The Secret Masterplan of ASX’s Most Loved Miner?

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JD, there's an M and a master
plan underway in the big tier

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gold space in WA and we've got
some theories out there.

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But what kicked off our interest
is yesterday's deal that Genesis

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is spending $250 million buying
the Laverton project from Focus

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Minerals.
And we think there's more than

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meets the eye to their plan
here.

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It has implications for Genesis,
Focus, Regis, Volt, Magnetic and

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even Anglo Gold Ashanti.
So if you're interested in the M

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and A landscape across the WA
gold companies, which you should

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because kind of matters a fair
bit in the market at the moment,

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stay tuned.
Spoiler I think Genesis is going

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to do another deal soon too.
Absolutely, stay tuned.

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We learned a heap in the lead up
to this episode didn't we mate?

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Talking, talking with people.
Why don't we RIP into it with

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the deal?
So, so Genesis have come out,

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they've bought Focuses,
Labourton project, we've talked

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about the fact that this has
been for sale for a while now.

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What are they paid mate?
250 bucks.

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So a lousy deal for for Genesis,
just $250 million going to be

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paid in cash, funded from their
cash reserves, obviously company

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net cash and the deal should be
wrapped up next month.

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Pretty pretty straightforward.
Obviously buying this from Focus

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Minerals, a much smaller
business.

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Now the payback isn't exactly
straight.

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We're going to get into all of
this when we talk about the

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master plan that we think is at
hand with Genesis.

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But given the meal was already
full and a fair bit of work

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needs to be done on these
tenements and on these resources

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that they're buying, it's not
exactly clear when they're going

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to see a return on this.
But it's all going to come

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together in the in this broader
strategy.

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So but.
But the the mill is full in like

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quotation marks.
However, like a lot of

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commentaries being out there in
the market that Genesis could

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use with some higher grade feed
to go to that Laverton mill,

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that Laverton mill of course
Mount Morgan's former Dacian

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mill.
Yeah, it could, it could, it

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could use some high grade.
Are they going to get high grade

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here that the headline is 4
million ounces in this project,

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but is it really 4 million
ounces?

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Well, I mean it runs at 1.7g per
ton, but I don't know how many

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asterisks you want to put next
to this.

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A fair bit of work needs to be
done on this.

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The, the work that has been done
to date was done quite a while

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ago now.
And these, a lot of these work,

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the old pits, you know, work has
been done in and around the

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area, but there's a reason
they're not being mined right

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now.
The the reason why they've

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obviously come in and scooped
this up is they're sort of

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consolidation of the Laverton
area.

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So we're talking roughly 30
kilometers, but we're talking

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from a bunch of pits and a bit
underground as well.

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Now that Laverton Mill has just
been flicked back on in, in

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classic Genesis fashion, you'd
say it was flicked on early,

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ahead of schedule, all these
things.

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Genesis know what they're doing
on on that front and it came in

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with this fantastic headline.
Forms temporary class is

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permanent.
How good's that?

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Love that.
So to your point on the the

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grade that they're processing .9
grams per ton right now, that is

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obviously a lot of stockpiles
being traded, low grade

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stockpiles that have been
traded.

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But as long suspected, they're
now sort of acknowledging that

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the Tower Hill dirt, for people
wondering which one that is,

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that that's the sort of deposit
that has the the rail track

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rider over the top of it in the
heart of almost in the heart of

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Leonora is not actually going to
be sent 100 kilometers away to

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the Laverson Mill.
They can process that where it

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makes sense in the mill that's
right next door.

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And they can have this focus,
minerals, dirt, go into the

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Laverton mill once they've
proven it all up.

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Which could still be a, you
know, a while away.

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This is 4 million oz resources
is a is a chunky headline and

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it's worth of interrogation and
a face value.

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You think 2050 million for 4
million oz.

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So I don't know how many 4
million oz projects there are

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out there to buy, but it's kind
of doesn't seem like too much to

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pay.
And then you kind of look into

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the detail a bit more and
there's of course those

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asterisks like you talked about.
100% mate, 4 million oz can come

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in many different shapes and
sizes, but the question everyone

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really wants answered is what
what is the quality?

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What are the the hairs on this
resource?

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And if you're not answering or
asking that question, you tend

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to have a strong opinion on on
that one.

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And I think if you look on the
first page of Genesis

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announcement under their
priorities, you get a you get a

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good indication of what Genesis
think now just read it out

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quickly infill and extensional
drilling to de risk and rebuild

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resource, rebuild the resource.
Those words kind of stand out to

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me.
So clearly it needs a bit more

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work, but 99% of the resources
and the reserves sit on granted

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mining leases, which we know in
this day and age is not not the

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quickest thing to attain.
So it's got that gone for it at

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least.
Yeah, definitely this this view

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out there that Chinese own
development projects are are

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pretty substantially overstated.
You know, there's, there's a,

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there's a view that kind of
every intercept is called an

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ounce or interpreted as an ounce
that there are these kind of,

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you know, big crazy block models
when you sift through it kind of

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falls apart in your hands.
So that's a perception out

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there.
And and I think in the case of

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of Focus's Laverton project, the
headlines 4 million oz mineral

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resource, theoretically a
resource oz needs to have a

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reasonable prospect of economic
extraction, right?

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That's.
That's the, that's the code.

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There's certainly not 4 million
ounces to have a reasonable

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prospect of economic extraction
here.

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How many are there that that
there's a bit to play out here.

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I think I think there were
probably many people in the

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industry who tried to get access
to Focus's data for for many

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years and for a long time it was
just impossible to actually do a

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deal with Focus that kind of
land banking it there was a

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bunch of debt in the cap
structure from Shandong.

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You couldn't get anything done.
They wanted more than book value

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if they were going to explore
anything.

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Now we're in this gold market.
A few other things have

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happened, which we'll get to and
and finally people got access to

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a data room.
Look at the data and they might

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have had high hopes on what they
could have actually uncovered

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because there's always a bit
more access you get in into when

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the information when you get,
you know, the the data room

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versus the public data and.
Absolutely.

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And and focus as well is now
focused part in the pan on

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Coolgardi family as well.
And you mentioned the the

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massive amount of debt.
So the timing was right for

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something to kind of happen.
Yeah, the and the, the point is

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that the, the data on labor
didn't maybe didn't quite meet

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expectations of what they could
could have been for sure, which

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probably just, you know,
underlined the, the perception

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of, of buying, you know,
projects in the hands of, of, of

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Chinese parties.
But they've got a deal done,

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mate.
They've got a deal done and and

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you know, I think if you look at
what part of the resource would

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have been of, of hot interest
to, to Genesis, it's probably

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my, my view, the stuff east of
Sunrise Dam.

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I'm talking it's like Barnacode,
Carradale, Bertville, if you

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look at the map, which will pull
up here of all the different

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resources that that fit into it.
So focus this is resource on on

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those areas, sort of you marked
it to be 1.5 million ounces in

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that area.
It's also where most of the

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reserves are too.
The catch is that that some of

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these are estimated under the
job 2004, which indicates the,

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you know, the rigor in some of
that estimation might not quite

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be up to scratch.
All of this to say, I I wouldn't

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be surprised if all of this sort
of ground sits on Genesis books

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for two to three years before
they update their own resource

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on it and and do it in, in their
way kind of re estimating

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things.
I'm sure they'll put plenty,

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plenty more holes into it in
that process.

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Mate, all all this talk about
resources that need a bit of

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work, there's a there's a
certain company that comes to

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mind, me Kedrill.
Kedrill, you are looking for the

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goods.
You want to prove up the goods.

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If you want to be mine ready.
Kedrill is who you want to call

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mate.
Mate.

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What do you reckon is a good
daily target for a diamond

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driller?
300 meters.

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A day, a day, a day, mate.
Meters.

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Try kilometers.
That is what Rhino does.

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Diamond holes in the golden
fields, dirt.

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It's like knife through soft
butter to him and the team.

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It's not just that either mate.
Sample quality is top notch.

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If you want clean recoveries and
you want tight QA QC done, K

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Drew is the team you need to
call.

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You want those assays to come
back and you want to know that

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you can trust them.
K Drew is who you want to call.

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Right.
Whether yeah, exploration work

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or a mid tier locking in a
longer term program, K Drew's

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got the gear and the people to
handle it.

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Quick turnarounds and a team
that actually knows what they're

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doing, they can actually work
with the geology again.

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K Drew, you want to upgrade that
jock 2004 to something credible.

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You need Rana to punch a few
infield halls.

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Get in touch with Kay Drill.
Thank you, Kay Drill.

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Genesis Call.
Kay, Drew.

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So what was one of the the the
reasons do you think that focus

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might have been willing to part
ways with with the Labour term?

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Was there a perception that them
actually getting approvals to to

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develop this was in doubt?
Yeah, Approvals is a is an

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interesting one and it's
probably probably the right time

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to plug in a completely
unsubstantiated rumour that we'd

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heard.
You can, you can see, and I'll

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flash up the map here that to
the northeast of Laverton, and

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this is right in amongst the
tenements there is the Jindalee

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operational radar network.
And I had no idea what this was.

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I saw it pop up yesterday when I
was just looking around in the

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area.
It's a over the horizon radar

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which the military uses and
essentially it enables them to,

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you know, quote UN quote, see
thousands of kilometres away.

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So there's a few of these across
the country.

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They're pretty important
militarily and it just throws up

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the question, would Focus, if
they wanted to progress these or

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other projects in the area have
been able to get the approvals

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given the strong Chinese
ownership of Focus.

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So again, we don't know the
answer to that one, but I

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thought it was an interesting
little rabbit hole to go down.

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As a result, focus might not
just be focused entirely on on

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on coolgati.
That's it.

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Now you've you've been piercing
away.

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Genesis has brought a growth
strategy here and I've been

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theorizing about the M and A
strategy.

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I think the two are related, but
let's kick off with what what

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you're piercing together.
Reading the tea leaves about

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what Genesis is pulling
together.

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Yeah, 100%.
They're clearly in an investment

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phase and not looking to to
harvest cash at the moment like

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some of the other goldies we've
seen in this sort of pretty rich

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gold price environment.
So I think the the logical next

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step is just meal expansion.
They've clearly got heaps and

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heaps and heaps of tons.
They've got all the tons.

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They they call it sort of long
or in their wording in a lot of

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their presentations, mind you,
they were saying that before

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this deal, so.
Is everyone not like long or in

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this gold price environment you
just re cut your reserves lower,

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cut off grade and all of a
sudden Oh yeah, you know what I

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mean Like everyone makes more
money by putting more tons

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through the mill in this gold
price.

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Surely everyone's long or at the
moment.

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Sure, I mean.
Good time for the UPC, yeah?

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In any case, you're longer after
spending $250 million and, and

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pulling in another 73 million
tons of dirt, right?

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And I mean, Genesis have clearly
signaled to this meal expansion.

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So studies ongoing at Leonora in
the priorities.

225
00:10:24,920 --> 00:10:27,000
It was another one of the
relatively high up points there

226
00:10:27,000 --> 00:10:29,920
that they're going to be doing
the work that they need to do at

227
00:10:29,920 --> 00:10:31,400
Laverton.
Obviously, kind of to your

228
00:10:31,400 --> 00:10:34,200
point, it needs to be the, the
right grade that goes through

229
00:10:34,200 --> 00:10:35,120
it.
You know, just do it for the,

230
00:10:35,640 --> 00:10:38,400
for the sake of doing it.
And interestingly, they, they

231
00:10:38,400 --> 00:10:41,920
said they're going to refurb the
the Barnicot meal, which is sort

232
00:10:41,920 --> 00:10:45,640
of coming into the fold in
amongst all these, in amongst

233
00:10:45,640 --> 00:10:49,080
the focused acquisition.
That's 1.5 million tonnes per

234
00:10:49,080 --> 00:10:52,320
annum capacity.
Who knows how much capital that

235
00:10:52,320 --> 00:10:53,880
needs to get it?
You know, I didn't even know

236
00:10:53,880 --> 00:10:56,040
there was a meal there.
Like I did not know that focuses

237
00:10:56,040 --> 00:10:58,840
labor had a had a meal on it so.
Didn't know to digging in the

238
00:10:58,840 --> 00:11:00,320
weeds.
Either, but must be pretty.

239
00:11:00,960 --> 00:11:04,280
You can't imagine it's in.
It'd be a bit dated, yeah, I'd

240
00:11:04,280 --> 00:11:07,720
say for sure.
So 350 million tonnes in

241
00:11:07,720 --> 00:11:11,040
resources now if you're if
you're generous and you include

242
00:11:11,040 --> 00:11:13,600
barnacoat, which is clearly a
little while off, that's

243
00:11:13,600 --> 00:11:17,560
6,000,000 tons of processing
capacity that they've got when

244
00:11:17,560 --> 00:11:20,000
they're sort of running the
meals that they've got currently

245
00:11:20,680 --> 00:11:23,720
at over nameplate, which they've
been doing for for a couple of

246
00:11:23,720 --> 00:11:26,640
quarters now.
That's more than a lifetime of

247
00:11:26,640 --> 00:11:28,840
all.
So cash harvesting still a

248
00:11:28,840 --> 00:11:31,360
little while away investments
going to be going into the

249
00:11:31,360 --> 00:11:33,720
ground and that has been your
benefits.

250
00:11:33,720 --> 00:11:36,440
You know that that pulls down
and you can spread that fixed

251
00:11:36,440 --> 00:11:39,720
cost base of the more oz.
Once you do that and you know

252
00:11:39,720 --> 00:11:43,840
there's a reason why Daisy and
ran into trouble with with their

253
00:11:43,840 --> 00:11:47,840
sort of Laverton mill there, a
new owner and a high gold price

254
00:11:47,840 --> 00:11:49,160
doesn't just fix that
immediately.

255
00:11:49,160 --> 00:11:51,360
You need to try and pull down
the the cost base and do the

256
00:11:51,360 --> 00:11:53,200
things you can.
High gold price makes a big

257
00:11:53,200 --> 00:11:54,400
difference.
It helps.

258
00:11:54,560 --> 00:11:57,160
It certainly helps.
But I think, I think expanding

259
00:11:57,160 --> 00:12:00,240
that is is all a part of it and
creating this blue chip company

260
00:12:00,240 --> 00:12:03,720
that that Genesis is on track to
be, it's lower and lower costs

261
00:12:03,720 --> 00:12:06,400
and you need to invest the
capital to get yourself there.

262
00:12:06,600 --> 00:12:08,600
Yeah, I'm not sure there'll ever
be a company that's in cash

263
00:12:08,600 --> 00:12:11,080
harvesting mode.
I don't think that's like the MO

264
00:12:11,080 --> 00:12:13,600
of Genesis.
I think they, they, they backed

265
00:12:13,600 --> 00:12:18,000
themselves to grow via
acquisitions at the right price

266
00:12:18,000 --> 00:12:19,560
and yada, yada.
And yeah, I've got, I've got

267
00:12:19,560 --> 00:12:20,640
pretty capital internally.
I've.

268
00:12:20,640 --> 00:12:22,920
Got pretty strong views that I
was going to sort of wrap up on,

269
00:12:22,960 --> 00:12:24,560
on that.
Yeah, 100% there, there is a

270
00:12:24,560 --> 00:12:28,840
playbook that this company has
run for the last 3 1/2 years

271
00:12:28,840 --> 00:12:31,560
and.
Prior to Genesis Saracen, same

272
00:12:31,560 --> 00:12:33,520
playbook, yeah.
Yeah, exactly.

273
00:12:33,520 --> 00:12:36,120
And yeah, just just look at what
happened with Northern Star,

274
00:12:36,560 --> 00:12:39,520
maybe rinse and repeat Is isn't
too far from what we're seeing

275
00:12:39,520 --> 00:12:40,840
right here.
Yeah.

276
00:12:41,240 --> 00:12:43,040
So let's talk about the the M
and a pace.

277
00:12:43,040 --> 00:12:46,880
This is clearly a, you know, a
cornerstone piece of their

278
00:12:46,880 --> 00:12:47,760
growth strategy.
Yeah.

279
00:12:47,760 --> 00:12:49,880
I'm gonna, I'm gonna speak a
little bit about my pretty

280
00:12:49,880 --> 00:12:53,120
unfounded theory of what I think
Genesis could really be up to

281
00:12:53,120 --> 00:12:55,320
here.
And as far as I can tell, no one

282
00:12:55,320 --> 00:12:59,360
is talking about this mate.
We've spoken in the past about

283
00:12:59,360 --> 00:13:02,320
the tremendously public sale
process that Magnetic Resources

284
00:13:02,320 --> 00:13:05,000
has been embarking on.
I mean, the number of parties in

285
00:13:05,000 --> 00:13:07,400
the data room was the headline
part of George Saccolius's

286
00:13:07,400 --> 00:13:08,960
speech that diggers 10 months
ago.

287
00:13:08,960 --> 00:13:11,400
But still no deal from all those
parties in the data room.

288
00:13:11,400 --> 00:13:13,680
That doesn't stop him from
telling the press how many

289
00:13:13,680 --> 00:13:15,280
people are in that data room,
mate, because there was an

290
00:13:15,280 --> 00:13:18,040
article in the West two weeks
ago suggesting there are 7

291
00:13:18,040 --> 00:13:20,520
active parties still sifting
through details in the data room

292
00:13:20,520 --> 00:13:23,920
of of Magnetic Resource.
So what's really going on here?

293
00:13:23,920 --> 00:13:25,920
Right?
Well, post the Diggers

294
00:13:25,920 --> 00:13:28,720
excitement last year, Magnetic
kind of came back to earth.

295
00:13:29,040 --> 00:13:32,000
Share price fell off from like
$1.60 all the way down to, you

296
00:13:32,000 --> 00:13:35,640
know, just just above $1.10.
Kind of kind of shows you how

297
00:13:35,880 --> 00:13:38,520
how rough a strategy just buying
on the expectation that a deal

298
00:13:38,520 --> 00:13:40,640
gets done.
Yeah, yeah, yeah.

299
00:13:41,520 --> 00:13:45,080
However, it's been on a bit of
tear since coming back to Earth.

300
00:13:45,120 --> 00:13:50,640
It's it's now all time highs
reaching $500 million market cap

301
00:13:50,640 --> 00:13:54,040
$1.78 share price today.
Now what, what is magnetic?

302
00:13:54,040 --> 00:13:56,360
What have they got?
Lady Julie N 4 is the shiny

303
00:13:56,360 --> 00:13:59,000
discovery that has been a game
changer for for magnetic.

304
00:13:59,000 --> 00:14:02,120
This discovery is not without
its own question Marks and and

305
00:14:02,120 --> 00:14:07,920
one of the question marks over
magnetics project is the ability

306
00:14:07,920 --> 00:14:12,040
to actually mine the deposit
because you're awfully close to

307
00:14:12,200 --> 00:14:14,800
magnetics tenement boundary.
And I'll just flash up here.

308
00:14:14,800 --> 00:14:17,880
Here's a plan view from
magnetics scoping study.

309
00:14:18,080 --> 00:14:21,480
Can you see the, the, the pit
labeled LNJ 4 at the top?

310
00:14:21,480 --> 00:14:24,480
It's pretty damn close to that
boundary, right JD?

311
00:14:25,040 --> 00:14:27,680
One of the problems being the
ability to mine the deposit is a

312
00:14:27,680 --> 00:14:30,480
pretty big problem.
That's a big maybe you can mine

313
00:14:30,480 --> 00:14:32,160
some of it, but you know, in
order to actually like get the,

314
00:14:32,360 --> 00:14:33,920
you know, the full, yeah, full
value.

315
00:14:33,920 --> 00:14:35,920
Break it.
Break it down in in detail, man.

316
00:14:36,080 --> 00:14:38,480
If if you look at look at that
plan, most people in mining,

317
00:14:38,480 --> 00:14:40,720
they'll have a few observations
about, you know, the real open

318
00:14:40,720 --> 00:14:44,080
pit constraints of mining.
LNJ 4, you should typically

319
00:14:44,080 --> 00:14:47,840
calculate an abandonment zone by
getting an angle from pose to

320
00:14:47,840 --> 00:14:49,840
the fresh oxide contact in the
pit.

321
00:14:50,120 --> 00:14:52,320
Run that out.
Then you factor in a buffer zone

322
00:14:52,320 --> 00:14:56,600
which is typically 50 + 50
meters to to mind the ore body.

323
00:14:57,200 --> 00:15:00,400
If you do that for magnetics
project here, you quickly find

324
00:15:00,400 --> 00:15:01,680
yourself beyond the northern
boundary.

325
00:15:02,800 --> 00:15:06,840
Now guess who has the tenement
to the north of magnetics

326
00:15:06,840 --> 00:15:07,920
boundary there?
Focus.

327
00:15:07,920 --> 00:15:10,800
Focus Genesis.
Genesis there.

328
00:15:10,960 --> 00:15:14,120
Yeah.
Well, so over the last year or

329
00:15:14,120 --> 00:15:17,000
so that Magnetic has had its
data room open to every Tom,

330
00:15:17,000 --> 00:15:18,800
Dick and Harry in the gold
mining industry.

331
00:15:19,480 --> 00:15:21,840
What do you think everyone has
probably gone and tried to do?

332
00:15:21,840 --> 00:15:25,400
They've probably all realized
the boundary mining constraint I

333
00:15:25,400 --> 00:15:27,480
just pointed out and they've
probably gotten in touch with

334
00:15:27,480 --> 00:15:30,040
Focus to see if they would, you
know, carve out a slither of

335
00:15:30,040 --> 00:15:33,120
that tenement to enable, you
know, proper mining scenario

336
00:15:33,400 --> 00:15:36,760
with with sufficient abandonment
zone for the for the pit walls

337
00:15:36,760 --> 00:15:40,000
and everything that's required.
And Focus has probably been

338
00:15:40,000 --> 00:15:43,200
pretty commercial and said Nah,
no, that Focus has probably

339
00:15:43,200 --> 00:15:46,600
realized that that Slither would
could very well be a substantial

340
00:15:46,600 --> 00:15:49,440
part of the potential value of
their Labourton gold project

341
00:15:49,440 --> 00:15:50,400
you.
Would have learnt from your

342
00:15:50,400 --> 00:15:52,080
banking days mate that that is
leverage.

343
00:15:52,200 --> 00:15:55,040
It's leverage.
So after 6 odd months, it seems

344
00:15:55,040 --> 00:15:58,680
to me Focus decided to instead
run a sale process themselves

345
00:15:58,680 --> 00:16:00,200
over the entire Labourton
project.

346
00:16:00,200 --> 00:16:04,120
You know, everything, all four,
all 4 million oz that are there

347
00:16:04,120 --> 00:16:07,240
and now that's sold to Genesis.
And all of this poses the

348
00:16:07,240 --> 00:16:12,480
question if you always needed
Focus or in particular that kind

349
00:16:12,480 --> 00:16:16,760
of tenement of Focus in order to
mine magnetics LNJ 4.

350
00:16:17,760 --> 00:16:20,720
Well, now Genesis has focus.
Are they therefore coming from

351
00:16:20,720 --> 00:16:23,160
magnetic?
And that's something I do think

352
00:16:23,160 --> 00:16:27,080
we really need to consider here.
And magnetic is absolutely not

353
00:16:27,080 --> 00:16:29,720
cheap on you.
It's market cap is $500 million.

354
00:16:29,760 --> 00:16:32,880
It is, it is expensive, but
Genesis are in pole position.

355
00:16:33,160 --> 00:16:35,800
And when they're in pole
position because you can't

356
00:16:35,880 --> 00:16:38,600
really maximize the value of
that without Genesis now.

357
00:16:38,600 --> 00:16:41,240
Well, they probably don't feel
the pressure, the time pressure

358
00:16:41,280 --> 00:16:42,600
either.
They can they can take their

359
00:16:42,600 --> 00:16:44,720
time.
No one else can really mine it

360
00:16:44,720 --> 00:16:46,400
without them.
So there's no there's no like

361
00:16:46,400 --> 00:16:49,760
impending, you know, Oh, they're
going to bid bag now imminently

362
00:16:49,760 --> 00:16:52,560
because they have leverage.
Like who else is?

363
00:16:52,680 --> 00:16:55,000
Who else is going to buy
magnetic when when Genesis is

364
00:16:55,000 --> 00:16:56,240
the one with the leverage?
Yeah.

365
00:16:56,240 --> 00:16:59,240
And they have that sort of block
of shareholders at Magnetic that

366
00:16:59,240 --> 00:17:02,400
they need to to win over and
they'll be going through that

367
00:17:02,400 --> 00:17:05,359
process now.
I would imagine if we if we look

368
00:17:05,359 --> 00:17:08,040
around the area there, maybe
we'll pull up the map again.

369
00:17:08,560 --> 00:17:11,800
Sunrise Dam jumps out at you.
It's an interesting discussion

370
00:17:11,800 --> 00:17:14,560
point.
Sunrise Dam, obviously owned and

371
00:17:14,560 --> 00:17:18,400
operated by Anglo Gold Ashanti.
Now, we we reported word on the

372
00:17:18,400 --> 00:17:22,960
decline in our daily newsletter,
the Director Special last week

373
00:17:22,960 --> 00:17:26,240
that Anglo Gold may have been
fielding sneaky bids for Sunrise

374
00:17:26,240 --> 00:17:28,880
Dam.
By the way, JD, all of our

375
00:17:28,880 --> 00:17:32,000
listeners, the money miners.
If you aren't subscribed to the

376
00:17:32,000 --> 00:17:34,120
Director special, pause the
podcast right now.

377
00:17:34,280 --> 00:17:37,720
Go to moneyofmine.com, put in
your e-mail, then click the

378
00:17:37,720 --> 00:17:39,360
confirmation e-mail that comes
into your inbox.

379
00:17:39,360 --> 00:17:42,320
Then press play on the podcast
again, because there's real

380
00:17:42,320 --> 00:17:45,360
alpha in our newsletter.
The the Metals Acquisition Corp

381
00:17:45,360 --> 00:17:48,440
or Mac Copper, you know, trading
whole deal today.

382
00:17:48,680 --> 00:17:51,720
I don't know if it's out by by
them by the time this podcast

383
00:17:51,720 --> 00:17:55,400
goes out, but you know the we,
we, we first reported that

384
00:17:55,400 --> 00:17:57,760
rumour twice in the directors
special over the last few

385
00:17:57,760 --> 00:18:01,240
months, first on March 21st,
then again on the 1st of April a

386
00:18:01,240 --> 00:18:03,040
month ago.
Now, two months later, mate,

387
00:18:03,040 --> 00:18:05,120
Mack is in a trading halt.
And you can read the exact same

388
00:18:05,120 --> 00:18:07,760
rumour that we talked about that
it's Harmony gold buying Mack in

389
00:18:07,760 --> 00:18:10,280
street talk today.
So if you want the inside word

390
00:18:10,480 --> 00:18:12,280
on the decline every morning
before it's in the newspaper

391
00:18:12,280 --> 00:18:15,280
headlines or months before
director special at

392
00:18:15,280 --> 00:18:17,520
moneyofmine.com.
Shameless promotion mate.

393
00:18:17,760 --> 00:18:21,000
And after that, let's let's
focus on on Sunrise dam mate.

394
00:18:21,080 --> 00:18:23,560
So we reported Anglo was
fielding sticky bids for that in

395
00:18:23,560 --> 00:18:27,760
the director special last week
and we didn't name Genesis then,

396
00:18:28,120 --> 00:18:32,040
but we're pretty sure it was
Genesis that submitted a bid for

397
00:18:32,040 --> 00:18:33,600
Sunrise Dam we'll.
Name them now.

398
00:18:33,920 --> 00:18:36,440
There's, there's no public
information about Anglo selling

399
00:18:36,440 --> 00:18:39,680
Sunrise Dam for what it's worth.
But look at how Anglo

400
00:18:39,680 --> 00:18:41,800
categorizes its portfolio,
right.

401
00:18:41,800 --> 00:18:44,440
It splits its assets into what
it calls Tier 1 and Tier 2.

402
00:18:44,840 --> 00:18:49,480
Slide seven of their, you know,
investor deck, you can see the 2

403
00:18:49,480 --> 00:18:52,680
Australian projects there.
Tropicana clearly labeled A tier

404
00:18:52,680 --> 00:18:56,120
one asset, Sunrise Dam clearly
labeled A Tier 2 asset.

405
00:18:56,120 --> 00:18:59,200
So it wouldn't surprise me if
Anglo Gold thought about

406
00:18:59,560 --> 00:19:02,840
capitalizing on, you know, the
gold environment that we're

407
00:19:03,040 --> 00:19:06,120
we're in and sold Sunrise Dam
and the good times to, you know,

408
00:19:06,120 --> 00:19:08,320
quote UN quote, improve the
quality of its portfolio.

409
00:19:08,640 --> 00:19:10,520
I could see them doing a
playbook like that.

410
00:19:10,680 --> 00:19:14,080
It'd be refreshing to see a
major sort of rationalized

411
00:19:14,080 --> 00:19:17,280
assets in the portfolio, not at
the the lows of the market like

412
00:19:17,280 --> 00:19:19,240
sure like we saw ten years ago,
but now we saw.

413
00:19:19,640 --> 00:19:21,200
Newmont.
Newmont sold all their Tier 2

414
00:19:21,200 --> 00:19:23,440
stuff after them exactly with
new Crest.

415
00:19:23,440 --> 00:19:25,600
A whole heap of assets that
they, yeah, you know, didn't

416
00:19:25,720 --> 00:19:27,600
pass pass master for them being
sold.

417
00:19:27,600 --> 00:19:31,800
It's, yeah, all part of this
evolution in the major mine is

418
00:19:31,800 --> 00:19:35,160
becoming better stewards of
capital, which, yeah, in time

419
00:19:35,160 --> 00:19:36,680
they get rewarded by
institutions.

420
00:19:36,680 --> 00:19:39,240
And at one point in time, a Tier
2 asset could have been a tier

421
00:19:39,240 --> 00:19:41,800
one asset, you know, so at a
certain point in my life, you

422
00:19:41,800 --> 00:19:43,960
know, you, it makes sense to, to
sell it off.

423
00:19:43,960 --> 00:19:47,520
And absolutely.
Now if, if, if Sunrise Dam was

424
00:19:47,520 --> 00:19:50,440
up for grabs, I think it would
be incredibly competitive.

425
00:19:50,440 --> 00:19:54,160
Personally, I can the consensus
around Sunrise Dam is that there

426
00:19:54,640 --> 00:19:57,720
is a lot more gold and you know,
the asset will keep on giving

427
00:19:57,720 --> 00:19:59,800
maybe maybe even a bit like,
well, you know, kind of.

428
00:20:00,160 --> 00:20:01,560
There's lots of depth
extensions.

429
00:20:02,200 --> 00:20:03,360
There's, there's plenty of gold
there.

430
00:20:03,360 --> 00:20:06,160
So, so you can imagine why
Genesis would have an interest

431
00:20:06,160 --> 00:20:08,600
in that case.
But let's wait and see if

432
00:20:08,720 --> 00:20:11,640
Sunrise Dam is actually gettable
and whether or not Genesis are

433
00:20:11,640 --> 00:20:13,440
the ones to emerge with the
chocolates too.

434
00:20:13,440 --> 00:20:17,360
But you could pretty clearly
picture a scenario where

435
00:20:17,360 --> 00:20:21,680
Sunrise, Dam, magnetic and, and
focus could all come together

436
00:20:21,680 --> 00:20:25,680
and, and, and all of a sudden,
you know, if Genesis managed to

437
00:20:25,680 --> 00:20:27,960
get, get all of that stuff
together, there's a, there's a

438
00:20:27,960 --> 00:20:30,160
pretty interesting, you know,
Leverton hub that they've

439
00:20:30,160 --> 00:20:33,080
managed to consolidate.
Yeah, they want to consolidate

440
00:20:33,080 --> 00:20:35,800
the area makes makes perfect
sense at the right price.

441
00:20:36,360 --> 00:20:38,520
Jodie Sunrise, Damn.
And well, yeah, they're both

442
00:20:38,520 --> 00:20:41,840
underground mines now.
Underground mines need ground

443
00:20:41,840 --> 00:20:45,080
support time for our Sandvik
ground support minute of the

444
00:20:45,080 --> 00:20:47,480
week from Derek Kurt.
What is the variability in

445
00:20:47,480 --> 00:20:50,480
manufacturing across all of all
the globe effectively?

446
00:20:50,640 --> 00:20:51,840
Yeah.
I think you've seen obviously

447
00:20:52,280 --> 00:20:55,440
you know, when you say the DSI
business globally or the Sandvik

448
00:20:55,480 --> 00:20:57,480
ground support division, you
know, we've got 20 plus

449
00:20:57,480 --> 00:21:01,200
manufacturing locations around
the world and people go, oh, why

450
00:21:01,200 --> 00:21:02,680
so many, why don't you
consolidate?

451
00:21:02,680 --> 00:21:05,920
And the reality is most of our
product is steel.

452
00:21:05,920 --> 00:21:10,480
So in terms of quantity, we're
shipping like or selling 500,000

453
00:21:10,480 --> 00:21:13,840
tons of steel, you know, a year
to customers.

454
00:21:13,840 --> 00:21:16,440
And so to move that logistically
would be a nightmare.

455
00:21:16,760 --> 00:21:19,840
So it's very much a regionally
focused manufacturing because of

456
00:21:19,840 --> 00:21:22,000
the sheer volumes of material we
have to deal with.

457
00:21:22,400 --> 00:21:25,360
And part of that strategy is
being close to our customers for

458
00:21:25,360 --> 00:21:29,720
that responsiveness as well.
So, you know, logistically and

459
00:21:29,720 --> 00:21:32,120
from a service perspective, it
makes sense to make product

460
00:21:32,280 --> 00:21:34,880
where your customers are.
Thanks Derek, Kurt and Sandvik,

461
00:21:34,920 --> 00:21:37,640
Ground Support.
OK mate, let's let's bring

462
00:21:37,640 --> 00:21:39,440
another party into the fold
here.

463
00:21:39,440 --> 00:21:43,160
Genesis have pretty long been
rumored to to do a a deal, a

464
00:21:43,160 --> 00:21:48,160
merger with Vault, formerly Red
and Silverlake came into all of

465
00:21:48,160 --> 00:21:49,320
that.
What do you think this means for

466
00:21:49,440 --> 00:21:52,560
them?
Oh mate, I I feel like our

467
00:21:52,560 --> 00:21:55,240
podcast will never officially be
over until those two companies

468
00:21:55,240 --> 00:21:57,240
merge.
So here's the the the battle for

469
00:21:57,240 --> 00:22:00,920
Leonora was the beginning of it.
And wasn't it interesting to see

470
00:22:00,920 --> 00:22:05,240
Vault reveal an announcement of
their own yesterday, the same

471
00:22:05,240 --> 00:22:07,840
day Genesis announces that
they've bought focuses

472
00:22:07,840 --> 00:22:09,680
Labourton.
And in a nutshell, that

473
00:22:09,680 --> 00:22:12,480
announcement from Vault, it
basically said that they're

474
00:22:12,480 --> 00:22:16,960
going to they're expanding the
mill 50% to to to be capable of

475
00:22:17,120 --> 00:22:20,840
of 7.5 million tons per annum
throughput, while they also re

476
00:22:20,840 --> 00:22:24,200
cut their own reserves.
And the grade of those reserves

477
00:22:24,200 --> 00:22:29,240
has fallen some 33%, allowing a
33% increase in the in the

478
00:22:29,240 --> 00:22:32,800
number of of Oz in the reserve.
You know, the old kind of cut

479
00:22:32,800 --> 00:22:34,920
off grade dynamic supply there.
It's kind of remarkable.

480
00:22:34,920 --> 00:22:38,760
You you, you rate it and the cut
off grade for the reserves is

481
00:22:38,760 --> 00:22:42,600
now a 0 point 0.23g per ton open
pit cut off grade for is it?

482
00:22:42,600 --> 00:22:45,120
That's that's the the gold price
environment where we're in it.

483
00:22:45,160 --> 00:22:47,280
It kind of allows allows a cut
off grade like that.

484
00:22:47,800 --> 00:22:51,720
Yeah, the the head grade now,
well the reserve grade rather

485
00:22:52,000 --> 00:22:55,160
really jumps out at you just
over .6g per ton.

486
00:22:55,200 --> 00:22:56,960
Yeah, that and that's the,
that's the, I think that's the

487
00:22:56,960 --> 00:22:58,880
important number.
And I'll flash up a, a

488
00:22:58,880 --> 00:23:00,640
reconciliation kind of
waterfall.

489
00:23:00,640 --> 00:23:03,200
You can see of the not the
reserves, but the mineral

490
00:23:03,200 --> 00:23:05,960
resource and you can get a
picture of, of, of how you know,

491
00:23:05,960 --> 00:23:08,240
things have changed from their
their last, last resource.

492
00:23:08,240 --> 00:23:12,080
And as it relates to getting a
deal done with Genesis, if you

493
00:23:12,080 --> 00:23:14,680
just think about what like you
know, Volt or Red 5, whatever

494
00:23:14,680 --> 00:23:19,360
was doing historically and that
was stockpiling or 0.9g per ton

495
00:23:19,360 --> 00:23:22,480
from from mining, but we're
producing from the mill at 0.6

496
00:23:22,480 --> 00:23:25,480
to 0.7g per ton.
And it just didn't compute

497
00:23:25,520 --> 00:23:29,200
right.
And I think, I think Genesis

498
00:23:29,200 --> 00:23:32,920
would have no doubt been like
pretty hesitant or reluctant to

499
00:23:32,920 --> 00:23:36,520
to do a deal and consolidate
when the market expectations

500
00:23:36,520 --> 00:23:40,200
about what the reserve actually
was here from a grade

501
00:23:40,200 --> 00:23:41,480
perspective was pretty
overcooked.

502
00:23:41,760 --> 00:23:44,960
So I interpret the disclosure on
Monday as a necessary part of a

503
00:23:44,960 --> 00:23:48,440
bridging a a bit of spread to
enable a consolidation to happen

504
00:23:48,440 --> 00:23:50,080
there.
You can kind of think of the,

505
00:23:50,560 --> 00:23:53,240
you know, the mind plan
disclosure that came out of

506
00:23:53,800 --> 00:23:56,640
Remelius a few days before the
the deal.

507
00:23:56,840 --> 00:23:59,160
The deal was Spartan, right?
There was a necessary disclosure

508
00:23:59,360 --> 00:24:01,600
to bridge a bit of spread.
I'm not saying there's actually

509
00:24:01,600 --> 00:24:05,440
a, an imminent deal to be had
between Vault and Genesis.

510
00:24:05,440 --> 00:24:09,200
I'm just saying that this this
grade reserve issue might have

511
00:24:09,200 --> 00:24:12,720
been a a point of contention in
discussions and the disclosure

512
00:24:12,720 --> 00:24:16,200
is, is is necessary in order to
actually see, you know, the

513
00:24:16,200 --> 00:24:18,480
future consolidation here.
All part of that process.

514
00:24:18,840 --> 00:24:21,880
Yeah.
So is it enough to fully bridge

515
00:24:21,880 --> 00:24:23,680
it and get a deal done?
I don't know.

516
00:24:24,200 --> 00:24:26,560
I don't know.
So Vault's going to expand their

517
00:24:26,560 --> 00:24:27,440
meal.
They're going to get better

518
00:24:27,440 --> 00:24:31,760
economies of of scale to support
lower mining costs that make low

519
00:24:31,760 --> 00:24:36,160
grade mining better.
But even with that, a look at

520
00:24:36,160 --> 00:24:41,360
stage five of the mine plan, the
the king of the hills and you

521
00:24:41,360 --> 00:24:44,120
can see it in this chart here
really well that the strip ratio

522
00:24:44,120 --> 00:24:47,160
is in that stage 5.
Granted, stage 5 doesn't kick in

523
00:24:47,160 --> 00:24:50,920
till 2032, but the strip ratio
there's like nearly 6 to 1.

524
00:24:50,920 --> 00:24:53,240
And I wonder if that part of the
mine plan where you get lower

525
00:24:53,240 --> 00:24:56,040
grade high strip ratio.
I wonder if that would have

526
00:24:56,040 --> 00:24:59,880
stacked up if that didn't
increase the gold price used in

527
00:24:59,880 --> 00:25:04,880
the reserves from 2900 bucks an
ounce obviously to to 3750 bucks

528
00:25:04,880 --> 00:25:07,640
an ounce.
I'm I'm I'm convinced that

529
00:25:08,320 --> 00:25:11,920
eventually these two companies
do merge, but that doesn't mean

530
00:25:11,920 --> 00:25:15,040
that either company is a buy or
sell right now because there's

531
00:25:15,040 --> 00:25:17,920
plenty that can play out
beforehand that influences know

532
00:25:17,920 --> 00:25:20,400
what the ultimate merger ratio
could be.

533
00:25:21,320 --> 00:25:23,200
Yeah, the the gold price
assumptions is a really

534
00:25:23,200 --> 00:25:25,960
interesting point as well
because the gold prices shut up

535
00:25:25,960 --> 00:25:30,680
so, so quickly, right?
That 3700 might seem pretty far

536
00:25:30,680 --> 00:25:34,760
away from where we are, but time
wise we were there not that long

537
00:25:34,760 --> 00:25:38,960
ago to pull in one more company
into the fold now mate, Regis,

538
00:25:38,960 --> 00:25:43,360
we spoke about Regis just a week
or two ago with regards to their

539
00:25:43,760 --> 00:25:47,440
reported interest in Ravenswood,
which we suspected had had

540
00:25:47,440 --> 00:25:50,520
ceased and that sort of
eventuated now in in the press.

541
00:25:50,520 --> 00:25:57,320
There are $3.7 billion company,
370 ish million in cash now we

542
00:25:57,320 --> 00:25:59,400
put forward in that episode.
So you can go back and listen to

543
00:25:59,400 --> 00:26:00,880
it.
Why we think they're hungry to

544
00:26:00,880 --> 00:26:04,920
do a deal now there's one less
asset potentially on on that

545
00:26:04,920 --> 00:26:07,520
list that they've got.
Yeah, I and I think we spoke

546
00:26:07,520 --> 00:26:09,680
about the fact that I wouldn't
be surprised to see them have

547
00:26:09,680 --> 00:26:12,440
interest in, in in focuses
labour.

548
00:26:12,440 --> 00:26:14,080
Obviously that that hasn't
eventuated.

549
00:26:14,080 --> 00:26:17,320
Genesis has picked it up.
I do think Regis is up to

550
00:26:17,320 --> 00:26:19,680
something and I can't quite
pinpoint what it is.

551
00:26:19,680 --> 00:26:24,400
I think, I think they're pretty
damn motivated right now and

552
00:26:24,400 --> 00:26:28,720
yeah, like they're making a lot
of cash right now, but that cash

553
00:26:28,720 --> 00:26:31,760
generation dynamic is not going
to last forever for them.

554
00:26:31,760 --> 00:26:34,320
The nature of the, the mining
methods are revolving and

555
00:26:34,320 --> 00:26:36,640
changing it and, and druked and
and druked and the

556
00:26:36,640 --> 00:26:37,840
mineralization gets weaker
depth.

557
00:26:37,840 --> 00:26:41,440
There's still question marks
about, you know, the the long

558
00:26:41,440 --> 00:26:44,800
term economics of the
underground model there this

559
00:26:44,800 --> 00:26:45,960
gold price.
I'll still make money, but it's

560
00:26:45,960 --> 00:26:47,480
like, how much are they going to
make?

561
00:26:47,800 --> 00:26:50,600
This script is valued really
well and I'm I'm sure the

562
00:26:50,600 --> 00:26:52,840
Bellevue opportunity is is front
of mind for them.

563
00:26:53,520 --> 00:26:55,120
I can't quite figure out what
they're up to though, because I

564
00:26:55,120 --> 00:26:56,400
wouldn't be surprised if there's
something else.

565
00:26:56,400 --> 00:26:59,800
Too one more company to to pull
into the fold here focus the

566
00:26:59,800 --> 00:27:02,800
seller of the assets.
They closed up a pretty lousy

567
00:27:02,880 --> 00:27:05,960
90%.
They had a ripping day and

568
00:27:05,960 --> 00:27:09,720
they're a, they're a funny
company majority kind of Chinese

569
00:27:09,760 --> 00:27:12,520
ownership at one point they
tripled, almost tripled

570
00:27:12,640 --> 00:27:15,400
Yesterday they pulled off a
little bit from that, but

571
00:27:15,920 --> 00:27:19,440
they're now gonna pull back
their focus on to their Coolgati

572
00:27:19,520 --> 00:27:21,560
operations.
Plenty of gold down there.

573
00:27:21,560 --> 00:27:26,480
So market cap of 110 million
yeah, enterprise value of

574
00:27:26,760 --> 00:27:29,480
26,000,000 so.
The the big hindrance in their

575
00:27:29,480 --> 00:27:31,680
capital structure has for the
longest time being that

576
00:27:31,680 --> 00:27:34,520
$186,000,000 in debt to
Shandong.

577
00:27:34,760 --> 00:27:36,080
Shandong is their largest
shareholder.

578
00:27:36,080 --> 00:27:38,840
I think they own like 62 ish
percent of the company.

579
00:27:38,840 --> 00:27:43,040
Yeah, there's there's issues
with Shandong kind of increasing

580
00:27:43,040 --> 00:27:45,720
its equity ownership because
because of Ferb and all that

581
00:27:45,720 --> 00:27:47,720
sort of stuff.
So the way that focus has

582
00:27:47,960 --> 00:27:51,720
effectively just been continuing
to fund it's negative cash flow

583
00:27:52,520 --> 00:27:55,320
for, for for several years now
is with this increase in kind of

584
00:27:55,720 --> 00:27:59,080
debt to to Shandong, very
interestingly now they're going

585
00:27:59,080 --> 00:28:01,120
to be net cash.
Yeah, a funny company.

586
00:28:01,320 --> 00:28:03,440
A very funny company.
It's it's always beat like, you

587
00:28:03,440 --> 00:28:06,200
know, there is no world where
I'm going to buy shares in focus

588
00:28:06,200 --> 00:28:09,760
because it's just a it's just
too hard a a proposition to ever

589
00:28:09,760 --> 00:28:11,440
kind of, you know, come to terms
with then you've got.

590
00:28:11,800 --> 00:28:15,280
I'll try and tempt you mate.
OK, so never mind that they

591
00:28:15,280 --> 00:28:20,720
trade less than $100,000 worth
on a, on a good day, might be a

592
00:28:20,720 --> 00:28:22,480
problem for a, for a big swinger
like yourself.

593
00:28:22,480 --> 00:28:26,920
But recently they've been
running the mill at about 1.5

594
00:28:27,040 --> 00:28:29,680
million tons per annum run rate.
A lot of that is third party or

595
00:28:29,680 --> 00:28:31,800
that they're trading, so they're
just taking a fee for that.

596
00:28:32,200 --> 00:28:35,000
But development at Bonnie Vale,
this is their underground

597
00:28:35,000 --> 00:28:37,960
development is churning away and
pretty soon they should be

598
00:28:38,280 --> 00:28:39,800
producing from the gold down
there.

599
00:28:39,800 --> 00:28:43,480
So they've got Barminco down
there doing the mining services.

600
00:28:44,360 --> 00:28:50,120
Now this has an all reserve of
180,000 ounces at 6g per tonne.

601
00:28:50,120 --> 00:28:53,080
So cracking grade down there.
And then they've got a couple

602
00:28:53,080 --> 00:28:57,680
open pits which have been
feeding into the mill for give

603
00:28:57,720 --> 00:29:01,400
call it a year or so now.
So only four ish years in mine

604
00:29:01,400 --> 00:29:02,800
life.
They're going to do some

605
00:29:02,840 --> 00:29:05,760
exploration work and try and
prove that all out.

606
00:29:05,880 --> 00:29:09,720
But you know, they've, they've
got much better capacity to, to

607
00:29:09,720 --> 00:29:12,040
do that, to prove it all out, to
do the work they need to do

608
00:29:12,400 --> 00:29:15,520
being better capitalized, they
should make pretty comfortable

609
00:29:15,520 --> 00:29:19,320
cash EV of 26,000,000 just
wouldn't bank on any of it

610
00:29:19,320 --> 00:29:22,000
coming back to you as as a
shareholder.

611
00:29:22,440 --> 00:29:25,560
You know what, like it closed up
90% and I feel like it was

612
00:29:25,560 --> 00:29:27,840
actually just an absolute no
brainer in the lead up.

613
00:29:27,840 --> 00:29:30,440
Everyone knew this for sale.
Everyone knew the ballpark kind

614
00:29:30,440 --> 00:29:33,360
of price was probably going to
be between 200 and $300 million

615
00:29:33,360 --> 00:29:34,840
that it went for.
You could pretty easily work out

616
00:29:34,840 --> 00:29:37,840
that this company goes to net
cash and and then the share

617
00:29:37,840 --> 00:29:40,320
price up 90%.
It was sort of that was a layup,

618
00:29:40,320 --> 00:29:43,160
but still couldn't, you couldn't
convince me to buy shares in

619
00:29:43,160 --> 00:29:46,680
Focus.
All right, mate, we'll move on

620
00:29:46,680 --> 00:29:49,560
to the the final kind of talking
point, something I find really

621
00:29:49,560 --> 00:29:53,080
interesting with with Genesis
again.

622
00:29:53,080 --> 00:29:57,120
So it's, it's the art of
institutional appeal, which I

623
00:29:57,120 --> 00:29:59,840
think there are a few better in
the space at than Genesis.

624
00:29:59,840 --> 00:30:02,480
And I'll just lay out a few kind
of facts as I kind of see them.

625
00:30:02,480 --> 00:30:06,440
So to have strong institutional
appeal and to get your stock

626
00:30:06,440 --> 00:30:08,920
price up ultimately you need to
check a few boxes, right?

627
00:30:08,920 --> 00:30:12,160
So you need operational
performance, that is table

628
00:30:12,160 --> 00:30:16,480
stakes you need to meet and then
beat, upgrade your guidance

629
00:30:16,480 --> 00:30:19,480
consistently.
And you also need to do things

630
00:30:19,480 --> 00:30:22,400
like bring stuff on earlier than
planned in quotation marks.

631
00:30:22,400 --> 00:30:25,040
Like I mentioned before, you
know, you need to understand

632
00:30:25,040 --> 00:30:28,640
what you your goals are and you
need to hit them reliably.

633
00:30:28,960 --> 00:30:31,560
You need to have balance sheet
sheet strength.

634
00:30:31,560 --> 00:30:33,880
So that's .2.
These guys are net cash.

635
00:30:34,280 --> 00:30:37,200
That's one O 1 sort of stuff.
You know management needs to

636
00:30:37,200 --> 00:30:40,600
have a proven track record.
Check, check, check, check,

637
00:30:40,600 --> 00:30:42,040
check.
Aligned with shareholders,

638
00:30:42,480 --> 00:30:44,360
aligned with.
Shareholders as well, they

639
00:30:44,360 --> 00:30:47,880
easily hit that one.
Capital discipline is the fourth

640
00:30:47,880 --> 00:30:50,880
point I've got here.
Now this one takes time to to be

641
00:30:50,880 --> 00:30:53,480
able to actually observe.
It's something you observe in

642
00:30:53,520 --> 00:30:56,160
retrospect.
But the gold price to date helps

643
00:30:56,160 --> 00:30:57,960
them phenomenally.
And they try and talk to this by

644
00:30:58,280 --> 00:31:00,760
that chart that they use and
they say this is when we bought

645
00:31:01,120 --> 00:31:02,840
this price.
You know, this gold project

646
00:31:02,840 --> 00:31:05,280
counter cyclical investment,
yada, yada, yada.

647
00:31:06,080 --> 00:31:08,560
You know in, in all fairness,
like the gold prices ripped, you

648
00:31:08,560 --> 00:31:11,520
can kind of make that argument
easily now, but that needs to

649
00:31:11,520 --> 00:31:14,200
play out over a number of years
to be fully proven out.

650
00:31:15,000 --> 00:31:17,280
And all these sort of tailwinds
help.

651
00:31:17,280 --> 00:31:20,640
So the gold price jumping up,
them having done those deals

652
00:31:20,640 --> 00:31:23,800
that they did a couple years ago
allows them to now use revolving

653
00:31:23,800 --> 00:31:25,760
facilities as opposed to project
finance.

654
00:31:26,040 --> 00:31:28,840
You get a lower cost of capital.
So there are tailwinds on

655
00:31:28,960 --> 00:31:32,640
tailwinds on that front too.
Then you need a growth story.

656
00:31:33,080 --> 00:31:36,360
We've literally spent the whole
episode talking about Genesis's

657
00:31:36,360 --> 00:31:38,600
growth story.
There's a few, there's a few in

658
00:31:38,600 --> 00:31:40,040
the portfolio we haven't even
touched on.

659
00:31:40,040 --> 00:31:42,680
I mean, of course, like Yahoo
has been a a long great story

660
00:31:42,680 --> 00:31:44,720
meal expansions we haven't even
talked about like the, you know,

661
00:31:44,720 --> 00:31:47,680
Bardock and all that sort of
stuff that they've they've got

662
00:31:47,680 --> 00:31:49,840
that could cut, you know, a.
100% they're talking about, you

663
00:31:49,840 --> 00:31:52,640
know, ad hub drilling more
potentially going underground,

664
00:31:52,640 --> 00:31:55,200
all that sort of stuff.
Another point I've got is that

665
00:31:55,520 --> 00:31:57,880
you need liquidity in your stock
and you need to be included in

666
00:31:57,880 --> 00:31:59,920
indexes.
So if we go back three years,

667
00:31:59,920 --> 00:32:03,440
they're in the all odds we look
today, they're in the ASX 200,

668
00:32:03,840 --> 00:32:07,040
they're in the MSCI small cap
index, they're in the GDX,

669
00:32:07,040 --> 00:32:10,280
they're in the GDXJ, they're
closing in on the ASX 100.

670
00:32:10,280 --> 00:32:13,240
So they've knocked that one out
the park in in pretty short

671
00:32:13,240 --> 00:32:15,080
order.
And the last point I've sort of

672
00:32:15,080 --> 00:32:17,280
got is your marketing side of
the business.

673
00:32:17,280 --> 00:32:20,880
You need sales side coverage.
You don't want to surprise

674
00:32:20,880 --> 00:32:22,960
investors with news.
You sort of signal to these

675
00:32:22,960 --> 00:32:25,800
things, you don't want to get on
the wrong side of proxy

676
00:32:25,800 --> 00:32:27,480
advisors, all that sort of
stuff.

677
00:32:27,920 --> 00:32:30,760
You've got the the growth story
wrapped into it that you can

678
00:32:30,760 --> 00:32:34,920
market that is Aspire 400, which
Genesis regularly talk about.

679
00:32:35,040 --> 00:32:39,320
You're totally right though,
they are elated at at anchoring

680
00:32:39,320 --> 00:32:43,800
expectations like a point that
they know is achievable and

681
00:32:43,800 --> 00:32:46,280
always kind of over delivering
to the upside.

682
00:32:46,720 --> 00:32:48,040
And it was the same with
Saracen.

683
00:32:48,400 --> 00:32:52,120
It's yeah, it's one thing to to
anchor expectations lower and

684
00:32:52,120 --> 00:32:54,680
over deliver, but then it's
another thing to consistently

685
00:32:54,840 --> 00:32:57,480
deliver still, you know, just by
the fact that it's a lot of

686
00:32:57,600 --> 00:32:59,160
unknown unknowns that you come
across in mining.

687
00:33:00,240 --> 00:33:01,760
Yeah, I do.
I mean, these guys know what

688
00:33:01,760 --> 00:33:04,320
institutional investors want.
I think that's one of the

689
00:33:04,320 --> 00:33:05,920
easiest ways to to kind of
capture it.

690
00:33:05,920 --> 00:33:08,960
But all that leads me to the
final talking point, mate.

691
00:33:09,680 --> 00:33:13,240
You think Riley's going to going
to step back in in the near

692
00:33:13,240 --> 00:33:16,280
term?
So there was a lot of talk about

693
00:33:16,280 --> 00:33:20,520
new execs coming on, a lot of
putting other people within the

694
00:33:20,520 --> 00:33:23,800
business, whether that be sort
of magnet, Matt Nixon front and

695
00:33:23,800 --> 00:33:25,200
center.
And you know, you could you

696
00:33:25,200 --> 00:33:27,400
could argue that's just great
leadership praising, praising

697
00:33:27,400 --> 00:33:30,120
your people in public.
There's always a comment to that

698
00:33:30,120 --> 00:33:33,480
effect in the statement.
It could also be a bit of both

699
00:33:33,600 --> 00:33:37,640
Riley slowly stepping back
whilst just being a good leader

700
00:33:37,640 --> 00:33:38,920
as well.
But I think it's an interesting

701
00:33:38,920 --> 00:33:41,920
point worth discussing.
Yeah, I interpret it as a bit of

702
00:33:41,920 --> 00:33:44,560
a bit of foreshadowing, but I
don't know if that's the right

703
00:33:44,560 --> 00:33:47,640
take away.
I just, it was a big, it was a

704
00:33:47,640 --> 00:33:49,880
big public pump up of the tires
of Matt Nixon.

705
00:33:49,880 --> 00:33:53,560
I think there's like a a view in
the market that Matt, Matt Nixon

706
00:33:53,560 --> 00:33:57,040
is, is somewhat paying.
You know, he's, he's, he's the

707
00:33:57,040 --> 00:34:00,400
future leader of this business.
When there's a management

708
00:34:00,400 --> 00:34:02,560
premium associated with with
Rael, right?

709
00:34:02,680 --> 00:34:05,720
Like what what happens when Rael
goes well, you kind of you need

710
00:34:05,720 --> 00:34:07,800
that period of succession, all
that sort of stuff.

711
00:34:08,120 --> 00:34:10,639
Who was the Ned?
The he's not an executive

712
00:34:10,639 --> 00:34:12,800
director that that came in on on
a good wicket.

713
00:34:13,320 --> 00:34:14,880
Duncan.
Coots, Duncan Coots.

714
00:34:14,880 --> 00:34:16,639
Yeah, it wasn't.
I found, I found that

715
00:34:16,639 --> 00:34:19,440
interesting too.
Like, I do want all of those

716
00:34:19,440 --> 00:34:21,960
sorts of things.
It's like, yeah, I do think

717
00:34:21,960 --> 00:34:25,000
there was there's there's a
something's going on in relation

718
00:34:25,000 --> 00:34:28,600
to, in relation to, you know,
talent, bringing talent through

719
00:34:28,600 --> 00:34:30,880
succession planning, all that,
all that kind of stuff at this

720
00:34:30,880 --> 00:34:34,320
business and as you need to do
in order to have a sustain

721
00:34:34,320 --> 00:34:36,000
management premium.
And I think we're on the same

722
00:34:36,000 --> 00:34:38,960
page in in talking about him
stepping to A to a chair role as

723
00:34:38,960 --> 00:34:40,520
not just going to leave the
business.

724
00:34:40,520 --> 00:34:44,440
Like, yeah, in my mind, that's
that's how I say kind of Jake

725
00:34:44,440 --> 00:34:46,679
client type Mark, Mark Clark as
well.

726
00:34:46,679 --> 00:34:49,960
You go into the the chair role.
Yeah, Do still involved do it

727
00:34:49,960 --> 00:34:53,280
that way, Yeah, yeah.
And then you're sort of whether

728
00:34:53,280 --> 00:34:56,360
that's exec and then sort of in
time, who knows if we're wrong

729
00:34:56,360 --> 00:34:58,120
brow.
Please come on the podcast we'd

730
00:34:58,800 --> 00:35:01,960
yeah, your.
Presents would be welcome.

731
00:35:01,960 --> 00:35:04,560
You'd help us otherwise, yeah.
Yeah, All right, mate.

732
00:35:04,560 --> 00:35:05,960
I think that's a good spot to
leave it.

733
00:35:05,960 --> 00:35:09,920
A lot going on in WA gold and a
lot going on at Genesis and a

734
00:35:09,920 --> 00:35:11,000
whole bunch of those other
players.

735
00:35:11,440 --> 00:35:13,360
There's activity, there is
activity.

736
00:35:13,440 --> 00:35:16,480
There's a lot of activity, Yeah,
gets the.

737
00:35:16,640 --> 00:35:18,480
Gets you thinking, doesn't it?
Let's thank our partners though

738
00:35:18,480 --> 00:35:20,360
mate, I've enjoyed.
Let's RIP it mate.

739
00:35:20,520 --> 00:35:23,040
Mineral mining services,
grounded Sandy ground support,

740
00:35:23,040 --> 00:35:26,400
CR insurance, K drill, KC A side
services, black diamond drilling

741
00:35:26,400 --> 00:35:28,320
services and cross boundary
energy.

742
00:35:28,520 --> 00:35:29,440
Hoodoo hoodoo.