Paladin’s CEO Exit: Cause for Concern?

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That's that last ad you did for
us.

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Yeah.
That was good.

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You liked it?
I actually did, yeah.

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I thought that was one of the
better ones for some reason.

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Yeah, that's.
Cool.

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Yeah.
So you're either getting better.

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Or.
That one just kind of.

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That through.
Hopefully we get let me let me

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pull it out.
I had to get better or that was

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it, an anomaly.
So.

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So who still needs convincing
now?

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It's in the fin, So maybe it was
because of that, yeah.

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Yeah, yeah, research back like.
Research back.

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There's a science behind it now.
It's actually, do you know,

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Yeah, a doctor in, you know,
architectural and well-being.

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Or do you know?
Yeah, whatever his PhD is.

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Yeah, wouldn't it be funny if
you just gave us feedback on our

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ads, you know, and then that's
our ad for next week.

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Yeah, you guys know what I agree
with.

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That yeah, what are you?
Gonna ramp up here, yeah.

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Once you got there mate.
Oh, sorry mate, it's just I'm

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always reading this book.
Yeah, I like to put this book

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front and centre and yeah, I
think you should just sit here

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for me.
Place it right there.

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From now on, yeah, it's a quite
a good book.

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I should read it one day mate.
You know what time reading hey.

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Yeah.
No, it's good.

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It's good.
It's really good one.

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Have you read it?
I've sort of perused it I would

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say.
Rocks, fossils and formations.

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Discoveries through time.
I hear the author is quite

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switched.
On Thomas RH Warwick.

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Rings a bell mate, we've got a
bit on the menu today.

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Yeah, we do this stuff going how
good, how good of a sport was

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Paul Natoli at the start there?
What a what an absolute legend

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that was Paul Natoli of Grounded
Construction, if it wasn't

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immediately obvious from the
beautiful lots of tones of his

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voice giving us some guidance
and feedback on our last ad.

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A local hero go poorly mate.
Like you said, lots happening in

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commodities, lots happening in
markets.

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I, I'm excited commodities are,
are sort of moving kind of

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volatile.
We've seen gold peel off and

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everything.
And when it comes to the

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companies, mate, Paladin have
made some changes at the helm.

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Predictive came out with the DFS
and I'm very keen to sort of dig

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into how the M and A dynamics
play out.

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We've, we've seen about a year
of action and I think we're

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into, into crunch time there now
and.

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They predicted the discovery.
Can we predict who the buyer is

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going to be?
And we've got approvals in

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Victoria of all places, as well
as a junior in the lithium space

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doing a buy back, so plenty to
RIP through.

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Now Ian Purdy has is the parting

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palate and this came out in in
an announcement yesterday.

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Very curious framing of the
announcement.

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It was it was like it was it was
worded in a way that it made you

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second guess.
Hang on, he's as as he impaired,

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he told the market and flagged
in advance that he's leaving.

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It was everything was about the
appointment of this other guy.

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You.
Get the head scratcher right.

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I saw some analysts sort of call
it well, well, telegraphed or

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words to that effect hadn't been
sort of telegraphed so, so well

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to us at least.
And yeah, it sort of gets you

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thinking, giving the given the
nature of where this business is

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AT and and the evolution.
So Paul Hemborough is going to

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step up, become managing
director and CEO, always been

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the CEOO since 2023.
So he's got familiarity with

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that, with the business, with
the market.

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Before that, he was at Rio Tinto
for a long time as well as BHB,

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had a good spell there.
So I see Ian Perdy's going to

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step down.
He came into the business near

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the beginning of 2020 when spot
uranium was breaking through 30

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bucks in that year.
It was a very different

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business.
Obviously Langer Heinrich wasn't

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even operational.
They were talking about doing

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PFS work on on the restart, so
balance sheet needed.

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Tidying up, I think they sold
the the the non core project as

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well.
Yep, they sold Kayla Keira

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within a month or so of him
coming in.

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And yeah, there's, there's been
a fair bit to say the least,

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that has happened through his
tenure at the company.

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But like you said, the wording
of this one raises a bit of an

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eyebrow and it's just worth
chatting about and and getting

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into a bit more I reckon.
Why do you find it intriguing?

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But for a couple of reasons,
right let no doubt this, this

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business is in a different
position to what it was five

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years ago.
But there's been a lot of good

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stuff and there's also been a
couple question marks in the

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last year or so.
So to to name a couple that the

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water shortage challenges last
year, early last year.

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The controversy around that
merger with Fission?

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Yeah, exactly that.
That took a lot, a lot longer

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than people who suspected it
might.

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You had, you know, all of a
sudden too much water with the

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the weather events earlier this
year, you had reconciliation,

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you know, question marks with
the stockpiles there, class

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actions following guidance being
marked down and then guidance

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being pulled entirely earlier
this year.

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So there's a few question marks
on those points, but I think

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it's quite simple, like a leader
of a mining company sets down

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during ramp up.
And that's just one of those

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check box items that makes you
peel into it a bit more and just

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to make sure everything's in
order.

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It's a pretty sort of
straightforward, and it's not

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always A cause for concern, but
it's it's worth digging into.

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Yeah, Yeah.
Sometimes it can be explained

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away, but it's yeah, one of
those one of those things that

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you see happen and, and, and
maybe they're in a different

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phase of ramp up, like they've
been ramping up for a while.

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But yeah, there's.
Because it's a race that

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project, you know, the it's not
the the mind or gone through the

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the plant just yet.
So it's a bit of a different

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based.
Yeah, so tell me about the

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wording in the announcement.
Well, I feel like there seems to

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be a bit of ambiguity.
So taking a phrase planned and

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rigorous succession process
involving executive search

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specialists, first question mark
is like you, you know, you're

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hiring search specialists, but
you made an internal hire.

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Now fair enough.
Maybe you just want to vet the

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field and make sure you've got
the perfect candidate for the

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job.
But then you sort of dig in a

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bit deeper and they sort of say
an interim COO process has been

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established within Paladin in
the event that ACO transition

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period is required.
That seems to kind of contradict

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the the planned approach that
they mentioned just.

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Before it's the, the wording
interim.

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Interim is something you've kind
of put in place when there's an

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unplanned thing that happened,
yeah.

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When things happen a bit more
sudden.

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Abruptly, yeah, which happens
but but the but it kind of is

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contrary to the well flagged and
also the the planned wording

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that we see in the other parts
of the announcement and analysts

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remarks since but but Peddie's
not stepping away straight away.

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He's hanging around until
mid-december.

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He's available.
So there's a six month, quite a

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lengthy notice period in there
as opposed to living abruptly,

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which is like a more more
promising sign than it could be

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the case.
Yeah.

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So, so Paul will become CEO from
the beginning of September and

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Perdia said he will remain there
and that's sort of clear within

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the the notice period, which can
be activated by both himself or

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or the company, but that would
run until December given it's a

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six month kind of period.
And I think it's worth flagging

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now like different CE OS suit
companies at different stages.

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And I think it's incredibly rare
to have one CEO that is the the

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perfect person to be the, the
one that raises the capital and

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does the exploration phase, you
know, discovers a project.

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If that's the type of company
for, to developing an asset, for

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to ramping it up and then
managing it in steady state, I

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think that's incredibly rare.
And I think it's a justified

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statement to say that you have
different people with different

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skill sets that are appropriate
for managing a business at

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different times.
Added to that, I think it's

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incredibly rare you get the
perfect time for someone to step

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down.
Like, like, I mean, Jake Klein

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recently, he's sort of stepping
down at, at evolution seems to

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be in kind of textbook.
It's, it's gone too well.

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You know, the gold price has
ripped.

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It's an opportune time.
It's been there 15 years.

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But in most cases, like you're
putting fires out at one point

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or another.
So there's always going to kind

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of be question marks, but I
think I think it is pretty valid

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to keep in mind that different
people arrive for companies at

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different times in in the
company's life cycle.

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I think that I think that
argument is like, surely, yeah,

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it's valid.
But I feel like it's much more

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valid when when you're talking
about the kind of CEO who who

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was in and around the mix in the
discovery phase really proven,

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proven it up and taking it
through through those early

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development stages.
Yeah, and that is, that's a

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general statement.
Yeah, right.

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That's not a specific comment on
Paladin that I'm making there.

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Yeah.
And then you've got then you've

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got the kind of like the
operator or the, Yeah, the

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established operator, the guy
who knows how to run a mining

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company.
Paladin was.

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00:09:33,160 --> 00:09:35,680
Paladin was a built mine.
This is a restart project now.

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00:09:36,240 --> 00:09:39,880
He had to do a lot in relation
to the financing and also the

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00:09:39,880 --> 00:09:42,200
operational oversight to kind of
get things going in a in a

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00:09:42,200 --> 00:09:44,800
country that's not Australia,
obviously all those sorts of

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00:09:44,800 --> 00:09:47,760
things.
He wasn't the exploration guy at

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00:09:48,320 --> 00:09:49,720
the time he was appointed in
2020.

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00:09:49,840 --> 00:09:52,280
Was the view that he would run
the uranium mining company?

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00:09:52,760 --> 00:09:57,240
Yes, it probably was so.
Yeah, the the, the person to do

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00:09:57,240 --> 00:10:01,120
the capital raising component
and to to build, build hype

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00:10:01,120 --> 00:10:03,760
around a stock and get all that
in.

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00:10:03,760 --> 00:10:07,520
I mean you could say that's kind
of part of any CE OS mandate.

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00:10:07,520 --> 00:10:12,040
But I take your point.
I also think 5 to 6 years like

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that, it's not an out of the
ordinary tenure running,

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00:10:16,520 --> 00:10:19,920
running, running a company.
If you're going to play devil's

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00:10:19,920 --> 00:10:22,840
advocate in this instance and
and see see that side of it,

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00:10:23,360 --> 00:10:27,560
it's a relatively standard
tenure, yeah, for a business,

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00:10:27,600 --> 00:10:28,560
but.
What, why?

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00:10:28,560 --> 00:10:31,640
So why is this like, like key?
Are there examples that come to

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mind and everything where you've
seen ACEO depart during a

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00:10:34,760 --> 00:10:36,840
fragile period of a single asset
developer Strand line.

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00:10:36,840 --> 00:10:37,720
Life strand line.
Yeah.

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00:10:37,720 --> 00:10:38,720
Yeah.
It's funny you mentioned that

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00:10:38,720 --> 00:10:40,320
one because that was the one
that came to mind.

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00:10:40,320 --> 00:10:43,120
Because I know that you you've
got this rule that if you see

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00:10:43,120 --> 00:10:45,320
it, you you'd like, you know,
you would sell your stock

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00:10:45,320 --> 00:10:48,480
because it's information
asymmetry in that instance.

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00:10:48,520 --> 00:10:52,440
Yeah, but he.
But that that time the CEO, he

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00:10:52,440 --> 00:10:55,320
actually he was an MD, he
stepped off the board initially

226
00:10:55,320 --> 00:10:59,080
remained I think CEO for a brief
period of time and a.

227
00:10:59,080 --> 00:11:01,920
Brief moment in.
Transitioned out of the company,

228
00:11:01,920 --> 00:11:05,160
but the moment you saw you saw
him step down in some capacity

229
00:11:05,160 --> 00:11:06,640
and he sold.
His shirt and by all accounts,

230
00:11:06,640 --> 00:11:08,720
you know, in that case, the
perfect person to build the

231
00:11:08,720 --> 00:11:12,480
project got it done on budget
throughout COVID, which was

232
00:11:12,480 --> 00:11:15,800
incredibly hard, but they had a
whole host of different

233
00:11:16,080 --> 00:11:17,800
challenges that they were coming
into.

234
00:11:17,800 --> 00:11:20,120
And this was mineral sands.
It's not, you know,

235
00:11:20,120 --> 00:11:23,800
run-of-the-mill gold mining.
So that that was caused for for

236
00:11:23,800 --> 00:11:25,400
concern in that in that
instance.

237
00:11:25,560 --> 00:11:27,400
Yeah.
Do you think, do you think there

238
00:11:27,400 --> 00:11:29,440
are parallels to parallel or do
you think it's quite different?

239
00:11:31,440 --> 00:11:35,760
I would say the the alarm bell
went off straight away again and

240
00:11:35,760 --> 00:11:40,080
ramp up has been nowhere near as
smooth as they wanted and it

241
00:11:40,080 --> 00:11:42,800
never is.
But I wouldn't say I'm, I'm well

242
00:11:42,800 --> 00:11:45,920
versed enough with, with the
intricacies of their mining

243
00:11:45,920 --> 00:11:48,360
operation at Langhahanrish to,
to completely comment.

244
00:11:48,360 --> 00:11:52,120
But you want to be doing a lot
of homework now if you're

245
00:11:52,120 --> 00:11:55,120
holding the stock, like a lot of
homework, not to mention what we

246
00:11:55,120 --> 00:11:57,800
spoke about last week in the
context of how these guys are

247
00:11:57,800 --> 00:12:01,080
kind of valued given what
they've got already and where

248
00:12:01,080 --> 00:12:04,240
uranium prices are currently, I
think you're paying for a bit of

249
00:12:04,240 --> 00:12:08,280
upside like we said there.
So that would make me all the

250
00:12:08,280 --> 00:12:10,560
more cautious.
Yeah.

251
00:12:10,680 --> 00:12:11,960
And context matters as well,
right?

252
00:12:11,960 --> 00:12:16,520
Like in the case of Alan and
like that they are facing, I

253
00:12:16,880 --> 00:12:19,680
think it's two class action
lawsuit.

254
00:12:20,440 --> 00:12:24,520
The, the class action lawsuits,
the way they get funded is the

255
00:12:24,960 --> 00:12:27,320
that there's like this whole
kind of litigation funding

256
00:12:27,320 --> 00:12:30,400
dynamic, but in effect, you
wouldn't see the class action,

257
00:12:30,400 --> 00:12:33,160
at least the first one, get to
where it is if the the

258
00:12:33,600 --> 00:12:35,280
litigation funders hadn't
already introduced.

259
00:12:35,280 --> 00:12:38,320
There's a very good probability
that this this is going to, you

260
00:12:38,320 --> 00:12:39,560
know, they want to get paid
real.

261
00:12:39,840 --> 00:12:42,480
There's, there's, there's, it's
not quite like maybe it's a home

262
00:12:42,480 --> 00:12:46,680
run case, maybe it's not, but
it's pretty, you know, it's a,

263
00:12:46,760 --> 00:12:50,120
it's probably a very highly
probable outcome that that, you

264
00:12:50,120 --> 00:12:51,400
know, shareholders win in the
class action.

265
00:12:51,840 --> 00:12:53,000
At which point?
Quick as well, right?

266
00:12:53,320 --> 00:12:55,680
Yeah.
And at which point in time, like

267
00:12:56,160 --> 00:12:59,760
is it inevitable that the the
CEO of the company at that point

268
00:12:59,760 --> 00:13:02,800
in time has to step down as a
result of the you know the

269
00:13:02,800 --> 00:13:07,680
optics, the the pushback from
proxy advisors, all that kind of

270
00:13:07,680 --> 00:13:09,120
stuff?
Like is it?

271
00:13:09,120 --> 00:13:11,480
Is it maybe pre emptive in
expectation of losing the class

272
00:13:11,480 --> 00:13:14,160
action to?
It could be, I don't know, but

273
00:13:14,160 --> 00:13:17,000
that that would be a better
explanation If you own the stock

274
00:13:17,000 --> 00:13:19,680
than than you know something
relating to information

275
00:13:19,680 --> 00:13:21,760
asymmetry.
Yeah, that wouldn't be bad.

276
00:13:22,280 --> 00:13:25,080
Yeah, that that would and the
stock went up, the stock went

277
00:13:25,080 --> 00:13:26,520
up.
So I think, I think the market

278
00:13:26,520 --> 00:13:27,840
thought, you know, this is a
good thing.

279
00:13:29,120 --> 00:13:31,800
Exactly.
Yeah, it'd be that class action

280
00:13:31,800 --> 00:13:34,480
would be an interesting part of
the the business to to follow

281
00:13:34,480 --> 00:13:36,360
and and see where that kind of
takes it.

282
00:13:36,600 --> 00:13:39,400
Yeah, how about predictive?
Right.

283
00:13:39,400 --> 00:13:40,800
We've got a few question marks
about predictive.

284
00:13:40,800 --> 00:13:44,320
They came out with their DFS.
So they obviously own the bank

285
00:13:44,320 --> 00:13:47,080
hand project in Guinea of all
places.

286
00:13:47,080 --> 00:13:50,280
And I think we're curious to to
ask a question, is there much

287
00:13:50,280 --> 00:13:53,960
kind of meat left on the bone
for investors at this stage?

288
00:13:53,960 --> 00:13:56,560
And what and what is the next
chapter of this takeover saga

289
00:13:56,960 --> 00:14:01,600
that we saw start up with Percy
is coming into the the company

290
00:14:01,600 --> 00:14:05,120
and taking a stake sort of 2/3
of the way through last year.

291
00:14:05,120 --> 00:14:07,920
So Yep, yeah, worth sharing a
couple of the numbers.

292
00:14:08,040 --> 00:14:10,160
And what are the what are the
headline numbers that you saw on

293
00:14:10,160 --> 00:14:14,320
the study?
So 250,000 oz per annum is the

294
00:14:14,440 --> 00:14:17,520
production guide for 12 years of
mine life at an all in

295
00:14:17,520 --> 00:14:20,960
sustaining cost the bit over
1000 US an ounce.

296
00:14:21,440 --> 00:14:25,160
The reserve grade is close to
1.8g per ton, but the

297
00:14:25,160 --> 00:14:28,040
underground is much closer to
four and that will time with

298
00:14:28,040 --> 00:14:32,760
that the mine plan we'll speak
to in a second MPV 5 of 2.5

299
00:14:32,760 --> 00:14:40,120
billion and an IRR of 46% using
a 2400 gold price.

300
00:14:40,200 --> 00:14:44,040
And the last detail I mentioned
is that the CapEx is about US

301
00:14:44,040 --> 00:14:48,400
$460 million there, big CapEx.
But this is a quality mine when

302
00:14:48,400 --> 00:14:51,120
it's going, there's no doubt.
Yeah, exactly.

303
00:14:51,120 --> 00:14:55,920
So if if we compare and contrast
the PFS which came out in early

304
00:14:55,920 --> 00:15:01,120
2024 with the DFS, there's a few
different details to highlight

305
00:15:01,120 --> 00:15:03,080
and there's a bit of a
difference approach.

306
00:15:03,080 --> 00:15:06,280
And we sort of show on screen
now what a bit of this looks

307
00:15:06,280 --> 00:15:09,320
like.
So they're going for a smaller

308
00:15:09,960 --> 00:15:13,960
Neb pit and that is saying the
strip ratio reduced pretty

309
00:15:13,960 --> 00:15:19,160
significantly from 4.6 to 1 to
1.9 to 1.

310
00:15:19,160 --> 00:15:22,080
So it's a much smaller pit with
this steeper pit walls.

311
00:15:22,600 --> 00:15:24,920
But what they're going to do is
they're going to attack the

312
00:15:24,920 --> 00:15:27,000
underground much earlier.
They're going to go at it from

313
00:15:27,280 --> 00:15:31,120
the GBE pit and they're going to
start this whilst they are

314
00:15:31,120 --> 00:15:34,240
constructing the plant.
So by the time the plant is good

315
00:15:34,240 --> 00:15:38,880
to go at sort of year 0, if you
like, they've already developed

316
00:15:38,880 --> 00:15:43,520
out the decline to that high
grade part of the ore body.

317
00:15:44,240 --> 00:15:47,480
And that they can just be
underground mining contributing

318
00:15:47,480 --> 00:15:51,960
what they sort of call at least
25% of fresh ore from the

319
00:15:51,960 --> 00:15:54,160
beginning.
So it's a, it's quite a

320
00:15:54,160 --> 00:15:56,680
different approach and it'll
make sense if you sort of look

321
00:15:56,680 --> 00:15:59,120
at the the graphics that we're
we're showing.

322
00:15:59,120 --> 00:16:01,960
But there's a few other
differences in approach as well.

323
00:16:01,960 --> 00:16:03,840
They've gone for slightly
smaller throughput.

324
00:16:04,160 --> 00:16:07,560
So instead of 5.5, they've gone
for 4.5 million tons per annum.

325
00:16:08,400 --> 00:16:10,080
And they've also seen the grade
increase.

326
00:16:10,080 --> 00:16:13,960
So that's gone from kind of
close to 1.6 to 1.8.

327
00:16:13,960 --> 00:16:18,440
And the overall output is down
20,000 oz per annum.

328
00:16:18,440 --> 00:16:20,880
But they're mining that at a
more competitive cost.

329
00:16:21,320 --> 00:16:27,080
So ultimately, you see in the
financials, the MPV up 140% from

330
00:16:27,080 --> 00:16:29,360
the PFS, which is a substantial
lift.

331
00:16:29,960 --> 00:16:32,360
And as anyone listening to this
would know, the gold price has

332
00:16:32,360 --> 00:16:34,720
been on a tear.
So they have factored in a gold

333
00:16:34,720 --> 00:16:38,040
price that is 600 US bucks
higher than what they'd assumed

334
00:16:38,040 --> 00:16:40,480
previously.
So all that in the context of

335
00:16:40,480 --> 00:16:44,280
the CapEx staying pretty steady?
They yeah, those are those are

336
00:16:44,280 --> 00:16:45,440
those are certainly really tidy
numbers.

337
00:16:45,440 --> 00:16:47,200
This is going to be like a
phenomenal mine.

338
00:16:47,200 --> 00:16:49,240
And the visuals are awesome too
that really help you kind of

339
00:16:49,240 --> 00:16:51,560
contextualize it.
And they changed the macro

340
00:16:51,560 --> 00:16:53,480
assumptions there, including the
gold price.

341
00:16:53,880 --> 00:16:55,640
I just wish they had have
changed the discount rate too.

342
00:16:57,000 --> 00:16:58,720
Kudos.
The same day that came out,

343
00:16:58,720 --> 00:17:04,480
Astral put out their own study
on on what's PFS and like big

344
00:17:04,480 --> 00:17:06,880
props to them.
They put a sensible 8% discount

345
00:17:06,880 --> 00:17:09,560
rate on a, you know, a
goldfields kind of single asset

346
00:17:09,560 --> 00:17:11,680
gold project.
It's, you know, that's that's

347
00:17:11,680 --> 00:17:15,319
much more reflective of of what
should be in these study

348
00:17:15,319 --> 00:17:17,200
numbers.
I'm starting a petition like and

349
00:17:17,200 --> 00:17:20,599
and this, you know, predictors
in Guinea and the argument is,

350
00:17:21,079 --> 00:17:22,760
well, everyone else does it.
You're going to get comped

351
00:17:22,760 --> 00:17:24,839
everyone else.
So you have to use, you have to

352
00:17:24,839 --> 00:17:27,400
use MPV 5%.
Not anymore mate, starting

353
00:17:27,400 --> 00:17:28,920
petition.
But I don't care if you're in

354
00:17:29,160 --> 00:17:31,800
Goldfields or Guinea and PV
eights.

355
00:17:31,800 --> 00:17:34,680
Let's just start with that.
Hard to argue with that if you

356
00:17:34,680 --> 00:17:36,560
are going to get in the the PDI
campus.

357
00:17:36,560 --> 00:17:38,880
Astral here to cause a bit of a
bit of conflict.

358
00:17:38,920 --> 00:17:41,920
I think they're using a a
decently lower gold price

359
00:17:41,920 --> 00:17:44,600
assumption.
Yeah, yeah, yeah, you're right.

360
00:17:44,760 --> 00:17:46,200
You are 100% right on that
front.

361
00:17:47,200 --> 00:17:50,000
Yeah, I thought the astral
numbers are tidy as well.

362
00:17:50,000 --> 00:17:52,320
Close to 100,000 oz per annum
operation.

363
00:17:52,360 --> 00:17:54,080
Yeah, that's.
That's shaping up to be like a

364
00:17:54,080 --> 00:17:55,560
very financial project, there's
no doubt.

365
00:17:56,240 --> 00:17:59,760
Yeah, 13 years of mining on a 19
year life, as as they put it.

366
00:17:59,920 --> 00:18:00,960
It's an interesting one to
follow.

367
00:18:00,960 --> 00:18:01,960
Hey.
Yep, Yep.

368
00:18:02,280 --> 00:18:05,360
But refresh me on the latest
kind of corporate stuff going on

369
00:18:05,480 --> 00:18:08,040
with Predictive.
I mean, Perseus obviously picked

370
00:18:08,040 --> 00:18:11,080
up that stack from Capital
Drilling now then then we saw

371
00:18:11,760 --> 00:18:15,200
Zijin and Lundin actually enter.
The cap structure, not montage.

372
00:18:15,400 --> 00:18:18,680
Yeah.
So Perseus went and took a 14%

373
00:18:18,680 --> 00:18:21,280
state mid 2024.
Within a month or so, they

374
00:18:21,280 --> 00:18:24,600
stepped that up to almost 20%.
At that point, everyone kind of

375
00:18:24,600 --> 00:18:26,040
thinks, you know, they've got
their foot on this.

376
00:18:26,160 --> 00:18:28,080
And they did it kind of
interestingly because the stock

377
00:18:28,080 --> 00:18:32,200
had traded up to nearly 30
cents, dipped briefly, and they

378
00:18:32,200 --> 00:18:34,360
scooped up their stake at closer
to $0.20.

379
00:18:34,360 --> 00:18:36,240
And then it bounces right back
up.

380
00:18:36,320 --> 00:18:43,320
So subsequently, in February of
this year, we see Lundin and

381
00:18:43,400 --> 00:18:46,680
Zijin take a cumulative 10%
mistake.

382
00:18:46,680 --> 00:18:52,520
Now they invested $69 million at
26 and a half cents and the

383
00:18:52,520 --> 00:18:56,080
stock just ripped pretty much.
So this dilution took Perseus

384
00:18:56,080 --> 00:19:00,240
below 18% and all of a sudden
you've got a company that's kept

385
00:19:00,240 --> 00:19:04,960
closer to a billion dollars as
opposed to the whatever 6 or

386
00:19:04,960 --> 00:19:06,680
$700 million that had been
prior.

387
00:19:06,680 --> 00:19:10,920
So it jumps up more than 30% and
it's traded at that elevated

388
00:19:10,920 --> 00:19:14,800
level since.
So kind of between 35 and 45 ish

389
00:19:14,800 --> 00:19:18,040
cents for the last six months.
That's that's the playing field

390
00:19:18,040 --> 00:19:19,640
set right there.
Competitive.

391
00:19:20,120 --> 00:19:23,240
It is, it is.
And obviously Jeff who we had on

392
00:19:23,240 --> 00:19:26,560
the show around that time, he
and the team at Percy's were

393
00:19:26,560 --> 00:19:30,520
were less than impressed with
how things had kind of played

394
00:19:30,520 --> 00:19:33,960
out and more to the point that
the valuation that the company

395
00:19:34,200 --> 00:19:37,840
was trading at and it's
attractiveness given the the

396
00:19:37,840 --> 00:19:39,720
CapEx that then would need to be
spent.

397
00:19:39,720 --> 00:19:41,000
So they were.
Sure, he was unimpressed without

398
00:19:41,000 --> 00:19:43,040
played out.
I think he was just, he was just

399
00:19:43,040 --> 00:19:46,040
trying to make us a point on.
Like valuation on valuation,

400
00:19:46,080 --> 00:19:49,040
yeah, yeah.
So framing it as a kind of

401
00:19:49,040 --> 00:19:52,440
billion dollars plus maybe
another 30% to take it out plus

402
00:19:52,840 --> 00:19:59,320
700 Aussie means your $2 billion
in in the hole and you need to

403
00:20:00,640 --> 00:20:03,680
make a lot of money and do a lot
of mining to earn that back.

404
00:20:03,760 --> 00:20:05,400
So they're sitting on a.
You have to.

405
00:20:05,400 --> 00:20:08,640
Start shooting a gold price
that's yeah, north of maybe your

406
00:20:08,640 --> 00:20:11,600
internal deck is.
And is that a sensible or

407
00:20:11,600 --> 00:20:12,760
prudent thing to do?
Yeah.

408
00:20:12,800 --> 00:20:15,560
And and what is the payback kind
of period given the the

409
00:20:15,560 --> 00:20:19,680
volatility in political
stability in in country as well.

410
00:20:19,680 --> 00:20:23,440
But there's just now sit on a
decent little hyper profit that

411
00:20:23,440 --> 00:20:26,480
they can cash in should that
time come.

412
00:20:26,840 --> 00:20:28,160
But that's how things kind of
stand.

413
00:20:28,160 --> 00:20:31,600
And I think it's interesting to,
to quickly actually have a chat

414
00:20:31,600 --> 00:20:34,280
about Guinea and understand
where they're at because they've

415
00:20:34,280 --> 00:20:36,480
been seeing a lot of changes,
right?

416
00:20:36,600 --> 00:20:40,400
What's changing?
So you, you remember just a

417
00:20:40,400 --> 00:20:43,760
couple weeks ago, maybe 3 or 4
weeks ago now, we saw hundred

418
00:20:43,960 --> 00:20:47,800
22150 tenements be pulled by the
government.

419
00:20:47,800 --> 00:20:51,320
Now there was, there was varying
views, predictive work swept up

420
00:20:51,320 --> 00:20:53,160
in this.
So they had their Argo and

421
00:20:53,400 --> 00:20:56,960
Bokoro, which weren't really
going to play a substantial role

422
00:20:57,320 --> 00:21:01,640
in this, but they, they got
pulled off them essentially.

423
00:21:01,640 --> 00:21:02,920
And there was sort of question
mark.

424
00:21:02,920 --> 00:21:08,560
So some people who operate in
countries said some of the some

425
00:21:08,560 --> 00:21:12,080
of the revocation of permits was
warranted.

426
00:21:12,080 --> 00:21:14,280
You know, people hadn't held it
up their end of the bargain.

427
00:21:14,840 --> 00:21:17,120
Other people didn't agree with
that so much.

428
00:21:17,120 --> 00:21:20,240
But if you look at what these
guys have factored into the DFS,

429
00:21:20,240 --> 00:21:25,360
you've got 6% on royalties going
at the door, you got a 30% tax

430
00:21:25,360 --> 00:21:28,560
rate assumed and you've got a
15% free carried interest.

431
00:21:28,560 --> 00:21:33,440
So they are yet to receive those
final permits, but that that's

432
00:21:33,440 --> 00:21:39,400
the the, the distribution that
they have factored into their

433
00:21:39,400 --> 00:21:41,920
modeling.
And yeah, when when you sort of

434
00:21:41,920 --> 00:21:46,480
comparable out that's on par
with a lot of West Africa and

435
00:21:46,960 --> 00:21:49,320
remains to be seen whether that
gets the the all clear, but

436
00:21:49,320 --> 00:21:51,080
that's sort of in line with the
recent mining code.

437
00:21:51,520 --> 00:21:53,120
So the billion dollar question
is who?

438
00:21:53,320 --> 00:21:54,720
Who gets the chocolates at the
end of all this?

439
00:21:55,560 --> 00:21:58,200
An alternate party coming in and
taking it out.

440
00:21:58,200 --> 00:22:02,080
As you know it's complicated
given the big stakes we we see

441
00:22:02,080 --> 00:22:06,360
there, but one interesting name
to throw in the ring just to

442
00:22:06,360 --> 00:22:08,560
talk about in general really is
London gold.

443
00:22:08,760 --> 00:22:12,360
They now kept at 19 billion
Aussie, they have run over 120%

444
00:22:12,480 --> 00:22:15,480
year to date and they got
Newmont on the register with 32%

445
00:22:15,480 --> 00:22:17,360
of the business there.
You ever?

446
00:22:17,400 --> 00:22:19,880
Seen you ever seen a valuation
like that for a single asset

447
00:22:20,440 --> 00:22:21,240
operation?
I don't know if I.

448
00:22:21,240 --> 00:22:25,080
Have I I not saying one that
comes to mind it.

449
00:22:25,160 --> 00:22:27,880
Probably is, but someone else
We're on Roads Ridge.

450
00:22:29,920 --> 00:22:33,720
Different base.
They have executed really well

451
00:22:33,720 --> 00:22:38,120
in Ecuador to to put it simply,
they're now sitting with US 450

452
00:22:38,120 --> 00:22:41,240
million in net cash.
They did 170 million in free

453
00:22:41,240 --> 00:22:45,080
cash in 1/4.
They're paying dividends and I

454
00:22:45,080 --> 00:22:48,720
think it's pretty marvelous
execution given the the tough

455
00:22:48,720 --> 00:22:49,920
jurisdiction.
You know, there were a lot of

456
00:22:49,920 --> 00:22:52,000
question marks when when they
went in there and started

457
00:22:52,000 --> 00:22:55,240
building router del military and
they've they've done a great

458
00:22:55,240 --> 00:22:56,920
job.
Tremendous job, took a long term

459
00:22:56,920 --> 00:23:00,160
for you, like we're on side with
the government and like a

460
00:23:00,160 --> 00:23:04,120
reaping the rewards of it, yeah.
But they are still a $19 billion

461
00:23:04,120 --> 00:23:07,760
business with an asset in, well
a single asset in, in Ecuador.

462
00:23:08,280 --> 00:23:10,440
And valuation aside, I'm, I'm
super impressed.

463
00:23:10,440 --> 00:23:12,920
But I'm curious if they are
looking, they've spoken very

464
00:23:12,920 --> 00:23:17,520
much about an exploration focus
and capital returns, you know,

465
00:23:17,520 --> 00:23:19,920
dividends and, and, and the like
that they're going to start

466
00:23:19,920 --> 00:23:22,040
paying out.
And I guess I have more question

467
00:23:22,040 --> 00:23:25,680
marks about that state sitting
within the Lundeen family, how

468
00:23:25,680 --> 00:23:29,080
they think about it.
They sort of famously have 25 to

469
00:23:29,080 --> 00:23:34,720
30% stakes in a lot of companies
and their MO has not been taking

470
00:23:34,720 --> 00:23:37,960
out companies at this stage.
It's it's often been a lot

471
00:23:37,960 --> 00:23:41,240
earlier stage than this.
So I don't know how they would

472
00:23:41,240 --> 00:23:44,760
think about it and I'd be very
curious to explore that, but.

473
00:23:45,040 --> 00:23:50,240
I don't think the I think London
gold would be the vehicle to to

474
00:23:50,840 --> 00:23:54,320
embark in in West Africa for for
the London.

475
00:23:54,320 --> 00:23:59,360
So I imagine that that might
maintain a very kind of its own

476
00:23:59,360 --> 00:24:02,320
thing, South American focus.
I think you'd be right.

477
00:24:02,320 --> 00:24:05,640
I think it becomes a different
base and they've got a host of

478
00:24:05,640 --> 00:24:07,600
vehicles as well as spinning up
new ones.

479
00:24:07,800 --> 00:24:11,560
Seeing the seeing the the
simultaneous placement from

480
00:24:11,560 --> 00:24:16,520
London family and and and Zejin
at the same time into into

481
00:24:16,520 --> 00:24:19,320
predictive, I think was probably
more telling if the London's

482
00:24:19,960 --> 00:24:23,200
like a horse that they're
backing from a from a company

483
00:24:23,200 --> 00:24:26,080
perspective on their W African
gold endeavours.

484
00:24:26,080 --> 00:24:29,760
And that's montage, yeah.
You've got the inside line to

485
00:24:29,760 --> 00:24:32,080
Zejan as well, so.
Well, that's that's the other

486
00:24:32,080 --> 00:24:34,320
curious thing, right?
If you've got both both Lundin

487
00:24:34,360 --> 00:24:40,280
family and Zejan backing montage
like normally you, you one of

488
00:24:40,280 --> 00:24:44,200
the things that kind of kills
the competitive spirit in MNA in

489
00:24:44,720 --> 00:24:47,840
in mining is the fact that No2
Chinese parties have a bid

490
00:24:47,840 --> 00:24:49,640
against each other.
They always there's just this

491
00:24:49,640 --> 00:24:52,600
implicit understanding that, you
know, we're we're we're gonna

492
00:24:53,000 --> 00:24:55,080
like one of us will get it, but
it's but both not gonna get into

493
00:24:55,080 --> 00:24:57,040
a bidding wall.
Yeah, that kind of sucks.

494
00:24:57,040 --> 00:24:59,720
And now you've got, you've got
the like removing the Londones

495
00:24:59,720 --> 00:25:03,040
from from the potential of the a
competitive bidding outcome as

496
00:25:03,040 --> 00:25:06,040
well, because they're, you know,
they're on side with Zijin and

497
00:25:06,040 --> 00:25:08,080
this vehicle anyway.
Maybe the Russians will come,

498
00:25:08,120 --> 00:25:11,080
not go to operate, but that
would be an incredibly complex,

499
00:25:11,480 --> 00:25:14,280
yeah, proposition given, given
where we're at.

500
00:25:14,280 --> 00:25:19,200
But yeah, I mean, Zijin made a
big splash buying AKM not too

501
00:25:19,200 --> 00:25:20,440
long ago.
It was a big transaction.

502
00:25:20,960 --> 00:25:25,720
So we'll see what what their
approach is going forward.

503
00:25:25,720 --> 00:25:29,200
But yeah, I mean, I wonder given
the the road ahead that

504
00:25:29,200 --> 00:25:33,280
predictive has in wanting to
start construction early next

505
00:25:33,280 --> 00:25:36,320
year, does a perspective buyer
just let them start marching

506
00:25:36,320 --> 00:25:40,360
down that that lonesome road and
be there when they perhaps

507
00:25:40,360 --> 00:25:44,960
stumble or come into challenges?
Do they get creative and provide

508
00:25:44,960 --> 00:25:47,600
some sort of financing to get
their way in the in the door?

509
00:25:47,600 --> 00:25:49,960
You know, lots of different
shapes and sizes that could take

510
00:25:49,960 --> 00:25:52,520
but.
Key catalyst here is, and I

511
00:25:52,520 --> 00:25:55,440
think it's the end of this
calendar year, that's when

512
00:25:55,960 --> 00:26:01,000
you've got the at the moment
you've Percy submitted a full

513
00:26:01,000 --> 00:26:03,240
change of control.
They have to 50% share that

514
00:26:03,240 --> 00:26:06,240
upside with Capital Drilling who
they bought their stake off by

515
00:26:06,240 --> 00:26:07,920
the end of the year.
Capital Drilling is no longer

516
00:26:07,920 --> 00:26:10,800
entitled to that extra 50%.
So, you know, Percy's would save

517
00:26:10,800 --> 00:26:14,840
money, but but having said that,
do you think that like Percy's

518
00:26:15,320 --> 00:26:19,120
will be sensible and and not
kind of pay overs and they might

519
00:26:19,120 --> 00:26:25,760
actually be quite willing to
sell their stake to to Lundine

520
00:26:25,760 --> 00:26:29,920
and Zijan jointly or more more
likely, in my opinion, montage

521
00:26:30,080 --> 00:26:32,200
because I just, I just
interpreted that as like a

522
00:26:32,240 --> 00:26:33,640
montage stake more than
anything.

523
00:26:33,800 --> 00:26:37,560
Yeah, or or or throw this one
out there, Montage and Percy's

524
00:26:37,560 --> 00:26:40,360
merger, then then take over
predictive.

525
00:26:42,040 --> 00:26:44,120
That'd really take the
competitive attention out of the

526
00:26:44,120 --> 00:26:46,880
process, but it would be, yeah,
it'd be interesting.

527
00:26:46,880 --> 00:26:49,920
I mean, the big next step for
predictive is to get the

528
00:26:50,080 --> 00:26:53,920
exploitation permit that comes
through there, you know, on the

529
00:26:53,920 --> 00:26:57,720
cusp of them to sort financing
and find their way to developing

530
00:26:57,760 --> 00:27:00,360
the asset.
But yeah, a lot on the table.

531
00:27:00,360 --> 00:27:05,880
I, I'm aligned with your
thinking on Perseus being been

532
00:27:05,880 --> 00:27:08,400
conservative in, in approaching
M&A.

533
00:27:08,400 --> 00:27:09,760
They've, they've got a lot to
spend.

534
00:27:09,760 --> 00:27:11,960
They've got to develop Nyang
Saga as well.

535
00:27:12,480 --> 00:27:16,280
And yeah, I, I can't see them at
this sort of valuation coming

536
00:27:16,280 --> 00:27:18,920
in, but we'll, we'll see what
happens.

537
00:27:19,280 --> 00:27:22,880
It's, it's pretty tricky to be
competitive versus like Chinese

538
00:27:22,880 --> 00:27:25,160
capital to for the number of
reasons we've already talked

539
00:27:25,160 --> 00:27:27,320
about, not least of which they
take a strategic view as opposed

540
00:27:27,320 --> 00:27:32,960
to like having to back out an
MPV using a rational gold price

541
00:27:32,960 --> 00:27:35,680
or anything like that.
So, yeah, it could, it could, it

542
00:27:35,680 --> 00:27:37,040
just could go that way.
That's OK.

543
00:27:37,080 --> 00:27:39,120
PCs will make money.
Pretty sure shareholders will

544
00:27:39,120 --> 00:27:42,160
make money.
The Chinese will build a mine

545
00:27:42,600 --> 00:27:46,280
like happy days.
But yeah, yeah, I think more

546
00:27:46,280 --> 00:27:48,880
important thing is just be
sensible, like from a capital

547
00:27:48,880 --> 00:27:51,520
allocation perspective when like
in these times, there's a gold

548
00:27:51,520 --> 00:27:54,680
miner as well, because it's,
it's this is like a window.

549
00:27:54,680 --> 00:27:57,680
Everyone's making good money now
all of a sudden the the

550
00:27:57,680 --> 00:28:01,640
valuations of the development
opportunities have come up a lot

551
00:28:01,840 --> 00:28:05,880
even in West Africa where they
were not a lot like just 12

552
00:28:05,880 --> 00:28:08,280
months ago.
So that's, that's going to be a

553
00:28:08,280 --> 00:28:11,480
big differentiator between yeah,
the gold miners like in 12

554
00:28:11,480 --> 00:28:14,280
months time.
This is now is how they were

555
00:28:14,280 --> 00:28:16,600
thoughtful about a creative
opportunities to use their

556
00:28:16,600 --> 00:28:20,400
capital right now when
valuations are are elevated.

557
00:28:21,400 --> 00:28:25,120
Yeah, a lot of the London family
will be, you know very closely

558
00:28:25,120 --> 00:28:31,720
familiar with with red back in
West Africa and the kind of

559
00:28:31,960 --> 00:28:36,360
absurd valuation they received
in selling that out in the last

560
00:28:36,360 --> 00:28:38,960
bull market cycle.
I mean they did that a bit

561
00:28:38,960 --> 00:28:41,080
before it sort of happened like
2010 ish time frame is it?

562
00:28:41,080 --> 00:28:44,280
The more tiny one.
Had Yeah, Tasira.

563
00:28:44,720 --> 00:28:46,240
And Tasira.
Yeah.

564
00:28:47,280 --> 00:28:51,680
Saltikinros.
Yes, Saltikinros and that was a

565
00:28:51,680 --> 00:28:54,920
$7.7 billion transaction.
They all made a multi the.

566
00:28:55,240 --> 00:28:58,680
Landings did.
Or they were part of that

567
00:28:58,680 --> 00:29:01,320
vehicle gotcha and isn't?
That funny because.

568
00:29:01,320 --> 00:29:02,880
Kinross paid the price.
Kinross.

569
00:29:02,880 --> 00:29:04,720
Kinross then had to.
Well, wasn't that Kinross that

570
00:29:04,720 --> 00:29:08,960
sold through to Del Norte to the
London Gold?

571
00:29:09,040 --> 00:29:10,920
A bit later on.
As a probably as a result of

572
00:29:10,920 --> 00:29:13,840
that, Patras thank Kinross
twice.

573
00:29:13,840 --> 00:29:15,640
I didn't.
I actually didn't know that.

574
00:29:15,800 --> 00:29:18,080
Yeah.
So it's it's interesting and I'm

575
00:29:18,080 --> 00:29:20,160
completely with you there.
Like this is the time where you

576
00:29:20,160 --> 00:29:21,960
want to see these gold.
He's just piling up cash.

577
00:29:21,960 --> 00:29:25,040
You don't want to see anyone
blowing their brains out on M&A,

578
00:29:25,080 --> 00:29:28,320
not the PDI shareholders will
want to hear that, but they want

579
00:29:28,320 --> 00:29:32,760
to stay disciplined and and you
know fill up the bank account in

580
00:29:32,760 --> 00:29:35,200
the good times and deploy it in
the in the bad times.

581
00:29:35,200 --> 00:29:38,400
Wow.
But we should mention a couple

582
00:29:38,400 --> 00:29:42,560
other stories just quickly.
Astrin and their JV partners

583
00:29:42,720 --> 00:29:48,520
Energy Fuels have received the
approvals for what there is the

584
00:29:48,520 --> 00:29:50,440
working plan for construction
and operations.

585
00:29:50,440 --> 00:29:53,400
So they have the Donald Rare
Earth and Mineral Sands project

586
00:29:53,400 --> 00:29:57,240
in in the state of Victoria,
which isn't known for handing

587
00:29:57,240 --> 00:30:01,160
out mining permits so easily.
And yeah, they're off to get

588
00:30:01,160 --> 00:30:04,720
sort of financing sorted now and
get their ducks in a row there.

589
00:30:04,720 --> 00:30:07,320
But is that final?
Approval or is this still?

590
00:30:08,080 --> 00:30:11,000
Yep, final approval, final major
regulatory.

591
00:30:11,000 --> 00:30:12,800
Approval, right?
Yeah.

592
00:30:12,960 --> 00:30:17,520
Stock rocketed up sort of 47%
yesterday and another 10% today.

593
00:30:17,520 --> 00:30:20,440
So, yeah, I'm really curious to
see how that goes.

594
00:30:20,440 --> 00:30:24,000
And it's good in a way there's
been a more constructive outlook

595
00:30:24,000 --> 00:30:28,080
on the value add in in regional
towns there that well potential

596
00:30:28,080 --> 00:30:31,480
operation could play.
Isn't this isn't this kind of

597
00:30:31,480 --> 00:30:34,560
curious?
The two the two payments in

598
00:30:34,560 --> 00:30:37,400
Victoria have been the first
payments in party forever.

599
00:30:37,400 --> 00:30:40,480
Is that VHMS, Gaussian and now
this?

600
00:30:40,640 --> 00:30:42,080
Are those like mineral sands
projects?

601
00:30:42,080 --> 00:30:45,000
Like Gaussian will argue they're
a rare earth project too, but.

602
00:30:47,920 --> 00:30:49,480
And how weird is that?
Strategic matter.

603
00:30:49,480 --> 00:30:53,200
It's strategic.
So like the amount of like land

604
00:30:53,320 --> 00:30:55,760
you actually have to disturb on
a mineral science project is

605
00:30:55,760 --> 00:30:58,760
like vastly greater than you
would a normal mine, but the

606
00:30:58,760 --> 00:31:01,080
Victorians somehow are more
comfortable with that than they

607
00:31:01,080 --> 00:31:04,440
are just allowing a normal mine
anyway.

608
00:31:05,400 --> 00:31:08,800
Don't understand Victorians?
It's an interesting one.

609
00:31:09,080 --> 00:31:11,720
And the last thing to mention,
another quick story here,

610
00:31:12,280 --> 00:31:15,160
Wildcat, they have seen their
market cap fall pretty

611
00:31:15,160 --> 00:31:19,160
dramatically to $190 million.
They have $60 million in the

612
00:31:19,160 --> 00:31:23,000
bank and this is not something
you say everyday they're doing a

613
00:31:23,000 --> 00:31:27,720
buyback 5,000,000 bucks worth.
So back in themselves, back in

614
00:31:27,720 --> 00:31:30,360
the value that Taba Taba has
and.

615
00:31:31,880 --> 00:31:34,880
Unusual circumstances.
They're they're, they're trying

616
00:31:34,880 --> 00:31:35,840
to say they're cheap.
Yeah.

617
00:31:36,120 --> 00:31:39,800
Yeah, they're signalling to the
market and had a little bounce

618
00:31:39,800 --> 00:31:41,640
on the back of it, but.
They've still got plenty in the

619
00:31:41,640 --> 00:31:43,720
bank and they're on go slow mode
right now, so they're not at

620
00:31:43,720 --> 00:31:47,800
risk of regretting using the
cash for the buyback in the near

621
00:31:47,800 --> 00:31:48,400
term.
Yeah, it wouldn't.

622
00:31:48,400 --> 00:31:49,800
Look, good.
If you had to do a raise, you

623
00:31:49,800 --> 00:31:52,720
have a lower price later on.
Yeah, but a lot that they've

624
00:31:53,000 --> 00:31:56,040
backed themselves into this one.
So we'll see what happens.

625
00:31:56,560 --> 00:32:01,600
Lithium price is at a real low
ebb and doesn't seem to be

626
00:32:01,600 --> 00:32:05,240
changing, but maybe we'll see a
couple cracks come through in

627
00:32:05,240 --> 00:32:07,640
the near term future and we'll
be off to the races again.

628
00:32:07,920 --> 00:32:09,080
Couple of partners to thank
mate.

629
00:32:09,320 --> 00:32:11,800
Thank you to Mineral Mining
Services, Grounded sand, Big

630
00:32:11,800 --> 00:32:13,840
ground support, K Drew and Cross
Boundary Energy.

631
00:32:14,840 --> 00:32:15,320
Voodoo.
Voodoo.

632
00:32:16,520 --> 00:32:19,360
Now remember, I'm an idiot.
JD is an idiot.

633
00:32:19,720 --> 00:32:21,800
If you thought any of this was
anything other than

634
00:32:21,800 --> 00:32:24,480
entertainment, you're an idiot
and you need to read out a

635
00:32:24,480 --> 00:32:24,960
disclaimer.