The different styles of resource investing

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I, I, yeah, I've got an
open-ended question for you

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guys.
How do you make money in

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resources investing?
Incidentally, there's a lot of a

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lot more like a much larger list
of ways you can lose money

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investing in resources stuffs in
there is to to make money.

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But yeah, the four categories
that I have is.

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Rhino Money miners today we are
talking about multiple mining

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companies and doesn't matter
which bloody mining company are

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CR Insurance is your friend to
sort insurance out for you

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Don't.
Insurance is not a taboo word.

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It's not boys because you call
them, they sort the whole thing

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out for you.
It's the trusted broker.

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Peace of Mind, That's what
insurance gives you.

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It's like it's the thing you
need when you're up shit Creek.

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And now, and if you feel like
you're up shit Creek with

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insurance, COCRE will give you a
bloody 16 paddles like they are

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the team, they are African
mining insurance specialists.

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They're located Sydney,
Brisbane, Perth and Orange

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Orange.
So mate, just get them to run

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their eye out.
You might have too much

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insurance, you mightn't have
enough.

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You might have bad insurance, a
wrong one, but I'll tell you.

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The review's free.
Yep.

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Review's free.
Unbelievable.

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Go CRE I.
Think it still is.

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What do we got there?
We got bloody Genesis Quarterly

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out yesterday.
You got Aurelia?

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Yeah.
We're going to talk about

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Aurelia, mate.
And we're going to.

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Talk about CRE in orange.
Yep, and.

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We're going to talk about gold
fields a bit going on there.

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Is it bloody?
Have you have you sniffed it out

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or is it public?
It's pretty public.

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It's pretty public, although it
it's not as widely reported as

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maybe it should be.
Yeah, right.

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I'll start with.
Left myself in suspense, right?

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Genesis, Genesis.
Jesus Christ, look at the bloody

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she's flying 4 bucks 40 Ding
Ding Ding for the Alley GC gold

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fund, which by rights should be
gone off based on the last year.

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I hope it is unless she's
trimmed too early.

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So cash holding increases by 111
million to four 348 and they

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produce just below 60,000 oz.
But now I'm pretty sure the cash

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and bullion increased by 99
million Aussie quarter on

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quarter to 321.
But it's the the they got the

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liquid investments of 28 mil.
So 'cause remember, they hold

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7.3% of Gorilla Gold, which has
a 300 mil market cap now.

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Wow.
So that's worth about 22 mil in

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itself.
And quarter on quarter, it's

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gone from $0.26 to $0.48 based
on March 31.

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So that's where a bit a bit of
extra money's come in from the

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value of that liquid investment.
Maddie, I can see in in the show

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notes here you've written in
about size 36 font.

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Are you extra excited about the
the cash?

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Building.
I don't know why I did that, it

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must have just been the way my
computer screen was. 100 bucks

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added for the quarter.
It's not not bad.

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It's something to get excited.
Yeah, no, they've done done

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bloody well.
So average sales price of 4496,

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they did have some Fords to
deliver into, but they're

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relatively so that four and a
half thousand were delivered in

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at 3649.
So pretty much they've only got

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4 1/2 thousand 1/4 for the next
two at 3700.

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So they're pretty much pretty
close to fully exposed about 7%

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of production and they do have
some small amount of 0 cost

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collars to deliver into at 4235
from December 25 onwards, 4 1/2

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thousand so, but it's a small
amount of production.

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So you'd say 90 odd percent
unhedged, so isn't.

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It funny you put those collars
in kind of thinking, oh, the

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gold price won't surpass that
and then.

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Yeah, I know it does.
Yeah, 40, yeah, 42 like 4200

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collars.
They're like, of course you

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bloody would have back then to
get a downside of 3500, but it's

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just changed so quickly.
So yeah, again, they've

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reiterated their guidance 19210.
You can see the growth profile

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that is ahead of them with the
Lavenham mill getting turned

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back on.
And I'll go through what sort of

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coming up and what is
potentially not two to three

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years as initially anticipated.
So Gualia that was they got a

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lot of this was flagged in the
previous quarter.

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So they still got they got 25
and a bit 1000 oz at 6.2g mined

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there.
So the the ore delivered was

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129,000 down from 182 but they
were progressing through a

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selective portion of the mine
which was flagged in the

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previous quarter.
So but grades bloody positively

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reconciled Ulysses.
So ramp up soapings continued

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there.
So that's they've got they've

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got about 4000 oz at 3.4g from
there.

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You do say their their reserve
grade at Ulysses is 3.7g.

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So the previous two quarters
have been below that.

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But I would looking at the like
it was the highest amount of

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jumbo development made is in the
past year for this quarter.

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So I would anticipate there'd be
a higher percentage of

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development or to stopping or
hence the reserve grade might be

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a bit lower.
But yeah, like Admiral and Hub,

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like bloody, yeah, good little
pits, like Admiral's 1.8g, Hub

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3.8g out of that open pit.
So it's a good little bloody

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sugar hit there.
And their studies are actually

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planned to go look at
underground at Hub.

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So unless there's some bloody
super gene thing that cuts it

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off, you think if you get 3.8 in
the pit, yeah, underground might

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be all right.
So we'll keep posted there.

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Leonora Mill a bit underfed,
probably because of Gwalia.

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A bit less dirt coming out of
Gwalia and everything.

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So 300 and 304,000 tons.
I remember it's a 1.4 million

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ton per annum mil.
They did say there was a

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microburst.
Storm Microburst.

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I've never heard that word.
Microburst, it's a new one.

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It's in bloody quotation marks
so that there was a couple of

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days power loss and a bit of
damage to infrastructure.

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But they've got the flexibility
now that they can just track the

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ship to Laverton and send it to
the Mount Morgan's mill.

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So that's where the flexibility
of those two mills can really

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come in handy because they can
just divert trucks straight

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away.
Like having that they can send

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them both directions kind of
come in handy for like your

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shutdowns and everything because
you can just throw everything up

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the other end.
And so I live it in.

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Most of that was the existing
stockpiles process there.

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784,000 tonne .9.
They have got a bit of third

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party or coming from Bright Star
and Kumarina.

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So you can see here on the for
the live of the mill, the

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restart.
What what's it say?

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Live of the mill form is
temporary, class is permanent.

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Doesn't that sound like a Nike?
App.

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I just read that.
Form is temporary, class is

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permanent.
That's quality I could.

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I could What is a good
Australian brand that needs my

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voice on TV?
Form is temporary, class is

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permanent.
It's a hell of a caption for a

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for a figure in a in a mining
quarterly.

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So now Tower Hill, it's
progressing to plan.

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So it says they've got the
section heritage, section 19

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approval received environmental
wise, they've got the clearing

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permit application for stage one
that's submitted.

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There's then you've obviously
got stage 2 as well, the day

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watering it, the rail
shortening.

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So it's not a diversion anymore.
They're shortening it that

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targeting that agreement for
June quarter 2025, delivering

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first or FY20 8 and development
in FY20 7.

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But joys of having multiple
assets because if you look back

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4th of April 2023, the like it
said Tower Hill approvals and

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development timeline will be two
to three years.

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Same in the Diggers Prezile
2023, two to three years.

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Well, we're at two years now and
the rail shortening agreement

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hasn't been signed yet.
So the the two to three years

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approvals development that they
said that wasn't for first all

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that was approvals development
that's probably going to end up

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as anticipated by most probably
four years if that goes to plan.

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So but when you've got multiple
assets, multiple plans, you're

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the focus isn't on that sole
asset as much.

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So that's where it gets a bit
you're, you're protected in that

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sense a bit so.
You also reckon those guys are

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pretty good at underweighting
expectations as well.

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They don't want to get people
too pumped up about it and beat

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those expectations.
Well, and look at evolution

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Mangari, what with that
commissioning was 10 months

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ahead.
Yeah.

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Schedule and on the budget.
Nine to six, yeah, but it was

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they got lucky on the timing of
a few things.

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Kind of, you know, a few things
kind of got in before certain

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holiday periods.
The long lead things all just

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lined up and it all it all came
together cheaper and.

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Faster, Yeah, yeah.
So look, there is, there is

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potential, but it's looking that
that would have been blown out.

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It was a bit probably bullish
initially.

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I thought you can see why they
paid 53 mil at the time.

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They paid for that Bruno Lewis
and Rayside projects.

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They've just done some reserve,
a bit of infill drilling there

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for, for the reserve and like 5
metres at 27.8 grams, 15 1/2

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eight at 15.
Like that's a, that's an open

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pit.
So there's some and that because

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remember, that's the one they
got out of Kin where they just

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took that one right in the
middle.

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And just like, Nah, we don't
want any of the rest of it.

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We just want that one.
So you can probably say why.

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So yeah, they're bearing the
fruit of their growth plan at

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the moment, I'd say with getting
that live in the mill turned

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back on.
Yeah, I think Jupiter that's

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scheduled to start mining in
FY20 6.

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00:09:51,000 --> 00:09:56,360
So that'll be a good chunk of
the feed for Mount Morgan's.

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00:09:56,360 --> 00:09:59,200
But I'll be I'll be interested
to see if they're going to need

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00:09:59,240 --> 00:10:02,600
more or.
Did you hear 50's comments, you

183
00:10:02,600 --> 00:10:03,840
know JD's?
No, I didn't.

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00:10:03,880 --> 00:10:08,280
He said, he said, yeah, like,
you know, kind of he he played

185
00:10:08,280 --> 00:10:11,200
down the potential of a tie up
with with vault at the moment.

186
00:10:11,200 --> 00:10:13,400
But he sort of said, look, I
think, I think where what they

187
00:10:13,480 --> 00:10:16,200
where they could use a deal is
to to add high grade ounces to

188
00:10:16,440 --> 00:10:20,320
to Labourton.
And he specifically listed Focus

189
00:10:20,600 --> 00:10:23,040
Magnetic and Bright Star.
Yeah.

190
00:10:23,040 --> 00:10:26,000
Now Focus is Labourton projected
publicly for sale that's out

191
00:10:26,000 --> 00:10:27,600
there.
They could buy that.

192
00:10:28,080 --> 00:10:30,800
Yeah, Vault is publicly for
sale.

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00:10:30,880 --> 00:10:34,200
That's out there.
Magnetic publicly has a data

194
00:10:34,200 --> 00:10:35,320
room.
Yes, yeah.

195
00:10:37,160 --> 00:10:40,400
It what about tons?
Was it was it was he more

196
00:10:40,400 --> 00:10:42,400
focused on getting high grade?
Yeah, just high grade.

197
00:10:42,400 --> 00:10:44,440
I mean, you've got you've got
Jupiter and all that sort of

198
00:10:44,440 --> 00:10:45,560
stuff.
It's just like, can you add some

199
00:10:45,560 --> 00:10:47,680
sugar to make that grade go go
north, you know?

200
00:10:47,920 --> 00:10:49,240
Yeah, yeah, yeah.
I don't think you guys are

201
00:10:49,240 --> 00:10:51,000
concerned about the free cash
flow in this gold price, but

202
00:10:51,000 --> 00:10:53,480
it's just, you know, a bit of
sugar can really move the dial

203
00:10:53,480 --> 00:10:55,320
there.
Yeah, and I think between like

204
00:10:55,680 --> 00:11:00,040
Bruno Lewis coming on Jupiter,
like, yeah, you'd think it's

205
00:11:00,040 --> 00:11:02,080
just trying to make sure they
got 3,000,000 tonne to put

206
00:11:02,080 --> 00:11:03,600
through it.
And I think 'cause they can,

207
00:11:03,960 --> 00:11:07,320
they, I think they'll get to, if
it's all open pit, they'll

208
00:11:07,320 --> 00:11:10,240
probably get 4 out of it.
Like there's a lot of potential

209
00:11:10,240 --> 00:11:12,560
there as long as they've got
enough, enough feed.

210
00:11:12,560 --> 00:11:15,880
So hence the oil purchase
agreements, they will find out,

211
00:11:15,880 --> 00:11:19,480
they'll say all the stuff that
brought stars up to up that end

212
00:11:19,480 --> 00:11:21,000
with.
I know there's like undergrounds

213
00:11:21,000 --> 00:11:24,520
going in and stuff like it'll be
bloody all gone there.

214
00:11:24,520 --> 00:11:26,200
I think they'll be taking every
bit of dirt they can.

215
00:11:26,200 --> 00:11:28,200
And and that's the other thing.
I mean, they could like Bright

216
00:11:28,200 --> 00:11:30,240
Star now that they've got, you
know, sandstone and that's a

217
00:11:30,240 --> 00:11:31,920
priority focus and all that sort
of stuff.

218
00:11:31,920 --> 00:11:34,560
They could recycle capital by
selling that Bright Star project

219
00:11:34,560 --> 00:11:36,960
to to if if that was of use,
Terry.

220
00:11:37,240 --> 00:11:39,000
But all of those things are kind
of on the table.

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00:11:39,000 --> 00:11:42,000
I think if, if, if I agree to
answers really do move the dial

222
00:11:42,000 --> 00:11:44,480
a bit.
And yeah, yeah, if Genesis kind

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00:11:44,480 --> 00:11:48,160
of want to do something that's
not Vault, that's what they do.

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00:11:48,600 --> 00:11:50,800
Yeah, it doesn't look like it's
gonna.

225
00:11:51,240 --> 00:11:53,200
Yeah, who knows?
Then I'll say I'll fucking

226
00:11:53,480 --> 00:11:55,280
merely Spartan.
Happened a week after I said

227
00:11:55,280 --> 00:11:58,920
that wasn't going to happen, so
I didn't listen to me anyway.

228
00:11:58,920 --> 00:12:01,480
Right, let's go.
Let's go over Race to God's

229
00:12:01,480 --> 00:12:03,680
Country, NSW.
Oh, really?

230
00:12:04,480 --> 00:12:07,160
I, I, yeah, I've got an
open-ended question for you guys

231
00:12:07,160 --> 00:12:09,880
before I before I kind of talk
about really the companies for

232
00:12:09,880 --> 00:12:12,600
me.
Just keen to get your unprepared

233
00:12:12,960 --> 00:12:15,880
responses to the question too.
How do you make money in

234
00:12:15,880 --> 00:12:21,600
resources investing?
Are you kind of referring to the

235
00:12:21,600 --> 00:12:24,080
different styles that you can
play in the arena?

236
00:12:24,240 --> 00:12:26,200
Inter Interpret how you.
Are as in as in buying the

237
00:12:26,200 --> 00:12:27,840
stocks?
Yeah, how do you make money?

238
00:12:28,080 --> 00:12:30,680
Find, find which one's going to
be a self fulfilling prophecy

239
00:12:30,680 --> 00:12:33,640
that it'll just go up because
you got good management and

240
00:12:33,640 --> 00:12:35,560
what, Yeah.
Back management, pick the

241
00:12:35,560 --> 00:12:39,440
commodity cycle nice and early,
get on like a sort of tier one

242
00:12:39,440 --> 00:12:42,240
or a big discovery nice and
early.

243
00:12:44,200 --> 00:12:46,840
Some people can pick catalysts
that's that's a bit harder,

244
00:12:46,840 --> 00:12:53,760
whether that's M&A or, or you
know, other other types of deals

245
00:12:53,760 --> 00:12:57,720
and things like that.
Probably look at, look at, look

246
00:12:57,720 --> 00:13:01,080
at the ones that are the most
bombed out, less susceptible to

247
00:13:01,760 --> 00:13:06,000
missing guidance, the most like
the least riskiest to actually

248
00:13:06,000 --> 00:13:09,680
hit it and the ones that have
some some upside somewhere in

249
00:13:09,680 --> 00:13:11,920
whether it's exploration or
something to give you a

250
00:13:11,920 --> 00:13:14,240
statistical chance.
The ones that are completely

251
00:13:14,240 --> 00:13:17,120
bombed out like a, like a
Spartan where there's a

252
00:13:17,120 --> 00:13:19,480
recapitalisation and all these
sorts of things.

253
00:13:19,480 --> 00:13:23,720
And maybe there's a a a part of
the story that was

254
00:13:23,720 --> 00:13:25,560
underweighted, whether that's
new management coming in,

255
00:13:25,560 --> 00:13:28,720
whether that's a discovery where
the the futures can kind of

256
00:13:28,720 --> 00:13:30,560
change I.
Think I think you do all of

257
00:13:30,560 --> 00:13:31,440
them.
You'll make fuck.

258
00:13:33,240 --> 00:13:35,160
All the way easier on paper than
in reality.

259
00:13:35,160 --> 00:13:38,320
Yeah, I think you touched on all
the categories there that, that,

260
00:13:38,320 --> 00:13:41,240
that I, that I come up.
Incidentally, there's a lot, a

261
00:13:41,240 --> 00:13:44,200
lot more like a a much larger
list of ways you can lose money

262
00:13:44,880 --> 00:13:47,160
investing in resources, stocks
in there is to to make money.

263
00:13:47,160 --> 00:13:49,760
But yeah, the four categories
that I have is being early in a

264
00:13:49,760 --> 00:13:51,800
world class ore body.
So you ride the less on curve to

265
00:13:51,800 --> 00:13:54,920
a take out or production.
Now this is the GO alpha kind of

266
00:13:54,920 --> 00:13:57,640
style of investing.
A lot of that cohort, they sift

267
00:13:57,640 --> 00:13:59,400
through the discovery
announcements, you know, every

268
00:13:59,400 --> 00:14:00,480
morning.
Yeah.

269
00:14:00,640 --> 00:14:04,240
Like looking for, looking for
the next big thing #2 be early

270
00:14:04,560 --> 00:14:06,560
to a commodity cycle.
Buy the stuff that is out of

271
00:14:06,560 --> 00:14:09,640
flavour, like gold stocks were
two years ago, for example.

272
00:14:09,640 --> 00:14:12,000
And you'd be patient.
You let cycles run their course.

273
00:14:12,200 --> 00:14:14,360
This is, you know, the
contrarian investment style,

274
00:14:14,360 --> 00:14:17,720
which works really well in
cyclical industries #3 reading

275
00:14:17,720 --> 00:14:19,720
the M&A tea leaves.
Yeah.

276
00:14:19,720 --> 00:14:23,240
If you, if you know a company
needs to buy a certain deposit

277
00:14:23,240 --> 00:14:25,280
for it's nearby mill, they're
probably going to have to pay a

278
00:14:25,480 --> 00:14:27,240
premium for the ability to do
that.

279
00:14:27,480 --> 00:14:29,840
This sounds easy in practice,
but it's much harder to actually

280
00:14:29,840 --> 00:14:33,120
make money from because timing
matters a lot #4 picking

281
00:14:33,120 --> 00:14:35,200
turnarounds.
I have a lot of respect for the

282
00:14:35,200 --> 00:14:37,840
people that are good at this.
It's it's very hard and it takes

283
00:14:37,840 --> 00:14:40,640
like real skill.
Like, what's a turnaround play

284
00:14:41,160 --> 00:14:42,920
like we see all the time in our
industry.

285
00:14:42,920 --> 00:14:45,720
Mining companies can find
themselves in dire situations.

286
00:14:45,720 --> 00:14:47,400
They're, you know, royally
cooked.

287
00:14:47,600 --> 00:14:50,320
And sentiment about them
couldn't be any worse.

288
00:14:50,520 --> 00:14:52,400
And what causes them to be
royally cooked?

289
00:14:52,960 --> 00:14:55,160
Could be It could be that
sometimes I've got too much

290
00:14:55,160 --> 00:14:56,280
debt.
It could be that there's a bad

291
00:14:56,280 --> 00:14:58,400
hedge book.
Sometimes poor operational

292
00:14:58,400 --> 00:15:00,560
decisions by the management team
in place.

293
00:15:00,680 --> 00:15:03,040
Sometimes the rocks you thought
were there aren't as good when

294
00:15:03,040 --> 00:15:05,240
you actually start mining them.
Sometimes it's out of your

295
00:15:05,240 --> 00:15:07,760
control too, like a weather
event or a, you know, government

296
00:15:07,760 --> 00:15:10,640
regime shift.
If the reason the mining company

297
00:15:10,640 --> 00:15:13,120
is cooked is the rocks, then
you're screwed.

298
00:15:13,240 --> 00:15:15,600
But if the rocks are good and
there's potential for it to turn

299
00:15:15,600 --> 00:15:18,640
around with better management or
recapitalised capital structure,

300
00:15:19,760 --> 00:15:22,440
you know those are those are
turn around opportunities.

301
00:15:22,560 --> 00:15:24,440
You can think of a couple of
like successful turn around

302
00:15:24,440 --> 00:15:26,400
examples.
I've put our Bander in that

303
00:15:26,400 --> 00:15:28,560
category.
I've called Metro mining in that

304
00:15:28,560 --> 00:15:30,120
category.
You know, think of like the

305
00:15:30,120 --> 00:15:33,200
stories like investing in Saint
Barbara at $0.04 in 2014.

306
00:15:33,200 --> 00:15:34,800
As long as it's old.
Yeah.

307
00:15:36,160 --> 00:15:38,800
Like resolute up until you know,
she'd hit the fan recently

308
00:15:38,800 --> 00:15:40,280
there.
You know, I'd argue Oz minerals

309
00:15:40,280 --> 00:15:42,360
at one point was a a bit of a
turn around it.

310
00:15:42,440 --> 00:15:45,200
It certainly helps if you if you
get I think.

311
00:15:45,200 --> 00:15:47,440
Well, I actually don't put
Spartan in the category purely

312
00:15:47,440 --> 00:15:52,920
because like having a discovery
isn't a, a, a catalyst.

313
00:15:52,920 --> 00:15:55,120
You could have controlled, you
know, they, they, they did

314
00:15:55,120 --> 00:15:56,360
change strategy.
They turned off the meal.

315
00:15:56,360 --> 00:15:58,400
There was a management change
all those things.

316
00:15:58,400 --> 00:16:02,560
But like you couldn't have, you
could and you could have bought

317
00:16:02,560 --> 00:16:05,160
it cheap, but you couldn't have
predicted that catalyst because

318
00:16:05,160 --> 00:16:08,560
it was a discovery in some ways.
But yeah, that maybe they

319
00:16:08,560 --> 00:16:10,880
disagree.
I'd put Pilbara in the category

320
00:16:10,880 --> 00:16:14,240
and you know, Pilbara had a had
a commodity tail cycle on their

321
00:16:14,240 --> 00:16:17,080
side and that you know, that's
another kind of form of catalyst

322
00:16:17,080 --> 00:16:18,960
too, but.
I was going to say your your

323
00:16:18,960 --> 00:16:21,880
second point, the commodity
cycle and four have a lot of

324
00:16:21,960 --> 00:16:24,560
overlap in the behaviour of
companies.

325
00:16:24,560 --> 00:16:27,000
Totally, totally.
Those are those are the, yeah,

326
00:16:27,160 --> 00:16:29,320
the broad categories.
Some, some other people probably

327
00:16:29,320 --> 00:16:32,800
have a few other strategies of
ways to to make money and

328
00:16:33,080 --> 00:16:35,320
resources investing too.
And if you do like it and it's a

329
00:16:35,320 --> 00:16:36,400
different one, then leave a
comment.

330
00:16:36,400 --> 00:16:37,600
Let me know what what I've
missed.

331
00:16:38,320 --> 00:16:44,800
But buy this.
Buy the promote Yeah, so.

332
00:16:45,160 --> 00:16:47,320
I take it you can to talk about
turnarounds.

333
00:16:48,040 --> 00:16:50,400
I do.
To be a successful turn around,

334
00:16:50,400 --> 00:16:53,040
you need the catalyst that turns
things around, right?

335
00:16:53,720 --> 00:16:56,920
Sometimes that's the a recap to
pay out all of the the debt that

336
00:16:56,920 --> 00:16:59,440
is overburdening the company.
Sometimes that's a change of

337
00:16:59,440 --> 00:17:01,560
management.
Sometimes it's an expansion

338
00:17:01,560 --> 00:17:04,520
project to lower unit cost rate
production into a commodity

339
00:17:04,520 --> 00:17:07,000
tailwind.
What's more interesting in

340
00:17:07,000 --> 00:17:11,400
turnarounds, they're usually
small caps, They're usually like

341
00:17:11,400 --> 00:17:14,760
sub $200 million market caps and
maybe maybe have one or two

342
00:17:14,760 --> 00:17:16,319
assets.
You know, they're they're in

343
00:17:16,319 --> 00:17:19,359
that kind of unloved territory.
And and so they don't have a

344
00:17:19,359 --> 00:17:21,119
particularly institutional
following.

345
00:17:21,119 --> 00:17:24,960
But if they turn it around, they
graduate to a size that gets

346
00:17:24,960 --> 00:17:27,400
some, you know, gets
institutions looking at them and

347
00:17:27,400 --> 00:17:29,640
all of a sudden they're in the
indexes and you can you can sell

348
00:17:29,640 --> 00:17:31,360
your bags to the instos.
Happy days, right?

349
00:17:31,840 --> 00:17:36,760
Aurelia metals came up in J DS
interview with Fisty and which

350
00:17:36,760 --> 00:17:41,000
went up on Friday since Friday,
the stock is literally now 35%

351
00:17:41,000 --> 00:17:46,080
more expensive.
So well done Fisty and a really

352
00:17:46,200 --> 00:17:48,880
fits the the turn around
category perfectly.

353
00:17:48,880 --> 00:17:52,200
We've, we've hashed out the
reasons why Aurelia got itself

354
00:17:52,200 --> 00:17:55,560
into a predicament, you know, a
dozen times on the show before

355
00:17:56,320 --> 00:17:59,400
buying dogs for 200 million
bucks in December 2020, largely

356
00:17:59,400 --> 00:18:01,000
debt funded was it's, was it's
undoing.

357
00:18:01,440 --> 00:18:05,480
And you can see in that share
price chart there, 84% of it's

358
00:18:05,480 --> 00:18:09,400
equity value just eroded over
the following years after after

359
00:18:09,400 --> 00:18:11,920
doing that.
But over that time they did keep

360
00:18:11,920 --> 00:18:14,960
moving their federation project
forward and that was their

361
00:18:14,960 --> 00:18:16,680
development growth project,
which is actually a good

362
00:18:16,680 --> 00:18:19,240
project.
The management of board of the,

363
00:18:19,520 --> 00:18:21,400
you know, were there when the
Dogs deal got done.

364
00:18:21,400 --> 00:18:23,960
They got the boot.
There's a whole new board, new

365
00:18:23,960 --> 00:18:27,040
MD, new executive team that
largely got put in place around

366
00:18:27,040 --> 00:18:30,720
the rock bottom of end of 2022,
start of 2023.

367
00:18:31,080 --> 00:18:35,920
In fact, with the new management
team in place, they then put to

368
00:18:35,920 --> 00:18:39,760
bed the balance sheet concerns
too, with a $40 million capital

369
00:18:39,760 --> 00:18:44,320
raise at $0.09 in May 2023.
It's low was $0.09.

370
00:18:44,360 --> 00:18:47,440
It's now trading at $0.29.
That was the turn around

371
00:18:47,440 --> 00:18:50,440
catalyst.
You know, there, there, there

372
00:18:50,440 --> 00:18:52,680
were three at once, right?
New team, better balance sheet,

373
00:18:53,200 --> 00:18:54,720
proximal development of
federation.

374
00:18:56,480 --> 00:18:59,680
Yeah, so.
So why I guess why is federation

375
00:18:59,680 --> 00:19:04,720
the is that their that's going
to be their flagship

376
00:19:05,000 --> 00:19:07,200
effectively?
This will be their core.

377
00:19:07,200 --> 00:19:11,080
It is their core asset.
It's a polymetallic VMS, kind of

378
00:19:11,080 --> 00:19:13,880
classic cobar style deposit.
It has, you know, a vertical

379
00:19:13,880 --> 00:19:16,720
orientation.
I'll flash up its, its reserve,

380
00:19:16,720 --> 00:19:22,160
you know, 2.4 million tons
containing 8.7% zinc, 5.1% lead,

381
00:19:22,160 --> 00:19:27,000
0.3% copper, 1.4g per ton gold
and a little bit of silver too.

382
00:19:27,000 --> 00:19:30,680
Federation is entering its first
full year of commercial

383
00:19:30,680 --> 00:19:34,600
production now I think, you
know, initial, initial kind of

384
00:19:34,640 --> 00:19:36,720
kicked off around July last
year.

385
00:19:36,720 --> 00:19:38,720
So it's, you know, it's, it's,
it's moving forward, it's

386
00:19:38,720 --> 00:19:40,720
ramping up.
But interestingly, they are

387
00:19:40,720 --> 00:19:42,760
mining it from the top of the
ore body.

388
00:19:43,280 --> 00:19:48,120
You can see where development is
as as at this month here just in

389
00:19:48,120 --> 00:19:50,080
that you know, you can actually
see the the the development

390
00:19:50,280 --> 00:19:52,760
underground development there on
the on the on the section.

391
00:19:53,360 --> 00:19:58,560
That they and that 1.4g gold
like say they're getting half of

392
00:19:58,560 --> 00:20:00,120
it into concentrate.
That's bloody.

393
00:20:00,360 --> 00:20:02,400
It's worth a bit of coin these
days, like.

394
00:20:02,440 --> 00:20:05,000
All the other metals too.
I mean, I think it's like a 5.5

395
00:20:05,560 --> 00:20:07,280
gold equivalent.
Yeah, yeah.

396
00:20:07,280 --> 00:20:09,640
But I mean these polymetallics
you should you should think of

397
00:20:09,640 --> 00:20:12,600
it in like a dollar per tonne
net smell to return.

398
00:20:12,840 --> 00:20:14,800
Yeah, which is pretty, pretty
attractive here.

399
00:20:15,080 --> 00:20:17,440
The decision to to you know,
mine from the top down meant

400
00:20:17,440 --> 00:20:21,520
that all gets to the mill sooner
lower, lower front capital,

401
00:20:21,520 --> 00:20:24,200
faster pay back and it and it
meant that they could keep their

402
00:20:24,200 --> 00:20:27,840
capital structure of the company
intact since that May 2023

403
00:20:27,840 --> 00:20:30,600
capital raise.
And underpinning the low CapEx

404
00:20:30,600 --> 00:20:33,160
start up is also the fact that a
really has an under

405
00:20:33,200 --> 00:20:37,360
underutilised processing
facility just 80 kilometres down

406
00:20:37,480 --> 00:20:41,120
the road at their peak mine.
So they can just hold it there.

407
00:20:41,120 --> 00:20:42,640
They didn't have to build it,
build it, build a mill.

408
00:20:42,960 --> 00:20:45,920
And they actually just got
approval to start holding

409
00:20:45,920 --> 00:20:50,160
600,000 tonnes per annum on the
on the roads from Federation to

410
00:20:50,200 --> 00:20:53,680
to peak instead of the 200,000
tonne per annum limit before.

411
00:20:53,920 --> 00:20:57,200
The thing that Fisty spoke to in
your interview JD was the cash

412
00:20:57,200 --> 00:21:01,000
generation that the company is
on the verge of having from from

413
00:21:01,080 --> 00:21:03,880
FY20 6.
They basically they transition

414
00:21:03,880 --> 00:21:07,480
into thicker higher grade Stopes
at depth which carry the

415
00:21:07,480 --> 00:21:09,840
strongest margins and underpin
the mines free cash flow

416
00:21:09,840 --> 00:21:11,320
generation.
And you can kind of even see it

417
00:21:11,320 --> 00:21:13,000
just on the on the section
there, right?

418
00:21:13,000 --> 00:21:15,400
Like all of a sudden you, you
know, your mining shapes.

419
00:21:15,440 --> 00:21:18,440
Yeah, which I mean you can just
think of the the benefit that

420
00:21:18,440 --> 00:21:21,680
that that has from a, a free
cash flow generation potential.

421
00:21:22,240 --> 00:21:25,440
SO50's estimate was $100 million
of free cash flow per annum on

422
00:21:25,440 --> 00:21:28,200
an EV, like an enterprise value
of $250 million.

423
00:21:28,520 --> 00:21:31,360
Unfortunately, the market has
clued on a bit more now and the

424
00:21:31,360 --> 00:21:34,840
EV is no longer 250 million,
it's closer to $400 million.

425
00:21:35,320 --> 00:21:37,800
But I, I really do love
appreciating a turn around.

426
00:21:37,800 --> 00:21:40,320
And I think, you know, there's
a, there's a lot to be admired

427
00:21:40,320 --> 00:21:43,600
about, you know, a company that
can turn, turn things around

428
00:21:43,600 --> 00:21:48,000
and, and yeah, you know, really,
really move the dial like, you

429
00:21:48,000 --> 00:21:51,600
know, you've got an operational
plan that works and create

430
00:21:51,600 --> 00:21:52,920
shareholder value.
I think there's a lot to be

431
00:21:52,920 --> 00:21:56,800
admired about about that when
it's pulled off and you know, I

432
00:21:56,800 --> 00:21:59,200
really is, is frankly, they're
on the on the cusp of really

433
00:21:59,200 --> 00:22:01,400
reaping the reward from its turn
around.

434
00:22:01,880 --> 00:22:03,640
You know, whether or not it's
still cheap or not, you have to

435
00:22:03,640 --> 00:22:06,200
make your own mind up.
But regardless, it's embarked on

436
00:22:06,200 --> 00:22:07,760
this path of of of a turn
around.

437
00:22:07,760 --> 00:22:09,800
And today it's, it's been, it's
been an impressive thing to

438
00:22:09,800 --> 00:22:11,640
watch.
I'll have to, I have to write it

439
00:22:11,640 --> 00:22:14,320
up on it.
Are they obviously go on top

440
00:22:14,320 --> 00:22:14,960
down now?
Will they?

441
00:22:15,000 --> 00:22:16,680
Do they talk about paste or
anything?

442
00:22:16,840 --> 00:22:20,000
Or yeah, they, they, they
basically got to experiment with

443
00:22:20,000 --> 00:22:23,840
the pace early and kind of, you
know, like, like, yeah, the,

444
00:22:23,880 --> 00:22:25,720
the, the pay system's been
tested and all that sort of

445
00:22:25,720 --> 00:22:26,600
stuff.
Yeah.

446
00:22:26,600 --> 00:22:28,000
All right.
So they're obviously I think

447
00:22:28,000 --> 00:22:30,800
because I think before they were
going to go like bottom, like

448
00:22:30,800 --> 00:22:33,920
not when they say bottom up, you
don't go to the bottom.

449
00:22:33,920 --> 00:22:37,800
It's just like you go, you work
on top of the paste and and

450
00:22:38,000 --> 00:22:43,840
everything.
So it's it it's because you can

451
00:22:43,840 --> 00:22:46,320
do a lot of work in the other
Stopes drilling them out while

452
00:22:46,320 --> 00:22:47,440
you're backfilling.
Yeah.

453
00:22:47,680 --> 00:22:51,600
But for top down like that's the
best way to manage stress

454
00:22:51,600 --> 00:22:54,400
because you always got a stress
shadow top year because it's

455
00:22:54,400 --> 00:22:55,680
being excavated.
Gotcha.

456
00:22:55,680 --> 00:22:58,160
Gotcha.
And it's yeah, as you said, it's

457
00:22:58,160 --> 00:23:00,520
quicker because you just start
because you've got to develop 3

458
00:23:00,520 --> 00:23:03,400
levels down before you mine and
start whereas you just start

459
00:23:03,640 --> 00:23:06,440
taking or as you go.
Yeah, but it can be can be a bit

460
00:23:06,440 --> 00:23:10,400
slower because you've got to
wait for that pace to cure

461
00:23:10,400 --> 00:23:12,640
before you mine under it and
stuff like that.

462
00:23:12,640 --> 00:23:14,120
So there's pros and pros and
cons.

463
00:23:14,120 --> 00:23:14,800
It's.
A trade off.

464
00:23:14,800 --> 00:23:16,680
And in this case, they made the
trade off based on the, you

465
00:23:17,200 --> 00:23:19,360
know, the the reduced upfront
cash.

466
00:23:19,480 --> 00:23:22,520
Yeah, yeah, yeah, yeah.
Shout out to young fella Lucas.

467
00:23:22,680 --> 00:23:24,960
He wrote this excellent note
that he posted on LinkedIn

468
00:23:24,960 --> 00:23:27,160
together with Fisty's comments.
Inspired me to take a look at a

469
00:23:27,160 --> 00:23:31,520
really again, Luke says no.
He he, he writes this, he says

470
00:23:31,520 --> 00:23:33,960
it really is transitioning from
a complex story into a cash

471
00:23:33,960 --> 00:23:36,600
machine and the market is yet to
reprice it accordingly.

472
00:23:37,080 --> 00:23:41,280
Unfortunately for the punters
and they're reading Luke's note,

473
00:23:41,280 --> 00:23:44,520
the market is repriced at 35%
higher already since then.

474
00:23:44,520 --> 00:23:46,320
So I.
Reckon Lucas has made some cash?

475
00:23:46,680 --> 00:23:48,560
Hope so, yeah, you deserve.
Lucas moving the market.

476
00:23:49,000 --> 00:23:51,960
Yeah, yeah.
Oh, it's, I think one thing we

477
00:23:51,960 --> 00:23:54,800
didn't mention about
turnarounds.

478
00:23:54,800 --> 00:23:57,600
Oh, we sort of did about like
you mentioned, because they sort

479
00:23:57,600 --> 00:24:00,880
of, you know, new management
team and and everything like,

480
00:24:00,880 --> 00:24:03,480
even though they're not publicly
listed, like Kaydrill were the

481
00:24:03,480 --> 00:24:05,240
same when Ron O'Sullivan rocked
up.

482
00:24:06,160 --> 00:24:07,760
Like he's he's a turn around
man.

483
00:24:07,760 --> 00:24:11,360
Yeah, like they just injected
him like the obviously the

484
00:24:11,360 --> 00:24:14,800
sample management friggin
standards went through the roof,

485
00:24:14,800 --> 00:24:18,760
like just company morale and
look at how many Arsene Diamond

486
00:24:18,760 --> 00:24:21,360
I was they're drilling these
days, but just punching him in

487
00:24:21,360 --> 00:24:22,760
the gold.
Fields in all sorts of

488
00:24:22,760 --> 00:24:26,160
directions, mate and rhino he
just when you when you in his

489
00:24:26,160 --> 00:24:28,720
presence, you kind of just fall
into line.

490
00:24:28,800 --> 00:24:31,880
I've learned like this.
I don't know, you just want to

491
00:24:31,880 --> 00:24:34,040
say yes to him no matter what.
Like he's just that kind of

492
00:24:34,040 --> 00:24:35,800
figure.
Yeah, and you, like you will say

493
00:24:35,800 --> 00:24:38,040
yes to everything because you
trust him that he won't make you

494
00:24:38,040 --> 00:24:40,240
do anything stupid.
No, like because he'll just

495
00:24:40,240 --> 00:24:41,720
never tell you to jump off a
Cliff.

496
00:24:42,040 --> 00:24:46,640
No, like it's that you get into
his the Ron O'Sullivan vortex of

497
00:24:46,640 --> 00:24:48,680
trust.
If you haven't met him, I think

498
00:24:48,680 --> 00:24:51,520
you need to make it your mission
to meet him and just understand

499
00:24:51,520 --> 00:24:54,160
what we're talking about with
this vortex, because the net

500
00:24:54,160 --> 00:24:57,240
effect of it is more drill
meters, faster drill meters, bit

501
00:24:57,240 --> 00:24:59,240
like better workers who are on
those rigs getting the

502
00:24:59,240 --> 00:25:01,320
performance you need and.
I never quit.

503
00:25:01,920 --> 00:25:05,000
Never quit the the quality of
that sample management elite.

504
00:25:05,160 --> 00:25:07,480
Yeah, yeah, you just love him.
Just reliable.

505
00:25:07,480 --> 00:25:10,600
Try reliable when you get in the
vortex, just try not to kiss

506
00:25:10,600 --> 00:25:12,280
him.
Everyone tries because they fall

507
00:25:12,280 --> 00:25:13,720
in love with him.
Go okay drill.

508
00:25:13,720 --> 00:25:17,360
Go Ryan O'Sullivan JD, what have
you bloody found out with

509
00:25:17,480 --> 00:25:20,400
Goldfields and it's not Gold Rd.
related.

510
00:25:20,400 --> 00:25:22,800
Not gold Rd. related.
We are going to Ghana for this

511
00:25:22,800 --> 00:25:24,640
story guys.
Go to Ghana.

512
00:25:24,640 --> 00:25:26,360
And then the story sort of
expands from there.

513
00:25:26,360 --> 00:25:30,960
But goldfields have had to hand
over the keys to their domain

514
00:25:31,000 --> 00:25:33,160
goldmine to the Ghanaian
government.

515
00:25:33,400 --> 00:25:38,240
And oh, just a quick by the way,
Goldfields are now AUS $22

516
00:25:38,240 --> 00:25:40,880
billion company.
Their market cap has nearly

517
00:25:40,880 --> 00:25:45,400
doubled since January.
So they're on a a tear.

518
00:25:45,400 --> 00:25:48,040
That's a talk to the gold price.
Yeah, right.

519
00:25:48,240 --> 00:25:49,560
Even amongst the majors, that
is.

520
00:25:49,800 --> 00:25:53,360
I gather it wasn't like they
just didn't voluntarily rock up

521
00:25:53,360 --> 00:25:56,520
our look, we're thinking we
might give this back to you.

522
00:25:57,320 --> 00:26:00,640
I assume it was forcefully
requested.

523
00:26:00,840 --> 00:26:02,640
Yeah, you're quite astute
Matthew.

524
00:26:02,640 --> 00:26:04,000
Doesn't tend to play out that
way.

525
00:26:04,000 --> 00:26:07,640
I'll give a bit of background to
to the mine to to sort of start

526
00:26:07,640 --> 00:26:09,440
this story.
So Goldfields have majority

527
00:26:09,480 --> 00:26:12,840
owned demand for over 20 odd
years now.

528
00:26:13,160 --> 00:26:15,240
Government has a 10% free
carried interest.

529
00:26:15,760 --> 00:26:19,800
The mine on 100% basis did
135,000 oz.

530
00:26:19,800 --> 00:26:23,440
So it's it's pretty small.
It's a bit over 5% of goldfields

531
00:26:23,440 --> 00:26:27,720
total output.
Mining ceased through the year

532
00:26:27,720 --> 00:26:32,120
of 2024 last year and they moved
to trading stockpiles there, but

533
00:26:32,120 --> 00:26:35,600
still did pretty decent cash
flow as you'd expect with with

534
00:26:35,600 --> 00:26:39,200
mining costs turned off.
Free cash flow of $140 million.

535
00:26:39,200 --> 00:26:42,040
Did it did it stop because it
the orbity, the orbity was

536
00:26:42,040 --> 00:26:45,120
extinguished or what it.
So there's a bit to it and it's

537
00:26:45,120 --> 00:26:48,240
it's kind of complicated.
I guess I'll get there in a

538
00:26:48,240 --> 00:26:51,560
second because there's still
3,000,000 odd ounces in

539
00:26:51,680 --> 00:26:55,400
resources, but no reserves.
Given situation, they don't have

540
00:26:55,400 --> 00:26:57,680
the confidence to put things
into reserves.

541
00:26:57,680 --> 00:27:01,600
But essentially this was this.
And in the broader area was

542
00:27:01,600 --> 00:27:05,640
mined for a long time from the
from the 19th century through to

543
00:27:05,640 --> 00:27:09,360
the kind of 1950s.
But modern mining restarted here

544
00:27:09,360 --> 00:27:14,480
in 1997 with a mining lease, the
license being granted just

545
00:27:14,480 --> 00:27:17,400
before that.
Now production through the 20

546
00:27:17,400 --> 00:27:20,680
tens kind of waned a little bit
and then gold fields came out

547
00:27:20,680 --> 00:27:24,200
with this big reinvestment plan
favorite a kind of eight-year

548
00:27:24,200 --> 00:27:27,160
outlook, which is more or less
where we're kind of at from 2016

549
00:27:27,160 --> 00:27:31,240
to about now and then in the
early twenty 20s.

550
00:27:31,240 --> 00:27:35,200
So 2122 they start talking about
studies to try and extend the

551
00:27:35,200 --> 00:27:38,680
life as well as maybe looking at
selling the project.

552
00:27:39,120 --> 00:27:45,320
Now production had been on sort
of queue to end this year, but

553
00:27:45,680 --> 00:27:49,160
like, like I said, you, you look
at the the resources and in

554
00:27:49,160 --> 00:27:52,920
measured and indicated there's
2.2 million oz still at 1.8g.

555
00:27:52,920 --> 00:27:55,960
So it's decent.
It was a sort of a bigger mine

556
00:27:55,960 --> 00:27:58,840
with a few satellite pits kind
of feeding into it.

557
00:27:59,080 --> 00:28:02,280
Now the company added that they
tried all these exploration

558
00:28:02,280 --> 00:28:04,000
targets.
None of them turned out to be

559
00:28:04,320 --> 00:28:07,480
kind of too fruitful.
They hadn't really spent much

560
00:28:07,480 --> 00:28:10,800
last year and not an awful lot
the year before either on, on

561
00:28:10,800 --> 00:28:13,560
exploration.
But if you do go back on the

562
00:28:13,560 --> 00:28:17,240
goldfields website, which hasn't
been granted, you know, updated

563
00:28:17,240 --> 00:28:19,480
in, in too long.
I, I take it this is from the

564
00:28:19,760 --> 00:28:24,000
sort of 2018 time frame they
talk about mineral reserves

565
00:28:24,120 --> 00:28:28,360
being depleted by 2031.
So there, there's answers there.

566
00:28:28,360 --> 00:28:32,280
And I dare say they knew that
this mining lease was wrapping

567
00:28:32,280 --> 00:28:34,720
up in 2025.
Hence they haven't invested

568
00:28:34,720 --> 00:28:37,760
heaps of capital because they
had some sort of inklings that

569
00:28:37,760 --> 00:28:39,200
something like this would
happen.

570
00:28:39,240 --> 00:28:42,760
So it's not black and white as
to what the future of this would

571
00:28:42,760 --> 00:28:45,200
actually look like, but there's
clearly gold in and around the

572
00:28:45,200 --> 00:28:47,080
area.
So what what was the, I guess

573
00:28:47,080 --> 00:28:49,800
the background on they thought
this was going to happen?

574
00:28:49,800 --> 00:28:52,960
There must have been must have
been some lease dramas for a

575
00:28:52,960 --> 00:28:54,360
while.
Yeah, yeah, absolutely.

576
00:28:54,360 --> 00:28:59,040
So December 2024, last year they
submit an application to re

577
00:28:59,040 --> 00:29:01,160
extend it.
They had like I said, received a

578
00:29:01,160 --> 00:29:03,760
30 year lease almost 30 years
ago.

579
00:29:04,040 --> 00:29:06,840
It's due to expire April 25,
where we are today.

580
00:29:07,440 --> 00:29:09,640
In that annual report from last
year, there was a couple of

581
00:29:09,640 --> 00:29:13,080
interesting comments.
So they say that they'd, you

582
00:29:13,080 --> 00:29:15,320
know, they sort of discussed
that they're pursuing or would

583
00:29:15,320 --> 00:29:18,800
look to pursue all avenues to
extend the lease as you'd kind

584
00:29:18,800 --> 00:29:20,680
of expect.
And they actually specifically

585
00:29:20,680 --> 00:29:23,680
mentioned international
arbitration if necessary.

586
00:29:24,440 --> 00:29:26,960
Now this week, the, the Minerals
Commission, the sort of

587
00:29:27,280 --> 00:29:29,680
applicable body that looks over
this stuff in, in Ghana,

588
00:29:29,960 --> 00:29:32,520
rejected the application.
They told Goldfields stop all

589
00:29:32,520 --> 00:29:35,720
your mining, you need to be by
tomorrow off the site needs to

590
00:29:35,720 --> 00:29:38,240
be vacant.
And the company said that

591
00:29:38,240 --> 00:29:41,840
complied with that orders, they
won't be there as of tomorrow.

592
00:29:43,040 --> 00:29:46,560
So then kind of what next is, is
the question to ask.

593
00:29:46,560 --> 00:29:49,880
And the government hasn't
specifically said why they

594
00:29:49,880 --> 00:29:54,520
didn't accept the mining lease.
And you know, it's kind of par

595
00:29:54,520 --> 00:29:58,600
for the course you if the
company meets all the necessary

596
00:29:58,600 --> 00:30:02,240
requirements, you extend it.
That's how things normally work

597
00:30:02,240 --> 00:30:06,520
and Ghana by and large is held
in high esteem than a lot of

598
00:30:06,520 --> 00:30:07,720
it's sort of neighboring
countries.

599
00:30:07,720 --> 00:30:11,840
People are sort of called it a,
you know, by African standards,

600
00:30:12,120 --> 00:30:14,240
a good jurisdiction to to
operate in.

601
00:30:14,240 --> 00:30:16,360
So it's, it's pretty interesting
on that front.

602
00:30:17,320 --> 00:30:19,120
The government wants to take the
reins of this mine.

603
00:30:19,120 --> 00:30:20,840
It's very clear.
You can go on YouTube and

604
00:30:20,840 --> 00:30:23,880
there's these sort of videos
with a couple 100 views where

605
00:30:24,200 --> 00:30:27,360
CEO of the Minerals Commission
and other videos with the deputy

606
00:30:27,360 --> 00:30:30,400
CEO of the Minerals Commission
specifically talking about this.

607
00:30:30,400 --> 00:30:32,720
Mind, they're saying they're
going to honor all the existing

608
00:30:32,720 --> 00:30:34,040
contracts.
Nobody's going to lose their

609
00:30:34,040 --> 00:30:35,880
jobs, but processing will
continue.

610
00:30:36,400 --> 00:30:38,800
And there's a sort of strong
focus on Ghanaians being the one

611
00:30:38,800 --> 00:30:43,200
that's benefits from this.
And they push back on what

612
00:30:43,200 --> 00:30:46,080
Goldfield said in one comment
that said they said Goldfields

613
00:30:46,240 --> 00:30:49,360
didn't meet all the
requirements, but they didn't go

614
00:30:49,360 --> 00:30:52,560
into any great detail on what
kind of requirements other than

615
00:30:52,560 --> 00:30:56,680
saying there's no reserve.
But that kind of goes hand in

616
00:30:56,680 --> 00:30:58,640
hand.
Why would Goldfields put a

617
00:30:58,640 --> 00:31:00,320
reserve if they don't have
confidence that they're actually

618
00:31:00,320 --> 00:31:02,520
going to mine it?
That doesn't really makes sense,

619
00:31:02,520 --> 00:31:06,160
but that was the only real
specific point that the

620
00:31:06,160 --> 00:31:09,560
government pushed back on.
They did add that they want a

621
00:31:09,560 --> 00:31:11,360
better deal for the Ghanaian
people.

622
00:31:11,400 --> 00:31:16,000
As you kind of expect right now,
there's there's a bit more going

623
00:31:16,000 --> 00:31:18,320
on on Ghana.
So I'll, I'll take a step back

624
00:31:18,320 --> 00:31:22,600
for a moment now, because there
is much, much broader action

625
00:31:22,600 --> 00:31:25,360
happening.
And Ghana's not some like tiny

626
00:31:25,360 --> 00:31:27,280
little gold producer.
It's the sixth biggest gold

627
00:31:27,280 --> 00:31:30,440
producer on the planet.
They produce a tremendous amount

628
00:31:30,440 --> 00:31:33,880
of gold by global standards.
And they just created this body

629
00:31:33,880 --> 00:31:37,160
called Goldbod, which is now
going to be the sole authority

630
00:31:37,160 --> 00:31:41,680
to buy, sell, assay, export any
gold from small sale gold

631
00:31:41,680 --> 00:31:43,720
miners, right?
So this isn't including your

632
00:31:43,720 --> 00:31:48,640
purchases of the world and your
Anglo golds and others, but they

633
00:31:48,640 --> 00:31:52,360
want to organize artisanal
mining in the area and they were

634
00:31:52,360 --> 00:31:54,640
pretty punchy about this.
They said any foreign nationals

635
00:31:54,640 --> 00:31:57,960
tied up in small scale artisanal
mining are going to be booted

636
00:31:57,960 --> 00:32:00,120
out the country.
They lifted the growth and

637
00:32:00,120 --> 00:32:03,440
sustainability levy for major
mining companies as well.

638
00:32:03,440 --> 00:32:06,840
So that is the big guys.
That's lifted from 1% to 3% of

639
00:32:06,840 --> 00:32:10,480
gross production and so.
Like a royalty, effectively.

640
00:32:10,480 --> 00:32:14,680
More or less, yeah.
And the finance minister said in

641
00:32:14,680 --> 00:32:17,760
Parliament that the government
must leverage rising gold prices

642
00:32:17,760 --> 00:32:19,640
to boost revenue for national
development.

643
00:32:20,600 --> 00:32:23,600
So interestingly, the what we
would call the opposition leader

644
00:32:23,800 --> 00:32:26,280
pushed back on this and said
this is going to have an adverse

645
00:32:26,320 --> 00:32:29,240
effect on the resources industry
in our country.

646
00:32:29,240 --> 00:32:32,160
So it's getting, it's getting a
bit punchy over there.

647
00:32:33,040 --> 00:32:37,120
They sold as a country over 11
billion U.S. dollars of gold

648
00:32:37,120 --> 00:32:40,080
last year.
Half of that came from artisanal

649
00:32:40,080 --> 00:32:41,360
mining.
Wow.

650
00:32:41,880 --> 00:32:44,320
That is a huge, huge amount
which the government isn't

651
00:32:44,320 --> 00:32:46,600
getting a clip on.
So that is why they're getting

652
00:32:46,600 --> 00:32:50,280
pretty, pretty punchy and they
want their share, as you'd kind

653
00:32:50,280 --> 00:32:52,880
of expect.
And that the story as it relates

654
00:32:52,880 --> 00:32:55,920
to Goldfields gets a bit more
complicated because as you guys

655
00:32:55,920 --> 00:32:59,120
might remember, they own the
Taqwa mine in Ghana as well.

656
00:32:59,400 --> 00:33:01,840
This is a beast.
This pumps out over half a

657
00:33:01,840 --> 00:33:05,440
million oz per annum.
And they want to form this into

658
00:33:05,440 --> 00:33:08,440
a joint venture with Anglo
Gold's idea Prem.

659
00:33:08,480 --> 00:33:11,360
So this this was mentioned back
in 2023.

660
00:33:11,800 --> 00:33:14,320
And clearly the Ghanaian
government have this as

661
00:33:14,320 --> 00:33:18,000
leverage.
They need government approval to

662
00:33:18,000 --> 00:33:21,120
join up these two minds and to
to press on with the expansion

663
00:33:21,440 --> 00:33:24,320
at this operation.
That alone has 11 years of life

664
00:33:25,120 --> 00:33:27,800
at half a million oz, right?
This is huge.

665
00:33:27,800 --> 00:33:33,200
So I would imagine Goldfields
are just viewing this having to

666
00:33:33,200 --> 00:33:37,240
give up the the license for the
upper other operation domain as

667
00:33:37,240 --> 00:33:38,320
the cost of doing business,
right?

668
00:33:38,320 --> 00:33:42,640
Because this is really the the
golden goose that you don't want

669
00:33:42,640 --> 00:33:44,600
to give away.
You want to stay on the right

670
00:33:44,600 --> 00:33:46,800
side of the government.
Yeah, right.

671
00:33:46,800 --> 00:33:50,760
That's it's interesting that
they're going after the mining

672
00:33:50,760 --> 00:33:54,000
companies and the locals as well
for the clip.

673
00:33:54,280 --> 00:33:57,320
Yeah, yeah, absolutely.
I think that, I mean, that

674
00:33:57,640 --> 00:34:00,600
really leads me to, to my final
thoughts on, on why I find this

675
00:34:00,600 --> 00:34:04,080
super, super interesting
because, you know, some, some

676
00:34:04,080 --> 00:34:07,880
people might not be all that
bothered by this small mine,

677
00:34:07,880 --> 00:34:10,719
relatively small mine owned by a
South African company in, in

678
00:34:10,719 --> 00:34:12,280
Ghana.
That's, that's fair enough.

679
00:34:12,280 --> 00:34:15,840
But I feel there's a lot more to
this story because nothing

680
00:34:15,840 --> 00:34:18,760
happens in a vacuum.
And as an investor, you need to

681
00:34:18,760 --> 00:34:21,800
be reading the tea leaves about
what's going on because we've

682
00:34:21,800 --> 00:34:24,199
seen it in Mali, You're seeing
it now in Ghana in a

683
00:34:24,199 --> 00:34:26,880
jurisdiction that people thought
was was safer.

684
00:34:26,880 --> 00:34:29,760
And these things, they don't
happen in isolation.

685
00:34:29,760 --> 00:34:32,199
Just like companies look at what
their neighbors are doing next

686
00:34:32,199 --> 00:34:35,520
door, governments do the same.
And with the gold price going

687
00:34:35,520 --> 00:34:38,920
through the roof, there's
horrific youth unemployment in

688
00:34:38,920 --> 00:34:42,719
Ghana.
Artisanal mining has damaged

689
00:34:42,719 --> 00:34:44,880
more than half the the rivers in
the country.

690
00:34:45,159 --> 00:34:47,639
There's a lot of reasons for why
they want to get a hold of this,

691
00:34:47,639 --> 00:34:51,400
get the cash in the door and
look after their people as well

692
00:34:51,400 --> 00:34:54,440
as look after themselves.
Kind of no surprise on that

693
00:34:54,440 --> 00:34:56,199
front, but.
There are the unintended

694
00:34:56,199 --> 00:34:59,640
consequences along the way of
just like, yeah, other companies

695
00:34:59,880 --> 00:35:02,320
who are thinking about investing
in in the country all of a

696
00:35:02,320 --> 00:35:04,200
sudden think twice.
Yeah, absolutely.

697
00:35:04,200 --> 00:35:07,240
And clearly domain isn't a world
class asset.

698
00:35:07,400 --> 00:35:11,160
It's not going to be a massive
blow to to goldfields cash

699
00:35:11,160 --> 00:35:12,840
flows.
There would have still been

700
00:35:12,840 --> 00:35:15,000
value.
I mean just processing the

701
00:35:15,000 --> 00:35:18,960
stockpiles, imagine if it's even
if it's 50,000 ounces of all

702
00:35:18,960 --> 00:35:22,640
that's already been mind like
we're we're talking 100 million

703
00:35:22,840 --> 00:35:26,080
U.S. dollars in in cash flow.
So that alone not to mention

704
00:35:26,080 --> 00:35:29,120
what you'd sell a 5 million
tonne per annum plant for with

705
00:35:29,200 --> 00:35:32,280
with gold in and around the area
that there is value that they're

706
00:35:32,680 --> 00:35:36,800
foregoing here.
But it was very, very noteworthy

707
00:35:36,800 --> 00:35:40,120
that Gold Fields in their
announcement yesterday, made no

708
00:35:40,120 --> 00:35:42,000
mention of international
arbitration, but.

709
00:35:43,520 --> 00:35:46,000
Trying to keep it.
They want to keep it cordial.

710
00:35:46,000 --> 00:35:47,760
They want to keep the
relationship with the government

711
00:35:48,080 --> 00:35:51,920
all kosher because they know
that taqwa is way more important

712
00:35:51,920 --> 00:35:54,200
for them.
And they don't want to build up

713
00:35:54,200 --> 00:35:57,000
any animosity with the I mean,
this is my assumption.

714
00:35:57,000 --> 00:35:59,520
And I think it's the most kind
of obvious assumption, right?

715
00:35:59,520 --> 00:36:03,040
They want to stay on on side
with the Ghanaian government and

716
00:36:03,040 --> 00:36:06,920
make sure that the the big one
they've got is in good hands.

717
00:36:06,920 --> 00:36:09,040
And they're going to have to
forego a little bit.

718
00:36:09,040 --> 00:36:14,480
But yeah, with gold prices doing
what they've done, I'm not going

719
00:36:14,480 --> 00:36:17,200
to be surprised if we start
seeing more things like this all

720
00:36:17,200 --> 00:36:19,200
around the world.
It's it's just par for the

721
00:36:19,200 --> 00:36:22,160
course.
And yeah, in a in a sort of

722
00:36:22,160 --> 00:36:25,000
environment of like resource
nationalism, you just see more

723
00:36:25,000 --> 00:36:28,160
and more of this when countries
are doing it hard, when they've

724
00:36:28,160 --> 00:36:31,800
got yet that they owe the the
IMF or the World Banker, all

725
00:36:31,800 --> 00:36:33,640
this sort of stuff, they're
going to twist the levers that

726
00:36:33,640 --> 00:36:35,280
they.
Can well, I think resource

727
00:36:35,280 --> 00:36:38,720
nationalism was already
happening a lot in Africa before

728
00:36:38,720 --> 00:36:40,920
the gold price started RIP.
And so it's probably going to be

729
00:36:40,920 --> 00:36:44,160
even more heightened now, yeah,
A. 100% it's happening in in

730
00:36:44,160 --> 00:36:46,960
South America as well.
You look at what what Chile did

731
00:36:46,960 --> 00:36:49,040
to the lithium sector, it's all
around the world.

732
00:36:49,240 --> 00:36:52,600
The, the, the, the tricky thing,
I say tricky thing, but it's

733
00:36:52,600 --> 00:36:56,840
like the, the thing to be
cognizant of is like when, when

734
00:36:57,480 --> 00:37:01,560
regimes change based on the good
times, then you're really into

735
00:37:01,560 --> 00:37:05,040
that industry in the, in the
normal times, think of

736
00:37:05,040 --> 00:37:07,840
Queensland and the coal royalty
change, right?

737
00:37:07,840 --> 00:37:11,080
So the good times came making
super profits.

738
00:37:11,080 --> 00:37:13,800
Oh, we're going to Jack up these
royalties to absolutely onerous

739
00:37:13,800 --> 00:37:16,480
levels, which progressively get
higher and higher as you make

740
00:37:16,480 --> 00:37:18,840
more money.
And now, like, as coal prices

741
00:37:18,840 --> 00:37:22,320
moderate, it becomes really hard
to have just free cash flow.

742
00:37:23,160 --> 00:37:26,280
So you don't want that to happen
just because it's good times

743
00:37:26,280 --> 00:37:27,640
right now in the gold sector.
Yeah.

744
00:37:28,240 --> 00:37:29,600
Definitely.
Yeah, mate.

745
00:37:29,960 --> 00:37:34,240
I reckon your bloody your
prediction is your analysis.

746
00:37:34,240 --> 00:37:36,760
Spot on Jada.
That is definitely what they do.

747
00:37:37,440 --> 00:37:39,000
Thank you man.
Catchy in the corporate team.

748
00:37:39,480 --> 00:37:42,080
It's, I mean, it's, it's one to
watch for minors all around the

749
00:37:42,080 --> 00:37:44,520
world, I reckon.
Yeah, yeah, love it.

750
00:37:44,640 --> 00:37:47,160
Should we?
You could create J DS Bond map

751
00:37:47,160 --> 00:37:50,880
of international relationships.
I'm sure they'd.

752
00:37:50,880 --> 00:37:54,840
Be they've already done M and IL
as one, that could be your next

753
00:37:54,840 --> 00:37:57,240
project.
We met some cracking folks in in

754
00:37:57,240 --> 00:38:00,400
South Africa who who do this,
but they they keep it on the

755
00:38:00,640 --> 00:38:03,120
very hush hush and they maintain
those relationships.

756
00:38:03,120 --> 00:38:04,120
I.
Want to give you trade so you

757
00:38:04,120 --> 00:38:05,720
could serve.
By No No.

758
00:38:06,680 --> 00:38:08,720
Well, you get it for free here.
Why?

759
00:38:08,720 --> 00:38:10,400
Not all my dartboard
predictions.

760
00:38:11,040 --> 00:38:13,040
Love it righto.
Thanks to all the bloody

761
00:38:13,040 --> 00:38:16,080
partners.
GRX tickets mate.

762
00:38:16,080 --> 00:38:19,920
Use the code, come to Brisbane
with me and we'll bloody have a

763
00:38:19,920 --> 00:38:23,600
beer and talk tech and
innovation because that's what I

764
00:38:23,600 --> 00:38:24,840
do.
I talk tech.

765
00:38:25,040 --> 00:38:26,960
I talk tech and innovation with
people.

766
00:38:27,600 --> 00:38:30,680
I'm a trusted source of it.
JRX conference, Brisbane, May

767
00:38:30,680 --> 00:38:33,480
2020 Second discount code in the
show notes.

768
00:38:33,800 --> 00:38:36,840
Great partners these people are
sensational.

769
00:38:36,840 --> 00:38:41,280
MMS ground sand and ground
support, CR insurance K drill WA

770
00:38:41,280 --> 00:38:46,120
water borders quattro kci black
diamond drilling services and

771
00:38:46,120 --> 00:38:50,480
cross boundary energy roof.
Information contained in this

772
00:38:50,480 --> 00:38:53,200
episode of Money of Mine is of
general nature only and does not

773
00:38:53,200 --> 00:38:55,840
take into account the
objectives, financial situation

774
00:38:55,920 --> 00:38:57,960
or needs of any particular
person.

775
00:38:58,200 --> 00:39:01,240
Before making any investment
decision, you should consult

776
00:39:01,240 --> 00:39:04,320
with your financial advisor and
consider how appropriate the

777
00:39:04,320 --> 00:39:08,000
advice is to your objectives,
financial situation and needs.