:39:59,240
comparative sort of chart,
Coronado has just had a terrible

757
00:39:59,240 --> 00:40:01,920
sort of time.
They've got assets in different

758
00:40:01,920 --> 00:40:05,840
continents and of, you know,
varying degrees of successful,

759
00:40:06,120 --> 00:40:09,480
you know, in operations over the
past few years.

760
00:40:09,480 --> 00:40:12,360
And Cara's family been one
that's pulled them down a lot of

761
00:40:12,840 --> 00:40:16,360
bad weather and sort of flow on
effects and they they've spoken

762
00:40:16,360 --> 00:40:19,840
about, you know.
Idling the fleet, you know, all

763
00:40:19,840 --> 00:40:22,480
these sorts of things which
might be short term good, long

764
00:40:22,480 --> 00:40:25,160
term bad, all these kind of
things to sort of give them a

765
00:40:25,160 --> 00:40:28,280
bit more wiggle room.
But it's been, it's been pretty

766
00:40:28,280 --> 00:40:31,160
tough out there.
So CapEx is still a decent size

767
00:40:31,160 --> 00:40:32,800
number.
They, they kept that the same.

768
00:40:32,800 --> 00:40:35,400
You can see and the thing will
flick up here that that stays

769
00:40:35,400 --> 00:40:40,160
between 2:20 and 2:50 US for,
for the financial year.

770
00:40:41,440 --> 00:40:43,320
They did say they're going to
probably come in at the the

771
00:40:43,320 --> 00:40:46,640
upper end of that one with some
work being accelerated into to

772
00:40:46,640 --> 00:40:50,080
calendar year 2024.
They also spoke a bit about

773
00:40:50,600 --> 00:40:54,160
organic growth projects at
Buchanan and Cara as well.

774
00:40:54,160 --> 00:40:56,840
So you got Mammoth underground.
Buchanan by the way, is the one

775
00:40:57,160 --> 00:41:00,880
over in the States and they said
they remain on on budget and on

776
00:41:00,880 --> 00:41:03,560
schedule.
So there's a a bit of positive

777
00:41:03,560 --> 00:41:06,360
news there.
And yeah, I think the last

778
00:41:06,360 --> 00:41:09,200
detail to kind of note, which is
something we've seen with almost

779
00:41:09,200 --> 00:41:11,680
every Queensland coal miner,
there was more sort of scathing

780
00:41:11,680 --> 00:41:15,720
words around the, you know,
quote unquote, extreme royalties

781
00:41:15,720 --> 00:41:18,040
that have been hitting all the
miners over there.

782
00:41:18,080 --> 00:41:20,640
And that language hasn't really
changed over the past year and a

783
00:41:20,640 --> 00:41:22,240
half.
And I don't expect it to, but

784
00:41:22,640 --> 00:41:25,320
who knows if we're going to see
any sort of, you know, changes

785
00:41:25,320 --> 00:41:28,600
on that front?
Here's a bloody question without

786
00:41:28,600 --> 00:41:29,840
notice.
A quiz.

787
00:41:30,600 --> 00:41:32,680
Another one where you see
significant rainfall.

788
00:41:32,680 --> 00:41:36,120
You think North Queensland like
rainfall?

789
00:41:36,120 --> 00:41:39,160
Well, you get a lot of rain
there and then the royalties and

790
00:41:40,480 --> 00:41:44,320
where if you could pick where to
have a mining project in

791
00:41:44,360 --> 00:41:48,800
Australia taking into account
rainfall like seasonality,

792
00:41:49,440 --> 00:41:55,000
access to water, the quality of
water, native tidal, ease of

793
00:41:55,000 --> 00:42:00,200
operation, where would you pick?
Good question I.

794
00:42:01,240 --> 00:42:03,720
Wow.
Like cat like like Kalgoorlie,

795
00:42:03,720 --> 00:42:07,680
for instance, like water is a
water's a challenge there like

796
00:42:08,040 --> 00:42:11,480
you go down South Cambowder and
that like the salinity of the

797
00:42:11,480 --> 00:42:16,520
waters an issue and the amount
of water. 1.

798
00:42:16,520 --> 00:42:18,120
Model.
Think of the merchants.

799
00:42:20,160 --> 00:42:20,520
It's.
Actually.

800
00:42:21,040 --> 00:42:23,480
Green bushes is.
Oh, that's what, that's what I

801
00:42:23,480 --> 00:42:25,840
was going to say, yeah.
Green bushes like that, you

802
00:42:26,080 --> 00:42:27,240
couldn't build it today because.
You can't.

803
00:42:27,240 --> 00:42:28,120
It's.
In the National Park?

804
00:42:28,120 --> 00:42:28,920
Yeah, exactly.
Yeah.

805
00:42:29,000 --> 00:42:31,600
Exactly.
But in terms of like probably

806
00:42:31,600 --> 00:42:34,800
seasonality, I assume they got a
lot of water.

807
00:42:36,320 --> 00:42:39,200
It's also the right, it's also
the right commodity, right?

808
00:42:39,200 --> 00:42:42,760
You're not going to get a a cold
Queensland type tax on on

809
00:42:42,760 --> 00:42:45,560
lithium.
I think that buddy.

810
00:42:45,560 --> 00:42:48,800
I suppose that Murchison,
Leonora, Leinster areas.

811
00:42:48,800 --> 00:42:51,680
Probably not too bad.
Not too bad, but then God was

812
00:42:51,720 --> 00:42:56,840
even saying, I think the native
title becomes an issue there as

813
00:42:56,840 --> 00:42:58,480
well.
Well, that's pretty difficult.

814
00:42:58,480 --> 00:42:59,840
There's probably an issue
everywhere.

815
00:42:59,840 --> 00:43:02,000
Now.
You go up north, pill, pill,

816
00:43:02,000 --> 00:43:05,000
like you got the potential
cyclones.

817
00:43:05,680 --> 00:43:07,360
Yeah.
The the operations you're doing

818
00:43:07,360 --> 00:43:12,160
up there are just such massive,
you know, open pit operations

819
00:43:12,160 --> 00:43:15,240
which come with their own sort
of challenges, native title and

820
00:43:15,240 --> 00:43:17,080
the like, you know, permitting
and all these sorts of things

821
00:43:17,080 --> 00:43:19,520
so.
Green bushes I wouldn't go to

822
00:43:19,520 --> 00:43:20,960
NSW.
No as.

823
00:43:21,640 --> 00:43:23,600
Much as I love the place.
Well, I think the question is

824
00:43:23,600 --> 00:43:26,120
very much what would you do in
2024, right?

825
00:43:26,120 --> 00:43:28,920
Because things change over time.
Maybe South Australia?

826
00:43:30,120 --> 00:43:31,720
What's that?
There's a couple of those mines

827
00:43:31,720 --> 00:43:33,400
that are right next to the
Barossa Valley.

828
00:43:33,400 --> 00:43:35,000
I mean, that's pretty cool.
Hillgrove.

829
00:43:35,200 --> 00:43:38,040
Hillgrove got it up.
There's one, there's one there

830
00:43:38,040 --> 00:43:42,400
that's yeah, it's, it's too
close, too close to town.

831
00:43:42,400 --> 00:43:44,800
It's they put a, there's a
goldscoping study on one of

832
00:43:44,800 --> 00:43:46,120
them.
It's too, it's too, it's too

833
00:43:46,240 --> 00:43:49,000
close, too close and they get
permanent kind of thing, but.

834
00:43:49,200 --> 00:43:51,280
Yeah, yeah.
And I think there was a bit of

835
00:43:53,120 --> 00:43:54,520
yeah, there was some easy that
was a.

836
00:43:54,520 --> 00:43:58,520
Really good question actually.
Oh great, that green down South.

837
00:43:58,520 --> 00:44:01,920
CFWAI reckon that might be the
spot Maybe Ravens thought.

838
00:44:02,240 --> 00:44:05,720
Ravens thought.
I have heard the black cockatoos

839
00:44:05,720 --> 00:44:08,360
a big issue if you're trying to
build a mine down South now even

840
00:44:08,360 --> 00:44:09,480
though.
Yeah, yeah.

841
00:44:09,640 --> 00:44:12,040
I think it could be hard to get.
The whole environmental process

842
00:44:12,080 --> 00:44:13,480
would be tricky.
Yeah, yeah.

843
00:44:13,720 --> 00:44:15,640
This is bauxite that.
Yeah.

844
00:44:16,280 --> 00:44:20,160
You know, scales many, many 10s
of thousands of acres, Yeah.

845
00:44:20,280 --> 00:44:25,040
So I think we're stand Tasmania,
that's maybe tricky, pretty

846
00:44:25,040 --> 00:44:30,560
tricky unionised as well.
I think Victoria, that's bloody

847
00:44:30,560 --> 00:44:33,000
ARB from permits like
Australia's bloody ARB.

848
00:44:33,000 --> 00:44:35,280
We're we're struggling to fall.
I'll go on the Murchison.

849
00:44:35,400 --> 00:44:38,400
Let's go to Murchison.
Go to the Murchison.

850
00:44:39,520 --> 00:44:40,880
Trying to think of an island
somewhere.

851
00:44:42,080 --> 00:44:48,200
New Caledonia, What islands are
there?

852
00:44:49,240 --> 00:44:52,360
Caledonia had that was the that
was the nickel 1 wasn't it?

853
00:44:52,560 --> 00:44:54,920
Was that nickel in New Caledonia
at one stage?

854
00:44:55,480 --> 00:44:57,680
One stage right now.
Go get some they had.

855
00:44:57,680 --> 00:45:00,320
The protests there this year.
Go get some bloody phosphide

856
00:45:00,400 --> 00:45:02,880
over at Nauru.
Yeah, I was going to say the

857
00:45:03,640 --> 00:45:06,920
islands of South America, of
Chile and stuff, they were just

858
00:45:07,360 --> 00:45:10,120
just bird shit that were mined
for as long as they could be.

859
00:45:12,000 --> 00:45:15,400
They were gold mines for a
little while before all

860
00:45:15,400 --> 00:45:16,320
disappeared.
And pretty.

861
00:45:16,320 --> 00:45:18,800
Sure, go Brazil.
Maybe Brazil is the new hotspot.

862
00:45:19,200 --> 00:45:21,520
Forget Australia.
Why choose Africa?

863
00:45:22,200 --> 00:45:24,880
Just cheaper.
Yeah, you gotta be specific

864
00:45:24,880 --> 00:45:28,440
about your country.
So I think we've come to the

865
00:45:28,720 --> 00:45:30,400
conclusion mining is hard.
Mining is pretty.

866
00:45:30,400 --> 00:45:33,240
Hard, good summer.
Good summer.

867
00:45:33,960 --> 00:45:35,560
Well, it's not hard to call
Axis.

868
00:45:35,920 --> 00:45:37,600
No.
There's phone numbers there.

869
00:45:37,600 --> 00:45:39,280
It's in the shine.
Just bloody call.

870
00:45:39,280 --> 00:45:41,760
Call Sean, Sean.
He's a he's a guru.

871
00:45:41,840 --> 00:45:44,640
Knows everything about drill
hole orientation and

872
00:45:44,880 --> 00:45:46,680
instrumentation.
Legend.

873
00:45:46,800 --> 00:45:48,880
You can see him at Adia.
Drill.

874
00:45:48,880 --> 00:45:51,520
Oh, nice.
He's gonna be blind.

875
00:45:51,520 --> 00:45:55,640
Oh, I cannot wait, cannot wait.
And and Speaking of Adia, Adia,

876
00:45:56,160 --> 00:45:59,200
Australian.
Drilling Industry Association.

877
00:45:59,200 --> 00:46:04,360
That's the one JD I was just
tested yeah and MMS mineral

878
00:46:04,360 --> 00:46:10,120
mining services verify Dosi
underground Silverstone stop

879
00:46:10,120 --> 00:46:13,040
scrolling too fast and.
CRE insurance, Greenland's

880
00:46:13,040 --> 00:46:16,480
equipment.
Cage Hue, Spark and Hoodoo

881
00:46:16,720 --> 00:46:21,120
Hoodoo Information contained in
this episode of Money of Mine is

882
00:46:21,120 --> 00:46:23,320
of general nature only and does
not take into account the

883
00:46:23,320 --> 00:46:26,920
objectives, financial situation
or needs of any particular

884
00:46:26,920 --> 00:46:28,960
person.
Before making any investment

885
00:46:28,960 --> 00:46:32,000
decision, you should consult
with your financial advisor and

886
00:46:32,000 --> 00:46:35,160
consider how appropriate the
advice is to your objectives,

887
00:46:35,360 --> 00:46:37,360
financial situation and needs.