The Hedge Fund That Stays Ahead of the Street (Matt Zabloski)

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We don't even look at gold
really as a commodity.

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I look at gold as a currency.
But what we have right now in

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our portfolio, you know, 2 to 3
gold producers that trade at

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ridiculously inexpensive
valuations.

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Travis Ricciardo, we have an
awesome interview coming up with

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a brand new fund manager that
we're speaking with for the

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first time, a natural resources
focused fund manager.

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Not just any fund manager, a
hedge fund manager, a hedge

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fund.
They don't talk to us normally.

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We're talking with Matt
Zablowski, who is the founder of

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Dellbrook.
Now they, as he kind of speaks

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about, have two different funds,
but they run essentially 1

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strategy for the natural
resources environment and they

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are based out of Vancouver.
So we're going to get a whole

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different take from our usual
Aussie focused audience.

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And we're going to get to speak
about some companies that we

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don't speak about all that often
here.

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So I'm very excited to share
this conversation.

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Matt is, is, is a lot more
forthcoming than than I expect.

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And he it was, it was, it was a
pleasure to speak with.

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He's, he's succinct.
He says a lot with few words and

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you get great insight to how you
know people who are who are

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managing a lot of money with
sometimes, you know, pretty,

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pretty sophisticated hedging
strategies, how they think about

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the the investment universe that
that we're.

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We all love and as we talk about
Trev, he's been doing it for

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quite some time.
So he started up Dell Brook in

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about 2011.
So just with his business here,

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it's 15 is and obviously has a
bit of a track record before

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starting that too.
So looking forward to sharing

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this conversation and a whole
host of insights from Matt

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Zablowski trap.
We are sitting here with Matt

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Zablowski, founder of Dellbrook,
and I was reading through his

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investor letter over the weekend
and there's some, there's some

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really awesome stuff, natural
resources focused fund manager

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that we'd love to speak with.
And Matt, there were some

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comments in in that investor
letter that were just jumping

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out to me and I've got to ask
you about so that the first one

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you had, it was a four or five
pager, but you had emboldened in

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there, emboldened rather what
we're witnessing is structural,

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not cyclical.
So I'm curious to to dive into

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this and see what you mean by
that statement first.

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Sure.
Yeah, and, and, and thank you

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for having me today.
You know, that statement for us

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really summarized I guess what
we saw at the end of 25 going to

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26, which was, you know, global
commodities in a shift to

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exactly what we said, a a more
structural, not cyclical change

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driven by a variety of factors
across the commodity landscape.

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Now obviously every commodity
isn't created equal, so we need

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to caveat that.
But really I think what we're

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seeing globally on the demand
supply for most metals at the

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moment is a, a, a, a structural
shift where we're beginning to

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pay I suppose for the under
investment of the last couple

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decades in resource exploration
and development.

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And really setting the situation
up where we have sort of a new

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demand supply imbalance, you
know, predicated on East versus

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West in terms of supply, but
also the West not being able to

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fulfill their needs because of
underinvestment in the sector

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for the last 20 odd years.
And are you, are you sort of

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starting to to feel this with
institutional allocations

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coming, coming towards your fund
or just seeing more larger in

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stores on on the registers of
the companies in which you

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participate?
Yeah, I, I'd say, you know, a

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lot of a little bit of B right
now.

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We've been in this sector going
on 20 years.

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So we've seen many cycles.
I'd say, you know, in terms of

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institutional allocation, it is
very, very small.

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I mean the S&P materials index
as a percentage of the overall

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S&P is still relatively small.
So anybody who is indexing to

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the S&P 500 in North America or
globally will not have a huge

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weighting here.
But you know, honestly, I think

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the cycle has been prolonged to
the downside and that's lost a

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lot of specialized managers
forced them to become something

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else.
We're happy we sort of held held

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a position as a material manager
going on 20 years.

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So for us globally, you know, I
think we we lead in terms of

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experience and we're beginning
to see institutional allocators

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first wanting education as to
why they need exposure to the

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sector, what it really means,
what the volatility profile is,

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but also what the return profile
is.

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And a lot of people are
realizing that there just isn't

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that specialty manager set that
you have in something like

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technology or, or healthcare.
So, you know, we're, we're

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probably one of the few firms
that have probably been around

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the longest who've been covering
the space.

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Right before we hit record you,
you said, Matt that you're an

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open book and you don't always
get that level of, of, of

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openness for a, for a long short
hedge fund.

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Why the transparency?
Look, I mean, we like to talk

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about the names that that that
we're involved in.

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You know, we spend a lot of time
on structuring a lot of time on,

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you know, our high conviction
ideas.

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We run a very high conviction
portfolio.

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I mean we really have, you know,
half of our assets probably in

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the top 10 or 12 names.
So you know, we are happy to

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share best ideas with other
funds.

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You know, it's a little bit more
difficult of a conversation when

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you're, you know, pushing some
of your bigger shorts.

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People don't necessarily like
that, but you know, I believe

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that I believe that brings
efficiency to the market.

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We're not scared of shorting
individual equities, individual

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pieces of credit, etcetera.
So for us, you know, especially

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with our LP base that you know,
we have some of the very

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strongest L PS I think who you
know, very intelligent and

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investors who know what we can
return for them.

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So, you know, we're happy to
share ideas and we bring one off

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ideas to investors all the time.
You, you spoke about that small

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allocation to materials and we
had a guest on a couple weeks

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ago.
So that the numbers kind of

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pressed in my head.
I think he said it was 1.6% of

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the S&P was allocated to the,
the material space.

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It's just a, a kind of startling
number.

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And on the back of that, you
know, we, we saw the volatility

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not just the last 1020 years,
but like the last quarter alone,

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the volatility has been kind of
staggering.

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What what do you think that does
to the the attraction of

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institutional investors to to
the space to the prolonging of

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the the investment cycles and
the CapEx cycles with these

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companies and the like?
Look, I, I think it's difficult.

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I think it's also difficult, you
know, because a lot of the

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allocation institutionally and
on the retail side of being at

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the ETS that don't provide
actual funding to companies.

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But you know, generally for us,
I think the volatility profile

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is something that we explain to
our LP's, we explain the return

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as well.
I mean, our fund does have a

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sharp ratio that's over 1, you
know, which is always a nice

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pass for for institutions when
they're looking at that risk

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adjusted return.
But it's not for the faint of

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heart.
I mean, cyclicals are not for

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the faint of heart.
Materials are sort of the cyclic

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or can be the cyclicals that are
on, you know, a bit of an even

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higher volatility trajectory.
But it also goes back to why you

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invest in this structure as a
hedge fund, not a long only

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fund, right.
The ability for us to utilize

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hedging tools both on the macro
side, on the individual equity

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side, in terms of relative value
on the index hedging etcetera.

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I think you know we can show
proof that that there is a

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reason to have allocation here.
It can return, you know, very

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significant return profiles like
we produced in 2025, but we can

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mitigate the risk and our, our,
you know, our, our, our general

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thought process from a high
level is to keep the sharp above

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1.
But, you know, if we can manage

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an upside volatility that's 1
1/2 to two times the downside

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volatility, then we've really
done a good job.

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That 2025 return 151% huge, huge
year.

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I'm sure Q1 was a a roller
coaster.

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How do you, how do you explain
the, the well, yeah, how do you

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explain the, the return profiles
of of Q1 and how do you like

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manage that accordingly?
Yeah.

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So our Q1 numbers aren't
official yet, but we're up about

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10% in the first quarter, which
makes us, you know, I think

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probably in the top, top 5% of
hedge funds globally, not just

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not just materials hedge funds,
but it was volatile, right.

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We came ripping out of the gate
in January and February, you

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know, March, you know, for
everybody once I think not to

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use the term which is overused,
you know, tail event.

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But I think a lot of what
happened there when you see

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correlations amongst all risk
assets go to 1 and everything

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drops, you know, you can never
have enough of a hedge book on.

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We're still running with a net
long bias in the funds that we

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manage that long to the tune of
about 40% net long.

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So for us, yeah, obviously
March, March was a bit of a

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pullback, but it's very
difficult to manage any capital

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in this sector month to month.
We tend to try to do a quarter

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to quarter and I'm happy to see
the team put up a positive Q1.

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So we, we have sort of chatted
in the past with people in the,

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in the pod shop land, you know,
long, short and March was just a

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de grossing event.
They they just had to reduce

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their size in, in the market.
But like you just said there,

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you you like to think a bit
longer term than perhaps a pod

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shop might.
Was it still a time just to to

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de gross your exposure to to the
market over the past month?

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Yeah.
I mean luckily for us in the

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first couple months in the
quarter we were bringing

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exposure down.
You know, we had a great end

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2025 we were up, you know,
fairly material in January,

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February reaching price targets
within the the long portfolio

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for sure.
So we we we are not market

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timers, but we were bringing
exposure down already, not in

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anticipation of any event, but
just because valuations look

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pretty rich to us.
We did de lever, de gross a bit

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more brought that down in the
month of March increase the

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portfolio hedges.
We still have a bias for a net

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long positioning within the
material space, certain

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commodities over others.
But you know, ultimately, you

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know, I think what March really
produced, whether it be in the

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pawn shops or other funds, is,
you know, a pretty quick and and

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violent opportunity for the
tourists in the space to to

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disappear.
I don't know that running some

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of the incredibly tight risk
parameters of a pawn shop works

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in the material space.
It just doesn't because the

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market cap constraints are
there.

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And, and honestly, I think you
have to take a little bit of a

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slightly longer term view on
some of these themes to play

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out.
But in, in reality, you know,

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whenever you see a sector like
you see in the material space

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over the last, call it 12 to 18
months, where it's not well,

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fundamentally understood and you
end up with a lot of tourists

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chasing, let's call it nothing
more than commodity beta, you're

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going to end up with pull backs
like you saw in March when any

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event happens.
And really, at the end of the

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day, that creates opportunity.
What what style of of trade is

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like would would explain the the
the the the large portion of of

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of your returns man.
That's a good question.

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I mean, we, we, we tend to buck
on our strategies in, in 3

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distinct buckets, you know, one
being relative value, 11 being

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more thematic longer term
investing, you know, themes that

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we see within global materials,
both long and short.

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And the other is event driven.
You know, it's just the

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fundamental analysis that we do
within the coverage universe

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that we have.
You know, I'd say the relative

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value trades probably the most
difficult in the last, call it

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12 to 18 months, you know,
momentum being what it is,

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individual equity pairs have
been pretty tough to, to keep

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pace with indices in terms of
about performance.

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So I'd say it's probably be
pretty equally split between the

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event driven and the more
thematic trades that we've had.

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You know, we've had a big, big
theme in the last 12 months on

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precious metals, probably even
more than that.

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We were early to the precious
metals trade.

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You know, in 2025 we played a
great trade on some silver

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spreads.
I really saw a capital flowing

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00:11:15,840 --> 00:11:18,880
from gold and silver that worked
out very well for us looking

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00:11:18,880 --> 00:11:20,680
forward.
I mean, we still have some

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00:11:20,680 --> 00:11:22,640
pretty, pretty bullish prospects
for gold.

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We're not gold bugs by any
means, but margins are pretty

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00:11:26,120 --> 00:11:28,560
material right now within the
space and even a flat gold

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00:11:28,560 --> 00:11:31,760
price, the free cash flow
generation still over 7%, which

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00:11:31,760 --> 00:11:34,720
is leading any sector of the S&P
500 right now.

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00:11:35,720 --> 00:11:37,360
And really for us, I think
you're looking forward to

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00:11:37,360 --> 00:11:39,080
matically, you need to talk
about things like critical

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00:11:39,080 --> 00:11:42,360
metals, you need to talk about,
you know, the defense industrial

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complex and and you know, those
demands from Western Hemisphere

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00:11:47,120 --> 00:11:48,640
on, on the global commodities
trade.

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00:11:49,120 --> 00:11:51,960
And then you can't miss that.
You know, exports of critical

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00:11:51,960 --> 00:11:55,600
metals from China were given a
one year reprieve and in

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00:11:55,600 --> 00:11:57,320
November.
And you know, we just don't

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00:11:57,320 --> 00:11:59,480
think that's going to be
extended beyond November of this

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00:11:59,480 --> 00:12:00,880
year.
So there's lots of thematic

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00:12:00,880 --> 00:12:02,600
things are going on in the
market right now that I think

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00:12:02,600 --> 00:12:04,480
investors need to be aware of,
both long and short.

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00:12:04,680 --> 00:12:07,360
When when you say, when you say
event, event driven trades, like

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00:12:07,440 --> 00:12:10,840
if I were to segregate that into
into some buckets as well, like

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00:12:10,960 --> 00:12:14,480
like how much of that is
anticipation of of earnings is

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00:12:14,480 --> 00:12:17,800
an event versus like, you know,
M and a is an event or?

246
00:12:19,040 --> 00:12:20,840
Yeah.
I mean if you're speaking about

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00:12:21,160 --> 00:12:25,680
of M and as you know strictly on
spec ARB trades, it's not, you

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00:12:25,680 --> 00:12:27,440
know, many people have died on
that hill.

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00:12:28,040 --> 00:12:31,600
So, so it's it's not a place
you'll find us to the degree

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00:12:31,600 --> 00:12:33,920
there are risk ARB
opportunities, we will play

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00:12:33,920 --> 00:12:37,440
them, we will leverage them.
Yeah, there have been a few M&A

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00:12:37,440 --> 00:12:40,080
opportunities in the space.
I think there's going to be a

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00:12:40,080 --> 00:12:41,360
lot more to come in the coming
years.

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00:12:41,360 --> 00:12:45,240
When you see the balance sheet
expansion within, you know that

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00:12:45,240 --> 00:12:47,840
cash flow growing, sorry, net
cash balance is growing pretty

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00:12:47,840 --> 00:12:50,240
materially.
But then you know things like

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00:12:50,360 --> 00:12:53,400
like earnings production
updates, you know resource

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00:12:53,400 --> 00:12:56,360
updates, that's sort of the the
bread and butter of some of what

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00:12:56,360 --> 00:12:59,120
are our analysts do.
And you know the general

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00:12:59,120 --> 00:13:01,680
thinking for us is we should be
well ahead of the Street.

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00:13:02,320 --> 00:13:05,120
You know, generally until it
just the last 12 months there

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00:13:05,120 --> 00:13:08,240
hasn't been great sell side
coverage across the material

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00:13:08,240 --> 00:13:10,520
sector, especially the the
metals and mining sector.

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00:13:10,520 --> 00:13:14,360
So if we can use use the
research framework that we

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00:13:14,360 --> 00:13:18,160
employ to put shorter duration
capital at risk, both long and

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00:13:18,160 --> 00:13:20,520
short, we have a pretty good
track record of generating

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00:13:20,520 --> 00:13:24,520
those, you know what we call in
sort of a baseball analogy

268
00:13:24,640 --> 00:13:28,120
singles, you know, but over a
short duration of time that

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00:13:28,120 --> 00:13:30,760
compound quite nicely.
And if I, if I had to

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00:13:31,280 --> 00:13:38,240
conceptualize that a bit better,
so there like how exactly will a

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00:13:38,320 --> 00:13:40,200
firm like Delbrook be ahead of
the street?

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00:13:40,240 --> 00:13:43,040
Like what?
Like what proprietary research

273
00:13:44,040 --> 00:13:46,600
tools do you have to kind of be
one step ahead?

274
00:13:48,280 --> 00:13:50,400
If you're talking about from the
buy side standpoint, I mean we

275
00:13:50,400 --> 00:13:52,480
have the tenor, we've been doing
this for 20 years.

276
00:13:53,280 --> 00:13:57,280
I'd hazard a guess at a good
number of generalists in the

277
00:13:57,280 --> 00:14:00,280
space right now couldn't
accurately build you a, a, a

278
00:14:00,280 --> 00:14:04,080
production model for a gold
company that is any more than

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00:14:04,080 --> 00:14:05,240
just what the streets feeding
them.

280
00:14:06,040 --> 00:14:07,800
You know, we have our research
team that's constantly

281
00:14:07,800 --> 00:14:10,360
traveling, looking at projects
trying to understand both what

282
00:14:10,360 --> 00:14:11,920
the opportunities and the risks
are.

283
00:14:12,440 --> 00:14:15,360
I'd say we also just had the
relationships in the space, you

284
00:14:15,360 --> 00:14:17,440
know, and we run a very
concentrated portfolio.

285
00:14:18,480 --> 00:14:20,840
Those, those event driven
opportunities pop in and out of

286
00:14:20,840 --> 00:14:23,640
the portfolio with relatively
good frequency.

287
00:14:24,080 --> 00:14:26,600
But, but honestly, it's the
relationships and just the, the

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00:14:26,600 --> 00:14:29,120
fundamental research that we do.
I mean, we have our analysts on

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00:14:29,120 --> 00:14:32,200
the phone with companies trying
to push on key themes, you know,

290
00:14:32,320 --> 00:14:35,280
one of which today we're just
speaking about, which is energy

291
00:14:35,280 --> 00:14:37,160
inflation in the mining sector,
right?

292
00:14:37,920 --> 00:14:39,560
You know, I think a lot of
people still haven't begun to

293
00:14:39,560 --> 00:14:41,800
put some of that into their
models, right, which I think

294
00:14:41,800 --> 00:14:44,520
could be pretty detrimental to
some of the Street estimates

295
00:14:44,520 --> 00:14:48,520
going into Q1 reporting and then
into Q2 if it carries on.

296
00:14:48,760 --> 00:14:51,720
Trav, I've got a message for the
sales and marketing teams within

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00:14:51,960 --> 00:14:53,800
miners.
You know, as a mining company

298
00:14:53,800 --> 00:14:55,680
scales up, it brings production
online.

299
00:14:56,040 --> 00:14:59,720
You just start getting bombarded
with emails coming in for people

300
00:14:59,720 --> 00:15:02,480
wanting your medal.
It's a classic bottleneck where

301
00:15:02,480 --> 00:15:05,160
everything just gets trapped in
that inbox or a static

302
00:15:05,160 --> 00:15:07,240
spreadsheet.
You can, you can end up spending

303
00:15:07,240 --> 00:15:10,240
half your day just triaging
emails and if you're doing that,

304
00:15:10,320 --> 00:15:13,080
it's pretty hard to just stay
focused on the actual strategy

305
00:15:13,120 --> 00:15:16,000
of getting the best margin for
your product.

306
00:15:16,280 --> 00:15:19,680
That's exactly the kind of issue
that Metals Hub is solving for

307
00:15:19,680 --> 00:15:21,200
the biggest players out there
mate.

308
00:15:21,440 --> 00:15:23,640
It is indeed.
They have created essentially

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00:15:23,640 --> 00:15:26,720
this all in one AI system that
takes all those unstructured

310
00:15:26,840 --> 00:15:30,720
inbound e-mail inquiries that
you get, and it delivers a

311
00:15:30,720 --> 00:15:35,080
clean, organized set of deals
that you can go through and

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00:15:35,080 --> 00:15:38,000
assess and you can see which
deal delivers you the best net

313
00:15:38,000 --> 00:15:40,560
back.
It's all about working smarter,

314
00:15:40,560 --> 00:15:42,440
mate.
And like we're seeing groups

315
00:15:42,440 --> 00:15:45,160
like Boston Metal, Brazil, Anglo
American, then moving the

316
00:15:45,160 --> 00:15:47,840
workflows onto the platform just
to stay streamlined.

317
00:15:47,840 --> 00:15:51,160
And there's a great case study
of what Anglo American is using

318
00:15:51,160 --> 00:15:54,040
the tech for on Metals Hub
website right now.

319
00:15:54,320 --> 00:15:58,360
Just go to
www.metalshub.com/money of mine.

320
00:15:58,520 --> 00:16:01,880
Check it out right now.
Go metal sub when we kind of

321
00:16:01,880 --> 00:16:05,920
zoom out at the, the returns of
the, the funds or the, the

322
00:16:05,920 --> 00:16:09,480
strategy that you guys run the,
the returns are, are fantastic,

323
00:16:09,480 --> 00:16:12,840
but there's some pretty volatile
years in between, which is no

324
00:16:12,840 --> 00:16:15,360
surprise looking at the, the,
the resources space.

325
00:16:15,360 --> 00:16:18,080
But inferring from the, the
writing that you guys had, there

326
00:16:18,080 --> 00:16:22,840
was a real period of learning
coming through 2223 and the,

327
00:16:23,000 --> 00:16:26,440
the, how you guys manage risk
really kind of evolved.

328
00:16:26,440 --> 00:16:28,040
I, I kind of inferred from that
period.

329
00:16:28,040 --> 00:16:31,360
Can you kind of talk through
that and how it actually shapes

330
00:16:31,360 --> 00:16:34,960
the the strategies you you put
into into the trades you make?

331
00:16:36,440 --> 00:16:39,720
Yeah, absolutely.
I mean for US 2223, you know,

332
00:16:39,840 --> 00:16:43,320
the key, key learning from that,
I mean, we were quite early to

333
00:16:43,320 --> 00:16:45,560
the gold trade.
We had a situation where where

334
00:16:45,560 --> 00:16:47,840
gold in and of itself was
working as a commodity, but the

335
00:16:47,840 --> 00:16:51,080
equities were not working.
And we, you know, we were facing

336
00:16:51,400 --> 00:16:54,320
situations where we had certain
long positions, you know, we

337
00:16:54,320 --> 00:16:57,440
bought at, you know, 2 1/2 three
times cash flow that you know,

338
00:16:57,440 --> 00:17:00,000
very quickly, you know, over the
course of a few months trading

339
00:17:00,000 --> 00:17:02,080
less than two times cash flow.
So the commodity was working.

340
00:17:02,080 --> 00:17:05,839
The equities weren't, you know,
key to us for that is just re

341
00:17:05,839 --> 00:17:07,560
evaluating some of the risk
parameters.

342
00:17:07,920 --> 00:17:10,119
I think if we were guilty of
anything, we're probably spread

343
00:17:10,119 --> 00:17:12,960
a bit too, too wide in terms of
the overall portfolio.

344
00:17:13,520 --> 00:17:16,079
One of the key, key learnings
that we've we've implemented is

345
00:17:16,079 --> 00:17:19,960
just greater concentration,
which, you know, may not seem to

346
00:17:19,960 --> 00:17:22,760
make logical sense to to many
to, to reduce risk.

347
00:17:22,760 --> 00:17:26,640
But we've really found it helps
keep the team focused on the

348
00:17:26,640 --> 00:17:29,360
names that we have the highest
conviction in and really not

349
00:17:29,360 --> 00:17:33,320
waste time around the periphery
on ideas that may seem good, but

350
00:17:33,320 --> 00:17:35,680
could require more hand holding
within a portfolio.

351
00:17:35,680 --> 00:17:39,120
So you know what, like I said
for us, you know, keeping the

352
00:17:39,440 --> 00:17:43,160
the top ideas high conviction
and watching them, you know,

353
00:17:43,160 --> 00:17:45,640
like a hawk has been something
that's really, you know, been a

354
00:17:45,640 --> 00:17:47,880
learning coming out of those
those years and something that I

355
00:17:47,880 --> 00:17:50,560
think we'll continue to do, you
know, in the future.

356
00:17:50,800 --> 00:17:53,040
We've also expanded the research
team here internally.

357
00:17:53,040 --> 00:17:55,760
So you know, keeping the same
level of focus, but being able

358
00:17:55,760 --> 00:17:58,840
to focus on a greater deal of
opportunities, sub sectors,

359
00:17:58,840 --> 00:18:00,440
etcetera really has been key to
us.

360
00:18:00,920 --> 00:18:03,360
That's a fascinating approach.
I'm curious when it comes to

361
00:18:03,360 --> 00:18:06,320
then portfolio structure, so you
run quite concentrated.

362
00:18:06,600 --> 00:18:10,360
Do you make a sort of extended
effort to diversify across

363
00:18:10,360 --> 00:18:13,200
commodities so there's some
spreads, it's not all getting a

364
00:18:13,200 --> 00:18:16,640
gold wind or do you see that as
a benefit as well in some sense?

365
00:18:17,760 --> 00:18:19,320
So generally within the
portfolio, we're trying to

366
00:18:19,320 --> 00:18:24,440
capture no sort of broad
commodity beta solely for for

367
00:18:24,440 --> 00:18:26,480
commodity beta sake.
You know, our view is that

368
00:18:26,480 --> 00:18:28,080
investors can generally do that
themselves.

369
00:18:28,080 --> 00:18:31,000
If you want your raining
exposure, you can buy an ETF.

370
00:18:31,800 --> 00:18:35,600
You know, when when we start the
process, we look sort of and

371
00:18:35,600 --> 00:18:38,720
say, hey, should we be spending
time on on, on on this sub

372
00:18:38,720 --> 00:18:40,720
sector, yes or no?
If there's conviction in the

373
00:18:40,720 --> 00:18:43,280
commodity, if there's conviction
in the names trading at a

374
00:18:43,280 --> 00:18:47,160
discount or you know, even some
fundamental reason to operation,

375
00:18:47,160 --> 00:18:50,000
look at a company, company as a
turn around, we'll spend time on

376
00:18:50,000 --> 00:18:53,440
that.
Where we will spend additional

377
00:18:53,440 --> 00:18:57,760
time now is hedging the overall
equity exposure within that sub

378
00:18:57,760 --> 00:18:59,640
commodity.
You know, gold for example,

379
00:18:59,640 --> 00:19:01,880
right now perfect example for us
right now.

380
00:19:02,200 --> 00:19:04,480
You know, we're we're generally
neutral to the prospects for

381
00:19:04,480 --> 00:19:06,520
bullion right now.
I mean I can make an argument to

382
00:19:06,520 --> 00:19:09,240
you in the short term.
It trades down, it trades up.

383
00:19:09,240 --> 00:19:11,120
I don't think anybody knows.
We don't even look at gold

384
00:19:11,120 --> 00:19:13,160
really as a commodity.
I look at gold as a currency,

385
00:19:14,080 --> 00:19:17,760
but what we have right now in
our portfolio are you know 2 to

386
00:19:17,760 --> 00:19:21,560
3 gold producers that trade at
ridiculously inexpensive

387
00:19:21,560 --> 00:19:24,240
valuation.
So obviously a large value value

388
00:19:24,240 --> 00:19:27,480
skewed to the long portfolio.
But with that we're overlaid

389
00:19:27,480 --> 00:19:29,880
with a broad based gold equity
hedge, right.

390
00:19:29,880 --> 00:19:32,600
So really trying to trying to
try to squeeze and flesh out

391
00:19:32,960 --> 00:19:35,400
alpha generation through
security selection in that

392
00:19:35,400 --> 00:19:38,280
sector right now.
You know we will play some

393
00:19:38,280 --> 00:19:40,040
commodity movements on momentum
wise.

394
00:19:40,040 --> 00:19:41,920
Perfect example was last year
with silver.

395
00:19:42,240 --> 00:19:44,560
You know our analysts flags
great opportunities in the

396
00:19:44,560 --> 00:19:47,520
silver sector, both in the
commodity itself, but also in

397
00:19:47,520 --> 00:19:49,880
the equities.
The equity market cap is

398
00:19:50,200 --> 00:19:52,800
generally relatively small
within the silver space.

399
00:19:52,800 --> 00:19:55,560
So the best way for us to play
the thesis that we had on silver

400
00:19:55,560 --> 00:19:58,920
last year were through things
like call spreads on an ETF for

401
00:19:58,920 --> 00:20:01,480
the underlying commodity.
So really for us, we're flexible

402
00:20:01,480 --> 00:20:04,640
in the approach that we take,
but really trying to focus in on

403
00:20:04,640 --> 00:20:06,920
the fundamental operating
principles of the companies.

404
00:20:07,240 --> 00:20:10,680
And the reason we enjoy looking
at the at the operating

405
00:20:10,680 --> 00:20:13,240
companies is because when we do
our job correctly, we're able to

406
00:20:13,240 --> 00:20:15,360
pick up the.
Return profile, yes, from the

407
00:20:15,360 --> 00:20:17,960
commodity, that's great, but
also the operating leverage and

408
00:20:17,960 --> 00:20:20,680
the financial leverage that's
that's inherent within those

409
00:20:20,680 --> 00:20:23,320
companies obviously being
cognizant to the fact that that

410
00:20:23,320 --> 00:20:26,320
bites both ways.
So the fun mandate lets you play

411
00:20:26,320 --> 00:20:29,840
across various financial assets
as as well instruments.

412
00:20:31,160 --> 00:20:34,160
Yeah.
I, I mean, yes, across many, I

413
00:20:34,160 --> 00:20:37,280
mean I have to caviate it with
the fact that, you know, we are

414
00:20:37,280 --> 00:20:39,840
a hedge fund that offers
quarterly redemption with 90

415
00:20:39,840 --> 00:20:42,680
days notice.
So you know, we do credit,

416
00:20:43,640 --> 00:20:46,960
private credit, public credit,
but a lot of that you know, is,

417
00:20:47,080 --> 00:20:51,000
is, is either carved off within
the fund structure put into side

418
00:20:51,000 --> 00:20:53,040
cars, SPVS.
But yeah, I mean, generally I'd

419
00:20:53,040 --> 00:20:57,560
say we're about 80% equity
investors within the sector with

420
00:20:57,560 --> 00:21:03,560
20% being being other.
In, in the, and the dynamic you

421
00:21:04,040 --> 00:21:06,480
talked about with the yeah,
assessing the financial average

422
00:21:06,520 --> 00:21:08,720
operating leverage of these,
these companies at a fundamental

423
00:21:08,720 --> 00:21:11,040
level, noting that it buys both
ways.

424
00:21:11,240 --> 00:21:15,480
Well, if, if I think of the, the
short side of the, the book, I'd

425
00:21:15,520 --> 00:21:19,040
love to know how you, how you
come up with a high conviction

426
00:21:19,040 --> 00:21:24,160
short idea or a specific name.
When, when, when often times

427
00:21:24,160 --> 00:21:27,280
it's the, you know, the, the,
the worst companies go up the

428
00:21:27,280 --> 00:21:29,920
most because of that high, you
know, operating leverage that

429
00:21:29,920 --> 00:21:32,880
they, they often have.
Or, or maybe maybe it's a, you

430
00:21:32,880 --> 00:21:35,320
know, highly speculative.
Do you need an event like you

431
00:21:35,320 --> 00:21:37,960
need some some some catalyst
that's near term that they're

432
00:21:37,960 --> 00:21:40,280
going to miss or or underperform
or something like that to to

433
00:21:40,280 --> 00:21:43,640
justify that short?
Yeah, signaling of equity shorts

434
00:21:43,640 --> 00:21:46,160
right now within the global
commodity sector in terms of

435
00:21:46,160 --> 00:21:47,840
operating companies is awfully
difficult.

436
00:21:48,560 --> 00:21:52,320
You know a lot of it as you
alluded to, you know, the worst,

437
00:21:52,320 --> 00:21:54,280
the worst of the best
performers, which which from a

438
00:21:54,320 --> 00:21:56,600
fundamental equity analyst
standpoint makes it just

439
00:21:56,600 --> 00:21:59,480
infuriating, right.
I mean, but it makes sense,

440
00:21:59,480 --> 00:22:00,960
right?
The highest cost operator will

441
00:22:00,960 --> 00:22:03,160
have the most bang for their
buck as a commodity price goes

442
00:22:03,160 --> 00:22:06,480
up.
Where we've had success within

443
00:22:06,480 --> 00:22:08,920
the commodity landscape that's
been generally positive momentum

444
00:22:08,920 --> 00:22:11,200
has been on individual equity
shorts where you can point to a

445
00:22:11,200 --> 00:22:15,040
specific event, you know, where
we diligence is a specific

446
00:22:15,040 --> 00:22:17,560
event.
Maybe, you know, operating

447
00:22:18,080 --> 00:22:21,520
capacity on a mill is offline
more than you know the street

448
00:22:21,520 --> 00:22:22,960
believes.
Maybe there's some, some

449
00:22:22,960 --> 00:22:26,840
fundamental, you know, issue
with recoveries, you know,

450
00:22:26,920 --> 00:22:30,000
metallurgically or whatever it
really gets into I guess a lot

451
00:22:30,000 --> 00:22:32,680
of the, the weeds at the General
St. won't.

452
00:22:33,440 --> 00:22:36,080
So that's where we've had
success in the last, call it 12

453
00:22:36,080 --> 00:22:39,400
to 18 months because generally
you talk about gold, copper, you

454
00:22:39,400 --> 00:22:42,920
know, nickel, they've all had a
fairly positive tailwind to

455
00:22:42,920 --> 00:22:45,840
them.
So having duration short

456
00:22:45,840 --> 00:22:50,000
exposure to a single equity has
just been, you know, a nightmare

457
00:22:50,000 --> 00:22:53,760
scenario for investor for for
hedge funds and, and and that's

458
00:22:53,760 --> 00:22:57,240
just be avoided.
We're not market timers, but as

459
00:22:57,240 --> 00:22:59,360
we see, commodities generally
are cyclical.

460
00:22:59,360 --> 00:23:03,520
As we see cycles turn, there's
obviously, you know, valuation

461
00:23:03,520 --> 00:23:05,960
parameters within some of the
commodity sectors right now that

462
00:23:05,960 --> 00:23:09,480
are absurd doesn't mean that
they will not continue to be

463
00:23:09,480 --> 00:23:11,280
absurd.
So you need to, you know, find

464
00:23:11,280 --> 00:23:14,200
an inflection, have conviction
in the inflection and then apply

465
00:23:14,800 --> 00:23:17,720
the capital accordingly.
You know, I can show you gold

466
00:23:17,720 --> 00:23:21,000
equities right now, the trade
AT2A2 Times Now, right?

467
00:23:21,400 --> 00:23:24,880
But probably, you know,
nothing's going to break that

468
00:23:24,880 --> 00:23:28,320
until you break the underlying
dynamic of, you know, the retail

469
00:23:28,320 --> 00:23:30,120
or the journalist community
who's invested there.

470
00:23:30,680 --> 00:23:35,560
Or is this lug or otherwise?
A reserve comment.

471
00:23:37,560 --> 00:23:41,920
So you mentioned tourists there
and you wrote about them in your

472
00:23:41,920 --> 00:23:45,040
note that they bring an
interesting element because they

473
00:23:45,040 --> 00:23:48,800
bring the they bring the flows,
they bring money to the space as

474
00:23:48,800 --> 00:23:50,560
well.
How do you think about tourists

475
00:23:50,560 --> 00:23:52,800
in the sector and what are you
seeing right now about them?

476
00:23:54,560 --> 00:23:57,640
I mean, we love it, right,
because it, it, it creates a

477
00:23:57,640 --> 00:24:00,160
period of price discovery, it
creates an efficiency, it

478
00:24:00,160 --> 00:24:03,520
creates liquidity.
And really it allows a fund like

479
00:24:03,520 --> 00:24:06,080
ours to play in names that
traditionally may be liquidity

480
00:24:06,120 --> 00:24:08,360
had not allowed us to get
involved in, right.

481
00:24:08,680 --> 00:24:11,160
I'm, I'm talking about, you
know, some billion dollar names

482
00:24:11,160 --> 00:24:15,720
or whatever where, you know, we,
we just can't expose capital

483
00:24:15,720 --> 00:24:21,080
given the ADV parameters, you
know, historically, but now you

484
00:24:21,080 --> 00:24:22,360
got a lot more liquidity in the
space.

485
00:24:22,360 --> 00:24:27,560
So we like it because, you know,
yes, it adds volatility, upside

486
00:24:27,560 --> 00:24:29,840
and downside volatility, but it
also opens up a great deal of

487
00:24:29,840 --> 00:24:32,240
opportunities for us to trade
the book around on a more active

488
00:24:32,240 --> 00:24:34,920
basis.
You know, and I think you know,

489
00:24:34,920 --> 00:24:36,920
you've, you've seen the downside
of it last couple weeks in

490
00:24:36,920 --> 00:24:41,840
March, but you know, if you're
fast or if you're reverse a few

491
00:24:41,840 --> 00:24:43,760
months before that, you saw the
positive of it, right?

492
00:24:43,760 --> 00:24:45,480
You just see the flows of
capital come in.

493
00:24:45,480 --> 00:24:48,120
So, you know, whatever happens
in the market to increase

494
00:24:48,120 --> 00:24:50,320
liquidity I think is generally
positive for funds like ours.

495
00:24:50,960 --> 00:24:54,240
Does the does the model allow
you to to benefit from like long

496
00:24:54,240 --> 00:24:56,000
duration trades?
I mean, we all know that that's

497
00:24:56,000 --> 00:25:01,120
where super money can be made
in, in in resources A. 100% I

498
00:25:01,120 --> 00:25:03,560
mean we do have that bucket that
I call more thematic investing,

499
00:25:04,120 --> 00:25:05,840
right, which is both long and
short.

500
00:25:05,840 --> 00:25:10,440
But you know where are
commodities going, individual

501
00:25:10,440 --> 00:25:12,640
commodity based on certain
certain themes that we see,

502
00:25:12,640 --> 00:25:13,640
right.
I mean, we had a great

503
00:25:13,640 --> 00:25:17,760
investment a couple years ago in
a, you know, one of the world's

504
00:25:17,760 --> 00:25:22,680
largest producers of TIN, right?
And the whole thematic behind it

505
00:25:22,680 --> 00:25:28,040
was AI microchip complexity, TIN
being used as a primary

506
00:25:28,040 --> 00:25:31,960
component for soldering of a
greater complex chipset and

507
00:25:31,960 --> 00:25:33,400
really saw the TIN price moving
up.

508
00:25:33,400 --> 00:25:35,320
And we're able to, you know,
over a period of 18 months,

509
00:25:35,320 --> 00:25:37,200
probably triple our money in a
couple of these names.

510
00:25:37,800 --> 00:25:40,040
So yeah, you're correct.
I mean, we're not just all fast

511
00:25:40,040 --> 00:25:41,880
money.
There is a, a certain portion of

512
00:25:41,880 --> 00:25:44,200
the book probably 3040% that is
more thematic.

513
00:25:44,480 --> 00:25:48,240
But there's no reason you can't
have that thematic longer

514
00:25:48,240 --> 00:25:51,080
duration compounding of returns
whilst hedging some downside.

515
00:25:53,160 --> 00:25:56,440
Let's talk about TIN.
Are you still as constructive on

516
00:25:56,440 --> 00:25:59,840
its on its outlook here?
The equities have obviously like

517
00:25:59,920 --> 00:26:03,000
much, much higher.
But like if you if you back out

518
00:26:03,000 --> 00:26:06,400
the multiple, the you know the
earnings multiple of of

519
00:26:06,400 --> 00:26:09,560
Meddlesex or alpha men, maybe
it's maybe it's climbed

520
00:26:09,560 --> 00:26:12,520
slightly, but not tremendously.
Yes, their earnings have grown

521
00:26:12,520 --> 00:26:13,840
substantially because tin price
is growing.

522
00:26:14,960 --> 00:26:16,480
Yeah.
I mean, so we've, we've, we've

523
00:26:16,480 --> 00:26:18,280
written some of these tin names
quite nicely.

524
00:26:18,280 --> 00:26:21,320
You know, earlier this year I
alluded to, you know, taking

525
00:26:21,320 --> 00:26:22,800
some exposure down in some
names.

526
00:26:23,600 --> 00:26:28,280
Obviously, certain things meet
price targets that we have, you

527
00:26:28,280 --> 00:26:31,120
know, one of those examples took
an opportunity to take some of

528
00:26:31,120 --> 00:26:34,600
the money off the table.
Still a big believer in scarcity

529
00:26:34,600 --> 00:26:36,280
supply.
I don't think Indonesia is going

530
00:26:36,280 --> 00:26:38,960
to be able to produce what
they've claimed to be able to

531
00:26:38,960 --> 00:26:41,680
produce in the past.
You know, that said, some of

532
00:26:41,680 --> 00:26:44,160
these tin, tin operations are in
areas that you don't exactly

533
00:26:44,160 --> 00:26:46,400
want to go on vacation, right?
And we've seen that.

534
00:26:47,120 --> 00:26:50,880
We've seen seen production
curtailments, mines put on care

535
00:26:50,880 --> 00:26:52,920
and maintenance because of of
security concerns.

536
00:26:53,480 --> 00:26:57,200
But the cash flow generation,
you know that 45,000 a ton tin

537
00:26:57,200 --> 00:27:02,160
or even $50,000 a ton tin when
you're producing AA20 or 21,000

538
00:27:02,960 --> 00:27:05,560
pretty material, right.
And you know, the ability for

539
00:27:05,560 --> 00:27:07,520
these companies to pay
dividends, to buy back shares,

540
00:27:07,520 --> 00:27:10,480
etcetera, they still look
relatively inexpensive on a cash

541
00:27:10,480 --> 00:27:14,680
flow basis.
Was was TIN an opportunity to to

542
00:27:14,680 --> 00:27:17,360
do a payers trade in any way or
you were just very constructive

543
00:27:17,360 --> 00:27:20,320
on the the thematic kind of
outlook for for the underlying?

544
00:27:21,400 --> 00:27:22,680
Yeah.
Look, I mean, 1010 is such a

545
00:27:22,680 --> 00:27:25,400
thin market in terms of market
cap investability in the

546
00:27:25,400 --> 00:27:26,880
equities.
For us.

547
00:27:26,880 --> 00:27:30,360
It was probably a 5% or less,
you know, sort of directional

548
00:27:30,400 --> 00:27:35,120
thematic trade, something that,
you know, turned a 5% exposure

549
00:27:35,120 --> 00:27:38,000
into, you know, it would have
been 15.

550
00:27:38,000 --> 00:27:40,920
We probably were up that much
and got some dividends along the

551
00:27:40,920 --> 00:27:43,920
way.
So it, that to us is just more,

552
00:27:43,920 --> 00:27:46,480
more thematic.
Those types of Paris trades in

553
00:27:46,880 --> 00:27:49,760
some of these minor metals are
just, I mean, it's a bit, bit

554
00:27:49,760 --> 00:27:51,360
difficult.
You can look at ways to hedge,

555
00:27:52,040 --> 00:27:57,800
you know, exposure with, with
with with correlated assets, but

556
00:27:57,920 --> 00:28:02,280
I mean, I, I struggle to to
present you a fully hedged, you

557
00:28:02,280 --> 00:28:03,720
know, trading in something like
complement.

558
00:28:05,400 --> 00:28:08,600
On the that thematic side of the
book, Matt, what are some of the

559
00:28:08,840 --> 00:28:13,040
the longer duration like
thematic thematic buckets of of

560
00:28:13,040 --> 00:28:16,440
bets that you you are have
relatively high conviction on at

561
00:28:16,440 --> 00:28:19,240
the moment?
Yeah, I thought you, you know, I

562
00:28:19,240 --> 00:28:21,280
think we wrote about this in our
Q4 and we'll write about it

563
00:28:21,280 --> 00:28:23,760
again in our Q1.
I don't think this critical

564
00:28:23,760 --> 00:28:27,400
metals narrative is over.
I think, you know, last year we

565
00:28:27,400 --> 00:28:31,040
had a certain list of critical
metals that were put on export

566
00:28:31,040 --> 00:28:34,600
restriction out of China,
antimony or gallium or

567
00:28:34,600 --> 00:28:36,440
everything that everybody's hot
to trot on, right.

568
00:28:36,440 --> 00:28:38,400
But then all of a sudden
November came around, there was

569
00:28:38,400 --> 00:28:42,840
a reprieve given, you know, some
export controls were, were

570
00:28:42,840 --> 00:28:46,720
loosened a little bit and you
saw things like antimony, for

571
00:28:46,720 --> 00:28:50,280
example, do like a, you know, a
full, full reversal of all the

572
00:28:50,280 --> 00:28:54,480
gains it had in 2025, right?
Look, I, I, I, and I'm not

573
00:28:54,480 --> 00:28:56,680
picking an antelope in
particular or, or any of these,

574
00:28:56,680 --> 00:28:59,120
but I'm just saying that, you
know, if you're looking for a

575
00:28:59,120 --> 00:29:02,960
further reprieve of export
restrictions out of China, I'd

576
00:29:02,960 --> 00:29:05,400
ask you if the geopolitical
situation between the US and

577
00:29:05,400 --> 00:29:08,640
China is better today than it
was six months ago, right?

578
00:29:08,640 --> 00:29:10,720
And, and, you know, I think the
answer everyone would have is

579
00:29:10,720 --> 00:29:13,880
it's a little bit worse, if not
a lot worse.

580
00:29:13,880 --> 00:29:18,160
So I think the critical metals
narrative, we've been, you know,

581
00:29:18,280 --> 00:29:22,640
big believers for about 8 months
now in some of the defense and

582
00:29:22,640 --> 00:29:24,840
dust industrial base
commodities.

583
00:29:26,680 --> 00:29:29,840
But within the critical metals
narrative there, everything's

584
00:29:29,840 --> 00:29:31,680
not created equal.
I mean, we've had a great call

585
00:29:31,680 --> 00:29:34,720
internally on things like
tungsten, which most people

586
00:29:35,360 --> 00:29:37,640
probably roll their eyes and say
I don't know what that's used

587
00:29:37,640 --> 00:29:41,360
for, but we've had some some big
wins on names like out El Monte

588
00:29:41,360 --> 00:29:43,480
for example.
Now that's been a good win for

589
00:29:43,480 --> 00:29:45,360
us.
You know, looking at

590
00:29:45,360 --> 00:29:48,760
underwriting other critical
metals opportunities right now

591
00:29:49,160 --> 00:29:52,240
both in the market, but we've
also seen a good number of sort

592
00:29:52,240 --> 00:29:56,560
of pre IPO bridge opportunities
that we get invested in in the

593
00:29:57,000 --> 00:29:59,200
the critical metals narrative.
Now that there's a market for

594
00:29:59,200 --> 00:30:02,080
these and they're coming coming
out with with projects that in

595
00:30:02,080 --> 00:30:05,040
this commodity construct are
actually reasonably priced

596
00:30:05,040 --> 00:30:07,200
projects that have a future to
them are.

597
00:30:07,760 --> 00:30:09,120
You still constructive on
Tungston?

598
00:30:11,000 --> 00:30:12,800
We are so constructive on on
tungsten.

599
00:30:12,800 --> 00:30:14,720
I mean, it's been a heck of a
ride for the commodity.

600
00:30:15,800 --> 00:30:18,200
I would tell you, whenever you
see a commodity do what tungsten

601
00:30:18,200 --> 00:30:20,880
has done, you're going to have a
lot of fluff come out of the

602
00:30:20,880 --> 00:30:22,880
closet, right?
You're going to have a lot of,

603
00:30:22,920 --> 00:30:25,960
you know, companies that just
have tungsten in their name and

604
00:30:25,960 --> 00:30:30,200
claim that they're going to dust
off a project from 1935 in Utah

605
00:30:30,200 --> 00:30:32,200
that makes tungsten.
I'm not picking on anybody in

606
00:30:32,200 --> 00:30:35,040
particular, but I'm just saying
that's what happens in commodity

607
00:30:35,040 --> 00:30:38,080
cycles.
So the prospects for tungsten in

608
00:30:38,080 --> 00:30:42,440
terms of production right now
absolutely still very

609
00:30:42,480 --> 00:30:46,280
constructive because the
elasticity on the demand side

610
00:30:46,280 --> 00:30:48,880
for price really is non
existent.

611
00:30:49,440 --> 00:30:52,960
You have an end buyer in the
defense industrial complex that

612
00:30:52,960 --> 00:30:56,240
will continue to pay to get a
source of supply, but the

613
00:30:56,240 --> 00:31:01,680
investable universe out there
that is available to catch this

614
00:31:01,680 --> 00:31:06,640
cycle is very small.
It is very, very small.

615
00:31:06,800 --> 00:31:11,840
If I if I think of the other the
other, the other metals that

616
00:31:11,840 --> 00:31:15,040
might fit into that defense
industrial complex.

617
00:31:15,440 --> 00:31:17,320
What do we have that is
interesting to you?

618
00:31:18,640 --> 00:31:21,520
Yeah, I mean, you have the
entire rare earth complex, you

619
00:31:21,520 --> 00:31:24,640
know, and, and I, I love, you
know, people paint the rare

620
00:31:24,640 --> 00:31:28,240
earth complex as one, one fresh
stroke, right?

621
00:31:28,240 --> 00:31:31,560
I mean, it's very much a nuance
based on deposits, based on what

622
00:31:31,560 --> 00:31:34,320
part of the production cycle
you're in.

623
00:31:34,960 --> 00:31:38,960
We tend to like the refining
side of that equation a lot more

624
00:31:38,960 --> 00:31:41,920
than the actual or extraction
and mining side of it, just

625
00:31:41,920 --> 00:31:45,760
because there's no shortage of
Andy PR assets out there.

626
00:31:46,560 --> 00:31:49,400
And if you look at the ND versus
the PR, there's a big difference

627
00:31:49,400 --> 00:31:51,880
in pricing there.
So we really need to focus more

628
00:31:52,120 --> 00:31:55,880
on the heavies as opposed to the
lights and heavy, heavy focus.

629
00:31:55,880 --> 00:31:59,800
Rare earth deposits aren't easy
to come by, at least out of the

630
00:32:00,000 --> 00:32:02,880
development side.
So we tend to spend more time on

631
00:32:02,880 --> 00:32:06,000
folks who are processing or the
not necessarily separating, but

632
00:32:06,000 --> 00:32:08,280
processing the rare earth
oxides.

633
00:32:09,440 --> 00:32:11,120
So you know, we've had
investments in the past and

634
00:32:11,120 --> 00:32:14,400
companies that have been mega
manufacturers, right, folks who

635
00:32:14,400 --> 00:32:17,560
are at the end of the value add
chain, but really where the

636
00:32:17,560 --> 00:32:21,200
value is added, that's been a
big win for us in the past.

637
00:32:21,960 --> 00:32:25,600
So we like that within that sort
of industrial defense narrative.

638
00:32:26,480 --> 00:32:29,400
Like a near.
Performance materials or yeah, I

639
00:32:29,400 --> 00:32:32,200
mean, we, we, we were large,
large investors of, you know,

640
00:32:32,840 --> 00:32:38,920
performance materials, you know,
early 2024 up until, you know,

641
00:32:38,920 --> 00:32:40,640
it's obviously had quite the
ride.

642
00:32:40,640 --> 00:32:44,480
So, you know, for us it looks to
be in the mid 20s, fairly

643
00:32:44,480 --> 00:32:46,640
valued, pulls back.
I think that's still a, a, a

644
00:32:46,640 --> 00:32:49,440
relatively safe place to be.
I mean, the cash flow generation

645
00:32:49,440 --> 00:32:52,960
is finally coming around the,
the volumes are finally starting

646
00:32:52,960 --> 00:32:55,360
to pick up.
I, I would be cautious though on

647
00:32:55,360 --> 00:32:57,280
some of the rare earth deposits
that are out there.

648
00:32:57,280 --> 00:33:01,520
I mean they're very difficult,
you know, to generate returns,

649
00:33:02,160 --> 00:33:04,760
especially in light of looking
at some of the pricing

650
00:33:04,760 --> 00:33:07,880
mechanisms that are being put
into support, you know, with

651
00:33:07,880 --> 00:33:11,280
floor pricing, you know, that
seems to me to really be sort of

652
00:33:11,280 --> 00:33:15,840
holding in some of the NDPR
pricing matrix for better or

653
00:33:15,840 --> 00:33:18,240
worse.
So, you know, I'd be, I'd be

654
00:33:18,240 --> 00:33:22,240
cautious on some of the actual
or extraction companies, the

655
00:33:22,240 --> 00:33:24,320
actual mining companies.
But yeah, the NEO performance

656
00:33:25,080 --> 00:33:29,800
has been a +1 and we've been
familiar with that company for

657
00:33:30,640 --> 00:33:34,480
many years now.
From a Western perspective, what

658
00:33:34,480 --> 00:33:37,280
is your take on these price
flows as it means to compete

659
00:33:37,280 --> 00:33:42,280
with China?
Look, I think it's interesting.

660
00:33:42,680 --> 00:33:45,680
I, I, I, you know, it's, it's
against everything cap, you

661
00:33:45,680 --> 00:33:48,520
know, capitalist based in my, in
my DNA.

662
00:33:48,520 --> 00:33:51,480
But I mean, it has to happen
because we haven't invested in

663
00:33:51,480 --> 00:33:55,360
this complex in any
institutional way for, for

664
00:33:55,360 --> 00:33:57,120
years, right?
We've been way too reliant of,

665
00:33:57,240 --> 00:33:59,160
you know, exporting stuff from
China.

666
00:34:00,080 --> 00:34:04,240
So, you know, it's put in place
for a reason.

667
00:34:04,800 --> 00:34:09,639
I, I, you know, I think it
supports the industry, you know,

668
00:34:09,639 --> 00:34:11,920
I, I just hope that what we end
up with, you know, right now

669
00:34:11,920 --> 00:34:15,800
there's no shortage of, of light
rails that are in the market,

670
00:34:15,880 --> 00:34:17,440
right?
We don't necessarily need that,

671
00:34:18,199 --> 00:34:21,840
that or we need more of the
heavy stuff, you know, the, the

672
00:34:21,840 --> 00:34:24,880
latter half of the, of the
oxides.

673
00:34:25,320 --> 00:34:28,960
But for us, you know, that's why
I'm cautious getting involved in

674
00:34:28,960 --> 00:34:32,880
the actual sector in terms of or
extraction and would rather play

675
00:34:32,880 --> 00:34:35,080
the value add guys who have the
technology behind them.

676
00:34:36,040 --> 00:34:40,080
But I can see the point of, you
know, the floor pricing and

677
00:34:40,080 --> 00:34:43,719
whether stockpiling of rare
earth oxides is something that

678
00:34:43,719 --> 00:34:46,800
is formally going to happen in
the US or in Europe.

679
00:34:47,080 --> 00:34:49,800
I guess time will tell.
But I mean, really it's, it's,

680
00:34:49,800 --> 00:34:52,920
it's providing the necessary
certainty to develop projects

681
00:34:52,920 --> 00:34:54,679
that we should have developed
ourselves over the last 20

682
00:34:54,679 --> 00:34:57,520
years.
Yeah, yeah, agreed.

683
00:34:58,240 --> 00:35:02,120
If we, if we change tax slightly
from from critical to battery

684
00:35:02,120 --> 00:35:05,280
materials here in Australia,
battery materials and lithium

685
00:35:05,280 --> 00:35:08,000
specifically is another space.
We've seen government,

686
00:35:08,120 --> 00:35:11,400
government chatter, government
equity investments as well.

687
00:35:11,400 --> 00:35:15,040
When I listen to a podcast
you've done last year, you spoke

688
00:35:15,040 --> 00:35:18,680
about the through that lithium
and SPOD specifically was in and

689
00:35:18,680 --> 00:35:24,160
that was, I think it was about
mid 2025 when SPOD was I think

690
00:35:24,160 --> 00:35:28,840
started with a with A6 and it
might have, it might have

691
00:35:28,840 --> 00:35:31,440
quadrupled, certainly tripled
since then.

692
00:35:32,000 --> 00:35:34,880
And that happened in a very
quick space of time.

693
00:35:34,880 --> 00:35:38,920
So what do you make of it now?
Look, I think if you play the

694
00:35:38,920 --> 00:35:43,280
energy, you know, transition
being accelerated by oil prices

695
00:35:43,280 --> 00:35:47,560
at 140 a barrel, I, I think
you'll see this trend trend

696
00:35:47,560 --> 00:35:50,440
continue.
I mean my, my, my, my concern on

697
00:35:50,440 --> 00:35:53,080
the spot, you mean side right
now is that everyone's making

698
00:35:53,080 --> 00:35:55,600
money, right?
I mean the margins are there and

699
00:35:55,600 --> 00:35:59,160
they're still, you know,
probably 25% addition to the

700
00:35:59,160 --> 00:36:00,720
market that could come on pretty
quickly.

701
00:36:00,720 --> 00:36:02,600
That's sort of on care and
maintenance are sitting on the

702
00:36:02,600 --> 00:36:05,440
sidelines.
That said, everything we've

703
00:36:05,440 --> 00:36:08,400
been, we, we've been reading
from Southeast Asia right now,

704
00:36:08,560 --> 00:36:13,200
you know, all the, the, the
channel checks we're doing with

705
00:36:13,200 --> 00:36:17,520
our contacts is showing that
electric vehicle demand is, you

706
00:36:17,520 --> 00:36:21,720
know, through the roof in some
of some of some of Asia right

707
00:36:21,720 --> 00:36:24,360
now, which you would make sense
with some of the fuel situations

708
00:36:24,360 --> 00:36:26,320
that are going on.
But I don't think the EV

709
00:36:26,360 --> 00:36:29,240
narrative is really what's going
to lead us, you know, to pull a

710
00:36:29,240 --> 00:36:31,880
lot of the, the demand for it.
I think some of the energy

711
00:36:32,280 --> 00:36:34,320
storage stuff is actually really
going to be the winner.

712
00:36:34,960 --> 00:36:38,560
Some of the, you know, the, the
core, you know, battery

713
00:36:38,560 --> 00:36:40,600
technology that's made, made
great strides.

714
00:36:40,600 --> 00:36:45,120
And I think you're seeing
battery as, as storage on a

715
00:36:45,120 --> 00:36:47,920
large scale really accelerating
China and other places of, of

716
00:36:48,160 --> 00:36:50,040
Southeast Asia.
And I, I really think the

717
00:36:50,040 --> 00:36:53,440
opportunity set, you know,
lithium names is still there.

718
00:36:54,160 --> 00:36:57,120
I think a lot of Western
investors have sort of thrown

719
00:36:57,120 --> 00:37:00,600
the EV narrative out with the
Trump administration because of

720
00:37:00,600 --> 00:37:02,720
a lack of subsidies.
And I think they just, you know,

721
00:37:02,720 --> 00:37:07,080
associate lithium only with EV's
and therefore they've just

722
00:37:07,080 --> 00:37:08,880
ignored the space.
I mean, when I made that comment

723
00:37:08,880 --> 00:37:11,680
late last year, you know, part
of the reason you saw such a

724
00:37:11,680 --> 00:37:14,920
turn in the equities was, you
know, yeah, spot was at six or

725
00:37:14,920 --> 00:37:19,440
700, but the equities were among
some of the shortest, shortest

726
00:37:20,080 --> 00:37:24,000
equities out there.
You had, you know, 30% short

727
00:37:24,000 --> 00:37:25,280
interest on some of these
things.

728
00:37:25,720 --> 00:37:29,480
So you had every, you know,
generalist hedge fund or pod

729
00:37:29,480 --> 00:37:31,840
shop or whatever trying to hide
out being short something that

730
00:37:31,840 --> 00:37:37,120
was already down 70 or 80%.
And it it takes very little to

731
00:37:37,120 --> 00:37:39,280
to create one hell of a squeeze
in a sector like that where

732
00:37:39,280 --> 00:37:42,120
market cap compression has has
become so extreme.

733
00:37:43,440 --> 00:37:46,400
Matt, I'd love to get an an
update on some of the the

734
00:37:46,440 --> 00:37:50,000
specific names that were were
huge contributors to to

735
00:37:50,000 --> 00:37:53,280
performance in 2025.
You know, list out America's

736
00:37:53,280 --> 00:37:56,320
gold and silver Hemlo mining
fuel at a medals.

737
00:37:57,360 --> 00:37:59,720
Last time you, you, you provide
an update, you said these names

738
00:37:59,720 --> 00:38:01,320
continue to show tremendous
value.

739
00:38:01,600 --> 00:38:04,440
Maybe that that quotes a bit
dated, but do you still see same

740
00:38:04,440 --> 00:38:05,920
dynamics with those names?
Are you still long?

741
00:38:07,520 --> 00:38:09,800
Yeah, I, I mean, obviously
around the periphery we're

742
00:38:09,800 --> 00:38:12,880
always adding or, or taking
away, you know, America's gold

743
00:38:12,880 --> 00:38:14,840
and silver has been a great
winner for us.

744
00:38:14,840 --> 00:38:19,880
I mean, it's a company that, you
know, we had originally invested

745
00:38:19,880 --> 00:38:23,320
in a, a structured piece of
credit, you know, basically

746
00:38:23,320 --> 00:38:27,480
providing capital for a mine to,
you know, to, to expand

747
00:38:27,480 --> 00:38:30,120
production.
You know, we've taken that stock

748
00:38:30,440 --> 00:38:34,120
in our portfolio from less than
a dollar per share up to, you

749
00:38:34,120 --> 00:38:38,320
know, almost $14.00 a share.
So it's been a real winner for

750
00:38:38,320 --> 00:38:40,600
our LP's.
Obviously we have price targets

751
00:38:40,600 --> 00:38:44,600
on these and as as you know,
valuation expands, we're we're

752
00:38:44,880 --> 00:38:47,080
taking some profit off the tail.
But something that we continue

753
00:38:47,080 --> 00:38:49,400
to like, you know, the silver
narrative I think is a little

754
00:38:49,400 --> 00:38:51,760
bit muted right now in the
market with the uncertainty in

755
00:38:51,760 --> 00:38:54,200
gold.
But I'd also point out just from

756
00:38:54,200 --> 00:39:00,480
a critical metal standpoint that
America's is, is the only actual

757
00:39:00,480 --> 00:39:04,320
operating mine of antimony right
now in the United States.

758
00:39:04,320 --> 00:39:07,400
So they're actually producing
antimony at their operations in

759
00:39:07,400 --> 00:39:10,680
Idaho, which is a huge strategic
metal and a huge push for the

760
00:39:10,680 --> 00:39:12,120
Department of Defense in the
United States.

761
00:39:13,760 --> 00:39:19,000
You know, Hem Hemlo for us is,
is a great one as well.

762
00:39:19,000 --> 00:39:22,080
That's the old Hemlo mine that
came out of Barrick, the company

763
00:39:22,480 --> 00:39:25,120
that acquired at the management
team, you know, a plus

764
00:39:25,120 --> 00:39:28,840
management team, which we backed
and, and buying that mine from

765
00:39:28,840 --> 00:39:30,480
Barrick for just over a billion
dollars.

766
00:39:30,800 --> 00:39:32,640
You know, I think there's still
a lot of low hanging fruit on

767
00:39:32,640 --> 00:39:36,120
that, on that name.
You know, stock trades in the

768
00:39:36,120 --> 00:39:39,240
mid sixes right now.
And I think internally we we can

769
00:39:39,240 --> 00:39:43,080
Look North of 10 to a target
price, but just a lot of short,

770
00:39:43,280 --> 00:39:46,680
shorter term catalyst that we
can see out there.

771
00:39:47,560 --> 00:39:50,600
You know, and I, you know, I
really believe this is an

772
00:39:50,680 --> 00:39:53,120
undiscovered name simply because
it is relatively new to the

773
00:39:53,120 --> 00:39:54,920
capital marks.
And I think think, think we'll

774
00:39:54,920 --> 00:39:58,080
end up with, you know, a
pleasant upside surprise on that

775
00:39:58,600 --> 00:40:01,080
even at $4500 gold.
I mean, you can follow the press

776
00:40:01,080 --> 00:40:02,720
releases within the company.
They just paid down the

777
00:40:02,720 --> 00:40:05,000
revolving credit facility.
They're making a lot of money

778
00:40:05,040 --> 00:40:08,160
right now.
And you know, the market hasn't

779
00:40:08,560 --> 00:40:10,720
hasn't cut off to the free cash
flow generation there.

780
00:40:12,200 --> 00:40:14,160
Yeah.
So I still love those tenants.

781
00:40:15,160 --> 00:40:17,080
I've got I've got one final one
for you, Matt.

782
00:40:17,600 --> 00:40:19,440
Yeah.
Who's the natural resources

783
00:40:19,440 --> 00:40:22,960
investor that that you you rate
the highest you've ever come

784
00:40:22,960 --> 00:40:25,760
across?
That's a tough one.

785
00:40:25,760 --> 00:40:30,760
There's not many left, right.
Look, I mean, I, I've, I've,

786
00:40:31,120 --> 00:40:34,120
I've had the pleasure of working
with, you know, a lot of very

787
00:40:34,120 --> 00:40:37,000
solid natural resource investors
throughout my career, both

788
00:40:37,000 --> 00:40:40,400
learning from the likes of folks
at Fidelity and then, you know,

789
00:40:40,400 --> 00:40:42,480
a variety of others.
I, I, I can't put my finger on

790
00:40:42,480 --> 00:40:45,480
anyone in particular, but it's
been a process where, you know,

791
00:40:45,480 --> 00:40:48,320
you see the guys, you know, in
Toronto or in New York who've

792
00:40:48,320 --> 00:40:50,000
been in the sector for a long
time.

793
00:40:50,240 --> 00:40:53,440
Some are gold bugs, some aren't.
You know, I had the great

794
00:40:53,440 --> 00:40:55,760
pleasure working under an
individual named Tony Fell years

795
00:40:55,760 --> 00:40:59,440
ago at RBC, who is amongst one
of the biggest gold bugs I know

796
00:40:59,440 --> 00:41:02,480
out there who really sort of
brought, brought to light, you

797
00:41:02,480 --> 00:41:06,240
know, gold as an asset for me.
But in general, I've had, you

798
00:41:06,240 --> 00:41:10,080
know, the the privilege across
some so much, much larger firms,

799
00:41:10,160 --> 00:41:12,280
firms than ours to work with
some of the best natural

800
00:41:12,280 --> 00:41:15,720
resource investors.
I've got two more commodities I

801
00:41:15,720 --> 00:41:18,600
want to ask you about, Matt.
Firstly, uranium.

802
00:41:18,600 --> 00:41:23,360
Uranium is, is hot here, but
and, and a lot of people talking

803
00:41:23,360 --> 00:41:26,120
more on the back of what's
happening in Iran about this

804
00:41:26,120 --> 00:41:30,120
potential nuclear build out,
which is a very long term thing.

805
00:41:30,120 --> 00:41:33,040
But the, the uranium fans have
been pretty big for the last

806
00:41:33,080 --> 00:41:35,720
five years.
What do you make of the the the

807
00:41:35,720 --> 00:41:37,920
duration and the nature of that
that trade?

808
00:41:40,160 --> 00:41:41,720
Yeah.
I mean, uranium is a tough one.

809
00:41:41,720 --> 00:41:44,560
I mean, so just as a matter of
history, you know, we had a

810
00:41:44,560 --> 00:41:47,040
great, great investment in
Camaco when they bought

811
00:41:47,040 --> 00:41:51,160
Westinghouse years ago.
You know, that stock has done

812
00:41:51,320 --> 00:41:53,840
very, very well.
We've taken profit along the

813
00:41:53,840 --> 00:41:56,800
way, surpassed our price target
right now.

814
00:41:56,800 --> 00:42:00,120
But you know, really the issue I
have in uranium is it's a great

815
00:42:00,120 --> 00:42:04,280
story to tell and it's a very
difficult sector to invest in.

816
00:42:05,080 --> 00:42:08,200
Why is that?
Well, look, everyone loves the

817
00:42:08,200 --> 00:42:14,760
nuclear renaissance story, yet
nobody wants to build a nuclear

818
00:42:14,760 --> 00:42:17,280
power plant next to their house,
right?

819
00:42:17,280 --> 00:42:23,960
So it's always this difficult
sector because the story to

820
00:42:23,960 --> 00:42:26,280
reality is so far apart in my
mind.

821
00:42:27,640 --> 00:42:31,280
In addition, the investable
market cap of the space is just

822
00:42:31,280 --> 00:42:35,760
falls off a Cliff so quickly.
You know, I have chemical and

823
00:42:35,760 --> 00:42:39,640
then I have maybe next Gen.
which is a development story.

824
00:42:39,640 --> 00:42:43,600
But after that, it's just, you
know, the market cap craters,

825
00:42:43,600 --> 00:42:45,160
right?
So, so it's, it's, it's, it's

826
00:42:45,160 --> 00:42:49,680
tough with that small market
cap, though, the Uber bulls in

827
00:42:49,680 --> 00:42:53,120
the space are able to paint this
wonderful narrative of utopia

828
00:42:53,120 --> 00:42:55,600
within uranium.
So we've, we've, we've been

829
00:42:55,600 --> 00:42:57,520
along the space in the past,
we've been short the space in

830
00:42:57,520 --> 00:43:00,360
the past.
At the moment, I'd simply say we

831
00:43:00,360 --> 00:43:03,760
take a pass on it.
I think there's not a lot to

832
00:43:03,760 --> 00:43:06,960
invest in, in the space because
I don't really see the catalyst

833
00:43:06,960 --> 00:43:09,320
for that next leg up in uranium
pricing.

834
00:43:09,880 --> 00:43:14,880
And I certainly don't see the
reason that we'd be chasing

835
00:43:14,880 --> 00:43:18,200
chemical up too much higher.
We love the Westinghouse

836
00:43:18,200 --> 00:43:21,400
acquisition.
I just think there's a lot of

837
00:43:21,560 --> 00:43:24,400
fully valued multiple in that
stock right now.

838
00:43:25,200 --> 00:43:26,800
Yeah, yeah, that makes a lot of
sense.

839
00:43:26,800 --> 00:43:29,520
And that's echoes what we hear
from a lot of people.

840
00:43:30,600 --> 00:43:32,920
And what about copper?
Copper's had this beautiful

841
00:43:33,080 --> 00:43:36,560
outlook for, for, for so long,
for forever almost.

842
00:43:36,920 --> 00:43:39,720
And it, it, you know, it
performed really well over the,

843
00:43:39,840 --> 00:43:42,200
over the past year, like 6 bucks
a pound.

844
00:43:42,280 --> 00:43:44,760
What it was getting to there is
a, a pretty decent price.

845
00:43:44,760 --> 00:43:46,160
How do you how do you weigh all
of that?

846
00:43:47,640 --> 00:43:48,920
Yeah.
I mean, it's funny what a couple

847
00:43:49,000 --> 00:43:50,400
shaky weeks on the market does,
right?

848
00:43:50,400 --> 00:43:53,240
I mean, a month or two ago we
were talking about how we were

849
00:43:53,240 --> 00:43:55,640
short copper and now everyone's
saying there's a wall of supply

850
00:43:55,640 --> 00:43:59,880
coming.
So you know, we we fall on being

851
00:43:59,880 --> 00:44:02,960
longer term bullish copper.
I think there's all sorts of

852
00:44:02,960 --> 00:44:05,640
thematics behind copper that
people need to be aware of, you

853
00:44:05,640 --> 00:44:08,360
know, the least of which is
probably, you know, the under

854
00:44:08,360 --> 00:44:10,680
investment in transmission for
electricity globally.

855
00:44:10,680 --> 00:44:13,160
And I think that's huge.
People scratch the service of

856
00:44:13,160 --> 00:44:15,560
that, but that's a, you know,
that's an investment cycle

857
00:44:15,560 --> 00:44:19,520
that's in the trillions.
Where we focused on honestly is

858
00:44:19,520 --> 00:44:24,360
on domestic US producing copper
because we're capturing this,

859
00:44:24,600 --> 00:44:28,360
this tariff that's there right
now in terms of sale price for

860
00:44:28,520 --> 00:44:31,800
cathode in the in the in the
United States.

861
00:44:32,120 --> 00:44:34,880
You know, we think going to
June, the talk of tariff relief

862
00:44:34,880 --> 00:44:37,360
in the United States I think is
not going to happen.

863
00:44:38,120 --> 00:44:41,320
And So what for us, look, copper
has been a relatively good place

864
00:44:41,320 --> 00:44:43,320
to be.
I think you know, if we want to

865
00:44:43,320 --> 00:44:45,880
get into the weeds, a place for
us to be and where we are in

866
00:44:46,160 --> 00:44:49,720
terms of our copper exposure is
mostly on US domicile production

867
00:44:49,720 --> 00:44:53,120
and development of copper.
It will be through SSEW bringing

868
00:44:53,120 --> 00:44:58,320
out copper copper cathodes that
can be sold on COMEX and capture

869
00:44:58,320 --> 00:45:02,840
the tariff premium.
Yeah, yeah, yeah.

870
00:45:02,840 --> 00:45:04,440
Came came to say that I'd love
to know.

871
00:45:04,440 --> 00:45:06,800
Lastly, is there is there any
other names in the portfolio

872
00:45:06,840 --> 00:45:10,880
you're happy to to share or chat
about specifically any, any

873
00:45:10,880 --> 00:45:13,000
Aussie names we might be more
familiar with?

874
00:45:13,000 --> 00:45:15,280
We'd love to hear what else sits
in that portfolio right now.

875
00:45:16,560 --> 00:45:17,960
Yeah.
I mean, look, our analysts are,

876
00:45:18,080 --> 00:45:20,920
you know, very bullish on on
Robex, for example.

877
00:45:21,480 --> 00:45:24,640
You know, that's that's, that's
been a great, a great name.

878
00:45:24,640 --> 00:45:26,120
I mean, we've, we've.
Taken that Wilcox.

879
00:45:26,320 --> 00:45:29,040
On the red, did you really?
Yeah, last week.

880
00:45:29,160 --> 00:45:30,320
There you go, He's an impressive
dude.

881
00:45:30,320 --> 00:45:31,800
There you go.
Yeah.

882
00:45:31,960 --> 00:45:35,000
I mean, that's an impressive
name, you know, big believers in

883
00:45:35,000 --> 00:45:37,600
that.
We were, you know, very long on

884
00:45:37,600 --> 00:45:42,320
West Gold and things like that.
You know, we, we commented, you

885
00:45:42,320 --> 00:45:44,760
know, one of the best things
about our Australian exposure,

886
00:45:44,760 --> 00:45:47,040
which is probably sitting at
10:00-ish percent of the fund

887
00:45:47,440 --> 00:45:50,720
is, you know, a much deeper
institutional investor base that

888
00:45:50,720 --> 00:45:53,720
lowers volatility of returns of
some of those equities versus

889
00:45:53,720 --> 00:45:56,400
North American.
It seems to be just just, you

890
00:45:56,400 --> 00:45:59,640
know, much more competent
investor base looking at some of

891
00:45:59,640 --> 00:46:03,000
the Aussie, Aussie list listed
equities.

892
00:46:03,000 --> 00:46:05,920
But I'd say in terms of, you
know, straight Aussie gold

893
00:46:05,920 --> 00:46:08,720
exposure right now, it's
probably Robex for us.

894
00:46:09,280 --> 00:46:11,040
Yeah.
And before we started recording,

895
00:46:11,040 --> 00:46:15,400
you voiced a couple of concerns
about the cost inflation that

896
00:46:15,560 --> 00:46:17,640
your analysts had picked up here
in Australia.

897
00:46:17,840 --> 00:46:20,400
Have you noticed that across the
world yet as well?

898
00:46:22,000 --> 00:46:23,920
I don't think you know, people
are talking about it, especially

899
00:46:23,920 --> 00:46:28,360
on the diesel front.
You know, I, if I, you know,

900
00:46:28,360 --> 00:46:31,880
mentioned this morning we, we
had a, a portfolio meeting with

901
00:46:32,000 --> 00:46:34,720
my analyst team and we're just
talking about, you know, the

902
00:46:34,720 --> 00:46:40,320
price of, of diesel landed in,
in Chile right now is, you know,

903
00:46:40,440 --> 00:46:42,520
the second, second most
expensive in the world.

904
00:46:43,120 --> 00:46:45,360
And if you think about just back
to your copper narrative or even

905
00:46:45,360 --> 00:46:49,760
some of the individual equities,
you know, they're in, in the

906
00:46:49,760 --> 00:46:54,880
Andes working on, you know, not
only are the trucks on diesel,

907
00:46:54,880 --> 00:46:57,280
but the mills diesel powered and
everything else, the crushers

908
00:46:57,280 --> 00:46:59,840
are diesel powered.
There could be a lot of pain on

909
00:46:59,840 --> 00:47:01,840
some of those names.
Think about what could happen to

910
00:47:01,840 --> 00:47:04,400
Codelco and things like that in
terms of having to slow down

911
00:47:04,400 --> 00:47:08,040
throughput just because of cost
inflation as it pertains to

912
00:47:08,040 --> 00:47:11,040
energy.
So I think there's a lot there

913
00:47:11,480 --> 00:47:15,080
for the market to look through.
It really is going to depend on

914
00:47:15,080 --> 00:47:16,960
how long these higher energy
prices go.

915
00:47:16,960 --> 00:47:20,280
But you know, we've we've pulled
back on exposure specifically to

916
00:47:20,280 --> 00:47:23,800
Central and South America where
operators are very dependent on

917
00:47:24,320 --> 00:47:27,120
on source diesel coming in.
And you know, we think that

918
00:47:27,120 --> 00:47:30,680
could be a downside surprise to
some of these these these

919
00:47:30,680 --> 00:47:33,640
companies that have rode higher
commodity prices up.

920
00:47:33,680 --> 00:47:36,240
I think a lot of the margin can
disappear pretty quickly when

921
00:47:36,240 --> 00:47:39,160
you see price spikes seen on the
OpEx.

922
00:47:40,520 --> 00:47:43,400
Afraid a few Aussie names could
fall into that bucket as well.

923
00:47:43,400 --> 00:47:46,200
Let's see how the next month or
two plays out on that front.

924
00:47:47,160 --> 00:47:49,160
Thank you so much Matt.
It's been an absolute pleasure

925
00:47:49,160 --> 00:47:53,880
to to speak all things investing
in in our wonderful resources

926
00:47:53,880 --> 00:47:57,160
sector.
Wonderful guys, thank you for

927
00:47:57,160 --> 00:47:58,760
having me.
A massive thank you to our

928
00:47:58,840 --> 00:48:00,400
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929
00:48:00,400 --> 00:48:05,160
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930
00:48:05,640 --> 00:48:08,040
Intralinks and Focus the
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931
00:48:08,840 --> 00:48:12,400
Hoodoo, hoodoo.
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932
00:48:12,640 --> 00:48:15,120
JD is an idiot.
If you thought any of this was

933
00:48:15,120 --> 00:48:17,640
anything other than
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934
00:48:18,000 --> 00:48:19,160
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