S32 Smashed on Worsley Worries

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Friday running miners.
The quarterly season's heating

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up, and I'm yet to see an
exploration company report

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they've switched supplies to
Axis Mining Technology, if they

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weren't already.
So I look forward to seeing at

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least one talking about gyros
and Corey's before the end of

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the quarterly's boys.
Low hanging fruit, isn't it?

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Yeah, Jesus Christ, what more do
we need to do here?

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Axis Mining Tech, the trusted.
You just trust them.

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That's all you need to know,
boys.

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Director's special, mate.
She's flying and the bloody,

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even the ads are bloody.
The banner ads are full up as

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well for the next month or so,
so get in quick if you want to

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get in line.
Is that how I was supposed to

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say it?
Yeah, it is supposed to sound a

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lot too much like a dickhead,
but like, fuck, you want to get

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in?
You better get in there.

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She's going off.
Yes.

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And I think, I think that we're
learning all this stuff about

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email marketing, but just to, to
make sure it guarantees it in

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your inbox and it helps us as
well.

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If you just add, when you get
the director special in your

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inbox, search it and add it as a
contact that tells whoever your

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email server is that it's a safe
thing.

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And it maximises our
deliverability, everyone.

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Just reply and if you reply as
well, just reply and say JD, I

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like your haircut or something
like that.

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Then they're just the, it all
just flies from there.

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JD welcome back in the flesh,
mate.

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Thank you very much mate, happy
to be here.

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Good to see you mate.
What have we got today, boys?

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There's only one place to start,
and that's uranium.

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Of course, yeah.
Going out to Namibia, aren't we?

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God's country, Yes, what a what?
A bit out of the bloody Trav's

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bet that he didn't take might
have actually come to fruition.

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Sounds surprised.
Well, no, it's it's separate to

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the podcast.
It was on Twitter, but I'm not

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sure everything you do on
Twitter is associated with the

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podcast.
But was it?

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Would it?
How long did it have to stay

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below $3?
No, no, it was six months from

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then, so it's basically in 2 1/2
months time would have been the

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the measurement date awesome
there was below below three yeah

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six months time.
So it was basically that was the

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the bet.
Don't know if it'd happened, but

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the the it's a huge story, mate.
S 32 is a fucking $15 billion

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company and it's down 13 odd
percent today in today, which is

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just like dosh.
That's a that's a lot of a lot

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of money.
A lot of money vaporised, gone,

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poof.
Yeah, it's like a bloody gold

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developer, fucking gold producer
wiped out off the market cap.

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Bloody unbelievable.
Speaking of gold producers, ah

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yes, outrageous.
Yeah, DFS for Mcfillimy's kind

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of have a chat about that one
too and try to get a couple 33

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strugglers.
Maybe strugglers, Maybe, maybe.

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Maybe survivors.
Well, yeah.

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But just three interesting
stories I'm going to tell at the

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end.
Let's do it, Maddie all.

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Right, I good old Paladin, you'd
say.

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What?
One of the two producers on the

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ISX, is that right?
Yeah, yeah, yeah.

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Yeah, it's only them and Boss
producing pounds effectively.

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BHP.
Oh, BHP, of course, yes, but

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they're, they're always on ATF
flows, ATF flows.

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So they've produced a bit over
half, £1,000,000 up until 30th

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of June.
So they've got the the good old

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langar Heinrich Mine in Namibia
from the great fame of Johnny

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Borshov back in the day.
That's what this is.

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This was what, Yeah, they're,
they're living off the coat

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tails of the great Johnny B.
So there's only men I've seen

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with people's Twitter handles,
like with his photo and like one

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guy, J BS long lost son.
So you know you've made it if

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you got Twitter profiles about
you.

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So first shipment 320,000.
Sorry OP as well.

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Paladin, I own 775% of this.
It's 25% CNNC, the Chinese

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nuclear company.
So it's not 100% of this 1st.

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So these are all 100% basis 1st
shipment 320,000 lbs of yellow

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cake is on the boat as of 12th
of July.

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So not included in these numbers
for sale.

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So they received a cash receipt
of US Biplow 25 bucks as a

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partial advance payment for the
offtake in relation to this

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shipment.
So this assuming that payment

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was for all of that shipment,
that implies a uranium contract

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price of around $77.68 a pound.
So that's sort of spot sitting

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around at 84.
So that's sort of where that

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term pricing is if you back out
that I assume that's right.

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So they're they're guiding for
£4.25 million for FY25, going to

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ramp up to £6 million
eventually.

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And that's the 100% boss.
That's 100.

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Percent basis, yeah.
So they've they're guiding cost

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of production, these are the
midpoints.

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So cost of production 29 bucks,
50 a pound for next year.

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That's that's, that's they're
only producing from the

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stockpiles.
Yeah, right.

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So that that's basically cost of
processing, not including cost

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of mining because they're not
doing.

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That but what's going to happen
is I like and they've also said

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CapEx of 26 bucks.
So if you add the that cost of

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production, that CapEx together
that comes out at around 3560 a

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pound for next year if they hit
the midpoint.

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But then once they ramp up to
looking at their from their

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initial study and everything,
once they ramp up to £6 million,

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obviously your processing costs
comes down.

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You will add a mining cost in
which looks around about, I

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don't know, maybe 10 bucks a
pound.

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There's still stock stockpile
reclamation and stuff at the

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moment.
So there is a cost attributed to

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it.
So it'll look like it'll go up.

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No, it won't go up like shit
loads because the processing

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cost will come down a bit per
pound because they are lifting

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up to 6,000,000.
So they will add a mining cost

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on top of that when they
actually start mining, which is

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scheduled for pretty much start
around the start of FY20 6.

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And they're looking to reach
that 6,000,000 LB mark at end of

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calendar year 26th.
They've indicated so pretty much

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once that even once that mining
cost gets added on, processing

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come down a bit.
If you're looking at they're

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selling it at 78 bucks a pound,
pretty much 50% margin on what

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it's costing for them to get
them out.

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So when you look at 50% margin,
this is where the great uranium

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debate is at the moment, the
Super Bowls verse the rest.

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Best of Bulls.
The Super Bowls verse, yeah.

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And it was funny to like Warren
Irwin was the I guess probably

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the first one we've talked to
that's actually said look of

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sort of on the other end of it,
other end of the narrative at

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the moment.
But remember the Super Bowls all

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own uranium stocks and probably
physical.

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The people that aren't the Super
Bowls have probably made their

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money already and are out of it.
So just keep that in mind when

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we go through all these
reasonings.

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So if you talk about what's
incentive pricing for uranium,

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like if they're say like a hot
like Namibia is not the highest

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grade, highest quality more
uranium mines in the world, like

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they're no, not a they're not an
Adabaska Basin thing to reach

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much simpler open pit and it's
existing infrastructure.

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And everything.
But they're not a tier one.

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It's not a tier one thing.
And they're to.

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Restart project for a reason,
yeah.

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Exactly.
They're making, they're looking,

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they're like they're going to
make 50% margin.

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So same as a gold producer
producing not all in but close

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to all in of 1800 bucks an ounce
at these prices.

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So like you'd say the price of
uranium right now is what it

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needs to be to incentivize new
mines to come on.

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I think we, I don't say the idea
that uranium must going to go to

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bloody 130 or whatever.
Lot more, lot more things at

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play.
So we'll go through, I'll go,

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I'll go through what I've
interpreted it as both sides of

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the argument.
So even though, OK, the uranium

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term price right now that
they're selling for that's an

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incentive price.
But does that mean that all

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these uranium mines are going to
come on like that function of as

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great Mike Olken says, function
of getting permitted and

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developed.
Is that going to be quick enough

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to bloody negate this bloody so
called supply shortage?

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So will will they?
Will they come online faster

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than these new reactor builds?
So remember, A1 GW reactor can

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take six to 10 plus years to
build, depending on who builds a

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China pump amount six years or
less.

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So there's currently 62 reactors
under construction around the

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world.
As of now, 28 of them are in

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China.
So China's bloody flying, but on

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the other side, will there be
some of the later life reactors

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that are currently in operation
start shutting down while those

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new ones are getting built.
So it doesn't mean that there's

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going to be a bit bit more
requirement for supply, but a

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bit of drop in demand as well
with those shutting down.

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So that's there's a big bloody
balance and act there.

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And it makes, it makes perfect
sense that the first cab off the

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rank is all the restart
projects.

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So Honeymoon, Lange, Heinrich,
Alta Mesa, all these, all these

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projects that have been in
operation in the past, they just

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come on naturally much quicker,
don't they?

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Yeah, and God, I'd hate to say
fucking global uranium supply

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chain model, because there is so
many moving parts between these,

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all these reactor builds, the
conversion, the enrichment and

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the builds of all those
facilities plus the supply.

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Jesus Christ, that'd be like
like old mate, that picture that

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keeps coming up with the
fucking, the beautiful boy and

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the bloody off.
What was that off?

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Just the one with how every
company in Australia.

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The the meme I'll get keep
getting my head put on for the

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thumbnail.
That's that's Pepe Sylvia.

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00:10:00,680 --> 00:10:03,960
It's a meme from from It's
Always Sunny in Philadelphia.

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That's the one.
Yeah, yeah, yeah.

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It's one of those one of those
sort of setups then look then

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the then the political.
So then the political side.

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Big Trump looking to be back in
power soon.

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It'd be interesting to see what
effect that'll have on uranium

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because you can predict that
he'll want to make America great

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again.
So he could really enforce hard

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the detachment from Russia and
make it difficult for utilities

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to get these waivers.
But we did say last week that US

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utility centrist, they were
granted away before low enriched

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uranium from Russia for the
remainder of this year in 2025.

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I think I think one of the most
compelling arguments on the the

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US political side of things is
that he'd be supportive of, you

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00:10:48,120 --> 00:10:51,280
know, a lot of energy and that
just getting energy from every

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source possible, whether that be
oil and gas, nuclear, just so

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00:10:54,720 --> 00:10:57,160
that US manufacturing, one of
the things that is caught in his

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00:10:57,160 --> 00:10:59,920
heart, you know, can be done at
a cheaper rate.

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00:10:59,920 --> 00:11:02,000
You lower the cost of energy
across the country.

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00:11:02,360 --> 00:11:04,680
It benefits next to everything.
Yeah.

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00:11:04,720 --> 00:11:10,000
And I think for how much nuclear
that US uses, it's build has

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obviously been very it's growth
of the nuclear industry has been

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very small in race at times.
It's a lot of it's like existing

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from a lot of years ago.
So there's, but it could, it

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could ramp up renewables there
as well and like natural like

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LNG and as well, as you said as
part of a holistic power energy

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solution.
So who who knows the, the whole

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00:11:33,360 --> 00:11:36,040
Kazakhstan thing.
That's another very interesting

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00:11:36,040 --> 00:11:40,360
thing as we've seen with the
increased Takra tax rates, what

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00:11:40,360 --> 00:11:43,880
news will we see out of chemical
because that a prom which is due

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00:11:43,880 --> 00:11:47,000
to start in August.
So will this increased tax for

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the Kazakhstan JVS take some
pounds out of the market because

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00:11:52,440 --> 00:11:55,360
they've essentially taken away
the incentive to expand and hit

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00:11:55,360 --> 00:12:00,000
the high end of subsoil use
agreements to sort of play a bit

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00:12:00,000 --> 00:12:02,760
of creative accounting with
these tax brackets.

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00:12:02,760 --> 00:12:06,200
So that's we're yet to see what
the effect of that's going to

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00:12:06,200 --> 00:12:08,840
be.
Will Chemico, will cigar like a

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00:12:08,840 --> 00:12:11,560
MacArthur River actually bring
in the chocolates?

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Will they be be producing at
these 18,000,000 LB rates?

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Then the big WNI conference at
the start of September where all

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00:12:19,400 --> 00:12:22,680
the bigwigs get together to talk
uranium and contracting and

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00:12:23,000 --> 00:12:25,960
everything else because they've
attributed that the uncertainty

225
00:12:25,960 --> 00:12:29,920
around these waivers.
He is sort of one factor why

226
00:12:29,920 --> 00:12:31,320
everything's a bit quiet at the
moment.

227
00:12:31,320 --> 00:12:33,240
There's not much going on in
spot there.

228
00:12:33,760 --> 00:12:36,200
There's not much colour on
what's going on about new

229
00:12:36,200 --> 00:12:39,520
contracts getting done at the
moment.

230
00:12:39,520 --> 00:12:41,160
Surely you'll be given the
keynote, mate.

231
00:12:41,480 --> 00:12:43,960
Oh yeah, surprise.
Where's me fucking plane ticket?

232
00:12:43,960 --> 00:12:48,240
Anyone that wants me over there.
But if the likes of the great

233
00:12:48,240 --> 00:12:52,320
Mike Hulkin are correct and he's
like as he, he's a uranium bull,

234
00:12:52,320 --> 00:12:58,360
he's bloody entrenched in it.
So he's saying that real deficit

235
00:12:58,360 --> 00:13:02,560
will come around that 2030 and
and in as he said, uranium

236
00:13:02,560 --> 00:13:05,920
contracting world pounds
contractor today could be four,

237
00:13:05,920 --> 00:13:10,080
5-6 years down the road.
So it's like the question is,

238
00:13:10,080 --> 00:13:13,360
will, will utility start loading
up on the pounds to secure

239
00:13:13,360 --> 00:13:20,240
supply for that 2030 period now
or yeah, why haven't they

240
00:13:20,240 --> 00:13:22,120
already that?
And that's the thing, like

241
00:13:22,120 --> 00:13:25,960
everyone's like, there's all
this big thesis developing for

242
00:13:25,960 --> 00:13:29,400
this to take off, but it hasn't.
And you always think is that for

243
00:13:29,400 --> 00:13:32,120
a reason.
So there's the questions you

244
00:13:32,120 --> 00:13:33,600
need to ask.
And it's, it's one of those

245
00:13:33,600 --> 00:13:38,200
things you've, I end up in this
spot where I have no answers,

246
00:13:38,480 --> 00:13:41,400
but there's a lot of questions.
But there's two, there's just

247
00:13:41,400 --> 00:13:42,920
two, there's obviously two
sides.

248
00:13:42,920 --> 00:13:46,680
There's one side that doesn't
see it as going any other way

249
00:13:47,240 --> 00:13:51,360
but up and ballistic, but it
hasn't yet and you always have

250
00:13:51,360 --> 00:13:54,520
to be cautious as an investor to
not to get bloody sucked into

251
00:13:54,520 --> 00:13:56,040
that.
Totally, Yeah.

252
00:13:56,040 --> 00:13:59,000
And in simple terms, I think the
way you started out of segments

253
00:13:59,080 --> 00:14:02,480
like spot on, it's like the most
simplistic way to view commodity

254
00:14:02,480 --> 00:14:06,800
markets is at some price, you
have incentive for new supply to

255
00:14:06,800 --> 00:14:10,320
come online and new supply is
the cure for high prices.

256
00:14:11,560 --> 00:14:13,200
Yeah, that's it.
I think watching that supply

257
00:14:13,200 --> 00:14:15,920
dynamic is, is is like, you
know, the most meaningful thing

258
00:14:15,920 --> 00:14:18,600
you can you can do then, then
you've got the whole, the whole

259
00:14:18,600 --> 00:14:21,440
contracting landscape.
And yeah, maybe that's the bit

260
00:14:21,440 --> 00:14:23,440
that hasn't matched expectations
at the moment.

261
00:14:23,480 --> 00:14:28,120
Yeah, and I'll think and as you
got to and you with all this

262
00:14:28,120 --> 00:14:32,040
bloody looking into it so much,
you just you got to figure out

263
00:14:32,040 --> 00:14:34,360
if it is it going up, down or
staying the same?

264
00:14:34,440 --> 00:14:40,440
Who bloody knows?
But yeah, I, I, I'd like to know

265
00:14:40,440 --> 00:14:44,560
an example of a commodity in
terms of looking at the vertical

266
00:14:44,560 --> 00:14:49,720
integration of it that would be
so complicated in the supply

267
00:14:49,720 --> 00:14:53,280
demand dynamics.
I would like to know if there's

268
00:14:53,280 --> 00:14:57,680
one more with as much moving
parts as this and as much

269
00:14:57,680 --> 00:15:00,160
variation.
Whereas when when you talk about

270
00:15:00,160 --> 00:15:04,720
difference in tile assay that
they use through the centrifuges

271
00:15:04,720 --> 00:15:08,040
to then change how much uranium
goes in and the enrichment

272
00:15:08,040 --> 00:15:12,320
supply new site like as I said,
the the amount of reactor builds

273
00:15:12,320 --> 00:15:18,440
going around globally plus and
with such concentrated areas of

274
00:15:18,760 --> 00:15:21,880
enrichment and conversion.
It's it.

275
00:15:22,240 --> 00:15:25,480
It just fascinates me, as you
said, Jada.

276
00:15:25,760 --> 00:15:28,600
It's one of the reasons you get
funds with a specific mandate

277
00:15:28,640 --> 00:15:30,760
just to to study this part of
the world.

278
00:15:30,960 --> 00:15:33,280
You know, there's not many other
commodities where we see a fund.

279
00:15:33,560 --> 00:15:36,520
You know, you don't see pure
copper funds.

280
00:15:36,720 --> 00:15:38,360
Yeah, and that's one of the
reasons.

281
00:15:38,360 --> 00:15:40,880
Obviously there's a couple of
other reasons as well, but.

282
00:15:41,240 --> 00:15:43,720
Yeah, we're actually copper
would have to be easier to model

283
00:15:43,720 --> 00:15:46,840
than this side, I reckon.
I'll be interested to know.

284
00:15:46,840 --> 00:15:50,400
I think alum, the aluminium
complex complex, which is one

285
00:15:50,400 --> 00:15:55,560
we're going to talk about next,
is nowhere near as complex as

286
00:15:56,040 --> 00:15:59,560
uranium and the the whole
nuclear chain, but it has some

287
00:15:59,560 --> 00:16:02,520
complexities with the various
stages of of integration along

288
00:16:02,520 --> 00:16:03,560
the way.
In some ways, at least the

289
00:16:03,560 --> 00:16:06,960
demand for uranium, everyone
knows what the only reason you

290
00:16:07,080 --> 00:16:08,840
use it for.
Yeah, it's not like there's

291
00:16:08,840 --> 00:16:11,280
multiple use cases from that.
So you can work backwards from,

292
00:16:11,640 --> 00:16:14,280
from energy modelling, which is
some way simpler than other

293
00:16:14,520 --> 00:16:17,080
other commodities.
But the it's the processing

294
00:16:17,080 --> 00:16:18,800
stages, which is, you know, a
bit more complex.

295
00:16:18,800 --> 00:16:21,160
And figuring out what those
bottlenecks are is like a an

296
00:16:21,160 --> 00:16:23,600
interesting thing.
And and with the contracting as

297
00:16:23,600 --> 00:16:26,080
well, knowing that, I suppose
whether that takes some

298
00:16:26,080 --> 00:16:28,680
complexity out of it because
everything's contracted so far

299
00:16:28,680 --> 00:16:32,880
down the line.
It's hasn't got as, it's not as

300
00:16:32,880 --> 00:16:36,440
I don't know if it's as
sensitive to fluctuations

301
00:16:36,440 --> 00:16:38,960
because it's all planned out 5-6
years ahead.

302
00:16:39,160 --> 00:16:42,200
I'm not sure.
I'd love a bit of feedback from

303
00:16:42,200 --> 00:16:45,560
the gurus from a very coming
from a very simplistic base

304
00:16:45,560 --> 00:16:47,680
here.
So it's bloody interesting

305
00:16:47,680 --> 00:16:49,360
stuff.
I had a fucking migraine early,

306
00:16:49,360 --> 00:16:52,360
so I probably cocked up the
whole thing, but I was going to

307
00:16:52,360 --> 00:16:54,200
do the Ray Charles with me son.
He's on.

308
00:16:55,720 --> 00:16:57,040
I'm doing it for the team
anyway.

309
00:16:57,160 --> 00:17:00,560
That's what's called bloody,
say, just turning something very

310
00:17:00,560 --> 00:17:03,400
basic into a bloody filler
uranium filibuster.

311
00:17:03,400 --> 00:17:07,079
So, but it's just it's coming.
It's coming to an interesting

312
00:17:07,079 --> 00:17:08,839
time.
The fall.

313
00:17:08,920 --> 00:17:11,000
Once we go into the fall, the
fall.

314
00:17:11,000 --> 00:17:12,560
We'll see what comes out WNA
mate.

315
00:17:12,839 --> 00:17:17,760
Yeah, what's right, editors are
buddy, S 32.

316
00:17:17,760 --> 00:17:24,119
Well, they're S 12 today, but it
could be S 32 tomorrow, so.

317
00:17:24,760 --> 00:17:27,280
Yeah, yeah, just about for the
on the way.

318
00:17:27,280 --> 00:17:30,200
They're making good progress for
the month to be S 32 mate.

319
00:17:30,880 --> 00:17:34,720
So they had the quarterly come
out as well as an update from

320
00:17:34,720 --> 00:17:37,320
Worsley Illumina.
So let's get started with

321
00:17:37,680 --> 00:17:40,440
Worsley because I think that's
the the focus of the market.

322
00:17:40,440 --> 00:17:46,640
They're they're writing down
Worsley by US $554,000,000.

323
00:17:46,640 --> 00:17:49,200
So that's naturally the, the
headline that grabs people's

324
00:17:49,520 --> 00:17:51,040
attention.
And I think we should just get

325
00:17:51,040 --> 00:17:54,240
everyone on the on the same page
to start with Worsley Illumina

326
00:17:54,240 --> 00:17:56,120
accounts for that.
The bauxite operations out near

327
00:17:56,120 --> 00:18:01,280
Boddington and then the the
Illumina refinery near Collie

328
00:18:01,640 --> 00:18:05,480
that is 86% owned by South 32
with a couple Japanese partners.

329
00:18:05,920 --> 00:18:08,640
So they started their
environmental approvals process.

330
00:18:08,640 --> 00:18:11,400
This has obviously been in
operation for many, many decades

331
00:18:11,680 --> 00:18:16,680
now, but environmental approvals
processes to essentially start

332
00:18:16,680 --> 00:18:19,720
start the next stage and
continue what they're doing with

333
00:18:19,720 --> 00:18:22,880
their operations down there.
But they've sort of felt that

334
00:18:22,880 --> 00:18:26,360
the approval that they got given
by the WA Government was so

335
00:18:26,360 --> 00:18:28,640
restrictive that it would
challenge the long term

336
00:18:28,640 --> 00:18:31,920
viability of the operations.
That was, that was an approval,

337
00:18:32,280 --> 00:18:34,840
a conditional approval given to
them on the 8th of July.

338
00:18:34,960 --> 00:18:35,840
That's right, earlier this
month.

339
00:18:35,920 --> 00:18:38,240
That was pretty onerous in, in,
in one of them.

340
00:18:38,240 --> 00:18:41,400
They've come out with something
today saying long term viability

341
00:18:41,400 --> 00:18:42,800
is challenged.
Yeah.

342
00:18:42,800 --> 00:18:45,880
And I think that that particular
wording is what the markets kind

343
00:18:45,960 --> 00:18:49,120
of grabbed onto.
So the reason behind the write

344
00:18:49,120 --> 00:18:53,000
down is essentially increased
uncertainty ultimately around

345
00:18:53,000 --> 00:18:55,840
the the future cash flows of
that part of the business and

346
00:18:55,840 --> 00:18:59,800
the sort of associated
challenges in operating down

347
00:18:59,800 --> 00:19:02,240
there.
So obviously an impairment, a

348
00:19:02,240 --> 00:19:06,200
non cash expense, it'll show up
in the the full year results

349
00:19:06,200 --> 00:19:10,200
that we see in August and should
see a tax benefit given the the

350
00:19:10,200 --> 00:19:13,160
higher deductible expenses on
the back of that.

351
00:19:13,240 --> 00:19:15,880
But this, this operation is
pretty, pretty crucial to a lot

352
00:19:15,880 --> 00:19:17,320
of different parts of the
business, right?

353
00:19:17,320 --> 00:19:20,160
Like it's not, it's not like a
stand alone and doesn't feed

354
00:19:20,360 --> 00:19:22,520
everything else.
There's there's layers to this,

355
00:19:22,960 --> 00:19:24,960
this operation.
Yeah, absolutely.

356
00:19:24,960 --> 00:19:28,080
So as a quick reminder, you know
bulk site to alumina to

357
00:19:28,120 --> 00:19:31,840
aluminium, they mine the bulk
site and in the southwest here

358
00:19:31,840 --> 00:19:36,720
they turn it in a quite energy
intensive process into alumina,

359
00:19:36,920 --> 00:19:40,080
which from that particular
operation they send part to the

360
00:19:40,080 --> 00:19:43,640
market and part to their
smelters in Southern Africa.

361
00:19:43,640 --> 00:19:48,760
So Hillside and Mozel in South
Africa and Mozambique, one of

362
00:19:48,760 --> 00:19:53,000
them being 100% owned and the
other 64% owned.

363
00:19:53,000 --> 00:19:54,280
Yeah, right.
You know, you know why they

364
00:19:54,280 --> 00:19:56,680
build them over there.
JD Mozel and that.

365
00:19:57,160 --> 00:19:58,120
Energy, mate.
Power.

366
00:19:58,120 --> 00:20:03,040
Cheap hydropower, so bloody and
well, you see you, you see more

367
00:20:03,040 --> 00:20:05,880
of them getting more stuff like
this about to be built in

368
00:20:05,880 --> 00:20:07,360
Australia.
And you know why?

369
00:20:07,360 --> 00:20:11,240
That is why things have changed.
I've got a guess there's there's

370
00:20:11,240 --> 00:20:12,880
one company I think of with
Power Mate.

371
00:20:13,040 --> 00:20:16,920
If you they wait offset hydro
power costs, is Silverstone

372
00:20:16,920 --> 00:20:21,240
installing it for you to give
110% long term reliability?

373
00:20:21,280 --> 00:20:23,640
I'm surprised that power that
isn't hydro.

374
00:20:23,640 --> 00:20:26,040
Surprised S 32 didn't mention
that they're going to get in

375
00:20:26,040 --> 00:20:28,280
touch with Silverstone
adjustment today.

376
00:20:28,520 --> 00:20:31,560
Cross don't they after dropping
like that they need some

377
00:20:31,560 --> 00:20:35,640
Silverstone in their life.
So mate they could probably

378
00:20:35,640 --> 00:20:38,200
bloody those S.
Well, South Africa, the ones

379
00:20:38,200 --> 00:20:40,760
there, they pretty much live on
blackouts, so God, they need

380
00:20:40,760 --> 00:20:42,760
some friggin Silverstone in
their life too.

381
00:20:43,080 --> 00:20:44,400
They do.
Jeez, they could go bloody.

382
00:20:44,400 --> 00:20:46,600
Have a field day over there.
Get rid of escom.

383
00:20:46,600 --> 00:20:48,560
Get and.
Mate, get them in.

384
00:20:48,560 --> 00:20:50,240
There, Silverstone.
They'll even serve over the

385
00:20:50,240 --> 00:20:52,760
ground where the power's going
on do they'll even sort the

386
00:20:52,760 --> 00:20:57,280
water out to feed the bloody the
plant once the power's powering

387
00:20:57,280 --> 00:21:01,040
it like fucking that is what a
bloody turnkey of a mining mob

388
00:21:01,680 --> 00:21:03,960
guys.
Silverstone thank you very much.

389
00:21:03,960 --> 00:21:07,960
Anyway, we bloody back to.
That's why they need Silverstone

390
00:21:07,960 --> 00:21:08,880
continue.
Yeah.

391
00:21:08,880 --> 00:21:11,920
So, so just putting the
importance of the aluminium

392
00:21:11,920 --> 00:21:14,600
complex for South 32 front and
centre.

393
00:21:14,600 --> 00:21:17,840
This makes up looking at a few
broker reports about 10 billion

394
00:21:17,840 --> 00:21:21,040
plus, you know 11 billion on
some broker reports of the NAV

395
00:21:21,040 --> 00:21:24,400
of the whole business of a
company that these guys put in

396
00:21:24,400 --> 00:21:27,280
the in the mid 20s.
So about half the business

397
00:21:27,280 --> 00:21:29,400
pretty substantial.
Now of course I.

398
00:21:29,440 --> 00:21:31,920
Would not have known that until
you said that.

399
00:21:32,000 --> 00:21:35,920
Now they've got an aluminium
huge complex like an integrated

400
00:21:37,160 --> 00:21:41,440
set up in Brazil as well, mines
alumina aluminium.

401
00:21:41,440 --> 00:21:43,480
So there's kind of two parts to
it.

402
00:21:43,920 --> 00:21:47,760
But yeah, it makes up a very
substantial amount of of their

403
00:21:47,760 --> 00:21:50,000
business.
And like we sort of said that

404
00:21:50,360 --> 00:21:53,760
long term viability I think is
what's kind of spooked investors

405
00:21:53,760 --> 00:21:55,920
today.
And hence like you said at the

406
00:21:55,920 --> 00:21:59,880
top of the show, Maddie, a 12 or
13% off is very substantial.

407
00:21:59,880 --> 00:22:02,080
But I think you got to take it
with a bit of a pinch of salt

408
00:22:02,080 --> 00:22:05,360
because there is the the
political aspect to this as

409
00:22:05,360 --> 00:22:06,760
well.
They're a big employer.

410
00:22:07,280 --> 00:22:10,480
They want to, you know, get off
on the right foot with these

411
00:22:10,480 --> 00:22:12,200
negotiations.
And this is kind of part and

412
00:22:12,200 --> 00:22:15,480
parcel of throwing their weight
around and letting the state

413
00:22:15,480 --> 00:22:18,080
government know that, yes, they
are a big employer.

414
00:22:18,440 --> 00:22:20,000
They want this operation to go
ahead.

415
00:22:20,000 --> 00:22:22,760
They've been employing people
and doing work in the state for

416
00:22:22,760 --> 00:22:24,840
decades and they want to keep it
going that way.

417
00:22:25,160 --> 00:22:27,440
And they don't want to be
threatened and they don't want

418
00:22:27,440 --> 00:22:29,280
to have the profitability,
profitability of their

419
00:22:29,280 --> 00:22:32,240
operations put under too much
pressure.

420
00:22:32,240 --> 00:22:34,840
So it's a bit of that going on
at the moment.

421
00:22:34,840 --> 00:22:37,480
And this, like they said, it
sort of started in 2019.

422
00:22:37,480 --> 00:22:39,920
This particular process, it
takes a while to play out.

423
00:22:40,320 --> 00:22:43,680
And this is one step in that in
that sort of journey.

424
00:22:43,800 --> 00:22:47,000
Is the read through that that
some of the conditions put on

425
00:22:47,040 --> 00:22:50,880
put on them in the conditional
approval would mean, you know,

426
00:22:51,000 --> 00:22:53,760
basically mining from lower
grade areas and then the their

427
00:22:53,760 --> 00:22:56,560
base case and and effectively
that's that's kind of like, you

428
00:22:56,560 --> 00:22:59,360
know.
Yeah, whether it's, I mean at

429
00:22:59,360 --> 00:23:02,120
the end of the day just higher
costs or whether that's mining

430
00:23:02,120 --> 00:23:03,560
from lower is I mean it's pretty
light on.

431
00:23:03,560 --> 00:23:06,400
It's a 11 sort of page
announcement, whether that's

432
00:23:06,400 --> 00:23:10,800
mining from lower grade parts or
you know, everything else that

433
00:23:10,800 --> 00:23:13,040
can make the your sort of costs
higher.

434
00:23:13,360 --> 00:23:16,160
I've just just read the the
commentary from JPM.

435
00:23:16,160 --> 00:23:19,680
They go there is no detail yet,
but we assume at this stage that

436
00:23:19,680 --> 00:23:22,440
these conditions impact the mine
plan further limiting access to

437
00:23:22,440 --> 00:23:25,680
high grade ore which increases
costs, lowers production as

438
00:23:25,680 --> 00:23:28,640
experienced by AWAC.
There may be CapEx involved to

439
00:23:28,640 --> 00:23:31,360
move to new areas.
The impairment is large relative

440
00:23:31,360 --> 00:23:33,920
to the remaining carrying value
of 2 billion highlighting the

441
00:23:33,920 --> 00:23:36,800
impact.
So, yeah, but like you say, and

442
00:23:36,800 --> 00:23:40,600
sometimes you kind of you put
this kind of bearish outlook to

443
00:23:40,600 --> 00:23:44,280
the market as leverage in order
to get the, you know, reduced

444
00:23:44,280 --> 00:23:47,120
conditionality from the from the
regulator and and maybe that

445
00:23:47,120 --> 00:23:48,560
that's the way to resolve things
too.

446
00:23:48,800 --> 00:23:51,440
Yeah, I think that's part and
parcel of how bigger, bigger

447
00:23:51,440 --> 00:23:54,040
companies operate.
You know, they they see what

448
00:23:54,040 --> 00:23:57,760
they can extract from state and
federal governments.

449
00:23:58,560 --> 00:24:00,400
Yeah, it's all right.
So should we?

450
00:24:00,760 --> 00:24:05,360
Is there any coincidence that
it's been timed for this

451
00:24:05,360 --> 00:24:06,720
quarterly?
No way man.

452
00:24:06,720 --> 00:24:09,000
This announcement.
Do you remember?

453
00:24:09,000 --> 00:24:10,280
I don't.
Believe in coincidence?

454
00:24:10,720 --> 00:24:13,080
I don't know well, they didn't
get their conditional approval

455
00:24:13,080 --> 00:24:16,480
until until 8th of July, but I,
I was always just thinking that

456
00:24:16,480 --> 00:24:19,960
there might be some negative
surprises to come out this, this

457
00:24:20,160 --> 00:24:22,240
period of reporting for South 32
because you remember the

458
00:24:22,240 --> 00:24:25,440
measurement date for Grand
Casbury payday, big payday was

459
00:24:25,440 --> 00:24:28,040
the 30th of June 2024.
On this chart.

460
00:24:28,320 --> 00:24:31,760
I've I've marked the date
clearly that S 32 kind of they

461
00:24:31,760 --> 00:24:34,000
got there pretty easily in the
end out performing both the MSEI

462
00:24:34,080 --> 00:24:37,440
World Index and Ms and be metals
and mining index over the prior

463
00:24:37,440 --> 00:24:41,120
four year period, which would
mean care got the full LTR

464
00:24:41,120 --> 00:24:43,360
bonus, which at the time was,
you know, nearly $10 million in

465
00:24:43,360 --> 00:24:45,680
South 32 shares.
And but since then, since 30

466
00:24:45,680 --> 00:24:49,680
June they've they've sold off,
you know, nearly 20%, about 18%

467
00:24:50,800 --> 00:24:52,840
in particular today, like you
said, 12% alone.

468
00:24:52,840 --> 00:24:55,800
So things would be touch and go
now if it was kind of measured

469
00:24:55,800 --> 00:24:58,320
over the next few days, but
yeah.

470
00:24:58,480 --> 00:25:00,520
I think, I think it was my
understanding that this thing

471
00:25:00,600 --> 00:25:06,240
goes to this ten, 10 million
bucks goes to the the board in

472
00:25:06,240 --> 00:25:10,880
charge of R.E.M.
And they've still got a decision

473
00:25:10,880 --> 00:25:14,680
to make and they might not give
him every portion or every every

474
00:25:14,680 --> 00:25:17,000
dollar of that.
Well get how about bloody go

475
00:25:17,080 --> 00:25:21,280
from again my low base JD, why
don't you educate me on the the

476
00:25:21,280 --> 00:25:24,800
bauxite and aluminium market
broadly mate?

477
00:25:24,800 --> 00:25:28,240
Mr Money Mine Macro.
It's, it's getting pretty

478
00:25:28,480 --> 00:25:31,160
interesting.
We saw a couple little flies in

479
00:25:31,160 --> 00:25:34,360
and around the, the ASX metro
mining and the, the bauxite end

480
00:25:34,360 --> 00:25:36,800
of things doing well.
They're they're coming back

481
00:25:36,800 --> 00:25:40,520
online, expanding and they've
got a tailwind of the bauxite

482
00:25:40,520 --> 00:25:43,600
price doing quite well.
But Long story short, you've got

483
00:25:43,840 --> 00:25:48,040
China having mind the the best
sources of bauxite for a long

484
00:25:48,040 --> 00:25:50,280
time.
They're getting now to the the

485
00:25:50,280 --> 00:25:54,280
lower quality sources, which are
sort of higher silica, higher,

486
00:25:54,480 --> 00:25:56,160
higher cost at the end of the
day.

487
00:25:56,520 --> 00:25:59,960
And on the back of that, their
imports are rising.

488
00:25:59,960 --> 00:26:01,440
You've also got Indonesia
playing games.

489
00:26:01,440 --> 00:26:03,200
They're trying to do something
similar to what they did with

490
00:26:03,200 --> 00:26:06,280
nickel, copper and these sorts
of things that they banned from

491
00:26:06,280 --> 00:26:10,200
sort of mid to late 2023.
The export of bauxite ores.

492
00:26:10,920 --> 00:26:12,720
That obviously has pressure on
the price as well.

493
00:26:12,720 --> 00:26:16,720
And then you've got Guinea, a
big exporter of bauxite as well.

494
00:26:16,720 --> 00:26:18,400
They were sort of plateauing a
bit.

495
00:26:18,400 --> 00:26:21,760
They also had some strikes a few
months back as well, which all,

496
00:26:22,160 --> 00:26:25,760
you know, plays a role on.
On the prices now given the

497
00:26:25,880 --> 00:26:28,600
logistics involved, there are
sort of it's not just one price

498
00:26:28,600 --> 00:26:31,280
across the world.
Obviously you've got prices

499
00:26:31,280 --> 00:26:33,840
depending on where where the oil
is coming from and what the

500
00:26:33,840 --> 00:26:36,880
shipping rates are included in
all of that.

501
00:26:36,880 --> 00:26:39,600
But ultimately you've got the
the whole sort of complex book

502
00:26:39,600 --> 00:26:43,480
site, alumina and aluminium
moving upward through the first

503
00:26:43,520 --> 00:26:49,120
half of the year.
So aluminium hit roughly 2700

504
00:26:49,240 --> 00:26:51,720
U.S. dollars a tonne a couple
months back.

505
00:26:52,400 --> 00:26:55,320
It's peeled right off.
So it's sort of in and around

506
00:26:55,320 --> 00:26:59,280
2300 dollars per tonne these
days.

507
00:26:59,280 --> 00:27:02,160
So that's since the the end of
May it's it's peeled back.

508
00:27:02,160 --> 00:27:05,200
But this is all kind of
reflective in South 32's

509
00:27:05,280 --> 00:27:06,520
earnings.
So if you look at the prices

510
00:27:06,520 --> 00:27:09,720
received comparing the first
half of the financial year to

511
00:27:09,720 --> 00:27:13,040
the second half, you know
Worsley and Brazil Illumina was

512
00:27:13,040 --> 00:27:17,840
up 9% and Brazil Moselle and
Hillside aluminium was all up

513
00:27:17,880 --> 00:27:21,320
six to 10%.
So the, the, the tailwinds in

514
00:27:21,320 --> 00:27:23,280
the space sort of served them
quite well.

515
00:27:23,600 --> 00:27:25,680
And a couple of the commentators
out there have kind of been

516
00:27:25,680 --> 00:27:29,040
saying maybe they see a bit more
support around a price level

517
00:27:29,040 --> 00:27:32,560
where aluminium struggled to
breakthrough for a long time

518
00:27:32,560 --> 00:27:35,360
through 2023.
And now that might be the the

519
00:27:35,360 --> 00:27:38,120
sort of lower end of support.
But again, like we're going to

520
00:27:38,120 --> 00:27:40,800
say with these macro outlooks
and these commodity price

521
00:27:40,800 --> 00:27:43,160
assumptions, you can take them
with a pinch of salt because

522
00:27:43,160 --> 00:27:47,400
they're quite hard to actually,
you know, see eventuate.

523
00:27:47,400 --> 00:27:49,480
But I mean, one of the big
things you have to look for is

524
00:27:49,600 --> 00:27:53,040
Indonesia, whether they actually
do on reviewing that ban decide

525
00:27:53,040 --> 00:27:54,680
that they're not going to put it
in place or they are going to

526
00:27:54,680 --> 00:27:57,960
put it in place, that is going
to have a big impact on price.

527
00:27:57,960 --> 00:28:00,920
And then like we talked about
with pretty much every metal out

528
00:28:00,920 --> 00:28:03,720
there, Chinese construction,
what they end up doing will have

529
00:28:03,840 --> 00:28:07,680
a big sort of ramifications on
aluminium pricing, so.

530
00:28:08,200 --> 00:28:11,640
Is that that spot price you
quote there, JD?

531
00:28:11,640 --> 00:28:15,040
Is that what they sell it at?
Does it operate in similar to

532
00:28:15,040 --> 00:28:20,640
gold or are they contracted?
Or how does aluminium sales work

533
00:28:20,640 --> 00:28:22,560
do you know?
That's a that's a great

534
00:28:22,560 --> 00:28:24,960
question.
I'd I'd imagine they have off

535
00:28:24,960 --> 00:28:28,560
takes with with partners in in
in China.

536
00:28:28,560 --> 00:28:32,240
Like I said, the guys will send
some of their alumina to their

537
00:28:32,240 --> 00:28:36,200
smelters in South 82's case to
southern Africa and some they'll

538
00:28:36,560 --> 00:28:40,000
sell straight up to smelters in
China I imagine.

539
00:28:40,000 --> 00:28:42,640
There'd be a treatment charge on
the stuff they send to China,

540
00:28:42,640 --> 00:28:45,320
but their stuff that'd be, yeah,
probably getting.

541
00:28:45,760 --> 00:28:47,840
Close to the buck for the spot.
Yeah, yeah.

542
00:28:48,480 --> 00:28:51,080
Yeah, interesting.
Yeah, I really want to do a deep

543
00:28:51,080 --> 00:28:53,200
dive on this whole complex in
the market dynamics.

544
00:28:53,200 --> 00:28:56,040
And I've kind of heard that,
yeah, sort of some, some

545
00:28:56,040 --> 00:28:57,880
inventories are are really,
really low.

546
00:28:57,880 --> 00:28:59,960
The whole kind of complex is
pretty fragile to supply

547
00:28:59,960 --> 00:29:02,360
disruptions.
Chinese production, which they

548
00:29:02,360 --> 00:29:06,120
brought on domestically kind of
in the late 2000s, is depleting

549
00:29:06,120 --> 00:29:08,480
and that's why they can't bring
it on stuff from Guinea and even

550
00:29:08,480 --> 00:29:09,760
that's kind of tape it off now,
so.

551
00:29:09,960 --> 00:29:12,440
And you can see that quarter and
quarter, the imports, yeah, have

552
00:29:12,440 --> 00:29:14,480
been rising in, in recent times
in China.

553
00:29:14,600 --> 00:29:18,280
Yeah, so I, I think it's, it's,
it's a, it's an area we should

554
00:29:18,280 --> 00:29:21,480
we should, yeah, go deep on and
take some expertise for a future

555
00:29:21,480 --> 00:29:22,520
episode, I reckon.
What's?

556
00:29:22,600 --> 00:29:25,040
The what was the bloody?
Was there mania?

557
00:29:25,040 --> 00:29:28,960
Was it around 2010 or something?
The whole Rio Alcan thing like

558
00:29:29,040 --> 00:29:30,520
was that when?
2008 bit.

559
00:29:30,520 --> 00:29:34,720
Of an aluminium bull market.
There there was in some ways

560
00:29:35,040 --> 00:29:37,200
unlike it depends what you talk
to about that, because obviously

561
00:29:37,240 --> 00:29:40,880
the value of Alcan kind of all
got written off in in the end,

562
00:29:40,880 --> 00:29:45,000
but you know, BHP had interest
in Alcan, Rio ended up with it.

563
00:29:46,080 --> 00:29:49,320
Depending who you, who you talk
to, some people even reckon

564
00:29:49,320 --> 00:29:54,640
that, you know, Rio acquired
acquired Alcan has a bit of a

565
00:29:54,640 --> 00:29:58,240
poison pill to prevent, you
know, BHP from actually taking

566
00:29:58,240 --> 00:30:00,600
out Rio back then because it,
you know, was filled with a

567
00:30:00,600 --> 00:30:03,920
bunch of liabilities and it was
a, was a, was a price tag BHP

568
00:30:03,920 --> 00:30:04,920
could never get comfortable
with.

569
00:30:04,920 --> 00:30:07,880
But yeah, one day we one day
we'll, we'll, we'll go deep on

570
00:30:07,880 --> 00:30:10,520
that story, ID and JD.
Hell of a poison hell.

571
00:30:10,520 --> 00:30:14,840
Never thought I'd be so all
these commodities of would never

572
00:30:14,840 --> 00:30:17,040
have been interested in.
They're all.

573
00:30:17,040 --> 00:30:19,960
Every commodity has an
interesting place in the world.

574
00:30:19,960 --> 00:30:25,400
They do even aluminium God love
it right Regis the mcfilmies DFS

575
00:30:25,480 --> 00:30:27,400
the growth story.
That's it.

576
00:30:27,400 --> 00:30:28,280
Well.
Future growth.

577
00:30:28,680 --> 00:30:31,320
The the sort of you know, too
long didn't read of this one is

578
00:30:31,320 --> 00:30:33,280
that nothing is really
happening, but let's have a chat

579
00:30:33,280 --> 00:30:36,320
about it anyway, so.
That what TLDR is.

580
00:30:36,680 --> 00:30:41,160
Is yeah.
So a couple of the details, 1.89

581
00:30:41,240 --> 00:30:44,640
million ounces, they're going to
mine at 1.1 grammes to tonnes, 7

582
00:30:44,640 --> 00:30:49,600
million tonnes per annum plant,
9.4 year operation averaging

583
00:30:49,600 --> 00:30:56,120
187,000 oz, all in sustaining
cost a bit above 1500 an ounce

584
00:30:56,760 --> 00:31:01,360
NPV using a 5.5% discount rate
of $850 million.

585
00:31:01,680 --> 00:31:04,280
And here's the big one, which
was sort of seen in the past

586
00:31:04,280 --> 00:31:07,800
already, $1 billion CapEx.
So guys, thoughts?

587
00:31:08,680 --> 00:31:13,520
Yeah, just look at odd, you just
go straight to the 1.1 is, you

588
00:31:13,520 --> 00:31:16,560
know, obviously low, but just
looking at the Met, like once I

589
00:31:16,560 --> 00:31:19,880
get into the fresh rock like
it's, you know, average gold

590
00:31:19,880 --> 00:31:24,640
recovery of 85 to 89% looks
bloody hard.

591
00:31:25,000 --> 00:31:31,200
Look at that bomb ball work
index of like 15 to 18.

592
00:31:32,160 --> 00:31:35,960
So yeah, so a bomb ball 12 to
16.

593
00:31:35,960 --> 00:31:39,240
So that's like 16 that's like up
at Bellevue levels.

594
00:31:39,240 --> 00:31:44,040
So I don't know if it's bloody
hard if it's if there's like a a

595
00:31:44,080 --> 00:31:47,160
semi refractory nature.
I couldn't really find anything.

596
00:31:47,160 --> 00:31:51,280
I'll just, I, I did look back at
the the Newmont Mcfillimy's

597
00:31:51,280 --> 00:31:55,840
flotation test work back from
like 2010 and it shows here like

598
00:31:55,840 --> 00:31:59,480
the presence of copper in
couldn't couldn't find any

599
00:31:59,480 --> 00:32:02,440
mention of copper or anything in
the Regis one today.

600
00:32:02,440 --> 00:32:07,320
But just looking it, it looks
like it's there is copper there.

601
00:32:07,320 --> 00:32:10,520
And I don't know if there's a
semi refractory bit of copper.

602
00:32:12,120 --> 00:32:18,680
And I just think why would you
build a 7 million tonne plant

603
00:32:18,680 --> 00:32:22,920
and spend a billion dollar
billion isn't all the plant when

604
00:32:22,920 --> 00:32:27,840
why would you build all that for
10 year project when Katie is 40

605
00:32:27,840 --> 00:32:32,600
KS away, which treats semi
refractory copper sort of

606
00:32:32,680 --> 00:32:36,080
mineralisation.
Don't I can't say it, can't say

607
00:32:36,080 --> 00:32:37,760
it.
Yeah, getting over the lawn and

608
00:32:37,760 --> 00:32:41,560
happening when there'd be a
bloody when you just truck up 40

609
00:32:41,560 --> 00:32:44,480
guys.
And I don't know how amenable

610
00:32:44,480 --> 00:32:47,280
new monitor be to that.
Does it even displace Katia like

611
00:32:47,280 --> 00:32:51,120
there or is it high grade and?
Well, Katie is like crazy.

612
00:32:51,320 --> 00:32:53,680
Yeah, I think.
I think Katie is pretty light.

613
00:32:53,680 --> 00:32:57,120
It's a yeah.
It's a big fucking porphyry gold

614
00:32:57,120 --> 00:33:00,680
copper mine, so I'm not sure how
it all blends in, but it's not a

615
00:33:00,960 --> 00:33:03,480
yeah, Katie is not a high grade
bloody mine.

616
00:33:03,480 --> 00:33:05,640
It's just bucket huge.
I think it's like 30 million

617
00:33:05,640 --> 00:33:08,080
tonnes something they pump
through it, so I don't know I.

618
00:33:08,560 --> 00:33:12,320
Don't think the company in next
steps have kind of said

619
00:33:12,320 --> 00:33:13,440
everything that needs to be
said.

620
00:33:13,440 --> 00:33:17,760
The board will consider, you
know, FID in FY20 6.

621
00:33:18,000 --> 00:33:19,560
Yeah, it's.
An expensive option.

622
00:33:20,360 --> 00:33:24,360
Like you think of in these
beautiful farm regions near

623
00:33:24,360 --> 00:33:27,280
Blaney where it is, which is
sort of, you know, South of

624
00:33:27,280 --> 00:33:31,960
Orange Shield on the map there.
You'd think that the easiest way

625
00:33:31,960 --> 00:33:34,840
to get this mining would be
processing it somewhere else and

626
00:33:34,840 --> 00:33:39,520
not putting a TSF in and not
having to get permits to use

627
00:33:39,520 --> 00:33:43,280
Bloody Sign or just blow the
thing up and track it somewhere

628
00:33:43,280 --> 00:33:45,920
else.
The lowest barrier to entry for

629
00:33:45,920 --> 00:33:48,280
something like this.
They they they ran a scenario

630
00:33:48,280 --> 00:33:51,640
with with gold at spot sort of
3500 and obviously the economics

631
00:33:51,640 --> 00:33:53,640
would like way better.
So there's like talk there great

632
00:33:53,640 --> 00:33:57,480
option value if gold really just
like like roars, but you don't

633
00:33:57,480 --> 00:33:59,840
see it kind of getting built
unless you have just, you know,

634
00:33:59,880 --> 00:34:03,320
the whole kind of gold market
sort of just sustainably stay

635
00:34:03,320 --> 00:34:06,120
super elevated and keep growing.
I think not for a while.

636
00:34:06,120 --> 00:34:08,719
It'll get bit one day.
It's just like, you know, is it,

637
00:34:08,719 --> 00:34:11,239
is it meaningful today from an
MPV perspective?

638
00:34:11,760 --> 00:34:13,800
Not really.
Probably not, no.

639
00:34:13,920 --> 00:34:17,880
But and it looks like there's
potential for a lot of potential

640
00:34:17,880 --> 00:34:20,320
for it to go beyond that.
That's the initial case, the

641
00:34:20,320 --> 00:34:22,960
initial pit and everything.
I'm sure there's underground

642
00:34:22,960 --> 00:34:25,400
potential.
Be great for, you know, great

643
00:34:25,400 --> 00:34:28,440
for the communities there.
More mines, more money, but

644
00:34:29,199 --> 00:34:33,000
yeah, not sure.
Can't, yeah.

645
00:34:33,000 --> 00:34:35,679
Don't know if it'll land
somewhere else.

646
00:34:36,920 --> 00:34:41,000
Sure, they'll be exploring
other, other, other options.

647
00:34:41,000 --> 00:34:44,120
I mean, they've got a growth, a
growth issue now because it's,

648
00:34:44,120 --> 00:34:46,080
it's going to be hard to
persuade shareholders to say

649
00:34:46,080 --> 00:34:48,239
that, yeah, we want to allocate
a billion bucks to this.

650
00:34:48,239 --> 00:34:52,159
And but yeah, I think that's why
they're they're a prime

651
00:34:52,159 --> 00:34:56,120
candidate for for for a deal
announcement in the in the not

652
00:34:56,120 --> 00:34:58,320
too distant future.
Yeah, yeah, I'm not.

653
00:34:58,320 --> 00:35:03,160
And I'm not sure if something
like this like you can't see

654
00:35:03,160 --> 00:35:07,000
like a new monitor all about the
their tier one projects, what

655
00:35:07,000 --> 00:35:10,160
they class as tier one projects
and having just that in the

656
00:35:10,160 --> 00:35:12,160
portfolio.
So you can't see them being

657
00:35:12,400 --> 00:35:16,000
interested in a project like
this and trucking at 40 KS.

658
00:35:16,000 --> 00:35:18,040
Like that's just not a new month
thing to do.

659
00:35:18,320 --> 00:35:22,360
And God, I don't know if they do
bloody toll trading arrangements

660
00:35:22,360 --> 00:35:25,160
or something on a big friggin
operation like that.

661
00:35:25,680 --> 00:35:29,760
I think maybe not, I'm not sure.
So yeah.

662
00:35:30,760 --> 00:35:31,720
And you'll be on hold for a
while now.

663
00:35:32,040 --> 00:35:34,320
Yeah, she's looking tight.
Oh God.

664
00:35:34,320 --> 00:35:36,840
Especially considering how long
it took for him to get through

665
00:35:36,840 --> 00:35:40,720
that native title part of the
project.

666
00:35:40,720 --> 00:35:45,160
Imagine then going to full
permit environmental approvals

667
00:35:45,160 --> 00:35:48,280
for like the whole thing.
Still waiting on something for

668
00:35:48,280 --> 00:35:50,600
the approval for the 90
kilometre pipeline, I think at

669
00:35:50,600 --> 00:35:51,560
the moment.
So yeah.

670
00:35:51,840 --> 00:35:53,680
Yeah, yeah.
Well, God, if you were going to

671
00:35:53,680 --> 00:35:59,000
pick here's a guy, if you were
going to pick one of our bloody

672
00:35:59,000 --> 00:36:02,680
great friends that needs to go
out there, who would you pick?

673
00:36:03,960 --> 00:36:08,040
Question without notice.
Who is most needed out there?

674
00:36:09,320 --> 00:36:11,640
Big, big operation like that,
you need a lot of water.

675
00:36:12,000 --> 00:36:15,360
I'm thinking that 90 kilometre
pipeline.

676
00:36:16,960 --> 00:36:20,360
Why don't you negate that by
finding some closer?

677
00:36:21,520 --> 00:36:23,880
Very interesting, Matthew.
Or reckon Gerard James will be

678
00:36:23,880 --> 00:36:26,320
Blaney James.
He'll bloody he'll.

679
00:36:26,320 --> 00:36:30,960
He'll have enough work to go
there and it'll be Wan NSW water

680
00:36:30,960 --> 00:36:34,360
boars 'cause he could, he could
have a bloody, he could probably

681
00:36:34,800 --> 00:36:38,800
put 10% on that IRR.
Gerald James with some water

682
00:36:38,800 --> 00:36:40,600
exploration out near
Mcphillimy's.

683
00:36:40,600 --> 00:36:42,760
Drop a WAV Australia
waterboards.

684
00:36:42,760 --> 00:36:46,880
Australian waterboards.
What a bloody put a trademark on

685
00:36:46,880 --> 00:36:51,000
that ISIPJD.
Gerald James is going Australia

686
00:36:51,000 --> 00:36:52,080
wide.
Right.

687
00:36:52,520 --> 00:36:55,840
I, I think so 'cause like
there's only so much work he can

688
00:36:55,840 --> 00:37:00,560
get in WA and with us
catapulting him to the top of W

689
00:37:00,840 --> 00:37:05,640
of water exploration in
Australia, that's what's going

690
00:37:05,640 --> 00:37:08,240
to happen. 7 million tonnes per
annum, that's a big operation.

691
00:37:09,120 --> 00:37:12,480
Ray, just get in touch ISIP
before he starts.

692
00:37:12,720 --> 00:37:15,880
Obviously the uranium paleo
channels are going to take a bit

693
00:37:15,880 --> 00:37:18,560
of his time up.
As I said, he's a man in demand.

694
00:37:18,560 --> 00:37:21,000
He's he's he's in more demand
than a batter out on the

695
00:37:21,000 --> 00:37:24,800
director's special look to his
schedule's filling up way

696
00:37:24,800 --> 00:37:27,440
longer, way more out than.
Us you need water.

697
00:37:27,440 --> 00:37:31,000
Get in touch.
Love your work, Gerard, right?

698
00:37:31,000 --> 00:37:35,680
What's trap?
Three companies under the

699
00:37:35,680 --> 00:37:38,000
microscope.
Sort of, yeah, one of them.

700
00:37:38,080 --> 00:37:39,960
It could be lights out.
In the pressure cooker.

701
00:37:39,960 --> 00:37:42,840
For another one, it seems they
avoided lights out earlier in

702
00:37:42,840 --> 00:37:45,840
the year and it's all systems go
and the last one it was lights

703
00:37:45,840 --> 00:37:47,800
out a while ago but they're
stuck in purgatory.

704
00:37:49,480 --> 00:37:51,680
You know, I've just seen the
first one and we're trying to

705
00:37:51,680 --> 00:37:54,120
guess the other two.
So the one that is it is it

706
00:37:54,120 --> 00:37:56,760
lights out is Javoir the cobalt
catastrophe.

707
00:37:57,320 --> 00:37:59,760
The company is in trading halt
pending an announcement in

708
00:37:59,760 --> 00:38:03,480
relation to their they got these
ICO bonds for their ICO project.

709
00:38:03,480 --> 00:38:06,680
It was like a Nordic Nordic
bonds to the tune of USA $100

710
00:38:06,680 --> 00:38:11,640
million in relation to the yeah,
to the ICO asset guaranteed by

711
00:38:11,640 --> 00:38:13,760
the head company Javoir.
But there's a bit of a

712
00:38:13,760 --> 00:38:17,920
predicament for Javoir because
they got a, you know, a waiver

713
00:38:18,160 --> 00:38:22,160
on some of the covenants in
relation to this until the 20th

714
00:38:22,160 --> 00:38:24,280
of July.
So that way unless it's

715
00:38:24,280 --> 00:38:29,080
extended, is probably likely in
breach as of two days ago.

716
00:38:30,120 --> 00:38:33,480
So unless they can extend this
waiver, you know what, I don't

717
00:38:33,480 --> 00:38:35,960
know what happens there.
The halt announcement

718
00:38:35,960 --> 00:38:38,720
specifically talks about
extending the waiver and

719
00:38:39,040 --> 00:38:41,800
deferring an interest payment
that is supposed to be made

720
00:38:41,800 --> 00:38:45,280
today on the 22nd of July to
holders of that bond.

721
00:38:45,280 --> 00:38:46,760
It's like a semi annual interest
payment.

722
00:38:46,760 --> 00:38:49,240
So if they're trying to defer
that, it probably means they

723
00:38:49,680 --> 00:38:52,960
can't stump up the money to pay
it at this point in time, which

724
00:38:52,960 --> 00:38:56,160
isn't good news.
So a question I have is how

725
00:38:56,160 --> 00:38:58,400
supportive of the bondholders
actually going to be?

726
00:38:58,480 --> 00:39:01,440
Yeah, it's been been a
challenging environment for

727
00:39:01,440 --> 00:39:04,480
Cobalt, to say the least.
Javoir bit off way more than

728
00:39:04,480 --> 00:39:06,920
they could chew.
Heaps of debt assets in three

729
00:39:06,920 --> 00:39:10,480
continents, some point they had
like expansion or restart or

730
00:39:10,480 --> 00:39:12,800
developmental construction plans
across all three of them at the

731
00:39:12,800 --> 00:39:17,280
same freaking time, which make
mining companies don't do that

732
00:39:17,280 --> 00:39:18,840
since we're mining companies go
one at a time.

733
00:39:19,840 --> 00:39:22,840
I think, I think in the future
there will be a control H

734
00:39:23,400 --> 00:39:29,080
replace Javoir with Hastings.
I think that is like the way

735
00:39:29,080 --> 00:39:31,000
you've explained.
That sounds like the predicament

736
00:39:31,000 --> 00:39:33,840
they might find themselves in
with their wire convertible.

737
00:39:34,320 --> 00:39:36,760
Maybe, Yeah, I think Hastings
have an issue, but it's a

738
00:39:36,760 --> 00:39:40,080
different it's it's a different
issue in some respects, but it's

739
00:39:40,080 --> 00:39:41,160
not.
Yeah, they could.

740
00:39:41,200 --> 00:39:43,800
I mean it's.
Yeah, they're.

741
00:39:43,840 --> 00:39:45,520
Still an issue.
Still an issue I mean.

742
00:39:45,520 --> 00:39:49,480
Having ICO been secured over the
US 100 million is kind of

743
00:39:49,480 --> 00:39:51,360
interesting because that's not
worth 100 million.

744
00:39:51,960 --> 00:39:55,400
No, but the there's a guarantee
from the the head company.

745
00:39:55,400 --> 00:39:57,680
So which?
Is not a not a good sign for the

746
00:39:57,840 --> 00:40:01,920
the head company.
Exactly, and they've got one of

747
00:40:01,920 --> 00:40:04,160
the ugliest balance sheets
you'll ever see for a mining

748
00:40:04,160 --> 00:40:08,680
company.
Drawn debt of USA 169 million at

749
00:40:08,680 --> 00:40:12,240
31st of March when their cash
was a mere 26,000,000 operations

750
00:40:12,240 --> 00:40:13,880
lost $18 million in that quarter
by the way.

751
00:40:13,880 --> 00:40:16,680
So they they'd need to clean up
the balance sheet massively.

752
00:40:16,680 --> 00:40:19,400
When I looked, I think their
market cap on ASX was like 50

753
00:40:19,400 --> 00:40:24,200
million bucks.
So not very attractive from a

754
00:40:24,200 --> 00:40:25,600
gearing perspective, to say the
least.

755
00:40:27,280 --> 00:40:29,560
And I think that the trouble is
they need to clean up the

756
00:40:29,560 --> 00:40:31,760
balance sheet.
But there's not, I can't think

757
00:40:31,760 --> 00:40:35,160
of a, you know, a sensible.
I can't imagine how a sensible

758
00:40:35,160 --> 00:40:38,600
investor could, you know,
reasonably put equity into that.

759
00:40:38,880 --> 00:40:43,520
That's just such a yeah, like,
you know, it's just it's so hard

760
00:40:43,520 --> 00:40:46,240
to to clean that balance sheet
up that looks, it's just looks

761
00:40:46,240 --> 00:40:46,960
really ugly.
Can.

762
00:40:46,960 --> 00:40:51,280
You get a negative market cap
like considering the debt like

763
00:40:51,280 --> 00:40:53,200
you'd still have a.
Positive E you just go into

764
00:40:53,200 --> 00:40:55,960
suspension and you and you never
come out and then you know

765
00:40:56,000 --> 00:40:57,480
equity gets zero and you know
it'd be.

766
00:40:57,480 --> 00:40:59,440
The go people pay you to take
the shares.

767
00:40:59,800 --> 00:41:03,200
Surely every investor that had
any interest would have been

768
00:41:03,200 --> 00:41:06,320
touched up in the last 15
capital raisings that they've

769
00:41:06,320 --> 00:41:10,960
done. 98% down since I think mid
20220 Yeah.

770
00:41:11,160 --> 00:41:15,480
So in, in like 2 years to time,
that's that's a lot of a lot of

771
00:41:15,480 --> 00:41:18,520
value distraction in my opinion.
But heck, maybe they can buy

772
00:41:18,520 --> 00:41:20,240
more time and pull a rabbit out
of the hat.

773
00:41:21,600 --> 00:41:23,280
Aussie super to the rescue.
Nice night.

774
00:41:23,800 --> 00:41:26,000
But it doesn't, it doesn't look
like it's going to end pretty

775
00:41:26,000 --> 00:41:28,000
for the current shareholders.
I'll, I'll put it that way,

776
00:41:28,160 --> 00:41:29,920
yeah.
Right #2.

777
00:41:30,160 --> 00:41:31,840
Mate see a rutile.
So they were kind of, they were

778
00:41:31,840 --> 00:41:34,240
actually in bit trouble earlier
in the year when they know the

779
00:41:34,240 --> 00:41:36,440
government sort of looked like
the government with Buddy Rod

780
00:41:36,440 --> 00:41:40,160
pulling them.
And anyway, it's apparently not

781
00:41:40,160 --> 00:41:43,400
in trouble anymore because the
bid from Lien Oil has translated

782
00:41:43,400 --> 00:41:46,600
into an agreed cash offer
recommended by the board at

783
00:41:46,600 --> 00:41:50,920
$0.18 per share.
Remember Gemcorp had agreed a

784
00:41:50,920 --> 00:41:52,280
bid with the board just a couple
of weeks ago.

785
00:41:52,280 --> 00:41:54,240
It was $0.16 per share and now,
now this.

786
00:41:54,240 --> 00:41:57,360
So the stock is it's kind of
trading at exactly $0.18 today.

787
00:41:57,360 --> 00:42:01,000
So despite the many parties with
kind of a hefty shareholding,

788
00:42:01,000 --> 00:42:06,040
you got Gemcorp, PRM, Mano, Lien
Oil, all on the register of all

789
00:42:06,040 --> 00:42:07,960
have come on recently and all
have a chunky size.

790
00:42:08,560 --> 00:42:11,840
The market isn't really pricing
in too much of AA probability of

791
00:42:11,840 --> 00:42:14,480
a higher bid from here and I
think I think that's probably

792
00:42:14,480 --> 00:42:17,360
fair.
Remember Jan, your bear who's?

793
00:42:17,360 --> 00:42:19,320
I was about to say, what's he up
to at the moment?

794
00:42:19,320 --> 00:42:22,760
The big file.
He's I think well he he like

795
00:42:22,760 --> 00:42:26,600
Meno were the ones that wanted
him on the board So like he's

796
00:42:26,680 --> 00:42:29,560
yeah I I don't know if don't
have Meno going to put it bit in

797
00:42:29,560 --> 00:42:30,720
on I wouldn't wouldn't be
betting on it.

798
00:42:31,280 --> 00:42:34,480
Mining at area one has
recommenced the project look

799
00:42:34,480 --> 00:42:37,440
like it's going to make its way
into the hands of a Leonian kind

800
00:42:37,440 --> 00:42:41,760
of company being Leon oil.
So like, imagine the tax regime

801
00:42:41,960 --> 00:42:45,040
kind of issue that we're having
with the government, kind of

802
00:42:45,040 --> 00:42:47,160
there'll be a resolution there
'cause it's, you know, they,

803
00:42:47,320 --> 00:42:50,640
they, the government basically
like by all accounts did not get

804
00:42:50,640 --> 00:42:53,480
along very well with CR retail
layer management there.

805
00:42:53,480 --> 00:42:57,600
But they might get along with
Leoning and company better and

806
00:42:57,720 --> 00:43:01,520
Gemcorp who, who had that agreed
bid a couple weeks ago.

807
00:43:01,640 --> 00:43:03,360
So there's, there's special sits
guys, right?

808
00:43:03,360 --> 00:43:06,240
And they they'll be happy to
bank at the return they made

809
00:43:06,240 --> 00:43:10,560
buying stock from Stan at $0.15
and three months ago, now

810
00:43:10,560 --> 00:43:13,120
getting $0.18 a share.
That's like a 20% return in

811
00:43:13,120 --> 00:43:14,360
three months.
Maybe they've got to wait a bit

812
00:43:14,360 --> 00:43:16,200
longer for it to complete or
whatever, but it's a pretty tidy

813
00:43:16,200 --> 00:43:19,200
return.
And Mano, like I said, they'll

814
00:43:19,200 --> 00:43:22,880
know what they'll do.
PRM, the entity related to Craig

815
00:43:22,880 --> 00:43:27,640
Dean, the commodity trader,
they'd have bid it at 9.5 cents

816
00:43:27,640 --> 00:43:30,680
on market, but haven't seen or
heard much of them later other

817
00:43:30,680 --> 00:43:32,480
than just asking a few questions
at the AGM.

818
00:43:32,480 --> 00:43:34,760
So don't know.
Don't know what happens to them

819
00:43:34,760 --> 00:43:37,360
or where they go either.
But it could also be one where

820
00:43:37,360 --> 00:43:40,400
you have some some minority
shareholders band together and

821
00:43:40,600 --> 00:43:43,320
hold out and get a little bit of
an uplift collectively.

822
00:43:43,320 --> 00:43:45,840
But I don't know, it's just so
hard to have insight into how

823
00:43:46,240 --> 00:43:48,640
how many behind the scenes
conversations have been had

824
00:43:48,640 --> 00:43:51,320
between these parties that no
one really fucking knows much

825
00:43:51,320 --> 00:43:54,240
about.
Oh mate, I'd love to Gladdy, you

826
00:43:54,240 --> 00:43:58,360
don't want all your new bed up
and the hammer on you.

827
00:43:58,440 --> 00:44:01,800
God yeah buddy, how good's that?
It's like annoying.

828
00:44:03,640 --> 00:44:05,800
Company number.
Three, the third one mate, the

829
00:44:05,800 --> 00:44:07,400
one stuck in purgatory is
Galena.

830
00:44:08,560 --> 00:44:11,240
So, I mean, they're, they're
still in suspension and the

831
00:44:11,240 --> 00:44:15,000
concentrate production was 54%
higher quarter on quarter, which

832
00:44:15,000 --> 00:44:18,000
is not really good news for
them, but they're still in

833
00:44:18,000 --> 00:44:20,000
suspension.
They've still got the voluntary

834
00:44:20,000 --> 00:44:22,840
administrators appointed there.
There's no indication if they're

835
00:44:22,840 --> 00:44:25,720
making cash yet.
CF OS departed recently.

836
00:44:25,720 --> 00:44:29,040
They said they're reviewing
recap options at the moment

837
00:44:29,040 --> 00:44:31,000
still.
So let's, let's hope the, the

838
00:44:31,000 --> 00:44:33,960
operational kind of cash flow
trends the right way to enable

839
00:44:33,960 --> 00:44:38,400
them to actually kind of recap
in a way that's sustainable for

840
00:44:38,400 --> 00:44:41,040
the, for the company as well.
But yeah, TBA, just keep

841
00:44:41,040 --> 00:44:42,400
watching.
Still in purgatory.

842
00:44:43,240 --> 00:44:45,120
Yeah, right.
So no.

843
00:44:47,040 --> 00:44:49,480
So do they cause because they
don't have to give a?

844
00:44:49,880 --> 00:44:51,600
It was just an operation.
They don't have to give a

845
00:44:51,600 --> 00:44:53,600
financial statement now while
they're in.

846
00:44:53,640 --> 00:44:54,840
I don't think they do
suspension.

847
00:44:54,840 --> 00:44:57,320
There'll be a recompliance thing
when they relist and if they

848
00:44:57,320 --> 00:44:59,640
relist.
But yeah, at the moment I think

849
00:44:59,640 --> 00:45:01,200
they're obliged to do anything
like that, yeah.

850
00:45:01,400 --> 00:45:03,960
Yeah, yeah, that'd be
interesting to know.

851
00:45:04,080 --> 00:45:05,400
Yeah.
It's weird when you have

852
00:45:05,400 --> 00:45:08,440
something in admin that might be
making money.

853
00:45:09,120 --> 00:45:11,800
Yeah, don't know.
Yeah, Yeah, TBA.

854
00:45:12,400 --> 00:45:15,280
You reckon the RJD?
You're a man in the knife.

855
00:45:16,280 --> 00:45:18,400
I mean, are you talking about
after debt repayments?

856
00:45:18,480 --> 00:45:20,320
After debt repayments, I don't
think there will be no.

857
00:45:20,520 --> 00:45:24,720
Operationally.
Well, not enough to service the

858
00:45:24,720 --> 00:45:25,920
debt.
I don't think they're they're

859
00:45:25,920 --> 00:45:28,080
getting close to.
That I got to under an odd.

860
00:45:28,800 --> 00:45:32,480
Ballpark.
Yeah, it'll be, you know, that's

861
00:45:32,480 --> 00:45:36,240
pretty, pretty onerous.
If I build them on, I reckon,

862
00:45:37,120 --> 00:45:41,360
especially with debt.
Well, one company operations run

863
00:45:41,360 --> 00:45:44,480
the risk.
Yes, right out bloody.

864
00:45:44,840 --> 00:45:46,320
You know he's not running the
risk.

865
00:45:47,040 --> 00:45:50,840
Anyone use an axis?
Anyone use an axis and axis

866
00:45:50,840 --> 00:45:53,160
themselves?
Pretty much a bloody sure bet.

867
00:45:53,240 --> 00:45:58,360
Also if you're using mineral
mining services MMS verify get

868
00:45:58,360 --> 00:46:03,680
wet solutions DSI underground
Silverstone CRE insurance WA

869
00:46:03,680 --> 00:46:07,560
water boards soon to be renamed
Australia water boards K drill

870
00:46:07,560 --> 00:46:09,960
and you spark while you're at it
you.

871
00:46:10,160 --> 00:46:14,320
Spark JC money of mine for a
director special ad that's all

872
00:46:14,320 --> 00:46:15,720
you need to know that's.
It.

873
00:46:15,840 --> 00:46:19,000
Alright, alright.
Information contained in this

874
00:46:19,000 --> 00:46:21,720
episode of Money of Mine is of
general nature only and does not

875
00:46:21,720 --> 00:46:24,360
take into account the
objectives, financial situation

876
00:46:24,440 --> 00:46:26,440
or needs of any particular
person.

877
00:46:26,720 --> 00:46:29,760
Before making any investment
decision, you should consult

878
00:46:29,760 --> 00:46:32,840
with your financial advisor and
consider how appropriate the

879
00:46:32,840 --> 00:46:36,520
advice is to your objectives,
financial situation and needs.