There's No Value in Gold Right Now (Will Thomson)

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A good management team and a bad
project might still make it.

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A bad project and a bad
management team will never make

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and a bad management team and a
great project probably ends up

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as shitty company.
JD, we are joined today by Will

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Thompson of Massive Capital.
Will, it's been a massive year

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for Massive Capital and we're
delighted that you, you can, you

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can join us to talk about your
high conviction, you know, bets

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in the material space.
You, you've been a character on

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our, on our show in the past and
you've always intrigued us

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because you're, you're certainly
a unique thinker and you, and

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you think very deeply about,
about the, the, the positions

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you choose.
I had the privilege of, of

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reading through your, your Q4
letter, which I think, I think

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was dated the 16th of January
when, when you wrote it.

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Now that's not all that long
ago, but it really does feel

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like, you know, the world has
has moved dramatically since you

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even riding that.
I wanted to ask you a specific

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question there because you wrote
that investors were clinging to

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US mega cap tech and AI cap X
with a a quiet refusal to rotate

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into other assets even as real
assets outperformed.

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Sitting here now will starting
to see that genuine rotation out

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of those growth names and into
the sort of real assets that you

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own.
It's a really good question.

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It's certainly, there's
certainly, there's certainly a

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rotation it looks like, and
obviously this is a little high

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level for me and not my area of
expertise, but there definitely

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seems like a rotation out of
certain types of software names

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right now.
I think that one's hard to argue

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with.
It seems like whether people are

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rotating into the types of
things I own, energy, materials,

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industrials and infrastructure,
I think it's still an open

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question.
Don't think that there doesn't

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look like there's a huge
rotation into those things right

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now alongside that rotation out
of software.

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I think we'd see that more in
the the stock movement just

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because the flows would be so
big relative to the size of the

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resource sectors, if you will.
From a market cap perspective.

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There definitely has been
obviously some rotation over the

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last, let's call it 18 months
into more real assets.

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I would be surprised if we
weren't really just getting

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started though.
And that rotation is early

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innings.
I think there's a lot of room

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for more rotation and as far as
rotating out of the mega cap

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tech stocks, the your Nvidia's
hassle as Microsoft's things of

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that nature.
Yeah, I'm sure maybe we're we're

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seeing a little bit of that on
the margin, but we don't doesn't

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quite feel like a large rotation
out of those things at the

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moment.
Maybe just on the margin.

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I could be wrong though.
So it's pretty hard to see that

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happening at the moment in my
opinion.

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Have you sort of felt it with,
with inbounds and inbound

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interests?
I mean, on, on the front of your

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website, you invest in basic
materials, energy and, and

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industrial businesses.
And we're, we're very firmly in,

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in the echo Chamber of that
being the, the place to be.

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But it does feel like that is
being the whole conversation for

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a few months ago.
Real assets like the the the

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letter you write is called the
Real Asset Handbook, you know,

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so it feels pretty primarily
placed.

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We've seen an uptick in inbound,
there's no question about that.

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But it hasn't been, it hasn't
been like a Stampede to the

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door.
Now that could have more to do

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with me and my fund than it does
the real asset space.

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So I'm not, I'm not sure we
have, if we go back to the tech

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side of things, we have seen an
uptick in inbound out of

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California and some tech people
and specifically asset managers

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who have allocations from tech
investors who are now looking to

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place that someplace else though
that's interesting, but

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anecdotal and still quite a
small, you know, small group, if

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you will.
So yeah, I think we're starting

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to see it.
It's a conversation I've been

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having for a long time.
It's a conversation that I think

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is picking up and politics
globally are driving some of

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that.
You guys down in Australia,

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Gosh, what's the guy's name?
Greg.

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All of a sudden, like out of
nowhere, some Stack winner like

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blew up with articles a little
little disjointed about or say

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or something because I feel like
I wrote them a couple years ago.

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And but, but he did a fantastic
job writing them up again and

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did a has done a great job sort
of promoting them And, and other

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people like Robert Friedland
and, and those guys have have

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picked up on some of his
articles.

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So there's no question that
there's more enthusiasm.

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The question is whether that
enthusiasm is still just sort of

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the three of us in your podcast
listeners banging the drum

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louder or if people are are
actually, you know, starting to

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pay attention.
I do, you know, you go to a

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cocktail party these days, at
least here in the United States.

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And I don't know, inevitably, if
I say I invest in mining firms,

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somebody begins to tell me all
about this new found thing.

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They've heard it called rare
earth metals.

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So you know, there is some
movement.

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I think it's pretty immature at
this.

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Point, but we'll say.
That's a fascinating anecdote

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that the the tech people are
some of the ones that you're

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having the inbounds from.
And you know as well you're

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getting the standard pictures of
of rare earth projects in in

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Greenland or Ukraine, I bet as
well if you.

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I I have not had any pitches to
build build rare earth mines in

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Greenland yet that I did.
I did have a guy who pitched me

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on ADRC mining project so right
after it from I guess negotiated

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a E steel if you will.
Fiance is not not unfamiliar to

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you, but you're happy investing
there.

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Yeah, I have no problem with
that.

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I was not happy with this
character though what he was

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talking about so.
That's great.

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If before we jump into the DICI
do want to look across the the

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basket that you kind of invest
in.

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Will there's another kind of
difference with what Trev

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mentioned reflecting on just one
month ago when you wrote the the

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letter, the commodity price
movements, you know,

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specifically on the metals that
you look at and we all look at

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have been dramatic.
You know, especially the the

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precious metals, it's been been
really pronounced.

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So I'm kind of curious to hear,
you know, at a high level where

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you see the value across the
basic materials, the energy and

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the industrial type businesses
at the minute.

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Yeah.
So I see no value or very little

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value in precious metals.
All right, go into that.

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That's probably.
I don't know if that is

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contrarian or not.
I think it is, Yeah, I think it

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is.
I think we should go into.

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That easy?
Yeah, OK, so gold has moved so

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quick and so fast and I'll just
focus on gold.

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Silver, look, I, I for better or
worse, when I first started my

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fund, I was like, I don't really
have time or energy for multiple

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precious metals.
So I'm just going to stick with

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gold and kind of ignored the
silver market for no specific

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reason other than I just picked
gold instead.

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So I'll, I'll sort of focus on
gold, but I think the story with

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silver and the story with silver
is probably different because of

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its industrial uses, though
certainly necessarily applied.

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But gold, you know, look, you've
got a lot of behavior, a lot of

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political risk, a lot of
psychology built into the price

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of gold.
Right now.

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It's got, you know, the the
price of gold has got nothing to

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do with the cost of producing
gold.

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No one is coming around pitching
the gold projects that require

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$2000 gold, let alone, you know,
$5000 gold, right?

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The challenge is from my
perspective that everything and

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the gold space has baked in a
pretty healthy gold price at

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this point.
The equity prices all baked in a

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pretty healthy gold price.
And so, you know, a lot of

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things that I would have looked
at a couple years ago and would

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have been 150, two $150 million
companies are now, you know,

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reproduction gold miners who
don't have a definitive

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feasibility study and are
billion dollar companies.

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It's just hard.
I find this market to be really

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challenging to find value in.
Everything is running ahead of

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schedule, if you will.
We're trading at, you know,

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whatever .8 of NAV when we don't
even really have a good idea of

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what the development plan looks
like or you know, something.

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And so I just find right now to
be a tough environment to buy a

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gold miner in, unless you think
gold price is going to $8000 an

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ounce or something.
And at least for me, I try not

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to make that kind of bet.
And I think trying to forecast

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where gold price is going from
here is quite challenging.

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And the people who talk about
say eight $10,000 per oz gold,

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you know, they're talking big
global macro stories about, you

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know, central banks and interest
rates and, you know, de

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dollarization and things like
that driving it to that price.

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And then those things may
certainly occur, but it's very

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hard to put a timeline on those
things.

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And so buying an expensive gold
miner whose pre production free

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feasibility study you know, at
at at full prices is, is a

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challenge for me.
I would also say that, you know,

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the gold prices move so quick.
What is a good gold price to use

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for say a 10/15/20 year project?
I'm having a lot of trouble

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figuring out what the actual
gold price I should use is.

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Now I use a diversity of gold
prices in my valuations, but

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even there I'm having trouble
figuring out what the diversity

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is.
I mean, tell me what gold miner,

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what gold mining management team
wouldn't be perfectly happy if

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gold collapsed to 3500, You
know, any gold miners who

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wouldn't still mint money.
So it's kind of challenging to

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figure out, you know, so, so
with that sort of said, you're,

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you're assuming that more of
these macro variables, more of

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this psychological variables,
behavioral political risk

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variables, those are going to
continue to be there and

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maintain the price of gold up
high.

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And you know, that probably is
the case, but you know, how high

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is really high above the sort of
it's called industry cost of

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production.
Gold doesn't need to tie back to

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the cost of production the same
way an industrial metal does.

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But that does create a bit of an
anchor that you can only pile so

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much behavioral or political
risk variables on top before you

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get a bit, you know, the, the,
the price stack, if you will,

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gets a bit wobbly.
So I think gold's really

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challenging here.
I don't see a lot of value in

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gold.
Suppose you're you're wrong.

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Well, not wrong, but suppose
suppose the people who are who

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are long gold are are proven
correct for the macro reasons

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that are basement trade.
All of these things continuing.

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Do you do you still feel
comfortable with your portfolio

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allocation in other in other,
you know, material sectors that

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you'll you know you, you you'll
still perform well.

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I'll be at having minimal gold
portfolio allocation right now.

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I know, I know.
Is it Equinox?

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Is your sole gold position now?
And at this point, Equinox is

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our sold gold position.
So, so first of all, my

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commentary was not just to be
clear, make sure you know, all

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your listeners understand was
not a critique per SE of that

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argument.
Like perfectly frank, I have no

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opinion on that argument.
You know, like a $10,000 gold

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crowns gold argument, the big
macro historical argument.

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I, I don't really have any
opinion that they could very

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well be right.
And if they are right and they

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have a whole portfolio of ginger
gold liners, they'll recommend

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money I'm perfectly satisfied
with.

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You know, I came in the last
year with, you know, let's call

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it 12 to 15% of the portfolio in
G Mining and Equinox.

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I've had well over 100% rallies
from my entry price in both.

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I think E Mining got to a 300%
return.

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Equinox is looking at a least a
200, 100 plus percent return.

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So I have nothing to complain
about.

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And I've got a little ways to go
here on Equinox, which I think

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is still trading below its value
at $3600 gold.

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So I have no, no qualms with
lacking additional exposure to

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gold.
I still look at gold miners, you

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know, investment banks in
Toronto and Australia still

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bringing guys, you know, threw
me digitally, if you will for

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Zoom meetings.
And if there's an opportunity,

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I'll take it.
I just haven't found the

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opportunity.
Don't.

225
00:14:53,880 --> 00:14:57,360
Everything's priced to
operational executional

226
00:14:57,360 --> 00:15:02,000
perfection.
And as we all know that is could

227
00:15:02,000 --> 00:15:06,000
not be the base case for a
mining firm that should be like

228
00:15:06,920 --> 00:15:10,960
the bear or the bullet wire
case, let alone just the bull

229
00:15:10,960 --> 00:15:14,600
case.
I'd love to maybe go a little

230
00:15:14,600 --> 00:15:18,360
bit deeper and on Equinox while
we're here, because this Equinox

231
00:15:18,360 --> 00:15:21,560
is a really interesting stock
and and yeah, you've got, you've

232
00:15:21,560 --> 00:15:28,240
got great leverage, great growth
and and maybe a still a market

233
00:15:28,240 --> 00:15:31,920
mispricing or underestimating
that in the in the valuation.

234
00:15:32,720 --> 00:15:34,760
Why?
Why is the markets you know

235
00:15:34,760 --> 00:15:37,720
potentially not, not not
recognizing the achievement or

236
00:15:37,720 --> 00:15:40,640
pricing in the potential return
of a 1.1 million oz producer at

237
00:15:40,640 --> 00:15:48,640
this point in the cycle wheel?
I think that the, so I've been

238
00:15:48,640 --> 00:15:53,760
in Equinox since 2018 or 19, I
don't remember which it was

239
00:15:53,760 --> 00:15:58,880
probably the end of 2018.
But I've been through a lot of

240
00:15:58,880 --> 00:16:03,440
the company's operational growth
and what I would say is it's

241
00:16:03,440 --> 00:16:10,440
been highly effective and
extremely messy at the same

242
00:16:10,440 --> 00:16:15,320
time.
And it has also been highly

243
00:16:15,320 --> 00:16:22,920
opportunistic and the market
appears and the market's credit.

244
00:16:23,480 --> 00:16:25,840
I thought last year would be the
year where they focused on

245
00:16:25,840 --> 00:16:30,280
operations and didn't engage in
a merger very quickly.

246
00:16:30,280 --> 00:16:34,160
I was proven wrong last year,
you know, so, so every year I

247
00:16:34,160 --> 00:16:36,600
think a lot of people have come
into it thinking, OK, this is

248
00:16:36,600 --> 00:16:42,000
the year they focus on execution
as opposed to building.

249
00:16:42,640 --> 00:16:45,080
And, you know, you can execute
building well.

250
00:16:45,200 --> 00:16:48,400
And I personally think they have
executed building well, but

251
00:16:48,400 --> 00:16:51,600
building is still messy and it's
still complicated.

252
00:16:52,440 --> 00:16:55,840
And so there is complication in
the story.

253
00:16:56,000 --> 00:16:58,240
There's merging of all these
different companies.

254
00:16:58,920 --> 00:17:02,480
Each company, you know, came
with, some companies came with

255
00:17:02,480 --> 00:17:06,760
hedges, other companies came
with, you know, political risk,

256
00:17:07,560 --> 00:17:11,920
you know, So it was a merger of
a lot of different variables and

257
00:17:12,280 --> 00:17:16,480
it was never a very clean story.
In not being a clean story.

258
00:17:16,480 --> 00:17:19,920
I think it has underperformed.
In addition to the fact that,

259
00:17:20,920 --> 00:17:25,319
you know, from an operational
perspective, they haven't always

260
00:17:26,440 --> 00:17:28,600
been at the top of their game.
In my opinion.

261
00:17:28,760 --> 00:17:33,160
The potential of the assets and
the management team to get there

262
00:17:33,160 --> 00:17:37,440
has always been there, but
they've been so busy in my

263
00:17:37,440 --> 00:17:40,080
opinion that they haven't pulled
it all together.

264
00:17:40,600 --> 00:17:45,920
Now my hope, my expectation is
that with Darren Hall in there

265
00:17:46,240 --> 00:17:51,200
and a focus on operations, which
sort of is supposedly his bread

266
00:17:51,200 --> 00:17:54,440
and butter and what he intends
to focus on.

267
00:17:57,360 --> 00:18:00,240
My, my hope is that we start to
see especially this year, some

268
00:18:00,240 --> 00:18:04,160
of that that potential that's
been built over the last decade

269
00:18:04,720 --> 00:18:06,640
flow through the financial
state.

270
00:18:09,280 --> 00:18:12,440
That would be why I I suspect
the market can get used to under

271
00:18:12,440 --> 00:18:14,440
appreciate it.
It's it's too bassy and too

272
00:18:14,440 --> 00:18:17,200
complicated.
A good friend of ours, he he

273
00:18:17,200 --> 00:18:21,120
listens to many, many earnings
calls and he made the comment to

274
00:18:21,120 --> 00:18:23,480
Jade and I recently that Darren
Hall is his new favorite mining

275
00:18:23,480 --> 00:18:25,560
executive.
Yeah.

276
00:18:25,560 --> 00:18:28,400
Why is that?
I just think, you know, he's his

277
00:18:28,400 --> 00:18:31,480
demeanor and yeah, why he why he
handles himself on the calls.

278
00:18:32,680 --> 00:18:36,160
Well, I did an interview with
him on YouTube somewhere.

279
00:18:36,520 --> 00:18:40,240
Some zero interview with him a
couple of months ago and, and he

280
00:18:40,240 --> 00:18:45,920
did a, he did a great job and
he's very, he's very focused on

281
00:18:46,680 --> 00:18:51,280
telling the operational story
and the, the, the changes that

282
00:18:51,280 --> 00:18:56,200
they're making and, and telling
that story in a way that, that I

283
00:18:56,200 --> 00:18:58,840
thought at least most investors
should understand.

284
00:18:59,720 --> 00:19:02,280
So he's, he's done a good job
communicating I, I think.

285
00:19:03,040 --> 00:19:06,840
You also did an interview, if we
move commodities to, to copper,

286
00:19:06,840 --> 00:19:09,880
you did an interview with, with
the Lundins as well from memory.

287
00:19:09,880 --> 00:19:12,760
And you, you did a two-part
write up.

288
00:19:12,760 --> 00:19:17,680
And since then the, the story
has evolved more with just a

289
00:19:18,880 --> 00:19:21,040
kind of jaw-dropping kind of
numbers to, to what they've

290
00:19:21,040 --> 00:19:24,440
released and, and the financing
kind of coming together and, and

291
00:19:24,440 --> 00:19:26,920
the, the stages that we can now
visualize everything in.

292
00:19:26,920 --> 00:19:29,320
How are you?
How are you seeing Lundin mining

293
00:19:29,320 --> 00:19:32,000
at this moment?
It's it's a little expensive.

294
00:19:32,360 --> 00:19:36,880
I, I own it.
It's, it's 10% of our portfolio.

295
00:19:37,800 --> 00:19:40,960
I'm just, it's a big position.
I would say.

296
00:19:40,960 --> 00:19:43,960
I, I think it's a run a little
ahead of itself.

297
00:19:44,600 --> 00:19:49,240
But at the same time, as you
know, we sort of got the Vacuna,

298
00:19:49,560 --> 00:19:52,800
what they call it the Vacuna
integrated technical study.

299
00:19:53,440 --> 00:19:55,320
I guess it's just lat was it
last week?

300
00:19:56,800 --> 00:19:58,760
I was sick with the flu all last
week.

301
00:19:58,760 --> 00:20:00,200
So it felt like a really long
week.

302
00:20:01,760 --> 00:20:07,040
We just got it last week and you
know, it is a pretty spectacular

303
00:20:07,040 --> 00:20:10,600
project.
It does have $18 billion CapEx

304
00:20:10,600 --> 00:20:14,800
cost.
But you know a 70 year life of

305
00:20:14,800 --> 00:20:18,520
mine, it's one of the world's,
you know, critical copper mines.

306
00:20:18,520 --> 00:20:22,800
So while it and and it is one of
the world's critical copper

307
00:20:22,800 --> 00:20:26,480
mines.
With a team that can get it done

308
00:20:26,480 --> 00:20:30,880
and with financing or and the
ability to get it financed,

309
00:20:31,160 --> 00:20:35,000
think we have a lot of copper
projects, not a lot that are as

310
00:20:35,000 --> 00:20:37,080
good as Vacuna.
Vacuna is unique.

311
00:20:37,280 --> 00:20:39,960
There are a lot of potentially
really interesting copper

312
00:20:39,960 --> 00:20:45,360
projects out there that don't
have that team and don't have

313
00:20:45,360 --> 00:20:50,600
the financing lined up or one or
the other.

314
00:20:52,280 --> 00:20:57,080
They are the rare example of one
that's got project team and

315
00:20:57,080 --> 00:21:00,920
financing capability.
So while it has run and I do

316
00:21:00,920 --> 00:21:04,400
think it's a little ahead of
itself in terms of the price, I

317
00:21:04,440 --> 00:21:08,080
think it's really hard to argue
that it isn't the company to own

318
00:21:08,240 --> 00:21:11,920
in the copper space for the
next, you know, 5 to 10 years.

319
00:21:12,320 --> 00:21:15,520
I I think one of the
developments in that financing

320
00:21:15,520 --> 00:21:19,200
space in, you know, it's a kind
of a recent development is just

321
00:21:19,200 --> 00:21:23,280
the, the, the hugely a creative
deals that can be done right now

322
00:21:23,280 --> 00:21:25,880
from the streaming perspective.
And, and you know, Pecuni is not

323
00:21:25,880 --> 00:21:28,080
an exception to this because
there will be tremendous buy

324
00:21:28,320 --> 00:21:31,800
product credits from the future
production of that, that asset.

325
00:21:31,800 --> 00:21:34,560
But you know, simultaneously
with the release of that study,

326
00:21:34,560 --> 00:21:39,320
we saw BH PS record stream on,
on, on the silver of Antomena

327
00:21:39,320 --> 00:21:42,680
for, for a, for a staggering
nearly 5 billion U.S. dollars.

328
00:21:43,880 --> 00:21:47,240
I think like even though CapEx
upfront CapEx might, might be a

329
00:21:47,240 --> 00:21:51,040
chunky number, you look at these
streams and you think these the,

330
00:21:51,120 --> 00:21:53,520
the development of these can,
can be done in, in innovative

331
00:21:53,520 --> 00:21:56,200
ways with this, this kind of
cost of capital arbitrage that,

332
00:21:56,800 --> 00:21:58,960
that, that is that is really
beneficial to the miners.

333
00:22:02,240 --> 00:22:04,920
Yeah, I still think streaming is
pretty expensive.

334
00:22:04,960 --> 00:22:08,000
I haven't looked into the
details of that BHP stream yet.

335
00:22:08,000 --> 00:22:11,880
I was pretty shocked with the
just the headline number.

336
00:22:12,920 --> 00:22:17,080
I don't think I'd Is it the
biggest stream the.

337
00:22:17,280 --> 00:22:22,040
Biggest stream ever and, and
the, and it was the the upfront

338
00:22:22,040 --> 00:22:24,840
proceeds that BHP got from it
went, went north of the

339
00:22:24,840 --> 00:22:28,080
consensus NAV of their share of
that asset in the 1st place.

340
00:22:28,440 --> 00:22:30,240
And of course they, you know,
retaining all the all the

341
00:22:30,240 --> 00:22:32,320
copper.
But yeah, yeah.

342
00:22:33,000 --> 00:22:35,440
I'll have to look into that more
because that's pretty.

343
00:22:36,240 --> 00:22:37,840
That's a pretty punchy
situation.

344
00:22:37,840 --> 00:22:42,160
I, I, I, I don't think the
Lundeans need to do anything

345
00:22:42,160 --> 00:22:45,480
like that at finance for I think
they can figure this out

346
00:22:46,360 --> 00:22:51,880
without, without any of that.
But I think you're right,

347
00:22:51,880 --> 00:22:56,160
there's definitely opportunity.
Not every asset though, is going

348
00:22:56,160 --> 00:23:01,160
to have aim, you know, precious
metal byproduct credits and

349
00:23:01,160 --> 00:23:03,920
things like that.
But I think, you know, there's

350
00:23:03,920 --> 00:23:09,080
some assets in the United States
in Arizona, Nevada and those

351
00:23:09,080 --> 00:23:14,160
type of places, copper assets
that just mostly copper, some of

352
00:23:14,160 --> 00:23:16,480
them would be harder to finance.
I do think you're right.

353
00:23:16,480 --> 00:23:21,520
You know, I think environment
appears to be trending towards

354
00:23:21,520 --> 00:23:24,960
more favorable.
But at the same time, I will say

355
00:23:24,960 --> 00:23:30,600
I still see when when I I get
approached by banks for private

356
00:23:30,600 --> 00:23:35,480
placements to help finance
juniors, I still see mostly a

357
00:23:35,480 --> 00:23:38,240
full warrant per share with a
lot of the stuff I look at.

358
00:23:39,480 --> 00:23:43,200
And until you know, until
everyone's doing it at the

359
00:23:43,200 --> 00:23:47,120
market, you know, with no
warrants and stuff like that,

360
00:23:48,000 --> 00:23:51,560
the financing environment has,
you know, way a ways to go and

361
00:23:51,880 --> 00:23:55,680
until it's and and certain
positive as it couldn't be.

362
00:23:56,360 --> 00:23:58,640
We see, we see a bit less of
that though, you know, every,

363
00:23:58,640 --> 00:24:00,920
every now and then we see one
that comes, comes across our

364
00:24:00,920 --> 00:24:04,280
desk and we, you know, have to
spit our food out and, and, and

365
00:24:04,280 --> 00:24:06,880
see the egregious terms that
that are getting paid.

366
00:24:06,880 --> 00:24:08,920
But it's not as bad as it was a
few years ago, right?

367
00:24:09,080 --> 00:24:11,080
Capital is way more.
Forthcoming right now, yeah.

368
00:24:11,120 --> 00:24:14,320
No, it it definitely, yes, it's
it's definitely better.

369
00:24:14,320 --> 00:24:18,600
There's no doubt about that.
I just I it's still, I mean like

370
00:24:18,600 --> 00:24:21,200
the rotation story.
I still think it's early

371
00:24:21,200 --> 00:24:24,080
innings.
Everything is, you know,

372
00:24:24,120 --> 00:24:29,560
timelines are so long volume
pickups from some of these

373
00:24:29,560 --> 00:24:34,840
incremental projects, don't you
know, I mean even the kuna, the

374
00:24:34,840 --> 00:24:37,600
kuna is not big enough.
You know, we need a couple of

375
00:24:37,600 --> 00:24:40,760
Hakunas every year or something,
right?

376
00:24:40,760 --> 00:24:48,760
So, so the financing for a
replacement of what we've got is

377
00:24:48,760 --> 00:24:50,160
there.
The question is when the

378
00:24:50,160 --> 00:24:54,080
financing to continue to grow
what we've got is there and not,

379
00:24:54,080 --> 00:24:57,320
I think you're right.
We're now at the point where

380
00:24:57,320 --> 00:25:02,280
everyone seems to be capable of
financing to the degree that we

381
00:25:02,280 --> 00:25:06,240
can replace and stand still in
the volume of production across

382
00:25:06,240 --> 00:25:10,240
a whole series of commodities,
but actually grow them.

383
00:25:10,240 --> 00:25:15,160
I think it's a different story.
Well, you just on, on Monday and

384
00:25:15,160 --> 00:25:18,520
I mean your two-part write up
was, it was, it was really

385
00:25:18,560 --> 00:25:21,400
informative.
And you know, at the crux of it,

386
00:25:22,040 --> 00:25:24,240
you wrote that the, the history
of mining corporate strategy,

387
00:25:24,240 --> 00:25:27,560
few companies have executed a
more comprehensive and

388
00:25:27,560 --> 00:25:31,640
successful transformation.
Walk us through why that 2020 to

389
00:25:31,640 --> 00:25:36,680
2024 period was a a a true
capital allocation master class

390
00:25:36,840 --> 00:25:42,960
in your words.
Yeah, well, so my understanding

391
00:25:43,000 --> 00:25:49,360
of the Kuhn is that and, and
Jacqueline Dean told me this at

392
00:25:49,360 --> 00:25:52,120
some point doing some interview
with them or something.

393
00:25:53,280 --> 00:25:56,440
You know, I think they first
started drilling the thing in

394
00:25:56,440 --> 00:25:59,600
the like the late 80s, early
90's.

395
00:26:01,080 --> 00:26:04,040
The family, if you will, has
been sitting on this in one way

396
00:26:04,040 --> 00:26:09,800
shape or form for a long time.
And they had to, they had to

397
00:26:09,800 --> 00:26:12,400
prove it out to the point where
they really got a lot of

398
00:26:12,400 --> 00:26:16,720
confidence in what they had.
And I pinpoint that at sometime

399
00:26:16,720 --> 00:26:21,000
in the the, you know, late
twenty 10s, early twenty 20s, if

400
00:26:21,000 --> 00:26:24,400
you will.
So 2018, 19 something, you know,

401
00:26:24,400 --> 00:26:27,680
like that.
And then they had to sit back

402
00:26:27,680 --> 00:26:30,680
and, and sort of figure out how
are we going to build this?

403
00:26:30,680 --> 00:26:34,360
And I don't think you wouldn't
necessarily look at London

404
00:26:34,360 --> 00:26:40,600
mining in 2019 or 2020 and said,
yeah, sure they'll figure out

405
00:26:40,600 --> 00:26:46,560
some way to cover the $7 billion
CapEx associated with buildings.

406
00:26:47,080 --> 00:26:52,560
But what they've done is they
have at least again, in my

407
00:26:52,560 --> 00:26:55,720
opinion, based on on my
inference conversations with

408
00:26:55,720 --> 00:26:59,520
them etcetera, sometime in that
time period, they said we've got

409
00:26:59,520 --> 00:27:03,320
to build this.
This is going to be, you know,

410
00:27:03,480 --> 00:27:09,040
this is going to be a name brand
lending family asset like

411
00:27:09,640 --> 00:27:12,080
Fuerdra del Norte has become for
gold.

412
00:27:12,600 --> 00:27:16,040
This is going to make our next,
you know, whatever multiple

413
00:27:16,040 --> 00:27:19,120
billions.
How do we put ourselves in the

414
00:27:19,120 --> 00:27:25,000
strongest position possible to
not only build this asset, but

415
00:27:25,000 --> 00:27:28,640
leverage everything, you know,
that comes with building it.

416
00:27:29,080 --> 00:27:33,360
And so that is you know,
collecting and acquiring assets

417
00:27:33,360 --> 00:27:40,040
that were around it, Cassaronas
and and Ottas and Welch Brazil,

418
00:27:40,040 --> 00:27:47,440
but building the the water
treatment facilities etcetera.

419
00:27:48,360 --> 00:27:51,640
So everything was geared towards
putting them in the best

420
00:27:51,640 --> 00:27:56,800
position possible five years,
six years down the road for be

421
00:27:56,800 --> 00:28:02,240
able to execute on an $18
billion multi year build

422
00:28:02,240 --> 00:28:05,960
process.
It was about generating cash, it

423
00:28:05,960 --> 00:28:08,400
was about putting the balance
sheet in shape, it was about

424
00:28:08,400 --> 00:28:11,240
streamlining the assets to allow
for focus.

425
00:28:12,560 --> 00:28:16,400
Everything was a puzzle piece
that helped put the company

426
00:28:16,640 --> 00:28:23,080
where it is today and as a sort
of a mid tier capable of playing

427
00:28:23,080 --> 00:28:28,360
with the big boys like BHP and
Rio Tinto as an equal and as a

428
00:28:28,360 --> 00:28:31,240
partner.
And I don't think that a lot of

429
00:28:31,240 --> 00:28:37,920
firms in that mid tier space
could have made those moves to

430
00:28:37,920 --> 00:28:42,160
put themselves where they are.
I don't think all of it was a

431
00:28:42,160 --> 00:28:44,320
plan ahead of time.
You know, they took

432
00:28:44,320 --> 00:28:47,640
opportunities as they were
presented with them, but you

433
00:28:47,640 --> 00:28:51,120
know, they've they've done great
work with those opportunities to

434
00:28:51,360 --> 00:28:55,200
put themselves in this position.
It's tremendous that long term

435
00:28:55,200 --> 00:29:00,640
thinking and even overnight
lunar royalties the the the deal

436
00:29:00,640 --> 00:29:04,920
they've done on to to stream
silver at at Proto del Norte

437
00:29:05,960 --> 00:29:08,760
where the shareholders London
Gold will get the shares which

438
00:29:08,760 --> 00:29:10,960
will then be distributed to
shareholders.

439
00:29:11,000 --> 00:29:14,840
It's and you know, both, both
stock prices up lunar royalties

440
00:29:14,840 --> 00:29:18,200
now has two tremendous, you
know, rolls your stream assets

441
00:29:18,200 --> 00:29:21,520
and on the flip side, London
Gold shareholders are going to

442
00:29:21,560 --> 00:29:23,960
get the benefit through in
species share distribution.

443
00:29:23,960 --> 00:29:27,880
It's such such when.
They're continuing to build a

444
00:29:28,240 --> 00:29:30,800
tighter.
You know, one of the things I

445
00:29:30,800 --> 00:29:33,320
think, and I've never talked to
them about this, but one of the

446
00:29:33,320 --> 00:29:37,320
things that that I've always
struggled with is they've always

447
00:29:37,680 --> 00:29:41,080
as a family done so well
building assets and developing

448
00:29:41,080 --> 00:29:44,360
projects and advancing them.
But it was always in these

449
00:29:44,360 --> 00:29:49,000
siloed entities, A little
different with Lundin Mining,

450
00:29:49,000 --> 00:29:52,760
but still more siloed entities
than anything else.

451
00:29:53,840 --> 00:29:56,840
But they're figuring out ways
now I think to try and pull it

452
00:29:56,840 --> 00:30:00,640
all together.
And one of the things I do think

453
00:30:00,640 --> 00:30:04,640
is particularly important to
think about is that the assets

454
00:30:04,640 --> 00:30:07,520
in in Chile and Argentina that
they've pulled together for

455
00:30:07,520 --> 00:30:11,640
copper, you know, they've pulled
together complementary assets,

456
00:30:11,960 --> 00:30:19,160
assets that in theory and create
some economies of scale and

457
00:30:19,200 --> 00:30:23,160
create synergies.
Usually in mining when they

458
00:30:23,160 --> 00:30:25,200
start trotting out, you know,
we're going to merge because

459
00:30:25,200 --> 00:30:28,120
they're synergies, that's
usually nonsense, right?

460
00:30:28,120 --> 00:30:32,520
A mine stands alone on its two
its own 2 feet every, everything

461
00:30:32,520 --> 00:30:34,040
that one mine needs, another
mine needs.

462
00:30:34,200 --> 00:30:37,720
So unless they're like, you
know, barracks, barrack and

463
00:30:37,720 --> 00:30:40,920
Newmont's, you know, Nevada
gold, unless the assets are all

464
00:30:40,920 --> 00:30:44,120
right there, there are no
synergies.

465
00:30:45,160 --> 00:30:50,120
They've managed to thoughtfully
construct some some potential

466
00:30:50,120 --> 00:30:53,720
synergies.
So everything they're doing, I I

467
00:30:53,720 --> 00:30:58,160
think is, is all quite
integrated in a way that maybe

468
00:30:58,160 --> 00:31:02,880
the previous generation of
Lundeens didn't think about it.

469
00:31:04,160 --> 00:31:05,960
That's just a guess on mine
there.

470
00:31:06,560 --> 00:31:08,920
This all ties in wheel with a
kind of bigger point that I

471
00:31:08,920 --> 00:31:11,120
wanted to talk about because
you've got a paper in the works

472
00:31:11,120 --> 00:31:16,240
that you, you shared with us
about how betting on a mining

473
00:31:16,240 --> 00:31:19,680
company might not necessarily be
the, the best approach when you

474
00:31:19,680 --> 00:31:21,840
could just bet on the, the
commodity itself and these sorts

475
00:31:21,840 --> 00:31:23,880
of things.
And part of that thinking you

476
00:31:23,880 --> 00:31:27,240
talk about, you know, you're
investing in a mining company.

477
00:31:27,360 --> 00:31:29,040
You need to pick the, the right
management.

478
00:31:29,040 --> 00:31:31,680
You're investing in a company
that you know, in your words,

479
00:31:31,680 --> 00:31:34,320
needs to kind of stand on its
own 2 feet in a way.

480
00:31:34,360 --> 00:31:36,240
And it's almost cliche that
we're talking about London

481
00:31:36,240 --> 00:31:39,960
mining because they're like the
canonical example of like the,

482
00:31:39,960 --> 00:31:42,880
the management team that
everyone can, can get behind.

483
00:31:42,880 --> 00:31:45,440
And the guys are fantastic and
they've done it and they've got

484
00:31:45,440 --> 00:31:47,360
the track record and these sorts
of things.

485
00:31:47,680 --> 00:31:51,200
But I am kind of curious to, to
hear your thinking on vetting

486
00:31:51,200 --> 00:31:53,880
mining teams, how you think
about like management versus the

487
00:31:53,880 --> 00:31:56,160
commodity.
I know you've you've pushed

488
00:31:56,160 --> 00:31:59,840
macro to the side when you
really elevate the the idea of

489
00:31:59,840 --> 00:32:02,200
management team needs to lead
the company.

490
00:32:03,240 --> 00:32:08,480
Well, I think that and, and as I
sort of suggested in that paper,

491
00:32:08,520 --> 00:32:13,960
and hopefully it'll come out
this week, you know, if you, if

492
00:32:13,960 --> 00:32:18,960
you, you run a mining company
against a factor model and you

493
00:32:19,800 --> 00:32:22,000
deliberately choose which
factors you're picking.

494
00:32:22,000 --> 00:32:27,120
So in the case of the paper that
I wrote was currencies, risk

495
00:32:27,120 --> 00:32:33,200
free rate, global equities,
local equities and the commodity

496
00:32:35,000 --> 00:32:37,960
what, and the commodity has two
flavors.

497
00:32:37,960 --> 00:32:43,520
It has a direct price flavor
factor and then also a factor

498
00:32:43,520 --> 00:32:45,760
that's more about the
sensitivity to the rate of

499
00:32:45,760 --> 00:32:50,080
change in the commodity.
But when you, when you, you

500
00:32:50,320 --> 00:32:53,920
strip everything else out, what
you find is that very rarely

501
00:32:54,680 --> 00:33:00,600
does a, for example, a copper
miner, then very rarely does

502
00:33:00,600 --> 00:33:04,520
copper explain much more than
about 30% of the price action in

503
00:33:04,680 --> 00:33:11,200
the stock market.
It's, it's not just a difficult

504
00:33:11,200 --> 00:33:13,640
bet to say that I'm betting on
copper.

505
00:33:13,640 --> 00:33:17,920
I'm buying a copper miner.
It's, it's in many regards a

506
00:33:17,920 --> 00:33:23,160
factually inaccurate statement
and only at very rare moments

507
00:33:23,840 --> 00:33:29,080
does it actually deliver a
majority return derived from the

508
00:33:29,080 --> 00:33:32,680
commodity itself.
Most of the time the return is

509
00:33:32,680 --> 00:33:41,600
driven by global equity exposure
and local equity exposure, and

510
00:33:41,600 --> 00:33:47,160
then FX rolled and then the rest
of it is is company specific

511
00:33:47,160 --> 00:33:50,880
variables.
I think that the management team

512
00:33:51,720 --> 00:33:55,680
is the most important variable,
followed by the project.

513
00:33:56,480 --> 00:34:01,360
The project.
A good management team and a bad

514
00:34:01,360 --> 00:34:06,680
project might still make it.
A bad project and a bad

515
00:34:06,680 --> 00:34:08,360
management team will never make
it.

516
00:34:09,120 --> 00:34:12,280
And a bad management team and a
great project probably ends up

517
00:34:12,280 --> 00:34:16,880
as shitty company.
So I think the management team

518
00:34:16,880 --> 00:34:20,199
is, is the first question you
got to start with.

519
00:34:20,600 --> 00:34:24,280
And then you also have to start
with sort of asking a question

520
00:34:24,280 --> 00:34:28,320
about where in life cycle the
company is and whether that

521
00:34:28,320 --> 00:34:32,880
management team is capable of
handling the risks associated

522
00:34:32,880 --> 00:34:35,719
with that stage in in company's
life cycle.

523
00:34:36,080 --> 00:34:39,800
So Equinox, we'll go back to it
is a good example.

524
00:34:41,480 --> 00:34:46,600
You know, Greg, the former CEO,
I was quite impressed with his

525
00:34:46,600 --> 00:34:51,280
ability to assemble pieces.
You know, they made several

526
00:34:51,280 --> 00:34:56,000
mergers, several acquisitions.
He assembled the pieces to

527
00:34:56,000 --> 00:34:58,800
create Equinox, a company
capable of producing about

528
00:34:58,800 --> 00:35:01,520
1,000,000 ounces of gold a year
in less than a decade.

529
00:35:01,760 --> 00:35:06,400
That was a very, very impressive
assembly assemblage of pieces.

530
00:35:07,680 --> 00:35:11,040
Greg didn't really seem that
great at operating minds.

531
00:35:12,120 --> 00:35:15,520
Now he doesn't need to be.
Someone's got to assemble stuff

532
00:35:15,520 --> 00:35:19,560
and someone's got to operate.
Darren, Darren Hall, the the net

533
00:35:19,560 --> 00:35:22,320
and the current CEO, he seems
like more of an operator.

534
00:35:23,520 --> 00:35:25,480
They have to sit right.
He's going to have to prove it

535
00:35:25,480 --> 00:35:28,200
out.
But you know, getting the right

536
00:35:28,200 --> 00:35:30,800
management team at the right
life site, the right point in

537
00:35:30,800 --> 00:35:32,520
the company's life cycle is
really important.

538
00:35:32,840 --> 00:35:35,320
I think that it applies across
the board for any business.

539
00:35:35,520 --> 00:35:37,680
Well, oil and natural gas
companies are the same.

540
00:35:37,680 --> 00:35:41,520
Industrial companies are the
same, you know, a company that

541
00:35:41,600 --> 00:35:44,400
building a giant, you know,
chemical refinery or something,

542
00:35:44,640 --> 00:35:46,480
that's the same thing as
building a giant mine, right?

543
00:35:46,480 --> 00:35:48,240
You need a team that can build
stuff.

544
00:35:49,520 --> 00:35:54,840
Now, they may not be the same
team that can, you know,

545
00:35:54,840 --> 00:35:59,080
produce, you know, get the most
out of of the nameplate capacity

546
00:35:59,080 --> 00:36:01,080
out of out of whatever asset
they built.

547
00:36:01,960 --> 00:36:06,400
So I think about that variable
for the first and foremost and

548
00:36:06,400 --> 00:36:10,280
quite frequently that's just a
function of you know what

549
00:36:10,280 --> 00:36:13,040
they've done in the past and
then conversations and

550
00:36:14,040 --> 00:36:23,120
assessment of of them as people.
I also think that you know,

551
00:36:23,120 --> 00:36:25,920
another variable there is, is is
different people sort of capital

552
00:36:25,920 --> 00:36:28,280
allocation sort of thought
process.

553
00:36:29,000 --> 00:36:32,560
Some people want to allocate
capital counter cyclically.

554
00:36:33,280 --> 00:36:36,800
Other management teams want to,
you know, engage in M&A.

555
00:36:36,800 --> 00:36:39,800
Some management teams are good
at M So I'm invested in a

556
00:36:39,800 --> 00:36:44,000
company called Harbor Energy,
which is oil and natural gas

557
00:36:44,000 --> 00:36:48,840
producer in the UK.
Now I think that's another

558
00:36:48,840 --> 00:36:52,400
example of a management team was
managed to assemble assets

559
00:36:53,120 --> 00:36:59,080
around the globe to be perfectly
frank, quite effectively they've

560
00:36:59,080 --> 00:37:05,120
been stung by Auk excess profits
tax.

561
00:37:05,120 --> 00:37:08,840
You know what, whatever you want
to call it that that is nasty as

562
00:37:08,840 --> 00:37:14,120
it can be and frankly the tax
more likely to put people out of

563
00:37:14,120 --> 00:37:17,760
business than it is to bring
money into the government.

564
00:37:18,200 --> 00:37:21,760
But as a management team capable
of assembling assets via M&A,

565
00:37:21,960 --> 00:37:25,840
they've done a spectacular job.
So, you know, understanding

566
00:37:25,840 --> 00:37:29,160
management teams is largely, in
my opinion, about understanding

567
00:37:29,160 --> 00:37:31,800
the challenges that they're
going to be faced with over the

568
00:37:31,800 --> 00:37:35,520
next couple of years and trying
to lift them out.

569
00:37:35,840 --> 00:37:40,840
And then basically figure out if
that management team not only

570
00:37:41,360 --> 00:37:43,360
maybe has dealt with those
problems in the past and can

571
00:37:43,360 --> 00:37:46,320
deal with them in the future,
but it's likely to be able to

572
00:37:46,320 --> 00:37:50,000
deal with them, you know, having
never experienced some of them

573
00:37:50,880 --> 00:37:53,960
so.
I want to, I want to give it to

574
00:37:53,960 --> 00:37:59,400
a, a company that that I think I
think you own, which is love

575
00:37:59,400 --> 00:38:02,360
auto ASX punters will be very
familiar with this one.

576
00:38:02,440 --> 00:38:06,640
And you know, we've, we've
followed it on the edges and the

577
00:38:06,640 --> 00:38:09,920
antimony trade has been wicked
to watch, although we haven't

578
00:38:09,920 --> 00:38:13,280
participated in it, but the but
Lovato's had its own interesting

579
00:38:13,280 --> 00:38:18,000
journey where towards the back
end of last year, I think it was

580
00:38:18,280 --> 00:38:21,360
US Antimony Corp were bought,
was buying stock on market

581
00:38:21,360 --> 00:38:25,040
pretty aggressively and and then
came out with an old script bid

582
00:38:25,400 --> 00:38:28,600
and post that, you know, both
both shares and them.

583
00:38:28,600 --> 00:38:31,440
And Lovato sold off Lovato
defended the bid and now

584
00:38:31,440 --> 00:38:34,760
Lovato's trading back towards an
all time high price.

585
00:38:35,600 --> 00:38:37,920
Tell me about when you you know,
when you picked up a position,

586
00:38:37,920 --> 00:38:41,200
what you think this was and what
the likelihood of a of another

587
00:38:41,200 --> 00:38:42,440
bid here is.
Well.

588
00:38:45,200 --> 00:38:51,960
So another bid, that's an
interesting question.

589
00:38:52,000 --> 00:38:55,680
I'm not really sure if I have an
answer to whether there's

590
00:38:55,680 --> 00:39:02,040
another bid.
I don't I don't see any reason

591
00:39:02,040 --> 00:39:08,720
why US and antimony, Antimony,
excuse me, I don't see any

592
00:39:08,720 --> 00:39:11,240
reason why they would bid again.
I don't know what happened to

593
00:39:11,240 --> 00:39:17,080
the they owned 10% or or
acquired as much as 10%.

594
00:39:18,280 --> 00:39:19,720
I don't know what they're doing
with it.

595
00:39:19,720 --> 00:39:22,800
I probably should pay closer
attention and dig into it a

596
00:39:22,800 --> 00:39:24,600
little bit.
I'm not exactly sure.

597
00:39:25,800 --> 00:39:29,400
I don't think bidding for them
makes a lot of sense and they

598
00:39:29,400 --> 00:39:32,360
don't appear interested in
selling like given the

599
00:39:32,480 --> 00:39:35,400
additional exploration potential
etcetera, I'm not sure they

600
00:39:35,400 --> 00:39:37,480
could get what they think it's
worth.

601
00:39:39,840 --> 00:39:43,920
What attracted me initially to
it though was some of that

602
00:39:43,920 --> 00:39:45,880
capital allocation decision,
though.

603
00:39:45,960 --> 00:39:49,640
The Hill Grove mine, which they
they bought, was bought out of

604
00:39:49,640 --> 00:39:54,880
bankruptcy.
And what I think is interesting

605
00:39:55,560 --> 00:39:59,440
or an interesting thread to pull
on here for for mining investors

606
00:39:59,440 --> 00:40:02,960
or natural resource investors
more generally, they've seen it

607
00:40:02,960 --> 00:40:09,240
in other places is right now to
look at companies or

608
00:40:09,240 --> 00:40:14,440
opportunities where you have
past producers or where you have

609
00:40:14,440 --> 00:40:18,720
infrastructure that already
exists that has fallen into some

610
00:40:18,720 --> 00:40:22,040
state of disrepair and can be
purchased cheaply.

611
00:40:22,640 --> 00:40:26,080
Magnum Mining.
Which is also in My Portfolio is

612
00:40:26,120 --> 00:40:29,120
is not exactly the same story,
but it's kind of similar.

613
00:40:29,640 --> 00:40:34,040
They bought assets that in the
current environment make a whole

614
00:40:34,040 --> 00:40:39,120
lot of sense, but for various
reasons were not of interest to

615
00:40:39,120 --> 00:40:42,440
other people.
Larvato bought, you know, the

616
00:40:42,440 --> 00:40:47,000
Hill Grove asset out of
bankruptcy during a period and

617
00:40:47,000 --> 00:40:51,240
went into bankruptcy not because
there is an antimony there, not

618
00:40:51,240 --> 00:40:55,680
because there is gold there, not
because metallurgically is

619
00:40:55,680 --> 00:40:58,400
complicated or anything like
that, but because the previous

620
00:40:58,400 --> 00:41:03,520
owner ran into a period, you
know, prices wiped him out.

621
00:41:05,160 --> 00:41:09,000
That could repeat itself.
But it does appear that we've

622
00:41:09,000 --> 00:41:13,480
sent some new floors for gold
and antimony and things of that

623
00:41:13,480 --> 00:41:17,760
nature that should allow them to
operate more profitably.

624
00:41:18,000 --> 00:41:23,160
You also, you know that what you
can afford when you buy

625
00:41:23,160 --> 00:41:26,640
something for pennies on the
dollar in bankruptcy in terms of

626
00:41:26,640 --> 00:41:29,520
commodity price movement is
dramatically different when you,

627
00:41:29,800 --> 00:41:31,600
you know, build whole things
from scratch.

628
00:41:32,280 --> 00:41:35,680
So I think, and there are some
other opportunities like that,

629
00:41:36,040 --> 00:41:40,320
you know, with, with companies
in Canada where you see people

630
00:41:40,320 --> 00:41:43,360
buying, you know, old mills and
stuff of that nature.

631
00:41:44,040 --> 00:41:47,240
And you know, I was looking at
something recently and, and I'm

632
00:41:47,240 --> 00:41:49,960
not going to share the name
because, because I'm still

633
00:41:49,960 --> 00:41:55,240
looking at it, but, but I, I
think they bought a proper

634
00:41:55,240 --> 00:41:57,680
processing facility for six
cents on the dollar.

635
00:41:58,960 --> 00:42:03,360
You know what you can get away
with when you buy assets with

636
00:42:03,360 --> 00:42:07,480
permits and existing
infrastructure that sure still

637
00:42:07,480 --> 00:42:10,760
needs investment, but you know,
it doesn't doesn't need a half a

638
00:42:10,760 --> 00:42:12,920
billion dollars worth of
investment and needs 100

639
00:42:12,920 --> 00:42:16,240
million.
You can get away with a lot, a

640
00:42:16,240 --> 00:42:18,480
lot more.
Your optionality, you know,

641
00:42:18,640 --> 00:42:22,640
explodes dramatically.
And so, you know, that's what I

642
00:42:22,640 --> 00:42:26,280
saw with Larvada.
We we should do an episode on on

643
00:42:26,280 --> 00:42:28,240
these types of plays.
There's there's so many MP

644
00:42:28,240 --> 00:42:31,960
materials in a way has
similarities champion iron as

645
00:42:31,960 --> 00:42:35,840
well.
Anyone who caught that 2015 2016

646
00:42:35,840 --> 00:42:39,000
bear market whenever I'm that
had debt kind of bombed out.

647
00:42:39,360 --> 00:42:41,760
I reckon there's a fantastic
episode in in there I'd.

648
00:42:42,160 --> 00:42:44,880
Love to contrast it with there.
There are some assets which

649
00:42:44,880 --> 00:42:47,880
they're, they're distressed
assets and they get a rebirth,

650
00:42:47,880 --> 00:42:50,160
but they have a constant, you
know, they're, they kind of

651
00:42:50,160 --> 00:42:52,640
always become distressed.
And then there are ones that

652
00:42:53,080 --> 00:42:54,760
that have these remarkable kind
of turnarounds.

653
00:42:54,760 --> 00:42:57,560
And, and yeah, I'd love to peel
into how to pick the difference

654
00:42:57,560 --> 00:42:59,280
between the two.
And of course, the commodity

655
00:42:59,280 --> 00:43:00,640
cycle is a huge determining
that.

656
00:43:00,760 --> 00:43:03,720
And some assets have these
peculiarities from an

657
00:43:03,720 --> 00:43:05,880
operational or metallurgical
perspective that just make them

658
00:43:05,880 --> 00:43:10,120
perpetually challenging.
I do think that that what you

659
00:43:10,120 --> 00:43:12,960
point out right there, the
metallurgical complication or

660
00:43:13,240 --> 00:43:15,040
we're, we're processing
complication.

661
00:43:17,480 --> 00:43:21,720
I think simple is, is better
with these, but I, I, I think

662
00:43:21,720 --> 00:43:23,760
that across the board.
So like, I have a lot of trouble

663
00:43:23,760 --> 00:43:25,960
with rare earth companies, rare
earth miners.

664
00:43:25,960 --> 00:43:28,040
And I mean, some of them just
want to mine the rare earth.

665
00:43:28,040 --> 00:43:30,560
They don't want some metal.
Fine, that's a little different.

666
00:43:31,240 --> 00:43:34,480
But complication associated with
the processing and stuff like

667
00:43:34,480 --> 00:43:39,960
that, that, that scares me off.
So, you know, something like

668
00:43:40,000 --> 00:43:41,880
like Hill Grove is fairly
straightforward.

669
00:43:43,240 --> 00:43:48,080
Their problem was never
processing MP materials.

670
00:43:50,080 --> 00:43:53,560
It's a processing challenge.
I wish them the best of luck.

671
00:43:53,840 --> 00:43:57,480
I I will admit that I think
they've accomplished a lot more

672
00:43:57,480 --> 00:44:00,040
than I thought they would
initially accomplish when they

673
00:44:00,040 --> 00:44:04,400
first, you know, that management
team first went in, but you

674
00:44:04,400 --> 00:44:06,560
know, they've got a long way to
go.

675
00:44:08,760 --> 00:44:11,520
Being being cozy with the
current administration has its

676
00:44:11,520 --> 00:44:13,960
perks though, so it can it can
work for them.

677
00:44:15,040 --> 00:44:19,360
Yes, it does.
It does so and and they were I

678
00:44:19,360 --> 00:44:22,400
don't want to to cozy up as they
did.

679
00:44:23,640 --> 00:44:26,520
Well, there's there's a whole
heap of commodities I still kind

680
00:44:26,520 --> 00:44:30,440
of want to go go through.
Why don't we jump into 10 next

681
00:44:30,440 --> 00:44:32,400
and and just get you kind of
thoughts you've you've done a

682
00:44:32,400 --> 00:44:37,040
write up on, on Alpha Min 10 has
kind of like every other metal

683
00:44:37,040 --> 00:44:42,360
become sexy and there's a lot of
tie in with what your initial

684
00:44:42,360 --> 00:44:46,080
paper was to do you in, in a
previous life.

685
00:44:46,080 --> 00:44:49,720
Have, you know, priced political
risk and these sorts of things,

686
00:44:49,720 --> 00:44:52,880
which was a part of the paper
you did on on Alpha min.

687
00:44:53,160 --> 00:44:56,680
How are you seeing the, the tin
market more broadly?

688
00:44:56,720 --> 00:44:59,680
And then specifically with with
Alpha Min, do you think there's

689
00:44:59,680 --> 00:45:08,400
still a mispriced opportunity?
So on the tin side of things, I

690
00:45:08,400 --> 00:45:14,400
think tin has run pretty hot and
hard and is is due for a

691
00:45:14,400 --> 00:45:16,160
pullback.
That's a bit of like sort of

692
00:45:16,160 --> 00:45:20,080
short term market commentary.
But it, it seems to me, I think

693
00:45:20,080 --> 00:45:29,880
I saw, I think I saw the volume
of tin traded on the Shanghai

694
00:45:30,240 --> 00:45:37,440
exchange recently was like a
where we, we do 400,000 tons a

695
00:45:37,440 --> 00:45:40,760
year of tin and I think they
traded 1,000,000 tons a day.

696
00:45:41,280 --> 00:45:48,960
And so my, my read on that is
that with Tim sitting here

697
00:45:49,200 --> 00:45:52,760
yelling me, it looks like 46
today.

698
00:45:52,760 --> 00:45:57,920
I think it hit it as high as
58,000 a ton maybe or 56,000 a

699
00:45:57,920 --> 00:46:01,520
ton.
There's a lot of churn going on

700
00:46:01,520 --> 00:46:04,160
there in Shanghai.
Maybe that's that's juicing that

701
00:46:04,160 --> 00:46:07,760
a little bit.
You've got a the the paper

702
00:46:07,760 --> 00:46:11,040
market or something wagging the
physical tail of the dog or, or

703
00:46:11,040 --> 00:46:12,320
something, however you want to
phrase it.

704
00:46:12,880 --> 00:46:17,440
So, so I would be surprised if
tin hung out here for too long.

705
00:46:18,200 --> 00:46:22,320
But you know, you still have the
situation where I don't know

706
00:46:22,320 --> 00:46:24,400
what the next tin mine to come
online is.

707
00:46:25,480 --> 00:46:31,120
Yes, maybe it's the the Cornish
tin in in the UK maybe, but that

708
00:46:31,120 --> 00:46:33,280
thing always seems like it's
coming online next year.

709
00:46:33,600 --> 00:46:40,640
So I don't know.
And you still have Myanmar is

710
00:46:40,920 --> 00:46:43,680
not really in operation sort of
an operation.

711
00:46:43,680 --> 00:46:46,720
Maybe every once in a while they
produce some tin Now and then

712
00:46:46,720 --> 00:46:53,680
you have Indonesia who call sort
of trimmed a pack on tin mining

713
00:46:53,680 --> 00:46:56,840
a little bit via various
different rules that impacted

714
00:46:56,840 --> 00:47:02,240
artisanal liners.
And you have like 3 to 4%

715
00:47:02,240 --> 00:47:07,440
annualized growth on tin demand
as everyone needs to solder

716
00:47:07,560 --> 00:47:10,400
literally everything because
everything has a chip in it now.

717
00:47:11,280 --> 00:47:17,160
And you have, you know, supply
or demand, supply growth that

718
00:47:17,160 --> 00:47:21,480
that trails that dramatically.
You know, maybe you've got 2 to

719
00:47:21,480 --> 00:47:25,480
3% annualized supply growth
versus 3 to 4% demand growth.

720
00:47:26,240 --> 00:47:30,680
So while I do think tin prices
have run ahead of themselves on,

721
00:47:31,080 --> 00:47:34,320
you know, some churn in, in say
China and and perhaps in the

722
00:47:34,320 --> 00:47:39,800
LME, the outlook for tin is
still quite favorable and it's

723
00:47:39,800 --> 00:47:42,200
still this itty bitty teeny
little market.

724
00:47:42,880 --> 00:47:47,000
And the other story I think is
really interesting right now

725
00:47:47,120 --> 00:47:49,520
with with critical metals in
particular.

726
00:47:50,400 --> 00:47:52,840
And I don't know if the story is
the same in some place like

727
00:47:52,840 --> 00:47:54,560
Australia as it is in the United
States.

728
00:47:54,800 --> 00:47:56,920
It could be different.
I think the story is the same in

729
00:47:56,920 --> 00:48:00,480
Europe.
Like when we talk about critical

730
00:48:00,840 --> 00:48:05,600
metals, everyone wants to talk
about rare earths and rare earth

731
00:48:05,600 --> 00:48:09,200
metals are sort of like the, the
metal with the best press agent

732
00:48:10,120 --> 00:48:15,160
in antimony graphite.
I don't know, the list goes on.

733
00:48:15,160 --> 00:48:19,080
They, they have no press age.
And so if you look at, at the

734
00:48:19,480 --> 00:48:22,360
critical metals that the
governments around the world

735
00:48:22,360 --> 00:48:25,680
have just not gotten around to
yet, basically what it comes

736
00:48:25,680 --> 00:48:28,920
down to tin is going to be
pretty high up on that list, I

737
00:48:28,960 --> 00:48:34,080
think, though I, I think the
backdrop remains favorable from

738
00:48:34,080 --> 00:48:38,680
macro perspective.
Digging deeper, our position in

739
00:48:38,680 --> 00:48:44,920
tins alpha men, we've long been
shareholders, you know, I, I

740
00:48:44,920 --> 00:48:48,480
think they're going to do, I
don't know, I, I mean they can

741
00:48:48,480 --> 00:48:53,680
do free cash flow of $200
million this year on a market

742
00:48:53,680 --> 00:48:56,920
cap of I don't know like 1 1/2
billion.

743
00:48:56,920 --> 00:49:00,800
It's probably not even 1 1/2
billion US, it's got to be less

744
00:49:00,800 --> 00:49:04,680
than that 1.7 billion Canadian.
OK.

745
00:49:04,680 --> 00:49:08,440
So they'll be 200 million in in
free cash flow give or take.

746
00:49:09,040 --> 00:49:12,560
Dividend yield is going to be
10%.

747
00:49:14,240 --> 00:49:15,960
You know they have no fixed
dividend policy.

748
00:49:16,760 --> 00:49:18,680
The dividend probably could be
much higher than that.

749
00:49:18,720 --> 00:49:22,000
They could probably afford a
much higher dividend than that.

750
00:49:22,000 --> 00:49:25,640
So I think there's still
opportunity.

751
00:49:25,640 --> 00:49:30,520
It's becoming or approaching
more of a yield play than it is

752
00:49:30,520 --> 00:49:34,240
a capital appreciation play.
We made our first purchase at

753
00:49:34,240 --> 00:49:37,960
$0.40 several years ago and have
been long term holders.

754
00:49:38,640 --> 00:49:41,120
So we're sitting on quite a bit
of capital appreciation.

755
00:49:41,880 --> 00:49:46,120
But you know, 2250 is not
unreasonable.

756
00:49:46,440 --> 00:49:49,480
What has to change for it to
achieve that?

757
00:49:49,480 --> 00:49:57,640
It's a just a subtle shift in
the perception of Africa and the

758
00:49:57,640 --> 00:50:01,480
DRC as it as a risk.
Now whether that occurs or not,

759
00:50:01,480 --> 00:50:04,000
I don't know.
That doesn't occur, which I I

760
00:50:04,000 --> 00:50:07,200
don't really think it will.
You know it probably cops out at

761
00:50:07,200 --> 00:50:12,440
$1.50 buck 75 and and has a RIP
roaring dividend yield.

762
00:50:13,120 --> 00:50:14,120
I think that's already
happening.

763
00:50:14,120 --> 00:50:21,520
Will I think the yeah, it's like
a the the US Orion, you know,

764
00:50:21,600 --> 00:50:25,640
Mou to acquire the, the the
stake in, in Glencoe's DRC

765
00:50:25,720 --> 00:50:28,560
assets, even though it was non
binding and even though there's

766
00:50:28,560 --> 00:50:31,400
some ambiguity about whether
that actually does materialize

767
00:50:31,400 --> 00:50:36,240
to A to a real deal or not.
Like the the valuation was, was

768
00:50:36,240 --> 00:50:39,640
was well north of what what
people thought that those assets

769
00:50:39,840 --> 00:50:42,600
are worth.
And, and I know not all parts of

770
00:50:42,600 --> 00:50:44,760
the DRC are the same, but, but I
think that's part of this

771
00:50:44,760 --> 00:50:49,440
broader, you know, broader
international, you know,

772
00:50:49,440 --> 00:50:54,120
convergence that, that, that the
DRC assets, DSC minerals are

773
00:50:54,120 --> 00:50:57,440
incredibly important to, to, to
future growth globally.

774
00:50:57,440 --> 00:51:00,320
And they're geostrategically
incredibly important to the US

775
00:51:00,320 --> 00:51:03,040
and the US is making massive
inroads in in having influence

776
00:51:03,040 --> 00:51:04,920
in that region.
Can I add to that point as well,

777
00:51:04,920 --> 00:51:08,400
Trev, because the, the, the
assets in which there's been a

778
00:51:08,400 --> 00:51:13,120
deal over they, they are paying
a royalty to, to Dan Gertler,

779
00:51:13,280 --> 00:51:17,360
who sold the assets, who's been
sanctioned by the US for a

780
00:51:17,360 --> 00:51:20,840
decade plus for, for what, for
what he did and how he got his

781
00:51:20,840 --> 00:51:22,320
hands on the assets and these
sorts of things.

782
00:51:22,840 --> 00:51:24,960
And they're coming in and
they're, they're buying

783
00:51:24,960 --> 00:51:28,800
essentially these assets that,
that is a, a, a new kind of

784
00:51:28,800 --> 00:51:32,880
paradigm that we're in.
No, I mean, I, I think you're

785
00:51:32,880 --> 00:51:35,200
right.
It absolutely is a new paradigm.

786
00:51:36,320 --> 00:51:39,560
Whether that paradigm sticks
with change in administrations,

787
00:51:40,800 --> 00:51:49,000
I think that's an open question.
And whether that percolates down

788
00:51:49,000 --> 00:51:53,680
into the stock market and
people's approach to these

789
00:51:53,680 --> 00:52:00,680
assets as publicly traded assets
as opposed to say Orion, those

790
00:52:00,680 --> 00:52:04,520
assets would be private cash
flowing and or I mean eventually

791
00:52:04,520 --> 00:52:06,920
cash flowing.
I think about what the situation

792
00:52:06,920 --> 00:52:11,120
is currently.
You know, I, I think that's

793
00:52:11,120 --> 00:52:13,520
still an open question.
I mean, I still bring My

794
00:52:13,520 --> 00:52:17,280
Portfolio, if you will, and sit
down in front of people, you

795
00:52:17,280 --> 00:52:20,960
know, professional allocators,
if you will, yet, you know,

796
00:52:20,960 --> 00:52:25,600
people who should know better
than to just dismiss a place out

797
00:52:25,600 --> 00:52:29,720
of hand because they, they hear
it might be risky.

798
00:52:30,960 --> 00:52:34,120
And, and people look at My
Portfolio and they see a couple

799
00:52:34,120 --> 00:52:38,240
of African assets and they just
roll their eyes and they're

800
00:52:38,240 --> 00:52:40,400
like, oh boy, not for us.
We don't want to touch that with

801
00:52:40,400 --> 00:52:44,680
the tenants.
So I think you're right.

802
00:52:44,680 --> 00:52:46,400
I think there is a shifting of
the tide.

803
00:52:46,400 --> 00:52:52,600
But again, it, it's, it's so
it's got to be incredibly early

804
00:52:52,760 --> 00:52:57,960
because what's actually got to
happen in order for money to

805
00:52:57,960 --> 00:53:02,840
really flow and, and, and
interest to really be there.

806
00:53:03,080 --> 00:53:05,840
I think it's still a fairly
dramatic shift from here.

807
00:53:06,200 --> 00:53:10,560
Like, like JD, I'd love to talk
with you about some of the other

808
00:53:10,560 --> 00:53:13,600
commodities you've got exposure
to, but I think we'll, we'll

809
00:53:13,600 --> 00:53:15,560
wrap it up here as we kind of
approach the hour.

810
00:53:15,560 --> 00:53:19,520
And we'll, I wanted to, to
circle back to the, the letter

811
00:53:19,520 --> 00:53:24,240
you, you wrote 16th of January
and you, you, you close that

812
00:53:24,240 --> 00:53:26,840
letter by saying mining
opportunities and not with the

813
00:53:26,840 --> 00:53:30,520
same breadth or asymmetry and
that you're seeing better risk

814
00:53:30,520 --> 00:53:33,320
reward in, in wind defence and
niche chemicals.

815
00:53:33,520 --> 00:53:35,920
I mean, you say the moment is
approaching when a rebalancing

816
00:53:35,920 --> 00:53:39,680
away from mining century
portfolio will be warranted that

817
00:53:39,760 --> 00:53:42,560
that is not music to the ears of
of the the mining on the

818
00:53:42,560 --> 00:53:44,520
investors that that we kind of
speak to.

819
00:53:44,520 --> 00:53:48,080
But but, but in a, in the
context of an industry with with

820
00:53:48,080 --> 00:53:51,160
capital cycles, it's an
interesting observation that

821
00:53:51,520 --> 00:53:54,640
there will be a time where,
where, where, where our industry

822
00:53:54,640 --> 00:53:58,560
is not is, is, is on a different
part of that cycle than the

823
00:53:58,560 --> 00:54:00,280
asymmetric opportunity that we
we saw.

824
00:54:01,000 --> 00:54:03,560
Yeah.
I would just want to be a little

825
00:54:03,560 --> 00:54:09,280
careful about that comment in
that it does an important

826
00:54:09,280 --> 00:54:12,480
variable in that is of course
where we started with our mining

827
00:54:12,480 --> 00:54:16,560
alopecia.
And so our portfolio, which is

828
00:54:16,560 --> 00:54:20,280
supposed to be energy, materials
and industrials and

829
00:54:20,280 --> 00:54:23,400
infrastructure, industrial and
infrastructure with rough sort

830
00:54:23,400 --> 00:54:30,280
of like 33% guardrails around,
you know, we were up at 50% in

831
00:54:30,280 --> 00:54:35,400
mining and at one point last
year, our portfolio reached 75%

832
00:54:35,760 --> 00:54:40,640
in mining.
So you know, we have a portfolio

833
00:54:40,640 --> 00:54:47,760
that needs to be rebalanced away
just just based on the fact that

834
00:54:47,760 --> 00:54:50,840
that I've got some sort of
institutional criteria.

835
00:54:51,440 --> 00:54:54,280
It's not hard and fast.
I'm quite flexible, but I can't

836
00:54:54,280 --> 00:54:56,880
quite run 75% in mining at all
times.

837
00:54:57,160 --> 00:54:59,880
But I would also say, you know,
much like the gold story, right?

838
00:55:01,240 --> 00:55:04,880
You know, I don't think copper
is there, for example, But you

839
00:55:04,880 --> 00:55:07,560
know, a couple years ago I
thought it was easy to buy gold.

840
00:55:09,720 --> 00:55:13,320
Maybe easy might be a bit
dramatic, but it was, it was, it

841
00:55:13,320 --> 00:55:15,160
was more straightforward to buy
gold liners.

842
00:55:15,920 --> 00:55:18,200
Copper.
I still think copper here at

843
00:55:18,200 --> 00:55:22,200
580.
I don't even think this is truly

844
00:55:22,200 --> 00:55:25,120
the incentive price to build new
copper mines that we need to

845
00:55:25,120 --> 00:55:28,840
see, right?
I, I think it's more like 650 or

846
00:55:28,840 --> 00:55:31,680
$7.00.
That is the price that'll really

847
00:55:31,680 --> 00:55:33,440
get people building copper
mines.

848
00:55:33,880 --> 00:55:35,960
So there's still plenty of room
to run there.

849
00:55:35,960 --> 00:55:40,360
In my opinion.
You know, it's not about getting

850
00:55:40,360 --> 00:55:44,760
out of mining firms, it's about
us rebalancing our portfolio

851
00:55:44,960 --> 00:55:52,080
into more opportunities where we
see 23400 percent returns and we

852
00:55:52,080 --> 00:55:55,480
still see those in mining.
And that's what we swing our bat

853
00:55:55,480 --> 00:56:00,680
for is those types of planes.
We're just not seeing as many of

854
00:56:00,680 --> 00:56:04,840
them as we were in other places.
And we're seeing more of them,

855
00:56:05,600 --> 00:56:08,800
you know, energy, by way of
example, oil and natural gas.

856
00:56:09,440 --> 00:56:12,360
I mean, golly, people really
hate oil.

857
00:56:14,440 --> 00:56:18,640
I think it's about as disliked
as I mean, not quite as disliked

858
00:56:18,640 --> 00:56:20,880
as it was a couple of weeks ago
or a couple of months ago.

859
00:56:20,880 --> 00:56:25,720
But but boy, coming into the end
of 20252025, beginning of this

860
00:56:25,720 --> 00:56:29,120
year, but boy, oil was about as
disliked as it can get.

861
00:56:30,400 --> 00:56:35,280
You know, I try to go, you know,
where the skate, where the puck

862
00:56:35,280 --> 00:56:41,680
is going or something, right.
And, and so I think you see lot

863
00:56:41,680 --> 00:56:44,040
of profits made on gold, a lot
of profits made on copper.

864
00:56:44,040 --> 00:56:46,600
Some of these things are going
to need to be recycled into

865
00:56:46,680 --> 00:56:50,320
other things.
And some of your guys down in

866
00:56:50,320 --> 00:56:54,120
Australia, they invest in mining
only and they'll recycle them

867
00:56:54,120 --> 00:56:56,720
into miners.
I've got a slightly broader

868
00:56:56,720 --> 00:57:00,560
remit and so I can take
advantage of other opportunities

869
00:57:00,560 --> 00:57:04,360
I see elsewhere.
Again, not a claim that this

870
00:57:04,360 --> 00:57:11,120
cycle is over, but maybe a claim
that they'll be more volatility

871
00:57:11,520 --> 00:57:17,240
then people appreciate.
I think if you looked at the we

872
00:57:17,240 --> 00:57:20,840
can get the date slightly wrong,
but if you said the last super

873
00:57:20,840 --> 00:57:26,840
cycle went from like around, I
think I usually started in 1998

874
00:57:26,840 --> 00:57:31,800
or something and run it through
2015 and you look at something

875
00:57:31,800 --> 00:57:35,640
like the Bloomberg commodities
metal sub index.

876
00:57:36,480 --> 00:57:42,400
There were puns of 10 and 20%
draw downs during that period.

877
00:57:43,480 --> 00:57:46,480
It was all, you know, going up
into the right, but there was a

878
00:57:46,480 --> 00:57:51,600
lot of volatility.
And so you know what I fully

879
00:57:51,600 --> 00:57:54,840
expect, I don't think, you know,
super cycles are comparable.

880
00:57:54,840 --> 00:57:56,880
And I'm not saying we're in a
super cycle or anything like

881
00:57:56,880 --> 00:58:04,080
that, but you know, big upward
moves, there's a process and,

882
00:58:04,080 --> 00:58:08,120
and they go through wings and,
and I do think, you know, we're

883
00:58:08,120 --> 00:58:11,800
having a swing here and, or
we're potentially at a swing

884
00:58:11,800 --> 00:58:15,520
price here, you know, for gold.
I thought we were really going

885
00:58:15,520 --> 00:58:18,680
to deal it a couple weeks ago
and, and everyone turned around

886
00:58:18,680 --> 00:58:22,000
and bought it.
But so there'll be more

887
00:58:22,000 --> 00:58:25,600
opportunities.
I, I just, I'm seeing mostly in

888
00:58:25,600 --> 00:58:28,560
energy, but also in some weird
industrial places where there

889
00:58:28,560 --> 00:58:29,680
are a lot of great
opportunities.

890
00:58:30,200 --> 00:58:35,120
And, and then, you know, as you,
you said sort of quietly, I'd

891
00:58:35,120 --> 00:58:38,480
said something about wind.
You know, nobody hates wind

892
00:58:38,480 --> 00:58:43,440
right now more than while
everywhere, but there are some

893
00:58:43,440 --> 00:58:46,880
companies that can figure out
ways to make money in wind.

894
00:58:47,480 --> 00:58:51,920
And so, you know, that's a good
opportunity, especially again,

895
00:58:52,040 --> 00:58:56,400
it goes back to that, you know,
and we buy a mine processing

896
00:58:56,400 --> 00:58:58,080
facility for six cents on the
dollar.

897
00:58:59,000 --> 00:59:00,880
I'm always looking at buy
everything for six cents on the

898
00:59:00,880 --> 00:59:01,120
dog.
I've.

899
00:59:01,200 --> 00:59:04,400
Got an idea you just put these
offshore these offshore wind

900
00:59:04,400 --> 00:59:06,960
projects where the the
transmission to the the greatest

901
00:59:06,960 --> 00:59:09,840
of norms you just talk a data
center offshore now and happy

902
00:59:09,840 --> 00:59:13,440
days you.
Had a center offshore.

903
00:59:13,720 --> 00:59:16,520
Yeah, well, in the United
States, they're going to need to

904
00:59:16,520 --> 00:59:19,480
start building them someplace
because nobody wants them next

905
00:59:19,480 --> 00:59:22,240
to them.
We have real problems here in

906
00:59:22,240 --> 00:59:23,360
the United States.
Everyone.

907
00:59:23,360 --> 00:59:26,200
Everyone's complaining about the
latest data center built in

908
00:59:26,200 --> 00:59:28,000
their neighbor.
Offshore data centers and it's.

909
00:59:28,000 --> 00:59:30,280
Floating on the water and it's
got the cooling looked after as

910
00:59:30,280 --> 00:59:32,120
well.
Exactly solving all the.

911
00:59:32,120 --> 00:59:33,800
Problems.
Well, I think there is, there's

912
00:59:33,840 --> 00:59:40,560
a, there is an offshore oil, an
old offshore oil rig in the

913
00:59:40,560 --> 00:59:44,640
North Sea somewhere offshore UK,
not terribly deep, relatively

914
00:59:44,640 --> 00:59:48,840
shallow.
But however they constructed it,

915
00:59:49,160 --> 00:59:52,640
there's some sort of like
concrete pillar based approach,

916
00:59:52,640 --> 00:59:57,200
right?
And whoever owns it now has in

917
00:59:57,200 --> 01:00:03,120
fact put a data center through
the middle of that concrete

918
01:00:03,120 --> 01:00:07,320
column that holds it up.
And so the ocean around it does

919
01:00:07,320 --> 01:00:13,440
act like a cooler, if you will.
So that idea is not as

920
01:00:13,440 --> 01:00:16,800
ridiculous as you think it is.
Or or, you know, maybe you

921
01:00:16,800 --> 01:00:20,280
didn't think I'm not.
Sci-fi Becoming.

922
01:00:20,280 --> 01:00:22,200
Reality.
I'm starting a company tomorrow

923
01:00:22,240 --> 01:00:24,840
and I'll raise a billion dollars
off the back of this idea and

924
01:00:24,840 --> 01:00:26,800
deliver nothing.
Yeah.

925
01:00:28,080 --> 01:00:32,080
Well, you could pitch it to Elon
Musk and say, well, this is the

926
01:00:32,080 --> 01:00:36,720
first step to the astronauts in
the United States at NASA.

927
01:00:36,720 --> 01:00:39,280
You know, they practice.
They practice in the swimming

928
01:00:39,920 --> 01:00:41,640
Yep.
He wants to build space.

929
01:00:41,800 --> 01:00:45,480
The pitch should be well, let's
let's trial it by building it

930
01:00:45,520 --> 01:00:50,400
underwater, you know, so it's
got to give you the money if you

931
01:00:50,400 --> 01:00:52,440
can get in touch, then you.
Got to drink big will.

932
01:00:52,440 --> 01:00:55,520
We'll put a 50 times multiple on
it, unlike our our usual five

933
01:00:55,520 --> 01:00:57,520
times in our space and off to
the races.

934
01:00:57,520 --> 01:00:59,680
Thank you so much, Will.
It's been an absolute pleasure

935
01:00:59,680 --> 01:01:03,560
to speak about the the the
universe that that we love with

936
01:01:03,560 --> 01:01:05,280
you and I appreciate you making
the time.

937
01:01:06,360 --> 01:01:08,440
Yeah, well, always happy to do
it.

938
01:01:09,240 --> 01:01:12,320
Love listening to show.
It's the only mining podcast,

939
01:01:13,680 --> 01:01:16,040
the only mining podcast I think
I listened to.

940
01:01:16,720 --> 01:01:19,240
There are a couple of you guys
have a couple of competitors but

941
01:01:19,240 --> 01:01:22,120
but nobody really can do this,
but it's a good show.

942
01:01:22,440 --> 01:01:24,480
Much appreciated, Will.
I think we got through about 1/4

943
01:01:24,480 --> 01:01:25,720
of the questions we had jotted
down.

944
01:01:25,720 --> 01:01:28,000
So we'll have an abundance of
stuff to chat through next time.

945
01:01:28,480 --> 01:01:30,400
There we go, Trev.
Massive thank you to our awesome

946
01:01:30,400 --> 01:01:33,040
partners Stand at Ground,
Support, Focused Platform by

947
01:01:33,040 --> 01:01:35,760
Market Tech, Intralinks and
Exceed Capital.

948
01:01:36,760 --> 01:01:39,600
Now remember, I'm an idiot.
JD is an idiot.

949
01:01:39,920 --> 01:01:42,000
If you thought any of this was
anything other than

950
01:01:42,000 --> 01:01:44,640
entertainment, you're an idiot
and you need to read our

951
01:01:44,640 --> 01:01:45,160
disclaimer.