Rio lights up the junior copper market

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Gee, it's been a bloody activity
in the underdeveloped copper

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landscape.
Boys, period.

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Underground, underground,
underdeveloped bloody mate.

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We're going copper.
We've got the winner.

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We've got sip the good old good
old nifty.

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Keep coming back doesn't.
It nifty that mighty nifty.

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What's a word that it's?
It's just nifty's sounds like

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we're lunar in a way, yeah.
There's there's there's some

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parallels, I can see that.
It's just got that vibe about

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and the the.
U dogs aren't missing out either

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mate, the U dogs don't.
Forget the U dogs buddy, Next

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Gen signed their first sales
contract.

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A bit, not huge, but I don't
know, I'll make some shit up

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about what hasn't happened yet.
Why not?

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Let's start with Rio Winnow.
What's going on here, boys?

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Yeah.
So this one came out yesterday,

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fair bit actually came out
yesterday from Rio.

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They announced the transaction
regarding Winnow.

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They had their their big 2024
investor seminar as well.

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You know, 100 page slide deck
comes out, lots of analysts get

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asked questions as well.
So a little bit going on and

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there was also Palliser Capital,
a sort of smaller shareholders,

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Jacob Stalzem put it, wanting to
agitate and get the company to

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close that dual listed structure
that they've got similar to what

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BHDB did not too long ago.
But yeah, question was asked

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again in the investor seminar
and they quickly batted that one

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back.
So we're going to focus on the

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winnow transaction.
This is interesting, right?

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I mean, we, we'd heard for a
while that yeah, Rio, we're

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looking to sell it a stake of it
or find a partner or maybe even

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entertain an entire sale like a
who knows, But they've ended up

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selling 30% of it for 400
million U.S. dollars to Japanese

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trading house Sumitomo.
Yeah, not bad at all. 195 US of

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that upfront with 204 being
deferred and conditional.

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Rio also acknowledged what we'd
sort of heard back end that

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they've spent US 438 million on
the project to date.

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So fair bits gone in the ground
since they made that discovery

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in 2017 now.
Still that that's a big uplift

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on, on what they've put into it
over time.

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Just yeah, based on the C3 value
of that, that transaction that.

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Yeah, sort of circa 2 billion
ish.

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Yeah, Yeah.
I was about to say Aussie 2

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billion the value and that I
yeah, the project.

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Surprised.
Were you surprised to?

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Say that number, does that sound
low or high?

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High, it's, this is low grade,
it's deep.

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It's, it's, you know, like it.
Radio hadn't talked too much

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about it for a while.
It sort of faded and Sumitomo

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come out saying this is worth a
lot of money when brokers were

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valuing it at nothing on sort of
Rio summer parts valuation.

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My first kind of thoughts were
that the money they've put in

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and the money they're getting
line up a bit too perfectly and

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there's like a division within
Rio that just needed to get that

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number so that they can de risk
the project and go forward.

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That was like a a sort of first
thought.

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You still got to find a buyer
that's willing to do that.

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That's that's the interesting
thing to me.

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It's like this isn't this isn't
like a you know, any any mug

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sort of partnering and and
paying up.

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This is summer time.
I like this is this is the

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market clearing price for assets
like this.

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Now that's a super interesting
thing for me to reflect on.

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Yeah, is what the Japanese
trading house is.

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They've got the lowest cost of
capital, so it's pretty

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impossible to kind of compete,
but they're they're willing to

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pay 400 million U.S. dollars for
30% thirty.

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Percent, we know, as we as we
have touched on in the past, the

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rise of Japan and South Korea
just keeps on going.

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So.
Rio have still got the keys for

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this one.
Importantly, the managing

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partner obviously the the major
holder like that, that LaGrange

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deal they did not too long ago
where they sold 55% actually

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gave first quantum operatorship
there.

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But this one's a little bit
different now.

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We're also expecting APFS to
come out in 2025 focusing on a

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10 million tonne per annum
scenario.

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So very keen to see what that
comes out with.

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Now just for a quick recap,
we're we're going off the latest

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numbers being an inferred
resource of 721 million tonnes

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at .4% copper and .34 grammes
per tonne gold.

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There was a, you know, a high
categorised 503,000,000 tonne at

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.45% copper equivalent, but
there's a high grade component

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in there of 188,000,000 tonnes
at .68% copper equivalent.

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So if you're looking at a 10
million tonne per annum

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scenario, back of the envelope,
if you're doing a mine life

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that's almost close to two
decades, you could be looking at

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60,000 tonnes per annum copper
equivalent ish.

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You know, taking in some rough
kind of recoveries and, and

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whatnot into account.
Now that's if they focus on that

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high grade portion early, but
we'll see what that study turns

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out.
You know, it's still very early

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days with with this one and
obviously sitting in a group

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like Rio, you don't get heaps of
info about it.

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And I think it's still an open
ended question even with this

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transaction, whether that is a,
you know, quote unquote Rio

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Tinto asset.
Well, then I was just about

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asked with that 60,000 tonne
number and the fact that why

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would Rio need to sell 30% of
anything?

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Is it indicating that they want
to sell the whole thing

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eventually and it's not really a
Rio asset?

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I don't, I think it's a
different view, but I don't

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think so personally.
I think you get like validation

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from the market you create that
you know, no one was really

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banning this at anything.
All of a sudden, some time I say

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things worth $2 billion.
Also some time I will will, you

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know, jointly fund.
But you see mutually beneficial

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partnerships like this all the
time in the oil and gas world.

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But mining world doesn't seem to
do it as often.

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But it's super handy when you
can get a JV partner that has a

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lower cost of capital and you
can think more thoughtfully

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about the exact ways that you
allocate your own capital.

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Yeah, to the point on valuation,
this winner was in no ones base

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case, none of the analysts that
follow it have described much

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value at all to winner.
So now it goes for me not much

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to a little bit.
Yeah.

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So it's kind of good for see,
good to see for them.

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On the CapEx side of things, you
know just looking at what we've

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seen around Australia,
Mcfillimy's quoted a billion for

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7 million tonnes per annum.
Obviously gold project Casey GM

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1.5 billion to add 14,000,000
tonnes per annum to grey, sort

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of the undercooked as we kind of
called it, 10 million tonne per

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annum with an 800,000 tonne per
annum.

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Pox plant was 1.3 billion, Rex,
interestingly 850 million back

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in 2022 for a 6,000,000 tonne
per annum scenario.

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So I think you could comfortably
place a CapEx figure at 1.52

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billion is not hard to imagine.
Just to get a bit of a rough

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indication for this with
obviously like you say, CMM will

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be stamping up 30% of that that
CapEx going forward.

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It'd be good.
It'd be good to look at once

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line down and like you'd
probably do it with Bellevue now

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to see what was it's it's
probably hard to deduce it, but

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what's actually been spent pre
production, because once I once

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I start spending it like you
know, all the capital, you don't

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know if it was the pre
production or it's the continued

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advancements console going in
parallel.

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But like it'd be interesting to
see what those numbers have

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actually come out at.
Yeah, someone would know that

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surely, because Bellevue could
have spent, I don't know, might

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be up to 400 like on that.
I, I don't know if someone's

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figured that out, tell us.
Just send it through so we don't

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have to do the work.
It'd be easy.

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Sorry, me guessing.
So it was interesting to see Rio

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have a new head of copper in
internally and just listening to

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the investor seminar comments
that she made on on Winoo, she

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spoke about the internal
confidence on the asset

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increasing over the past year,
which was kind of interesting to

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hear, particularly on the
resource, as well as potential

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expandability of the assets,
maybe starting at a 10 million

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tonne per annum scenario, but
expanding.

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And just to put that in context,
you know, there was a lot of

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excitement coming out of 2017,
maybe mainly in that sort of

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2019-2020 period, first half
sort of 2020 about winner and

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then it died off quite a while
and that excitement really

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dissipated.
But you know, it'd be, it'd be

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great to see if it if that does
sort of eventuate that that team

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internally has heightened
confidence.

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And I'm not sure if that's, you
know, to do with like copper

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price forecast or how they're
kind of thinking about that or

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because they've, you know, they
spend a lot of money on it.

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They should have a fair amount
of data on the assets.

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I'd love to know what sort of
angle they're going at to in the

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last year have elevated, you
know, confidence in the asset.

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But it was a comment that really
sort of stood out to me.

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Did that money they've spent on
it was Could you infer that

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though they spent that money
hoping it was going to be a bit

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bigger and better quality than
it is?

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Or a. 100% I mean they were they
were hoping it was going to be

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knockout out of this kind of
world.

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And I think you can say it's not
quite been that, but it still

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could be an asset that that
generates a decent amount of

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value it.
Doesn't it doesn't move the

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dollar too much in terms of
their, you know, their copper,

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the output which yeah, your base
case kind of expanded, maybe can

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be doubled in time.
Maybe that moves the the needle

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a bit for them.
But yeah, what you talk.

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What is the, the, you know, the
elephant in the room which is

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coming together?
And is it what I forget what the

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grade it's like the grade of
that is, was it 1/2 percent or

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something or it's like for for
the scale of it and it is just

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such a outlier and what it is
compared to the sub 1% ones.

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Yeah, we'll flick up a chart now
that I that I saw earlier there,

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there is a pocket of much higher
grade stuff that OT need or Rio

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rather need to get approval from
from Mongolia still they haven't

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quite got that yet, but that'll
see the grade over that 25262728

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period really pick up going from
off the top of my head from .5

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over 1%.
So yeah, they need to get that

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approval and then they're going
to go hard at that.

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I think it's there's an
expectation that that comes

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through.
It's just a a matter of time

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you.
Know what I haven't been I

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should be keeping tabs on?
It's that entree resources which

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has the, you know, the tenement
for a part of the my plan which

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they need to access.
That's that bit.

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Yeah, yeah, it'll keep tabs on
that one.

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Yeah.
So that's.

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That was it was between a
certain RL, wasn't it?

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Yeah.
Yeah.

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And ITA.
Yeah, yeah, yeah.

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So I mean, yeah, just a couple
other comments.

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Like we sort of said that that
Japanese conglomerate, you know,

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spending money in Australia on
mining assets around the world

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is really, really interesting to
me.

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And it's still a little
underappreciated, I'd say.

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Like they just keep popping up
deal after deal and like you

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say, Trav lower cost of capital.
They've got a lot of capital as

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well.
Rio spoke again saying we'd love

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to do deals with them in base
metals across the complex as

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well as in lithium with, you
know, with CMM specifically.

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So that's one I'm I'm focused on
and not going to be surprised if

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you see their name popping up
big time.

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Continuing and they're so
welcome here.

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Like to have them?
No, no big Ferb headaches about

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anything like that, you know.
When you think of like copper

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every like copper going up his
consensus consensus trade, the

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copper cube, like copper stocks
traded, you know, pretty hefty

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kind of multiples at the moment.
They seem pretty, you know,

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fully valued for any uplifting
copper price.

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But I think where the relative
value is, is in these, you know,

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large, lowish grade, large
tonnage copper projects which

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have been around forever.
And you know, that they're like

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the core options becoming the
money.

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00:11:10,080 --> 00:11:13,800
And if the the stock prices of
the, you know, the single asset

223
00:11:13,800 --> 00:11:17,200
developer copper stocks don't
reflect full value, then you'll

224
00:11:17,200 --> 00:11:19,560
have the corporate outcomes
which assign value.

225
00:11:19,560 --> 00:11:24,840
And that just the the big the US
$400 million for 30% just was a

226
00:11:24,840 --> 00:11:28,760
wake up call to me that that
that's where relative value in

227
00:11:28,880 --> 00:11:31,160
the copper in the call.
Look what happened with Rex and

228
00:11:31,160 --> 00:11:33,480
that was still a bit of go.
So you're actually a couple

229
00:11:33,520 --> 00:11:36,440
other ones are, yeah, sitting
there waiting to be done.

230
00:11:36,480 --> 00:11:42,440
And then there's the there's
the, the I put a tweet out just

231
00:11:42,440 --> 00:11:44,840
asking people like, you know,
where's the the best copper

232
00:11:44,840 --> 00:11:46,880
around about projects.
And I think the quality is

233
00:11:46,880 --> 00:11:49,480
massively secured to the TSX and
TSXV as well.

234
00:11:50,240 --> 00:11:53,200
But there's, yeah, got to do
some further work and hopefully

235
00:11:53,200 --> 00:11:55,480
bring on an expert that's done
real kind of, you know,

236
00:11:55,480 --> 00:11:58,840
geological interrogation of the
large undeveloped kind of copper

237
00:11:59,240 --> 00:12:01,520
projects globally because
there's a lot of predictions of

238
00:12:01,520 --> 00:12:04,880
M&A in that sector over the next
12 months. 100% super, super

239
00:12:04,880 --> 00:12:07,360
keen to, to do that with
somebody who's knowledgeable

240
00:12:07,360 --> 00:12:09,440
across the, the space.
So I think the the last thing

241
00:12:09,440 --> 00:12:13,040
I'll just sort of say final
comment from Jacob Stalzem from

242
00:12:13,040 --> 00:12:17,040
that, that seminar talking in
the context of BHB potentially

243
00:12:17,040 --> 00:12:20,960
bidding Anglo again, he he sort
of said this, this Ding, Ding,

244
00:12:21,200 --> 00:12:24,360
Ding, Ding, Ding.
It's so expensive to buy copper

245
00:12:24,440 --> 00:12:26,760
right now.
And as a shareholder being posed

246
00:12:26,760 --> 00:12:30,520
the question of would Rio engage
in, you know, going for a

247
00:12:30,520 --> 00:12:33,200
company like Anglo, I would feel
there would be a fair bit of

248
00:12:33,200 --> 00:12:37,040
downside in becoming involved in
copper M&A like that.

249
00:12:37,240 --> 00:12:41,760
So you know, people are paying
kind of top dollar ish for the

250
00:12:41,760 --> 00:12:45,360
copper assets at the moment and
you know at the bigger end of

251
00:12:45,360 --> 00:12:48,880
town, especially those producing
what what he was talking about

252
00:12:48,880 --> 00:12:50,800
there.
So yeah, I thought that was an

253
00:12:51,200 --> 00:12:52,760
interesting one to to sort of
sign off with.

254
00:12:53,120 --> 00:12:55,480
Jacob, if you're listening, I'd
really appreciate it if he got

255
00:12:55,480 --> 00:12:58,400
involved.
I've got a lot riding on this

256
00:12:58,400 --> 00:13:05,480
one.
I've got a fun fact about about

257
00:13:05,480 --> 00:13:08,320
when for you guys too.
This is actually from an AFR

258
00:13:08,320 --> 00:13:13,520
article back in May 27th, 2019.
It's says a first drill

259
00:13:13,520 --> 00:13:15,160
discovery.
This is an excerpt from the

260
00:13:15,160 --> 00:13:16,480
article.
The interesting thing about

261
00:13:16,480 --> 00:13:19,480
Windows is that it was a first
drill hole discovery and it was

262
00:13:19,680 --> 00:13:22,800
into a defined target that we
identified geophysically.

263
00:13:22,840 --> 00:13:26,880
Macintosh said, yeah, there's a
whole sort of paragraph on on

264
00:13:26,880 --> 00:13:29,400
that fact.
And I was, I was reflecting on

265
00:13:29,400 --> 00:13:30,440
that.
I think it's kind of amazing, to

266
00:13:30,440 --> 00:13:32,600
be honest, like a first drill
hole discovery, thanks to

267
00:13:32,600 --> 00:13:36,880
geophysics that that just really
hits home how important getting

268
00:13:36,880 --> 00:13:41,120
geophysics data is, right?
And magic JD Luckily, we happen

269
00:13:41,120 --> 00:13:43,960
to know the trusted partner in
geophysics surveying in this

270
00:13:43,960 --> 00:13:45,520
great country, Nathan Daish.
And Daish.

271
00:13:45,560 --> 00:13:49,520
That oh Daish that you want to
find shit 500 metres

272
00:13:49,520 --> 00:13:51,280
underground, it's the only way
to do it.

273
00:13:51,720 --> 00:13:52,960
They were probably using him,
yeah.

274
00:13:53,120 --> 00:13:55,880
Gravity, radiometrics, magnetic
soil sampling, passive seismic.

275
00:13:56,000 --> 00:13:58,800
If you need geophysics data and
to find a discovery then you

276
00:13:58,800 --> 00:14:00,880
bloody better use an expert who
does the job properly.

277
00:14:01,160 --> 00:14:03,000
Daish that have been doing it
for 30 years.

278
00:14:03,760 --> 00:14:05,200
That's how you know you can
trust them.

279
00:14:05,200 --> 00:14:07,160
You know who else trust them?
Impressive client list.

280
00:14:07,160 --> 00:14:10,040
Maddie JD, BHP, Regis,
Australian Government of

281
00:14:10,040 --> 00:14:12,360
Geoscience, Fortescue, even Rio
Tinto.

282
00:14:12,520 --> 00:14:15,480
By the way, mate, the government
trusts them, right?

283
00:14:15,880 --> 00:14:17,280
What more do you need to say,
mate?

284
00:14:17,280 --> 00:14:19,840
All the dollar they might have
been involved in.

285
00:14:19,960 --> 00:14:21,680
Hemi, it could have been
renewed.

286
00:14:21,680 --> 00:14:23,200
They've done, they've done it
for BHP.

287
00:14:23,920 --> 00:14:26,080
We should probably ask, mate.
Right, Northern Star.

288
00:14:26,080 --> 00:14:28,000
Thank, Joe.
Thanks Dice for that.

289
00:14:28,280 --> 00:14:30,600
Details in the show notes.
I'll give him a call.

290
00:14:30,680 --> 00:14:35,320
Beautiful, right?
Cyprium gets bid by Appium.

291
00:14:35,680 --> 00:14:38,280
Yeah, 3 1/2 cents a share.
Not that.

292
00:14:38,280 --> 00:14:40,280
Give them the.
I'll get out of here mate.

293
00:14:41,320 --> 00:14:43,680
Give you 1.
You want to go.

294
00:14:44,840 --> 00:14:46,320
Interesting.
I I found this pretty

295
00:14:46,320 --> 00:14:48,280
interesting get out.
So when it popped up, so yeah,

296
00:14:48,280 --> 00:14:50,320
nifty, it got a nibble from
another private equity group.

297
00:14:50,320 --> 00:14:53,200
And of course, there's an
existing kind of private equity

298
00:14:53,560 --> 00:14:55,840
entity that's that's in amongst
the equity of the company at the

299
00:14:55,840 --> 00:14:58,840
moment being pack Rd.
But this is this is a bid from

300
00:14:58,840 --> 00:15:01,680
Appium and it's just on that
that whole theme of, you know,

301
00:15:01,680 --> 00:15:05,800
the, the cop, the copper world
and, and, and market activity.

302
00:15:06,240 --> 00:15:09,800
I've I've found an interesting 3
1/2 cents is, is the number, of

303
00:15:09,800 --> 00:15:11,640
course, for the share.
The share price was like it was

304
00:15:11,640 --> 00:15:13,760
about 100% premium on the on the
share price at the time.

305
00:15:13,880 --> 00:15:15,320
Cash too.
I oh cash.

306
00:15:15,320 --> 00:15:18,560
Yeah, it's probably, yeah, yeah,
no cash, of course.

307
00:15:18,560 --> 00:15:21,280
Cyprian moans, the troubled
Nifty Copper project, an asset.

308
00:15:21,440 --> 00:15:23,240
Maddie, you've talked about
plenty in the past and you've,

309
00:15:23,280 --> 00:15:26,880
you've gone into intricacies of,
of that operation in the last

310
00:15:26,880 --> 00:15:30,160
year, like last 12:00-ish
months, maybe a bit longer.

311
00:15:30,480 --> 00:15:32,520
There's been a lot that's
happened to that company, lots

312
00:15:32,520 --> 00:15:35,240
changed.
They put out APFS on a big open

313
00:15:35,240 --> 00:15:38,120
bid mining scenario last week.
It's sort of recapped a little

314
00:15:38,120 --> 00:15:41,160
bit there.
And there's a, there's a bit to

315
00:15:41,160 --> 00:15:43,320
peel through with the bid
because it's, it's sent the

316
00:15:43,320 --> 00:15:47,120
stock up like 32%.
It's trading at at 2 1/2 cents

317
00:15:47,120 --> 00:15:51,680
at the time of of talking, which
is still fairway South of the

318
00:15:51,680 --> 00:15:54,960
bid at 3.5 cents.
So what's what's?

319
00:15:54,960 --> 00:15:58,120
That.
There's a there's a detail that

320
00:15:58,120 --> 00:16:00,600
I'll I'll, you know, I'll
surprise you with, but.

321
00:16:01,240 --> 00:16:04,840
Let's get let's get into the the
value of Cyprium and you know,

322
00:16:05,040 --> 00:16:07,600
nifty.
If you, if you naively look at

323
00:16:07,600 --> 00:16:12,320
sort of, you know, Cyprium's
equity, that 3.5 cents is about

324
00:16:12,320 --> 00:16:14,320
53,000,000 bucks, right?
Nifty 50.

325
00:16:14,960 --> 00:16:17,840
But unfortunately there's a, a
fair bit of debt in the cap

326
00:16:17,840 --> 00:16:20,960
structure here, something that
can be, you know, pretty hairy

327
00:16:20,960 --> 00:16:22,480
for companies that don't have
cash flow.

328
00:16:22,480 --> 00:16:24,240
You just haven't debt because
how do you pay it back?

329
00:16:25,040 --> 00:16:28,400
We need more equity.
So, so as usual, they don't tell

330
00:16:28,400 --> 00:16:30,000
us the interest rate on the, on
the debt.

331
00:16:30,360 --> 00:16:32,840
The, the Glencore is actually a
prepayment facility, but for,

332
00:16:32,840 --> 00:16:34,560
you know, all intents and
purposes the debt facility.

333
00:16:35,000 --> 00:16:37,680
But stock standard commodity
traders like Glencore is sofa

334
00:16:37,680 --> 00:16:40,200
plus 15%.
So assure it's a 15% margin plus

335
00:16:40,200 --> 00:16:42,240
Glencore got 100% off take plus
security.

336
00:16:43,040 --> 00:16:46,000
Those those terms that 100% off
taking the security.

337
00:16:46,000 --> 00:16:48,760
We do know, I'm guessing that
the, the margin is 15%.

338
00:16:50,080 --> 00:16:52,920
Cyprium has cash of of 20
million.

339
00:16:53,160 --> 00:16:54,880
So they're fully drawn the 40
million debt, they've got cash

340
00:16:54,880 --> 00:16:56,960
of 20 million, but they've also
got these convertible notes

341
00:16:57,200 --> 00:17:01,040
which they're paying a 6% coupon
on to Metals X Ding Ding Ding to

342
00:17:01,040 --> 00:17:05,400
the tune of 37 million too.
So you know classify that as as

343
00:17:05,400 --> 00:17:07,680
as debt for the purpose of
calculating the EV at the

344
00:17:07,680 --> 00:17:09,240
company.
All up, that's an implied

345
00:17:09,720 --> 00:17:15,520
acquisition EV of $110 million
that Appian is kind of proposing

346
00:17:15,520 --> 00:17:16,960
here.
Because you acquire the shares,

347
00:17:16,960 --> 00:17:20,200
you're assuming that that you're
all in cost to get 100% and kind

348
00:17:20,200 --> 00:17:22,720
of clean up that cap structure,
call it call it 110.

349
00:17:22,960 --> 00:17:25,280
Dollars.
What's the metals X convertible?

350
00:17:25,280 --> 00:17:28,400
At what price?
It's less about the, I think the

351
00:17:28,560 --> 00:17:32,320
the conversion price is like
115% of the next cap raise

352
00:17:32,320 --> 00:17:34,520
that's done.
But for all intents and purposes

353
00:17:35,000 --> 00:17:37,480
the money has to be paid back.
I think that got extended to

354
00:17:37,480 --> 00:17:41,520
2028 and a 6% bond until till 6%
coupon until then.

355
00:17:41,520 --> 00:17:45,000
So just think of it as 6% debt,
which, you know, if Superman

356
00:17:45,000 --> 00:17:47,680
went on the rung, maybe they'd
consider converting it to.

357
00:17:47,800 --> 00:17:49,400
More wipe it.
Yeah, yeah.

358
00:17:51,080 --> 00:17:54,480
So 110 million bucks is, is what
happened sort of, you know,

359
00:17:54,880 --> 00:17:57,600
think thinking the upfront kind
of cost is to get get things

360
00:17:57,600 --> 00:18:00,040
cleanly.
And if you look at the PFS that

361
00:18:00,040 --> 00:18:04,320
came out last week says, you
know, you've got to take numbers

362
00:18:04,760 --> 00:18:08,040
with a grain of salt in APFS, of
course, especially for troubled

363
00:18:08,040 --> 00:18:09,920
restart projects to take these
with a grain of salt.

364
00:18:09,920 --> 00:18:14,320
But the PFS said the post tax
NPV was 756,000,000.

365
00:18:14,840 --> 00:18:20,520
So Appian's bid of 110 is about
0.15 times NAV or 0.15 times

366
00:18:20,520 --> 00:18:22,280
NPV, right.
Yeah.

367
00:18:23,080 --> 00:18:25,000
So if you, if you take a
positive outlook on the study,

368
00:18:25,480 --> 00:18:28,280
you can see the merit for Appian
to to you know, to be

369
00:18:28,280 --> 00:18:31,600
opportunistic here.
But one bit of context I think

370
00:18:31,600 --> 00:18:34,320
we're throwing out there.
It's like private private equity

371
00:18:34,320 --> 00:18:37,440
is is fucked up a lot with
copper opportunities in general,

372
00:18:37,440 --> 00:18:41,440
like everyone else in the world,
private equities has been hot

373
00:18:41,560 --> 00:18:43,520
wanting, wanting copper
opportunities to buy.

374
00:18:44,360 --> 00:18:48,080
But private equity have, you
know, an added limitation

375
00:18:48,080 --> 00:18:49,320
sometimes.
And that's just like getting

376
00:18:49,320 --> 00:18:50,840
things out of the right, right
size.

377
00:18:51,560 --> 00:18:54,800
And that can be, you know, a bit
of a tricky thing to do in the

378
00:18:54,800 --> 00:18:58,720
copper space where, you know,
generally the copper, the best

379
00:18:58,720 --> 00:19:01,080
copper opportunities are the
large, large mines.

380
00:19:01,080 --> 00:19:05,120
But you know, private equity is
is sort of narrowed down to your

381
00:19:05,120 --> 00:19:08,280
smaller scale opportunities
which which are definitely a

382
00:19:08,280 --> 00:19:11,960
lot, a lot trickier in copper.
Is that a function of when they

383
00:19:11,960 --> 00:19:14,760
need the return?
Not necessarily when they need

384
00:19:14,760 --> 00:19:21,000
the return, but I, I just think
like the, the, the quality kind

385
00:19:21,000 --> 00:19:24,000
of all gets sort of pushed,
pushed to the majors in, in

386
00:19:24,000 --> 00:19:25,840
copper and their large scale.
They're the ones that can fund

387
00:19:25,840 --> 00:19:28,240
the giant CapEx required and
that's how you get low cost

388
00:19:28,480 --> 00:19:32,760
assets on the on the cost curve.
And then the same time, you

389
00:19:32,760 --> 00:19:34,840
know, it's, it's the small scale
copper stuff that often, you

390
00:19:34,840 --> 00:19:38,720
know, has, has challenges
despite, you know, scale, scale

391
00:19:38,720 --> 00:19:39,760
economies and all that sort of
stuff.

392
00:19:39,760 --> 00:19:43,800
But so I just think, I think
that supply and demand of, of

393
00:19:43,800 --> 00:19:46,520
copper opportunities is, is just
like another thing to, to think

394
00:19:46,520 --> 00:19:48,800
about.
But you know, if, if happy is

395
00:19:48,800 --> 00:19:51,480
positive on the study, then I
can see, you know, merit in

396
00:19:51,760 --> 00:19:55,040
putting in some capital.
Maybe maybe they don't even

397
00:19:55,040 --> 00:19:57,760
think they need to turn it back
on themselves.

398
00:19:57,760 --> 00:19:59,320
They could sell it to someone
else at that point in time or

399
00:19:59,320 --> 00:20:01,000
IPO or something like that.
You know, those are all the

400
00:20:01,000 --> 00:20:03,560
different things private equity
could explore at the right point

401
00:20:03,560 --> 00:20:06,280
in time.
But I'm not saying Cyprian would

402
00:20:06,320 --> 00:20:08,520
be a dud Vap.
And I'm just more yeah, like

403
00:20:08,520 --> 00:20:10,440
point pointing to the the
challenges that can come with

404
00:20:10,440 --> 00:20:13,680
finding the right size copper
opportunity like you can we can

405
00:20:13,680 --> 00:20:15,880
think of a, you know, a bunch of
times private proper equity have

406
00:20:15,880 --> 00:20:17,480
done some dumb, dumb stuff in
copper and.

407
00:20:18,400 --> 00:20:21,640
On the end, it's probably a very
highly competitive because

408
00:20:21,680 --> 00:20:24,000
everyone's looking for not big
copper.

409
00:20:24,240 --> 00:20:27,520
Yeah, very, very competitive in
the industry, totally.

410
00:20:27,720 --> 00:20:30,000
So what?
What do you make of the the

411
00:20:30,000 --> 00:20:34,000
disclosure that Appian has bid?
I've got a theory about this and

412
00:20:34,000 --> 00:20:37,880
this is to to your, your point
as well, Maddie, earlier you

413
00:20:37,960 --> 00:20:40,200
don't, you don't always see
companies disclose when they've

414
00:20:40,200 --> 00:20:44,600
been, you know, when they've
received an NBIO for whatever

415
00:20:44,600 --> 00:20:46,080
reason.
There's, you know, some grey

416
00:20:46,080 --> 00:20:49,080
area around this and sometimes
boards just get comfortable not

417
00:20:49,080 --> 00:20:52,240
actually kind of disclosing when
they have been approached.

418
00:20:52,880 --> 00:20:55,120
But you know, in this, in this
case they have they have

419
00:20:55,120 --> 00:20:57,000
disclosed it.
The very interesting thing

420
00:20:57,000 --> 00:20:59,680
though, if you if you read
Sipum's announcement that was

421
00:21:00,200 --> 00:21:03,000
uploaded today, you'll see in
the top paragraph there the bid

422
00:21:03,000 --> 00:21:06,200
from Appian came in on the 26th
of November.

423
00:21:06,520 --> 00:21:09,880
That was nine days ago and it
was even one day before Sipum

424
00:21:09,880 --> 00:21:12,160
themselves relieved their own
PFS.

425
00:21:12,640 --> 00:21:17,320
So the board has taken its time
to consider the Appian proposal.

426
00:21:17,320 --> 00:21:19,960
9 days is a pretty lengthy
period of time to consider a

427
00:21:19,960 --> 00:21:22,720
proposal.
In my experience, they've, I've

428
00:21:22,720 --> 00:21:25,080
done that or they've, they have
a pretty good reason to want to

429
00:21:25,080 --> 00:21:27,960
disclose it now.
And that brings me to the

430
00:21:28,320 --> 00:21:30,880
Supreme's term sheet with
Glencore on the debt facility.

431
00:21:31,280 --> 00:21:36,200
JD, very interestingly, one of
the terms from Glencore when

432
00:21:36,200 --> 00:21:39,400
they provided this, you know,
this, this, this loan facility

433
00:21:40,720 --> 00:21:44,360
was that Cyprium would raise an
additional $20 million before

434
00:21:44,360 --> 00:21:48,960
the 31st of December 2024.
You can see that last point

435
00:21:48,960 --> 00:21:50,720
there.
It could have been via new

436
00:21:50,720 --> 00:21:53,680
equity, it could have been via
optional warrant exercise

437
00:21:53,680 --> 00:21:57,040
royalty on asset sales.
Those are all the kind of ways,

438
00:21:57,040 --> 00:21:59,520
but they needed to bring in an
extra $20 million in the door

439
00:22:00,000 --> 00:22:03,560
and Cyprium agreed to those
terms back in August.

440
00:22:04,720 --> 00:22:07,160
They've drawn down the debt.
So they need to, they need to

441
00:22:07,160 --> 00:22:11,400
deliver on, on, on this term.
And, and Ciprian hasn't raised

442
00:22:11,680 --> 00:22:15,000
any capital since then, but they
have, however, sold some

443
00:22:15,000 --> 00:22:19,760
generators on site, which was an
agreement to sell them for $9.3

444
00:22:19,760 --> 00:22:23,360
million, which on my math means
they still need to raise at

445
00:22:23,360 --> 00:22:25,960
least, you know, $11 million
before the end of this year.

446
00:22:26,920 --> 00:22:29,960
And fund manager, fund managers,
they're all going on holidays

447
00:22:29,960 --> 00:22:31,520
soon.
So it becomes pretty tricky to,

448
00:22:31,520 --> 00:22:35,880
you know, raise equity in a week
or Two's time because the, the

449
00:22:35,880 --> 00:22:39,120
fundies just aren't there to,
to, to ask the money for.

450
00:22:39,120 --> 00:22:43,920
So, so there's, there's either
there's a raise coming or they,

451
00:22:43,920 --> 00:22:47,200
they need to amend the terms
with Glencore because it's just,

452
00:22:47,280 --> 00:22:48,880
you know, you've got to, you've
got to, you've got to meet your

453
00:22:48,880 --> 00:22:52,000
commitment.
And what better backdrop to

454
00:22:52,000 --> 00:22:55,240
raise some money in than the
revelation that private equity

455
00:22:55,240 --> 00:22:57,960
group sees value at 3.5 cents,
which is well north of the

456
00:22:57,960 --> 00:23:00,120
current ship, what the share
price was and share price goes

457
00:23:00,120 --> 00:23:01,720
up.
So, you know, that's, that's my

458
00:23:01,920 --> 00:23:04,080
prediction is a cap.
Praise is around the corner.

459
00:23:04,360 --> 00:23:08,520
So when they if if they did
accept the offer from Appian,

460
00:23:09,640 --> 00:23:13,320
Happy would then assume the
Glencore and the Metals X

461
00:23:14,040 --> 00:23:16,000
convertibles.
Exactly.

462
00:23:16,520 --> 00:23:18,320
Exactly.
Yeah, yeah.

463
00:23:18,400 --> 00:23:23,040
Not that that, but that
condition would be sort of

464
00:23:23,040 --> 00:23:25,480
voided.
Wouldn't be voided APN 20

465
00:23:25,480 --> 00:23:29,200
million APN and APN and Cyprian
would probably separately

466
00:23:29,200 --> 00:23:31,640
negotiate an interim funding
solution.

467
00:23:31,840 --> 00:23:35,040
Yeah for for them to meet it.
And Glencor might, you know,

468
00:23:35,040 --> 00:23:37,960
wave wave it knowing that
there's going to be a better

469
00:23:37,960 --> 00:23:41,600
capitalised entity that is
taking taking over the the

470
00:23:41,600 --> 00:23:42,520
properties.
Yeah.

471
00:23:42,640 --> 00:23:44,280
Yeah.
Nice work.

472
00:23:44,360 --> 00:23:47,240
I think that's, you know, the
writing is kind of on the wall

473
00:23:47,240 --> 00:23:49,520
one way or another there.
So it's all all kind of.

474
00:23:51,160 --> 00:23:53,960
Yeah, I I would have thought the
share price would be closer to

475
00:23:53,960 --> 00:23:56,720
that 3 1/2 cents today if the
market wasn't, you know,

476
00:23:56,760 --> 00:24:00,000
sensible enough to realise that
they can raise and yeah, but has

477
00:24:00,000 --> 00:24:02,240
gone up.
But yeah, I think they still can

478
00:24:02,280 --> 00:24:05,800
raise or they sell more of the
properties and stuff.

479
00:24:05,800 --> 00:24:07,600
They've got to make that
commitment and then raise next

480
00:24:07,600 --> 00:24:08,040
year.
But.

481
00:24:08,360 --> 00:24:09,600
Yeah, yeah.
And are they?

482
00:24:09,640 --> 00:24:12,800
I haven't, I haven't looked into
the study too much, I won't lie.

483
00:24:12,800 --> 00:24:15,840
But I think when you talk about
the NAB for that project, well,

484
00:24:15,840 --> 00:24:19,920
there'd be some, some risk
adjusted NAB supplied to it just

485
00:24:19,920 --> 00:24:23,000
because of the complexities of
going in and around all the, the

486
00:24:23,000 --> 00:24:25,320
old workings and the old
subsidence areas.

487
00:24:25,320 --> 00:24:28,120
Like I think that MPV would
like, yeah, if it goes right.

488
00:24:28,120 --> 00:24:32,440
But I think there's a lot to go
into that project to effectively

489
00:24:32,440 --> 00:24:34,720
go around all that it'd be.
I think it's going to be a

490
00:24:34,720 --> 00:24:38,840
pretty challenging one just just
because of the, pardon the pun,

491
00:24:38,840 --> 00:24:41,000
chequered history.
Total is mine didn't check a

492
00:24:41,000 --> 00:24:43,080
board pattern.
Totally, totally.

493
00:24:43,160 --> 00:24:46,640
That's you're 100% right.
And that's, it's one of those

494
00:24:46,640 --> 00:24:49,800
ones that looks on paper sort of
well, this is this is.

495
00:24:50,640 --> 00:24:53,440
All doable.
Yeah, big, big pit, long life,

496
00:24:53,440 --> 00:24:57,680
you know, decent enough grade
existing infrastructure like

497
00:24:57,680 --> 00:25:00,560
happy, happy, happy days.
But, you know, people, people

498
00:25:00,960 --> 00:25:04,040
have a short memory, but they do
remember Nifty's troubled times

499
00:25:04,040 --> 00:25:06,200
as well and would be risking
those cash flows appropriately

500
00:25:06,200 --> 00:25:08,520
when they're making these.
But it's a call option too in a

501
00:25:08,520 --> 00:25:11,400
lot of ways, like at some some
copper price you're like, you

502
00:25:11,400 --> 00:25:13,480
know, So yeah.
And it's not.

503
00:25:13,600 --> 00:25:15,920
It's all.
It's not a showstopper or doable

504
00:25:15,920 --> 00:25:18,880
like mining pits around old
voids.

505
00:25:19,560 --> 00:25:21,280
Super pit's been doing it for
years.

506
00:25:21,680 --> 00:25:25,000
Like the controls of the Super
pit around all the old Golden

507
00:25:25,000 --> 00:25:27,280
Mile and certain areas you can't
drive over.

508
00:25:27,280 --> 00:25:29,880
And then they have to eventually
excavate into them.

509
00:25:29,880 --> 00:25:32,600
And it's like, it's yeah,
they've been doing it forever.

510
00:25:33,560 --> 00:25:37,120
That is the Super Pit.
There there was there was one

511
00:25:37,120 --> 00:25:39,360
last thing which popped up and I
was going through the detail of

512
00:25:39,360 --> 00:25:42,320
Superim's PFS, which did drop
last week.

513
00:25:42,320 --> 00:25:45,680
And you know, I read these PFSS,
Maddie, I've got an important

514
00:25:46,080 --> 00:25:50,000
details and these things first,
not the IRR, not the NPV, not

515
00:25:50,000 --> 00:25:51,800
the mining costs.
Not that important really.

516
00:25:52,480 --> 00:25:57,360
The camp they need to refurb and
upgrade the camp from an 80 men

517
00:25:57,360 --> 00:25:59,360
to 400 men.
I'll read this bit out.

518
00:25:59,800 --> 00:26:03,320
Third party provided a quote for
the upgrade and refurbishment of

519
00:26:03,320 --> 00:26:07,160
the camp in mid 2021 to upgrade
the camp to accommodate 399

520
00:26:07,160 --> 00:26:08,720
personnel.
It should be able to operate

521
00:26:08,720 --> 00:26:12,040
without the hotelling of rooms,
which is a significant point in

522
00:26:12,040 --> 00:26:13,800
the attraction and retention of
personnel.

523
00:26:15,120 --> 00:26:15,920
Well, you know what I'm
thinking.

524
00:26:17,640 --> 00:26:20,600
I like the fact Supreme wants a
camp proposition that he's

525
00:26:20,600 --> 00:26:21,680
attractive to staff.
Tick.

526
00:26:22,160 --> 00:26:25,880
But relying on a 2021 quote?
That's like using an iPhone 6S

527
00:26:25,880 --> 00:26:28,120
in 2024.
You can't.

528
00:26:28,520 --> 00:26:30,720
Camps have come a long way, just
ask.

529
00:26:30,720 --> 00:26:33,760
Grounded.
Oh mate, put put mate.

530
00:26:33,760 --> 00:26:37,880
That 399 or 400?
Because I'll be out there if

531
00:26:38,080 --> 00:26:40,200
bloody Pool Natalie builds this
bastard.

532
00:26:40,840 --> 00:26:42,840
Yeah, be a room.
Is it bread and butter?

533
00:26:42,840 --> 00:26:44,200
Mate?
They've done it for Fortescue at

534
00:26:44,200 --> 00:26:46,960
Alawana.
Started with a 200 man camp out

535
00:26:46,960 --> 00:26:48,480
there.
They're now doing the larger 800

536
00:26:48,480 --> 00:26:50,080
man camp, Tronox Academy
Village.

537
00:26:50,240 --> 00:26:52,880
This one is lush so the FIFO
crew are happy.

538
00:26:53,000 --> 00:26:55,760
Spacious design, swimming pool,
tennis court, gym and BBQ.

539
00:26:55,920 --> 00:26:57,800
Aluca went for the point of
difference mate, they're

540
00:26:57,800 --> 00:26:59,520
grounded.
Village has a basketball court

541
00:26:59,520 --> 00:27:01,000
too.
So my message is clear to

542
00:27:01,000 --> 00:27:03,080
Cyprium and all other mining
companies.

543
00:27:03,080 --> 00:27:05,440
If you want staff that wants to
stay working for you, get

544
00:27:05,440 --> 00:27:08,520
grounded to build the the
facilities they want to stay at.

545
00:27:09,600 --> 00:27:11,160
Go grounded.
Go grounded.

546
00:27:11,160 --> 00:27:12,280
Go.
Paul Natali.

547
00:27:12,280 --> 00:27:13,760
That's it.
Oh, I love them.

548
00:27:14,440 --> 00:27:16,280
Good work, boys.
Good work, Trav.

549
00:27:16,840 --> 00:27:20,160
Talk about a bit of uranium now.
Yeah, the old next Gen sales

550
00:27:20,160 --> 00:27:23,400
contract that come out first one
they've signed up their first

551
00:27:23,400 --> 00:27:28,240
bit of uranium contract you'd
say so not a considering the you

552
00:27:29,040 --> 00:27:32,240
Rook one's going to produce
hopefully £30 million a year.

553
00:27:32,240 --> 00:27:35,120
They've they've signed a
contract for £1,000,000 a year

554
00:27:35,120 --> 00:27:40,040
for the first five years.
So yeah, not a, not a £1,000,000

555
00:27:40,040 --> 00:27:42,040
is usually pretty big, not when
you're next Gen.

556
00:27:42,040 --> 00:27:45,560
But so the, I'll bring up the
table here.

557
00:27:45,560 --> 00:27:49,040
It's interesting.
They've, this is normally a very

558
00:27:49,040 --> 00:27:52,040
opaque part of the market, but
they've actually sort of,

559
00:27:52,280 --> 00:27:55,720
they've disclosed what the, how
the contracting pricing

560
00:27:55,720 --> 00:27:59,600
mechanism works normally if
chemical, chemical signing

561
00:27:59,600 --> 00:28:03,480
contracts flat out, but you
never know really what the

562
00:28:03,480 --> 00:28:06,920
detailed mechanism is.
So this is the, the market

563
00:28:06,920 --> 00:28:10,160
reference prices from 2029 to
2033.

564
00:28:10,160 --> 00:28:14,400
So they exclude escalation, it
says there, which means those

565
00:28:14,400 --> 00:28:18,040
prices can and likely will be
adjusted in the future due to,

566
00:28:18,160 --> 00:28:20,560
you know, inflation or
production costs.

567
00:28:20,640 --> 00:28:23,880
But these are the base case and
escalated prices.

568
00:28:23,880 --> 00:28:29,040
So it's saying when spot price
is 80 bucks, next Gen get paid

569
00:28:29,040 --> 00:28:34,320
79 bucks # when the spot price
goes to 100, they get paid $99 a

570
00:28:34,320 --> 00:28:35,600
pound.
So pretty in line.

571
00:28:35,800 --> 00:28:40,920
But then if the spot price rises
to 175, next Gen get paid 150.

572
00:28:40,920 --> 00:28:45,520
So I assume there's a bit of a,
yeah, we'll just say a bit of an

573
00:28:45,520 --> 00:28:50,160
exponential sort of lift from
that 100 to 150 as the price

574
00:28:50,160 --> 00:28:53,720
goes up in between.
So you can, it didn't say this

575
00:28:53,720 --> 00:28:58,400
explicitly, but I think it's
safe to assume the floor is $79.

576
00:28:58,680 --> 00:29:01,600
So if the spot price falls to
$60.00, they'll still be able to

577
00:29:01,600 --> 00:29:05,360
sell it for 79.
That was the bit that I

578
00:29:05,880 --> 00:29:09,320
struggled to interpret from it
because in the past Next Gen

579
00:29:09,320 --> 00:29:11,720
have stated that their
contracting strategy is 100%

580
00:29:11,720 --> 00:29:15,320
spot link.
So if you don't have a ceiling

581
00:29:15,600 --> 00:29:18,160
then I wouldn't assume you could
have a floor.

582
00:29:18,360 --> 00:29:22,840
But why?
Why would they have 175 to 150

583
00:29:23,000 --> 00:29:25,960
if they don't get a guarantee on
the bottom side?

584
00:29:26,200 --> 00:29:30,520
That's, this is I'd love, you
know, I'd love to see a lower

585
00:29:30,520 --> 00:29:33,480
sensitivity here because they
didn't provide what if uranium

586
00:29:33,480 --> 00:29:38,160
price was 70 or $60.00.
So I think they've got to

587
00:29:38,160 --> 00:29:40,280
clarify this.
But I, I interpreted that this

588
00:29:40,280 --> 00:29:44,400
is like, you know, an assurance
of volumes instead of selling

589
00:29:44,400 --> 00:29:46,240
everything into the spot market
and thanking the price.

590
00:29:46,240 --> 00:29:50,640
Yeah.
I didn't assume a set floor, but

591
00:29:50,760 --> 00:29:55,320
you know, the spot drags lower,
they don't go quite as low and

592
00:29:55,560 --> 00:29:59,000
the same like you see on the on
the upside spot price goes quite

593
00:29:59,000 --> 00:30:00,520
high.
They don't go quite as high.

594
00:30:00,960 --> 00:30:03,320
I didn't interpret it as a
strict floor, but they do leave,

595
00:30:03,360 --> 00:30:05,880
you know, a lot for the reader
to kind of interpret.

596
00:30:05,880 --> 00:30:08,640
Themselves, old Quakes, Quakes
is 1.

597
00:30:08,640 --> 00:30:12,640
He put up said floor 79, floor
150 ceiling.

598
00:30:12,720 --> 00:30:16,120
Based on how they've been, how
he's interpreted, assuming

599
00:30:16,120 --> 00:30:20,680
Quakes is a block, yeah, could
not be, but I couldn't say why

600
00:30:20,680 --> 00:30:24,160
they'd if it's going to track
down why you're giving them the

601
00:30:24,160 --> 00:30:27,600
upside on the other end.
So yeah, sure, it'll be

602
00:30:27,600 --> 00:30:29,280
clarified in a call, as you
said.

603
00:30:29,560 --> 00:30:31,240
Yeah, somebody will ask, I would
imagine.

604
00:30:31,240 --> 00:30:34,080
Yeah, wouldn't, wouldn't you
include the word floor Like

605
00:30:35,080 --> 00:30:37,640
yeah.
I also think the utilities maybe

606
00:30:37,760 --> 00:30:39,640
play a role.
Maybe there's some sort of, you

607
00:30:39,640 --> 00:30:42,120
know, like confidentiality.
Yeah, yeah.

608
00:30:42,680 --> 00:30:43,680
Who knows?
Yeah.

609
00:30:43,920 --> 00:30:48,120
So yeah, Toby on that one.
What about the 2029 also sort of

610
00:30:48,360 --> 00:30:50,640
detail in itself?
Yeah, yeah.

611
00:30:50,640 --> 00:30:53,600
But although and the question
that gets asked, what if they,

612
00:30:53,840 --> 00:30:55,920
what if they can't produce by
2029?

613
00:30:55,920 --> 00:31:00,360
What happened?
But you'd I am I'd put my bottom

614
00:31:00,360 --> 00:31:02,480
dollar on it.
There is clauses in that

615
00:31:02,480 --> 00:31:08,240
contract based on delivery if
the mine is not in production to

616
00:31:08,240 --> 00:31:13,360
project to protect next Gen.
So that wouldn't be firm.

617
00:31:13,360 --> 00:31:16,600
You have to be.
If you don't produce by 2029 you

618
00:31:16,600 --> 00:31:19,480
have to fill that.
There is usually clauses in the

619
00:31:19,480 --> 00:31:24,320
contracts that protect them and
God, you'd be mad not to go into

620
00:31:24,320 --> 00:31:26,800
that.
So I'd say they're because they

621
00:31:26,800 --> 00:31:30,600
do have £2.7 million in
inventory.

622
00:31:30,960 --> 00:31:34,080
So that was the, that was what
they purchased for.

623
00:31:34,440 --> 00:31:36,520
It was, I forgot the price was
actually this big.

624
00:31:36,520 --> 00:31:40,520
So US 270 million.
They purchased that for in May

625
00:31:40,520 --> 00:31:42,920
this year.
So that was 92 bucks a pound and

626
00:31:42,920 --> 00:31:45,280
it's at 7750 at the moment.
So they're probably kicking

627
00:31:45,280 --> 00:31:47,120
themselves.
They didn't, they purchased it

628
00:31:47,120 --> 00:31:48,840
then because that was why that
was.

629
00:31:48,840 --> 00:31:55,040
Remember they raised equity, the
Australian rise, which was I

630
00:31:55,040 --> 00:32:00,160
think it was at so 250 million
at Aussie, 13 bucks, 13 O3 on

631
00:32:00,160 --> 00:32:03,960
the CDI.
And then they I think it was

632
00:32:04,040 --> 00:32:09,800
seven days later they took a 270
mil US convertible out and

633
00:32:09,800 --> 00:32:12,400
bought to buy the £2.7 million.
So.

634
00:32:12,680 --> 00:32:15,880
And then from that like God,
they went from 13 bucks down to

635
00:32:15,880 --> 00:32:19,120
8 bucks on the CDI.
But they're now back up to

636
00:32:19,160 --> 00:32:21,440
pretty much the rise price
because they've had a good run

637
00:32:21,440 --> 00:32:22,920
so.
Yeah.

638
00:32:23,120 --> 00:32:26,680
I think some of their rationale
for the for the convert to was

639
00:32:26,680 --> 00:32:30,680
that buying the volumes would
help them negotiate their sales

640
00:32:30,680 --> 00:32:32,040
contract.
Yeah, yeah.

641
00:32:32,040 --> 00:32:36,600
And look and hopefully I think
their conversion price was

642
00:32:36,600 --> 00:32:40,880
because it was a 30% premium to
the five day when they rise.

643
00:32:41,120 --> 00:32:44,440
So that was Canadian.
I think this is on the TSX price

644
00:32:44,440 --> 00:32:48,400
Canadian 1470 and they're back
up to about 1168.

645
00:32:48,400 --> 00:32:52,160
So hopefully if everything goes
well, it will convert into

646
00:32:52,160 --> 00:32:57,280
shares at a later point and get
that wiped off the debt wiped

647
00:32:57,280 --> 00:33:03,720
off even though it is dilutive.
So yeah, we'll, it's she's on a

648
00:33:03,720 --> 00:33:07,760
bit of a tear because they've
got, they've got half a billion

649
00:33:07,760 --> 00:33:12,920
cash Canadian, they've got total
convertibles is 429,000,000

650
00:33:12,920 --> 00:33:16,880
Canadians.
So about 64% of that is from the

651
00:33:16,880 --> 00:33:19,280
one issued to purchase the
uranium?

652
00:33:19,600 --> 00:33:22,480
And then cap on that one memory,
that was the head.

653
00:33:22,480 --> 00:33:25,080
The Italian hedge fund and Sol
Pets have another one they did

654
00:33:25,080 --> 00:33:26,040
before that.
Yeah.

655
00:33:26,040 --> 00:33:29,120
And there's a couple with ISO
energy I think as well, like

656
00:33:29,560 --> 00:33:33,480
some existing ones, they're not
as big, but yeah, so most of it

657
00:33:33,480 --> 00:33:35,360
is to do with the uranium
inventory.

658
00:33:35,640 --> 00:33:40,000
And then so that £2.7 million
that's worth Canadian 300 at

659
00:33:40,000 --> 00:33:43,000
today's spot price, which is,
you know, a bit bit lower than

660
00:33:43,000 --> 00:33:46,920
what it was at.
So because updated CapEx in

661
00:33:46,960 --> 00:33:49,760
August this year, they got a
Canadian 2.2 billion.

662
00:33:49,880 --> 00:33:52,600
I guess the question is always
from now where's it going to

663
00:33:52,600 --> 00:33:56,000
come from?
It's quite interesting the

664
00:33:56,000 --> 00:34:00,800
timing of of this with have a
look at poor Alderana.

665
00:34:00,800 --> 00:34:03,040
So they'll be more keen, keen
than ever.

666
00:34:03,040 --> 00:34:06,040
So because the article came out
yesterday saying that Nausea

667
00:34:06,240 --> 00:34:10,520
have effectively taken over
control of Samir, they're mining

668
00:34:10,520 --> 00:34:14,280
in nausea pretty much said that
every decision at the board

669
00:34:14,880 --> 00:34:17,080
wasn't being taken into account
anymore.

670
00:34:17,280 --> 00:34:21,440
So they've taken control.
I think they've still operating

671
00:34:21,440 --> 00:34:24,679
one more on there.
So you assume that that's a

672
00:34:24,679 --> 00:34:27,679
mayor, but it's probably going
to be that uranium is going to

673
00:34:27,679 --> 00:34:30,520
be probably heading to Russia in
the future.

674
00:34:30,800 --> 00:34:33,080
The way why that's landscapes
gone.

675
00:34:33,080 --> 00:34:35,760
So because historically that
mine could produce around £7

676
00:34:35,760 --> 00:34:38,960
million a year, I think peak
back in 2012.

677
00:34:39,800 --> 00:34:42,480
So yeah, that's a bit of # a lot
of pounds, some pounds getting

678
00:34:42,480 --> 00:34:46,719
taken away from Murano.
So it's the logical chemical

679
00:34:46,719 --> 00:34:50,480
Urano play for next Gen.
And some could be, I know people

680
00:34:50,480 --> 00:34:53,120
have said maybe just chemical
like chemical and Urano.

681
00:34:53,120 --> 00:34:56,440
I've always got the relationship
with the existing Adabasco Basin

682
00:34:56,440 --> 00:34:59,320
operations.
So maybe like whether it's AJV

683
00:34:59,440 --> 00:35:03,640
on the cards and whether it's
going to be a full takeover or

684
00:35:04,640 --> 00:35:09,520
don't know, would Next Gen maybe
sell a stake, which is more than

685
00:35:09,520 --> 00:35:12,480
a minority stake for a free
carried interest and retain

686
00:35:12,480 --> 00:35:18,840
minority ownership of Rook 1
instead of being given away too?

687
00:35:18,840 --> 00:35:21,120
Because I think as you were
saying to me, Jade, it'd be

688
00:35:21,120 --> 00:35:25,200
tough for them to give away 20%,
sell a 20% stake.

689
00:35:25,200 --> 00:35:28,280
And then because ideally it'd be
getting a free carried interest

690
00:35:28,280 --> 00:35:31,200
to be nice for the CapEx.
Be great, but.

691
00:35:31,200 --> 00:35:33,680
How much would they have to sell
a royalty project?

692
00:35:33,680 --> 00:35:36,200
Imagine A.
Yeah, kind of a royalty to

693
00:35:36,200 --> 00:35:37,120
existing shareholders.
Oh.

694
00:35:37,520 --> 00:35:41,080
And fucking wouldn't be a bad
role to either have like you you

695
00:35:41,080 --> 00:35:43,960
think 'cause they're.
It's our NPCA, the new

696
00:35:43,960 --> 00:35:45,680
discovery.
What's the odds?

697
00:35:45,680 --> 00:35:47,640
Yeah, that, yeah, I haven't
looked into that much, it looks.

698
00:35:47,640 --> 00:35:48,760
Pretty.
It looks really good.

699
00:35:48,920 --> 00:35:51,440
Yeah.
It looks very good, yeah.

700
00:35:51,560 --> 00:35:53,080
Yeah.
And they got there.

701
00:35:53,640 --> 00:35:56,280
These are study numbers, but
they're updated study numbers.

702
00:35:56,280 --> 00:36:01,920
Operating cost US $10 a pound.
So look, even if it is double

703
00:36:01,920 --> 00:36:04,480
that for the OP, that's just the
unit operating cost.

704
00:36:04,800 --> 00:36:10,680
Like if they managed to make $50
margin per pound on £30 million,

705
00:36:10,680 --> 00:36:14,480
that's friggin 1 1/2 billion in
the door a year.

706
00:36:14,480 --> 00:36:18,640
So it's all dependent on and
they've obviously got a pretty

707
00:36:18,640 --> 00:36:22,520
high floor, a pretty, sorry, a
pretty high ceiling to some

708
00:36:22,520 --> 00:36:26,040
degree on that uranium price.
So bloody Sky's the limit if it

709
00:36:26,040 --> 00:36:28,240
does go up.
But yeah, it's huge, huge

710
00:36:28,240 --> 00:36:30,560
amounts of it's just, as you
said it.

711
00:36:30,920 --> 00:36:34,000
As you say, it is the project
that matters in the world.

712
00:36:34,400 --> 00:36:38,200
What it is just miles above.
Nothing can even compete with

713
00:36:38,200 --> 00:36:39,000
it.
Yeah.

714
00:36:39,040 --> 00:36:41,000
So it's.
Yeah.

715
00:36:41,000 --> 00:36:43,480
Now it'd be good.
It'd be interesting to see when

716
00:36:43,480 --> 00:36:48,080
there's some corporate action
here or like if they're they got

717
00:36:48,080 --> 00:36:50,160
when when you're that project,
you got that many friggin

718
00:36:50,160 --> 00:36:52,200
options.
God, you can full sell uranium.

719
00:36:52,200 --> 00:36:55,600
Like bloody God, they could do a
big motherfucking capital rise,

720
00:36:55,600 --> 00:36:57,920
no doubt.
But I'd assume with all the

721
00:36:57,920 --> 00:36:59,920
corporate interests and people
wanting to get their hands on

722
00:36:59,920 --> 00:37:04,400
it, you'd be looking what would
you do it?

723
00:37:04,480 --> 00:37:06,560
You'd sell a stake of some sort,
wouldn't you?

724
00:37:06,560 --> 00:37:08,640
Because God, you could sell it
for a good chunk it.

725
00:37:08,640 --> 00:37:12,760
Does remind me a little bit of
like the story of the sale of

726
00:37:12,760 --> 00:37:16,000
voices by in a lot of way, just
the context with the incumbent

727
00:37:16,000 --> 00:37:19,040
players.
Like, you know, Friedland knew

728
00:37:19,040 --> 00:37:22,320
that that Inco had to buy it,
right?

729
00:37:22,320 --> 00:37:24,080
Like he and he played the hand
really well.

730
00:37:24,080 --> 00:37:27,760
I think you like you've got
these incumbents which are face,

731
00:37:27,880 --> 00:37:31,560
you know, chemicals not getting
the full benefit of the uranium

732
00:37:31,560 --> 00:37:34,960
price as it goes north and sick
of backing out questions about

733
00:37:34,960 --> 00:37:37,920
that.
Orano is being, you know, hit on

734
00:37:37,920 --> 00:37:40,560
the head by all of this stuff in
Niger.

735
00:37:41,320 --> 00:37:45,120
Yeah, it's a, it's a great, it's
a great existing incumbent field

736
00:37:45,120 --> 00:37:48,000
to sell an asset in.
You could extract maximum value

737
00:37:48,000 --> 00:37:50,520
doing that, I think.
What would I do?

738
00:37:51,360 --> 00:37:53,600
And you wouldn't, you wouldn't
actually think it's like if they

739
00:37:53,600 --> 00:37:58,080
bought it now.
It's like a pro cyclical buy

740
00:37:58,080 --> 00:38:02,760
because like the the theme is
there but the underlying price

741
00:38:02,760 --> 00:38:04,800
isn't there yet.
Yeah, I'd.

742
00:38:05,680 --> 00:38:11,240
Probably argue against that just
on the grounds that that's what

743
00:38:11,240 --> 00:38:12,800
everyone says when it's pro
cyclical.

744
00:38:12,800 --> 00:38:13,680
Totally.
Yeah.

745
00:38:13,680 --> 00:38:15,840
Do you know what I mean?
Like the the price is run, it's

746
00:38:15,960 --> 00:38:19,160
multiples of what it was a few
years ago, but the outlook looks

747
00:38:19,160 --> 00:38:21,680
just so good.
Yeah, yeah, that's that's the

748
00:38:21,680 --> 00:38:23,800
context of every pro cyclical
deal ever.

749
00:38:23,880 --> 00:38:25,920
Yeah.
So would you compare it to when,

750
00:38:26,240 --> 00:38:29,960
and I suppose when, Albemarle
were bidding big for Lime Town

751
00:38:30,120 --> 00:38:32,320
the lithium price had already
come off shit loads?

752
00:38:33,200 --> 00:38:36,000
The first bids, I think it
happened, yeah.

753
00:38:36,000 --> 00:38:38,880
It wasn't 7000 bucks a tonne
spot, I think it had already

754
00:38:38,880 --> 00:38:42,920
come back about bloody fucking.
But that's the earlier bids that

755
00:38:42,920 --> 00:38:46,680
they the earlier bids that they
did, you know, they would have

756
00:38:46,680 --> 00:38:53,360
been early 23 spot was still you
know, it was 10X what it was a

757
00:38:53,360 --> 00:38:56,080
few years back.
Yeah, yeah, if you if you just

758
00:38:56,080 --> 00:38:58,680
take a step back so.
Yeah, yeah, yeah.

759
00:38:59,200 --> 00:39:03,480
But it wasn't at the yeah, I
suppose this hasn't this had the

760
00:39:03,480 --> 00:39:06,520
run to what whatever it was last
year 100 bucks or something.

761
00:39:06,520 --> 00:39:09,200
So it's come back to what, 7750
for the spot?

762
00:39:09,400 --> 00:39:13,640
Yeah, some sort of.
Parallels anyway, it's you know,

763
00:39:13,640 --> 00:39:17,680
we talked about how to grey was
the most expensive undeveloped

764
00:39:17,680 --> 00:39:21,960
gold project ever ever sold the
other day 5 billion Australian

765
00:39:21,960 --> 00:39:24,000
like the market cap of next
gen's to us that in order to buy

766
00:39:24,000 --> 00:39:26,160
it out right, you're going to
have to put a juicy premium on

767
00:39:26,560 --> 00:39:29,240
on top of that again.
So it's it'll beef off probably

768
00:39:29,280 --> 00:39:31,360
probably break records for the
most expensive undeveloped

769
00:39:31,360 --> 00:39:33,520
project ever sold.
If you were to sell that that's

770
00:39:34,040 --> 00:39:35,760
probably a practical thing to
do.

771
00:39:35,760 --> 00:39:38,720
It doesn't mean that it's not
upside to doing it whoever does

772
00:39:38,720 --> 00:39:42,000
it in the long run.
It's just that again, everyone's

773
00:39:42,000 --> 00:39:47,280
biking in a lot more rosy long
term market outlook on the on

774
00:39:47,280 --> 00:39:50,000
the commodity price and there is
today and maybe that's for good

775
00:39:50,000 --> 00:39:52,880
reason.
You know, maybe there's some

776
00:39:52,880 --> 00:39:54,920
caution to it, but you don't
quite know that at the time.

777
00:39:55,160 --> 00:39:58,080
And that and the fact that that
£30 million thing, I know

778
00:39:58,080 --> 00:40:02,800
there's upside lot that £30
million is for seven years like

779
00:40:02,800 --> 00:40:05,720
it's a.
There's the honey, the honey pot

780
00:40:05,720 --> 00:40:09,200
there and it's obviously not
going to depended on the

781
00:40:09,200 --> 00:40:11,280
resource and everything.
I don't think it's once that

782
00:40:11,280 --> 00:40:15,520
high grade chunk is taken out.
So it's a, there's lots of other

783
00:40:15,520 --> 00:40:19,440
shit around, but it won't.
It's that yeah, there's a,

784
00:40:19,440 --> 00:40:22,560
there's a finite life on that
big high grade section that they

785
00:40:22,560 --> 00:40:24,680
have already.
Uranium is a bit of a unique

786
00:40:24,680 --> 00:40:28,040
market as well, like a buyer
could go a bit further in

787
00:40:28,040 --> 00:40:30,560
uranium than they could in other
commodities to de risk a

788
00:40:30,560 --> 00:40:33,520
transaction by locking in
contracts just like this.

789
00:40:33,520 --> 00:40:35,280
And you could lock them in
within a tighter range.

790
00:40:35,560 --> 00:40:37,800
Obviously you've got to deliver
and you've got to deliver it a

791
00:40:37,800 --> 00:40:40,400
mighty cheap cash cost and all
in cost.

792
00:40:40,680 --> 00:40:45,080
But you could, you know, you
could eat into that price that

793
00:40:45,080 --> 00:40:48,720
you're paying quite a bit
through, you know, locking in

794
00:40:48,720 --> 00:40:51,200
the the revenue and just
delivering on on the on the

795
00:40:51,200 --> 00:40:53,680
costs.
And then you get a bit of

796
00:40:53,800 --> 00:40:58,840
optionality and you know, the
uranium prices run and you can,

797
00:40:59,960 --> 00:41:00,960
you know, see the upside of
that.

798
00:41:01,440 --> 00:41:06,240
So it's harder to do in other
commodities for 2029 like when,

799
00:41:06,240 --> 00:41:08,640
when was the last time we talked
about a copper producer locking

800
00:41:08,640 --> 00:41:12,320
in sales for 29 to 33 doesn't
happen?

801
00:41:12,480 --> 00:41:15,440
Yeah, because uranium pairs with
the infrastructure asset where

802
00:41:15,440 --> 00:41:16,640
you need the certainty.
Yeah.

803
00:41:16,760 --> 00:41:18,560
Exactly.
Yeah, yeah.

804
00:41:18,560 --> 00:41:23,120
And is it because it's they know
exactly where this uranium is,

805
00:41:23,440 --> 00:41:27,080
Uranium the contracting
different in terms of like, OK,

806
00:41:27,080 --> 00:41:30,240
your uranium is going to this
place, Yeah, it's this power

807
00:41:30,240 --> 00:41:31,120
plant.
Exactly.

808
00:41:31,560 --> 00:41:35,080
And the financing dynamics of
the infrastructure asset, like

809
00:41:35,080 --> 00:41:39,520
the the power plants that that
you know, you, you need to model

810
00:41:39,520 --> 00:41:43,160
that your cash flows for like 30
years and it's in a much lower

811
00:41:43,160 --> 00:41:45,480
cost of capital that goes into
financing those things and all

812
00:41:45,480 --> 00:41:46,480
that sort of stuff.
So you.

813
00:41:47,360 --> 00:41:49,160
Yeah.
If you're a battery maker,

814
00:41:49,160 --> 00:41:51,600
there's no way you're going to
do that with lithium in in 10

815
00:41:51,600 --> 00:41:53,520
years time 'cause you don't have
the same confidence that you

816
00:41:53,520 --> 00:41:56,960
would building a nuclear power
plant that uranium is going to

817
00:41:56,960 --> 00:41:59,920
be needed.
Yeah, that's one way to look at

818
00:41:59,920 --> 00:42:01,560
it.
Interesting.

819
00:42:01,600 --> 00:42:04,960
We'll wait and see.
We're going to be here talking.

820
00:42:04,960 --> 00:42:07,040
About it eagerly.
That is a super interesting one.

821
00:42:07,200 --> 00:42:10,360
Oh mate, MMS have moved into
West Perth, they have polo

822
00:42:10,360 --> 00:42:13,280
shirts flying around everywhere.
Have a barn made with them if

823
00:42:13,280 --> 00:42:16,480
you assume buddy pull Natalie
he's just around the corner.

824
00:42:16,760 --> 00:42:19,040
Bloody the ground to building
Sandvik ground sport.

825
00:42:19,360 --> 00:42:21,160
I don't think they've got a West
Perth office.

826
00:42:21,560 --> 00:42:26,600
CR Insurance West Perth they do
K drill through Harvey.

827
00:42:26,880 --> 00:42:31,080
He walks the streets of West
Perth, the Boulevard of broken

828
00:42:31,080 --> 00:42:32,880
dreams.
The office is Mayfair.

829
00:42:34,360 --> 00:42:37,920
It's probably the birth of this
empty St Fuck all people out

830
00:42:37,920 --> 00:42:40,120
there after the talk.
Bloody dice that.

831
00:42:40,120 --> 00:42:42,680
Come get an office over here.
Salt Bush contract and they'll

832
00:42:42,680 --> 00:42:46,280
be moving in soon.
Get wet solutions Maddie.

833
00:42:46,320 --> 00:42:51,960
All beer with him at Mayfair.
Information contained in this

834
00:42:51,960 --> 00:42:54,720
episode of Money of Mine is of
general nature only and does not

835
00:42:54,720 --> 00:42:57,360
take into account the
objectives, financial situation

836
00:42:57,440 --> 00:42:59,440
or needs of any particular
person.

837
00:42:59,720 --> 00:43:02,760
Before making any investment
decision, you should consult

838
00:43:02,760 --> 00:43:05,840
with your financial advisor and
consider how appropriate the

839
00:43:05,840 --> 00:43:09,520
advice is to your objectives,
financial situation and needs.