NST’s $5B Deal: Most Expensive Undeveloped Gold Mine Ever

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Right O money binders, Travis
told me.

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The biggest undeveloped gold
deal in history has happened

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today.
Yeah, yeah.

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I, yeah, I can qualify that
statement, I think.

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But this is a pretty momentous
day.

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It's a big day for a lot of the
great shareholders.

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Yeah God, bloody good for the
industry.

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I'm just thinking pits,
underground workers, just jet

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skis and Hiluxes coming the way
of a lot of miners.

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I love it.
Love it buddy.

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I think jeez, today is focused
on Northern Star acquiring

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Degray.
Holy snap and duck shit we go

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huge huge huge love it JD.
Weird you get a bit of a bloody

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mongrel over this mate.
Mate, I'm.

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I know you're pumped about the
underground aspect, but I think

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this is much more an an open pit
sort.

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Of open pits underground
fucking.

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Everything, it's all happening
mate.

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There's there's heaps to chat
about.

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So much it's, it feels enormous
and I'm sure we're going to go

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into it all.
Maddie, I'm, I'm keen to cover

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it all.
And we've all been doing our own

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thinking on this.
And there's the operational

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parts, there's the financial
parts, there's what it, what it

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means for, you know, Degrade for
Gold Rd, for Northern Star, all

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of that stuff and the other
players too.

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We'll get to it all.
I just wanted to tell the money

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miners we're tuning in tomorrow.
5:00 PM Brew Dog, we're having

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our money of mine Christmas
drinks come along.

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Just come along, come get pewdog
West Perth pop along 5 PMI.

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Got me simple.
I got me bloody daughter's

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Christmas concert at Wednesday
9:00 AM.

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So I'm not getting messed up but
I will be there till 10 or so.

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I have commitments, not like
last year which was 5:00 AM

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right?
Let's get into it.

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So mate, this is big time M and
I just before Chrissy.

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This is huge D oh ally ally GC
is out of win on the ATF Ding

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Ding Ding for degrade ally GC.
Oh mate, there's going to be

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bloody additions and
redemptions.

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It's flying.
The liquidity is off its charts

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right?
Right off the cuff.

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First thoughts, degrade
acquiring North Star requiring

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degrade for about 5 bill.
First thoughts were shit, that's

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a, that's a pretty big price tag
and it's a bit procyclical M&A,

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but we'll we'll get into that
I'm sure.

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Trev, what were your first
thoughts mate?

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I, I, I was, it's just, you
know, sometimes you just, you

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wake up, you check the
announcements and you're like,

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what the fuck?
It was a well kept secret, to be

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honest.
Like, yeah, I didn't, I didn't

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see it coming.
Like I knew that.

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I knew that Northern Star had
some latent interest.

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I thought it would come later,
but it's still, it's just such a

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big price tag.
I kind of, you know, always

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underestimated the probability
of it, of it, you know, coming

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through.
But it but it is and it's a year

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and it's it's a big deal.
Maddie, your thoughts mate?

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First one was like, right,
they're dressing themselves up

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to have these big, massive,
bloody long life assets, which

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could potentially mean they'll
flog off some of the smaller

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ones now and still reach their
2,000,000 ounces and could be a

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target lighter lighter in the
future for a global mega merger.

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That was the first thoughts,
literally.

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You're always thinking.
In the mind that just came to

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you.
I like it, mate, I like it and

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I'm sure I'm sure we'll talk
more about that sort of

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character Dam and you know, the
other potential, you know, spin

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outs that we might see down the
down the road near the end of

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the chat today.
I'll just RIP it out early.

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MMS better get the contract for
this. 10,000,010 million tonne

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of ore is going to be hauled by
This is transformational for

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Northern Star, but I want it to
be transformational for MMS as

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well.
Mineral Mining Services better

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be on the blower right now.
They better be in the data room.

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They better get this contract or
I'm going to spit me chips. 10

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million tonnes of ore.
Yeah, that's and the waste.

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That's mate.
They're the bloody.

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They're the time for the job.
There's a lot of material to

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move.
You're going.

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To start, do the right thing and
get MMS this contract they they

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can mix it with the big boys.
Don't worry about that.

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OK, go over the deal.
All right, let's let's run over

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the the highlights.
For anyone who didn't sort of

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read it just quickly, Northern
Star will issue 0.119 new shares

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for each degree share, So it's
an all script deal.

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Degree shareholders will get
just under 20% of the combined

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group.
So Northern Star are implying on

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their previous close price, a
$2.08 degree share price.

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That was a 44% premium to the 30
day BWOP.

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I think it was about a 37%
premium to degree's last close.

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So $5 billion.
That's the, that's the headline

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here.
Oh.

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I've said 5 1/2 before, sorry
about that 5. 5 mates and just

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sit on that five $5 billion
Aussie $5 billion for an

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undeveloped gold project never
happened in my career.

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For context, like the purchase
price here, Aussie 5 billion,

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that's about the same total
valuation as you know, both BHP

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and and London collectively
acquiring FILO on the life

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copper asset in, in Argentina
there, it's about 2 1/2 times

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the price paid for 100% of the
Super pit by, you know, Northern

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Star stake in Saracen State
collectively about five years

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ago.
It's it's 1.4 billion more than

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Anglo gold.
Ashanti have agreed to stump up

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the sentiment, which is an
existing producer of nearly

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500,000 oz per annum.
And that's that's in Egypt, of

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course.
So, you know, there's there's

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context to that, but I'm pretty
certain that this is the highest

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price tag ever paid for
development asset in the gold

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and precious metals space ever.
The North Americans will point

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to Red Back mining back in 2010,
acquired by Kinross for seven

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and a half billion Canadian
dollars.

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But there was some producing
assets part of the portfolio at

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the time too.
So I think you got to kind of

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qualify it as such.
I honestly think this is the,

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you know, the second biggest
development asset in the

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precious space.
You'd have to go all the way

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back to to 2010, when Andean was
acquired by Gold Corp for fuzzy

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3.6 billion.
This is massive.

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This is huge.
It's a huge deal.

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What do you, what do you think?
How do you look at it?

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But like when you it is as you
said bit of pro cyclical MNA but

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considering the value of their
script at the moment.

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Well, that's the that's the big
caveat to doing pro cyclical

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MNA.
You know, you're not doing a

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real Alcan loading up with with
debt in 2007 to do a deal.

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You you're using your paper.
So you know, you're you're still

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diluting, but it's it's not the
same.

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That could potentially get you
in a huge amount of debt trouble

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a couple years down the track.
Say the cycle kind of turns and

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and gold pulls off a bit.
You you got to look at it a bit

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differently.
And to add into that as well,

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the grey did close the September
quarter with 830 ish million in

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cash.
So need to need to slide that in

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that'll come into Northern stars
pro forma cash.

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So, yeah, I mean it, it's been
an interesting year, right?

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Like gold is up 3030 some
percent over the year in Aussie

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dollar turns from 3000 to to
over 4000 bucks and, and people

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just get more excited about it,
Maddie.

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And then you, you look at the
studies, you look at the DFS,

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you look at the, the optimised
pitch shells and the prices you

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did all of that AT.
And it's a positive.

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You can just say, hey, that was
done at such a a cheaper price.

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That's what you kind of do in a,
in an environment when the gold

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prices is is going up.
But of course, you know, we've

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spoken many times in the past
about hey, hey, you'd rather be

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doing M&A, looking at the cost
curve and saying, hey, the price

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is eating right into that cost
curve and heaps the minds are

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unprofitable and you're getting
a cheaper price.

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But that's not to say they're
not getting a bad deal here.

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It's it's directly proportional
sign that they're going to

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produce two and a half million
ounces in by FY20 9 and you know

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degrade is going to hold 20% of
and they're going to produce

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half a million.
So they're effectively the

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ownership is directly
proportional to their output of

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what they're predicting bang on.
Yeah.

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I mean, you could look at it on
a fully funded basis too,

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because they're still, they're
still the CapEx pieces is

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largely unfunded at this stage
too.

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So oh shit, yeah, yeah, the 800
million helps, Yeah.

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So it's yeah, might come in
handy.

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Yeah, absolutely.
So, you know, after talking

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about the, the sort of the
logistics of the kind of deal, I

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think we should talk about Gold
Rd, what their kind of role is

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the, and the register kind of
more broadly at Degrey in the

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context of getting this deal
done, getting it over the line.

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So no secret Gold Rd has a huge
stake, 17.3% of Degrey.

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They've done, you know,
phenomenally well out of that

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investment since they picked it
up some few years ago.

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They they're up to their 52 week
highs.

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I think I saw they're up over
10% today.

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So they're, they're having a
great time.

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And then you've got other instos
with 58% of the companies.

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So de Grey is pretty tightly
held.

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Top 50 shareholders hold about
75% of the business there.

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And of course, you know, you
have all sorts of kind of

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instos, you've got your, your
passive money as well as a few

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active managers holding that.
But one of the first positions

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we and a bunch of other analysts
looked at and asked on the call

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is what's gold?
What's Gold Rd going to do?

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Are they going to vote in
favour?

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Because that is the one
potential stumbling block to, to

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getting a kind of deal done.
And I'll just play a very brief

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snippet from the call today.
He is from the managing director

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of Northern Star Stew, Stew
Tonkin.

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And then sorry I didn't catch
the answer to the Gold Rd

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question about their support.
They're aware, they've been

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known, but we can't speak on
behalf of Gold Rd that that will

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be for them, them to speak.
Telling, right?

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Yeah.
I mean, given Gold Rd owns 70.3%

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of of of degrade, it's such a
meaningful stake that there's no

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way this deal got announced
without a conversation being had

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with Gold Rd.
You know, it'd be mad not to

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have the arm with them.
Yeah.

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You're asking for their
intention statement.

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You're asking for them to like
to, you know, write support that

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subject to no superior proposal,
we intend to vote in favour of

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the deal.
So that will click.

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You know, I'd find it hard to
believe that, that that that

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00:10:16,840 --> 00:10:19,880
conversation wasn't had.
But it's telling that there's

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no, no wording to that effect.
No, no mention of Gold Rd in any

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of the the docs revealed today.
So for whatever reason, Gold Rd

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has not provided their voting
intention statement.

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They're probably just retaining
their own optionality.

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But it's it's the absence of
that in the in the in the docs

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that that were released, which
was telling 17.3%.

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It is an interesting, kind of,
it's an interesting number.

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I actually think.
And, and normally it's, you

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know, it's a scheme, right.
So you need 75% of the

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shareholding by vote to, to
actually, to actually block a

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00:10:48,360 --> 00:10:50,560
deal.
I don't think, I don't think it

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would be enough to block this
deal even if they voted against

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it.
I think, I think it's like such

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a big and liquid stock.
You've got a lot of passive

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money there.
You're going to get proxy

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00:11:00,960 --> 00:11:04,040
advisors, just just recommend
shareholders and funds and

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00:11:04,040 --> 00:11:06,240
institutions vote in favour.
So that'll just, you know,

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00:11:06,600 --> 00:11:08,680
accepts into it.
And then you got M&A, ARB funds

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00:11:08,680 --> 00:11:11,400
will come in the mix and now
there's a big incentive to.

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00:11:11,560 --> 00:11:14,640
So I don't actually say that the
Goldbroad stake is an impediment

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to getting the deal done,
although their absence from from

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providing their support is
notable.

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00:11:19,040 --> 00:11:21,760
Yeah.
Unless they block out their

223
00:11:22,280 --> 00:11:25,200
position before the actual vote
to all the ARB funds and

224
00:11:25,200 --> 00:11:27,480
everyone bloody else, they could
start bloody selling it now if

225
00:11:27,480 --> 00:11:30,200
they wanted.
They they they could do that.

226
00:11:30,200 --> 00:11:33,840
I think yeah, I think they're
they're better to just hold on

227
00:11:33,840 --> 00:11:36,280
and retain optionality.
If someone else like if it

228
00:11:36,280 --> 00:11:39,360
became competitive, then that's
a strategic state that, you

229
00:11:39,360 --> 00:11:41,680
know, an antelope could could
want, right, Even though gold

230
00:11:41,680 --> 00:11:43,920
rate themself can't be
competitive in this situation,

231
00:11:43,920 --> 00:11:47,720
not on a stand alone basis.
But yeah, that I think you have

232
00:11:47,720 --> 00:11:50,720
better value just by kind of,
you know, holding out and seeing

233
00:11:50,720 --> 00:11:52,480
what happens if there's an
interloper.

234
00:11:53,560 --> 00:11:55,520
Yeah, don't you Gold Rd need the
money now?

235
00:11:56,320 --> 00:11:59,240
Don't think so, no.
I mean, but it's fascinating,

236
00:11:59,240 --> 00:12:03,080
right?
70.3% of 5 billion is is nearly

237
00:12:03,120 --> 00:12:05,440
a billion dollars.
Gold Rd's total market cap is

238
00:12:05,440 --> 00:12:09,120
2.2 billion so.
I think they put 350 mil into

239
00:12:09,120 --> 00:12:12,560
this, yeah.
I'm more thinking about the the

240
00:12:12,560 --> 00:12:16,800
C3 value on what the the value
of the Gruyere stake is.

241
00:12:16,800 --> 00:12:21,400
It's, you know, gold roads, a
sizable producer in Korea, is

242
00:12:21,400 --> 00:12:23,560
not being valued much by the
market at the moment, which is a

243
00:12:23,560 --> 00:12:26,120
pretty interesting phenomenon
when it all the other gold

244
00:12:26,120 --> 00:12:27,760
producers are trying to big
premiums.

245
00:12:29,000 --> 00:12:31,400
Yeah, I think, I think, you
know, it's that that word that

246
00:12:31,680 --> 00:12:34,000
investment bankers and and
management team loves.

247
00:12:34,000 --> 00:12:36,920
It's just optionality.
Why, why go into it now?

248
00:12:36,920 --> 00:12:40,200
Why put your name to it, you
know, given given a little bit

249
00:12:40,200 --> 00:12:42,920
away.
I mean, just just hold on, see

250
00:12:42,920 --> 00:12:46,840
what sort of happens.
Yeah, I don't know, like it's

251
00:12:46,840 --> 00:12:49,120
subject to subject to a superior
proposal.

252
00:12:49,120 --> 00:12:51,640
Like I don't think there's too
much harm in putting putting

253
00:12:51,640 --> 00:12:53,920
your name to that early.
It's just, it's an interesting,

254
00:12:54,080 --> 00:12:56,760
maybe there's like a desire to
agitate, but I don't think they

255
00:12:56,920 --> 00:13:00,520
they can keep in mind.
Remember when remember when Gina

256
00:13:00,520 --> 00:13:04,920
brought up like 20% of of a zoo,
20% of the zoo are on market and

257
00:13:04,920 --> 00:13:07,240
then all of a sudden in order to
get a deal over the line, I had

258
00:13:07,240 --> 00:13:10,840
to be a joint venture with SQM
that came in and it was, you

259
00:13:11,000 --> 00:13:13,120
know, a bidding consortium.
Maybe they've got hopes of

260
00:13:13,120 --> 00:13:15,840
having another non controlling
interest in the ultimate, the

261
00:13:15,840 --> 00:13:19,400
ultimate joint venture here by
by agitating to some extent, but

262
00:13:19,400 --> 00:13:21,400
I just don't think it's going to
happen to them this time.

263
00:13:22,120 --> 00:13:25,560
Yeah, yeah, it's a, it's a long
shot, but maybe they'll just

264
00:13:25,560 --> 00:13:27,280
have their fingers crossed and
see what happens.

265
00:13:27,280 --> 00:13:30,680
All right, let's let's kind of
talk about how Hemi fits into

266
00:13:30,680 --> 00:13:34,280
the the broader Northern Star.
So this is, this is a big bite

267
00:13:34,280 --> 00:13:38,160
like like we've said, and it's
not exactly a, a carbon copy of

268
00:13:38,360 --> 00:13:41,760
what Northern Star have
previously done in, in terms of

269
00:13:42,000 --> 00:13:43,720
M&A.
You know, they're, they're

270
00:13:43,720 --> 00:13:46,040
buying a huge undeveloped
project here.

271
00:13:46,040 --> 00:13:49,080
That's not been their, their MO
And they were asked a asked a

272
00:13:49,080 --> 00:13:52,520
question about this.
But Stew Duncan was very keen

273
00:13:52,520 --> 00:13:55,840
to, to push back on that.
I don't think he, he likes the

274
00:13:55,840 --> 00:13:58,160
question too much.
So here's his response to to

275
00:13:58,160 --> 00:14:00,760
Northern Star.
You know, in quotation marks not

276
00:14:00,760 --> 00:14:03,200
being a mind builder.
Have you thought about

277
00:14:03,200 --> 00:14:05,720
development risks?
Yeah, OK.

278
00:14:05,800 --> 00:14:09,600
So we understand them.
We've operated in this state for

279
00:14:09,680 --> 00:14:12,800
well over a decade and we've
developed lots of things from

280
00:14:12,800 --> 00:14:15,960
approvals, green fields, mining
leases all the way through to

281
00:14:16,000 --> 00:14:18,800
building plants to building
underground mines.

282
00:14:18,800 --> 00:14:19,960
We're doing it every day of the
week.

283
00:14:20,000 --> 00:14:25,200
We've got 7000 employees across
our portfolio and we're

284
00:14:25,200 --> 00:14:28,800
obviously the the largest gold,
gold operator in the country.

285
00:14:29,200 --> 00:14:33,080
We, we have good depth of
building stuff.

286
00:14:33,080 --> 00:14:37,200
It's what we do.
So I, I, I wouldn't dismiss

287
00:14:37,200 --> 00:14:40,080
that.
You know, we're saying our

288
00:14:40,080 --> 00:14:43,080
history is M&A.
We got into suburbs and

289
00:14:43,080 --> 00:14:49,440
jurisdictions at a level
renovated assets whilst we were

290
00:14:49,440 --> 00:14:53,400
operating them and expanded them
and brought them into a new, a

291
00:14:53,400 --> 00:14:57,480
new life through extending life
and operating those assets.

292
00:14:57,480 --> 00:15:02,480
So it isn't different to all of
the skills that sit in it there.

293
00:15:03,600 --> 00:15:06,200
You go yeah, that'd piss me off
too.

294
00:15:06,720 --> 00:15:07,560
What?
God, they're bloody.

295
00:15:07,560 --> 00:15:12,000
They're adding 13 million tonne,
the KCGM mill, they're bloody

296
00:15:12,120 --> 00:15:15,320
starting, been starting pits for
years, cutting bottles for

297
00:15:15,320 --> 00:15:17,360
years.
Like just because they haven't

298
00:15:17,840 --> 00:15:21,960
developed a pure green fields.
So they've been small scale

299
00:15:21,960 --> 00:15:23,920
green fields.
They've developed on existing

300
00:15:24,160 --> 00:15:28,080
leases like satellite projects.
So yeah, they've, yeah, they've

301
00:15:28,120 --> 00:15:30,720
been, they've been doing it for
bloody years.

302
00:15:31,360 --> 00:15:35,240
I, I think it's a, a logical
evolution, this kind of deal

303
00:15:35,240 --> 00:15:37,080
that they're a $20 billion miner
now.

304
00:15:37,480 --> 00:15:40,680
You know, there's been obviously
a number of, of second hand

305
00:15:40,680 --> 00:15:43,720
assets they've bought, like you
said, sort of renovated, but

306
00:15:43,720 --> 00:15:47,760
that kind of has limitations.
If you want to stay in in WA,

307
00:15:47,760 --> 00:15:50,040
you're going to have to evolve
and do different types of deals.

308
00:15:50,360 --> 00:15:53,520
And you know, I'm sure if they
don't have the people they can,

309
00:15:53,520 --> 00:15:56,680
they can get top notch people.
But yeah, they are where they

310
00:15:56,680 --> 00:15:59,440
are for it for a reason.
And then they'll inherit all the

311
00:15:59,440 --> 00:16:04,800
degrade personnel like the like
the the POC's experts internally

312
00:16:04,800 --> 00:16:07,360
there that they've got for this
whole process like it.

313
00:16:07,360 --> 00:16:10,760
I'd assume that Degrade Office
will just become its own bloody

314
00:16:10,840 --> 00:16:13,360
Northern Star satellite officer.
I don't know if they're going to

315
00:16:13,360 --> 00:16:17,440
integrate it all together or not
be fucking too big, but oh, you

316
00:16:17,440 --> 00:16:20,760
would imagine that team would
just be absorbed and they will

317
00:16:20,760 --> 00:16:23,280
continue on with a different
logo on their shirt.

318
00:16:24,480 --> 00:16:25,960
Yeah, they, they were keen to
stress that.

319
00:16:25,960 --> 00:16:27,680
And why, why wouldn't you?
Like?

320
00:16:27,680 --> 00:16:30,240
Absolutely, Maddie.
So I reckon the next point is

321
00:16:30,480 --> 00:16:32,160
approvals.
Now, this is a big one.

322
00:16:32,160 --> 00:16:36,000
The deal's not conditional on
any approvals, but you know,

323
00:16:36,000 --> 00:16:40,160
notably they've come in before
the approvals, you know, be it

324
00:16:40,160 --> 00:16:44,400
state, water, federal have been
received degrade came out and

325
00:16:44,400 --> 00:16:48,360
said we're expecting these to
come all through in 2025,

326
00:16:48,360 --> 00:16:51,440
although students sort of stay
on the call, maybe we're delayed

327
00:16:51,440 --> 00:16:53,320
a year, maybe we're delayed two
years.

328
00:16:53,320 --> 00:16:55,800
And it's sort of notable looking
at one of the charts that they

329
00:16:55,800 --> 00:16:59,800
put up, it's sort of, you know,
titled year one, year 2, year

330
00:16:59,800 --> 00:17:02,880
three as opposed to FY25, FY20
6.

331
00:17:02,880 --> 00:17:05,680
So it is a bit of a question
mark when these kind of come

332
00:17:05,680 --> 00:17:08,839
through approvals in WA,
approvals in Australia have

333
00:17:08,839 --> 00:17:13,480
been, you know, a huge point of
conversation across the industry

334
00:17:13,480 --> 00:17:15,480
this year.
That's that's not kind of

335
00:17:15,480 --> 00:17:17,560
changing.
But you know, Trev, when we were

336
00:17:17,560 --> 00:17:19,440
speaking about this this
morning, you kind of you kind of

337
00:17:19,440 --> 00:17:23,119
pointed out this maybe works in
in Northern Stars favour when

338
00:17:23,119 --> 00:17:26,119
you've got the big KCGM
expansion going on.

339
00:17:26,119 --> 00:17:29,840
You've also got got Hemi.
Did you thoughts kind of evolve

340
00:17:29,840 --> 00:17:30,960
on that one?
No that.

341
00:17:31,160 --> 00:17:35,480
Like my worry with with Northern
Star when I first read it was

342
00:17:35,480 --> 00:17:39,120
actually just like how they're
going to manage the overlapping

343
00:17:39,120 --> 00:17:41,880
kind of, yeah, big, big kind of
cap expanded to different

344
00:17:41,880 --> 00:17:43,720
projects.
You know, you don't want to

345
00:17:43,720 --> 00:17:46,000
stretch your bandwidth too, too
thin when you're when you're

346
00:17:46,000 --> 00:17:48,400
embarking on 2 pretty
substantial kind of, you know,

347
00:17:48,400 --> 00:17:51,680
CapEx projects.
So, yeah, if, if Hemi is

348
00:17:51,680 --> 00:17:55,560
delayed, like I actually have
some sense of minor relief in

349
00:17:55,560 --> 00:17:57,480
that.
And then, you know, some more,

350
00:17:57,720 --> 00:18:01,800
some more kind of comfort in, in
the, in the funding dynamics as

351
00:18:01,800 --> 00:18:04,680
well in some sense.
But, and that's, that's why

352
00:18:04,840 --> 00:18:06,760
like, you know, Hemi always
belonged in someone else's

353
00:18:06,760 --> 00:18:10,680
portfolio, not not to grace
because yeah, you, you, you want

354
00:18:10,680 --> 00:18:13,040
to have the balance sheet of, of
someone who has a much more

355
00:18:13,040 --> 00:18:15,360
substantial diversified
portfolio and funding capability

356
00:18:15,360 --> 00:18:18,120
and everything like that to
absorb any inconsistencies that

357
00:18:18,120 --> 00:18:22,000
come with, you know, financing,
approving, building, ramping up,

358
00:18:22,080 --> 00:18:24,440
commissioning, all, all of that
sort of stuff with a big kind of

359
00:18:24,440 --> 00:18:27,480
complex and, and, and in this
case, you know, for Australian

360
00:18:27,480 --> 00:18:31,440
novel processing mine.
So, you know, Northern Star are

361
00:18:31,440 --> 00:18:33,520
going to take that on.
I don't think it'll be trivial,

362
00:18:33,520 --> 00:18:38,960
but I do not mind if it's
delayed one to two years just

363
00:18:39,000 --> 00:18:42,120
just for the kind of CapEx case.
I suppose you got, if you look

364
00:18:42,120 --> 00:18:45,160
at it simply you got, they got
the 1st 800 million covered

365
00:18:45,160 --> 00:18:49,200
already like like let's say
it's, I know on, on that 1.3

366
00:18:49,200 --> 00:18:52,960
billion CapEx they put out, you
would, I think we all thought

367
00:18:52,960 --> 00:18:55,680
that was pretty under.
I think that was the general

368
00:18:55,680 --> 00:18:57,920
consensus when that came out for
degrade totally.

369
00:18:57,920 --> 00:19:01,000
Let's say it's 2 billion, like
if you got nearly half of it

370
00:19:01,000 --> 00:19:03,720
covered already with the cash
that's coming in, probably

371
00:19:04,120 --> 00:19:07,320
delays it a bit in a way.
Yeah, Yeah.

372
00:19:07,320 --> 00:19:10,200
I just think I think of it in
like, just in bandwidth sense as

373
00:19:10,200 --> 00:19:11,840
well.
Like the, the companies that

374
00:19:11,840 --> 00:19:16,200
have all gone and become like,
you know, built great gold

375
00:19:16,200 --> 00:19:19,120
mining businesses over time and
they've done it by, by

376
00:19:19,120 --> 00:19:21,240
developing mines.
They never developed 2 mines at

377
00:19:21,240 --> 00:19:23,080
the same time.
It's always one at a time,

378
00:19:23,080 --> 00:19:25,160
right?
Because because bandwidth can be

379
00:19:25,160 --> 00:19:27,040
very stretched if you're
embarking on 2, two major

380
00:19:27,040 --> 00:19:30,120
projects at the same time.
And they sort of downplay the

381
00:19:30,440 --> 00:19:33,880
extent to which, you know, the
KCGM expansion is, is part of

382
00:19:33,880 --> 00:19:36,760
their big footprint in the sense
like 10% of their 10% of their,

383
00:19:36,760 --> 00:19:40,080
I can't remember what the words
were, but you know, footprint or

384
00:19:40,080 --> 00:19:41,320
something at the moment.
But it's for.

385
00:19:41,520 --> 00:19:44,200
All intents and purposes, I I'd
be a lot more comfortable than

386
00:19:44,200 --> 00:19:47,760
kind of staging the two two big
projects in.

387
00:19:48,000 --> 00:19:51,880
It helps when they're at other
ends of the other ends of the

388
00:19:51,880 --> 00:19:56,120
state in a way, because you're
not relying on probably a lot

389
00:19:56,120 --> 00:19:58,120
different service providers
doing each.

390
00:19:58,120 --> 00:20:00,680
They're sort of decoupled.
They're very decoupled from each

391
00:20:00,680 --> 00:20:04,400
other on a geographic basis,
being at other ends of the

392
00:20:04,400 --> 00:20:05,560
country.
Yeah.

393
00:20:05,560 --> 00:20:06,880
Yeah, that's a that's a good
point.

394
00:20:06,880 --> 00:20:10,720
And, and just on the, on the
CapEx, they, I think the words

395
00:20:10,720 --> 00:20:12,720
they used were that that
number's a bit stale.

396
00:20:12,880 --> 00:20:14,400
So they're going to, they're
going to run through it and

397
00:20:14,400 --> 00:20:17,280
they're going to update the
market once more before they

398
00:20:17,480 --> 00:20:21,280
make FID obviously once the
approvals sort of come through.

399
00:20:21,280 --> 00:20:23,600
And yeah, there's a few other
things to to look at.

400
00:20:23,600 --> 00:20:26,880
They spoke about the EPCM and
EPC tenders that have been

401
00:20:26,880 --> 00:20:29,040
issued.
Contract mining tenders is

402
00:20:29,040 --> 00:20:31,000
underway.
And then yeah, your purchase

403
00:20:31,000 --> 00:20:34,440
power agreement is, is well
advanced according to Degray.

404
00:20:34,920 --> 00:20:36,880
Yeah.
Oh, look, it's gonna, it's gonna

405
00:20:36,880 --> 00:20:39,480
be transformational for him.
This could be transformational

406
00:20:39,480 --> 00:20:42,160
for saltbush contracting too,
don't you?

407
00:20:42,160 --> 00:20:45,640
Reckon Johnson mate, we've.
Got a new partner Get you buddy.

408
00:20:45,640 --> 00:20:48,880
There's pits scattered
everywhere up here but you need

409
00:20:48,880 --> 00:20:52,240
to keep those trucks moving in
your open pit.

410
00:20:52,240 --> 00:20:54,240
You want the diggers?
Just tip it into the truck and

411
00:20:54,240 --> 00:20:55,960
get the truck back.
Pretty much.

412
00:20:55,960 --> 00:20:59,240
What's salt Bush contracting do?
If you can't be fucked taking it

413
00:20:59,240 --> 00:21:01,760
all the way to the mill salt
Bush, do that bit.

414
00:21:02,080 --> 00:21:03,000
Got a whole lot.
Do it for you.

415
00:21:03,040 --> 00:21:07,360
They it doesn't matter if your
mills 300 KS away, bloody 5 KS

416
00:21:07,360 --> 00:21:08,760
away.
You want to keep trucks moving?

417
00:21:09,000 --> 00:21:13,920
Salt Bush Rd trains do the shit
part for you that you don't want

418
00:21:13,920 --> 00:21:15,640
to do.
Just bite.

419
00:21:16,240 --> 00:21:19,240
Get them up.
And they all want sponsors up at

420
00:21:19,240 --> 00:21:20,720
Hemi.
They do it, they do it.

421
00:21:20,720 --> 00:21:23,400
They don't fast, they don't
effectively, they don't reliably

422
00:21:23,400 --> 00:21:24,320
right.
I don't have down.

423
00:21:24,480 --> 00:21:27,640
It's just yeah mate, when it
comes to haulage, saltbush.

424
00:21:27,680 --> 00:21:29,880
That's it, even though we'll get
into them later mate, those

425
00:21:29,880 --> 00:21:33,920
Ashburton and Molina W projects,
if they take that bloody option,

426
00:21:33,920 --> 00:21:36,480
that's going to be a saltbush
jobby cart and all the dirt up

427
00:21:36,480 --> 00:21:39,840
to Hemi mate.
It is friggin brilliant mate and

428
00:21:39,840 --> 00:21:44,240
don't fit, but they'll even do
the roads, the bloody earthworks

429
00:21:44,240 --> 00:21:46,880
to get started, mine and then
they'll do the bloody tonnes

430
00:21:46,880 --> 00:21:51,560
from the mine to the milk.
So the full turnkey moving dirt.

431
00:21:51,680 --> 00:21:55,120
Give Lockie Jones a call.
Welcome Saltbush, He's numbers

432
00:21:55,120 --> 00:21:59,320
in the show night ready to move.
Dirt that that regional study

433
00:21:59,320 --> 00:22:01,720
that has got saltbush's name all
over it mate.

434
00:22:02,480 --> 00:22:04,480
Right.
So let's let's get into the talk

435
00:22:04,520 --> 00:22:08,760
about it.
So 10 million tonnes per annum

436
00:22:08,760 --> 00:22:12,880
that was the the DFS, but you
know again to quotes to you that

437
00:22:12,880 --> 00:22:15,840
the the plant is capable of
doing 15 or be it built for 10.

438
00:22:16,160 --> 00:22:21,520
So people trucking out numbers
700,000 oz per annum, even 900,

439
00:22:21,520 --> 00:22:24,280
I've seen that somewhere.
So a few different sort of

440
00:22:24,280 --> 00:22:25,720
additional scoping studies going
on.

441
00:22:25,720 --> 00:22:28,840
Firstly you've got the the
regional one that that came out

442
00:22:28,840 --> 00:22:32,720
I think in June or July, they're
talking about adding 140,000 oz

443
00:22:32,720 --> 00:22:35,920
per annum over a six year period
sort of coming in between years

444
00:22:36,000 --> 00:22:39,280
4:00 and 9:00.
That will cost them around about

445
00:22:39,280 --> 00:22:42,480
$200 million in upfront CapEx.
And then you've got the

446
00:22:42,480 --> 00:22:44,240
underground scoping study
underway.

447
00:22:44,240 --> 00:22:46,840
So that is meant to come out in
the in the December quarter.

448
00:22:47,240 --> 00:22:50,880
I believe the HEMI underground
resource now sits at 2.1 million

449
00:22:50,880 --> 00:22:56,840
oz at 1.57 grammes per tonne.
So not, not what used to be an

450
00:22:56,840 --> 00:22:59,240
underground grade, but it's a a
different day and age now.

451
00:22:59,240 --> 00:23:01,080
So we'll see how that stacks up
when they come out with the

452
00:23:01,080 --> 00:23:02,960
numbers.
Definitely not an under.

453
00:23:02,960 --> 00:23:05,320
It wasn't an underground
refractory grade either.

454
00:23:06,120 --> 00:23:08,880
It it certainly wasn't and
Maddie, I know you've you've

455
00:23:08,880 --> 00:23:11,440
spent a bit of time looking at
the Met Norman start sort of

456
00:23:11,440 --> 00:23:14,240
highlighting that they do the
ultra fine grinding at KCGM

457
00:23:14,520 --> 00:23:16,800
roasting at Canana Bell.
So they've got a, a bit of

458
00:23:16,800 --> 00:23:19,840
experience, but looking back
through the, the flow sheet from

459
00:23:19,840 --> 00:23:23,040
the, the DFS and sort of tuning
in, what did you, what did you

460
00:23:23,040 --> 00:23:25,840
kind of glean?
Yeah, and and as I said, a lot

461
00:23:25,840 --> 00:23:30,400
of this like they they don't
need to have the specific

462
00:23:30,400 --> 00:23:32,320
experience.
Like there's the guy, the people

463
00:23:32,320 --> 00:23:36,400
that are working for to Grey
have got experience running pox

464
00:23:36,400 --> 00:23:40,280
plants and they will come into
the Northern Star family.

465
00:23:40,520 --> 00:23:43,840
So it's not like they have to
have ran a pox plant at all.

466
00:23:43,840 --> 00:23:48,360
But you find people that have
done it, which they they exist.

467
00:23:48,480 --> 00:23:53,760
Box plants are a proven thing
and probably first start on like

468
00:23:53,760 --> 00:23:56,400
the whole oxide, transitional
fresh rock.

469
00:23:56,400 --> 00:23:58,800
That's what you hear.
So when you saw fresh rock,

470
00:23:58,800 --> 00:24:01,680
that's just all Floyd ship,
that's your refractory stuff,

471
00:24:01,680 --> 00:24:07,000
the lowest then oxides, the open
pit stuff, transitional, the

472
00:24:07,000 --> 00:24:10,880
problem child in between.
So looking at their DFS, oxide

473
00:24:10,880 --> 00:24:13,760
makes up 5% of the schedule food
tonnes.

474
00:24:14,000 --> 00:24:17,520
So it's actually not shit loads
I'm looking at.

475
00:24:17,520 --> 00:24:21,000
I'm assuming it's free milling.
The MET results from 2020

476
00:24:21,000 --> 00:24:24,960
indicated that the Brawlga oxide
material was free milling with

477
00:24:24,960 --> 00:24:28,240
93% recovery.
So it's not a refractory oxide.

478
00:24:28,240 --> 00:24:30,200
I don't know if they exist.
Do they exist?

479
00:24:30,360 --> 00:24:33,080
If refractory oxide exists
someone let me know.

480
00:24:34,080 --> 00:24:38,280
Transitional the problem job.
That's 13% of the feed.

481
00:24:38,280 --> 00:24:41,320
So 82 percent is fresh rock from
their DFS.

482
00:24:41,320 --> 00:24:47,240
So effectively if you 95% of the
feed is considered refractory

483
00:24:47,240 --> 00:24:50,880
because your transition doesn't
know who it identifies as,

484
00:24:51,040 --> 00:24:53,520
sometimes it's the bit of the
problem problem child.

485
00:24:53,520 --> 00:25:00,120
So I think with the Northern
Stars underground experience,

486
00:25:00,120 --> 00:25:02,560
and that's what they do have
experience in, they are an

487
00:25:02,560 --> 00:25:05,520
underground gold miner
predominantly that's bloody.

488
00:25:05,520 --> 00:25:10,600
That is what they do, brings a
lot of flexibility with the

489
00:25:10,600 --> 00:25:15,160
resource going to the mill.
Because for a pox plant to work,

490
00:25:15,720 --> 00:25:18,920
from my understanding based on
some good education of being

491
00:25:18,920 --> 00:25:23,440
given, it's all about
consistencies of the sulphide

492
00:25:23,720 --> 00:25:26,280
being fed into it.
Like the sulphur grade of the

493
00:25:26,280 --> 00:25:28,640
concentrate.
It's not the not the grade of

494
00:25:28,640 --> 00:25:32,000
the ore, it's how much sulphide
is in there that needs to be

495
00:25:32,000 --> 00:25:35,440
friggin sledge hammered off by
these pox pox trains.

496
00:25:35,520 --> 00:25:40,640
Yeah, because the sulphur that
that that that's meaningful to

497
00:25:40,640 --> 00:25:42,360
the mass pool, which is
meaningful to the.

498
00:25:42,720 --> 00:25:46,040
Yeah, yeah.
And it's like, I think you can,

499
00:25:46,040 --> 00:25:48,960
you can change the mass pool
base like adding oxygen and

500
00:25:48,960 --> 00:25:51,520
everything.
So if you if you you pull less,

501
00:25:51,800 --> 00:25:55,360
you get a higher grade.
If you pull shit loads of it up,

502
00:25:55,680 --> 00:25:58,880
you get more sulphides, but it's
a lower grade.

503
00:25:59,000 --> 00:26:03,400
So, but the, the fate, the, the
percent of sulphur going into

504
00:26:03,400 --> 00:26:08,040
that pox train needs to be
steady for it to work.

505
00:26:08,040 --> 00:26:10,320
Because it's like a big,
apparently it's like a big

506
00:26:10,320 --> 00:26:14,000
thermodynamic relationship
between how much sulphur is in

507
00:26:14,000 --> 00:26:17,200
that concentrate that's getting
fed into the pox train and the

508
00:26:17,200 --> 00:26:20,960
pressure and the temperature
that that pox train runs at for

509
00:26:20,960 --> 00:26:24,360
it to break it all up.
So if it's there's variability

510
00:26:24,640 --> 00:26:28,240
and you can't just dial up
temperature and pressure quickly

511
00:26:28,240 --> 00:26:30,840
on a pox train because they're
fucking, they just need to run

512
00:26:30,840 --> 00:26:34,520
steady and they need to.
So the sulphide feed gown in

513
00:26:34,520 --> 00:26:37,920
needs to be steady as well.
When you look at you look at the

514
00:26:37,920 --> 00:26:40,960
greater DFS plan was start with
a high grade starter pit.

515
00:26:42,200 --> 00:26:45,240
Do you think that is is a still
a feasible option or do you

516
00:26:45,240 --> 00:26:48,200
think Northern Star might be
rethinking it so that they can

517
00:26:48,200 --> 00:26:51,280
get a decent blend of a few
different deposits and all

518
00:26:51,280 --> 00:26:53,880
sources sort of be thinking
about that blend and consistency

519
00:26:53,880 --> 00:26:56,800
from the beginning, which might
mean more capital early?

520
00:26:57,160 --> 00:27:04,760
And fucking she's a talk of it.
It's like a mining chemistry set

521
00:27:04,760 --> 00:27:08,040
in a way like just in terms of
the amount of juggling that will

522
00:27:08,040 --> 00:27:10,600
be here like because you
obviously got a big like to

523
00:27:10,600 --> 00:27:13,880
build a 10 million plant that is
a big construction timeline to

524
00:27:13,880 --> 00:27:17,000
do that.
Remember oxides, 5% of your oil

525
00:27:17,000 --> 00:27:19,040
feed.
So it's not going to last for

526
00:27:19,040 --> 00:27:22,560
ages.
But do you want to be

527
00:27:22,800 --> 00:27:27,040
potentially developing some
underground mines or underground

528
00:27:27,040 --> 00:27:29,960
components of it while you're
building the plant?

529
00:27:30,240 --> 00:27:35,000
But then that comes back to
what's going to be the results

530
00:27:35,000 --> 00:27:36,680
of these underground feasibility
studies.

531
00:27:36,680 --> 00:27:41,400
Is it going to be cost effective
or feasible or could you make

532
00:27:41,400 --> 00:27:45,760
the same amount of money bulk
mining this underground or doing

533
00:27:45,760 --> 00:27:49,600
it via an open pit later on?
Because the advantage would be

534
00:27:49,840 --> 00:27:54,280
is that you could, they could be
mining the oxide stuff for free,

535
00:27:54,280 --> 00:27:57,840
milling stuff, develop
underground while there.

536
00:27:57,840 --> 00:27:59,760
And there's going to be
obviously multiple.

537
00:28:00,280 --> 00:28:02,880
Like there's, I'll bring up the
section here, There's multiple

538
00:28:02,880 --> 00:28:04,480
ore bodies.
There's probably, if they do go

539
00:28:04,480 --> 00:28:06,280
underground, there's probably
going to be multiple

540
00:28:06,280 --> 00:28:08,920
undergrounds.
But you could, they could very

541
00:28:08,920 --> 00:28:10,760
simplistically get themselves in
the position.

542
00:28:10,760 --> 00:28:14,000
Once that plant turns on, you've
got your oxide fade and then

543
00:28:14,000 --> 00:28:18,440
you've got bulk underground
material in the fresh rock and

544
00:28:18,440 --> 00:28:22,080
you leave that transition shit
to lighter.

545
00:28:22,080 --> 00:28:26,000
Because if you do everything via
pit, eventually once you go from

546
00:28:26,000 --> 00:28:28,600
oxide, you got to get through
the transition to get to the

547
00:28:28,600 --> 00:28:31,640
fresh rock.
I'm not sure of what the if I

548
00:28:31,640 --> 00:28:34,840
assume for a deposit this bloody
big, there will be high grade

549
00:28:35,080 --> 00:28:37,600
components that they will be
able to target.

550
00:28:37,600 --> 00:28:40,360
That's where your underground
becomes beneficial because you

551
00:28:40,360 --> 00:28:43,760
develop to the high grade, you
get the high grade parts 1st,

552
00:28:44,240 --> 00:28:48,840
but open pit you're very like,
you will have to go through that

553
00:28:48,840 --> 00:28:52,520
transition stuff eventually.
And that's obviously brings a

554
00:28:52,520 --> 00:28:55,920
lot of that's 13% of the ore
feed that brings a lot of

555
00:28:55,920 --> 00:28:58,800
challenges from my understanding
of keeping that consistent

556
00:28:58,800 --> 00:29:03,240
sulphide feed grade, sulphur
grade into the pox trains.

557
00:29:03,480 --> 00:29:10,520
So there are I, I would the pox
experience is one thing, like

558
00:29:10,520 --> 00:29:14,000
it's not the biggest thing, but
under understanding the resource

559
00:29:14,400 --> 00:29:19,320
and the refractory nature of
each part of it and what the

560
00:29:19,320 --> 00:29:21,960
sulphur content and putting that
into the mine plan.

561
00:29:21,960 --> 00:29:25,160
That is the most critical part
of this project is understanding

562
00:29:25,400 --> 00:29:28,720
what dirt is what and how you're
going to mine it to keep that

563
00:29:28,720 --> 00:29:31,600
blend the POC strains
effectively.

564
00:29:31,760 --> 00:29:35,080
If you cannot process, if there
every other processing method

565
00:29:35,080 --> 00:29:38,200
fails, you use a POC plant.
Like it's just the last resort.

566
00:29:38,200 --> 00:29:42,080
It's proven it works and the
reason it won't work is if

567
00:29:42,080 --> 00:29:44,720
there's variability in what's
getting fed into it.

568
00:29:44,720 --> 00:29:48,320
So understanding what they're
pulling out is going to be the

569
00:29:49,440 --> 00:29:53,880
the exciting part.
Jeez, this would be fun to work

570
00:29:53,880 --> 00:29:55,280
on.
This would be like, this is

571
00:29:55,280 --> 00:29:56,840
freaking.
As you said, it's the biggest

572
00:29:57,240 --> 00:30:00,120
Ross tag for a project.
It's friggin huge.

573
00:30:00,360 --> 00:30:02,800
The amount of options and
optimizations you could do on

574
00:30:02,800 --> 00:30:06,200
how best to mine this based on
understanding the resource.

575
00:30:06,560 --> 00:30:07,760
It's yeah, right.
I'll go.

576
00:30:07,760 --> 00:30:09,680
I'll go over the flow sheet
briefly again.

577
00:30:09,920 --> 00:30:11,680
So pretty.
And for those who don't know,

578
00:30:11,680 --> 00:30:14,640
because I've been wanking on
about refractory, refractory is

579
00:30:14,880 --> 00:30:16,720
it just doesn't leach in the
cyanide.

580
00:30:16,720 --> 00:30:20,320
It's got sulphides bloody
covering it and the cyanide

581
00:30:20,640 --> 00:30:22,640
can't leach the gold in the
solution.

582
00:30:22,640 --> 00:30:25,840
You've got to break up the
friggin the sulphides to get to

583
00:30:25,840 --> 00:30:28,120
the gold and that's, that's what
a pox does.

584
00:30:28,360 --> 00:30:32,640
Just a big fucking sledgehammer.
So they've got primary,

585
00:30:32,640 --> 00:30:35,720
secondary crusher, then high
pressure grinding roles, then

586
00:30:35,720 --> 00:30:39,440
into a ball mill HPJRS.
They're in place of a sag mill.

587
00:30:39,440 --> 00:30:44,880
I think I've got HPJR mixed up
with ultra fron grinding

588
00:30:44,880 --> 00:30:46,360
recently.
My apologies to the

589
00:30:46,360 --> 00:30:48,840
metallurgency out there, I just
got to tune up from 1.

590
00:30:49,280 --> 00:30:51,720
I'm really sorry, so
embarrassed.

591
00:30:51,720 --> 00:30:55,440
I thought I had this sorted.
So that that grinded material

592
00:30:55,440 --> 00:30:57,320
then goes into the flotation
circuit.

593
00:30:57,320 --> 00:31:00,040
So that floats the sulphide
material out.

594
00:31:00,040 --> 00:31:02,800
And then when you're talking
about mass pool Trav, that's

595
00:31:02,800 --> 00:31:06,200
mass pool means how much of how
much of the sulphide shitty

596
00:31:06,200 --> 00:31:08,160
you're floating out.
I think that DFS said they'll

597
00:31:08,160 --> 00:31:12,360
get an 8% mass pool.
So I'll bring this chart up here

598
00:31:12,360 --> 00:31:16,960
and it shows for that 10 million
tonne to get, if you get 8% mass

599
00:31:16,960 --> 00:31:22,400
pool, that's means you're
getting 800,000 tonne of float

600
00:31:23,040 --> 00:31:24,880
overflow.
And that's why they've got two

601
00:31:24,880 --> 00:31:28,360
400,000 tonne pox strains
because they're 8% mass pool of

602
00:31:28,360 --> 00:31:31,960
10 million tonne of dirt gives
you 800,000 tonne.

603
00:31:32,280 --> 00:31:37,360
So that overflow then goes into
the pox and then that just gets

604
00:31:37,360 --> 00:31:40,840
sledge hammered and comes out
unsulfided.

605
00:31:40,840 --> 00:31:45,160
Effectively that sulphur that's
the sulphides turn into turns

606
00:31:45,160 --> 00:31:47,840
acidic, then they have to Chuck
a shit load of lime in to

607
00:31:47,840 --> 00:31:51,240
neutralise it, then it goes into
your cyanide circuit, you've

608
00:31:51,240 --> 00:31:55,400
just unsulfided it and then the
underflow, the 9.2 million

609
00:31:55,400 --> 00:31:57,800
tonne, that is what hasn't
floated.

610
00:31:58,760 --> 00:32:02,440
So you would consider that the
unsulfide stuff?

611
00:32:02,560 --> 00:32:03,560
Yeah.
Can you do much with that?

612
00:32:04,280 --> 00:32:07,160
Well, that then, then, then that
goes into the free mill.

613
00:32:07,160 --> 00:32:11,000
So you're only floating out like
the flotation, it gets the

614
00:32:11,000 --> 00:32:15,440
sulphides, it floats it up so
it's and so the stuff remaining

615
00:32:16,800 --> 00:32:19,400
oh jeez, oh bloody might shoot
myself in the foot here.

616
00:32:19,400 --> 00:32:23,440
The stuff, the underfly that
doesn't float is free milling

617
00:32:23,520 --> 00:32:26,480
because it hasn't got sulphides.
So it's only floating out

618
00:32:26,480 --> 00:32:30,440
sulphides.
I think I've got to stop saying

619
00:32:30,440 --> 00:32:32,240
I think I've just got to lean in
with confidence.

620
00:32:33,600 --> 00:32:38,720
So yes, overall the, the mining
and the schedule like it might

621
00:32:38,840 --> 00:32:44,400
become more of a, it's more of a
metallurgical decision than say

622
00:32:44,400 --> 00:32:47,680
a grade decision.
Like they might, the schedule

623
00:32:47,680 --> 00:32:50,520
might be dependent on, right,
what's the best blend to

624
00:32:50,600 --> 00:32:54,640
optimise the POC circuit so we
get the best recovery.

625
00:32:54,640 --> 00:32:58,360
And like another, another
interesting one, which is the,

626
00:32:58,360 --> 00:33:01,240
it's like a bit bit they got rid
of that might come back to them

627
00:33:01,240 --> 00:33:05,880
is the Ashburton project that
Northern Star divested in 2020.

628
00:33:06,120 --> 00:33:10,400
So Degrave actually got a option
to acquire 100% of that

629
00:33:10,720 --> 00:33:15,520
Ashburton project from Kalamar
Zoo, which expires in Feb 2025.

630
00:33:15,720 --> 00:33:20,000
S Kalamar Zoo is actually the
was the other party with Karora

631
00:33:20,000 --> 00:33:23,960
that was Kelly Metals.
That's that Kalamar Zoo.

632
00:33:24,280 --> 00:33:27,840
So it's pretty far away.
It's about bloody 500 KS away.

633
00:33:27,840 --> 00:33:30,320
I think it's one of a bit
million oz there, but it's a

634
00:33:30,320 --> 00:33:33,240
refractory project that is
apparently very high in

635
00:33:33,240 --> 00:33:36,120
sulphides.
So I love it really high

636
00:33:36,120 --> 00:33:38,640
sulphide content in a in a
concentrate.

637
00:33:38,640 --> 00:33:41,920
So I like not saying they would
do this, but if they do or look

638
00:33:41,920 --> 00:33:46,280
like a legend, they could mine
that concentrated truck, the

639
00:33:46,280 --> 00:33:49,000
concentrate up to Hemi and
there's like that that could

640
00:33:49,000 --> 00:33:53,840
give like a Chuck it in a tank.
And if they need extra sulphides

641
00:33:53,840 --> 00:33:57,120
to balance out the feed gallon
into the pox, you can add a bit

642
00:33:57,120 --> 00:34:00,840
of that shit in to regulate that
pox.

643
00:34:00,840 --> 00:34:04,400
Yeah.
And then like mine I think to

644
00:34:05,360 --> 00:34:07,680
control it.
So it's not like going from like

645
00:34:07,720 --> 00:34:10,080
the, the flotation straight into
the pot.

646
00:34:10,080 --> 00:34:12,920
So if you get a spike in
sulphide, like fuck, we've got

647
00:34:12,920 --> 00:34:15,880
to change the box because you
can't you Chuck it in this big

648
00:34:15,880 --> 00:34:22,239
tank and let it mix slowly.
So your sulphide grade goes up

649
00:34:22,239 --> 00:34:26,840
and down very slowly, which
gives you time to then change

650
00:34:26,840 --> 00:34:30,800
the settings of the pox for a
higher or lower sulphur content,

651
00:34:31,199 --> 00:34:33,600
because it's not like you can't
they I would find it hard to

652
00:34:33,600 --> 00:34:36,080
believe they just maintain 8%
the whole time.

653
00:34:36,080 --> 00:34:38,159
It would be that would be just
too simple.

654
00:34:38,159 --> 00:34:42,560
So that's they're the options.
Whether they take up that option

655
00:34:42,560 --> 00:34:46,199
to I think they got to pay 30
mil could be in shares or cash

656
00:34:46,320 --> 00:34:50,320
15 mil by Feb and then 15 mil 18
months later.

657
00:34:50,600 --> 00:34:52,719
Whether that becomes an option,
I don't know.

658
00:34:52,960 --> 00:34:55,360
Mate, have a look at this.
This is getting out there.

659
00:34:55,360 --> 00:34:57,640
Imagine, remember, I'll see.
This could be part of a big

660
00:34:57,640 --> 00:35:02,040
bloody mega merger with a major
with yadda yadda, right?

661
00:35:02,040 --> 00:35:04,600
Kalamazoo have got all the
ground around Fosterville.

662
00:35:05,520 --> 00:35:08,400
This could be this could be just
a play to get Kalamazoo and

663
00:35:08,400 --> 00:35:11,120
Agnico Eagle, take them out the
mega merger.

664
00:35:11,520 --> 00:35:13,880
You never know.
Probably not.

665
00:35:15,520 --> 00:35:17,360
Love it, Maddie.
Is that where the head?

666
00:35:17,360 --> 00:35:20,920
Do you think they're trying?
They're not a they've gone from

667
00:35:20,920 --> 00:35:25,560
the Paulsen's days select like
underground mining, good cash

668
00:35:25,560 --> 00:35:28,720
flow.
They've revamped these other

669
00:35:28,720 --> 00:35:32,040
underground mines, you know, a
couple 100,000 oz ones.

670
00:35:32,280 --> 00:35:34,520
Now they're going they've got
the Super pit and they've got

671
00:35:34,520 --> 00:35:37,840
this big half a million ounce
minimum project.

672
00:35:37,840 --> 00:35:40,840
Are they now transforming
themselves into, well, they're

673
00:35:40,840 --> 00:35:45,160
going to be 25 billion pro forma
like a like a new major that

674
00:35:45,160 --> 00:35:49,480
targets big, big deposits.
As you get bigger, you want to

675
00:35:49,680 --> 00:35:52,400
you want to get longer life and
lower cost assets.

676
00:35:53,400 --> 00:35:57,560
This is this is, you know, once
it's all built in, everything

677
00:35:57,560 --> 00:35:59,960
might be a lower cost asset than
they've got.

678
00:35:59,960 --> 00:36:03,000
They point that animal cost
curve, but is it a longer life

679
00:36:03,280 --> 00:36:04,880
asset than they've currently
got?

680
00:36:04,880 --> 00:36:07,360
I don't think I think you can
say that necessarily.

681
00:36:07,760 --> 00:36:10,920
Will they do they become more or
less attractive to?

682
00:36:11,920 --> 00:36:14,360
I think, I think history is
proven with gold miners when you

683
00:36:14,360 --> 00:36:19,080
get to a certain scale, like
doing deals becomes very

684
00:36:19,080 --> 00:36:21,520
destructive rather than value
creative because you know, the

685
00:36:21,520 --> 00:36:25,160
sweet spot is, is somewhere like
where you, you know, you don't

686
00:36:25,160 --> 00:36:27,600
have so many laser management
that things kind of a too

687
00:36:27,600 --> 00:36:28,760
bureaucratic, all that sort of
stuff.

688
00:36:28,760 --> 00:36:30,720
You know, there's a there's a
maximum upper bound to the

689
00:36:30,720 --> 00:36:32,960
number of minds you want to
commit your bandwidth to.

690
00:36:33,440 --> 00:36:37,040
I don't know if it if I actually
think the relative value

691
00:36:37,040 --> 00:36:40,680
proposition is a lot more in
favour of, if any, any large

692
00:36:40,680 --> 00:36:45,320
kind of mega mega miners out
there wanting to just add scale.

693
00:36:45,480 --> 00:36:48,360
I don't think the value equation
is in in line with the the

694
00:36:48,360 --> 00:36:50,840
Australian miners at the moment.
I actually think that the North

695
00:36:50,840 --> 00:36:54,360
American listed miners are are
far cheaper on a, you know on on

696
00:36:54,360 --> 00:36:55,600
relative multiples.
Yeah.

697
00:36:55,880 --> 00:36:58,280
And I think, well, I think if
you're going to pick one company

698
00:36:58,280 --> 00:37:01,800
that wouldn't go become a
bureaucratic organisation, the

699
00:37:01,800 --> 00:37:04,720
bigger it gets, I'd I'd pick
Northern Star to be that.

700
00:37:05,080 --> 00:37:08,720
Maybe I mean like, why did Bill
and Rael leave?

701
00:37:08,960 --> 00:37:11,520
You know, it's just, it gets
things get too big, you know,

702
00:37:11,520 --> 00:37:15,400
it's not as fun like.
It's it's inevitable, right?

703
00:37:15,400 --> 00:37:17,200
Like you, you just got to keep
fighting it.

704
00:37:17,200 --> 00:37:21,120
If you're a big company, yeah,
every single founder of a

705
00:37:21,120 --> 00:37:23,360
company will say that.
And it's, it's kind of your job

706
00:37:23,360 --> 00:37:25,320
just to keep to keep chopping it
down.

707
00:37:25,320 --> 00:37:28,680
But it's a it's an interesting
point on, you know, where do

708
00:37:28,680 --> 00:37:32,440
they look and how do they
compare things with their

709
00:37:32,440 --> 00:37:36,840
portfolio of assets?
So KCGM is the, you know, that

710
00:37:36,840 --> 00:37:38,960
the stand out and you know,
particularly when you're talking

711
00:37:38,960 --> 00:37:41,560
about mine life, their trap like
that thing just goes on and on

712
00:37:41,560 --> 00:37:43,920
and on and on and everyone knows
that.

713
00:37:44,600 --> 00:37:48,280
And it it's really interesting
to to compare what the the rate

714
00:37:48,280 --> 00:37:51,920
of return from putting excess
cash into, you know, investing

715
00:37:51,920 --> 00:37:55,000
more into KCGM and just
hammering down the, the all in

716
00:37:55,000 --> 00:37:57,440
sustaining costs and the
operating costs there what that

717
00:37:57,440 --> 00:38:00,960
that can kind of return.
But I think I think Stu kind of

718
00:38:00,960 --> 00:38:03,360
spoke to this, you know, we, we
were intrigued about it.

719
00:38:03,360 --> 00:38:07,800
We spoke about it this, this
morning and the, the sense I

720
00:38:07,800 --> 00:38:11,200
kind of got is that they, they
can't really put any extra

721
00:38:11,200 --> 00:38:15,680
dollars into KCGM right now.
They just need to get that new

722
00:38:15,680 --> 00:38:17,040
meal that that's going to take a
bit of time.

723
00:38:17,040 --> 00:38:19,280
But they've, they've invested
the money or, you know, the

724
00:38:19,280 --> 00:38:23,000
money's been, you know,
pigeonholed to be spent in the

725
00:38:23,000 --> 00:38:26,160
coming years and extra dollars
isn't going to help that.

726
00:38:26,160 --> 00:38:28,880
So I'll play a little snippet
and people can kind of interpret

727
00:38:28,880 --> 00:38:30,440
for themselves and then we can
have a chat about it.

728
00:38:30,840 --> 00:38:32,720
Yeah, thanks to and Glenn and I
appreciate the additional

729
00:38:32,720 --> 00:38:33,600
colour.
I mean, I guess the question

730
00:38:33,640 --> 00:38:35,840
wasn't really around what gold
price was used to justify the

731
00:38:35,840 --> 00:38:37,920
acquisition or, or what you what
you need to get him to stack up.

732
00:38:37,920 --> 00:38:40,480
It was more around your existing
portfolios to you and and what

733
00:38:40,480 --> 00:38:42,640
the risk adjusted returns of
investing within that portfolio

734
00:38:42,760 --> 00:38:44,080
are.
You know, compared to an

735
00:38:44,360 --> 00:38:46,240
external acquisition which is is
no doubt, you know, high risk

736
00:38:46,240 --> 00:38:48,960
and you know as as a.
Longer period to pay back, but

737
00:38:48,960 --> 00:38:51,080
that's fine.
I I understand that and I guess

738
00:38:51,080 --> 00:38:54,280
the comparison is more to your
sort of reserve base at 2000

739
00:38:54,280 --> 00:38:56,120
bucks all the announcement
resource base of 2500.

740
00:38:56,160 --> 00:38:56,600
Announced.
All good.

741
00:38:56,600 --> 00:38:58,320
Thanks.
Yeah, thanks man.

742
00:38:58,320 --> 00:39:00,960
And we, we, we're in those
assessments anyway things like

743
00:39:01,280 --> 00:39:03,440
Bimston as soon as we get that
lower cost million and the

744
00:39:03,440 --> 00:39:05,640
opportunities on those, those
extensions around Kalgoorlie

745
00:39:05,760 --> 00:39:06,920
that that's really where those
things come in.

746
00:39:06,920 --> 00:39:09,680
But you know, we're all in
double digital IRRS and and and

747
00:39:09,680 --> 00:39:11,560
you know, they just look better
at better gold prices.

748
00:39:11,560 --> 00:39:14,160
So I guess we we're continuing
to advance those at the rate we

749
00:39:14,160 --> 00:39:16,080
can.
So that, that that's kind of it

750
00:39:16,080 --> 00:39:18,880
like and he he spoke to it in
other responses as well, but

751
00:39:18,880 --> 00:39:20,760
they're going all out of growth
and they're, and they're doing

752
00:39:20,760 --> 00:39:24,400
that kind of everywhere they can
is the impression that they were

753
00:39:24,520 --> 00:39:27,400
they were given the market.
But do you remember, Jadie, when

754
00:39:27,400 --> 00:39:30,840
they pulled the trigger on the
Feministen real expansion, it

755
00:39:30,840 --> 00:39:33,560
was a different outcome to what
had been kind of guided as

756
00:39:33,560 --> 00:39:35,400
options sort of 12 months
beforehand.

757
00:39:35,400 --> 00:39:37,880
They sort of, you know, they put
two options to the market like

758
00:39:37,880 --> 00:39:40,240
12 months before they announced
it, and they went with neither.

759
00:39:40,240 --> 00:39:41,720
It was sort of this in between
1:00, right?

760
00:39:41,720 --> 00:39:43,120
It's a bit.
They always could have.

761
00:39:43,200 --> 00:39:44,880
There was.
Yeah, they always could have

762
00:39:44,880 --> 00:39:46,680
chosen 24 more.
Versus 29?

763
00:39:46,840 --> 00:39:49,960
More thorough, like 27 bigger,
bigger, fresher, newer, more

764
00:39:49,960 --> 00:39:51,600
productive meal.
But they they opted for the in

765
00:39:51,600 --> 00:39:55,320
between jobby.
So, yeah, like I do, I do think

766
00:39:55,320 --> 00:39:57,280
it's the right question to ask.
I'll ask what like what was,

767
00:39:57,360 --> 00:40:00,120
what is, what was the equation,
you know, to to, to do things

768
00:40:00,120 --> 00:40:02,240
differently for MSN versus
versus this?

769
00:40:02,240 --> 00:40:06,760
Yeah. 100% and you're always
going to be asking it internally

770
00:40:06,760 --> 00:40:10,240
anyway like you're not going to
choose to go out and and pay a

771
00:40:10,240 --> 00:40:13,520
premium and do M&A.
If you think you've got a really

772
00:40:13,520 --> 00:40:17,640
good option internally, right,
that's you look at investing in

773
00:40:17,640 --> 00:40:21,520
your assets you got and then you
know, you, you look at dividends

774
00:40:21,520 --> 00:40:24,000
or buybacks or whatever.
And then you look at other M&A

775
00:40:24,000 --> 00:40:26,560
and, and just sort of stack up
the the returns that you can

776
00:40:26,560 --> 00:40:29,960
kind of get from H.
And yeah, it's kind of clear to

777
00:40:29,960 --> 00:40:34,160
me that they did that.
And you know, on their analysis,

778
00:40:34,200 --> 00:40:35,880
this is the one that's going to
give them the best sort of

779
00:40:35,880 --> 00:40:38,480
returns over the long run.
So I mean, their work's kind of

780
00:40:38,480 --> 00:40:41,160
cut out for them now.
But yeah, very, very interesting

781
00:40:41,160 --> 00:40:44,120
to see how they've gone about it
and and approached M&A.

782
00:40:44,720 --> 00:40:48,120
God would you would you take
500,000 oz piece together from

783
00:40:48,120 --> 00:40:51,640
three operations non refractory
or you go for this one

784
00:40:52,360 --> 00:40:56,440
refractory big scale?
Economies of scale, you know,

785
00:40:56,440 --> 00:40:59,800
mining and economies of scale
just just go hand in hand and

786
00:41:00,000 --> 00:41:02,720
refractory or not, it's, you
know, what cash can you get out

787
00:41:02,720 --> 00:41:04,760
the door?
And if they have the, the

788
00:41:04,760 --> 00:41:07,080
confidence from the team and
the, the people they've spoken

789
00:41:07,080 --> 00:41:11,600
with, then you know, chances are
you're probably, you know, every

790
00:41:11,600 --> 00:41:14,880
kind of refractory is different.
It's a, you know, it's not black

791
00:41:14,880 --> 00:41:19,160
and white, but economies of
scale, you know, one operations

792
00:41:19,160 --> 00:41:24,000
over three most times does the
job, you know, kind of, you

793
00:41:24,000 --> 00:41:26,800
know, keeping, keeping all the
other sort of things in line

794
00:41:26,800 --> 00:41:32,520
with one another.
Yeah, one or three, I can frame

795
00:41:32,520 --> 00:41:34,520
it differently.
I actually think like every,

796
00:41:34,520 --> 00:41:37,480
every capital allocation
decision is only like what's

797
00:41:37,480 --> 00:41:41,040
your next best alternative?
And in this case, I think the,

798
00:41:41,640 --> 00:41:47,080
the do Australian gold miners
have a licence to operate North

799
00:41:47,080 --> 00:41:50,480
America anymore in question in
doubt, but Pogo is looking OK

800
00:41:50,480 --> 00:41:51,600
now.
Maybe northern stock could have

801
00:41:51,800 --> 00:41:53,520
could have persuaded the market
that's the case.

802
00:41:53,960 --> 00:41:56,000
I think there's no doubt there's
undeveloped projects in North

803
00:41:56,000 --> 00:42:00,240
America that unlike a, you know,
P NAV basis screen far, far

804
00:42:00,480 --> 00:42:02,080
cheaper than than the ones in
Australia.

805
00:42:03,080 --> 00:42:07,280
But I'll think about they've got
pogos going good now.

806
00:42:07,280 --> 00:42:10,360
But it took so long, yeah, to
get there.

807
00:42:10,360 --> 00:42:12,000
And I would I'd argue that was
an.

808
00:42:12,000 --> 00:42:14,320
Existing mind though, right?
Like there's undeveloped, like

809
00:42:15,160 --> 00:42:19,280
we talked about snow, snow line,
the Ridge project in the past.

810
00:42:19,280 --> 00:42:22,960
We're talking like 3 gramme open
pit, like big, big beefy project

811
00:42:23,240 --> 00:42:27,960
market caps only in $800 million
and yeah, you're talking nearly

812
00:42:28,160 --> 00:42:30,320
300,000 oz a year.
That thing could do so.

813
00:42:30,400 --> 00:42:31,880
Yeah.
And there's been challenges in

814
00:42:31,880 --> 00:42:34,120
the Yukon, though, right?
Like 100 percent, 100%

815
00:42:34,120 --> 00:42:35,440
permitting.
Permitting is like.

816
00:42:35,600 --> 00:42:39,080
WA first, you know.
A hundred, 100%.

817
00:42:39,200 --> 00:42:42,920
I mean, yeah, Mind you, though,
you're still waiting for an an

818
00:42:42,920 --> 00:42:44,560
unknown timeline on permits here
too.

819
00:42:44,720 --> 00:42:47,360
And you and you and you've got
labour that's competing with

820
00:42:47,400 --> 00:42:49,440
iron ore.
Like, it's not straightforward,

821
00:42:49,560 --> 00:42:51,840
I don't think, but yeah.
Yeah, I think, I think with the

822
00:42:51,920 --> 00:42:54,960
with the undeveloped North
American ones, like as you said,

823
00:42:54,960 --> 00:42:58,320
it was an existing mine Pogo.
So you've got some people that

824
00:42:58,320 --> 00:43:02,840
know how to mine already that
you have to change, change some

825
00:43:02,840 --> 00:43:04,960
of their ways to mine the way
you want to mine.

826
00:43:05,600 --> 00:43:08,240
But I suppose the challenge with
undeveloped project over there,

827
00:43:08,280 --> 00:43:11,320
you've got to then recruit a lot
of people that might not have

828
00:43:11,320 --> 00:43:13,920
ever mined at all.
So which could be another

829
00:43:14,160 --> 00:43:17,520
problem, unless like to to send
a full expat workforce over

830
00:43:17,520 --> 00:43:20,520
there and try and then recruit
over there because you still

831
00:43:20,520 --> 00:43:21,720
have to employ it.
I think.

832
00:43:21,760 --> 00:43:25,000
I don't think there's an easy
way to get North American gown.

833
00:43:25,640 --> 00:43:27,720
I'm sure they've.
When you do, let me know.

834
00:43:28,240 --> 00:43:30,160
Everything's got price.
Everything's got a price, you

835
00:43:30,160 --> 00:43:33,760
know, and at some point your
margin of safety to to choose,

836
00:43:33,840 --> 00:43:35,720
you know, one thing over another
is is different.

837
00:43:35,720 --> 00:43:38,160
And the fact everything's got a
price, I actually kind of think

838
00:43:38,160 --> 00:43:40,840
is what the grace.
So now to like it's

839
00:43:40,840 --> 00:43:44,000
underperformed sort of, you
know, other other gold names

840
00:43:44,000 --> 00:43:46,320
sort of, you know, year to date
is still up here today.

841
00:43:46,320 --> 00:43:48,760
But yeah, for a long time it was
kind of flat and went up a

842
00:43:48,760 --> 00:43:50,920
little bit.
So that that relative

843
00:43:50,920 --> 00:43:53,280
underperformance has probably
led to it looking attractive to

844
00:43:53,520 --> 00:43:54,520
yeah, all the star.
Yeah.

845
00:43:54,520 --> 00:43:56,480
Well, it's probably at the share
price it should have been that

846
00:43:56,480 --> 00:44:00,160
near like it's at an all time
high today, so.

847
00:44:01,880 --> 00:44:04,400
Yeah, 100% maybe we, we've
spoken this whole conversation

848
00:44:04,400 --> 00:44:07,280
from Northern Stars perspective,
but let's sort of spin that a

849
00:44:07,280 --> 00:44:11,080
bit and, and put ourselves in a,
in a degrees, you know, in

850
00:44:11,080 --> 00:44:13,800
Ally's shoes, if you're a degree
sort of shareholder and how

851
00:44:13,800 --> 00:44:16,480
you're kind of thinking about it
because it's, it's a, it's a

852
00:44:16,480 --> 00:44:19,240
great result, right.
But if you look back at the the

853
00:44:19,240 --> 00:44:23,920
five year history of the share
price on on Friday previous

854
00:44:23,920 --> 00:44:26,480
announcement, they were at a
similar level to what they were

855
00:44:26,480 --> 00:44:30,000
back in September 2020 when
there was that sort of discovery

856
00:44:30,080 --> 00:44:32,360
kind of run up.
And then you look at the the

857
00:44:32,360 --> 00:44:35,880
valuations that brokers have
kind of put to this and this

858
00:44:35,880 --> 00:44:39,600
beard Russell one broker sort of
said it implies a 16% premium to

859
00:44:39,600 --> 00:44:41,920
the medium broker NAV, which is
kind of interesting.

860
00:44:41,920 --> 00:44:45,080
Obviously Stu Tonkin very eager
to to point out what we've

861
00:44:45,080 --> 00:44:48,120
spoken about in the past that if
you flush through current gold

862
00:44:48,120 --> 00:44:50,520
prices, it looks looks a fair
bit different.

863
00:44:51,400 --> 00:44:55,680
But yeah, I mean, the the
highest point to Grace traded in

864
00:44:55,760 --> 00:44:59,560
the last five years was the mid
one 60s and now it's just just

865
00:44:59,560 --> 00:45:02,840
under 2 bucks.
So I think it's a a really good

866
00:45:02,840 --> 00:45:05,600
result for for those
shareholders, you know, versus

867
00:45:05,600 --> 00:45:08,680
the alternative of just waiting
and waiting constructing the

868
00:45:08,680 --> 00:45:12,840
thing, you know, but gold price
going absolutely crazy it they

869
00:45:12,840 --> 00:45:15,480
could have been in that sort of
part of the Lassen curve for

870
00:45:15,480 --> 00:45:17,800
quite some time to come.
Awesome outcome for the grey

871
00:45:17,800 --> 00:45:20,520
shareholders in my opinion.
Oh mate, where do I sign?

872
00:45:20,920 --> 00:45:23,360
If awesome, like, yeah, it's
awesome.

873
00:45:23,360 --> 00:45:26,760
It's, you know, kudos, kudos to
de Grey for getting the outcome.

874
00:45:26,880 --> 00:45:29,520
Like what a great, what a great
ending for the Grey shareholders

875
00:45:29,520 --> 00:45:31,680
issuing, you know, everything's
hunky Dory from here and it's

876
00:45:31,680 --> 00:45:33,920
just it's just it's just a time
thing.

877
00:45:33,920 --> 00:45:35,760
Like this is 50.
Extra it's.

878
00:45:36,120 --> 00:45:40,200
It's exactly what you what what
you wanted, you know, in their

879
00:45:40,200 --> 00:45:41,400
opinion, it's a tier one
deposit.

880
00:45:41,400 --> 00:45:43,880
A tier one deposit belongs in in
someone else's hand.

881
00:45:43,880 --> 00:45:46,000
So that's just the way the world
works in mining.

882
00:45:46,160 --> 00:45:49,440
You don't want to take the risk
of of building it yourself.

883
00:45:49,440 --> 00:45:52,520
And then because of the dynamics
with funding and what that could

884
00:45:52,520 --> 00:45:54,240
happen with dilution.
If you come across an obstacle,

885
00:45:54,240 --> 00:45:58,120
which inevitably happens and in
hard things, whereas you know, a

886
00:45:58,120 --> 00:46:02,160
major with diversified portfolio
at the balance sheet to, to, to,

887
00:46:02,240 --> 00:46:04,600
to that, to have that not impact
you, you still get, you can

888
00:46:04,600 --> 00:46:06,440
still get an enormous, if you,
if you're bullish the project

889
00:46:06,440 --> 00:46:10,360
long term as well, you can ride
your northern * shareholding and

890
00:46:10,520 --> 00:46:12,440
see the upside of that too.
So I just think it's a wicked

891
00:46:12,440 --> 00:46:14,360
outcome.
And it's effectively cash

892
00:46:14,360 --> 00:46:20,040
because you're getting script in
a fucking highly liquid stock so

893
00:46:20,040 --> 00:46:22,120
you could bloody dump it
straight away if you want.

894
00:46:22,320 --> 00:46:23,680
So it's the same as getting
cash?

895
00:46:24,920 --> 00:46:29,160
But I did want to make a point
just on the valuation as well,

896
00:46:29,160 --> 00:46:30,880
right?
Like if you think of it from the

897
00:46:30,880 --> 00:46:32,920
Northern Star perspective,
again, not the degrade

898
00:46:32,920 --> 00:46:36,720
perspective, no doubt the deal
makes sense on a spreadsheet, at

899
00:46:36,720 --> 00:46:38,760
least this I'm sure the
spreadsheet works.

900
00:46:38,880 --> 00:46:40,880
I'm sure, right?
But the, we all know the real

901
00:46:40,880 --> 00:46:42,960
world doesn't eventuate like the
spreadsheet.

902
00:46:43,480 --> 00:46:45,840
So you need to make sure you've
got a lot of margin for error

903
00:46:45,840 --> 00:46:48,400
when you're when you're buying
something that could have error.

904
00:46:49,240 --> 00:46:52,360
And how much margin for error do
we think there is in Northern

905
00:46:52,360 --> 00:46:54,200
Stars $5 billion price tag,
right?

906
00:46:54,480 --> 00:46:59,600
Export prices like Stu says,
sure, a consensus not so sure.

907
00:47:00,120 --> 00:47:03,920
So they're they're paying like
16% above median NAV from the

908
00:47:03,920 --> 00:47:07,160
brokers.
That's that's UN risked NAV JD.

909
00:47:07,160 --> 00:47:09,640
So the brokers aren't kind of
risking the cash flows, which

910
00:47:10,040 --> 00:47:12,560
sometimes you do for development
asset, but they're plugging in

911
00:47:12,560 --> 00:47:15,680
the house gold decks, which type
a lower and could be could be

912
00:47:15,680 --> 00:47:17,920
lagging.
Is Northern Star getting a

913
00:47:17,920 --> 00:47:20,520
bargain here?
I don't, I don't think so.

914
00:47:21,680 --> 00:47:23,400
And you can see what the market
thinks of it, right?

915
00:47:23,400 --> 00:47:25,320
Like Northern Star is down 7%
today.

916
00:47:26,000 --> 00:47:28,320
It's only it's down a fair bit
more than the other gold

917
00:47:28,320 --> 00:47:30,240
producers.
So GDX is off too.

918
00:47:30,240 --> 00:47:32,720
But look at the heat map, right?
So the initial reaction from the

919
00:47:32,720 --> 00:47:35,800
Northern Star shareholders is is
there in that picture you can

920
00:47:35,800 --> 00:47:37,880
see it for the grey
shareholders.

921
00:47:38,400 --> 00:47:42,000
Great outcome totally Like,
yeah, it's just an awesome

922
00:47:42,000 --> 00:47:43,360
outcome.
But I think the other point to

923
00:47:43,360 --> 00:47:46,560
make on on the valuation is just
the mine life thing too, right?

924
00:47:46,560 --> 00:47:49,800
Like the I understand you pay a
premium price for premium

925
00:47:49,800 --> 00:47:51,960
assets.
Like that's the the thing people

926
00:47:51,960 --> 00:47:53,920
always point to is, you know, if
you want a tier one asset, you

927
00:47:53,920 --> 00:47:55,240
got to pay up for it.
You know, you're not going to

928
00:47:55,240 --> 00:47:58,840
get them on the cheap and
degrades never had to convince

929
00:47:58,840 --> 00:48:02,240
us that its production profile
is, is tier one quality.

930
00:48:02,240 --> 00:48:05,200
Like it's always been a 500,000
oz plus per annum.

931
00:48:05,600 --> 00:48:08,560
You know, production profile for
as long as it's been talked

932
00:48:08,560 --> 00:48:11,280
about how much you can choose.
But the merit of paying a

933
00:48:11,560 --> 00:48:14,920
premium price for premium assets
often comes down to the fact

934
00:48:14,920 --> 00:48:17,080
that you're getting a very long
life project.

935
00:48:17,080 --> 00:48:20,880
And it's that long life that
gives you optionality for, you

936
00:48:20,880 --> 00:48:23,080
know, the big commodity come up.
So things that happen over that

937
00:48:23,080 --> 00:48:25,000
long life.
And multiple cycles.

938
00:48:25,120 --> 00:48:28,200
Yeah, totally.
That's I think that's where

939
00:48:28,200 --> 00:48:31,480
there's still a question mark
with degrade like the DFS 12

940
00:48:31,480 --> 00:48:34,560
years my life, the the ore
bodies extended at depth.

941
00:48:34,560 --> 00:48:37,240
But we start talking about, you
know, these like 1:00-ish gramme

942
00:48:37,240 --> 00:48:40,520
per tonne sort of underground
mines which refractory like is

943
00:48:40,520 --> 00:48:44,120
that you know, are you going to
you going to keep doing that

944
00:48:44,240 --> 00:48:47,520
sort of in 12 after 12 years
time maybe that's the economics

945
00:48:47,600 --> 00:48:49,760
works for that to be the case
and all that sort of stuff.

946
00:48:49,760 --> 00:48:53,000
But yeah, and there's those
regional deposits that you

947
00:48:53,000 --> 00:48:55,000
talked about Maddie, they've
always been there then, you

948
00:48:55,000 --> 00:48:59,320
know, but it's, it's not clear
to me that that Hemi will be a

949
00:48:59,320 --> 00:49:02,160
producing mine in 20 years time.
That's an unknown to me.

950
00:49:02,240 --> 00:49:04,760
You know, it's not like you're
buying, you buy the Super Pit,

951
00:49:05,280 --> 00:49:07,040
you know, that's going to be
produced in 30 years from now.

952
00:49:07,800 --> 00:49:10,080
Don't it's not as clear to me
that Hemi is still producing in

953
00:49:10,080 --> 00:49:12,320
20 years.
That's like it's just a question

954
00:49:12,320 --> 00:49:15,320
mark.
There who knows yeah who knows

955
00:49:15,320 --> 00:49:18,840
you'd I assume once I drill the
live and fuck out of it

956
00:49:18,840 --> 00:49:21,320
underground I'll be interested
to see what type of method

957
00:49:21,320 --> 00:49:24,720
they'll use underground like if
it's if it's as bulk as it is

958
00:49:24,720 --> 00:49:28,200
like probably speaking out me
assy like is it amenable to

959
00:49:28,200 --> 00:49:32,560
caving and stuff like that for
like proper proper bulk tonnes?

960
00:49:33,000 --> 00:49:35,800
Not sure.
Yeah, yeah, yeah.

961
00:49:35,800 --> 00:49:39,400
And but it's one of those things
you gold mines continue to keep

962
00:49:39,400 --> 00:49:40,120
going.
So.

963
00:49:40,120 --> 00:49:41,480
But as you said, you don't know
yet.

964
00:49:41,840 --> 00:49:43,840
Yeah, but that's that's the
thing.

965
00:49:43,840 --> 00:49:46,720
You don't, you don't know.
But often when you pay up, you

966
00:49:46,720 --> 00:49:49,080
do know, right.
So feel like you don't know that

967
00:49:49,080 --> 00:49:52,200
that's going to be producing
mine for 30 years.

968
00:49:52,240 --> 00:49:56,000
Like like you know, yeah, Super
Pit, you do know the reserves of

969
00:49:56,000 --> 00:49:58,960
40 years or whatever they are
this you don't know.

970
00:49:58,960 --> 00:50:02,040
So you've got to you're you, you
know, you're paying up, but

971
00:50:02,040 --> 00:50:05,240
there's still uncertainty.
So that's, that's why, that's

972
00:50:05,240 --> 00:50:06,480
why normal style have to
deliver.

973
00:50:06,480 --> 00:50:09,640
That's why there's, I think
they're off, you know, 7% today

974
00:50:09,680 --> 00:50:11,880
because they've paid up.
Now they've got to, they've got

975
00:50:11,880 --> 00:50:15,280
to execute to prove to the
market that this is what they

976
00:50:15,280 --> 00:50:15,960
think it can be.
Yeah.

977
00:50:16,400 --> 00:50:20,040
Yeah.
Yeah, Matt, you raised the sort

978
00:50:20,040 --> 00:50:22,880
of question of of interloper.
So you sort of mentioned the

979
00:50:22,880 --> 00:50:27,280
point on AGNICO before you got
any, any high hopes of somebody

980
00:50:27,280 --> 00:50:27,920
coming in?
Matt.

981
00:50:28,040 --> 00:50:29,800
Matt.
Not this starch.

982
00:50:30,440 --> 00:50:36,560
Well, would you it's a big tag.
The one thing I'll point out is

983
00:50:36,920 --> 00:50:39,560
just something we mentioned I
think in the director special a

984
00:50:39,560 --> 00:50:43,360
week ago, Barrick and how they
look at tier 15 million oz 10

985
00:50:43,360 --> 00:50:46,640
year man life at 500,000 oz per
annum lower half of the cost

986
00:50:46,640 --> 00:50:51,200
curve, 15% return on investment
located in a world class

987
00:50:51,200 --> 00:50:54,560
geological district with
potential for organic reserve

988
00:50:54,560 --> 00:50:57,040
growth.
So cheques, a few of them, but

989
00:50:57,040 --> 00:51:01,080
I'm I'd be quite surprised if
somebody came in over the over

990
00:51:01,080 --> 00:51:05,360
the top here.
Yeah, and when what's the last

991
00:51:05,360 --> 00:51:08,960
besides Newmont taken back over
New Crest?

992
00:51:10,120 --> 00:51:13,000
When?
What's the last major that's

993
00:51:13,000 --> 00:51:18,960
come into Australia for gold?
Like Nico buying?

994
00:51:18,960 --> 00:51:21,960
Nico was, but it was.
Kirkland Lakes.

995
00:51:22,200 --> 00:51:26,040
And that was Kirkland already.
I don't know.

996
00:51:26,040 --> 00:51:28,200
I just can't.
You just look at all the

997
00:51:28,200 --> 00:51:31,840
divestment that's happened by
these majors in Australia.

998
00:51:31,840 --> 00:51:33,520
It's like, are they going to
reinvest?

999
00:51:33,560 --> 00:51:36,480
I don't know.
I just can't see it happening.

1000
00:51:37,080 --> 00:51:41,320
I, I, I do agree with you,
although I think the lens at

1001
00:51:41,320 --> 00:51:43,600
which they look at more of that
divestment is more sort of

1002
00:51:43,600 --> 00:51:48,400
subscale assets as opposed to,
you know, not wanting to operate

1003
00:51:48,400 --> 00:51:51,960
in Australia.
Like you know, Australia and WA

1004
00:51:51,960 --> 00:51:55,120
in particular is just a top
notch jurisdiction when you

1005
00:51:55,120 --> 00:51:57,240
compare it to anywhere.
But obviously that comes with a

1006
00:51:57,240 --> 00:51:59,640
price tag.
Yeah, it might look stupid when

1007
00:51:59,640 --> 00:52:06,840
someone does, but Nah, I can't,
don't I wouldn't you think?

1008
00:52:07,160 --> 00:52:09,080
What do you think it'd be more
likely to happen?

1009
00:52:09,080 --> 00:52:14,320
A major interloping on this
individually or as I said, doing

1010
00:52:14,320 --> 00:52:18,120
a lighter, lighter future merger
with someone like a Northern

1011
00:52:18,120 --> 00:52:23,640
Star to beef it out that way I.
Think.

1012
00:52:24,800 --> 00:52:27,000
Yeah, I don't think that I.
Don't think, I don't think an

1013
00:52:27,000 --> 00:52:29,920
antelope comes in sort of done
likely the price today it's

1014
00:52:30,360 --> 00:52:32,520
yeah, it's not pricing in an
uplift or anything like that.

1015
00:52:32,520 --> 00:52:33,360
It's.
Well, it's the biggest.

1016
00:52:33,360 --> 00:52:34,920
Ever.
Yeah, sorry.

1017
00:52:34,920 --> 00:52:37,160
I mean degrade share price.
So, well, that's a real.

1018
00:52:37,280 --> 00:52:38,680
Life it's not.
It's already big.

1019
00:52:39,040 --> 00:52:42,760
Yeah, but it's, it's you look at
the the merger ratio with

1020
00:52:42,760 --> 00:52:44,640
Northern Star, they're basically
back out.

1021
00:52:44,760 --> 00:52:48,040
There's there's, there's no,
it's not, it's, it's like, you

1022
00:52:48,040 --> 00:52:49,600
know, there's a small spread
there and everything.

1023
00:52:49,600 --> 00:52:51,960
But sometimes when the the
market is expecting an interlope

1024
00:52:51,960 --> 00:52:54,080
bar, it'll kind of trade above
the implied.

1025
00:52:54,600 --> 00:52:56,560
Yeah, it's not doing that.
Yeah, yeah.

1026
00:52:56,960 --> 00:52:59,600
The market's not where.
Where is it Trident on that

1027
00:52:59,600 --> 00:53:02,040
ratio at the moment?
It's it's there's, there's a bit

1028
00:53:02,040 --> 00:53:03,560
of a spread there.
There's a bit of a spread, but

1029
00:53:03,560 --> 00:53:04,960
it's not much.
Yeah, yeah, yeah.

1030
00:53:06,080 --> 00:53:08,520
Yeah.
So I mean, yeah, all all up a

1031
00:53:08,520 --> 00:53:12,640
super sort of fascinating deal.
And you know, with, with big

1032
00:53:12,640 --> 00:53:15,480
companies, that Northern Star
now is like, this is undoubtedly

1033
00:53:15,680 --> 00:53:19,640
a big, big company.
You know, these the management

1034
00:53:19,640 --> 00:53:23,600
teams really put their name to
to a deal.

1035
00:53:23,600 --> 00:53:27,560
And this is a big, this is the,
the biggest decision that they

1036
00:53:27,560 --> 00:53:31,760
will they will make, you know,
maybe in their sort of tenure.

1037
00:53:31,760 --> 00:53:33,360
So they really kind of put their
name to it.

1038
00:53:33,720 --> 00:53:35,840
So of course they would have
done the work and now they just

1039
00:53:35,840 --> 00:53:38,240
kind of need to need to execute,
right?

1040
00:53:38,400 --> 00:53:40,120
They yeah.
And as I said, they might, they

1041
00:53:40,120 --> 00:53:42,680
must have a freaking good
understanding of what that

1042
00:53:42,680 --> 00:53:48,440
resource is to do this deal.
Like no, as you said, there's

1043
00:53:48,560 --> 00:53:50,440
like questions on the life of
it.

1044
00:53:50,520 --> 00:53:54,320
But in terms of what's there at
the moment to take a bite like

1045
00:53:54,320 --> 00:53:58,600
this to go for a refractory
deposit, they must have a

1046
00:53:58,600 --> 00:54:02,920
freaking good understanding of
what that is and how they're how

1047
00:54:02,920 --> 00:54:05,760
they're going to attack it.
You wouldn't be, you wouldn't be

1048
00:54:05,760 --> 00:54:07,320
thinking about that after the
fact.

1049
00:54:07,760 --> 00:54:11,200
So I'd say there was some
extensive DD being done on this

1050
00:54:11,200 --> 00:54:12,280
for a long time.
You.

1051
00:54:12,280 --> 00:54:14,880
Reckon they put in any of their
own holes to match them up?

1052
00:54:16,920 --> 00:54:18,080
What drillers?
Yeah.

1053
00:54:19,280 --> 00:54:21,600
Just double them.
Yeah, twin, twin, any holes and

1054
00:54:21,600 --> 00:54:23,360
just make sure it all lined up.
Yeah, yeah.

1055
00:54:23,680 --> 00:54:25,440
Put it like a bloody yeah, I
don't know.

1056
00:54:25,440 --> 00:54:28,240
I won't say that thinking.
Oh, Mike de Guzman there.

1057
00:54:30,720 --> 00:54:33,360
I mean that the one little data
we didn't speak about, but it

1058
00:54:33,360 --> 00:54:35,160
was mentioned right at the end
of the call that, you know,

1059
00:54:35,160 --> 00:54:37,520
Northern Star approached to
Grey, they weren't running the

1060
00:54:37,520 --> 00:54:40,520
sale process.
And I don't know, they've had a

1061
00:54:40,520 --> 00:54:44,520
data room for for ages.
People would have looked, you

1062
00:54:44,520 --> 00:54:47,040
know, everyone's looked.
That's and for a deal not to be

1063
00:54:47,040 --> 00:54:50,440
done yet, I don't think you can.
Yeah, like they there was a, you

1064
00:54:50,920 --> 00:54:53,240
know, the scheme docs reference
a data room.

1065
00:54:53,240 --> 00:54:55,040
Maybe they didn't run an
official sale process.

1066
00:54:55,040 --> 00:54:58,920
But you know, for all intents
and purposes, I think, I think

1067
00:54:58,920 --> 00:55:01,680
you extract maximum value.
Any good advice will do that.

1068
00:55:01,680 --> 00:55:04,720
So you don't just accept them.
The only deal that you think you

1069
00:55:04,720 --> 00:55:08,640
can get you, you know, you try
and canvas others and if there's

1070
00:55:08,840 --> 00:55:11,320
nothing else, then, you know,
you go for it.

1071
00:55:11,400 --> 00:55:13,080
I get.
Yeah.

1072
00:55:13,080 --> 00:55:15,120
I guess what I'm getting at is I
don't think there was any

1073
00:55:15,120 --> 00:55:16,440
serious competition.
Yeah.

1074
00:55:17,200 --> 00:55:19,440
But wouldn't there have been for
the last two or three years, an

1075
00:55:19,440 --> 00:55:21,280
unofficial sales process going
on?

1076
00:55:21,280 --> 00:55:23,680
Like they would have been
amenable to a deal at any point

1077
00:55:23,680 --> 00:55:25,560
at the right price.
Wouldn't they just just an open

1078
00:55:25,560 --> 00:55:26,280
data room?
Yeah.

1079
00:55:26,280 --> 00:55:28,040
I think so.
I think so, and especially with

1080
00:55:28,040 --> 00:55:31,200
the financing process as well,
like they were, you know,

1081
00:55:31,720 --> 00:55:34,080
approaching a deadline to
announce what their, their

1082
00:55:34,080 --> 00:55:37,840
project finance thing is.
So and and you will see in

1083
00:55:37,840 --> 00:55:40,040
Northern Stars kind of scheme
ducks.

1084
00:55:40,040 --> 00:55:42,600
They don't, they're like saying,
you know, you can't, you can't

1085
00:55:42,600 --> 00:55:44,720
execute any of your project
finance stuff, which included,

1086
00:55:44,720 --> 00:55:46,680
by the way, a royalty standby
facility too.

1087
00:55:47,560 --> 00:55:50,240
Don't don't execute any of that
without our consent.

1088
00:55:50,360 --> 00:55:53,120
So I think Northern Stars
basically like you come to the

1089
00:55:53,120 --> 00:55:55,440
crossroad where you're either
going alone or you get acquired

1090
00:55:55,440 --> 00:55:57,440
and they got as close as they
possibly could to that point

1091
00:55:57,600 --> 00:56:00,200
where you make that decision
potentially, you know, mortgage

1092
00:56:00,200 --> 00:56:03,360
the bloody with the royalty,
which makes it less, less likely

1093
00:56:03,360 --> 00:56:05,520
to be acquired.
And they they took, they did the

1094
00:56:05,520 --> 00:56:07,240
right thing and they sold, they
sold the normal star.

1095
00:56:07,520 --> 00:56:07,760
Yeah.
They.

1096
00:56:08,840 --> 00:56:11,120
Would have said there's no
bloody way we're taking you out

1097
00:56:11,120 --> 00:56:14,720
if you sign a freaking royalty.
What?

1098
00:56:15,000 --> 00:56:18,720
OK, what do we think about
Northern Stars?

1099
00:56:19,200 --> 00:56:22,760
I think you've got it written
here, portfolio rationalisation.

1100
00:56:23,640 --> 00:56:25,240
This is the first thing that I
thought of.

1101
00:56:26,320 --> 00:56:28,720
What do you?
Think oh, just thinking that

1102
00:56:28,720 --> 00:56:33,240
were and the common theme was
they're wedded to previously

1103
00:56:33,240 --> 00:56:39,120
from this 2 million oz per annum
by FY20 9 I think it was or 20

1104
00:56:39,120 --> 00:56:41,560
out of 29 like that was their
that was their target.

1105
00:56:41,560 --> 00:56:43,520
They want to become a 2 million
oz producer.

1106
00:56:44,040 --> 00:56:46,720
Now they've got this they're
saying look, we pro forma will

1107
00:56:46,720 --> 00:56:51,160
buy 29 produce 2 1/2.
But I think now with this,

1108
00:56:51,160 --> 00:56:56,560
they've got the ability to now
potentially offload some of the

1109
00:56:56,560 --> 00:56:59,760
portfolio and still hit their 2
million oz.

1110
00:56:59,760 --> 00:57:02,520
I don't think they're wedded to
2 1/2 now because of this deal.

1111
00:57:02,720 --> 00:57:05,360
They are said they're going to
do 2 million.

1112
00:57:05,400 --> 00:57:09,680
I think this has opened up the
option to potentially unload

1113
00:57:09,680 --> 00:57:11,160
things without getting
crucified.

1114
00:57:12,240 --> 00:57:15,400
Yeah, it it would take a minute.
I think, you know, net, net

1115
00:57:15,400 --> 00:57:18,480
Remilius will be happier than
they were a couple days ago.

1116
00:57:18,760 --> 00:57:20,680
Yeah.
It's like a greater likelihood,

1117
00:57:20,680 --> 00:57:22,160
but it'll it'll take a bit of
time.

1118
00:57:22,680 --> 00:57:25,120
I think you're right.
You start to look at it a little

1119
00:57:25,120 --> 00:57:27,320
bit more now that this has kind
of happened.

1120
00:57:27,320 --> 00:57:29,760
But we'll see when that sort of
eventuates.

1121
00:57:29,880 --> 00:57:32,480
The conversation with Jake Klein
is sort of fresh in my head a

1122
00:57:32,480 --> 00:57:36,360
bit, and I really like the way
he thinks about the portfolio

1123
00:57:36,360 --> 00:57:37,440
and all that sort of stuff.
It's not.

1124
00:57:37,640 --> 00:57:41,480
It's not about having 2 million
oz for the sake of 2 million oz.

1125
00:57:41,480 --> 00:57:44,840
It's it's about, you know, OK,
improving the portfolio over

1126
00:57:44,840 --> 00:57:46,840
time.
So when the the markets could

1127
00:57:46,840 --> 00:57:49,640
sort of sell your, your lower
life, higher cost assets often

1128
00:57:49,640 --> 00:57:52,800
and hopefully, you know, re
recycle that capital and use it

1129
00:57:52,800 --> 00:57:56,000
to help you buy lower cost,
longer life assets.

1130
00:57:56,320 --> 00:57:59,120
So I don't, I don't love having
these arbitrary targets of like

1131
00:57:59,120 --> 00:58:02,080
a, a quantity production metric
because maybe it maybe it

1132
00:58:02,880 --> 00:58:06,280
encourages you to hold on to
some of the higher cost mines

1133
00:58:06,280 --> 00:58:09,360
that, that might make the
collective portfolio a bit bit

1134
00:58:09,360 --> 00:58:11,400
higher cost and not the best use
of free cash flow.

1135
00:58:11,440 --> 00:58:13,640
And you've got to bring a lot of
CapEx to keep him and all that

1136
00:58:13,640 --> 00:58:14,320
sort of stuff.
So.

1137
00:58:14,960 --> 00:58:16,200
Yeah.
And I think it's one of those.

1138
00:58:16,200 --> 00:58:19,960
So we're talking about
Karasuddin, What was it 2300 all

1139
00:58:19,960 --> 00:58:23,560
in sustaining costs to think I'm
not sure the capital allocation

1140
00:58:23,560 --> 00:58:27,480
required in the future, but like
2300 all in sustaining cost is

1141
00:58:27,480 --> 00:58:31,480
it it's making money, but you'd
think of what would you think of

1142
00:58:31,480 --> 00:58:35,320
the play if they've they've
acquired this for all script,

1143
00:58:35,840 --> 00:58:41,160
but then divest some assets for
cash at higher prices.

1144
00:58:41,680 --> 00:58:44,800
And that's like a bit of a, well
you sort of end up still at that

1145
00:58:44,800 --> 00:58:47,840
2 million oz spot.
But yeah, you've used your

1146
00:58:47,840 --> 00:58:50,760
script, but you've got a heap of
cash in the door plus the 800

1147
00:58:50,760 --> 00:58:53,800
from degrade and you've sort of
funded the CapEx for that

1148
00:58:53,800 --> 00:58:57,480
potentially and you've maybe
made your life a bit simpler,

1149
00:58:57,480 --> 00:58:59,760
don't I?
I don't know how that'd all work

1150
00:58:59,760 --> 00:59:02,200
in tandem.
I think if they were planning to

1151
00:59:02,200 --> 00:59:07,080
sell Karasu Dam, they may have
tried to debt fund a bit more of

1152
00:59:07,080 --> 00:59:09,440
this, knowing that the cash
would then come in the door from

1153
00:59:09,440 --> 00:59:12,280
their sale a bit further and
then you dilute less net, net.

1154
00:59:12,280 --> 00:59:15,960
But it's an old script deal.
So I don't Yeah, I don't, I

1155
00:59:15,960 --> 00:59:18,440
don't think their intention
would be to diverse Karasu just

1156
00:59:18,440 --> 00:59:20,760
yet.
But like you say, if they did

1157
00:59:20,760 --> 00:59:22,000
look at the rationalisation
there.

1158
00:59:22,000 --> 00:59:23,920
That's a big deal for Remelius,
you know?

1159
00:59:23,920 --> 00:59:25,840
Yeah, yeah.
Do you think they'd ever get rid

1160
00:59:25,840 --> 00:59:30,440
of Pogo if someone paid for?
It everything's at a price.

1161
00:59:30,440 --> 00:59:32,680
Yeah, because like wouldn't,
wouldn't you think that'd like

1162
00:59:33,200 --> 00:59:37,280
imagine selling it like jeez,
you'd think it'd simplify the

1163
00:59:37,400 --> 00:59:39,360
business a lot.
Not a lot of work's going into

1164
00:59:39,360 --> 00:59:43,200
it but like if someone offered
dosh a decent chunk and it's

1165
00:59:43,200 --> 00:59:46,000
what it's a 200,000 oz mine or
something.

1166
00:59:46,000 --> 00:59:48,520
It's one of the better assets
now too, like just from the cash

1167
00:59:48,520 --> 00:59:52,040
flow that that's delivering, you
know, relative to its yeah, the

1168
00:59:52,120 --> 00:59:54,520
ounce production that's that's,
that's like a that's a really

1169
00:59:54,520 --> 00:59:56,200
good asset for them at the
moment, yeah.

1170
00:59:57,280 --> 00:59:58,720
As you said, it's all got a
price.

1171
00:59:58,720 --> 01:00:02,680
Yeah, yeah.
I think I'm all out, guys.

1172
01:00:02,960 --> 01:00:04,720
I reckon we what?
Else what else would they sell?

1173
01:00:05,280 --> 01:00:08,080
I've IB S Cal.
It's going to be interesting

1174
01:00:08,080 --> 01:00:09,920
what they do with.
Them yeah, you like you said

1175
01:00:09,920 --> 01:00:13,040
that they would probably sell
some of their infrastructure,

1176
01:00:13,040 --> 01:00:17,440
infrastructure after the Fimson
like food expansion bill is

1177
01:00:17,440 --> 01:00:19,200
done.
I've got a question, but maybe

1178
01:00:19,200 --> 01:00:25,200
two questions for you guys.
Do you think in in three years

1179
01:00:25,200 --> 01:00:30,440
time will Northern Stars share
price outperform or underperform

1180
01:00:30,640 --> 01:00:34,280
its peer group?
Three years time, yeah.

1181
01:00:35,720 --> 01:00:39,840
Take the short side on that,
just just development on, on two

1182
01:00:39,840 --> 01:00:45,040
big, big, big projects versus
the peer group is it's it's

1183
01:00:45,040 --> 01:00:46,040
tough.
Right.

1184
01:00:46,680 --> 01:00:49,400
It's, it depends on how, how
good they sell the growth story

1185
01:00:49,400 --> 01:00:53,400
because like this, this is
really kicking the can down the

1186
01:00:53,400 --> 01:00:57,320
road for when free cash flow
comes in even even further

1187
01:00:57,320 --> 01:01:00,360
because they're, they're already
a growth story for the CapEx

1188
01:01:00,360 --> 01:01:03,960
spend needed for KCGM, then they
are adding more unless they

1189
01:01:03,960 --> 01:01:07,440
divest some assets and bring
some cash in the door to offset

1190
01:01:07,440 --> 01:01:10,280
it.
But it's really potentially

1191
01:01:10,880 --> 01:01:17,600
putting evolution ahead of them
for the large cap that you can

1192
01:01:17,600 --> 01:01:22,960
expect some free cash returns
from, but it depends on what

1193
01:01:22,960 --> 01:01:25,000
they do with their existing
portfolio, I guess.

1194
01:01:26,040 --> 01:01:27,560
I think it's got.
To be down.

1195
01:01:28,240 --> 01:01:31,000
Yeah, in saying that quickly,
you're fighting massively

1196
01:01:31,000 --> 01:01:34,760
against passive flows.
Northern Star will will suck up

1197
01:01:34,760 --> 01:01:36,440
the majority of them for anyone
looking to allocate in

1198
01:01:36,440 --> 01:01:38,880
Australia.
So if gold gets more attention,

1199
01:01:39,560 --> 01:01:41,440
they're just going to be winning
more and more dollars.

1200
01:01:41,440 --> 01:01:44,840
And yeah, that's just one thing
you're fighting against when

1201
01:01:44,840 --> 01:01:47,480
you're betting against the the
biggest name in the space.

1202
01:01:47,720 --> 01:01:50,400
Well and one more for you and I
agree, I agree.

1203
01:01:50,560 --> 01:01:57,400
But both your points there in 10
years time is, is any of the

1204
01:01:57,480 --> 01:01:59,200
acquisition value here written
down?

1205
01:02:05,120 --> 01:02:07,120
Oh jeez, I don't know.
I'd have to.

1206
01:02:09,520 --> 01:02:14,560
I would love to be in the weeds
about the really in the weeds

1207
01:02:14,560 --> 01:02:17,280
about geological confidence on
it, which I'm not.

1208
01:02:18,120 --> 01:02:21,360
That's it's the resource is
light, right?

1209
01:02:21,360 --> 01:02:27,440
Is this resource at that scale
going to perform in line?

1210
01:02:27,760 --> 01:02:28,640
Yeah.
That.

1211
01:02:28,640 --> 01:02:30,720
That you're also.
That is the.

1212
01:02:31,480 --> 01:02:35,680
That's where it all starts from.
It's what what is going to be

1213
01:02:36,200 --> 01:02:41,840
with a low grade resource.
If it's 1.3 instead of 1.5,

1214
01:02:42,400 --> 01:02:47,480
that's fucking huge.
So where's is there upside to

1215
01:02:47,520 --> 01:02:51,800
it?
There's also, you know, plenty

1216
01:02:51,800 --> 01:02:55,480
of fiscal stupidity from from
governments going around.

1217
01:02:55,760 --> 01:02:59,680
So that's a a huge tailwind
against, you know, if you're,

1218
01:02:59,800 --> 01:03:03,200
you're looking at the asset of
the value, if gold just goes up

1219
01:03:03,200 --> 01:03:06,640
over that period, you know, I'm,
I'm betting big against gold to

1220
01:03:06,640 --> 01:03:11,160
say in 10 years time.
So, oh, it it'll be tough, but

1221
01:03:11,160 --> 01:03:13,400
maybe I'll say no and give
Northern Star the benefit of the

1222
01:03:13,400 --> 01:03:14,840
death.
Sure, surely.

1223
01:03:14,840 --> 01:03:18,320
Like how do you, how do you look
at this like from the permitting

1224
01:03:18,720 --> 01:03:23,080
side of things and approvals
like far out, like this is now

1225
01:03:23,080 --> 01:03:27,920
the biggest, one of the biggest
development projects to go on in

1226
01:03:27,920 --> 01:03:29,680
the country.
I don't know, probably, probably

1227
01:03:29,680 --> 01:03:32,120
not the scale of iron ore, I
wouldn't imagine.

1228
01:03:32,120 --> 01:03:35,800
But in the Metallifer space,
this is now the biggest

1229
01:03:35,800 --> 01:03:37,520
development project in the
country.

1230
01:03:37,800 --> 01:03:42,120
Yeah, like fuck me, wouldn't you
really right.

1231
01:03:42,520 --> 01:03:47,160
Throw the kitchen sink at it to
help them get it going to be the

1232
01:03:47,160 --> 01:03:51,400
best for the state like.
This is going to happen 100%.

1233
01:03:51,480 --> 01:03:52,040
There's there's.
No.

1234
01:03:52,040 --> 01:03:56,400
Yeah, but like out like but time
wise, like they could fucking

1235
01:03:56,400 --> 01:04:00,440
drag it out for years to give
approvals or they could like get

1236
01:04:00,440 --> 01:04:02,800
behind them and like right.
What do you need us to do?

1237
01:04:02,840 --> 01:04:04,960
We need this and just get it
happening.

1238
01:04:04,960 --> 01:04:06,840
I think no.
Then that's at the expense of

1239
01:04:06,920 --> 01:04:09,240
the smaller development ones
that are already in line.

1240
01:04:09,240 --> 01:04:10,120
I.
Think we should do a whole

1241
01:04:10,120 --> 01:04:14,080
episode on how approval
timelines are blown out and how

1242
01:04:14,440 --> 01:04:18,520
disastrous that is?
I'll go get a bloody Yeah.

1243
01:04:18,560 --> 01:04:21,240
You know what they need?
I'll play a snippet.

1244
01:04:21,800 --> 01:04:24,240
When we asked Reebok to send us
Terry Tate, some people thought

1245
01:04:24,240 --> 01:04:26,800
we were crazy.
But I'm a firm believer in

1246
01:04:26,800 --> 01:04:29,200
paradigm breaking, outside the
box thinking.

1247
01:04:29,520 --> 01:04:34,120
Hey, buddy.
Break was over 15 minutes ago,

1248
01:04:34,440 --> 01:04:37,400
Mitch, and since Terry's been
with us, our productivity has

1249
01:04:37,400 --> 01:04:42,320
gone up 46%.
We're getting more from our

1250
01:04:42,320 --> 01:04:45,360
employees than ever before.
You know, you need a cover sheet

1251
01:04:45,560 --> 01:04:48,760
or your TPS reports Richard.
That ain't new, baby.

1252
01:04:49,040 --> 01:04:53,120
I know Terry tied in there
bloody that was a Super Bowl ad

1253
01:04:53,120 --> 01:04:55,960
for back in the day.
Just gather around just jamming

1254
01:04:55,960 --> 01:04:58,720
people in the in the government
office to get these bloody

1255
01:04:58,720 --> 01:05:02,840
approvals gone.
We need Terry tight in the in

1256
01:05:02,840 --> 01:05:05,760
the department.
Take a peek at what Miller is

1257
01:05:05,760 --> 01:05:08,720
doing in in Argentina.
That's that's some interesting,

1258
01:05:08,720 --> 01:05:11,640
interesting stuff.
Very different way of going

1259
01:05:11,640 --> 01:05:14,440
about it.
So yeah, I mean never, never

1260
01:05:14,440 --> 01:05:17,720
worked inside a government
organisation, Maddie, and I've

1261
01:05:17,720 --> 01:05:20,320
got absolutely no intention of,
but I don't really know what

1262
01:05:20,320 --> 01:05:21,640
happens.
You've got good in there, JD.

1263
01:05:21,720 --> 01:05:23,600
I could say you're really
fitting it.

1264
01:05:23,760 --> 01:05:28,600
You'd love their intensity.
Just thriving mate, So you.

1265
01:05:28,640 --> 01:05:30,440
Can catch up on your podcast
spot.

1266
01:05:31,160 --> 01:05:34,560
Oh I I dread a lot.
Maybe, maybe it wouldn't be so

1267
01:05:34,560 --> 01:05:36,040
bad after.
All mate probably shouldn't hang

1268
01:05:36,040 --> 01:05:39,120
shit on them since we're asking
them to do more, but fuck, can

1269
01:05:39,120 --> 01:05:42,720
you like to can someone it's in
all those interests.

1270
01:05:42,840 --> 01:05:45,920
Can someone from these
government entities get in touch

1271
01:05:45,920 --> 01:05:48,960
and tell us if we're complete,
like why they're stretched out?

1272
01:05:48,960 --> 01:05:52,360
Like, are we missing some key
piece of information that we're

1273
01:05:52,560 --> 01:05:55,360
not taking into consideration?
Like, hey, we're all this let's.

1274
01:05:56,840 --> 01:05:59,560
Get the the minister of mines or
something like that on what?

1275
01:06:00,080 --> 01:06:04,480
Do you do, mate?
Anyway, all righty, an hour,

1276
01:06:04,480 --> 01:06:07,240
Robbie Cabot there, an hour, an
hour long segment.

1277
01:06:08,680 --> 01:06:11,480
Big deal mate, big deal.
Holy snapping duck shit, right?

1278
01:06:11,560 --> 01:06:16,520
I want to see all the following
names up at Hemi, ISIP Mineral

1279
01:06:16,520 --> 01:06:19,760
Mining Services and Saltbush.
They're a given.

1280
01:06:21,280 --> 01:06:23,960
Oh Paul, Natalie be licking his
lips.

1281
01:06:24,360 --> 01:06:27,360
A grounded camp up at Hemi that
is on the way.

1282
01:06:29,960 --> 01:06:32,320
If we go underground there's
going to be Sandvik bolts

1283
01:06:32,400 --> 01:06:36,160
everywhere.
Dave Harrison, Adam Batista.

1284
01:06:36,160 --> 01:06:39,520
Steve Tarr should have been
called by now for CRE insurance.

1285
01:06:39,760 --> 01:06:41,440
Hope they're involved in the
process.

1286
01:06:42,600 --> 01:06:45,360
Any more drilling up there?
Nah, there'd have to be more

1287
01:06:45,360 --> 01:06:47,520
gold up there.
K drill go up there for sure.

1288
01:06:47,840 --> 01:06:55,720
Bloody Dice sat they've they
probably found it originally I

1289
01:06:56,240 --> 01:06:56,840
reckon.
They did.

1290
01:06:56,840 --> 01:06:57,920
Yeah, right up.
See y'all tomorrow.

1291
01:06:58,040 --> 01:06:59,240
Money minors.
Oh yeah.

1292
01:06:59,480 --> 01:07:00,560
We're pulled having a beer with
you.

1293
01:07:01,800 --> 01:07:04,360
The information contained in
this episode of Money of Mine is

1294
01:07:04,360 --> 01:07:06,520
of general nature only and does
not take into account the

1295
01:07:06,520 --> 01:07:10,160
objectives, financial situation
or needs of any particular

1296
01:07:10,160 --> 01:07:12,200
person.
Before making any investment

1297
01:07:12,200 --> 01:07:15,240
decision, you should consult
with your financial advisor and

1298
01:07:15,240 --> 01:07:18,400
consider how appropriate the
advice is to your objectives,

1299
01:07:18,600 --> 01:07:20,480
financial situation and needs.