Quick fire + Jake Klein on China, McPhillamys and M&A

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Right.
Eye money miners, very quick

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quarterly wrap up coming up as
quick as bloody MMS can get gear

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on your site to start moving
open pit dirt.

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That is how quick that is.
Like we're doing this segment to

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highlight how quick they are
because the gears there, the

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gear can be moving dirt probably
lunchtime.

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Pressure's on for us to be
quick.

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Yeah, yeah, I'm going to make it
quick because I won't be as

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quick as them, obviously.
Hey, boys.

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Yeah, Travan JC had a bit of a
special guest come in this

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morning to shoot the shit a bit.
Yeah, we did.

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We had Jake.
I don't.

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Know if you know it.
Did you know him?

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No, I can't cross him.
Jake Klein, executive chair of

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of Evolution Mining.
He popped in the studio, had a

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bit of a yarn.
He's one of those big thinkers

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in the industry.
He's always got something a bit

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kind of, you know, out there
that he wants to talk about.

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A few talking points.
And today we went in the the

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weeds of some of the, you know,
very strange government policy

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decisions that we've seen out
there, like the rug pool of

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Mcphillimy's and the
implications that has obviously

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he's evolution outrageous, but
was happy to talk about it,

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which, you know, I think was
important also Australia's

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relationship with China and kind
of the, you know, the the big

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theme of de globalisation, what
that means for for a lot of the

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industry.
And then, of course, I couldn't

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help myself but ask about deals,
future deals.

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So as.
Joe predicted.

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He gave you nothing.
I reckon there's something

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there, but I have to really
listen.

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Right now let's let's RIP in.
First off, cap off the rank ass

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Siona.
Mate, Lithium Co Lithium, Yeah,

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I just thought I'd point out,
you know, just wanted to point

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out kind of what stood out.
This was just one of those ugly

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waterfall charts, not much.
And it looks very good it.

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Looked all right until you read
what the item was.

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Yeah, yeah.
You look opening cash, closing

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cash, oh, cash went up.
So you think oh did they make

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money?
But no, the ones that go down

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include group underlying EBITDA
-18 million.

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But the thing that went up was
this net working capital

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movement of 46,000,000.
What they put that down to is

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customer prepayments and draw
down of ROM inventory.

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So you know it gets me a bit
nervous because those

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prepayments are now future
obligations that say owner must

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satisfy fire production and that
and delivery bears real cash

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cost to the business and there's
risk that that will be the loss

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making too.
So yeah, I found it interesting

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that is some hedging as well.
But I like from what I kind of

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pieced together, I think what
they've done is that there's

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some short dated contango in the
market.

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They can actually get a, a, you
know, a a bit of an uplift on

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selling kind of near term, near
term inventory as a result of

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that.
I wouldn't imagine it's it's too

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much, but.
Yeah, it's certainly a limited

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hedging, so.
Yes.

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And fun fact, I, I had someone
tell me that that that Zion is

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going to have to spend 22
million this quarter on

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exploration to be to get the
flow through financing kind of

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credits and all that sort of
stuff.

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Yeah.
Oh, chestnut.

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Yeah, right.
Good summer.

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But we're we're just going to
talk about not the numbers, just

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shit that interesting shit in
this Northern Star pretty flat.

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It was all pretty stock
standard, but hedge book is

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interesting for FY20 6.
As I, as I said in a call today,

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everyone starts talking about
hedging in a rising gold price

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environment.
And as I said, hedging never

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works in a rising gold price
environment.

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It's pretty, that's pretty.
Can't say it any more simpler

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than that.
More about trying to guarantee

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long term returns.
Works great when you pick the

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top you hedge right at the top
and then Phew, gold price

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forward.
Sorry, because they've, they've

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got it to 2 million oz for FY20
6.

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But nearly you look at the hedge
profile here, nearly third of

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that is hedged at an average
price of 3150.

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So it's just, it's funny when
you look at the numbers like the

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effect on large scale producers
like this, I like hypothetically

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let's say gold was 4100 or
stayed at this level all FY20 6,

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they realised price would be a
bit below 3800.

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So that's a hedge impactful.
So almost $200 million just in

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that.
So or it could go down and it's

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and it's all good.
So but, but you think, you think

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of an average realised price of
potentially 3738 hundred when

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they were doing the KCGM
expansion FID and everything,

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they would have taken that any
day of the week.

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So it's yeah, it's just, that's
what everyone talks about when

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the price goes up.
You can see the declining grades

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and oz output at Karasu Dam a
little bit back down to 2.6 for

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the underground grade.
They did point out in the call

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that it was part of the mining
sequence.

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It's easy one to say, yeah,
obviously a high higher open pit

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material move.
Not sure if there were cutbacks

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or something, but like mill head
grade back down to like bang on

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two grammes a tonne all in
sustaining costs up 300 bucks an

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ounce 2100.
Always wondering if this trend

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were to continue for lowering
grades, increase of costs, would

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it get northern start of the
point when they would consider

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off loading Karasu DM2 the
logical buyer Amelius for their

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Rebecca Rd project.
It's. 2100, all in sustaining

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costs almost a 50% margin, Yeah,
these days, so it could be

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worse.
But you can get that, you hear

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in the episode later with
Jackie.

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Well, this is when you should be
selling assets, not buying them

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in a gold price environment.
Well, I think you've got the the

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marketing challenge of not
hitting 2 million oz then, yeah.

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That's it, that's it And that
that's why I guess and we always

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come back to that point of just
seems like it's not never going

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to happen, but not in the short
term that they're ever going to

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offline this.
Yeah, yeah, playing the waiting

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game for sure.
You've been tracking the

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declining great at John D Last
time they reported too did.

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You so it wasn't too I looked it
was 3 point.

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Three.
OK.

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So yeah, yeah, that.
Programme looked all right.

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Yeah, it was pretty buddy.
Yeah, it just doesn't as you

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say, JD to where you take 2100
at the moment.

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So you would it's, they're not
going to go on and give it away,

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that's for sure.
Because the bargaining chip

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they've got against Remelius is
the the water infrastructure

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installed by Greenlands from the
Southern Ball field.

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Interesting.
That's right.

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Interesting.
Tell me, Tell me about.

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This well, like you could say
that probably adding 100 million

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to the price tag like because
you look at all the work that

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Greenlands did there at Carousel
Dam, like the bloody

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redevelopment of the existing
ball fields that like supply the

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ball pumps and the transfer pump
station, right.

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Another example of generation 7
AI driven Tele telemetry and

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leak detection systems.
Well, that's like unparalleled,

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but how do you it's amazing the
water and I've heard that the

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water pipes I install are like
those BMW car tyres, effectively

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self healing and puncher proof
like that is like just state of

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the art water infrastructure.
So it'll be the first time in M

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and A history where water
infrastructure will have such a

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large effect on the price tag
and the outcome.

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I believe so.
Could have been something else

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to keep in mind.
Could be in the poison pill.

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You know, we're gonna, we're
gonna use Greenlands to just

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make all of this super jazzy and
then they're, they're not going

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to pay up for what this is worth
now as a result.

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Yeah, when you're not working
over a poison pill, they're like

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a yeah, Yeah, they're like a
panadine Fort.

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Oh, they just make everything
better.

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It's definitely better, yeah.
Definitely better.

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It's definitely.
Better right Metals X.

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Yeah.
So, yeah, I think, I think it's

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been a bit too long since we've
spoken about the Mighty Meadows

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X So worth worth a little
chinwag again, they're trading

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around 43 cents.
They're doing all right at the

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moment.
Pardon me.

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So Renison had a record tin
production quarter.

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So things are actually looking
pretty good.

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I'll just start quickly on the
operational side of things, they

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mind two point or they produced
rather 2.9000 tonnes of tin at

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all in cost around 30,000 Aussie
per tonne.

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Now tin average about 47,000
Aussies that gives them about a

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$17,000 margin per tonne.
Obviously Middlesex owned half

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of the the operation there.
So about 1500 tonnes is their

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share and that kind of equals
net cash flow of 24 ish

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$1,000,000 and there's a cut by
the costs that aren't included

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in that.
That sort of runs at about $10

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million per annum or two and a
half $1,000,000 each quarter.

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So 22 ish million is the cash
flow.

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The financials themselves
aren't, aren't the cleanest

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because of the the JV structure,
but those numbers I just said

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are the ones that matter.
Cash flow was better this

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quarter than it was last
quarter, which is also good to

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see, especially in the face of
the tin price being about $2000

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on average lower over this
quarter.

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And there's there's one other
detail to kind of look out for

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you.
It's kind of confusing when you

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read it at first.
They report renison 100%, but

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they own half.
So in the in the table that they

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show you want to half those
numbers or just double check

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what you're kind of looking out
for there on the repurchasing

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side of their their stock.
Obviously it was a big deal four

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or five odd months ago when they
announced the buyback, they

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bought back just under 10
million shares, so about $4

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million.
I don't think we need to go

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through again.
They could probably do a bit

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more on that front, but we've
spoken about that.

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One of the interesting things to
look at though is they paid up

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to $0.40.
So I'd be keen as the

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announcements come out day by
day and they keep buying back

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the stock, whether they're going
to go over that $0.40 mark or if

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that's the sort of internal
limit they've got in place.

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And just looking at the the
valuation, so $197 million in

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cash, if you go through the the
net receivables inventory on it

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and revenue and and payables,
there's around about $18

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million.
So a bit over $200 million.

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You could kind of call that in
cash market cap of 380 million

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that gives you an AV of 170
million gets a bit better than

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that.
They've obviously made an

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investment in First Tin and
they've got a few other in

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investments in like Nico and a
couple other companies out there

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that they mentioned in the
quarterly.

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But like most things it's sort
of screens cheap for a reason.

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They again talk about maybe they
will do M&A, they're looking at

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base metals and a couple other
things, but always a a super,

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super interesting company to
keep tabs on.

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Yeah, you look at operating
operating cash flow, it's 22.7

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million go to annualize that you
get like yeah, ninety 90 million

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bucks.
So that you know 91,000,000

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annualised operating cash flow
either you said 170 like net off

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the investments.
You know, depending how you get

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funky with the the the Cyprian
con note and how you want to

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treat that.
We can we can just we can just

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call it an actual EV call it
call it 150,000,000.

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Find me lower sort of EV divided
by an operating cash flow

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multiple and the ASX for for any
company that has like a 10 year

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reserves life.
I'll be, I'll be shocked, but I

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can save them for a while.
It's like the big, the big risk

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is that they, they spend their
money on something silly and

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that, you know, there's plenty
of other risks that we've talked

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about in the past.
But yeah, a.

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Lot of potential though.
Next cab and taper, the Minari

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scoping study.
Yeah.

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So we, we won't run through all
the numbers money miners can

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just sort of have a have a
squeeze through that at their

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leisure.
But there's a few sort of

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interesting talking points.
I guess we we spoke a bit about

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00:11:32,120 --> 00:11:35,440
it in the context of of great
land infrastructure is one of

226
00:11:35,440 --> 00:11:36,720
those interesting talking
points.

227
00:11:36,720 --> 00:11:38,400
The the roads are a bit cooked
out there.

228
00:11:38,400 --> 00:11:40,520
They need a bit of work on them.
Obviously.

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00:11:40,520 --> 00:11:45,640
The other key point to talk
about is the, the fact or the

230
00:11:45,640 --> 00:11:47,840
question rather, do they need to
build a mill?

231
00:11:47,840 --> 00:11:51,560
So they're analysing a 3,000,000
tonne per annum stand alone

232
00:11:51,560 --> 00:11:53,520
scenario here in the scoping
study.

233
00:11:54,160 --> 00:11:58,920
Pre production capital is 300
million, about 1/3 of that goes

234
00:11:58,920 --> 00:12:01,760
towards the process plant.
They've got about 90 of that

235
00:12:02,040 --> 00:12:05,680
going towards pre production
mining capital.

236
00:12:06,360 --> 00:12:09,640
So that that is a sort of point
of debate and other people in

237
00:12:09,640 --> 00:12:12,360
the area can sort of run their
own numbers over it.

238
00:12:12,360 --> 00:12:15,400
But the stock has had a pretty
decent run of late.

239
00:12:15,400 --> 00:12:18,280
You look, you know, zoomed out
the past couple months and the

240
00:12:18,280 --> 00:12:21,480
thing sort of 3X now.
Obviously you got the great land

241
00:12:21,480 --> 00:12:23,040
deal happening in the vicinity
there.

242
00:12:23,480 --> 00:12:27,080
You've got Antapen themselves
signing off the deal with Rio

243
00:12:27,080 --> 00:12:29,120
over Citadel.
That'll sort of net them

244
00:12:29,400 --> 00:12:33,040
17,000,000 bucks in cash and
then you've got gold price

245
00:12:33,320 --> 00:12:37,560
running, so 3.1 cents.
They kept at about $130 million

246
00:12:38,560 --> 00:12:40,200
once they wrapped up that Rio
deal.

247
00:12:40,200 --> 00:12:43,680
Like I said, 17,000,000 that'll
take their cash to 23 ish

248
00:12:43,680 --> 00:12:48,000
million leaves them with an AV
of $110 million.

249
00:12:48,360 --> 00:12:53,160
There's also so that there's 4.7
billion shares outstanding 850

250
00:12:53,160 --> 00:12:57,600
ish million options, 650 now
well in the money now that the

251
00:12:57,640 --> 00:13:00,960
the stocks run up a decent bit.
So if the the stock holds up at

252
00:13:00,960 --> 00:13:05,440
this level, wouldn't be sort of
surprised to see about 14%

253
00:13:05,960 --> 00:13:10,080
dilution over the period.
Sort of they've got staggered

254
00:13:11,200 --> 00:13:14,280
expiry dates from 25 to sort of
2026.

255
00:13:14,280 --> 00:13:16,840
But yeah, I think that'd be a
bit more dilution.

256
00:13:16,840 --> 00:13:18,840
But all like it's still pretty
interesting to look at.

257
00:13:18,840 --> 00:13:21,280
And I think the, the real kind
of chat to have here is like

258
00:13:21,280 --> 00:13:24,480
what, what happens next?
So we've heard a couple rumours

259
00:13:24,480 --> 00:13:28,240
that Great Land, oh, I think
Antipa would put these ones out

260
00:13:28,240 --> 00:13:30,880
there that Great Land might use
them to make their way onto the

261
00:13:30,880 --> 00:13:34,800
ASXI Think there's sort of
various tax reasons and other

262
00:13:34,800 --> 00:13:38,040
sort of implications why that
might not be the, the most

263
00:13:38,040 --> 00:13:42,760
sensible kind of way to go for
Great Land to get themselves on

264
00:13:42,760 --> 00:13:45,120
to the ASX.
Also sort of worth noting, this

265
00:13:45,120 --> 00:13:48,360
is just a, a scoping study.
I know it's in the area, but

266
00:13:48,360 --> 00:13:51,920
the, the numbers are ±35 odd
percent.

267
00:13:51,920 --> 00:13:56,320
So yeah, I mean it's. 1-2
hundred percent since since the

268
00:13:56,320 --> 00:13:58,360
Greatland deal a month ago,
which is, yeah, kind of

269
00:13:58,680 --> 00:14:02,280
remarkable, yeah.
Yeah, I mean, in the in the, in

270
00:14:02,280 --> 00:14:05,040
the context of gold price
running hard as well, maybe a

271
00:14:05,040 --> 00:14:09,160
few of these sort of juniors
having a bit more attention put

272
00:14:09,160 --> 00:14:10,960
on them.
But it feels like all of a

273
00:14:10,960 --> 00:14:13,480
sudden a heap of people are
looking at at that sort of

274
00:14:13,480 --> 00:14:17,280
Patterson province and, you
know, maybe gold sort of

275
00:14:17,440 --> 00:14:20,560
developers or small caps more
broadly, right?

276
00:14:20,560 --> 00:14:22,560
I reckon there's no mill getting
built there.

277
00:14:22,560 --> 00:14:25,960
It's going to Telfer, that's
just 100% certain.

278
00:14:26,040 --> 00:14:29,080
Yeah, I reckon that that that
did like whether whether there's

279
00:14:29,080 --> 00:14:32,560
a merger with Ireland or not, I
reckon it all depends on like

280
00:14:32,560 --> 00:14:35,080
realistically what are what is
the time frame you could

281
00:14:35,080 --> 00:14:38,800
actually get that that fade into
the middle like other permitting

282
00:14:38,800 --> 00:14:40,240
challenges that are actually
going to blow out.

283
00:14:40,240 --> 00:14:43,360
And when you've got a bit of a,
you know, a fall off in the

284
00:14:43,400 --> 00:14:44,800
mining schedule that could be
filled.

285
00:14:45,280 --> 00:14:47,200
Can you actually get the anti
war in there at that point in

286
00:14:47,200 --> 00:14:49,280
time?
If not, then wait longer.

287
00:14:50,240 --> 00:14:52,080
Yeah.
And I'd be good to sort of say

288
00:14:52,080 --> 00:14:55,040
where whether they kind of go
like scoping study.

289
00:14:55,840 --> 00:14:59,320
The, the, the historical sort of
timeline from scoping study to

290
00:14:59,520 --> 00:15:01,680
to getting something in
production in, in racing times

291
00:15:01,680 --> 00:15:05,360
is quite a few years.
So we came to see if they sort

292
00:15:05,360 --> 00:15:08,520
of expedite things, Maybe they
sort of skip a study phase or

293
00:15:08,520 --> 00:15:11,680
something like that and really
start putting some of that that

294
00:15:11,680 --> 00:15:14,800
money they got in the ground and
use some of the new found love

295
00:15:14,800 --> 00:15:17,600
to maybe raise a bit more in
time and really hit things hard.

296
00:15:17,640 --> 00:15:21,160
Kind of say, I'm sure.
Yeah, the conversations have

297
00:15:21,160 --> 00:15:23,600
picked up a bit of pace in in
recent times in the boardroom

298
00:15:23,600 --> 00:15:25,720
there.
I think it's you think it's

299
00:15:25,720 --> 00:15:27,320
simple.
You think right, they're just

300
00:15:27,320 --> 00:15:31,040
going to mine it, crush it,
truck it to Telfa, no cyanide,

301
00:15:31,040 --> 00:15:33,440
no process, play it, no tailings
management, anything.

302
00:15:33,720 --> 00:15:40,280
But speaking to a person like an
MD going through the the same

303
00:15:40,280 --> 00:15:43,440
process at the moment, they
think you think it's simple, but

304
00:15:43,440 --> 00:15:46,880
it's still waiting in line,
waiting for the permits in the

305
00:15:46,880 --> 00:15:50,760
department to review it.
And you're just like might take

306
00:15:50,760 --> 00:15:53,720
six months to for a movement to
look at it even if it's simple.

307
00:15:53,960 --> 00:15:57,200
So that's the headwinds those
companies have got in our great

308
00:15:57,200 --> 00:15:58,920
country.
Crazy.

309
00:15:58,920 --> 00:16:01,480
I mean, I do think these guys
have plenty of work themselves

310
00:16:01,480 --> 00:16:04,760
that they they need to be done
in the in their own time.

311
00:16:05,480 --> 00:16:09,320
But even when we get to that
stage, yeah, it's just bloody

312
00:16:09,400 --> 00:16:13,240
hard work, right?
Should we get into the?

313
00:16:14,520 --> 00:16:16,480
You have a good summary at the
start.

314
00:16:16,560 --> 00:16:18,240
To Jake.
Yeah, we actually talk a little

315
00:16:18,240 --> 00:16:20,600
bit about some of that, you
know, government stuff going on.

316
00:16:20,600 --> 00:16:21,760
So you'll, you'll enjoy it,
Maddie.

317
00:16:22,600 --> 00:16:24,360
Let's do it.
Let's go.

318
00:16:24,800 --> 00:16:27,160
Jake Klein, thank you for for
coming.

319
00:16:27,160 --> 00:16:30,360
Last time we spoke was in, I
think was in the front bar of

320
00:16:30,360 --> 00:16:32,680
Debos.
Actually, I felt I was like, and

321
00:16:32,680 --> 00:16:34,560
here we are now you're sitting
in front of our bar in our

322
00:16:34,560 --> 00:16:37,400
studio.
Welcome to money of mine.

323
00:16:37,800 --> 00:16:39,880
We're yeah, stoked, stoked to
speak with you again.

324
00:16:40,320 --> 00:16:43,120
Thanks, Travis.
Really happy to be here, shows

325
00:16:43,120 --> 00:16:45,960
you the success you've had.
We're now in a proper studio.

326
00:16:47,400 --> 00:16:50,600
It's very professional.
I appreciate that.

327
00:16:50,600 --> 00:16:52,320
Yeah.
No, we, yeah, not, not in Kaggol

328
00:16:52,320 --> 00:16:54,400
anymore.
But last time we spoke as well,

329
00:16:54,400 --> 00:16:58,040
you were you were pitching the
merit of, of gold to be cool

330
00:16:58,040 --> 00:17:00,720
again.
Gold is now cool again.

331
00:17:00,720 --> 00:17:04,960
It's very cool.
So you know, keen, keen to keen

332
00:17:04,960 --> 00:17:08,000
to know what's on your mind
again now that you know your

333
00:17:08,079 --> 00:17:10,280
your prophecy to make gold call
again is actually true.

334
00:17:10,520 --> 00:17:12,160
It might be a bit too sexy.
I don't know what your thoughts

335
00:17:12,200 --> 00:17:13,680
are on that.
Yeah.

336
00:17:13,680 --> 00:17:16,560
I mean, I think, you know,
there's lots of reasons why we

337
00:17:16,560 --> 00:17:20,079
can debate why the gold price is
going to go higher and I think

338
00:17:20,200 --> 00:17:23,920
it may well, but from a gold
miners perspective, we're

339
00:17:23,920 --> 00:17:27,079
entering kind of a high risk
phase for gold miners.

340
00:17:27,079 --> 00:17:31,440
This is the time, you know that
gold miners have proven

341
00:17:31,440 --> 00:17:35,040
themselves when the gold price
is as high as this to be poor

342
00:17:35,040 --> 00:17:39,560
custodians of capital, and I'd
hate us to do that again.

343
00:17:40,280 --> 00:17:45,960
So I think I'm nervous because
the 4th $4000 gold price is

344
00:17:45,960 --> 00:17:50,840
phenomenal, but I think
investors still remember the

345
00:17:50,840 --> 00:17:53,760
skies they have from the last
time the gold price is high.

346
00:17:54,080 --> 00:17:57,040
The sector weren't good
custodians of capital and we've

347
00:17:57,040 --> 00:17:58,560
got to prove them wrong this
time.

348
00:17:59,480 --> 00:18:03,400
Do you think, do you think the
sector will be able to do that

349
00:18:03,400 --> 00:18:06,080
or do you think that, you know,
human behaviour was just, it's

350
00:18:06,080 --> 00:18:08,480
just the way it is.
People are short term instead of

351
00:18:08,520 --> 00:18:10,640
our short term motivated short
term thinking and they want

352
00:18:11,000 --> 00:18:13,560
growth for growth's sake because
they're incentivized on

353
00:18:13,560 --> 00:18:15,360
production targets or or
whatnot.

354
00:18:15,880 --> 00:18:19,400
I'm concerned because the
narrative that we've heard from

355
00:18:19,400 --> 00:18:22,480
investors, even if you look at
say evolution where it was, you

356
00:18:22,480 --> 00:18:24,920
know, we've been through a tough
period for the last couple of

357
00:18:24,920 --> 00:18:26,880
years.
We've had a decent couple of

358
00:18:26,880 --> 00:18:28,920
quarters.
This last quarter was

359
00:18:28,920 --> 00:18:31,120
particularly good.
We're making money and the

360
00:18:31,120 --> 00:18:34,040
narrative wins a little bit from
some investors.

361
00:18:35,000 --> 00:18:37,680
You know well done, you've
delivered, but how you going to

362
00:18:37,680 --> 00:18:39,920
grow now?
And I think that's high risk

363
00:18:39,920 --> 00:18:43,920
from our perspective.
We just want to bank that money.

364
00:18:45,000 --> 00:18:48,480
If you look at Evolution and you
think we're producing 750,000

365
00:18:48,480 --> 00:18:53,760
odd ounces of gold and the gold
price is $700.00 higher roughly

366
00:18:53,760 --> 00:18:57,840
than what we planned, we should
have $500 million more cash in

367
00:18:57,840 --> 00:19:01,280
the bank in 12 months time if
the gold price stays like this.

368
00:19:01,280 --> 00:19:04,040
And I think that to me is going
to be the asset test from

369
00:19:04,040 --> 00:19:07,840
investors.
Can gold miners convert the high

370
00:19:07,840 --> 00:19:09,960
gold price into money in the
bank?

371
00:19:10,600 --> 00:19:12,560
Yeah.
Or you know, even more

372
00:19:12,560 --> 00:19:17,080
explicitly, can they convert it
into returns to shareholders as

373
00:19:17,080 --> 00:19:20,840
a, you know, as opposed to a
kind of, yeah, I think, I think

374
00:19:20,840 --> 00:19:23,200
the gold industry in particular
has a tendency to want to want

375
00:19:23,200 --> 00:19:28,240
to grow via acquisition or, or
or you know, expansion or

376
00:19:29,120 --> 00:19:31,760
etcetera, all these kind of
other inorganic or organic

377
00:19:32,120 --> 00:19:33,960
potentials.
But they don't often think about

378
00:19:34,320 --> 00:19:38,080
use of capital in in dividend,
dividends and buybacks and

379
00:19:38,080 --> 00:19:41,440
afterthought in industry.
We have generally been put

380
00:19:41,440 --> 00:19:43,360
custodians of shareholders
capital.

381
00:19:43,360 --> 00:19:48,880
When the gold price is high, we
tend to spend it quickly and

382
00:19:48,880 --> 00:19:51,800
then realise when the gold price
is low, maybe we spent it too

383
00:19:51,800 --> 00:19:55,080
quickly.
So evolution is very focused on

384
00:19:55,080 --> 00:19:57,240
trying to be counter cyclical.
That's what we've said right

385
00:19:57,240 --> 00:20:00,400
from the beginning.
You know, when the gold price is

386
00:20:00,400 --> 00:20:02,840
high, we should be banking the
cash and that's what we're

387
00:20:02,840 --> 00:20:05,120
trying to do.
Now the gold price is low and

388
00:20:05,120 --> 00:20:07,960
you've got potentially some
distressed or motivated sellers.

389
00:20:08,440 --> 00:20:10,080
That's when we should be
acquiring things.

390
00:20:10,080 --> 00:20:15,720
So I think my.
Mantra is there is a time for

391
00:20:15,720 --> 00:20:18,680
deals and there is a time for
making money and now is a time

392
00:20:18,680 --> 00:20:23,960
for making money.
We had some questions for you as

393
00:20:23,960 --> 00:20:27,160
well, Jake, around just some
some broader issues in the, in

394
00:20:27,160 --> 00:20:31,000
the mining sector.
You know, it feels like we're a

395
00:20:31,000 --> 00:20:35,360
bit of a crossroads here in
Australia between where, you

396
00:20:35,360 --> 00:20:38,400
know, in action and trying to,
you know, achieve these sort of

397
00:20:38,400 --> 00:20:42,120
green ambitions.
And then, but actually, you

398
00:20:42,120 --> 00:20:45,280
know, developing and investing
in the, in the mining sector and

399
00:20:45,440 --> 00:20:48,000
downstream capabilities and, and
things like that.

400
00:20:48,000 --> 00:20:50,160
If, if there's inaction, it's
going to cost us.

401
00:20:51,200 --> 00:20:53,840
It feels like everyone knows
that this is something we should

402
00:20:53,840 --> 00:20:59,720
be doing, but no one's really
taking charge And there's not,

403
00:20:59,720 --> 00:21:05,840
doesn't seem to be a very long
term view or approach or plan.

404
00:21:06,880 --> 00:21:10,520
Do you think we're getting the
politicians are getting too

405
00:21:10,520 --> 00:21:13,880
caught up in politics?
Is it the the private sector to

406
00:21:13,880 --> 00:21:15,240
drive?
How do you how do you sort of

407
00:21:15,240 --> 00:21:20,120
think about all this?
I think we're at a a fork in the

408
00:21:20,120 --> 00:21:23,880
road.
We've become obsessed about

409
00:21:23,880 --> 00:21:28,880
short term decision making.
Maybe it's our election cycle,

410
00:21:29,360 --> 00:21:31,720
but there are very few things
that we can agree on on a

411
00:21:31,720 --> 00:21:36,440
bipartisan issue and and a
bipartisan approach.

412
00:21:37,280 --> 00:21:40,640
So if you think about it, the
last 30 years have been

413
00:21:40,640 --> 00:21:42,680
incredibly successful for
Australia.

414
00:21:42,680 --> 00:21:45,080
China merged as our largest
customer.

415
00:21:45,320 --> 00:21:49,560
We've been selling iron ore and
coal to China and they've had

416
00:21:49,560 --> 00:21:54,160
insatiable demand for it.
You know, the got the, the, the

417
00:21:54,160 --> 00:21:57,040
iron ore price when I first
started in the business 30 years

418
00:21:57,040 --> 00:22:00,120
ago was 25 bucks a tonne.
And Australia's producing about

419
00:22:00,120 --> 00:22:04,160
120 million tonnes a year.
And today we're producing almost

420
00:22:04,160 --> 00:22:06,800
a billion tonnes and selling it
to China.

421
00:22:06,800 --> 00:22:09,880
And the oil price is $100 a
tonne.

422
00:22:09,880 --> 00:22:14,720
So that's 33 times more in terms
of revenue.

423
00:22:15,400 --> 00:22:20,320
The mining industry has
delivered $365 billion in fiscal

424
00:22:20,320 --> 00:22:26,440
tax windfall to the government
of Australia and that has put

425
00:22:26,440 --> 00:22:31,400
Australia, you know, at the very
top of global GB GDP per capita

426
00:22:31,400 --> 00:22:33,120
rankings.
We are a rich and wealthy

427
00:22:33,120 --> 00:22:36,680
country.
My concern is how do we future

428
00:22:36,680 --> 00:22:40,680
proof the next 50 years because
our resources are going to get

429
00:22:40,680 --> 00:22:42,720
more difficult and challenging
to mine.

430
00:22:43,720 --> 00:22:47,040
The world seems to have changed
where globalisation is

431
00:22:47,520 --> 00:22:52,640
effectively over and China is
has emerged as a very

432
00:22:52,640 --> 00:22:55,200
significant competitor in terms
of resources.

433
00:22:55,200 --> 00:22:59,320
If you look at the companies
that they've created, Zigene is

434
00:22:59,360 --> 00:23:03,200
a $67 billion company.
This is a company that was a

435
00:23:03,200 --> 00:23:08,760
state owned enterprise 20 years
ago and they have a very good

436
00:23:08,760 --> 00:23:13,440
access to cheap capital.
They very ambitious and they

437
00:23:13,440 --> 00:23:14,960
have very strong government
support.

438
00:23:14,960 --> 00:23:18,120
And so if you're in Africa today
and you're trying to secure

439
00:23:18,120 --> 00:23:20,800
ground in Africa, your biggest
competition is going to come

440
00:23:20,800 --> 00:23:25,600
from Chinese competitors.
It's one of the, yeah, one of

441
00:23:25,600 --> 00:23:28,680
the one of the few places a with
excellent ore bodies, but where,

442
00:23:29,160 --> 00:23:32,440
you know, the Chinese are
allowed to actually still still

443
00:23:32,440 --> 00:23:34,320
acquire projects as well.
Yeah.

444
00:23:34,320 --> 00:23:37,240
So if you think about it, I was
involved in China in the in in

445
00:23:37,240 --> 00:23:41,360
the 90s and 2000s in a period of
amazing collaboration and

446
00:23:41,360 --> 00:23:43,840
cooperation between China and
Australia.

447
00:23:44,160 --> 00:23:46,680
It was like a sense that, you
know, China's definitely going

448
00:23:46,680 --> 00:23:49,400
to integrate into the world and
it it didn't happen and it

449
00:23:49,400 --> 00:23:53,360
hasn't happened.
And China has used that period

450
00:23:53,360 --> 00:23:58,320
to create these companies,
fortify itself and kind of go

451
00:23:58,320 --> 00:24:01,480
almost on a separate path.
Maybe they've been more

452
00:24:01,480 --> 00:24:04,760
successful than we have, but our
incapacity of being able to

453
00:24:04,760 --> 00:24:09,200
think any longer than one
election cycle seems to be a

454
00:24:09,200 --> 00:24:12,440
massive disadvantage to us if
we're dealing with a competitor,

455
00:24:12,440 --> 00:24:15,480
strategic competitor, that is
thinking long term and investing

456
00:24:15,480 --> 00:24:19,760
long term. 20 years ago feels
like such a a different time as

457
00:24:19,760 --> 00:24:23,560
well, right?
Because that the when when you

458
00:24:23,560 --> 00:24:29,320
were running Sino gold, the
yeah, this is an an ASX 100

459
00:24:29,320 --> 00:24:33,760
company at the end which which
had mines in China.

460
00:24:34,200 --> 00:24:38,320
It's kind of a bizarre thought
these days that, you know, that

461
00:24:38,320 --> 00:24:40,800
sort of vehicle would even exist
on on the ASX.

462
00:24:41,120 --> 00:24:43,960
Yeah, it was.
I mean it was an amazing

463
00:24:43,960 --> 00:24:46,960
experience.
It was crazy.

464
00:24:47,440 --> 00:24:51,280
There are, it was formed by a
few investment bankers from

465
00:24:51,280 --> 00:24:55,200
Macquarie in the 90s, myself and
Nick Curtis and a couple of

466
00:24:55,200 --> 00:24:59,240
people, we went to China.
We knew nothing about mining and

467
00:24:59,240 --> 00:25:03,520
we knew nothing about China.
And Nick is an amazingly

468
00:25:04,640 --> 00:25:08,120
optimistic entrepreneur.
He said, you know, do you think

469
00:25:08,120 --> 00:25:11,280
we can build gold mines here?
And we think we must have been

470
00:25:11,280 --> 00:25:15,520
at a bar because we said yes and
one thing leads to another and

471
00:25:15,520 --> 00:25:17,200
eventually Sign of Gold was
formed.

472
00:25:17,280 --> 00:25:19,520
Anyone like Jake out there
thinking of bloody building

473
00:25:19,520 --> 00:25:23,360
mines in China anytime soon?
That's bloody CRE insurance on

474
00:25:23,360 --> 00:25:25,760
the blower straight away.
Jesus Christ.

475
00:25:25,760 --> 00:25:29,560
It took him some minerals to go
on bloody do that didn't it?

476
00:25:29,600 --> 00:25:31,880
Saw no gold journey it was.
A different time mate.

477
00:25:31,880 --> 00:25:34,080
No one, no one in Australia.
He's going to be building a mine

478
00:25:34,080 --> 00:25:37,400
in China anytime soon, but they
will still be looking in places

479
00:25:37,400 --> 00:25:39,800
where you need bespoke risk to
be priced.

480
00:25:39,800 --> 00:25:43,120
The new China's, I mean mate,
Jackie must have had Steve Tarr

481
00:25:43,160 --> 00:25:45,440
holding his hand through that
process.

482
00:25:45,440 --> 00:25:48,160
I can't think of any other way
that you would have felt

483
00:25:48,160 --> 00:25:51,480
comfortable taking that amount
of risk like some some

484
00:25:51,480 --> 00:25:55,080
sensational insurance breaking
was in place.

485
00:25:55,080 --> 00:25:58,760
Like Tari, it's got Tari's name
written all over it.

486
00:25:58,760 --> 00:26:01,360
Like as Pete, miners shouldn't
be scared of international

487
00:26:01,360 --> 00:26:03,080
mining.
You don't need to be.

488
00:26:03,080 --> 00:26:08,360
You give Tari a call in CRE
Insurance Perth headquarters and

489
00:26:08,760 --> 00:26:12,280
it is an international mining
insurance expert and which means

490
00:26:12,640 --> 00:26:15,520
Australian mining.
He can just do it with his eyes

491
00:26:15,520 --> 00:26:17,520
closed, blindfolded, facing the
other way.

492
00:26:17,680 --> 00:26:20,040
The more bespoke the risk, the
the more excited he gets.

493
00:26:20,040 --> 00:26:22,280
He loves, he loves the SO Derek
stuff.

494
00:26:22,360 --> 00:26:24,760
But he still will do the boring
Australian stuff.

495
00:26:24,840 --> 00:26:27,000
If you need.
Him but he does it that quick it

496
00:26:27,000 --> 00:26:29,280
doesn't matter.
CR insurance, give him a call.

497
00:26:29,960 --> 00:26:31,440
He run his eyes over your
report.

498
00:26:31,440 --> 00:26:33,040
Right now.
Just let him have a look at

499
00:26:33,040 --> 00:26:33,960
yours.
Free.

500
00:26:34,680 --> 00:26:37,880
Free.
So back then the view like it

501
00:26:37,880 --> 00:26:41,440
was a real, you know,
globalisation agenda, China was

502
00:26:41,440 --> 00:26:44,600
opening up to foreign
investment, you know, like you

503
00:26:44,600 --> 00:26:47,480
know, the the investment
community was trying to embrace

504
00:26:47,480 --> 00:26:49,280
that and capitalise on that.
Was that the kind of?

505
00:26:49,680 --> 00:26:53,360
It was but kind of being or
thinking we were smart Macquarie

506
00:26:53,360 --> 00:26:55,760
bankers, we were thinking about
an arbitrage.

507
00:26:56,160 --> 00:26:59,200
So if you think about a plan
system, which China was at that

508
00:26:59,200 --> 00:27:05,920
time, where the geology wasn't
really viewed from a market

509
00:27:05,920 --> 00:27:08,120
perspective.
So answers in the ground weren't

510
00:27:08,280 --> 00:27:11,680
valued from a market perspective
though, only looked at as units

511
00:27:11,680 --> 00:27:14,000
of production in a planned
system.

512
00:27:14,360 --> 00:27:20,120
So we went to Ginchuan nickel
mine, which is in the Gobi

513
00:27:20,120 --> 00:27:22,720
Desert.
This was in 1994.

514
00:27:23,440 --> 00:27:27,200
And we were have one of the
plates of that was served for

515
00:27:27,200 --> 00:27:30,880
dinner was a camel's foot, which
we were told was a delicacy.

516
00:27:31,240 --> 00:27:34,880
I'm still trying to get over it,
but there are obviously a lot of

517
00:27:34,880 --> 00:27:36,520
three legged camels in the
desert.

518
00:27:36,840 --> 00:27:38,360
But it really was a camel's
foot.

519
00:27:39,560 --> 00:27:43,800
And we are being told in all
seriousness by the president of

520
00:27:43,800 --> 00:27:45,880
this organisation who is wearing
a mouse suit.

521
00:27:46,600 --> 00:27:50,240
And I think the ore body, it's,
it's one of the massive nickel

522
00:27:50,240 --> 00:27:57,640
ore bodies in the world that
their production crew minds one

523
00:27:57,640 --> 00:28:01,600
level every couple of years.
And the development crew, you

524
00:28:01,600 --> 00:28:04,640
know, develops 2 levels a year.
And we kind of said, like, you

525
00:28:04,640 --> 00:28:07,680
know, how many levels ahead is
the development crew?

526
00:28:08,280 --> 00:28:10,720
And he, we worked out, it was
kind of like 12 years.

527
00:28:10,720 --> 00:28:13,560
They developed the mind 12 years
ahead of where they're going to

528
00:28:13,560 --> 00:28:15,880
produce.
And we kind of said why?

529
00:28:15,880 --> 00:28:18,800
And he said, well, you know, the
development crew develops and

530
00:28:18,800 --> 00:28:21,320
the production crew produces and
that's how it works.

531
00:28:21,800 --> 00:28:27,520
So they were really in a planned
system at the time and we kind

532
00:28:27,520 --> 00:28:30,240
of saw that as an arbitrage.
You know, if we could get people

533
00:28:30,240 --> 00:28:34,040
to understand the value of
what's in the ground, then

534
00:28:34,040 --> 00:28:36,280
there's clearly a a value
uplift.

535
00:28:37,360 --> 00:28:42,560
I think what we underestimated
is how smart China China was and

536
00:28:43,000 --> 00:28:46,480
how they weren't going to sit do
what Russia did, which was

537
00:28:46,480 --> 00:28:50,480
privatise all of their assets
and, and, and basically put it

538
00:28:50,480 --> 00:28:54,160
into private hands.
They allowed us to experiment,

539
00:28:54,160 --> 00:28:58,360
I'd say on kind of B grade
deposits and build the first

540
00:28:58,360 --> 00:29:00,240
foreign owned gold mines in
China.

541
00:29:00,960 --> 00:29:05,040
The safety standards that we
implemented at our first mine, I

542
00:29:05,040 --> 00:29:08,040
think have formed the foundation
of the National Safety standard.

543
00:29:08,040 --> 00:29:13,880
So people were learning,
listening, utilising and yeah,

544
00:29:13,880 --> 00:29:16,720
it, it was amazing.
But you know China today has

545
00:29:17,080 --> 00:29:21,960
learnt not only from US but from
going outside of China and these

546
00:29:21,960 --> 00:29:25,960
companies like Zijin Jajin,
Shandong Gold or formidable

547
00:29:25,960 --> 00:29:28,160
competitors.
Yeah, wow.

548
00:29:28,160 --> 00:29:32,040
So it's funny you went there
with a view because you thought

549
00:29:32,040 --> 00:29:34,040
there was an arbitrage because
they didn't know how to mine

550
00:29:34,040 --> 00:29:36,800
properly.
But really, the Chinese were

551
00:29:36,800 --> 00:29:38,960
using you as the arbitrage to
learn how to mine properly and

552
00:29:38,960 --> 00:29:42,400
apply it everywhere.
Else, I think that's well said.

553
00:29:42,400 --> 00:29:46,680
We didn't realise it, but yeah,
we thought we we were doing the

554
00:29:46,680 --> 00:29:48,480
smart thing.
Yeah, yeah.

555
00:29:48,920 --> 00:29:54,880
And I guess in contrast to
Australia and, and, and policy,

556
00:29:55,760 --> 00:29:58,560
you know, making and, and
affecting policy here.

557
00:29:59,000 --> 00:30:03,120
Do you think and just sort of in
reference to sort of the Regis

558
00:30:03,120 --> 00:30:07,040
situation earlier this year with
Mcphillimy's, do you think our

559
00:30:07,040 --> 00:30:10,880
government is adequately
educated and informed about the

560
00:30:11,200 --> 00:30:15,400
the practicalities of mining and
how mining actually works in

561
00:30:15,400 --> 00:30:18,600
order to actually put these
policies in place and and affect

562
00:30:18,600 --> 00:30:21,120
them appropriately?
No, I don't.

563
00:30:21,640 --> 00:30:24,720
I, I think that was a terrible
decision and I think it's

564
00:30:24,720 --> 00:30:28,480
something we've got to address
that something so late in the in

565
00:30:28,480 --> 00:30:32,840
the process comes up and causes
the project to approvals to be

566
00:30:32,840 --> 00:30:36,800
rescinded because NSW has one of
the most rigorous approval

567
00:30:36,800 --> 00:30:41,440
processes in the world and Regis
went through that only to have

568
00:30:41,440 --> 00:30:44,920
it overturned at the last hurdle
by a federal decision.

569
00:30:46,000 --> 00:30:48,480
So I don't think so.
I think the other thing that we

570
00:30:48,480 --> 00:30:52,960
as a, as an industry need to do
more of is educates,

571
00:30:52,960 --> 00:30:57,600
particularly E coasters, about
the value that mining is

572
00:30:57,600 --> 00:31:01,800
contributing to this country.
It only employs 2% of the

573
00:31:01,800 --> 00:31:05,200
workforce, but our contribution
is in double digits.

574
00:31:06,160 --> 00:31:09,640
And this country just would not
be where it is today without

575
00:31:09,800 --> 00:31:13,360
mining.
So I, I don't think we sell it

576
00:31:13,360 --> 00:31:17,240
well enough and I don't think
our reputation is what it should

577
00:31:17,240 --> 00:31:23,600
be in decision makers who have,
who have the ability to do to

578
00:31:23,600 --> 00:31:27,880
make decisions like this.
I mean, the, yeah, the, the, the

579
00:31:27,880 --> 00:31:31,160
Regis ones like the, the
standout, you know, but there's,

580
00:31:31,240 --> 00:31:34,720
there's other examples of sort
of similar stuff happening here

581
00:31:34,720 --> 00:31:39,440
in Australia elsewhere as well.
And it, it, it feels like a

582
00:31:39,440 --> 00:31:43,760
complete disconnect from, you
know, the, the big thinkers who

583
00:31:43,760 --> 00:31:47,840
set the policies or enact the
policies versus what's actually

584
00:31:47,840 --> 00:31:49,960
required from a certainty
perspective to make an

585
00:31:49,960 --> 00:31:52,920
investment decision.
Yeah, I'd, I'd say that

586
00:31:52,920 --> 00:31:55,800
Australia's still, you know,
once you have the permits and

587
00:31:55,800 --> 00:31:58,440
once it's approved, you can
sleep easy at night that you own

588
00:31:58,440 --> 00:32:00,560
the asset.
You know, in China I had plenty

589
00:32:00,560 --> 00:32:02,920
of sleepless nights wondering
whether I was going to wake up

590
00:32:02,920 --> 00:32:05,080
the next morning and we didn't
own the asset.

591
00:32:05,080 --> 00:32:09,320
So it is a great mining
jurisdiction, but I think we

592
00:32:09,320 --> 00:32:12,720
have the opportunity to make it
greater and decisions like what

593
00:32:12,720 --> 00:32:15,480
happened with Regis detract from
that.

594
00:32:16,040 --> 00:32:19,120
Yeah.
Would you say Australia is

595
00:32:19,120 --> 00:32:21,760
getting sovereign risk?
No, wouldn't I?

596
00:32:21,840 --> 00:32:24,160
I still think Australia is a
great place to mine.

597
00:32:24,160 --> 00:32:26,920
Yes, it may be becoming more
difficult to permit, but I think

598
00:32:26,920 --> 00:32:31,240
again, we need to do more as an
industry to educate E coasters.

599
00:32:31,840 --> 00:32:35,720
I have young adult children, you
know, and their peers, they

600
00:32:35,720 --> 00:32:38,840
don't understand mining other
than it paid for their schooling

601
00:32:38,840 --> 00:32:42,800
and education, my kids.
But I, I, I think we can do more

602
00:32:42,800 --> 00:32:48,000
to, to, to get them to recognise
that mining is so critical for

603
00:32:48,000 --> 00:32:50,440
this green energy future that
we're all talking about and

604
00:32:50,440 --> 00:32:52,880
committed to.
Mining is critical to the

605
00:32:52,880 --> 00:32:56,640
success of this country and is
part of the future of this

606
00:32:56,640 --> 00:32:59,680
country.
And do you think that's also

607
00:33:00,080 --> 00:33:05,920
quite a large contributing
factor to sort of the not the

608
00:33:06,160 --> 00:33:08,960
the talent pool that probably
isn't growing as fast as it

609
00:33:08,960 --> 00:33:11,920
should be entering into the
mining industry as well sort of

610
00:33:11,920 --> 00:33:16,040
this wokeness in in some ways?
Yeah, I do.

611
00:33:16,800 --> 00:33:19,880
I think it's terrible that there
are fewer positions in

612
00:33:19,880 --> 00:33:23,680
universities today in the
geosciences and mining

613
00:33:23,680 --> 00:33:25,640
engineering than there was a
decade ago.

614
00:33:26,080 --> 00:33:30,600
That's that's terrible.
It's not setting ourselves up

615
00:33:30,600 --> 00:33:33,600
for the future.
If you think about opportunities

616
00:33:34,240 --> 00:33:37,720
in Australia, you think about,
you know, what can we do to

617
00:33:37,720 --> 00:33:40,600
value add these metals that
we're mining?

618
00:33:41,000 --> 00:33:44,240
Why are we happy to kind of ship
everything offshore and have it

619
00:33:44,240 --> 00:33:47,480
processed elsewhere?
Education, I think is an

620
00:33:47,480 --> 00:33:52,400
opportunity for us to be the
kind of the Ivy League standard

621
00:33:52,400 --> 00:33:56,080
of education globally.
Same with capsule markets.

622
00:33:56,080 --> 00:34:00,320
If you think about resources and
the fact that the tech space has

623
00:34:00,320 --> 00:34:05,280
grown so much that resources is
kind of less relevant to a New

624
00:34:05,280 --> 00:34:08,080
York fund manager, but in this
country, it's so important.

625
00:34:08,440 --> 00:34:12,080
We could be the epicentre of
capital and debt markets for

626
00:34:12,280 --> 00:34:14,960
global capital raising.
So I think there's a tremendous

627
00:34:14,960 --> 00:34:18,480
opportunity.
I'd love people in the tech

628
00:34:18,480 --> 00:34:20,480
space, young people who are
thinking about the next

629
00:34:20,480 --> 00:34:24,159
breakthrough in technology, to
be thinking about mining, but

630
00:34:24,159 --> 00:34:25,400
they're not.
They're thinking about

631
00:34:25,400 --> 00:34:29,040
deliveries, you know, from pizza
restaurants.

632
00:34:31,360 --> 00:34:34,239
I even think of it like, you
know, if you're a young and

633
00:34:34,239 --> 00:34:37,480
hungry young person, you always
want to be running in the

634
00:34:37,480 --> 00:34:39,679
direction where like everyone
else is running away from.

635
00:34:39,719 --> 00:34:41,639
So way easier to compete in a
small pond like.

636
00:34:42,280 --> 00:34:47,480
Yeah.
Well, you guys are have

637
00:34:47,480 --> 00:34:50,199
recognised that and have done an
amazing job in building this

638
00:34:50,199 --> 00:34:52,199
business.
So you know why and more people

639
00:34:52,199 --> 00:34:56,239
seeing the opportunity which you
saw in the mining space to not

640
00:34:56,239 --> 00:35:00,040
necessarily be miners or or or
or a mining company or mining

641
00:35:00,040 --> 00:35:04,280
contractors, but here's a is
podcasting technology.

642
00:35:04,680 --> 00:35:05,880
Yeah, I think so.
Media.

643
00:35:06,240 --> 00:35:09,360
Technology, you guys have done
that and and you've created a

644
00:35:09,360 --> 00:35:11,800
business.
So more people doing this would

645
00:35:11,800 --> 00:35:13,800
be fantastic.
Yeah, don't, don't encourage the

646
00:35:13,800 --> 00:35:15,360
competition, Jack.
No, no, I did.

647
00:35:15,360 --> 00:35:17,280
I did.
I did hear, I think Michael

648
00:35:17,280 --> 00:35:20,320
Vaughan was telling me on our
way in here that he was talking

649
00:35:20,320 --> 00:35:23,000
to someone overseas who said
yeah, they always listen to your

650
00:35:23,000 --> 00:35:23,880
podcast.
Yeah.

651
00:35:24,520 --> 00:35:27,600
You mentioned the, the building
out the sort of downstream

652
00:35:28,160 --> 00:35:31,800
capabilities or you know, those
other pieces of the value chain

653
00:35:31,800 --> 00:35:34,960
which you know, certainly aren't
as present in Australia compared

654
00:35:34,960 --> 00:35:37,600
to you know, China and other
places.

655
00:35:39,240 --> 00:35:41,800
You know, we've seen, you know,
some companies make an attempt

656
00:35:41,800 --> 00:35:45,840
at it and it's just proved
hopefully, you know, expensive

657
00:35:45,840 --> 00:35:49,360
and taken a lot of time and
things like that, which

658
00:35:49,360 --> 00:35:52,520
certainly doesn't incentivise
much, much others to go about

659
00:35:52,520 --> 00:35:55,320
it.
But you know, it certainly needs

660
00:35:55,320 --> 00:36:00,480
to needs to happen.
So do you think does the

661
00:36:00,480 --> 00:36:05,360
government sort of step in here?
Do do private, you know, the

662
00:36:05,400 --> 00:36:07,720
private sector just need to just
go for it?

663
00:36:07,760 --> 00:36:10,480
You know, how do you sort of see
that going forward in Australia?

664
00:36:10,840 --> 00:36:13,600
I don't think the private sector
will just be able to go for it

665
00:36:13,600 --> 00:36:16,880
because at the moment those
projects don't make the returns

666
00:36:16,880 --> 00:36:19,600
which private capital requires.
So it needs some sort of

667
00:36:19,600 --> 00:36:23,120
government support.
And there's a debate to be had

668
00:36:23,120 --> 00:36:25,480
as to where that government
support should be.

669
00:36:26,600 --> 00:36:29,120
But fundamentally, if you think
about, and this is a maybe a

670
00:36:29,120 --> 00:36:32,320
strange way to look at it, but
maybe the paradigm has changed.

671
00:36:32,320 --> 00:36:35,120
You know, in the in the 70s,
Australia had a manufacturing

672
00:36:35,120 --> 00:36:40,240
sector that all got, you know,
demolished really by China's

673
00:36:40,240 --> 00:36:42,200
emergence.
And everything now is

674
00:36:42,200 --> 00:36:44,680
manufactured and produced in
China essentially.

675
00:36:45,640 --> 00:36:48,800
But if if you think about
technology in the next 20 years

676
00:36:49,600 --> 00:36:52,240
and you think about our
aspiration, maybe we can

677
00:36:52,240 --> 00:36:55,000
actually deliver it on green
energy, which should be cheaper

678
00:36:55,000 --> 00:36:59,400
once it's been built.
If you can provide cheap green

679
00:36:59,400 --> 00:37:03,200
energy and you can use
technology, maybe manufacturing

680
00:37:03,200 --> 00:37:07,960
or processing, downstream
processing is not as far out of

681
00:37:07,960 --> 00:37:10,360
reach as we think.
But it requires a different

682
00:37:10,360 --> 00:37:14,040
paradigm and it requires a
commitment from government to

683
00:37:14,040 --> 00:37:16,920
support that sort of initiative
in things that really

684
00:37:16,920 --> 00:37:21,200
strategically are well thought
through and then can deliver

685
00:37:21,760 --> 00:37:25,680
returns on capital.
Yeah, I'm, I'm a, I'm a cynic on

686
00:37:25,680 --> 00:37:27,920
that one.
Yeah, yeah, I I just think that

687
00:37:27,920 --> 00:37:31,680
like history is littered with
times where government has tried

688
00:37:31,680 --> 00:37:35,960
to, to prop up a, a sector that
doesn't stack up in the private

689
00:37:36,040 --> 00:37:39,080
markets.
And then you you are the lead to

690
00:37:39,080 --> 00:37:43,000
inevitable like subsidies that
never end, like regulatory

691
00:37:43,000 --> 00:37:45,480
capture, all the things that
don't actually create a

692
00:37:45,480 --> 00:37:47,720
competitive industry in the 1st
place.

693
00:37:47,720 --> 00:37:50,560
Think government should do
everything they can to make the

694
00:37:50,560 --> 00:37:54,480
private sector returns better by
investing in infrastructure that

695
00:37:54,480 --> 00:37:55,960
could, you know, reduce the
cost?

696
00:37:55,960 --> 00:37:59,640
But I will perennially advocate
that the government doesn't sort

697
00:37:59,640 --> 00:38:01,800
of, you know.
So I think, I think, I think, I

698
00:38:01,800 --> 00:38:04,520
think that's a fairpoint.
But so part of the

699
00:38:04,520 --> 00:38:07,080
infrastructure is this
transition to green energy.

700
00:38:07,480 --> 00:38:10,480
So if you think about all the
commitments we have at the

701
00:38:10,480 --> 00:38:13,840
moment in terms of delivery of
that green energy, I, I think we

702
00:38:13,840 --> 00:38:16,720
need to have a conversation
about the time frames which

703
00:38:16,720 --> 00:38:21,080
people expect to be delivered
and the cost of it, because

704
00:38:21,160 --> 00:38:25,360
we're talking about the
replacement of a significant

705
00:38:25,360 --> 00:38:27,000
piece of national
infrastructure.

706
00:38:27,880 --> 00:38:33,560
At the moment we have federal
targets, but the delivery of

707
00:38:33,560 --> 00:38:38,000
that federal target is actually
is dependent on each state

708
00:38:38,000 --> 00:38:42,080
delivering to their target,
which is not necessarily in

709
00:38:42,200 --> 00:38:43,840
aligned with the federal
targets.

710
00:38:43,840 --> 00:38:46,840
So if you take the federal
target, I think it's 43%

711
00:38:46,840 --> 00:38:52,520
reduction by 20-30.
I think NSW is 50% by 2030.

712
00:38:52,800 --> 00:38:58,240
I think Queensland is 75% or 80%
by 2035.

713
00:38:58,840 --> 00:39:02,640
If you think about the Snowy
Hydro projects, it started with

714
00:39:02,640 --> 00:39:06,080
a $2 billion budget and it's now
at least 12, maybe 14, and who

715
00:39:06,080 --> 00:39:11,360
knows what it's going to cost to
finish All of the projects to

716
00:39:11,360 --> 00:39:14,120
deliver those targets should
have been started now, and none

717
00:39:14,120 --> 00:39:17,960
of them have.
So if we committed to, you've

718
00:39:17,960 --> 00:39:21,640
got to build out 32 gigawatts of
power, I think in each of the

719
00:39:21,640 --> 00:39:24,920
next three decades, and 32
gigawatts is a lot of power.

720
00:39:25,280 --> 00:39:29,240
You've got to put transmission
lines across a lot of Australia

721
00:39:29,400 --> 00:39:31,560
because you're talking about a
dispersed grid.

722
00:39:32,720 --> 00:39:35,280
Just as an example, at Mount
Rawdon, we're talking about this

723
00:39:35,680 --> 00:39:38,320
converting our project to a
pumped hydro project.

724
00:39:38,320 --> 00:39:42,000
There's a transmission line of
27 kilometres which covers 15

725
00:39:42,000 --> 00:39:45,800
land owners and it's taken us
two years of extensive

726
00:39:45,840 --> 00:39:49,720
engagement with those land
owners to get about 14 of the 15

727
00:39:49,720 --> 00:39:53,680
on board.
Yeah, it's not a hold out, but

728
00:39:53,680 --> 00:39:55,200
we can, we can take it around
there.

729
00:39:55,200 --> 00:39:58,720
But it's taken 2 years to talk
about 27 kilometres of

730
00:39:58,720 --> 00:40:01,680
transmission light.
My point is, is that there's

731
00:40:01,680 --> 00:40:06,160
only two ways that this that the
energy can be funded either tax

732
00:40:06,160 --> 00:40:09,280
today.
Or higher power price prices

733
00:40:09,280 --> 00:40:12,280
later, which is unacceptable.
So, you know, we've got to pay

734
00:40:12,280 --> 00:40:14,680
for the infrastructure, we've
got to agree who's going to pay

735
00:40:14,680 --> 00:40:17,920
for it.
But then it should be cheap

736
00:40:17,920 --> 00:40:22,120
green power in the future.
Should be, should be, yeah,

737
00:40:22,160 --> 00:40:24,560
Should be, should be, should be.
But yeah.

738
00:40:24,760 --> 00:40:27,680
And there's a, there's a trade
off on the capital intensity of

739
00:40:27,680 --> 00:40:29,800
the infrastructure investment in
the 1st place.

740
00:40:29,800 --> 00:40:34,640
Like, you know, if if we adopted
A and and and nuclear strategy,

741
00:40:34,640 --> 00:40:37,280
then that's arguably less
capital intensive.

742
00:40:37,280 --> 00:40:39,040
There's less transmission lines
required.

743
00:40:39,320 --> 00:40:41,520
Yeah.
And, and I'm all supportive of

744
00:40:41,520 --> 00:40:42,920
everything being put on the
table.

745
00:40:42,920 --> 00:40:46,600
My, my issue at the moment is
that we have these targets, but

746
00:40:46,600 --> 00:40:49,000
we have no real plan as to how
we're going to deliver those

747
00:40:49,000 --> 00:40:50,520
targets.
And we don't understand how much

748
00:40:50,520 --> 00:40:54,320
it's really going to cost.
Governments are there and, and

749
00:40:54,320 --> 00:40:57,240
just going back to your point,
governments are there to

750
00:40:57,240 --> 00:40:59,520
implement and deliver that
infrastructure.

751
00:40:59,520 --> 00:41:02,320
Now, you know, nuclear should be
on the table.

752
00:41:02,320 --> 00:41:04,160
All of the stuff should be on
the table and we should have a

753
00:41:04,160 --> 00:41:10,040
comprehensive nationwide plan,
not a kind of target announced

754
00:41:10,040 --> 00:41:13,760
before an election with no
understanding of how to deliver.

755
00:41:14,200 --> 00:41:18,840
Yeah, while we are, while we
still got you, Jack, I can't, I

756
00:41:18,840 --> 00:41:22,840
can't let you leave without
talking about deals.

757
00:41:24,320 --> 00:41:28,960
Evolution is a, you know, a
company that's got a reputation

758
00:41:28,960 --> 00:41:32,200
for being, you know, like a deal
doer both, both acquisitions,

759
00:41:32,400 --> 00:41:34,280
divestments, you know, the whole
works.

760
00:41:34,280 --> 00:41:37,920
And the company's been awfully
quiet since the acquisition of

761
00:41:37,920 --> 00:41:41,400
North Parks.
And, you know, like for it was

762
00:41:41,400 --> 00:41:44,440
about about 12 months ago that
that acquisition was announced

763
00:41:44,440 --> 00:41:46,400
maybe December last year,
December, December.

764
00:41:46,400 --> 00:41:48,440
So yeah, nearly nearly 12
months.

765
00:41:49,400 --> 00:41:53,720
And there was, you know, like a
bit of a shaky period in the

766
00:41:53,720 --> 00:41:57,400
market there share price, you
know, fell off bad quarterly

767
00:41:57,400 --> 00:42:02,360
came out in in January, then
gold rebounded strongly and kind

768
00:42:02,360 --> 00:42:05,360
of the the, the balance sheet
sort of fears faded And you

769
00:42:05,360 --> 00:42:08,280
know, the business is pretty,
pretty cash generative again and

770
00:42:08,680 --> 00:42:12,320
sort of happy days.
Does that mean that you know

771
00:42:12,360 --> 00:42:17,080
deals are back on the table?
Not really because I think if,

772
00:42:17,080 --> 00:42:20,760
if we think in a kind of
cyclical way, you know, now is

773
00:42:20,760 --> 00:42:23,240
not a time to be doing deals.
The gold price is high, the

774
00:42:23,240 --> 00:42:25,800
copper price is high.
There's no distressed sellers

775
00:42:25,800 --> 00:42:27,760
out there.
They're anxious buyers.

776
00:42:28,680 --> 00:42:31,320
I think in this type of market,
you've been better off being a

777
00:42:31,320 --> 00:42:33,920
seller than a buyer.
But just going back to the North

778
00:42:33,920 --> 00:42:37,400
Parks acquisition, you know, we
think it's it's an outstanding

779
00:42:37,400 --> 00:42:38,920
deal.
I think investors are starting

780
00:42:38,920 --> 00:42:41,440
to understand it.
But it was a pretty bruising

781
00:42:41,440 --> 00:42:42,960
deal.
Like if you're doing deals kind

782
00:42:42,960 --> 00:42:46,920
of cyclically, you know, people
aren't cheering necessarily at

783
00:42:46,920 --> 00:42:49,520
the time you do the deal.
So you really have to have some

784
00:42:49,520 --> 00:42:51,360
fortitude.
And, and I was surprised because

785
00:42:51,360 --> 00:42:56,400
I thought it was going to be a
really well received deal and it

786
00:42:56,400 --> 00:42:59,240
may have been a whole bunch of
factors related to it, but it

787
00:42:59,240 --> 00:43:01,840
was a pretty tough deal to to
get across the line.

788
00:43:02,040 --> 00:43:06,400
Yeah, like when you acquired
Cal, everyone thought you paid

789
00:43:06,400 --> 00:43:07,760
too much for that as well,
right.

790
00:43:07,760 --> 00:43:14,480
And in time sort of Yeah, The,
the, Yeah, the, I'm, I'm

791
00:43:14,480 --> 00:43:18,280
certainly guilty of this.
I'm quite critical of, of, yeah,

792
00:43:18,280 --> 00:43:20,960
deals where it just like, you
know, on a multiple perspective

793
00:43:20,960 --> 00:43:24,920
or even like on a, you know, you
know, peanut perspective or

794
00:43:24,920 --> 00:43:27,360
whatever.
It might appear pretty

795
00:43:27,360 --> 00:43:29,520
expensive, especially if it's a
competitive sale process as

796
00:43:29,520 --> 00:43:30,440
well.
I'm like, well, you have to pay

797
00:43:30,440 --> 00:43:32,720
up for that.
And then, you know, what I'm

798
00:43:32,720 --> 00:43:36,000
learning to appreciate of time
is that the, the, the assets

799
00:43:36,000 --> 00:43:39,320
that have quite like a very long
life, no expose himself to the

800
00:43:39,880 --> 00:43:42,920
the Super profit period of time
and pretty prices like flex up

801
00:43:42,920 --> 00:43:46,360
and down and and pay handsomely
thanks to that.

802
00:43:46,360 --> 00:43:47,800
And you have longevity through
the cycle too.

803
00:43:48,240 --> 00:43:50,360
I think so.
So, you know, I mean, Cal was

804
00:43:50,360 --> 00:43:53,400
actually bigger than our market
cap when he bought it, but it

805
00:43:53,400 --> 00:43:55,840
was an asset that was really
going to transform the company.

806
00:43:56,160 --> 00:43:58,440
And we'd done the deal a couple
of years earlier or a year

807
00:43:58,440 --> 00:44:02,280
earlier with Najib Sawiris in La
Mancha and he underpinned the

808
00:44:02,280 --> 00:44:04,040
equity rise.
And it was always with the

809
00:44:04,040 --> 00:44:07,920
strategy that he got involved to
try and get this company into a

810
00:44:07,920 --> 00:44:11,400
better space.
And Cal came along and I don't

811
00:44:11,400 --> 00:44:14,120
think we could have raised the
$400 million if he had

812
00:44:14,160 --> 00:44:16,400
cornerstone it with the $100
million.

813
00:44:17,200 --> 00:44:20,160
But just going back to kind of
what deals make sense, we've

814
00:44:20,160 --> 00:44:23,240
always said, you know, we'll
only do things that improve the

815
00:44:23,240 --> 00:44:26,720
quality of the portfolio and
that are creative to

816
00:44:26,720 --> 00:44:28,680
shareholders.
And I think each deal we've done

817
00:44:28,680 --> 00:44:30,960
has.
But if you're looking at how do

818
00:44:30,960 --> 00:44:36,200
you create value in these deals,
the easiest and best ways from

819
00:44:36,200 --> 00:44:40,400
geological discovery, because
you're pretty much modelling

820
00:44:40,400 --> 00:44:45,960
what is there and you know, what
is it that gets you that

821
00:44:45,960 --> 00:44:48,840
geological upside?
And that's a geology call where

822
00:44:48,840 --> 00:44:52,640
our team has been really good.
And you know, majors generally

823
00:44:52,640 --> 00:44:55,920
put themselves in places which
are geologically most

824
00:44:55,920 --> 00:44:58,360
prospective.
And that's been our kind of

825
00:44:58,360 --> 00:45:01,000
hunting ground buying from
majors that have established

826
00:45:01,000 --> 00:45:03,560
themselves.
But maybe the asset has not been

827
00:45:03,560 --> 00:45:06,840
courted them and they've they've
been a bit distracted and the

828
00:45:06,840 --> 00:45:08,880
asset comes available.
It's happened at Ernest Henry

829
00:45:08,880 --> 00:45:14,560
with Glenn call Cal from Barrack
N Parks from Seymour and and all

830
00:45:14,560 --> 00:45:19,160
of them I'd put in that category
where the real upside is through

831
00:45:19,160 --> 00:45:22,600
the discovery and the and the
better geological setting then

832
00:45:22,760 --> 00:45:25,600
people understood because the
asset has not really been

833
00:45:25,600 --> 00:45:28,360
profiled.
I mean, just going back to, you

834
00:45:28,360 --> 00:45:32,840
know, the analysis piece which
you guys are, are are expert at,

835
00:45:34,280 --> 00:45:36,800
you know, one of the things
which I think is, is challenging

836
00:45:36,800 --> 00:45:45,560
is that an NPV model always
prioritises capital upfront and

837
00:45:46,480 --> 00:45:48,920
penalises long mine life in some
ways.

838
00:45:49,640 --> 00:45:53,600
Because beyond 10 years at a
discount rate in what 7% you're

839
00:45:53,600 --> 00:45:56,320
not really getting value for
anything beyond 10 years.

840
00:45:57,040 --> 00:45:59,960
And there's always, your model
always looks better if you can

841
00:45:59,960 --> 00:46:02,720
bring forward capital and
accelerate production, which I

842
00:46:02,720 --> 00:46:04,960
don't think is right from for
the business.

843
00:46:05,240 --> 00:46:10,120
Kaepernick put out a, a, a, a,
yeah, a written piece on that.

844
00:46:10,240 --> 00:46:12,160
Just that very point, I think.
Last week I didn't see it.

845
00:46:12,160 --> 00:46:16,560
Yeah.
But yeah, you're, you're right.

846
00:46:16,560 --> 00:46:18,000
And there's, there's the
optionality pace.

847
00:46:18,000 --> 00:46:20,520
Can you accept like what, what
if you were just to purely

848
00:46:20,520 --> 00:46:23,440
maximise NAV on a, on a long
life asset, then you get a NAV

849
00:46:23,440 --> 00:46:26,800
that's much bigger, but you're
not going to, you know, all the

850
00:46:26,800 --> 00:46:28,800
cash flows come in, in a
different phase of life.

851
00:46:28,800 --> 00:46:30,920
And there's, there's a bunch of
factors.

852
00:46:31,240 --> 00:46:33,680
But the strategy of, of
evolution has always been to

853
00:46:36,200 --> 00:46:40,080
like gradually over time make
the portfolio have lower cost

854
00:46:40,080 --> 00:46:43,560
assets that have longer life.
Yeah, everyone wants to do that

855
00:46:43,560 --> 00:46:48,440
and not everyone does do that.
The the, the, the, but part of

856
00:46:48,440 --> 00:46:51,280
that too is also divesting the
assets that are in the portfolio

857
00:46:51,280 --> 00:46:53,960
that have the high cost and
short short of life too.

858
00:46:54,080 --> 00:46:57,800
So we've divested of three of
our assets Mandroy and which is

859
00:46:57,800 --> 00:47:00,920
coming to the end of its life as
a gold mine and being converted

860
00:47:00,920 --> 00:47:04,280
to a pumped hydro is the only
asset that remains from the

861
00:47:04,280 --> 00:47:06,520
original five that we started
evolution with.

862
00:47:06,520 --> 00:47:09,800
So, you know, we have been happy
sellers of assets.

863
00:47:09,800 --> 00:47:12,520
We've always tried to keep some
insurance to make sure that if

864
00:47:12,520 --> 00:47:15,240
we were wrong that we got paid
for it.

865
00:47:15,240 --> 00:47:19,520
And and you know, Cracker, Edna,
May, Pajinga or all assets which

866
00:47:19,520 --> 00:47:22,840
still pay us a royalty or some
sort of upside given that

867
00:47:22,840 --> 00:47:26,240
they're still operating.
And how do you find you between

868
00:47:26,240 --> 00:47:32,080
that sort of approach to your,
your asset portfolio, how do you

869
00:47:32,080 --> 00:47:34,920
sort of balance that with the
pressure from say investors and

870
00:47:34,920 --> 00:47:37,200
shareholders to say, oh, what's
the next step?

871
00:47:37,320 --> 00:47:40,680
How are you going to get bigger
when getting bigger mightn't

872
00:47:40,680 --> 00:47:43,880
necessarily fit with the
internal strategy?

873
00:47:44,760 --> 00:47:48,000
Yeah, it's a it's, it's an
interesting one because I mean,

874
00:47:48,000 --> 00:47:50,560
I think, you know, the most
important thing which is really

875
00:47:50,560 --> 00:47:55,040
difficult to do is to not listen
to the noise and listen to your

876
00:47:55,040 --> 00:47:57,520
shareholders because they are
the owners of the business, but

877
00:47:57,520 --> 00:48:00,320
try and not be distracted by the
noise.

878
00:48:01,360 --> 00:48:03,400
You know, we've had this very
clear strategy.

879
00:48:03,400 --> 00:48:05,080
It's work.
The challenge for us at the

880
00:48:05,080 --> 00:48:08,000
moment is that we've actually
put ourselves into some really

881
00:48:08,000 --> 00:48:12,440
good assets where as you get
better assets, the degree of

882
00:48:12,440 --> 00:48:15,080
difficulty in finding assets
which are better than the assets

883
00:48:15,080 --> 00:48:17,080
that you have is increasingly
difficult.

884
00:48:17,480 --> 00:48:18,880
And you know, that's the
challenge.

885
00:48:18,880 --> 00:48:21,680
So we see a lot of organic
growth in our portfolio at the

886
00:48:21,680 --> 00:48:24,960
moment, right at the moment it's
you know, if you think about the

887
00:48:24,960 --> 00:48:28,160
processes that are being run for
assets and the values that are

888
00:48:28,160 --> 00:48:31,240
being obtained for the assets
that they seem, they seem

889
00:48:31,240 --> 00:48:35,280
expensive.
There's 11 like reflection I had

890
00:48:35,280 --> 00:48:39,760
when sort of going through the
the the the history of deals of

891
00:48:40,240 --> 00:48:43,280
of evolution.
And it's a shame we don't see

892
00:48:43,280 --> 00:48:48,040
like, you know, deal making is
as as riveting as as this

893
00:48:48,040 --> 00:48:50,920
anymore.
But you know, even even the the

894
00:48:51,160 --> 00:48:53,080
initial deal which created
evolution, a lot of ways you

895
00:48:53,080 --> 00:48:57,040
were at you were at conquest,
which like I think when you

896
00:48:57,040 --> 00:48:59,360
joined it just had what the
feasibility study on on Mount

897
00:48:59,360 --> 00:49:02,160
Carlton.
You picked up a jingo, but then

898
00:49:02,880 --> 00:49:04,760
you know, you know, an
interconditional merger with

899
00:49:05,360 --> 00:49:08,280
Catalpa, which had Edna May and
30% of Krakow.

900
00:49:08,640 --> 00:49:11,280
But on the exact same
announcement of that done this

901
00:49:11,280 --> 00:49:14,600
equity raise bring in, you know,
New Crest as a major shareholder

902
00:49:14,600 --> 00:49:18,200
and you acquire the other 70% of
Krakow from New Crest plus Mount

903
00:49:18,200 --> 00:49:21,560
Rawdon at the exact same time.
You don't see, yeah, you just

904
00:49:21,560 --> 00:49:23,040
don't see deals like that
anymore.

905
00:49:23,040 --> 00:49:25,960
But and then over time, like in
in evolution and this period of

906
00:49:25,960 --> 00:49:30,040
just like super funky deal
making, like real funky deal

907
00:49:30,040 --> 00:49:34,280
making, you know, the the like
La Mancha stuff like, yeah, all

908
00:49:34,320 --> 00:49:35,880
like all of that was like very
funky.

909
00:49:36,600 --> 00:49:39,920
But then over time the deal like
the deal making get gets a bit

910
00:49:39,920 --> 00:49:41,760
less sexy, a bit less sexy.
You know, you're just buying

911
00:49:41,760 --> 00:49:43,720
stuff in sale process and all
that sort of stuff.

912
00:49:43,720 --> 00:49:45,240
But that's just a comment on the
whole market.

913
00:49:45,680 --> 00:49:46,960
Deal making is a bit less sexy
now.

914
00:49:46,960 --> 00:49:50,920
Yeah, I, I'm not sure.
I mean, just going back to

915
00:49:50,920 --> 00:49:53,520
Conquest, I mean, we've had a
really interesting time like so

916
00:49:53,880 --> 00:49:57,280
the, the reason we got involved
in conquest is because it was a

917
00:49:57,280 --> 00:50:02,120
high, high, high sulfidation
epithermal deposit, which had

918
00:50:02,120 --> 00:50:07,040
had a feasibility study done on
it that used a Biox or roasting

919
00:50:07,040 --> 00:50:09,920
process and found that it would
be uneconomic.

920
00:50:10,560 --> 00:50:14,200
So we actually in China had
built a very similar mine where

921
00:50:14,200 --> 00:50:17,400
we'd run out of money and we
figured out that we could only

922
00:50:17,400 --> 00:50:20,880
sell the concentrate in China.
So we sell the concentrate and

923
00:50:20,920 --> 00:50:25,920
one of our colleagues who is
still in evolution ran the Zhang

924
00:50:25,920 --> 00:50:29,480
Cha Ling mine it for us in China
or was involved in it.

925
00:50:30,000 --> 00:50:35,640
And he went off to China with a
few bags of concentrates samples

926
00:50:35,640 --> 00:50:39,840
from Mount Carlton and got us an
off take contract which allowed

927
00:50:39,840 --> 00:50:42,920
us to build Man Carlton without
any of the downstream

928
00:50:42,920 --> 00:50:46,320
processing, you know, the Biox.
And we just sold concentrate,

929
00:50:46,320 --> 00:50:49,840
which was amazing because Man,
Carlton made like $100 million

930
00:50:50,200 --> 00:50:52,040
for a few years until it ran out
of gold.

931
00:50:53,920 --> 00:50:56,320
But yeah, I, I don't know.
I think you know, what are the,

932
00:50:56,320 --> 00:51:00,120
the, the sort of attributes you
need in a, in a, in a good deal.

933
00:51:00,120 --> 00:51:02,640
You need a motivated seller.
And probably at the moment

934
00:51:02,640 --> 00:51:05,880
they're not motivated sellers in
gold and and copper, they're

935
00:51:05,880 --> 00:51:07,040
motivated buyers.
There's.

936
00:51:07,120 --> 00:51:09,400
A lot of motivated buyers.
Maybe in lithium there's some

937
00:51:09,400 --> 00:51:11,120
motivated sellers, but.
We're not going into.

938
00:51:11,120 --> 00:51:15,560
Lithium, you know, you need a, a
view on the geology.

939
00:51:15,560 --> 00:51:18,640
And then, and then I think one
of the challenges in the sector

940
00:51:19,040 --> 00:51:23,000
is I, I, I think people
management teams have inertia

941
00:51:23,000 --> 00:51:26,760
about doing deals because
everyone thinks that they're

942
00:51:26,760 --> 00:51:29,840
undervalued and the person
approaching them is overvalued.

943
00:51:29,840 --> 00:51:34,000
And there needs to be a bit more
kind of collaboration and

944
00:51:34,000 --> 00:51:37,800
boldness in getting deals done.
That really makes sense for all

945
00:51:37,800 --> 00:51:42,120
sets of shareholders.
So in that, in that example,

946
00:51:42,800 --> 00:51:47,920
Catalpa, they had the 30% of of
crack out, which had a right of

947
00:51:47,920 --> 00:51:50,800
refusal on the other 70% which
came in from you guys.

948
00:51:50,800 --> 00:51:54,080
But at the same time Qatarpa was
under like St Barbara had had

949
00:51:54,080 --> 00:51:57,040
bid for that a month earlier.
And then yeah, you know, sorry,

950
00:51:57,040 --> 00:51:59,120
St Barbara not doing that deal,
we're doing this one instead.

951
00:52:00,440 --> 00:52:03,000
It's like three parties coming
together thinking this is the

952
00:52:03,000 --> 00:52:06,720
best outcome and the pro forma
sort of benefited everyone in a

953
00:52:06,720 --> 00:52:09,320
lot of ways who got to ride the
benefit over time.

954
00:52:09,320 --> 00:52:11,560
Do you think there's less
collaboration for those sorts

955
00:52:11,560 --> 00:52:13,680
of?
Once again, that was kind of

956
00:52:13,680 --> 00:52:17,960
done with a major so new Crest
with a counterparty.

957
00:52:17,960 --> 00:52:20,880
I went to go and see when they
bought Lahir and Greg Robinson

958
00:52:21,440 --> 00:52:25,480
listened and sort of understood
that Mount Rawdon and cracker

959
00:52:25,480 --> 00:52:28,760
his 70% of cracker were not
going to be cool and he kind of

960
00:52:28,760 --> 00:52:33,200
bought into OK, well, I loaned
33% of this new vehicle, but he

961
00:52:33,200 --> 00:52:36,400
said, you know, in order for it
to get done Katelpa have this

962
00:52:36,400 --> 00:52:39,400
pre emptive over my 70%.
So go and see them and get it

963
00:52:39,600 --> 00:52:43,880
done with them.
But he, he lends in and helped

964
00:52:43,880 --> 00:52:47,200
us get catalpa over the line as
well, because once they'd

965
00:52:47,200 --> 00:52:51,000
endorsed it, a major, you know,
I think it did have an

966
00:52:51,000 --> 00:52:55,280
influence.
So he, he he was very supportive

967
00:52:55,280 --> 00:52:57,360
of the deal and, and created
evolution.

968
00:52:57,360 --> 00:53:01,440
And Laurie Conway, who's now the
CEO of the business, actually

969
00:53:01,440 --> 00:53:04,760
was the non executive director
appointed by new Crest.

970
00:53:04,760 --> 00:53:08,440
So I, I think if you're dealing
with groups that, that

971
00:53:08,440 --> 00:53:12,120
understand how value is created,
it, it can be done, but you need

972
00:53:12,120 --> 00:53:15,040
it, you know, you, you need to
think a bit out of the box.

973
00:53:16,360 --> 00:53:19,920
And if you do everything that
every investment bank banker

974
00:53:19,920 --> 00:53:22,120
walks in and says, you know,
here's a great deal for you,

975
00:53:22,480 --> 00:53:24,040
you're probably going to end up
in tears.

976
00:53:24,440 --> 00:53:26,280
I'm not an investment banker,
but I've got a deal for you.

977
00:53:26,480 --> 00:53:31,960
Yeah, I'm always, always.
I'm sure it's I'm sure it's at

978
00:53:31,960 --> 00:53:34,960
the top of your shopping list.
Anyway, Yeah, you like you've

979
00:53:35,360 --> 00:53:38,360
eat the East Kendana joint
venture.

980
00:53:38,480 --> 00:53:43,080
You know, you've, you've picked
up sort of Northern Star's share

981
00:53:43,080 --> 00:53:44,920
of that.
Now surely there's a motivation

982
00:53:44,920 --> 00:53:47,480
to wrap up the entire thing with
random tribune of these funky

983
00:53:47,480 --> 00:53:50,400
sort of strange and sex
companies that are mostly

984
00:53:50,400 --> 00:53:53,520
bullion.
Pretty sure they'd like yeah.

985
00:53:53,840 --> 00:53:55,800
Negative EV if you net off the
actual bullion.

986
00:53:56,120 --> 00:53:58,520
Then if that fits in the funky
category, it just sounds like a

987
00:53:58,520 --> 00:54:03,040
purchase.
Yeah, we own 20% of Tribune.

988
00:54:04,560 --> 00:54:09,160
I think that the, you know, the
Tribune and Rand companies, you

989
00:54:09,160 --> 00:54:14,680
know, have been somewhat
esoteric to investors their,

990
00:54:14,680 --> 00:54:18,680
their shareholders or on you
know, not institutional

991
00:54:18,680 --> 00:54:21,080
shareholders.
So I think we, we've gone with

992
00:54:21,080 --> 00:54:24,440
that and is, is to try and
engage with them, collaborate

993
00:54:24,440 --> 00:54:29,040
with them and and maximise the
value at, at the EKJV where the

994
00:54:29,040 --> 00:54:33,800
51% owner of the joint venture,
their material, that material

995
00:54:33,800 --> 00:54:38,000
gets processed in our plans.
So our approach has been to try

996
00:54:38,000 --> 00:54:40,640
and collaborate and maximise the
value for both shareholders.

997
00:54:41,040 --> 00:54:45,320
Again, I think, you know, if you
said is it a deal that I could

998
00:54:45,320 --> 00:54:48,240
genuinely say is accretive to
our shareholders, I think based

999
00:54:48,240 --> 00:54:50,760
on value expectations, the
answer's no and therefore

1000
00:54:51,120 --> 00:54:53,160
unlikely to be done.
So sorry.

1001
00:54:53,160 --> 00:54:58,840
Oh.
You would say that you got any

1002
00:54:58,840 --> 00:55:00,880
more Ellie?
No, no, that was, that was

1003
00:55:00,880 --> 00:55:02,560
fantastic.
Thanks for your time, Jake.

1004
00:55:02,560 --> 00:55:04,280
We really appreciate it.
Thank you.

1005
00:55:04,280 --> 00:55:06,040
Thank you so much for coming in.
Thanks.

1006
00:55:07,120 --> 00:55:10,160
Good stuff, Trav and JC, you
know, fun random factor.

1007
00:55:10,160 --> 00:55:13,760
You know that the term holy snap
and duck shit got recently used

1008
00:55:13,760 --> 00:55:17,680
in a corporate review meeting?
No, really.

1009
00:55:17,680 --> 00:55:20,840
Anyway, back to I've heard word
on the decline.

1010
00:55:20,840 --> 00:55:22,480
Anyway, back to Jake and
Evolution.

1011
00:55:25,160 --> 00:55:26,600
Good, John I trap.
Yeah, it was.

1012
00:55:26,600 --> 00:55:27,520
It was.
Yeah, it was good.

1013
00:55:27,720 --> 00:55:29,880
It was good.
Yeah, it was pretty interesting.

1014
00:55:30,280 --> 00:55:31,120
I did.
I did enjoy it.

1015
00:55:31,280 --> 00:55:32,440
I did enjoy it.
What are you?

1016
00:55:32,560 --> 00:55:34,600
What are you?
What do you reckon he gave you

1017
00:55:34,600 --> 00:55:35,760
that you didn't think he gave
you?

1018
00:55:37,680 --> 00:55:41,120
On the deal front, well, you
know what I was thinking when he

1019
00:55:41,120 --> 00:55:44,640
said a deal can't be done with
random tribute, but he accepted

1020
00:55:44,640 --> 00:55:46,880
that they're trading at negative
EVI don't understand how that

1021
00:55:46,880 --> 00:55:50,080
works unless, unless the major
shareholder or controlling

1022
00:55:50,080 --> 00:55:52,080
shareholding interest actually
just has stars in their eyes

1023
00:55:52,080 --> 00:55:55,240
because like, yeah, you know
what I mean?

1024
00:55:55,240 --> 00:55:58,240
Like anyway.
Who knows?

1025
00:55:58,400 --> 00:56:01,360
Yeah, who knows?
Who knows?

1026
00:56:02,000 --> 00:56:03,680
I know where.
The mess of the best I can fit

1027
00:56:03,680 --> 00:56:06,280
mine in contractor in the world.
That's a fact.

1028
00:56:06,480 --> 00:56:09,840
That's like there's no Rand or
Tribune bloody cryptic messages

1029
00:56:09,840 --> 00:56:12,120
there.
It's like fact, fact, fact.

1030
00:56:12,800 --> 00:56:15,720
Hey, what else is going on?
Where's the bloody where's the

1031
00:56:15,720 --> 00:56:18,120
sponsors going are?
You testing me?

1032
00:56:18,160 --> 00:56:21,200
I think we know them.
We've got a couple others.

1033
00:56:21,280 --> 00:56:23,480
We've got the.
Grounded Construction Group,

1034
00:56:23,480 --> 00:56:26,800
we've got cross boundary energy,
we've got the Sandy Ground

1035
00:56:26,800 --> 00:56:30,240
Support Division.
GRE insurance that we mentioned

1036
00:56:30,240 --> 00:56:32,120
in the show.
Greenland's equipment.

1037
00:56:32,160 --> 00:56:36,640
McMahon Mining Title services,
Strange earthworks at Haulage,

1038
00:56:36,840 --> 00:56:39,600
Bloody cage drill just punching,
arson and diamond dolls

1039
00:56:39,960 --> 00:56:43,880
everywhere and our bloody
beautiful friends at Spark.

1040
00:56:44,800 --> 00:56:50,600
If you're an active sex trader,
the information contained in

1041
00:56:50,600 --> 00:56:53,400
this episode of Money of Mine is
of general nature only and does

1042
00:56:53,400 --> 00:56:56,200
not take into account the
objectives, financial situation,

1043
00:56:56,240 --> 00:56:58,240
or needs of any particular
person.

1044
00:56:58,560 --> 00:57:01,600
Before making any investment
decision, you should consult

1045
00:57:01,600 --> 00:57:04,640
with your financial advisor and
consider how appropriate the

1046
00:57:04,640 --> 00:57:08,360
advice is to your objectives,
financial situation and needs.