Navigating Market Chaos with Resource Investor Will Thomson

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You become a larger and larger
position in an ETF that is

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market cap weighted.
You get an ever increasing

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percentage of the flows that
flow into that ETF and your

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stock price response is it if
you put a dollar in the stock

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doesn't go up a dollar, it now
goes up $1.50.

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Right mate.
We've got a wonderful

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conversation with none other
than William Thompson who

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manages the a fund called
Massive Capital.

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We've had Will on in the past
and I I really enjoy speaking

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with with Will because he's one
of those people that is just so

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transparent about everything.
It's almost shocking how

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transparent he is about.
Things, yeah.

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Or not.
He, he, he always kind of

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articulates his thinking and
he's like, I, I see him as a bit

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of an unusual kind of fund
manager.

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And I mean that in a refreshing
way.

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Just just his transparency is,
is kind of striking.

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No matter what you ask him, he
shares what you know.

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He's what it's been like riding,
Yeah, the Alpha Mint emotional

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roller coaster over the last
last six months, which I found

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like a particularly interesting
part of our our conversation.

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I think the money might as well
get something out of this one.

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Ali.
Awesome.

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But first, if you, if you, if
you're going to go constructing

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a mine tomorrow, AJ, what would
you, what would you need?

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I would need a hell of a lot of
equipment and all the people to

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go with it too.
Equipment and people exactly

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Ali, hopefully you have a plan
as well.

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But if you shouldn't get a plan,
well, equipment and people can

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can help you in that
construction process.

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And I happen to know the one
name to call for both of them.

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Let me guess, it's.
KCAKCA size absolutely guess

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what equipment they have right
now I'm talking about right now

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immediately right this second
they've got 412 seater Toyota

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hierarchy 4 by 4 mine spec buses
Mitsubishi fuseo tipper truck

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Volvo 5 ton excavator 2 brand
new ITS right now right now

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well.
My hypothetical mind.

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I'll definitely need an
excavator for that one, thank

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you.
You're you're gonna need people

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too, Ali.
And guess what, KCA has industry

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leading way of getting you the
right people.

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It's sorcery.
I don't know how they do it, but

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they somehow always managed to
get the right people, be IT

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service crew, charger, bogger
operators, underground shifts,

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supervisors, mobile crusher
operators, open pit all

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rounders, underground HD
fitters.

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I'm only scratching the surface
here.

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I think we all know who we need
to call.

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Just call KCI Will.
Has anyone ever told you that

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you look like Chuck Buttowski?
You don't know.

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Oh this is amazing.
I'm so happy I'll put up, I'll

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pull up a photo right now.
Chuck Butkowski, he's a

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fictional character from this
like pretty niche comedy drama

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spy series.
This guy that worked in like a,

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you know, an electrical Best Buy
store became, you know,

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inadvertently became a spy and
you are a doppelganger of Chuck.

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I I just can't get it out of my
head after saying it.

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No, no one's told me that
before.

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It hasn't, it hasn't aired for
about, you know, 13 years, but.

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You don't need to feel insulted,
Wilkers Trev told me this

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morning.
And I've no idea who the person

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it was either, so we're all
good.

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I yeah, I have no problem with
that right now.

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I kind of like, on my screen at
least, I look like a tomato red.

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I don't know what the deal is,
but I assume your audience won't

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mind.
You're coming out good here.

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Thanks again for for joining us
today.

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Well, it's been a long time
since we've spoken.

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I, I want to start this
conversation with a, a little

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snippet from an article you're
writing for people out there

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curious to, to see Will or after
this conversation.

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He puts a lot of research out
there so you can go and sign up

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to it.
There's this line you wrote that

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stuck out to me.
In Maslow's hierarchy of needs,

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the products produced by Mag 7
are mostly only important for

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the final few stages of human
humanities conceptualized needs.

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My question is will when are
materials or resource companies

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going to become in vogue again
and get the attention that the

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mag 7 have had for the last few
years?

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Well, not sure they ever get the
attention the mag 7 has gotten,

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but you know I'm.
I am optimistic that the next 10

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years will be maybe not less
about technology and innovation

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and things like that, but at
least there'll be more interest

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in the real assets at least that
my firm invests in.

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And I think, you know, there's a
couple of drivers behind that.

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There's obviously increased
defense spending.

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There's this sort of intense
effort on everyone's

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government's sort of part to
create resilience in their

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economies.
All of that type of activity is

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usually material and energy
intensive.

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And it, it's going to create
increased demand for sort of

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everything that you guys talk
about and everything that my

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firm invests in, oil, natural
gas, copper, nickel, steel

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producers, cement producers,
chemicals, doesn't matter.

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It, it'll be across the board.
So I, I, it, it's never going to

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be NVIDIA headlines except when
something goes wrong.

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But I think it'll, it'll be of
more interest than it has been

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the past decade.
I also think there's A at least

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especially in the United States,
there is a with technology,

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we've now sort of reached what
appears to be at least some from

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my perspective, the edge of what
our infrastructure as it

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currently is sort of set up can
handle data centers, AI, you

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know, data processing, stuff
like that.

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Our electrical grid are
infrastructure just in general,

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it can't really it it can't
handle much more without an

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extensive build out.
And so even if it isn't sort of

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the first headline in the
newspaper, you know, everybody's

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thinking about it and you know,
it's become critically

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important.
And I think even the tech

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companies are beginning to
realize that so.

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Yeah, it is fascinating.
If we if we look back in kind of

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history and I know you, you tend
to do this in the in the papers

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you write, you take a long term
time horizon.

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If we look at the kind of 70s,
you go from a period at the the

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late 60s with the Nifty 50 being
tech companies all at the four

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into a period where LED through,
you know, by inflation and those

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sorts of challenges throughout
the period, materials companies

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really came to the fore.
Gold was up sort of 20X after we

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came off off the gold standard.
Is that the type of environment

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you think we could potentially
be coming through the like the

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late twenty 20s where we are
spurred on again by things like

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inflation and the need to build
out infrastructure like you

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touched on there?
So I, I think inflation is going

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to be, I've been saying this for
a while actually, I guess I, I,

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I think we're going to
experience a lot of inflationary

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volatility by which I mean, you
know, this year inflation will

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be fine.
Next year, it's going to pick up

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a little bit and it'll cause
some issues.

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The year after that, maybe it's,
it's down a little bit and it,

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it, it's going to be bouncing
around a lot.

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I think what was really unique
about the last, let's call it

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the the hope so, but separate
out you have the the end of the

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boat standards of the 70s to the
end of the Cold War.

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Then you have the Cold War till
now, that period from the end of

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the Cold War to now.
What I think was actually really

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unique about it was how the
grand scheme of things calm

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everything.
People didn't worry a lot about

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inflation.
They didn't, you know, interest

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rates were, you know, just on a
downward path and then bottom

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currencies, you know, you didn't
worry a lot about currency

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risks.
It was a, a calm period of time

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where you could come into
markets, frankly buy, hold,

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forget and not worry about
anything.

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I don't think the, you know,
next 10 or 20 years is going to

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be nearly as as calm and
uneventful, be perfectly frank

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as as current markets or, or as
markets are going to be going

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forward.
And I mean, even even when we

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did have events, you know, like
the war in Iraq or or say the

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war in Afghanistan or 911 or or
anything like that, market sort

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of took it in stride and moved
on.

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I just don't think it's going to
be that simple going forward

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because I don't think that
conflicts, geopolitical turmoil

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is going to, it's going to let
up.

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And in the absence of easy
money, those events have more

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impact and that volatility is
more impactful.

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Before we hit record, well you
shared with us that it it took

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you longer than it ever has to
write your your quarterly letter

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for massive capital this
quarter.

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Why is that?
How much going on?

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I just didn't really know what
to say about any.

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I mean, I think a lot of it's
like a lot of companies aren't

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quite pulling guidance.
You're not usually short for

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words, though, Will.
You're a philosophy, you know,

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You're a philosophy manager.
You're yeah.

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Well, I wasn't, I wasn't
terribly short for words with

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with this time around either.
It still ended up being like 10

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pages, but I just, I wasn't
satisfied I guess, with anything

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I had to say, right?
Why?

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Feel like now is the time where
someone wants me to say

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something profound and I just
couldn't come up with anything

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profound.
That that's, that's actually a

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really interesting, yeah, I
think quip about right now, I do

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think like no one, no one has a
freaking clue what's going on.

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Markets whip soaring.
You know, things are completely

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unexpected.
Like these are, these are

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complex chaotic systems.
And yeah, when like macro is

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just so, so tricky.
Macro is like dictating

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everything at the moment.
Yeah, it's I also think that

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when you've got a single person
who can say something and move

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markets in the way Donald Trump
has, that makes it incredibly

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tricky because you just never,
never know what's going to come

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out of him and his
administration.

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I mean, I think alpha man like a
perfect example of the DRC like

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I put when I wrote, I wrote a, a
paper on on alpha man recently

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and I think I put the odds of
AUS deal and I was like 5% tops

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not going to happen.
And lo and behold, that who

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knows if it it holds, Who knows
if it's any good.

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I, I don't know.
But to be perfectly frank, the

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fact that the United States even
had people over there to

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negotiate an agreement and
discuss this with Rwanda and the

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DRC flabbergast.
There's only been two trips by

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U.S.
President to the DRC or to to

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sub-Saharan Africa in the last
10 years.

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She has made like 8 something.
I'm just flabbergasted that the

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United States someone picked up
a phone called.

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I'd love to, I'd love to
explore, yeah.

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Reflections you've had on, on,
on Alpha Man, specifically over

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the last, you know, call it,
call it three months, maybe a

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bit longer because, yeah.
You know, I think you were it

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was one of your highest kind of
conviction companies.

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And, and when when they
announced kind of that they were

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going to care, care and
maintenance.

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I remember reading a tweet you
put up about reflecting on some

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of the prize that or assumptions
that you might have, you might

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have had that might have been
incorrect.

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Can you walk, walk us through
like, you know, yeah, how you've

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been thinking about your
investment in Alpha Min as

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everything is unfolded.
And I know it's been volatile

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over over the last like 3
months.

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Yeah.
So I invested in Alpha Min.

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It's initially in 2019.
Mine wasn't up and running yet,

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so it must have been 2019 or
thereabouts.

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I've been invested in the in
pile and have watched events in

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North Kivu and the Great Lakes
region, sort of read about it

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extensively, studied it as
deeply as as I can.

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Haven't had a chance to go over
there, although I've tried a

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couple of times and it's just
never worked out.

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And so I sort of developed what
I thought was a reasonable feel

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for the, the political situation
on the ground and, and had some

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connections on the ground and
spoke with some people around

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the time I guess October,
November last year when M23

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started sort of making much more
aggressive inroads into the

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North Cuba region.
And if you you sort of layout,

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00:13:41,480 --> 00:13:45,360
layout the roads and you layout
where artistical minds are and

225
00:13:45,360 --> 00:13:49,480
things of that nature, there
doesn't seem to be a lot of

226
00:13:49,480 --> 00:13:56,560
reason for M23 to advance in
country very far, especially if

227
00:13:56,800 --> 00:14:00,080
they're backed by Wanda.
And the goal is really sort of

228
00:14:00,080 --> 00:14:03,920
more economic capture of
minerals and things of that

229
00:14:03,920 --> 00:14:10,200
nature rather than say an effort
to literally like overthrow the

230
00:14:10,200 --> 00:14:11,880
government or something like
that.

231
00:14:12,640 --> 00:14:16,640
And so I had a fair amount of
conviction that that M23

232
00:14:16,640 --> 00:14:20,600
wouldn't sort of get to the mind
take it things of that nature.

233
00:14:21,120 --> 00:14:25,640
Management always seem pretty
confident in their ability to

234
00:14:26,240 --> 00:14:28,560
operate in that environment.
And at least from my

235
00:14:28,560 --> 00:14:32,080
perspective, they've done a
spectacular job of operating in

236
00:14:32,080 --> 00:14:35,480
that environment.
A lot of mining firms have done

237
00:14:36,480 --> 00:14:41,440
a lot less with a lot more and a
lot better environments than

238
00:14:41,440 --> 00:14:48,840
that management team has.
So I took this situation as an

239
00:14:48,840 --> 00:14:52,960
opportunity to sort of add my
position, and I think I added it

240
00:14:52,960 --> 00:14:57,400
$0.75.
And then they announced that,

241
00:14:57,400 --> 00:15:00,480
you know, they were going to
shut down operations and it

242
00:15:00,480 --> 00:15:02,560
tanked to whatever it was,
$0.45.

243
00:15:02,560 --> 00:15:06,840
And I added a little bit there.
But once they turned it off, my

244
00:15:06,840 --> 00:15:11,200
assumption was, you know, until
this is all cleaned up and they

245
00:15:11,200 --> 00:15:14,840
can say we're going to turn it
on and we're not going to have

246
00:15:14,840 --> 00:15:17,240
to worry about the political
situation, at least not

247
00:15:17,240 --> 00:15:21,080
immediately.
You know, they, they weren't

248
00:15:21,080 --> 00:15:25,040
going to turn it back on and,
and getting to that point where

249
00:15:25,040 --> 00:15:26,840
they weren't going to have to
worry about the political

250
00:15:26,840 --> 00:15:31,760
situation.
And I assumed it could take two

251
00:15:31,760 --> 00:15:36,760
years, if not a little longer.
And I was happy to sit and wait

252
00:15:36,760 --> 00:15:40,880
and average down and, and sort
of, you know, take the position

253
00:15:40,880 --> 00:15:43,720
and, and put it to the side and
just sort of wait patiently.

254
00:15:45,800 --> 00:15:53,080
But I've been just astounded by
how rapidly not only the

255
00:15:53,080 --> 00:15:57,960
government of the DRC and Rwanda
have gotten together on one page

256
00:15:57,960 --> 00:16:06,640
seemingly and come to an
agreement, but that M23 has, it

257
00:16:06,640 --> 00:16:12,600
seems, you know, sort of listen
to what Rwanda, the Rwanda

258
00:16:12,600 --> 00:16:14,640
government has told them and and
backed off.

259
00:16:14,680 --> 00:16:21,160
It was always that M23 was a
client, if you will, of Rwanda,

260
00:16:21,160 --> 00:16:24,560
but the degree to which rebel
groups are clients of other

261
00:16:24,560 --> 00:16:28,040
states is always a bit of a
question and now looks like

262
00:16:28,040 --> 00:16:30,360
they've for all intensive
purposes, we're just on arm in

263
00:16:30,360 --> 00:16:34,720
the military.
I'm a little disappointed given

264
00:16:34,720 --> 00:16:39,000
how it all went down.
This is the first time I've been

265
00:16:39,000 --> 00:16:42,400
disappointed in management at
Alpha Men, but I've been a

266
00:16:42,400 --> 00:16:47,880
little disappointed because this
seemed it seemed a little.

267
00:16:48,560 --> 00:16:53,320
Given how fast this reversed
itself.

268
00:16:53,920 --> 00:16:57,480
It seems like shutting the mind
down in the 1st place might have

269
00:16:57,480 --> 00:17:03,200
been them sort of pulling the
trigger a little too quickly and

270
00:17:03,200 --> 00:17:08,720
acting out of fear without
really necessarily maybe talking

271
00:17:08,720 --> 00:17:11,160
with people around them who
might have been in a better

272
00:17:11,160 --> 00:17:16,440
position to judge how fast the
situation would resolve itself

273
00:17:16,440 --> 00:17:19,359
with the United States.
But it's tough to tell you.

274
00:17:19,920 --> 00:17:21,480
Know what I've been thinking
about lately, Ellie?

275
00:17:21,839 --> 00:17:24,319
Tell us, Trev.
How can we how can we minimize

276
00:17:24,319 --> 00:17:27,480
the cost of exploration so that
we can find more discoveries?

277
00:17:27,640 --> 00:17:30,600
Well, I mean, drilling's one for
start, but it's a pretty

278
00:17:30,600 --> 00:17:33,360
expensive exercise, isn't?
It it is that is a big cost of

279
00:17:33,360 --> 00:17:34,960
exploration.
But I like you thinking, you

280
00:17:34,960 --> 00:17:37,600
know, one of the big costs of
drilling that we we don't even

281
00:17:37,600 --> 00:17:40,120
think about too much.
Well, at least I don't

282
00:17:40,280 --> 00:17:42,960
admittedly, it's consumables and
I'm talking drill bits down the

283
00:17:42,960 --> 00:17:46,080
whole hammers, drill pipes, Subs
like casing systems is expensive

284
00:17:46,080 --> 00:17:49,120
when you get when you're just
chewing through parts, which

285
00:17:49,120 --> 00:17:52,800
kind of reminds me BD drill
fixes this black diamond

286
00:17:52,800 --> 00:17:55,000
drilling services alley.
They are the go to name in

287
00:17:55,000 --> 00:17:57,840
consumables because their parts
go the distance.

288
00:17:57,840 --> 00:17:59,680
BD drill.
You want to minimize the cost

289
00:17:59,680 --> 00:18:02,720
per meter drilled, you better be
using BD drill consumables in

290
00:18:02,720 --> 00:18:05,040
those rigs.
They've got distribution hubs

291
00:18:05,040 --> 00:18:08,200
across the world.
They manufacture over 600,000

292
00:18:08,400 --> 00:18:11,160
drill bits a year under strict
QA testing, which means you know

293
00:18:11,160 --> 00:18:14,240
what it's going to last.
Inventory on site everywhere.

294
00:18:14,240 --> 00:18:16,920
Use BD drill, make exploration
cheaper and find more

295
00:18:16,920 --> 00:18:17,960
discoveries.
Love it.

296
00:18:17,960 --> 00:18:21,000
BD Drill.
I mean, like, like we also sort

297
00:18:21,000 --> 00:18:25,680
of spoke about though the global
macro environment, the role that

298
00:18:25,680 --> 00:18:29,240
the US wants to play in
countries around the world over

299
00:18:29,240 --> 00:18:31,400
that period, over the last six
months has changed quite

300
00:18:31,800 --> 00:18:34,160
dramatically.
It was, you know, the, the

301
00:18:34,160 --> 00:18:37,200
articles you'd see about the US
doing anything in sort of

302
00:18:37,200 --> 00:18:39,040
Central Africa.
There were very few and far

303
00:18:39,040 --> 00:18:41,960
between over the past five plus
years.

304
00:18:42,480 --> 00:18:45,400
And then all of a sudden I
started seeing them a couple

305
00:18:45,400 --> 00:18:48,760
times a day coming through.
What do you think is the role of

306
00:18:48,800 --> 00:18:52,600
of the states in, in Central
Africa, in in Zambia, in the

307
00:18:52,600 --> 00:18:55,040
DRC, these sorts of parts going
forward?

308
00:18:58,040 --> 00:19:02,160
I think these are are critical
countries for the United States.

309
00:19:03,160 --> 00:19:07,320
Let's just call it the West in
general, I'll say Japan,

310
00:19:07,320 --> 00:19:09,840
Australia, Europe and the United
States.

311
00:19:10,120 --> 00:19:14,400
I think these are critical
markets for them to be involved

312
00:19:14,400 --> 00:19:16,080
in.
I mean, you look at something

313
00:19:16,080 --> 00:19:23,480
like the DRC and they've got
just a tremendous natural

314
00:19:23,480 --> 00:19:29,560
resource endowment and it is
monopolized by China and it is

315
00:19:29,560 --> 00:19:33,000
need by China because China's
got some special insight.

316
00:19:33,440 --> 00:19:38,040
It's been abolized by China
because China shows up and, and,

317
00:19:38,280 --> 00:19:42,240
and basically says we'd like to
do business here. the United

318
00:19:42,240 --> 00:19:46,240
States doesn't show up.
Europe shows up in some places.

319
00:19:46,880 --> 00:19:51,200
Australia, you guys are a little
more adventurous than most of

320
00:19:51,640 --> 00:19:54,360
the developed world.
So, you know, mining firms in

321
00:19:54,360 --> 00:19:58,160
Australia are Australian mining
firms are in Africa.

322
00:19:58,920 --> 00:20:01,280
But generally speaking, you
know, we just haven't been

323
00:20:01,280 --> 00:20:05,960
showing up.
We've got to show up because

324
00:20:05,960 --> 00:20:10,560
this is where the, the, the
remaining sort of relatively

325
00:20:10,560 --> 00:20:15,160
easy geological deposits are in
Africa.

326
00:20:15,160 --> 00:20:16,920
And it's only because it's under
explored.

327
00:20:16,920 --> 00:20:19,200
I mean, the other place would be
someplace like Iran.

328
00:20:20,960 --> 00:20:24,160
But you know, who knows how long
it takes for for.

329
00:20:24,520 --> 00:20:26,800
You know, mining firms to enter
a place like Iran.

330
00:20:29,200 --> 00:20:33,320
So they're critical markets.
It's a critical sort of area of

331
00:20:33,320 --> 00:20:36,480
competition between the West and
China.

332
00:20:37,480 --> 00:20:40,720
And at the moment China is
absolutely winning.

333
00:20:41,040 --> 00:20:45,080
But think, you know, one of some
of the recent headlines you

334
00:20:45,080 --> 00:20:48,120
would have seen about the US and
Africa have to do with the

335
00:20:48,120 --> 00:20:57,560
railway into Zambia from the
from the coast on, yes, through

336
00:20:57,560 --> 00:21:02,440
Angola to get copper out.
And you know, that railway was

337
00:21:02,440 --> 00:21:05,880
originally built by the Chinese,
but they did kind of like a

338
00:21:05,880 --> 00:21:08,560
mediocre job of that.
And so we're, you know, the

339
00:21:08,560 --> 00:21:14,040
United States, along with
partners in Europe, you know,

340
00:21:14,040 --> 00:21:16,880
are rebuilding that.
And, and I think that there is

341
00:21:16,880 --> 00:21:21,080
an opportunity because a lot of
the African governments are are

342
00:21:21,080 --> 00:21:24,480
absolutely unsatisfied with what
they've gotten out of China.

343
00:21:24,760 --> 00:21:27,720
You know, the relationship with
the United States and with

344
00:21:27,720 --> 00:21:32,520
Western countries tends to be
tense because we often ask a lot

345
00:21:32,720 --> 00:21:35,800
of of those countries on a
political and social side of

346
00:21:35,800 --> 00:21:37,960
things.
And China does not.

347
00:21:38,400 --> 00:21:40,880
At the same time.
Now we're starting to pull back

348
00:21:40,880 --> 00:21:45,480
on some of those requests and
can definitely provide those

349
00:21:45,480 --> 00:21:51,880
countries with a broader slate
of sort of value add that China

350
00:21:52,640 --> 00:21:58,600
is interested in doing.
And as it relates to to

351
00:21:58,720 --> 00:22:02,480
Alphamen, how do you think
things play out for them from

352
00:22:02,480 --> 00:22:04,400
here?
I mean some of it, a lot of it

353
00:22:04,400 --> 00:22:08,800
is obviously I mean the stocks
all the way back up to you know

354
00:22:10,240 --> 00:22:12,480
94 cents I think is where it
closed today.

355
00:22:13,960 --> 00:22:20,120
It's back up to you know prices
before M23 went into Goma if I

356
00:22:20,120 --> 00:22:25,160
remember correctly.
I think going forward the degree

357
00:22:25,160 --> 00:22:30,280
to which you know, we don't see
headlines about M 23 is going to

358
00:22:30,280 --> 00:22:33,200
be important.
I do think that there is an

359
00:22:33,200 --> 00:22:42,000
opportunity for them to market
themselves correctly as you know

360
00:22:42,040 --> 00:22:47,400
a western facing company in this
newly opening territory that the

361
00:22:47,400 --> 00:22:52,160
United States is now involved in
and we're providing a critical

362
00:22:52,160 --> 00:22:57,400
essential resource into Western
supply chains and that might

363
00:22:57,440 --> 00:23:00,360
allow the stock.
One of the, the challenges with

364
00:23:00,360 --> 00:23:04,720
the company was always that it
was in the DRS and so you could

365
00:23:04,720 --> 00:23:09,880
run ADCF on the company and look
at the result and you know,

366
00:23:09,880 --> 00:23:12,240
you're never going to actually
get that price.

367
00:23:12,920 --> 00:23:16,960
The political risk is too high.
Western investors are too sort

368
00:23:16,960 --> 00:23:19,720
of nervous about Africa.
So you're never going to get

369
00:23:19,720 --> 00:23:22,600
that price now.
And, and you know, maybe at the

370
00:23:22,600 --> 00:23:28,680
time it was you, the best you
could do was 60% or, or 60, you

371
00:23:28,680 --> 00:23:31,920
know, 70% of that value.
You know, now there's an

372
00:23:31,920 --> 00:23:34,800
opportunity then maybe, maybe it
can get to 85%.

373
00:23:36,680 --> 00:23:42,440
So I think there's an
opportunity for them now execute

374
00:23:42,440 --> 00:23:44,800
the restart properly.
I don't know where it currently

375
00:23:44,800 --> 00:23:46,800
stands.
I don't know how far they got in

376
00:23:46,800 --> 00:23:51,320
terms of shutting it down.
I mean, it was so quick, you

377
00:23:51,320 --> 00:23:55,040
know, I, I don't know what, you
know, for all I know they may

378
00:23:55,040 --> 00:23:57,440
have just basically pulled
everyone and shut some things

379
00:23:57,440 --> 00:23:58,960
down.
And you know, it's not going to

380
00:23:58,960 --> 00:24:03,400
be hard to turn back on.
But they definitely have an

381
00:24:03,400 --> 00:24:09,080
opportunity, I think to to try
and close their valuation gap in

382
00:24:09,080 --> 00:24:13,480
a way that they they couldn't
prior to this US agreement.

383
00:24:13,840 --> 00:24:17,920
Is is is the Capital Management
part part like the the the

384
00:24:17,920 --> 00:24:20,640
dividends, the dividend yield
has always been tremendously

385
00:24:20,640 --> 00:24:24,680
attractive on alpha man like you
think that will return?

386
00:24:25,160 --> 00:24:28,400
I think the dividend yield will
or the dividend, you know, I

387
00:24:28,400 --> 00:24:31,160
think they'll start paying the
dividend as quickly as possible.

388
00:24:32,520 --> 00:24:35,040
You know, we got to get an
estimate of what it cost to

389
00:24:35,040 --> 00:24:37,080
restart the thing.
But they, they've got a strong

390
00:24:37,080 --> 00:24:41,280
balance sheet and you know,
they've got plenty of cash.

391
00:24:41,280 --> 00:24:45,120
So I would be surprised if, you
know, we don't get dividends

392
00:24:45,120 --> 00:24:48,640
almost, you know, sort of
immediately on maybe not on

393
00:24:48,640 --> 00:24:53,560
schedule, but basically on
schedule relative to what they

394
00:24:53,560 --> 00:24:56,720
were going to do, you know, if
they hadn't interrupted

395
00:24:56,720 --> 00:25:00,600
operations.
So some delay, but I I can't

396
00:25:00,600 --> 00:25:03,360
imagine that it would be much.
And then the other thing is that

397
00:25:03,360 --> 00:25:07,440
with their ownership, the
private equity firm that owns a

398
00:25:07,440 --> 00:25:12,040
big slog denim, yeah, that
dividend is how that firm gets

399
00:25:12,040 --> 00:25:15,600
paid on that position.
So I, I think it's, it's in

400
00:25:15,600 --> 00:25:20,760
everyone's interest that the
dividend get going as soon as is

401
00:25:20,760 --> 00:25:23,600
feasible.
I've no doubt that they'll

402
00:25:23,640 --> 00:25:27,360
they'll manage that sort of
appropriately relative to their

403
00:25:27,360 --> 00:25:30,240
their balance sheet.
If we move one country to the

404
00:25:30,240 --> 00:25:35,680
South, will, you wrote a paper
on Zambia as a sort of emerging

405
00:25:35,720 --> 00:25:38,640
copper player, a kind of
sleeping giant, a country that

406
00:25:38,640 --> 00:25:41,720
had produced a lot of copper in
the past and then sort of

407
00:25:41,720 --> 00:25:44,640
mismanaged to an extent at a
national level.

408
00:25:45,040 --> 00:25:47,480
And you've started to play that
through a few juniors.

409
00:25:47,520 --> 00:25:51,240
But if we start nice and broad,
what kind of role do you think

410
00:25:51,240 --> 00:25:54,000
and what kind of confidence do
you have in in the country being

411
00:25:54,000 --> 00:25:57,960
able to execute on pulling all
the majors back in and growing

412
00:25:57,960 --> 00:25:58,640
its profile?
I.

413
00:26:00,040 --> 00:26:04,360
Mean, you know, look at this
point, I don't think globally

414
00:26:04,360 --> 00:26:08,680
the world is at a point where we
can really afford black

415
00:26:08,680 --> 00:26:13,840
countries like Zambia that have
tremendous geological endowments

416
00:26:13,880 --> 00:26:20,320
in critical minerals, just sort
of, you know, fail to monetize

417
00:26:20,320 --> 00:26:25,600
them in some way, shape or form.
I think that, you know, it's

418
00:26:25,600 --> 00:26:29,960
definitely an uphill slope for a
country like Zambia.

419
00:26:29,960 --> 00:26:36,920
They, you know, they have some
majors in their things, but you

420
00:26:36,920 --> 00:26:40,760
know, the, the infrastructure,
if you will, that needs to

421
00:26:40,760 --> 00:26:43,360
exist, not just the physical
infrastructure, but the legal

422
00:26:43,360 --> 00:26:44,920
infrastructure, things of that
nature.

423
00:26:45,240 --> 00:26:49,680
You know, it needs to be a
little more tested and it needs

424
00:26:49,680 --> 00:26:54,160
to, you know, to continue to
evolve with the with the demands

425
00:26:54,160 --> 00:26:57,560
of the situation.
There's definitely going to be

426
00:26:57,560 --> 00:27:01,280
some hurdles.
Electricity already is a hurdle

427
00:27:01,280 --> 00:27:04,520
in country.
So there is some obvious hurdles

428
00:27:04,520 --> 00:27:12,080
like that.
But they have a desire, they

429
00:27:12,080 --> 00:27:17,600
have the, the resources to
become a, a major player in

430
00:27:17,600 --> 00:27:20,320
copper.
And so there's there's no reason

431
00:27:20,320 --> 00:27:24,560
why they shouldn't.
So I, I think it's going to be

432
00:27:24,560 --> 00:27:31,400
slow, but we've got some smart
people in country and, you know,

433
00:27:31,400 --> 00:27:34,120
being part of that, that sort of
Central African copper belt with

434
00:27:34,120 --> 00:27:37,120
the history that they do,
there's a lot of copper there

435
00:27:37,120 --> 00:27:39,320
and a lot of reason to believe
there's more 1.

436
00:27:40,640 --> 00:27:45,280
And it should be relatively easy
to relatively easy deposits, you

437
00:27:45,280 --> 00:27:46,720
know, in the grand scheme of
things.

438
00:27:47,840 --> 00:27:51,400
One of your portfolio companies
Prospect Resources really

439
00:27:51,400 --> 00:27:55,240
recently had yeah announced A
strategic investment from Best

440
00:27:55,240 --> 00:28:00,200
Quantum who is one of the majors
in in country and is yeah able

441
00:28:00,200 --> 00:28:02,280
to trend its brand in operating
in Zambia.

442
00:28:02,280 --> 00:28:04,720
You must have interpreted that
as a big vote of confidence in

443
00:28:04,720 --> 00:28:08,280
your strategy of of of picking
speaking juniors.

444
00:28:08,760 --> 00:28:10,400
Yeah.
So just just to be clear, I

445
00:28:10,400 --> 00:28:13,080
talked about a couple of juniors
in there in that paper.

446
00:28:13,080 --> 00:28:16,360
Prospect was one of them.
I'm not invested in prospect.

447
00:28:16,360 --> 00:28:18,120
We have a position in Midnight
Sun.

448
00:28:18,760 --> 00:28:27,120
But I absolutely think that, you
know, both the the the the

449
00:28:27,120 --> 00:28:30,240
majors like first quantum there
are vote of confidence and they

450
00:28:30,240 --> 00:28:31,880
already have some mines in the
region.

451
00:28:32,960 --> 00:28:37,600
You know, Ivanhoe is looking
cobalt metals, which is the Bill

452
00:28:37,600 --> 00:28:41,360
Gates backed AI mining firm.
We'll have to see what comes of

453
00:28:41,360 --> 00:28:43,240
it.
But you know, they have a lot of

454
00:28:43,320 --> 00:28:46,680
really strong geologists on
their team.

455
00:28:47,040 --> 00:28:50,840
They're there in a big way.
So there's there's a lot of

456
00:28:50,840 --> 00:29:00,160
people betting on Zambia as an
opportunity for the West to sort

457
00:29:00,160 --> 00:29:04,960
of catch a March, I guess on
resource development in Africa

458
00:29:05,280 --> 00:29:08,720
relative to say, China.
Talk us through the the Midnight

459
00:29:08,720 --> 00:29:12,000
Sun play just briefly.
They've they've been on a a good

460
00:29:12,000 --> 00:29:16,120
run Will and they're yeah, early
stage junior.

461
00:29:16,120 --> 00:29:19,920
What why did you go, you know,
down down to the junior and to

462
00:29:20,000 --> 00:29:22,560
to play the space?
Well, I don't tend to invest in

463
00:29:22,560 --> 00:29:24,840
a lot of majors.
Every once in a while I'll

464
00:29:24,840 --> 00:29:28,640
invest in a major, a first
quantum or bare gold or

465
00:29:28,640 --> 00:29:30,480
something like that.
But but it's not it doesn't

466
00:29:30,480 --> 00:29:35,760
happen very often, but I don't
usually go quite as early as I

467
00:29:36,320 --> 00:29:39,840
as midnight sun either.
I'm usually more of a, you know,

468
00:29:40,400 --> 00:29:46,480
invest in development.
Midnight Sun is exploring, but

469
00:29:46,680 --> 00:29:54,360
what they've found and more
importantly, the commentary I've

470
00:29:54,360 --> 00:30:02,000
seen and the people I've spoken
with at COBOL, which is again,

471
00:30:02,000 --> 00:30:07,800
the the Bill Gates backed firm.
Just think the geology is

472
00:30:07,800 --> 00:30:10,520
spectacular.
And again, you're, you're on

473
00:30:10,520 --> 00:30:17,440
that same trend as, as mines
like Kamoa Kakula, you know, big

474
00:30:19,080 --> 00:30:24,640
reasonable grade, you know,
mines that are, are going to be

475
00:30:24,640 --> 00:30:28,400
sort of Tier 1 producing or
capable of producing, you know,

476
00:30:28,400 --> 00:30:31,880
400,000 tons of copper a year or
more type of thing.

477
00:30:32,600 --> 00:30:36,080
And, and from my perspective,
you know, small mines, big

478
00:30:36,080 --> 00:30:39,440
mines, the risk is the same.
So you better go big.

479
00:30:41,240 --> 00:30:45,560
You know, I think the, the one
Dean 1 Dean family always talked

480
00:30:45,560 --> 00:30:47,200
about hunting for elephants,
right?

481
00:30:47,240 --> 00:30:48,840
You want to go hunting for
elephants.

482
00:30:49,440 --> 00:30:52,160
Where you're going to do it is a
place like Zambia or you're

483
00:30:52,160 --> 00:30:54,920
going to do it.
You know, these days in in the

484
00:30:54,920 --> 00:30:59,000
Vacuna High, Argentina, which is
going to be easier or probably

485
00:30:59,000 --> 00:31:03,360
be a little easier in Zambia
than it will be in Argentina.

486
00:31:03,360 --> 00:31:09,080
Although I'm also invested in
lending, mining, just so that's

487
00:31:09,080 --> 00:31:11,720
what attracted me to it.
And just sort of looking at the

488
00:31:11,720 --> 00:31:14,640
DRC, you sort of look at it and
you say, well, what, where,

489
00:31:14,840 --> 00:31:17,440
where does one go next?
Let's look around the area.

490
00:31:17,760 --> 00:31:21,400
And the obvious place is Zambia.
So what's happening in Zambia?

491
00:31:23,040 --> 00:31:30,240
And Midnight Sun appeared to be
the team most in a position to

492
00:31:30,240 --> 00:31:33,160
capitalize on what they've
found.

493
00:31:34,080 --> 00:31:40,400
They not only have a deal with
First Quantum also to provide

494
00:31:40,400 --> 00:31:48,880
one of their copper smelting
operations, copper refining or

495
00:31:48,880 --> 00:31:54,400
refining operations with with
oxide ore that they've

496
00:31:54,400 --> 00:31:57,880
discovered, which is should in
theory be a a sort of a quick to

497
00:31:57,880 --> 00:32:01,440
free cash flow sort of
situation.

498
00:32:02,040 --> 00:32:04,600
But this relationship with
Cobalt, the relationship with

499
00:32:04,600 --> 00:32:08,520
other firms, you know, they've
got a lot of ties to majors who

500
00:32:08,520 --> 00:32:11,480
are going to be capable of
developing these assets, capable

501
00:32:11,480 --> 00:32:15,520
of developing the mines.
And I'm always looking for sort

502
00:32:15,520 --> 00:32:18,520
of that additional optionality.
They just had a lot of

503
00:32:18,520 --> 00:32:20,840
optionality.
If we, if we look at the gold

504
00:32:20,840 --> 00:32:24,080
part of your portfolio now we'll
I'm keen to explore this and

505
00:32:24,080 --> 00:32:26,040
the, and the way you've kind of
played it, it's, it's a bit

506
00:32:26,040 --> 00:32:27,520
interesting.
So what I could kind of gather

507
00:32:27,520 --> 00:32:33,640
it's 1415% of your portfolio
largely made through 2 bets, 1

508
00:32:33,640 --> 00:32:37,160
in in G mining, the other in
Equinox.

509
00:32:37,160 --> 00:32:40,400
Why don't we start with Equinox?
They are doing a tie up with

510
00:32:40,400 --> 00:32:41,640
Caliber.
What did you make of the deal

511
00:32:41,640 --> 00:32:43,400
when when you first heard about
it?

512
00:32:44,280 --> 00:32:49,680
Well, when I first heard about
it, I was a little annoyed.

513
00:32:51,280 --> 00:32:55,360
I'd sort of thought that, you
know, this year that they might,

514
00:32:55,880 --> 00:32:59,320
you know, just sort of quietly
start producing gold and maybe

515
00:32:59,320 --> 00:33:03,400
there'd be a little free cash
flow and they tidy up the

516
00:33:03,400 --> 00:33:05,040
balance sheet a little bit and
things like that.

517
00:33:05,040 --> 00:33:08,320
I, I hadn't really given them a
hunting license, if you will,

518
00:33:08,320 --> 00:33:14,200
for this year.
That being said, after I had a

519
00:33:14,200 --> 00:33:19,240
cup of coffee and looked at the
the assets and things like that,

520
00:33:19,240 --> 00:33:24,520
it I think it makes good sense
for Equinox shareholders.

521
00:33:24,560 --> 00:33:33,720
I'm less certain if it makes
good sense for I'm blighting on

522
00:33:33,720 --> 00:33:36,240
the name of Caliber.
Caliber.

523
00:33:36,240 --> 00:33:38,320
Thank you.
I'm less certain if it makes

524
00:33:38,320 --> 00:33:40,720
good sense for Caliber, but
you're OK.

525
00:33:40,720 --> 00:33:41,760
Thank you for that and do
yourself.

526
00:33:42,160 --> 00:33:46,000
There there was actually I read
a tweet this morning, believe it

527
00:33:46,000 --> 00:33:47,600
or not, about that Equinox, I
guess what's the most

528
00:33:47,600 --> 00:33:50,240
disappointing gold stock 2025 to
date, not necessarily

529
00:33:50,240 --> 00:33:52,960
underwater, but one that has
failed to live up to

530
00:33:52,960 --> 00:33:55,480
expectations.
I'll start Equinox gold from new

531
00:33:55,480 --> 00:33:58,280
mine rewrite anticipation to
empire building at any costs,

532
00:33:58,440 --> 00:34:02,560
shareholders footing the bill of
I you would be disappointed,

533
00:34:02,560 --> 00:34:04,640
though, if you're kind of, you
know, if you if you were

534
00:34:04,640 --> 00:34:09,280
expecting a, you know, a rewrite
as as, as greenstone was ramping

535
00:34:09,400 --> 00:34:14,040
and it's a massive plan.
And, and instead you've got kind

536
00:34:14,040 --> 00:34:16,639
of the overhang of a of a deal
and shareholders that are kind

537
00:34:16,639 --> 00:34:19,639
of, yeah, weighing up whether
they want to hang around or not.

538
00:34:19,679 --> 00:34:22,040
Yeah.
Look, I mean, I've been invested

539
00:34:22,040 --> 00:34:30,040
in Equinox for six or seven
years now.

540
00:34:32,000 --> 00:34:34,639
It has not been the easiest
investment.

541
00:34:34,719 --> 00:34:37,440
I've made money on it.
I've trimmed it at times, but

542
00:34:37,440 --> 00:34:40,840
I've maintained this core
position probably far longer

543
00:34:40,840 --> 00:34:46,480
than I should have.
They said they want to be a

544
00:34:46,480 --> 00:34:49,600
million ounce producer.
They've always said that.

545
00:34:49,600 --> 00:34:55,440
And Ross BD has a thesis that I
don't think is without merit,

546
00:34:55,840 --> 00:35:01,320
that in order to be a sort of
productive gold miner these

547
00:35:01,320 --> 00:35:06,320
days, you need to achieve scale.
Because if you don't achieve

548
00:35:06,320 --> 00:35:09,240
scale, markets aren't going to
pay any attention to you.

549
00:35:09,280 --> 00:35:13,720
And it's just going to be, you
know, us on money of mine

550
00:35:13,720 --> 00:35:17,120
talking junior miners will be
the only investors when what you

551
00:35:17,120 --> 00:35:21,040
know, Ross Beatty really wants
is, is BlackRock and Vanguard

552
00:35:21,040 --> 00:35:24,440
money.
If you want BlackRock and

553
00:35:24,440 --> 00:35:26,520
Vanguard money, you absolutely
need scale.

554
00:35:26,520 --> 00:35:29,800
He's spot on about that.
If you want scale, you've got to

555
00:35:29,800 --> 00:35:31,480
be producing more than 1,000,000
oz.

556
00:35:31,680 --> 00:35:34,760
So I mean that that all ties
together in my mind.

557
00:35:36,520 --> 00:35:38,680
You know, the question was
always how did they get there?

558
00:35:39,440 --> 00:35:42,600
They've had a lot of growing
pains and trying to get there.

559
00:35:43,080 --> 00:35:48,160
But I think if you sit back and
you say, well, you know, how do

560
00:35:48,160 --> 00:35:52,760
you build a million plus oz gold
miner in less than a decade?

561
00:35:54,000 --> 00:35:57,360
There's going to be a lot of
growing pains and you're going

562
00:35:57,360 --> 00:36:01,320
to need a very patient
shareholder base to get past

563
00:36:01,320 --> 00:36:05,360
that million ounce mark.
And that's that's the role I've

564
00:36:05,360 --> 00:36:08,360
served at least as a as a very
patient shareholder whose

565
00:36:08,360 --> 00:36:11,000
understanding of the goal of
getting to 1,000,000 ounces in

566
00:36:11,000 --> 00:36:15,560
scale that should pay off in the
fullness of time.

567
00:36:15,560 --> 00:36:19,720
But you have a lot to say I'm.
Probably a brave person for

568
00:36:19,720 --> 00:36:24,280
challenging Ross Beatty on it on
anything but I yeah I almost

569
00:36:24,280 --> 00:36:29,200
wonder if if the opposite is is
kind of true for for mining

570
00:36:29,200 --> 00:36:32,880
companies in in so far that if
they like what's the sweet spot

571
00:36:32,880 --> 00:36:36,520
number of operations where you
don't need an extra level of of

572
00:36:36,520 --> 00:36:38,960
management.
How can you stay lean, nimble,

573
00:36:39,280 --> 00:36:40,960
very like efficient?
And that's, you know,

574
00:36:40,960 --> 00:36:43,760
proportionate to the, the number
of operations you have, the

575
00:36:43,760 --> 00:36:47,560
number of geographical kind of
areas that you operate in.

576
00:36:47,560 --> 00:36:50,480
And, and, and the rest of me all
know that like the, yeah, the,

577
00:36:50,640 --> 00:36:53,200
the mining companies that pop up
and create tremendous value.

578
00:36:53,200 --> 00:36:54,720
They keep things, they do keep
things lean.

579
00:36:54,720 --> 00:36:56,800
They've got a core team and
they're across like all of the

580
00:36:56,800 --> 00:36:58,760
operations stuff to the, to the
top level.

581
00:36:59,400 --> 00:37:02,680
So the scale thing kind of makes
sense in my head from the

582
00:37:02,680 --> 00:37:06,520
perspective of being wrapped
like market relevant, but I

583
00:37:06,520 --> 00:37:08,320
don't actually think it
maximizes total shareholder

584
00:37:08,320 --> 00:37:10,200
return.
I think total shareholder, it

585
00:37:10,200 --> 00:37:12,520
does maximize your pay packet at
an executive level.

586
00:37:12,600 --> 00:37:14,840
There's no doubt the only way
you can get that is by empire

587
00:37:14,840 --> 00:37:17,080
building, but I don't think it
maximizes total shareholder

588
00:37:17,080 --> 00:37:20,560
return necessarily.
So I think yeah, yeah.

589
00:37:20,560 --> 00:37:24,840
So I think it's going to depend
if I, I think there's probably a

590
00:37:24,840 --> 00:37:30,760
lot of truth to what you say.
It'll be a function of whether

591
00:37:30,760 --> 00:37:35,240
it attracts flows or not.
Yeah, certainly liquidity, all

592
00:37:35,240 --> 00:37:36,760
that.
Sort of stuff if it can, if, if

593
00:37:36,760 --> 00:37:42,160
it can truly attract flow and
you know it, it gets up there

594
00:37:42,160 --> 00:37:45,360
with Barrick and Newmont.
I mean, it's not going to be

595
00:37:45,360 --> 00:37:47,760
that many ounces.
So it's not going to be quite

596
00:37:47,760 --> 00:37:51,280
there.
But and you know, can can play a

597
00:37:51,280 --> 00:37:58,480
bigger role, an ever bigger role
in ETFs and benefit from the

598
00:38:01,240 --> 00:38:05,240
inelasticity of being a larger
and larger, you know, you become

599
00:38:05,240 --> 00:38:08,760
a larger and larger position in
an ETF that is market cap

600
00:38:08,760 --> 00:38:11,520
weighted.
You get an ever increasing

601
00:38:11,520 --> 00:38:14,600
percentage of the flows that
flow into that ETF.

602
00:38:14,880 --> 00:38:20,640
And your stock price response
is, is you know, if you put a

603
00:38:20,640 --> 00:38:23,000
dollar in the stock doesn't go
up a dollar, it now goes up

604
00:38:23,000 --> 00:38:26,600
$1.50 and then it goes up $1.75
when you put a dollar in

605
00:38:26,600 --> 00:38:31,200
etcetera, etcetera.
I don't know if he thought

606
00:38:31,200 --> 00:38:37,200
through it that deeply, but
there is some logic to that.

607
00:38:37,200 --> 00:38:40,240
And so I but I do think you're
right on a pure fundamental

608
00:38:40,240 --> 00:38:43,600
basis for sure.
I don't think it is going to

609
00:38:43,600 --> 00:38:47,800
generate the total shareholder
returns, the free cash flow

610
00:38:47,800 --> 00:38:53,560
etcetera, but it might, it might
surprise in the stock price.

611
00:38:54,640 --> 00:38:56,720
It's all good.
You just put a chart of the

612
00:38:56,720 --> 00:39:00,680
market cap growth in instead of
the, the share price growth as I

613
00:39:00,680 --> 00:39:02,920
think they did in that
presentation.

614
00:39:03,640 --> 00:39:05,240
It's, it's an interesting one.
I mean, one of the other

615
00:39:05,240 --> 00:39:07,840
benefits as well is the, the
cheaper cost of capital for

616
00:39:08,520 --> 00:39:11,080
future deals, which they'll no
doubt do.

617
00:39:11,080 --> 00:39:13,400
And it'll be interesting to see
how they go about cleaning up

618
00:39:13,400 --> 00:39:17,160
the portfolio.
From memory, they've got 8 or 9

619
00:39:17,640 --> 00:39:23,400
producing assets now and you
know each party brings 11 chunky

620
00:39:23,400 --> 00:39:27,480
one and then you've got a tail
end of of assets through through

621
00:39:27,480 --> 00:39:32,560
Central America and.
Unless as of a week ago, there

622
00:39:32,560 --> 00:39:35,720
is yeah some some non renewal of
of one of their minds.

623
00:39:36,240 --> 00:39:38,120
Yeah, I mean, they've got.
The question marks on the

624
00:39:38,120 --> 00:39:41,960
Mexican one, yeah.
Yeah, Los Filos, they they've

625
00:39:41,960 --> 00:39:45,840
got to, they've got to figure
out something with Los Filos

626
00:39:45,840 --> 00:39:50,560
that I mean, first they've got
to obviously get this merger

627
00:39:50,560 --> 00:39:53,320
done now.
So it's not like they don't have

628
00:39:53,680 --> 00:39:56,240
plenty of things to do.
Then they absolutely have to

629
00:39:56,240 --> 00:39:59,840
figure out Los Filos.
But then they probably, you

630
00:39:59,840 --> 00:40:01,960
know, they have, they have
these.

631
00:40:03,240 --> 00:40:06,920
A mine in Brazil called Santa
Luis.

632
00:40:06,960 --> 00:40:12,280
Santa Luis and they have a mine,
RDM gold mine, both of those are

633
00:40:12,280 --> 00:40:18,600
in Brazil.
They probably can jettison those

634
00:40:18,600 --> 00:40:20,520
at this point.
They probably should try and

635
00:40:20,520 --> 00:40:27,320
find someone to buy them.
You know, Mesquite in

636
00:40:27,600 --> 00:40:32,760
California, somehow they managed
to keep finding Oz there and

637
00:40:32,760 --> 00:40:37,160
keep producing, but it's not,
you know, it's not the greatest

638
00:40:37,160 --> 00:40:40,320
mine in the world.
And once Castle Mountain is up

639
00:40:40,320 --> 00:40:42,920
and running in a couple of
years, they probably should get

640
00:40:42,920 --> 00:40:45,960
rid of that too.
So they're definitely some mines

641
00:40:45,960 --> 00:40:50,720
that they should probably
jettison that as they continue

642
00:40:50,720 --> 00:40:58,160
to grow, hopefully, sure.
Just become more more trouble

643
00:40:58,160 --> 00:41:02,000
than there was.
Agreed.

644
00:41:02,000 --> 00:41:05,520
If we if we stay in, in Brazil
on the point you've, you've also

645
00:41:05,520 --> 00:41:08,640
had mentioned G mining, which is
a really cool story.

646
00:41:08,640 --> 00:41:11,880
You know, a mining services
company that's coming into the

647
00:41:11,880 --> 00:41:14,760
the space of wanting to own
assets, as many of them, as many

648
00:41:14,760 --> 00:41:18,200
of them actually want to do, but
they're putting it into practice

649
00:41:18,200 --> 00:41:21,040
and they've, I think, I think
you said, when I listened to

650
00:41:21,040 --> 00:41:25,520
you, you said they've built 90
plus processing plants around

651
00:41:25,520 --> 00:41:30,520
the world and now they're
they're producing from talk on

652
00:41:30,520 --> 00:41:32,720
Tinzin.
Yo, I'm saying that one right.

653
00:41:33,000 --> 00:41:38,800
And they've got a a development
asset, which they should hit if

654
00:41:38,800 --> 00:41:42,200
ID on later this year.
How long have you been?

655
00:41:42,640 --> 00:41:44,360
How long have you been playing G
Mining?

656
00:41:45,480 --> 00:41:50,120
Yeah, so not all that long, I
guess.

657
00:41:50,360 --> 00:41:56,880
So the Guyana asset they have is
called OCO West and OCO W they

658
00:41:56,880 --> 00:42:06,120
bought from Reunion.
I was invested in Reunion and

659
00:42:06,120 --> 00:42:10,440
that's how I actually came to
Gene Mining and I didn't.

660
00:42:10,440 --> 00:42:12,960
I mean, I'd heard the name, but
I just had never actually looked

661
00:42:12,960 --> 00:42:16,920
at it until they made the offer
on Reunion.

662
00:42:16,920 --> 00:42:20,960
And I was in Reunion because of
some of the people that were

663
00:42:20,960 --> 00:42:24,600
involved with Reunion and some
of their track record.

664
00:42:25,480 --> 00:42:30,840
And then I started digging into
G mining and you know, they're,

665
00:42:30,920 --> 00:42:33,960
they're the service side of the
business.

666
00:42:34,000 --> 00:42:38,960
Just has such a good reputation
and has done such a good job at,

667
00:42:39,320 --> 00:42:44,760
at all the sites that they've
operated on that this transition

668
00:42:44,760 --> 00:42:47,920
to building, you know, building
and owning the mines outright

669
00:42:49,960 --> 00:42:52,720
kind of made sense.
It was quite an intriguing move.

670
00:42:53,600 --> 00:42:58,760
And so the combination of of
the, the success they had

671
00:42:58,760 --> 00:43:03,280
putting up the you did a better
job pronouncing it that.

672
00:43:03,280 --> 00:43:09,560
I'm going to then call it Tucka
Tucka the the Tuck of mind.

673
00:43:10,200 --> 00:43:13,280
It just made sense to sort of
continue to hold my reunion go

674
00:43:13,320 --> 00:43:18,080
or what had been a reunion gold
position and over time, I just

675
00:43:18,080 --> 00:43:22,320
continued to build into it.
I think I made my last purchases

676
00:43:22,320 --> 00:43:27,640
and in sort of like November of
last year and so have held it

677
00:43:27,640 --> 00:43:34,360
since, although I did recently
trim it because it got to be 14%

678
00:43:34,360 --> 00:43:37,040
of My Portfolio.
Yeah.

679
00:43:37,080 --> 00:43:42,160
And the Guyana like asset looks
pretty special and there's a lot

680
00:43:42,160 --> 00:43:44,320
of interest in that.
And I could, you know, the

681
00:43:44,360 --> 00:43:49,200
Guyana Shield at the at the
moment rumour that, you know,

682
00:43:49,240 --> 00:43:52,160
GG2's, you know, potentially
going to get there'll be a deal

683
00:43:52,160 --> 00:43:54,200
with Anglo Gold in the near
future.

684
00:43:54,200 --> 00:43:57,840
And yes, it seems like a pretty
interesting kind of part of part

685
00:43:57,840 --> 00:44:01,120
of the gold growth stories that
are out there at the moment.

686
00:44:02,440 --> 00:44:09,360
Yeah, Well, it's definitely,
definitely one of the last

687
00:44:09,360 --> 00:44:12,320
couple of years, I guess maybe
over the last 10 years it it

688
00:44:12,320 --> 00:44:16,560
went from being, you know, one
of those under explored areas to

689
00:44:16,560 --> 00:44:20,640
now an area that is, you know,
sort of ripe with, you know,

690
00:44:20,640 --> 00:44:22,920
geologists running around
looking for looking for

691
00:44:22,920 --> 00:44:26,600
opportunities and they certainly
have found some.

692
00:44:27,960 --> 00:44:33,200
And yes, I think OCA W looks
like it'll be a pretty great

693
00:44:33,200 --> 00:44:37,440
deposit, so.
I'm really keen to hear you

694
00:44:37,440 --> 00:44:41,240
speak a bit more about your,
your portfolio construction

695
00:44:41,280 --> 00:44:45,400
because the way you kind of
piece it together against some

696
00:44:45,400 --> 00:44:48,480
of the other funds that we, we
speak with, you take relatively

697
00:44:48,480 --> 00:44:51,040
large positions.
You know, a lot of others might

698
00:44:51,040 --> 00:44:54,960
talk in the ones twos, threes, 4
percents of the portfolio.

699
00:44:55,920 --> 00:44:58,200
Do you have sort of bands within
each commodity?

700
00:44:58,200 --> 00:45:00,480
And I know you're not just in
mining, yet you spread across

701
00:45:01,120 --> 00:45:02,600
industrials and these sorts of
things.

702
00:45:02,600 --> 00:45:06,800
But do you have sort of Max
sizes that you can sort of

703
00:45:06,800 --> 00:45:09,160
allocate to, to certain parts
and that kind of guides your

704
00:45:09,160 --> 00:45:11,160
thinking?
And then you like to actually

705
00:45:11,160 --> 00:45:13,800
not be spread across too many
names when it comes down to, you

706
00:45:14,240 --> 00:45:16,960
know, whether that be gold,
copper, energy.

707
00:45:16,960 --> 00:45:24,400
How do you think about that?
So work oil construction is

708
00:45:24,400 --> 00:45:30,760
really tricky.
I think it, I think it deserves

709
00:45:30,760 --> 00:45:33,120
a lot more attention than people
give it.

710
00:45:33,600 --> 00:45:39,480
And I think it's an area where
there is more opportunity to add

711
00:45:39,480 --> 00:45:43,360
value for your investors than
people tend to think.

712
00:45:45,480 --> 00:45:48,360
You know, I, I can't really get
much better at analyzing a

713
00:45:48,400 --> 00:45:51,480
balance sheet.
Sort of I've looked at them and

714
00:45:52,080 --> 00:45:54,360
probably about as good as I'm
going to get it analyzing a

715
00:45:54,360 --> 00:45:59,680
balance sheet, but there's still
room for improvement and

716
00:45:59,680 --> 00:46:02,440
innovation in portfolio design,
I think.

717
00:46:02,800 --> 00:46:10,280
So in my case, at the moment, as
you said, I, I sort of, I invest

718
00:46:10,280 --> 00:46:12,120
in energy, materials and
industrials.

719
00:46:12,560 --> 00:46:16,720
I aim to roughly put about 1/3
of the portfolio in each of

720
00:46:16,720 --> 00:46:20,840
those categories.
Inevitably, I end up with more

721
00:46:20,840 --> 00:46:25,360
like 40% energy, 40% materials
and the remainder in industrials

722
00:46:25,360 --> 00:46:28,240
rather than it being evenly
divided across all three.

723
00:46:29,120 --> 00:46:35,800
But then after that it, it
becomes more of an exercise of

724
00:46:35,800 --> 00:46:41,000
looking at how much correlation
I have between different

725
00:46:41,000 --> 00:46:46,280
companies and different assets
and different commodities At the

726
00:46:46,280 --> 00:46:50,440
individual position level.
Though the way I approach my

727
00:46:50,440 --> 00:46:57,560
sizing is I've, I've sort of
figured out this is what I, this

728
00:46:57,560 --> 00:47:00,400
is what I'd want a 10% position
to look like.

729
00:47:00,560 --> 00:47:03,360
If I was to say, go into a
company on day one and just put

730
00:47:03,360 --> 00:47:06,200
10% of the portfolio down on day
one.

731
00:47:07,040 --> 00:47:09,520
This is the criteria it would
have to meet.

732
00:47:10,480 --> 00:47:15,920
And then position sizing is
scaled basically linearly off of

733
00:47:15,920 --> 00:47:20,120
that.
So let's, let's say it's, you

734
00:47:20,120 --> 00:47:24,600
know, let, let's say I demand a,
you know, whatever, a solid

735
00:47:24,600 --> 00:47:27,280
balance sheet.
And oil companies are a little

736
00:47:27,280 --> 00:47:29,720
easier because they have usually
good dividends.

737
00:47:30,240 --> 00:47:34,880
Let's say for an oil company to
be 10% position, I demand a 10%

738
00:47:34,880 --> 00:47:37,880
dividend.
This company is interesting,

739
00:47:37,880 --> 00:47:41,560
it's got good return potential,
but it's only got an 8% dividend

740
00:47:41,560 --> 00:47:45,400
yield or a 6% dividend yield.
It's going to scale smaller on

741
00:47:45,400 --> 00:47:49,560
this sort of linear system that
I have set up relative to the

742
00:47:49,560 --> 00:47:52,000
perfect position.
The perfect position is

743
00:47:52,000 --> 00:47:55,760
something I can go into with 10%
of the portfolio on day one.

744
00:47:57,000 --> 00:47:59,640
And so that's how I sort of
manage the position sizing.

745
00:47:59,640 --> 00:48:03,920
And then after that I, I think
that that initial position

746
00:48:03,920 --> 00:48:06,080
sizing is relatively easy and
straightforward.

747
00:48:06,440 --> 00:48:10,440
It's the the management of the
position to the life that is

748
00:48:10,440 --> 00:48:15,200
actually much more tricky.
So how large do I let G mining

749
00:48:15,200 --> 00:48:18,000
get?
I, in this case, I let it get to

750
00:48:18,000 --> 00:48:20,880
14%.
And then the beginning of last

751
00:48:20,880 --> 00:48:24,600
week, I trimmed it.
And I'd love to say that I had a

752
00:48:24,600 --> 00:48:28,600
really sophisticated way to
decide that now is the time to

753
00:48:28,600 --> 00:48:33,080
trim that position.
But the reality is that I've

754
00:48:33,080 --> 00:48:40,480
looked at gold positioning.
I looked at, you know, sentiment

755
00:48:42,000 --> 00:48:46,960
around the economy.
I looked at news flow, I looked

756
00:48:46,960 --> 00:48:49,920
at the fact that it was starting
to the gold price was sort of

757
00:48:49,920 --> 00:48:57,120
starting to trade sideways and I
had no fundamental catalysts and

758
00:48:57,120 --> 00:48:59,600
sort of all that together.
I said, OK, so now's the time to

759
00:48:59,600 --> 00:49:02,600
trim it.
And I actually trimmed it back

760
00:49:03,600 --> 00:49:09,760
to the, the level that my sort
of linear scaling said it should

761
00:49:09,760 --> 00:49:13,240
now be at.
So it's that it should now be

762
00:49:13,240 --> 00:49:18,200
more like a 7% position in My
Portfolio given all the possible

763
00:49:18,200 --> 00:49:21,400
sort of returns that I expect
from it going forward.

764
00:49:21,840 --> 00:49:24,800
And so I've scaled it back to
that and and actually I, I

765
00:49:24,800 --> 00:49:27,280
suspect I'm trying to scale back
a little bit further.

766
00:49:27,960 --> 00:49:32,600
So your perfect position is 10%.
Do you actually come across many

767
00:49:32,600 --> 00:49:36,240
companies that that meet that
top notch criteria?

768
00:49:37,680 --> 00:49:43,440
No, so and actually my, my, my,
my top position size is, is 8%.

769
00:49:44,320 --> 00:49:46,640
It's not actually 10%.
It's easier just to think about

770
00:49:46,640 --> 00:49:48,040
things in terms of 10%.
Gotcha.

771
00:49:51,000 --> 00:49:56,400
It's 8%.
And no, I, I don't, I don't, I

772
00:49:56,400 --> 00:50:00,640
don't know if I've ever actually
put anything on at 8% on sort of

773
00:50:00,640 --> 00:50:04,840
like day one.
It would have to just be

774
00:50:05,360 --> 00:50:08,640
spectacular because because then
my room to average down is quite

775
00:50:08,640 --> 00:50:12,640
limited to, it's got to fall
pretty precipitously for me to

776
00:50:12,640 --> 00:50:14,920
average down.
And, and admittedly, I would say

777
00:50:14,920 --> 00:50:18,240
my first purchase is no one is
worse at, at their first

778
00:50:18,240 --> 00:50:21,920
purchase than I am.
Every first purchase I make is,

779
00:50:22,640 --> 00:50:26,560
you know, like 25% above where
my last purchase is.

780
00:50:27,680 --> 00:50:32,400
But I I I need room to average
down because I I'm always

781
00:50:32,400 --> 00:50:33,680
overly.
It seems.

782
00:50:33,920 --> 00:50:36,120
Like you're uncharacteristically
self deprecating for an

783
00:50:36,120 --> 00:50:38,320
American.
Well, like you're, you're

784
00:50:38,320 --> 00:50:40,400
generally one of the most
unusual fund managers.

785
00:50:40,400 --> 00:50:42,880
I reckon that we've we, you
know, we've spoken with in the

786
00:50:42,880 --> 00:50:46,920
sense that like you're a, you're
a North Carolina and that cares

787
00:50:46,920 --> 00:50:49,000
about an invest in mining
stocks.

788
00:50:50,440 --> 00:50:52,840
You run a one man fund.
Like it's still, it's kind of

789
00:50:52,840 --> 00:50:54,800
perplexing to me that you can
outsource everything and it's

790
00:50:54,800 --> 00:50:57,240
like the fund is, is you and
only you.

791
00:50:57,240 --> 00:50:59,480
That's kind of like just a
remarkable thing to think.

792
00:50:59,480 --> 00:51:03,280
About I'll I'll make it even a
little more confusing.

793
00:51:03,680 --> 00:51:05,880
I'm not actually from North
Carolina.

794
00:51:05,880 --> 00:51:08,000
I'm actually a Connecticut
Yankee.

795
00:51:08,040 --> 00:51:11,880
Oh, that probably makes sense.
Yeah, Stout gotcha.

796
00:51:11,880 --> 00:51:17,360
And spent his entire life on the
Wall Street and in New England

797
00:51:17,360 --> 00:51:22,040
private schools.
I never got within 1000 miles of

798
00:51:22,040 --> 00:51:25,240
a mine before I decided I wanted
to invest in mines.

799
00:51:25,240 --> 00:51:29,120
Perplexity it's but I respect
the the strategy to, you know,

800
00:51:29,520 --> 00:51:32,000
be different and seek alpha
where you know others are kind

801
00:51:32,000 --> 00:51:34,920
of not playing.
Yeah, I think it's.

802
00:51:35,000 --> 00:51:38,200
A We are trying, I am trying to
expand the team now that was

803
00:51:38,200 --> 00:51:40,360
going on, hopefully not giving
you a one man shot for that

804
00:51:40,360 --> 00:51:41,680
much.
Longer like, like I think you're

805
00:51:41,680 --> 00:51:43,840
the only person I've ever met
that has like successfully

806
00:51:43,840 --> 00:51:45,120
outsourced absolutely
everything.

807
00:51:45,120 --> 00:51:46,400
Like I've never heard of that
before.

808
00:51:46,640 --> 00:51:48,960
Maybe it's a more common
modeling in the US.

809
00:51:48,960 --> 00:51:53,160
Yeah, I don't, I don't know.
I don't know how common it is.

810
00:51:53,480 --> 00:51:56,880
I mean, the, the, the ability to
outsource things here in the

811
00:51:56,880 --> 00:52:02,600
United States and the acceptance
of that by family offices,

812
00:52:02,600 --> 00:52:06,960
institutions, high net worth,
high net worth, it's easy.

813
00:52:07,560 --> 00:52:10,440
Family offices, it's a little
bit of a higher hurdle.

814
00:52:11,640 --> 00:52:14,520
But both family offices and
institutions at this point are,

815
00:52:14,520 --> 00:52:17,320
are pretty accepting of the
outsourcing.

816
00:52:17,800 --> 00:52:21,480
They're frankly less accepting
of the one man person, sort of

817
00:52:21,640 --> 00:52:26,040
my my one man person would, if
you will, then the outsourcing

818
00:52:26,040 --> 00:52:28,920
that.
That and that's, that's, that's

819
00:52:28,920 --> 00:52:31,120
kind of like my, my next
question is, I mean, you have to

820
00:52:32,320 --> 00:52:34,240
worry about everything in the
running of the business that the

821
00:52:34,240 --> 00:52:37,680
marketing, yeah, like
relationships with your

822
00:52:37,680 --> 00:52:41,320
investors, while also kind of,
you know, keeping tabs on every

823
00:52:41,320 --> 00:52:44,800
single stock and also seeking
new ideas.

824
00:52:45,720 --> 00:52:48,000
I'm curious like what?
What are your strategies for

825
00:52:48,000 --> 00:52:51,440
idea generation when there's
unlimited desires for your

826
00:52:51,440 --> 00:53:01,520
bandwidth?
So I try to keep my calendar as

827
00:53:03,080 --> 00:53:09,600
empty as possible so I don't
schedule a lot of meetings.

828
00:53:09,600 --> 00:53:12,480
I don't, I mean, today.
You guys are the first people

829
00:53:12,480 --> 00:53:15,880
I've talked to in a long time
I've spent.

830
00:53:15,920 --> 00:53:18,440
I've been here in this.
We should add for the listeners

831
00:53:18,440 --> 00:53:20,160
that you're speaking to us at, I
think, 8:00 PM.

832
00:53:21,240 --> 00:53:25,240
Yeah. 8:00 PM, Yeah, or I'm
sorry, it's 8:58 PM.

833
00:53:25,240 --> 00:53:32,120
There we go.
So my day starts at 4:45 and

834
00:53:33,080 --> 00:53:37,560
it's basically, you know, I
usually kick off sort of around

835
00:53:37,560 --> 00:53:41,160
now.
And you know, if I didn't have

836
00:53:41,160 --> 00:53:44,680
this podcast, I wouldn't have
talked with anyone all day other

837
00:53:44,680 --> 00:53:46,800
than a few chats with people on
Bloomberg.

838
00:53:48,920 --> 00:53:53,800
So I try to keep my my schedule
just open and mostly just spend

839
00:53:53,800 --> 00:53:55,680
the entire day reading and
writing.

840
00:53:56,640 --> 00:54:01,320
I would say that I think and
generate most of my good ideas

841
00:54:01,360 --> 00:54:05,280
from reading something and then
trying to write about it and

842
00:54:05,280 --> 00:54:09,080
trying to fit the pieces of what
I'm reading together and then

843
00:54:09,080 --> 00:54:11,560
saying, oh, they're sort of
looks like there's an

844
00:54:11,560 --> 00:54:14,680
opportunity or a gap there.
What is the company that's

845
00:54:14,680 --> 00:54:18,600
filling that gap in either, you
know, sort of the argument that

846
00:54:18,600 --> 00:54:24,240
I've decided to make about
something or, you know, the

847
00:54:24,240 --> 00:54:26,480
evolution of an industry or
something like that.

848
00:54:28,680 --> 00:54:31,560
And I try to read really
broadly.

849
00:54:31,560 --> 00:54:36,360
I also try to focus most of my
time and effort on, you know,

850
00:54:36,360 --> 00:54:39,880
certain places like Africa,
right, where I don't think other

851
00:54:39,880 --> 00:54:42,240
people are.
So for instance, like you guys

852
00:54:42,240 --> 00:54:45,280
couldn't ask me anything about
fracking for the way I know

853
00:54:45,280 --> 00:54:47,360
nothing about them.
Never.

854
00:54:47,360 --> 00:54:50,360
I've hardly ever even looked at
a fracking like an oil,

855
00:54:50,360 --> 00:54:52,000
electric, gas producer.
That's a fracking.

856
00:54:52,360 --> 00:54:55,360
Why?
Because there's tons of people

857
00:54:55,360 --> 00:54:58,560
here in the United States who
spend all day everyday doing

858
00:54:58,560 --> 00:55:04,600
nothing but thinking about U.S.
oil and natural gas, for

859
00:55:05,000 --> 00:55:08,320
instance.
I can add no value there because

860
00:55:08,320 --> 00:55:11,880
I am so far behind.
It would take me a good, you

861
00:55:11,880 --> 00:55:16,400
know, 6 to 9 months of, of, of
consistent work just to catch

862
00:55:16,400 --> 00:55:19,680
up.
So I try not to spend my time in

863
00:55:19,680 --> 00:55:24,640
areas that I expect others are
going to be, you know, sort of

864
00:55:24,640 --> 00:55:26,480
focused on it.
And so that's how you end up

865
00:55:26,480 --> 00:55:31,240
with things like the Zambia play
or we're invested in it coming

866
00:55:31,240 --> 00:55:36,560
in Japan called oregano, which
makes equipment to to to purify

867
00:55:36,560 --> 00:55:41,960
water to the specifications that
biotech firms need and

868
00:55:41,960 --> 00:55:44,120
semiconductor firms need and
stuff like that.

869
00:55:44,400 --> 00:55:48,720
You know, real sort of nichy,
techy stuff, but that's not

870
00:55:48,720 --> 00:55:52,440
nichy and techy in sort of the
way people think about it these

871
00:55:52,440 --> 00:55:54,320
days, you know, acts and stuff
like that.

872
00:55:54,320 --> 00:56:00,480
So I often find reading things
like Nature or, you know,

873
00:56:00,520 --> 00:56:03,600
science journals to be really
helpful because it sort of gives

874
00:56:03,600 --> 00:56:11,880
you an idea of where the edge of
gives you an edge of where an

875
00:56:11,880 --> 00:56:14,440
idea of where the edge of sort
of like commercial operations

876
00:56:14,600 --> 00:56:16,520
are.
And so you sort of say, OK, this

877
00:56:16,520 --> 00:56:19,400
is science.
What what's just below this sort

878
00:56:19,400 --> 00:56:22,640
of science and lab?
And that's sort of an

879
00:56:22,640 --> 00:56:26,520
interesting place to look.
So I don't know if that answers

880
00:56:26,520 --> 00:56:30,040
your question.
Yeah, I, I find it intriguing.

881
00:56:30,480 --> 00:56:32,480
I do.
I wonder if like the, the future

882
00:56:32,480 --> 00:56:35,760
of like, yeah, the future of
funds management in some ways

883
00:56:35,800 --> 00:56:38,360
becomes a lot more like
individualized.

884
00:56:38,840 --> 00:56:41,760
Like I know there are regulatory
like obstacles and costs, but

885
00:56:42,040 --> 00:56:45,440
the capital is like pretty,
pretty fluid and can and can

886
00:56:45,440 --> 00:56:48,040
follow performance and
performance maybe maybe just

887
00:56:48,440 --> 00:56:53,280
tracks individuals.
I do think there's going to be a

888
00:56:53,280 --> 00:57:01,480
change.
So, you know, I should, one of

889
00:57:01,480 --> 00:57:04,040
the reasons I struggle with
trying to hire someone right now

890
00:57:04,040 --> 00:57:10,640
is because I've got an Advisory
Board and, and I have, you know,

891
00:57:10,720 --> 00:57:14,880
in an investor in my actual like
management company, you know,

892
00:57:14,880 --> 00:57:19,000
and they like me to go out and
hire, say someone who comes out

893
00:57:19,000 --> 00:57:21,440
of Millennium or someone who
comes out of Citadel or

894
00:57:21,440 --> 00:57:24,400
something like that, someone who
has their own ideas.

895
00:57:25,200 --> 00:57:27,720
And I find that to just that
sounds like a freaking nightmare

896
00:57:27,720 --> 00:57:29,680
to me.
I, I don't want someone with

897
00:57:29,680 --> 00:57:34,800
their own ideas, everything in
the end, I'm the portfolio

898
00:57:34,800 --> 00:57:38,880
manager, so I've got to sort of
backstop everything.

899
00:57:39,880 --> 00:57:45,120
So you know having someone with
their own ideas seems and I have

900
00:57:45,560 --> 00:57:49,040
hard to make because I mostly
just want them to work on my

901
00:57:49,040 --> 00:57:50,480
ideas.
I don't want them to work on

902
00:57:50,480 --> 00:57:53,880
their own ideas.
So one man shop in some regards

903
00:57:53,880 --> 00:57:57,600
works really nicely for
concentrated portfolio

904
00:57:57,600 --> 00:58:02,640
inequities and stock picking.
I do think that the industry is

905
00:58:02,680 --> 00:58:05,840
evolving.
So as as you guys sort of noted

906
00:58:05,840 --> 00:58:09,840
earlier, we have research
product out now my entire

907
00:58:09,840 --> 00:58:13,240
business is sort of research.
And so the idea of also selling

908
00:58:13,240 --> 00:58:17,000
some of the research to the, to
the degree it doesn't conflict

909
00:58:17,000 --> 00:58:20,160
with my you know, sort of
fiduciary responsibilities makes

910
00:58:20,160 --> 00:58:23,160
all the sense in the world.
I think that the industry needs

911
00:58:23,160 --> 00:58:28,760
to evolve a little bit because
we now have really big guys and

912
00:58:29,680 --> 00:58:33,120
you know that that middle is a
really hard place to be, you

913
00:58:33,120 --> 00:58:36,280
know, a couple of billion
dollars with a, with a big team.

914
00:58:37,200 --> 00:58:40,400
The, the economics of it aren't
actually all that great where

915
00:58:40,400 --> 00:58:43,480
it's at my level, the economics
really aren't that bad as long

916
00:58:43,480 --> 00:58:47,200
as I continue to add capital
and, and it gets to be quite

917
00:58:47,200 --> 00:58:49,760
good.
And selling the research at the

918
00:58:49,760 --> 00:58:52,760
same time and sort of being
multifaceted in that way,

919
00:58:52,760 --> 00:58:56,400
providing some consulting to
institutions that are looking at

920
00:58:56,400 --> 00:59:02,400
mining and things like that,
that that diversification is a

921
00:59:02,400 --> 00:59:07,320
really nice business and it all
of it adds to all the other

922
00:59:07,320 --> 00:59:11,800
parts of it.
Yeah, I actually heard you talk

923
00:59:11,800 --> 00:59:16,760
about the the multi Strat fund
that that was like effectively

924
00:59:16,760 --> 00:59:19,120
kind of piggybacking on on your
alpha.

925
00:59:19,520 --> 00:59:23,200
Did they they actually like so
do they contribute funds to you

926
00:59:23,200 --> 00:59:25,560
under management or is it just
idea generation that they're

927
00:59:25,560 --> 00:59:27,960
they're paying for?
Yeah, no.

928
00:59:27,960 --> 00:59:30,560
So they just pay for idea
generation.

929
00:59:30,720 --> 00:59:36,240
They deploy My Portfolio lock
stock and barrel with with a few

930
00:59:36,240 --> 00:59:44,200
caveats related to their
institutional sort of or their

931
00:59:44,560 --> 00:59:46,360
investment criteria.
So they're like they don't do

932
00:59:46,360 --> 00:59:49,320
anything with ETFs.
So if I put a position on that

933
00:59:49,400 --> 00:59:51,440
that's an ETF or something,
they're hard to do that.

934
00:59:51,440 --> 00:59:59,080
But any individual stock that I
invest in, they also invest in.

935
00:59:59,360 --> 01:00:02,720
They scale it proportionally
appropriately for their

936
01:00:02,720 --> 01:00:07,240
portfolio and size it according
to their sizing criteria, which

937
01:00:07,240 --> 01:00:11,680
is different than mine.
But that all occurs on their

938
01:00:11,680 --> 01:00:14,200
end.
And all they're paying for is

939
01:00:14,200 --> 01:00:16,720
sort of the flow of ideas, I
think.

940
01:00:17,160 --> 01:00:21,080
I I'm sure there is a difference
between what Millennium and

941
01:00:21,080 --> 01:00:25,280
Citadel is doing and what these
guys are doing, but the returns

942
01:00:25,280 --> 01:00:29,600
are no different.
I would be surprised if there

943
01:00:29,600 --> 01:00:34,040
isn't a lot more of what what
this multi Strat sort of for

944
01:00:34,360 --> 01:00:39,200
model is attempting doesn't come
down the pipeline because it's

945
01:00:40,640 --> 01:00:43,640
it's it's a lot more cost
effective for sure.

946
01:00:44,560 --> 01:00:50,600
And I mean, my business in
theory could be nothing but

947
01:00:50,600 --> 01:00:55,120
servicing that bigger ambitions
than that.

948
01:00:55,120 --> 01:01:00,480
But from a lifestyle
perspective, it's sufficient to,

949
01:01:00,800 --> 01:01:03,080
to, to have a nice lifestyle
level.

950
01:01:04,800 --> 01:01:09,360
So you, I could see why a lot
of, you know, people who might

951
01:01:09,360 --> 01:01:11,520
like to start a fund, but maybe
they don't want to go through

952
01:01:11,520 --> 01:01:14,280
the process, the fundraising,
stuff like that would gravitate

953
01:01:14,280 --> 01:01:18,000
towards it if there was more of
these different types of firms.

954
01:01:18,800 --> 01:01:22,320
When you talk about the
fundraising aspect, how how

955
01:01:22,320 --> 01:01:27,120
receptive are people to a kind
of natural resource, materials,

956
01:01:27,120 --> 01:01:31,560
energy focused investor in your
part of the world?

957
01:01:31,840 --> 01:01:39,720
It's, it's pretty binary.
People are either interested or

958
01:01:39,720 --> 01:01:44,000
they aren't.
And there's a lot of people who

959
01:01:44,000 --> 01:01:45,680
just don't know anything about
it.

960
01:01:46,080 --> 01:01:51,760
And so you've got to, you've got
to talk with them before before

961
01:01:51,760 --> 01:01:55,240
they can even decide whether
they're sort of an it's for them

962
01:01:55,240 --> 01:01:59,360
or not.
You know, like I, I used to

963
01:01:59,360 --> 01:02:03,320
never, but, but it's a
constantly evolving.

964
01:02:03,320 --> 01:02:05,520
Like I used to never talk with
anyone in California.

965
01:02:07,120 --> 01:02:10,600
Now I actually have a
reasonable, I've had reasonable

966
01:02:10,600 --> 01:02:15,440
inbound inquiries from family
offices and institutions in

967
01:02:15,440 --> 01:02:19,920
California who I guess have just
been sort of overweight tax for

968
01:02:19,920 --> 01:02:21,360
so long.
And they're now looking and

969
01:02:21,360 --> 01:02:24,160
they're like, well, where, what,
what do we do next?

970
01:02:24,360 --> 01:02:28,720
How do we bring more balance to
this portfolio that is, you

971
01:02:28,720 --> 01:02:31,600
know, way too heavy on VC stuff
or something like that?

972
01:02:34,520 --> 01:02:40,400
I do have more traction I find
in Europe talking with European

973
01:02:40,400 --> 01:02:43,720
families and European
institutions, they seem to get

974
01:02:43,960 --> 01:02:47,840
what they they, they get the
companies out investing in a lot

975
01:02:47,840 --> 01:02:54,720
more.
And in Asia, there's absolutely

976
01:02:54,720 --> 01:03:01,680
more to sort of acceptance,
understanding and interest in,

977
01:03:01,680 --> 01:03:05,400
in the types of businesses that
I'm I invest in than than say in

978
01:03:05,400 --> 01:03:08,280
the United States.
I think that just is a function

979
01:03:08,280 --> 01:03:12,360
of where they are in their
economic development and that's

980
01:03:12,360 --> 01:03:15,360
what everyone is familiar.
How much of that is that?

981
01:03:15,920 --> 01:03:17,600
That's a theory.
If if you're willing to share,

982
01:03:17,600 --> 01:03:21,360
how much of the capital comes X
North America X US?

983
01:03:27,180 --> 01:03:31,460
3rd little bit a little bit more
maybe yeah, a little bit more

984
01:03:32,940 --> 01:03:35,500
probably.
I suspect over the long haul it,

985
01:03:35,500 --> 01:03:42,940
it ends up running closer to
5050 and, and, and it could it,

986
01:03:43,700 --> 01:03:47,940
I think if, if I was in Europe
or if I was in Asia, it would

987
01:03:47,940 --> 01:03:51,400
obviously be very just, you
know, I'm in the United States

988
01:03:51,400 --> 01:03:56,360
and it's just easier for me to
be here and market and meet with

989
01:03:56,360 --> 01:04:00,360
investors and things like that.
That is Asia, so.

990
01:04:01,960 --> 01:04:06,000
It's been brilliant to to
explore all avenues of of the,

991
01:04:06,600 --> 01:04:08,920
you know, mining companies, but
also the funds management

992
01:04:08,920 --> 01:04:12,080
business on on this call.
Well, it's like where you are,

993
01:04:12,080 --> 01:04:13,880
so we better let you get to bed.
But thank you so much for

994
01:04:13,880 --> 01:04:15,120
joining.
Thanks Will.

995
01:04:15,560 --> 01:04:19,280
Well, I do appreciate that and
enjoy your show guys

996
01:04:19,280 --> 01:04:23,040
tremendously and obviously happy
to have you to hop back on at

997
01:04:23,040 --> 01:04:24,600
anytime.
Awesome.

998
01:04:24,600 --> 01:04:27,600
Thanks mate.
Good work trap and team that was

999
01:04:28,440 --> 01:04:31,600
I'm I'm about I'm sure I'm about
to listen to what a great

1000
01:04:31,600 --> 01:04:33,600
episode it is.
Thank you, Will Thompson, and

1001
01:04:33,640 --> 01:04:35,680
thank you, Will.
Insight and thank you to our

1002
01:04:35,680 --> 01:04:38,200
wonderful partners too, Ali.
I mean, if you're going to head

1003
01:04:38,200 --> 01:04:41,480
to the GRX conference, which you
should actually use the discount

1004
01:04:41,480 --> 01:04:44,440
codes, the show notes, get your
discount to go to that wonderful

1005
01:04:44,680 --> 01:04:47,280
conference.
I think mineral mining services

1006
01:04:47,280 --> 01:04:52,440
grounded Sandy ground support
CRE insurance K drill KC O site

1007
01:04:52,440 --> 01:04:55,080
services black diamond drilling
services cross boundary Energy

1008
01:04:57,320 --> 01:04:59,920
Information contained in this
episode of Money of Mine is of

1009
01:04:59,920 --> 01:05:02,000
general nature only and does not
take into account the

1010
01:05:02,000 --> 01:05:05,600
objectives, financial situation
or needs of any particular

1011
01:05:05,600 --> 01:05:07,640
person.
Before making any investment

1012
01:05:07,640 --> 01:05:10,720
decision, you should consult
with your financial advisor and

1013
01:05:10,720 --> 01:05:13,840
consider how appropriate the
advice is to your objectives,

1014
01:05:14,040 --> 01:05:16,040
financial situation and needs.