Undervalued Copper, Twitter Activism and IperionX with Hank Ruehl

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Like a sufficiently large crowd
of motivated shareholders all

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wanting the same thing because,
they say, undervalued equity.

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I don't recall seeing anything
quite like this before.

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I think part of the reason that
there is this crowd sourced

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interest in this particular
campaign is because if there is

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actual real, realizable value.
We do so many retakes.

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You wouldn't believe how often
we cook it, so don't even worry.

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Jonas Benedict Dawling, Travis
Ricciardo doing something a

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little bit different today.
I'm excited.

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We've got, we've got a, we've
got someone else joining us for

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a bit of, a bit of a riff.
And it's not like a, we're going

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to talk about some stories, some
stuff that's happened in the

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market.
In fact, I can't help myself but

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want to provide an update on the
rack attack in Arizona.

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It's on my mind.
There's updates, there's things

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happening.
It's heating up.

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It's heating up and we're also
going to explore some some

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territory like there's a very
interesting kind of copper

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growth or or base metals growth
story that we've never talked

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about before, never explored,
but we're going to cover it and

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I'm actually pretty interested
in it.

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I'm also super excited to talk
about another company, another

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titanium tech ish play mining
adjacent Iperian X that has been

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on the you know, on the cast.
We wanted to talk about it for a

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long time, but.
Retail.

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Retail guys love this one.
Yeah, yeah.

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I feel inexperienced to cover
it, but I'm excited that we're

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going to do it.
Plus is royalty activist drama

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and it's all over Twitter, TNR
gold or TNRV.

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If if you've been following that
one cherry on top, joining us

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for as we explore these these
topics, mate, we're joined by

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Hank rule of Sierra Morena
capital.

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He's a small fund manager based
in the in the US investing in

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the sector that we love.
So appreciate you kind of

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joining us for for a bit of an
exploratory conversation as we

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we cover a bunch of stuff today,
mate.

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Yeah, thanks a ton for having me
guys.

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This should be very fun.
You know big big fan of money of

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mine big fan of a lot of the
companies we're going to talk

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about as well.
So should be should be pretty

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fun.
Let's.

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Do this.
You're a fan of the Yeah, you're

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a fan of the companies we talk
about and I reckon you like

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because you cover the metals and
mining sector, Hank, you would,

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you would know that whenever
there's like any potential

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mining services contractor, open
pit mining contractor or, or

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anything along those lines that
kind of pops up and you need,

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you need someone who can help
you deploy A mining fleet ASAP

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to monetise the value in the
ground.

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Who would you call?
Yeah.

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I mean, I'd have to say Mineral
Mining Services is right up

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there.
Ms. The team that just gets it

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done.
Mineral Mining Services MMS the

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brand transcends into the United
States even though MMS they are

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absolutely like killing it
knocking out of the park.

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Every kings W WA gold industry,
right?

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WA gold mate, they do even more
than that.

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It's not just not just gold.
I've I've seen them, I've seen

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them covalent it's true.
If there's dirt to be moved and

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mined MMS, the people you call,
you get in touch with them.

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They do that with their stacked
tech services.

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This team mate just stacked with
talent.

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Doesn't matter if it's drill and
blast, load and haul MMS will

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have you sorted.
Hank wouldn't you would love to

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know that that was that were
filled with very talented

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technical people all throughout
them that can help you come up

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with the the mine plan, help you
figure out, you know the

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resource updates help you get
all of that stuff loaded.

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That's what MMS.
Do without a doubt.

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Let's let's start with the rack
attack guys.

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I'm, I'm excited and I'm excited
to do this with, with you, Hank,

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because you can share a bit of
the, the US kind of insight.

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We've obviously spoken about
this story quite a bit in, in

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recent times and it is heating
up, heating up, heating up,

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right.
So we've got Kintera and Camel

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going head to head now.
And yeah, the the market is

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anticipating even more.
As they, as they should make, as

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they should in in this case,
when we last talked about a

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Quintera submitted an NBIO 5.7
cents to the board of New World.

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Now in short order, the New
World board deemed that clearly

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kind of capable of becoming a
superior offer.

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So Quintera, they loved this bit
of statement at 5.7 cents.

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Then at the end of the day,
Camel, they get their hands on

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another 7% of the company's
ordinary shares.

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They pay 6.2 cents for them, so
half a cent more.

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And that leaves Camel at the end
of that with like 12.1% of the

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company in, in ordinary stock
versus Quintero is like 19 odd

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percent.
Now what Camel say they're doing

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after they get their hands on
that line of stock, they're

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amending the scheme.
So all shareholders will get

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paid that price.
So they're they're offered

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everyone is now 6.2 cents.
New world stock flies to 6.5

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cents on Friday.
So the balls in Quinteros court,

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right?
What did they come to the party

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or not?
And yesterday we find out the

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answer to that.
They drop a supplementary bit of

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statement.
They've upped their takeover

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offer to 6.2 cents as well.
By the way, even though it's the

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same price as Camels offer, they
reckon that their offer is

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superior on conditionality and
they're going to vote against

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the Camel scheme with their line
of stock.

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Of course this is so good, and
6.5 cents is we're talking about

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30% above what was nearly a 100%
premium.

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So what does this all mean now
mate?

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It's interesting, like both both
parties are like neck and neck

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here and after escalating like
bids and scooping up stock

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themselves, we're I think we're
close to to, you know, the end

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game and Cantera, they didn't
bid higher than camel like like

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they could have.
They could have, you know, come

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in with with an even higher
price than 6.2 cents.

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They matched it right.
So that's the first sign of

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price discipline we've seen in
this entire contest.

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It's important too, because
like, things were escalating

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before and Cantera, they, they,
they actually have a bid on

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market at 6.2 cents.
So should the price dip there,

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they're actually going to pick
up even more than they've got at

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the moment.
Right now, the stock's trading

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at 6.4 cents.
Neither party has declared best

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and final bid yet.
That's important.

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That's why there's likely more
to go.

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So the big question to figure
out is, is how much juice is

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left here at 6.2 cents?
This is a $230 million

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acquisition for Cara or or
Camel.

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Both of these buyers are
supremely motivated to do a

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deal.
They've got different reasons

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supporting that motivation, but
the price paid for both of them

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matters a lot, right?
This is going to go to whoever

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wants it the most.
They can both afford it, but if

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I were to to blindly guess just
like like just fly out guess

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with no like nothing other than
a guess, I guess his Kinterra

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end up with this at 7 cents.
That's my guess.

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I like and that's like a
complete thumb sucker, right?

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But things can like, like, OK,
we've seen some price discipline

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here, but things can also
escalate after price discipline.

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Like if you cast your mind back
to when while U and BHP were

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going head to head in, the final
uplift in that contest that got

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the deal done was an eye
watering 47% uplift to BHP's

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last bid.
So anything can happen in these

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situations.
Like your guess is, is as good

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as mine.
But I, I'm just kind of sensing

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a bit more like discipline on
price, like maybe maybe both

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parties get a bit sensitive to
overpaying around here.

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And I think Quintero would be my
bet as our favourites to get the

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deal done.
Yeah, that that, that was a

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unique and fascinating bit of
drama there with nor on with

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Wylo having picked up a stake
pretty early.

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Yeah, in in the piece.
Which they used to justify.

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The the theft, yeah, but that
got if we got got a 47 up

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percent up there from here that.
'D be.

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That'd be crazy.
I mean, that's that.

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'D be pretty cool.
Extremely.

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Improbable.
I am sided with you in that I

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think Quintero is even more
motivated to put this money to

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work.
But yeah, seven cents would be a

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belter.
I think you got a prediction to

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throw in the mix or just
thoughts on this type of action

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that we haven't seen in a long
time for US based assets?

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That's a really good last line
there.

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This is good competitive
attention for AUS Asset.

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I wish both parties the best.
I wish shareholders the best.

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Not necessarily the US asset I
would have necessarily picked to

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be, you know, front and Center
for this kind of competitive,

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hyper competitive process.
I mean, I know it's high grade,

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I know there's some
infrastructure advantages

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etcetera.
But you look at the size of the

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prize and like you guys said,
just the, the level to which

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these guys are bidding and you
can't help but think they're

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only bidding this much because
it's a competitive process,

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which is again, but motivated to
do a deal.

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It's one of the things that this
is something I would say as a

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public equity guy, the drag on
the private equity guys, but

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it's there.
They have to do a deal when they

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have to do them.
They're constrained in that sort

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of way.
And they only get so many shots

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on goal and so on and so forth.
And their shots have to be of a

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specific size.
And for Quintero, I know they've

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got, you know, a specific
strategy and a specific set of

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geographies they have to work
with.

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So it all, I guess, to lead back
to the first question.

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That's ultimately I think why I
would agree with you guys in

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terms of backing them to be the
winner here.

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And yeah, I think $0.07 is
pretty reasonable.

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We're seeing, like you guys
said, finally this pullback

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here, maybe before the last, the
last onslaught that ultimately

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gets it over the top.
Winners is a funny way to use it

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in an auction, isn't it?
It's who really wins in an

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auction?
The seller like but.

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The shareholders, the existing.
Exactly, exactly.

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Good on that.
Good on them.

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Shareholders you invest in like
transition metals, that's like

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the MO of your fund and you'd be
all too familiar with it.

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The low CapEx kind of
development story in copper is

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there's just like few and far
between, like how many

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opportunities are there?
And then also like how many of

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those low CapEx like development
stories are there that are in

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Arizona, you know, an area that
is like supremely familiar to

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the Quintero team because they
they're ex Waterton, they've got

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a which has a mine like 100
kilometers.

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Away permits in place.
Exactly.

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So I just think the motivation
to go at it for them would be

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pretty damn high.
Absolutely.

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And all those are good things.
To be fair.

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That's got to be taken lightly,
especially in a place like

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Arizona where having permits
versus not can be the

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difference.
As an extreme example, the other

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end, right, you'll look at
resolution.

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Obviously scale.
Scale is nice, but if you can't

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get it out of the ground, it's
not a time frame that you want

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to.
You must be looking at the 230

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million Aussie kind of implied
equity value right now and

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comparing it with your favorite,
yeah, kind of copper base metals

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growth stock, which as an equity
value of only 330 million

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Canadian.
And by the way, it's already

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producing.
There's growth in it, but it's

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already producing.
Absolutely.

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00:09:55,200 --> 00:09:57,760
Every time there's a copper
acquisition story, I think was

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00:09:57,760 --> 00:10:00,400
it Mac Copper?
Also ASX?

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00:10:00,720 --> 00:10:04,800
Yeah, Mac Xanadu was another one
recently, yeah, as well.

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And Rex last year.
There's been a plethora of them.

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Yeah, it's good.
It's good to see for the sector,

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but it also all you know, and
everybody always trots out their

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comparison charts of, oh, we
have so many million tons that

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you know, X percent copper,
etcetera.

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But back-to-back to, yeah, my,
my favorite mining stock,

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00:10:21,480 --> 00:10:24,120
biggest position for over a year
now at this point, Magna Mining,

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00:10:24,120 --> 00:10:26,800
which is polymetallic, it's
copper, but also nickel and

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PGMS.
But yeah, you look at, you look

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at their, and this is just
their, their current MRE.

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If you look at historic or a
number of the other mines they

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have, they've got 48 million
tons at about a 2.62 point, 7%

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copper equivalent versus I think
New World's was something like

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00:10:43,000 --> 00:10:46,720
14,000,000 tons at 3.8.
And again, yeah, New World's

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relatively low CapEx.
Now he was producing police did

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00:10:49,440 --> 00:10:53,000
again as Fab said, one of their
minds, but Creedy W is up and

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running right now.
And the other ones, if you look

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at their they've got a they've
got a staged very methodical,

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00:10:59,120 --> 00:11:04,240
but also pretty swift basically
roughly 1 mine a year plan to of

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restarting these other mines
that they have in the Sudbury

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region.
They the you look at the

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economics on some of these
restarts and the PEA for their

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00:11:12,400 --> 00:11:15,360
Crane Hill project, for example,
post tax IRR on the restart is

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129%.
They can get these things up and

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00:11:17,920 --> 00:11:22,080
running with very little.
I think it's 45,000,000 Canadian

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00:11:22,120 --> 00:11:25,400
net CapEx that they got to put
into that and I want to say the

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00:11:25,400 --> 00:11:28,440
projects worth around 150
million Canadian that spot.

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00:11:28,440 --> 00:11:32,200
So easy restarts, lot of
resources in a lot of places, a

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lot of optionality and then the
other part as well.

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00:11:34,280 --> 00:11:36,440
And now I'm just filibustering
about Magna, but I like them a

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lot is those are resources from
for the most part, the Crane

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00:11:40,200 --> 00:11:42,760
Hill and Shakespeare projects
have been owned by Magna before

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00:11:42,840 --> 00:11:45,800
this last September.
But a lot of those, a lot of the

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00:11:45,840 --> 00:11:48,880
other resources, if you look at
Magna are resources that were

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00:11:48,920 --> 00:11:53,000
most recently done by KGHM,
which owned 4 mines.

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00:11:53,000 --> 00:11:56,640
That one operating mine, Mccree
W 3 fast producing mines,

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00:11:56,640 --> 00:12:00,000
Levalsky and Kirkwood, that
again, all of these except for

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00:12:00,000 --> 00:12:02,880
Kirkwood fully permitted
Sudbury, one of the best

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00:12:03,080 --> 00:12:04,680
jurisdictions in the world for
mining.

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You've got 2 mills in the area,
both of them, the one valet, 1

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00:12:07,880 --> 00:12:10,280
Glencore, both of them very
hungry for feed.

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00:12:10,280 --> 00:12:12,960
Glencore is down to running only
every other shift on their mill

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00:12:12,960 --> 00:12:14,160
because they don't have enough
feed.

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Each of those guys are only
operating a couple mines at

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most.
But it's again, there's still a

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00:12:18,880 --> 00:12:21,600
lot of mineralization left in
Sudbury and it's you'll look at

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the forget the exact number I
should know, but some double

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00:12:24,240 --> 00:12:26,320
digit percentage of all nickel
ever mined on Earth is from

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00:12:26,320 --> 00:12:28,240
Sudbury.
I don't think it gets much play

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00:12:28,240 --> 00:12:31,240
because there aren't that many
juniors operating the space, but

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00:12:31,240 --> 00:12:32,800
there is Magna.
And KG.

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00:12:32,800 --> 00:12:34,880
They sold out to Magna in
September.

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00:12:35,120 --> 00:12:37,440
Exactly right.
For a pretty sweet deal on

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00:12:37,440 --> 00:12:40,040
Magna's part, it was 5 million
Canadian cash upfront and

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00:12:40,040 --> 00:12:42,520
deferred payments totalling 20
something million.

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00:12:42,520 --> 00:12:45,960
That'll be conditional on on the
start of production at a couple

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00:12:46,200 --> 00:12:49,680
of the mines that were sold and
some Magna stock and obviously

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00:12:49,680 --> 00:12:51,520
Magna assumes closure
liabilities and stuff.

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00:12:51,520 --> 00:12:55,080
The thing is KGHM wanted to
sell, wasn't doing anything with

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00:12:55,080 --> 00:12:56,960
these projects, viewed them as
non core.

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00:12:57,200 --> 00:13:01,200
They're within Sudbury, they're
all in on Vic, and ultimately I

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00:13:01,200 --> 00:13:02,760
think they're taking a long way
around on that.

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00:13:02,760 --> 00:13:03,600
We'll see.
I wouldn't.

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00:13:03,600 --> 00:13:06,240
The Magna guys would probably
get frustrated, vexed with me

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00:13:06,240 --> 00:13:09,120
for saying this, but I could see
half a decade on Magna ends up

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00:13:09,120 --> 00:13:10,960
getting Victoria too.
So we'll see.

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00:13:11,200 --> 00:13:12,440
We'll see how that all plays
out.

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00:13:12,440 --> 00:13:15,360
But yeah, ultimately these were
KGHM products projects.

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00:13:15,360 --> 00:13:18,160
They've got historic resources,
but a lot of those historic

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00:13:18,160 --> 00:13:21,920
resources, KGHM wasn't doing
much exploration honestly.

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00:13:21,920 --> 00:13:24,800
They were running these mines.
Again, they were non core

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00:13:24,800 --> 00:13:26,680
assets.
They were running them just to

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00:13:26,720 --> 00:13:29,800
stay break even or just about.
And so Magnus coming in, they

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00:13:29,800 --> 00:13:32,440
know these mines.
You look at the CEO of Magnum

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00:13:32,440 --> 00:13:35,760
Mining, he started out as a lead
miner and then a foreman at

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00:13:35,760 --> 00:13:38,400
Mccree W at this mine that they
just got from AG sender.

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00:13:38,720 --> 00:13:42,080
A lot of the Magna guys are part
of the FNX and the Quadra FNX

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00:13:42,080 --> 00:13:45,320
team that also operate in
Sudbury during the 2000s when

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00:13:45,320 --> 00:13:48,880
the top TSX listed stocks in
terms of performance over the

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00:13:48,880 --> 00:13:51,960
course of the 2000s ultimately
got bought by KGHM.

299
00:13:52,240 --> 00:13:55,560
Now FN XS successor has taken
the same assets back out for a

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00:13:55,560 --> 00:13:57,880
song.
So yeah, so all that was leading

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00:13:57,880 --> 00:13:59,600
up to say, I think there's quite
a bit more.

302
00:13:59,600 --> 00:14:01,600
And if you look at some of
Magna's recent drill results,

303
00:14:01,840 --> 00:14:05,120
there's quite a bit more
mineralization, both immediately

304
00:14:05,120 --> 00:14:08,640
adjacent to to existing
resources that's very easily

305
00:14:08,640 --> 00:14:11,120
accessed from existing Stokes
and so on and so forth.

306
00:14:11,120 --> 00:14:14,280
And also stuff that's a bit
further out that can actually be

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00:14:14,280 --> 00:14:18,960
used by Magna to reconfigure
some mine plans and ultimately

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00:14:19,200 --> 00:14:20,840
grow production.
They can drive a ramp for

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00:14:20,840 --> 00:14:23,360
example, through this really
high grade close to surface.

310
00:14:23,360 --> 00:14:27,160
It's not too big, but it's we're
talking like 2627% top

311
00:14:27,160 --> 00:14:30,200
equivalent hits over a meter
pretty reliably at Levac.

312
00:14:30,200 --> 00:14:32,920
They can hopefully drive a ramp
through that into the existing

313
00:14:32,920 --> 00:14:36,200
known mineralization and mine,
you know significantly more

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00:14:36,200 --> 00:14:38,640
tonnage than what KGM was doing
there.

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00:14:38,920 --> 00:14:41,720
To kind of play devil's
advocate, Hank, the stock has

316
00:14:41,840 --> 00:14:44,200
more than 4X since the beginning
of last year.

317
00:14:44,200 --> 00:14:46,320
So it's not completely without
love.

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00:14:46,320 --> 00:14:49,600
Do you, do you see that just as
justified and something to

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00:14:49,600 --> 00:14:51,120
continue?
Absolutely.

320
00:14:51,120 --> 00:14:54,440
I actually, and for what it's
worth, is it not so humble

321
00:14:54,440 --> 00:14:56,120
ragged.
I've held it basically since

322
00:14:56,120 --> 00:14:58,320
then.
My average is $0.53 Canadian.

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00:14:58,360 --> 00:15:02,000
But at the same time, and I've
said this, I don't think this is

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00:15:02,000 --> 00:15:05,600
a unique thought among Magna
shareholders is I think you look

325
00:15:05,600 --> 00:15:08,200
at the concrete progress they've
made over the course of that

326
00:15:08,200 --> 00:15:09,480
time.
A year and a half ago, it was

327
00:15:09,480 --> 00:15:13,080
just Crane Hill and Shakespeare.
Metals prices were relatively

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00:15:13,080 --> 00:15:15,240
where they are now.
Copper's obviously come up a bit

329
00:15:15,240 --> 00:15:17,080
etcetera.
But there there was, it was a

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00:15:17,080 --> 00:15:19,560
pretty different company.
The KGHM acquisition was

331
00:15:19,560 --> 00:15:22,160
transformational.
I think the market recognized

332
00:15:22,160 --> 00:15:24,000
that.
Obviously, again, it's been up a

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00:15:24,000 --> 00:15:27,240
fair amount.
It was TSX, the top 50 stock.

334
00:15:27,240 --> 00:15:31,280
But I think you'll look at you
project a couple years out here.

335
00:15:31,280 --> 00:15:35,520
I think actually in some ways
now almost Magna is is done a

336
00:15:35,520 --> 00:15:38,600
relative disservice by being
treated as a small subscale

337
00:15:38,600 --> 00:15:41,680
producer rather than as a
developer that can promise the

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00:15:41,680 --> 00:15:43,360
world.
And I still think that there's

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00:15:43,680 --> 00:15:46,000
that in this in the world of
mining, there is some sort of

340
00:15:46,000 --> 00:15:49,000
premium for people in at least
in terms of excitement

341
00:15:49,000 --> 00:15:52,200
engagement for people that go
out and find Greenfield hits in

342
00:15:52,200 --> 00:15:55,440
the middle of nowhere that are
this kids that look a lot like

343
00:15:55,440 --> 00:15:57,880
that might look a lot like the
sort of stuff Magna is drilling

344
00:15:57,880 --> 00:16:00,080
as resource expansion at Mccree
West or whatever.

345
00:16:00,160 --> 00:16:03,640
I guess to, to finally answer
your question, I think I think

346
00:16:03,640 --> 00:16:06,200
ultimately you model out where
could these guys be in terms of

347
00:16:06,520 --> 00:16:08,880
forward-looking statements here,
not investment advice etcetera,

348
00:16:08,880 --> 00:16:12,200
but where could these guys be in
terms of cash flow three years

349
00:16:12,200 --> 00:16:14,040
out.
And I think it's very reasonable

350
00:16:14,040 --> 00:16:18,400
that they're doing 70, five, $80
million US in 2028 from a

351
00:16:18,400 --> 00:16:21,360
combination of recruiting W
Levak and Crane Hill and maybe

352
00:16:21,360 --> 00:16:24,160
Popolski at that point as well.
In in free cash.

353
00:16:24,400 --> 00:16:26,000
In free cash.
In free cash.

354
00:16:26,680 --> 00:16:29,240
To to to understand your
philosophy a bit better, Hank,

355
00:16:29,240 --> 00:16:32,200
'cause I quite like it.
You seem to really hunt out

356
00:16:32,200 --> 00:16:36,240
these low CapEx restart type
players of brownfield expansion.

357
00:16:36,560 --> 00:16:40,160
Can you expand a bit on on why
you've come to that being the

358
00:16:40,240 --> 00:16:42,480
one of the foundations of your
investment approach?

359
00:16:42,760 --> 00:16:45,640
I think one of the biggest, one
of, I think there's a number,

360
00:16:45,640 --> 00:16:47,000
there's a number of reasons for
it.

361
00:16:47,000 --> 00:16:49,880
One is 1 is just that it really
does seem to me that the

362
00:16:50,200 --> 00:16:53,080
actually, again, you look at new
World cop, new world resources

363
00:16:53,080 --> 00:16:56,320
stuff with a, with a relatively
high IRR, stuff that's got a

364
00:16:56,320 --> 00:16:59,800
relatively crown field stuff
tends to have a relatively short

365
00:16:59,920 --> 00:17:01,640
start up time, so on and so
forth.

366
00:17:01,640 --> 00:17:04,119
It's not going to be the, it's
not going to be a Vacuumia

367
00:17:04,119 --> 00:17:06,520
district play or whatever, but
it's it's going to get in

368
00:17:06,520 --> 00:17:09,119
production probably before those
guys do, assuming it's a halfway

369
00:17:09,119 --> 00:17:12,480
decent project.
And that I think on the one hand

370
00:17:12,480 --> 00:17:14,280
you've got some mining
investors, they'll tell you the

371
00:17:14,280 --> 00:17:16,800
worst thing a mining company can
ever do is go into production.

372
00:17:16,800 --> 00:17:19,760
But if you've got good
management, which is by no means

373
00:17:19,760 --> 00:17:22,839
guaranteed, then I think then
you're actually you're really

374
00:17:22,839 --> 00:17:24,720
off the races.
You get that developer to

375
00:17:24,720 --> 00:17:27,160
produce a re rate.
A lot of brownfield places.

376
00:17:27,160 --> 00:17:29,520
There's another quote that I
really like actually from this,

377
00:17:29,600 --> 00:17:33,200
from this oil and gas guy who I
really respect the best place to

378
00:17:33,200 --> 00:17:35,600
look for resources where a lot
of other people have looked,

379
00:17:35,600 --> 00:17:37,480
etcetera, etcetera.
And obviously that can be true

380
00:17:37,480 --> 00:17:41,000
with Greenfield stuff as well.
But I just especially brownfield

381
00:17:41,000 --> 00:17:43,360
stuff often can be the gift that
keeps on giving, especially

382
00:17:43,360 --> 00:17:45,400
again, if you have people that
know how to work it.

383
00:17:45,400 --> 00:17:48,000
But again, I think the other
finally, the reason for it is

384
00:17:48,000 --> 00:17:49,560
just this isn't that big a
sector.

385
00:17:49,720 --> 00:17:51,400
There are only so many big
players.

386
00:17:51,880 --> 00:17:53,240
They make their moves from time
to time.

387
00:17:53,240 --> 00:17:56,000
Occasionally they do and you get
a Filo success story or whatever

388
00:17:56,240 --> 00:17:58,920
and those are awesome.
But while Filo is happening,

389
00:17:58,920 --> 00:18:02,600
there can be a Florence copper
or a sand Dionicio and Spain

390
00:18:02,640 --> 00:18:05,200
permit that there.
There can be a lot of 1530

391
00:18:05,200 --> 00:18:08,840
thousand ton a year mines for
copper that you know, while the

392
00:18:08,840 --> 00:18:11,840
big guys are really winding up
for the 20 thirties.

393
00:18:12,120 --> 00:18:15,240
So just like that, it's more
sure time is money and there's

394
00:18:15,240 --> 00:18:17,640
more surety when you can
actually get stuff going.

395
00:18:18,040 --> 00:18:21,160
That deal with KGHM like that
was that's price like you're

396
00:18:21,520 --> 00:18:25,040
you're buying a liability, it's
like you're yeah, so.

397
00:18:25,280 --> 00:18:27,600
For KGHM, it was they were
losing money on care and

398
00:18:27,600 --> 00:18:29,760
maintenance for the other mines
and they had no intention of

399
00:18:29,760 --> 00:18:31,800
bringing those into production.
Yeah, yeah.

400
00:18:31,800 --> 00:18:34,440
And I guess there, there is some
rehab obligations here that are

401
00:18:34,520 --> 00:18:36,480
being assumed.
But this team there are they

402
00:18:36,680 --> 00:18:39,200
understand the area and they,
they got a good grip of that.

403
00:18:39,360 --> 00:18:41,160
But there is a perception that
these mines are like a cigar

404
00:18:41,160 --> 00:18:42,240
butt, right?
That they're.

405
00:18:42,360 --> 00:18:44,960
Yeah, that's one of the things
that I think I try to combat

406
00:18:44,960 --> 00:18:46,480
whenever I talk about them.
Absolutely.

407
00:18:46,480 --> 00:18:49,080
There's the old tired mines.
You look at them.

408
00:18:49,080 --> 00:18:52,360
I think KGHM projected that
Merfredi W had about five years

409
00:18:52,400 --> 00:18:55,320
of mineralization left.
That was their mine plan for it.

410
00:18:55,400 --> 00:18:58,880
I was there about a month and a
half ago, was talking to an old

411
00:18:58,880 --> 00:19:01,240
miner there and he said that,
yeah, that's also what they said

412
00:19:01,240 --> 00:19:04,400
20 years ago.
So there's I think and again you

413
00:19:04,400 --> 00:19:08,560
get back to the Magna guys know
the area, they know these mines

414
00:19:08,560 --> 00:19:11,760
specifically.
And if you invest a little bit

415
00:19:11,760 --> 00:19:15,120
of upfront both development and
exploration CapEx, which is

416
00:19:15,240 --> 00:19:17,440
exactly what they're currently
doing, I think they will

417
00:19:17,440 --> 00:19:19,960
continue to get many more years
out of these mines.

418
00:19:20,320 --> 00:19:23,280
Hank, I can't we can't have you
on the podcast and not delve

419
00:19:23,280 --> 00:19:27,360
into a story that has engulfed
the attention of much of into it

420
00:19:27,360 --> 00:19:31,240
in the last couple weeks.
I'm talking about TNR gold.

421
00:19:31,280 --> 00:19:35,600
I think there's essentially A
grassroots E activist play going

422
00:19:35,600 --> 00:19:39,240
on at this very small cap
royalty like vehicle.

423
00:19:39,560 --> 00:19:41,000
I think we've got a that the
scene here.

424
00:19:41,000 --> 00:19:44,560
What the heck is TNR and why?
Like why is this company

425
00:19:44,640 --> 00:19:46,560
existing?
What's the activist angle?

426
00:19:46,880 --> 00:19:49,640
Yeah, absolutely.
It's been a fun one to follow.

427
00:19:49,640 --> 00:19:52,400
There's a lot of back and forth.
I've been probably even getting

428
00:19:52,400 --> 00:19:55,720
into it on Twitter more than I
typically would just because

429
00:19:55,720 --> 00:19:59,360
it's an interesting story.
But yeah, it's let's talk about

430
00:19:59,360 --> 00:20:01,520
TNR Gold.
So it's a royalty company.

431
00:20:01,840 --> 00:20:05,080
You guys said it's got
functionally 2 main royalties.

432
00:20:05,080 --> 00:20:09,280
One's Mariana Lithium fanning
project in Argentina, 20,000.

433
00:20:09,640 --> 00:20:12,680
Tons of lithium carbonate
equivalent a year, it'll be half

434
00:20:12,680 --> 00:20:15,880
a percent royalty after a 900K
buyback, roughly speaking.

435
00:20:15,880 --> 00:20:17,960
There's a couple they're holding
a bit of that on behalf of a

436
00:20:17,960 --> 00:20:21,160
shareholder, whatever, but let's
call it generously $1,000,000 US

437
00:20:21,160 --> 00:20:24,480
year, a little above 10K lithium
carbonate.

438
00:20:24,600 --> 00:20:27,280
And if you look at where lithium
producer trading etcetera and

439
00:20:27,280 --> 00:20:29,480
this is now I'm going to start
to get into a little bit of

440
00:20:29,480 --> 00:20:31,320
projection, what should this be
worth etcetera.

441
00:20:31,560 --> 00:20:33,920
And actually for what it's
worth, the the executive

442
00:20:33,920 --> 00:20:37,640
chairman of TNR Gold has a
blogspot article from a couple

443
00:20:37,640 --> 00:20:39,160
years ago where he actually lays
that one.

444
00:20:39,160 --> 00:20:41,280
He thinks the valuation case of
TNR Gold is.

445
00:20:41,600 --> 00:20:44,000
I actually think the numbers,
the lithium number he used is

446
00:20:44,000 --> 00:20:46,640
higher than the one that I've
used just because prices have

447
00:20:46,640 --> 00:20:49,760
moved so on and so forth.
I think is his, let's call the

448
00:20:50,120 --> 00:20:53,120
Mariana Lithium, it's probably a
$10 million US royalty.

449
00:20:53,120 --> 00:20:55,720
I think again if lithium.
That's not in production yet,

450
00:20:55,720 --> 00:20:58,080
that asset, but it's it is.
It's about to be.

451
00:20:58,160 --> 00:21:00,560
It's very like this year
exactly.

452
00:21:00,840 --> 00:21:04,320
And then the, so you know that
if you look at where TNR was

453
00:21:04,320 --> 00:21:06,880
trading in May 2025, that's
that's worth more than the

454
00:21:06,880 --> 00:21:09,360
market cap of TNR gold, which is
around 10 to $12 million

455
00:21:09,360 --> 00:21:12,280
Canadian about a month ago.
And so the big, but the bigger

456
00:21:12,280 --> 00:21:16,720
prize for TNR gold is it got a
0.36% royalty on Los Azils, the

457
00:21:17,120 --> 00:21:20,560
McEwen mining project, which is
that sets a mine that's

458
00:21:20,560 --> 00:21:22,320
essentially going to be
producing 3,000,000 lbs of

459
00:21:22,320 --> 00:21:26,240
copper for at least 30 years and
maybe for 75 years or whatever.

460
00:21:26,240 --> 00:21:29,200
And you'll look at Kurel, I
think had a Kurel, the executive

461
00:21:29,200 --> 00:21:33,000
Chairman, Tamar, I think had a
valuation for it of about $0.40

462
00:21:33,080 --> 00:21:37,000
Canadian equivalent or actually
no, sorry, about $40 million US,

463
00:21:37,200 --> 00:21:41,120
which ultimately and I think 40
to 50 is probably reasonable for

464
00:21:41,120 --> 00:21:43,760
that.
If you take $10,000 on copper

465
00:21:43,880 --> 00:21:46,000
and you take again, the fact
that again, look at New World

466
00:21:46,000 --> 00:21:48,680
resources people like people
like cash flow and copper.

467
00:21:49,040 --> 00:21:50,600
Now that's not going to be cash
flow yet.

468
00:21:50,600 --> 00:21:54,120
That's what I think 20-30.
But but it's a very long life of

469
00:21:54,120 --> 00:21:55,320
mine.
It's a big project.

470
00:21:55,560 --> 00:21:58,280
So in any event you combine
those two royalties, let's even

471
00:21:58,280 --> 00:22:02,480
call what's Azul is 40 million,
let's call area and A10 and this

472
00:22:02,480 --> 00:22:06,360
was a company that was trading
at 10 to $12 million Canadian a

473
00:22:06,360 --> 00:22:08,400
month ago.
And so there is this disconnect

474
00:22:08,720 --> 00:22:11,400
between where the royalties of
trade versus where the valuation

475
00:22:11,400 --> 00:22:14,120
of TNR gold is.
And both sides of this kind of

476
00:22:14,120 --> 00:22:17,320
campaign that seems to have
started up certainly agree upon

477
00:22:17,320 --> 00:22:21,320
that fact that this is this is a
vehicle that's trading nowhere

478
00:22:21,320 --> 00:22:23,160
close to where it's assumed now
would be.

479
00:22:23,160 --> 00:22:25,160
And so then as an investor, you
always have to ask, why is that

480
00:22:25,160 --> 00:22:27,400
the case?
Why it's about the certainty of

481
00:22:27,520 --> 00:22:29,920
when and how and whether those
cash flows accrue to

482
00:22:29,920 --> 00:22:31,280
shareholders.
There's a big.

483
00:22:31,360 --> 00:22:33,440
There's a big factor when you're
doing the calcs and that's yeah,

484
00:22:33,440 --> 00:22:35,720
you've got to figure out what's
the MPV of corporate costs and

485
00:22:35,720 --> 00:22:38,320
what's your dilution like on
your way to becoming profitable.

486
00:22:38,320 --> 00:22:40,720
And when you're sub scale kind
of royalty company, your

487
00:22:40,720 --> 00:22:42,800
overheads are pretty
tremendously interested.

488
00:22:43,000 --> 00:22:46,920
You don't quite get any value of
what the portfolio is sometimes

489
00:22:46,920 --> 00:22:48,640
worth, especially if their
development royalty like.

490
00:22:48,840 --> 00:22:51,920
Yeah, I think that's very,
that's super well said.

491
00:22:51,920 --> 00:22:55,200
And I think actually, if you, if
you look back at TNRS financial

492
00:22:55,200 --> 00:22:58,600
statements from 2024, again,
this was a $10 million company

493
00:22:58,840 --> 00:23:06,760
and they they spent over the
course of 2024, they spent

494
00:23:06,760 --> 00:23:09,840
around it, they had around a
operating loss of around

495
00:23:09,840 --> 00:23:12,720
$1,000,000 Canadian over the
course of that year.

496
00:23:12,720 --> 00:23:16,480
They actually raised a $300,000
Canadian placement, which they

497
00:23:16,480 --> 00:23:20,160
said was for exploration of the
property purposes for their

498
00:23:20,360 --> 00:23:22,560
shotgun gold.
They've got an exploration gold

499
00:23:22,560 --> 00:23:25,440
project in Alaska, which frankly
puzzles me a bit.

500
00:23:25,440 --> 00:23:27,400
I'm not sure where that comes
into the business model of a

501
00:23:27,400 --> 00:23:28,640
royalty company, but fair
enough.

502
00:23:28,960 --> 00:23:31,360
But if so, they raised that
placement 300K.

503
00:23:31,360 --> 00:23:35,240
They did about 140K Canadian of
share buybacks again, I guess in

504
00:23:35,240 --> 00:23:37,440
in recognition of the fact that
the stock was undervalued.

505
00:23:37,760 --> 00:23:40,480
And then if you look at the way
they spent the $1,000,000

506
00:23:40,480 --> 00:23:44,120
Canadian operating expenses, you
had 25K for administration fees,

507
00:23:44,120 --> 00:23:49,480
180K for consulting fees, 192K
for directors fees, 168K for

508
00:23:49,480 --> 00:23:54,640
management fees, 63 K for office
and miscellaneous, 189 K for

509
00:23:54,640 --> 00:23:56,440
professional fees.
These are all separate line

510
00:23:56,440 --> 00:23:58,680
items. 20K for property
expenses, so maybe that's

511
00:23:58,680 --> 00:24:02,240
shotgun gold. 78K for
shareholder communications and

512
00:24:02,240 --> 00:24:05,120
on top of that another 79 K just
for good measure for share based

513
00:24:05,120 --> 00:24:09,440
payments to to management.
And also just to tell remind

514
00:24:09,440 --> 00:24:12,760
people of the corporate set up
of TNR Gold.

515
00:24:12,960 --> 00:24:16,040
There's four directors, there's
the executive chairman, Carol

516
00:24:16,040 --> 00:24:19,560
Clip, the son VP of corporate
development, Constantine Clip.

517
00:24:19,880 --> 00:24:22,200
Between them they own about 14%
of the company.

518
00:24:22,200 --> 00:24:25,080
And then you've got two other
directors, one of whom's owns

519
00:24:25,200 --> 00:24:30,080
0.2% of TNR Gold and one of whom
owned as of the record date for

520
00:24:30,080 --> 00:24:32,800
the AGM 0 shares.
To the management don't own

521
00:24:32,800 --> 00:24:36,400
stock.
The board to the not the non

522
00:24:36,600 --> 00:24:38,640
family.
The non controlling family board

523
00:24:38,640 --> 00:24:40,160
numbers don't own stock
functionally.

524
00:24:40,800 --> 00:24:42,040
Gotcha.
And Hank, there, there was a

525
00:24:42,040 --> 00:24:44,320
takeover attempt here a couple
years back now.

526
00:24:44,680 --> 00:24:47,720
Absolutely.
September 2023 Lithium royalties

527
00:24:47,720 --> 00:24:53,440
made a takeover offer for CNR at
0 point at $0.08 Canadian, which

528
00:24:53,600 --> 00:24:56,600
a year and a half later last
month, TNR Gold was trading at

529
00:24:56,680 --> 00:24:59,040
5:00 to 6:00 cents Canadians,
certainly a premium to where

530
00:24:59,280 --> 00:25:00,640
they were.
It was also a premium to where

531
00:25:00,640 --> 00:25:02,200
they were at the time.
Before that, they were around

532
00:25:02,200 --> 00:25:05,240
5:00 to 6:00 cents and and so
management rejected that.

533
00:25:05,240 --> 00:25:08,080
They said it wasn't reflective
of the underlying value of TNR

534
00:25:08,080 --> 00:25:11,560
Gold's royalties.
Again, I think the activist side

535
00:25:11,560 --> 00:25:13,920
and also just for what's worth,
I don't consider myself a part

536
00:25:13,920 --> 00:25:16,680
of the activist side.
I own a small portion of TNR

537
00:25:16,920 --> 00:25:19,360
shares because I agree with the
general thesis that I think this

538
00:25:19,360 --> 00:25:21,120
thing's undervalued.
I look forward to seeing how it

539
00:25:21,120 --> 00:25:23,920
all plays out.
But, but TNR management said,

540
00:25:23,920 --> 00:25:26,760
yeah, this isn't reflective of
our airline value, we're turning

541
00:25:26,760 --> 00:25:28,640
it down.
But the day after they received

542
00:25:28,640 --> 00:25:31,720
that offer, before they publicly
responded, they actually granted

543
00:25:31,720 --> 00:25:35,080
themselves one and a half
million stock options at 5

544
00:25:35,080 --> 00:25:37,960
Canadian cents, which was the
price it was trading, then

545
00:25:38,160 --> 00:25:39,760
pretty immediately shot up to
seven cents.

546
00:25:40,320 --> 00:25:43,160
And they've also prior, sorry,
even prior to that they enact A

547
00:25:43,160 --> 00:25:46,600
shareholder rights plan with the
goal and other companies do this

548
00:25:46,600 --> 00:25:49,320
as well to insulate themselves
from the prospect of a would be

549
00:25:49,320 --> 00:25:52,280
acquirer buying up enough shares
on market to launch a hostile

550
00:25:52,280 --> 00:25:54,240
takeover.
The Canadian poison pill.

551
00:25:54,600 --> 00:25:56,600
Exactly.
Exactly.

552
00:25:56,640 --> 00:25:58,960
And they've also got change of
control payments for Purell and

553
00:25:58,960 --> 00:26:02,120
Constantine that are five times
their their annual compensation.

554
00:26:02,480 --> 00:26:04,640
I gotcha.
So I can understand the like the

555
00:26:04,640 --> 00:26:06,560
interest there's real value in
this portfolio.

556
00:26:06,560 --> 00:26:10,240
It's undervalued by the market.
There's it appears the register

557
00:26:10,240 --> 00:26:14,040
is not like there's no no one
there of size that can block a

558
00:26:14,080 --> 00:26:17,160
potential activist campaign.
The value of the portfolio has

559
00:26:17,160 --> 00:26:20,000
been validated by like a
literally a royalty company.

560
00:26:20,080 --> 00:26:20,760
Yeah.
So where does?

561
00:26:20,760 --> 00:26:22,840
That with the royalties by the
way, ultimately ended up

562
00:26:22,840 --> 00:26:26,840
acquiring a separate royalty on
Mariana that actually valued

563
00:26:26,840 --> 00:26:31,960
that, that valued the royalty
that TNR has at basically

564
00:26:32,040 --> 00:26:34,840
similar to or more than the
market cap of the company at the

565
00:26:34,840 --> 00:26:35,600
time.
Yeah.

566
00:26:35,840 --> 00:26:38,760
So, yeah.
And then the stock of TNR, it

567
00:26:38,760 --> 00:26:42,040
just drifts back into oblivion,
even though it may be short term

568
00:26:42,320 --> 00:26:44,120
backed in a takeover a couple
years ago.

569
00:26:44,120 --> 00:26:47,840
It's just it's just drifted off
and it was like like three 3-4

570
00:26:47,840 --> 00:26:49,720
cents recently.
Pretty much again there there

571
00:26:49,720 --> 00:26:52,200
wasn't much activity over the
course of 2024.

572
00:26:52,200 --> 00:26:53,760
Again, they did that three
indicate placement.

573
00:26:54,000 --> 00:26:56,480
They did the little share
buyback, no additional royalty

574
00:26:56,480 --> 00:26:58,560
transactions, no exploration
work.

575
00:26:58,960 --> 00:27:02,440
And basically, yeah, again, just
just corporate overhead to to

576
00:27:02,440 --> 00:27:06,640
keep the lights on or whatever.
So yeah, so then you get to last

577
00:27:06,640 --> 00:27:10,840
month and and you enter a
colorful Twitter personality,

578
00:27:10,880 --> 00:27:14,600
the koala as he calls himself
who exactly?

579
00:27:14,880 --> 00:27:17,080
And for what it's worth, I would
consider him a friend.

580
00:27:17,080 --> 00:27:19,480
I'd consider him a competitor if
anything.

581
00:27:19,480 --> 00:27:21,560
Actually, both are mining
investors.

582
00:27:21,560 --> 00:27:24,680
There's we talk sometimes, but
we're certainly not coordinated.

583
00:27:24,680 --> 00:27:26,720
There's lots of stuff that you
won't catch me in alpha man

584
00:27:26,720 --> 00:27:29,760
anytime soon.
And so there's so there's no,

585
00:27:29,920 --> 00:27:32,240
there's no formal relationship
whatsoever between us.

586
00:27:32,240 --> 00:27:35,160
But but I like the way he's
thinking in general terms about

587
00:27:35,160 --> 00:27:38,920
TNR, at least that again,
there's there's this unrealized

588
00:27:39,320 --> 00:27:41,600
value here.
And functionally basically, I

589
00:27:41,600 --> 00:27:43,720
know Marianne is going to start
passioning later this year.

590
00:27:43,720 --> 00:27:46,800
But again, you look at the just
baseline kind of GNA expenses

591
00:27:46,800 --> 00:27:49,560
from last year and the lion
share of that royalty is going

592
00:27:49,560 --> 00:27:53,240
to get eaten or already up to as
of March 31st, they were up to

593
00:27:53,440 --> 00:27:56,720
almost 300,000 Canadian in
accounts payable with basically

594
00:27:56,720 --> 00:27:58,120
no cash left on their balance
sheet.

595
00:27:58,200 --> 00:28:00,840
Mariana Basic you're looking to
share for basically the next

596
00:28:00,840 --> 00:28:02,720
five years.
The majority of that cash flow

597
00:28:03,040 --> 00:28:05,520
is just going right to
management, which gets back to

598
00:28:05,520 --> 00:28:09,440
the thought of should the micro
cap to royalty, stand alone

599
00:28:09,440 --> 00:28:12,160
company, public company really
be a thing or should they

600
00:28:12,160 --> 00:28:15,200
recognize shareholder value
ultimately for themselves and

601
00:28:15,200 --> 00:28:18,400
for other shareholders by
conducting a competitive process

602
00:28:18,400 --> 00:28:20,520
where they dispose of these
royalties anyway?

603
00:28:20,640 --> 00:28:25,080
Yesterday, so Koala buys stock
on on market, which is the it's

604
00:28:25,080 --> 00:28:27,720
pretty substantial volume
relative to previous trading

605
00:28:27,880 --> 00:28:30,240
history, which is the share
price higher.

606
00:28:30,240 --> 00:28:32,960
A bit of noise surfaces about
what's going on.

607
00:28:33,160 --> 00:28:35,000
What is that?
How do you read the situation?

608
00:28:35,320 --> 00:28:39,680
At this point or you know, or at
that, or I guess at that point,

609
00:28:39,720 --> 00:28:42,360
at that point, I think, yeah,
it's a tough item.

610
00:28:42,600 --> 00:28:46,600
At that point, I think Koala did
you know what a shareholder

611
00:28:46,600 --> 00:28:48,960
would do?
It's you, you buy up the stock

612
00:28:49,120 --> 00:28:52,120
and then, then and only then
once he he clearly bought a fair

613
00:28:52,120 --> 00:28:54,280
amount of stock on market.
Did he express any public

614
00:28:54,280 --> 00:28:56,560
opinion about TNR or its
management?

615
00:28:56,720 --> 00:28:59,800
Encourage Encourage shareholders
to vote against the re election

616
00:28:59,800 --> 00:29:01,480
of directors.
He certainly did.

617
00:29:01,560 --> 00:29:04,800
And then the AGM happened about
a little over a week ago.

618
00:29:04,880 --> 00:29:07,160
TNR, all directors were re
elected.

619
00:29:07,360 --> 00:29:09,920
TNR has not released the voting
results.

620
00:29:10,240 --> 00:29:13,560
They actually, in a tweet
earlier today, the executive

621
00:29:13,560 --> 00:29:17,120
chairman of TNR, both said that
they weren't required to release

622
00:29:17,120 --> 00:29:19,360
the voting results, but then
also said that they might

623
00:29:19,360 --> 00:29:21,080
release the voting results.
And they were consulting with

624
00:29:21,080 --> 00:29:23,200
lawyers about whether or not to
release the voting results.

625
00:29:23,480 --> 00:29:28,520
Then also released a purported
transcript from Grok of asking,

626
00:29:28,520 --> 00:29:31,440
oh, were these results because
they used the words overwhelming

627
00:29:31,440 --> 00:29:33,920
support for these voting results
that they haven't released.

628
00:29:34,280 --> 00:29:38,120
And Carol asks Grok, well, were
these results overwhelming or

629
00:29:38,120 --> 00:29:40,480
not?
And so then Grok says yes, they

630
00:29:40,480 --> 00:29:43,240
were.
The result of XX percent is

631
00:29:43,240 --> 00:29:46,000
considered overwhelming.
The actual voting percent, once

632
00:29:46,000 --> 00:29:48,280
again, is redacted.
So I'll leave listeners to draw

633
00:29:48,280 --> 00:29:50,240
their own conclusions about what
all that means.

634
00:29:50,560 --> 00:29:53,160
But I think I, for one, think
it'd be great to see those

635
00:29:53,320 --> 00:29:56,280
voting results at some point.
If there's one observation on on

636
00:29:56,520 --> 00:29:59,840
activist campaigns that involve,
I guess turfing an incumbent

637
00:29:59,840 --> 00:30:03,360
board, it's that the incumbent
board really does not like that

638
00:30:03,360 --> 00:30:05,080
proposition.
They especially don't like it in

639
00:30:05,080 --> 00:30:08,560
this public and they go to some
pretty extreme lengths to defend

640
00:30:08,560 --> 00:30:09,680
their position.
No.

641
00:30:09,680 --> 00:30:11,240
And one can certainly understand
that.

642
00:30:11,240 --> 00:30:13,640
And again, again, I don't
consider myself part of an

643
00:30:13,640 --> 00:30:15,680
activist campaign.
And I think there's I think

644
00:30:15,680 --> 00:30:20,480
there's a pathway to realization
of TNR value that involves the

645
00:30:20,480 --> 00:30:23,480
existing board staying in place
right up until the time that

646
00:30:23,800 --> 00:30:26,400
that the royalties are sold off
and everything when everybody

647
00:30:26,400 --> 00:30:29,000
can go home happy.
I think that the Koala certainly

648
00:30:29,000 --> 00:30:32,320
came out strong, it seems with
the call to withhold votes and

649
00:30:32,520 --> 00:30:33,960
management certainly has
responded.

650
00:30:33,960 --> 00:30:37,200
But even more strongly and more
personally, I'm not sure how

651
00:30:37,200 --> 00:30:39,920
productive any of that is
relative to just the question of

652
00:30:40,000 --> 00:30:42,240
how does one realize value.
Because again, before, before

653
00:30:42,240 --> 00:30:45,400
the call came along, let's just
rewind again, This was a stock

654
00:30:45,400 --> 00:30:48,000
that had been stuck in that 5 to
6 cent trading range for about

655
00:30:48,000 --> 00:30:50,720
18 months since the last offer.
And there were really no signs

656
00:30:50,720 --> 00:30:52,920
on the horizon.
There's this cryptic

657
00:30:52,920 --> 00:30:56,120
announcement about a strategic
review and what exactly that

658
00:30:56,120 --> 00:31:00,400
means, but so I'm not sure how
prospective shareholder pre

659
00:31:00,400 --> 00:31:03,720
Koala would have had assurances
that that there'd be any swift

660
00:31:03,960 --> 00:31:05,360
for that.
This is why the whole campaign

661
00:31:05,360 --> 00:31:07,600
is like really quite interesting
to me is because you've already

662
00:31:07,600 --> 00:31:10,640
had a third party like a like
Lithium Royalty Corp.

663
00:31:10,680 --> 00:31:12,640
They want they've wanted to buy
this, they wanted to pay $0.08

664
00:31:12,640 --> 00:31:16,560
for this.
They couldn't do what Koala has

665
00:31:16,560 --> 00:31:19,640
done and buy stock and kind of
launch a grassroots kind of

666
00:31:19,640 --> 00:31:24,200
activist campaign because
because like the the poison pill

667
00:31:24,200 --> 00:31:26,680
that was deployed, the right
issue, which kind of nullifies

668
00:31:26,680 --> 00:31:29,200
the ability to have influence in
in in that sense, the only way

669
00:31:29,200 --> 00:31:32,600
you can actually get an outcome
is if it it's like a non

670
00:31:32,600 --> 00:31:35,320
coordinated, non centralized,
kind of like a sufficiently

671
00:31:35,320 --> 00:31:38,800
large crowd of motivated
shareholders all kind of reading

672
00:31:38,880 --> 00:31:41,000
the tea leaves and wanting the
same thing because they say,

673
00:31:41,160 --> 00:31:43,960
they say undervalued equity.
Absolutely.

674
00:31:43,960 --> 00:31:47,960
Which is, and I think we were,
I, I don't recall seeing

675
00:31:47,960 --> 00:31:51,160
anything quite like this before.
And it's been, it's certainly

676
00:31:51,160 --> 00:31:53,600
been fascinating to watch it
play out on Twitter.

677
00:31:53,600 --> 00:31:57,720
Do you look at ceo.ca as well?
And there's people are, and I

678
00:31:57,720 --> 00:31:59,880
think part of the reason
actually that there is this,

679
00:32:00,000 --> 00:32:02,760
this, I don't know, this crowd
sourced interest in this

680
00:32:02,760 --> 00:32:05,800
particular campaign is because
I, I think there's some sort of

681
00:32:05,800 --> 00:32:09,120
question once again, like there
is actual real realizable value

682
00:32:09,120 --> 00:32:11,280
here.
Unlike a lot of junior miners

683
00:32:11,280 --> 00:32:14,560
that, that might have high
operating expenses relative to

684
00:32:14,560 --> 00:32:16,280
their market caps, but it's not
clear.

685
00:32:16,280 --> 00:32:18,240
There's a bunch of it's all
exploration or whatever.

686
00:32:18,240 --> 00:32:20,000
So there's not really.
Again, there's.

687
00:32:20,040 --> 00:32:22,720
There is realizable value here.
There's nothing particularly

688
00:32:22,720 --> 00:32:26,560
abnormal about like the the
management team and dilution and

689
00:32:27,080 --> 00:32:28,400
high.
Overhead, yeah, I mean, it's not

690
00:32:28,480 --> 00:32:30,440
crazy the thing that is
differentiated.

691
00:32:30,680 --> 00:32:34,360
Is is the value of the portfolio
is so, yeah, so clear.

692
00:32:34,760 --> 00:32:36,800
Hank, if you have to, if you
have to put some money on an

693
00:32:36,800 --> 00:32:39,480
outcome, where are we in by the
end of the year?

694
00:32:39,480 --> 00:32:40,760
What kind of happens with this
one?

695
00:32:41,120 --> 00:32:43,440
Oh man, I don't know.
And I think a lot of it will

696
00:32:43,560 --> 00:32:48,320
depend on, on the how willing
management is to look at the

697
00:32:48,320 --> 00:32:51,440
situation and say, hey, we
actually we have an opportunity

698
00:32:51,440 --> 00:32:54,000
to make a lot of money for
ourselves and our shareholders

699
00:32:54,080 --> 00:32:59,240
by, by by hastening our efforts
to, to really start a

700
00:32:59,240 --> 00:33:01,120
competitive process here and
wind down the company.

701
00:33:01,160 --> 00:33:03,880
For what it's worth, my, I'm
actually both in terms of

702
00:33:04,120 --> 00:33:06,360
literally having put my money,
I'm a little bit on the fence

703
00:33:06,360 --> 00:33:07,880
again, I've got a small
investment.

704
00:33:07,880 --> 00:33:10,960
I think if I see progress
towards anything that looks like

705
00:33:10,960 --> 00:33:14,480
it'll cause those royalties to
get sold all very likely buy in

706
00:33:14,480 --> 00:33:16,760
more at the moment.
I think it's a hard one to

707
00:33:16,760 --> 00:33:19,240
forecast.
I don't know it's a it's a

708
00:33:19,240 --> 00:33:21,920
opaque registry.
I don't know really many of the

709
00:33:21,920 --> 00:33:24,920
other shareholders again, the
the kind of the crowd sourced

710
00:33:24,920 --> 00:33:27,320
activist campaign.
It's a fascinating thing to

711
00:33:27,320 --> 00:33:28,760
watch.
I think we'll see.

712
00:33:29,040 --> 00:33:32,800
We'll see how much sustained
bullet has assuming that's even

713
00:33:32,800 --> 00:33:34,760
the way that it plays out or opt
to go.

714
00:33:34,760 --> 00:33:37,360
So I'm going to give a really
lame answer of I'm not sure.

715
00:33:37,600 --> 00:33:40,960
No worries.
I reckon we can talk a bit about

716
00:33:40,960 --> 00:33:42,600
Iperion X.
You guys can.

717
00:33:43,040 --> 00:33:45,360
Very curious, right?
This is I'd love to if you guys

718
00:33:45,360 --> 00:33:47,400
got time.
Yeah, this is a really

719
00:33:47,400 --> 00:33:49,520
interesting 1 and I'm excited
that you want to chat about it,

720
00:33:49,520 --> 00:33:54,720
Hank, because it's not a mining
company and they've got a couple

721
00:33:54,720 --> 00:33:58,800
bits of patented technology in a
sort of metallurgical process

722
00:33:59,080 --> 00:34:02,920
that is is their kind of edge.
And the the rough numbers around

723
00:34:02,920 --> 00:34:06,040
what the opportunity could be
enticing, but it's a hard 1 to

724
00:34:06,040 --> 00:34:07,760
get up to speed with to
validate.

725
00:34:07,760 --> 00:34:10,120
So how have you gone about that
process of getting comfortable

726
00:34:10,120 --> 00:34:12,280
with it?
It took me a long while to I

727
00:34:12,280 --> 00:34:13,480
guess is the first thing I'll
say.

728
00:34:13,480 --> 00:34:16,960
I this is when I watched for
probably close to 18 months and

729
00:34:17,239 --> 00:34:20,480
pretty much since I started the
fun, but didn't pull the trigger

730
00:34:20,480 --> 00:34:23,280
on and missed out on a lot of
games in the process just

731
00:34:23,280 --> 00:34:26,800
because a lot of the stuff you
said it's that's not a pureplay

732
00:34:26,800 --> 00:34:29,960
mining company.
I think that the story has

733
00:34:30,040 --> 00:34:33,679
evolved over the years and
continues to evolve in terms of

734
00:34:33,679 --> 00:34:37,520
now there's I think an ever
greater focus on finished driven

735
00:34:37,520 --> 00:34:41,639
near net shape titanium product
manufacturing as opposed to even

736
00:34:41,880 --> 00:34:45,480
ignorance spherical powders.
And certainly relative to and I

737
00:34:45,480 --> 00:34:48,239
know when I was first looking at
it in 2023, a big part of the

738
00:34:48,239 --> 00:34:51,080
cell was their their upstream
mineral sands project in

739
00:34:51,080 --> 00:34:53,440
Tennessee, which you know the
which they're still working on.

740
00:34:53,440 --> 00:34:56,760
They're doing DFS and that it,
it looks like a perfectly fine

741
00:34:56,760 --> 00:34:59,160
project and eventually I think
it'll be a good component of

742
00:34:59,160 --> 00:35:01,360
their operations.
But that's not really, as I

743
00:35:01,360 --> 00:35:03,440
think you guys know as well.
And as the markets have seen,

744
00:35:03,440 --> 00:35:05,920
that's not really where the
lion's share of the value is

745
00:35:05,920 --> 00:35:07,440
here.
It's actually about being able

746
00:35:07,440 --> 00:35:11,000
to make fasteners for planes or
smartwatch cases or whatever

747
00:35:11,000 --> 00:35:14,240
that that with, like you said,
patented technologies that just

748
00:35:14,240 --> 00:35:17,640
have a significantly
significantly fewer steps,

749
00:35:17,640 --> 00:35:21,560
significantly less loss of
mineral over the course of the

750
00:35:21,560 --> 00:35:24,800
process, significantly lower
energy consumption and

751
00:35:24,800 --> 00:35:27,000
ultimately, for all those
reasons, significantly lower

752
00:35:27,000 --> 00:35:27,880
cost.
And even.

753
00:35:28,160 --> 00:35:30,880
And this was another thing that
I was frankly skeptical of for

754
00:35:30,880 --> 00:35:33,400
the longest time is you come,
you look at enough critical

755
00:35:33,400 --> 00:35:35,520
minerals plays in the world and
there's always some sort of

756
00:35:35,520 --> 00:35:39,080
trade off for why X company in
the USI lost a lot of money on

757
00:35:39,080 --> 00:35:42,400
sure, why global, for example,
because just as a that's a bad

758
00:35:42,400 --> 00:35:45,280
example of they just couldn't
mind cobalt more cheaply than

759
00:35:45,600 --> 00:35:47,640
guys in the VRC or Indonesia or
wherever.

760
00:35:47,640 --> 00:35:50,440
And so whenever you look at
first world jurisdictions or

761
00:35:50,440 --> 00:35:52,960
whatever, as I do, you get used
to the thought of maybe if

762
00:35:52,960 --> 00:35:54,480
there's enough government help,
etcetera.

763
00:35:54,800 --> 00:35:57,080
It seems like from all
indicators, And again, the proof

764
00:35:57,080 --> 00:35:58,720
will be in the pudding once
these guys are ramped up.

765
00:35:58,720 --> 00:36:01,920
But that actually there's just a
structural advantage to the

766
00:36:02,000 --> 00:36:05,400
metallurgical processes that
they have patent in and they or

767
00:36:05,560 --> 00:36:07,640
the company they bought it from
ultimately the University of

768
00:36:07,640 --> 00:36:11,040
Utah have been working on for
over a decade at this point.

769
00:36:11,280 --> 00:36:14,320
So that's like we're students of
commodity markets.

770
00:36:14,320 --> 00:36:19,120
From time to time, technology
will disrupt cost curves and

771
00:36:19,280 --> 00:36:22,800
there'll be some new way that
can help produce some commodity,

772
00:36:22,800 --> 00:36:24,080
the cheaper price and everyone
else.

773
00:36:24,080 --> 00:36:26,280
And if you've got a pattern,
happy days, you know, with the

774
00:36:26,280 --> 00:36:27,880
pig.
And that's the pitch here for

775
00:36:27,880 --> 00:36:31,040
what iperion X is doing.
I know people that I like.

776
00:36:31,320 --> 00:36:34,760
I have tremendous respect for
that both like mega, mega

777
00:36:34,760 --> 00:36:37,840
Iperion X bulls and also mega
Iperion X bears.

778
00:36:37,840 --> 00:36:40,960
And the bulls kind of point to
this tech being validated and

779
00:36:40,960 --> 00:36:43,600
the bears point to the there
being no sales and the tech not,

780
00:36:43,680 --> 00:36:45,480
hence the tech not being
validated.

781
00:36:45,480 --> 00:36:48,080
And I suppose that's the
opportunity you take as well if

782
00:36:48,080 --> 00:36:49,760
you're, if you're long or short
this one.

783
00:36:49,760 --> 00:36:52,880
But how did you get comfortable
in your view that everything

784
00:36:52,880 --> 00:36:53,800
works?
Yeah.

785
00:36:53,800 --> 00:36:56,160
And that it can go from web
scale to commercial scale?

786
00:36:56,400 --> 00:36:59,520
So I suppose the big question.
I think actually going, it's

787
00:36:59,560 --> 00:37:02,680
been my backyard relatively.
It's just down in Virginia.

788
00:37:02,680 --> 00:37:06,120
I drove down, got breakfast on
the way and was there by 8:00

789
00:37:06,120 --> 00:37:07,840
AM.
It's actually walking through

790
00:37:07,840 --> 00:37:10,160
the facility seeing the parks
they're making.

791
00:37:10,440 --> 00:37:14,240
I actually, I think that's all
surprisingly really helpful and

792
00:37:14,440 --> 00:37:16,960
not just in the oh, wow, I saw
it, but in terms of walking

793
00:37:16,960 --> 00:37:19,400
through, OK, here is this piece
of equipment and they've

794
00:37:19,400 --> 00:37:22,920
currently got installed for
their 125 ton a year pilot plant

795
00:37:22,920 --> 00:37:25,200
scale operation.
But it actually isn't going to

796
00:37:25,200 --> 00:37:28,720
require any modifications to be
able to handle a hundred 1000

797
00:37:28,720 --> 00:37:31,600
tons a year throughput, which is
what the current building that

798
00:37:31,600 --> 00:37:35,960
they I guess the current roof
over their their powder

799
00:37:35,960 --> 00:37:38,560
production operations.
It looks like that's what back

800
00:37:38,560 --> 00:37:41,640
and handle and so there's look,
there's always risk in scaling.

801
00:37:41,640 --> 00:37:43,640
And I think actually back to
your other point, I think

802
00:37:43,640 --> 00:37:46,400
there's probably even more, I
wouldn't even call it risk.

803
00:37:46,400 --> 00:37:48,760
I just think there's going to be
teething problems in terms of

804
00:37:48,760 --> 00:37:50,880
sales.
The more downstream you go, the

805
00:37:50,880 --> 00:37:53,400
more towards finished products,
the more bespoke those contracts

806
00:37:53,400 --> 00:37:54,760
are going to be.
A lot of them are going to be

807
00:37:54,760 --> 00:37:57,560
pretty small dollar things.
The margins on it may be

808
00:37:57,560 --> 00:38:00,000
perfectly good because you're
essentially 3D printing again, a

809
00:38:00,000 --> 00:38:03,280
bolt or whatever that these guys
can make for under a buck and it

810
00:38:03,280 --> 00:38:05,520
would sell for $22.00.
So it's that's great.

811
00:38:05,520 --> 00:38:08,120
If you're only selling a few
hundred of them, it takes a long

812
00:38:08,120 --> 00:38:09,920
way to justify a billion dollar
market cap.

813
00:38:09,920 --> 00:38:13,120
So I certainly hear where the
where the shorts are coming from

814
00:38:13,120 --> 00:38:14,640
on that.
At the end of the day, I think

815
00:38:14,640 --> 00:38:18,000
though, if the tech works, the
size of the market opportunity

816
00:38:18,000 --> 00:38:20,480
is what it is.
These guys can't out compete

817
00:38:20,600 --> 00:38:24,240
Everybody in that assuming that
the tech works and they have

818
00:38:24,240 --> 00:38:27,760
enough, they're just on that.
I actually think of course I

819
00:38:27,760 --> 00:38:31,240
would say that.
So I first invested in November

820
00:38:31,400 --> 00:38:34,920
of this past year.
I think this is an exciting time

821
00:38:34,920 --> 00:38:38,200
to be invested in my humble
opinion because you're right on.

822
00:38:38,400 --> 00:38:41,080
There's in my mind just enough
proof that things work.

823
00:38:41,360 --> 00:38:44,480
But if you one waits till the
time that you're actually OK,

824
00:38:44,480 --> 00:38:48,120
they're doing $200 million a
year in turnover then OK, cool.

825
00:38:48,200 --> 00:38:50,120
You've almost by that point, I
think it's going to be

826
00:38:50,200 --> 00:38:53,400
blisteringly apparent to the
markets where the opportunity is

827
00:38:53,400 --> 00:38:56,280
and has been.
That's so yeah, I guess I think

828
00:38:56,280 --> 00:39:00,080
sales that's going to be a
process for them and there's

829
00:39:00,080 --> 00:39:02,720
probably going to be an art to
actually going out.

830
00:39:02,720 --> 00:39:06,960
But again, they've got, you
know, you look at 4 blocky DoD

831
00:39:06,960 --> 00:39:09,600
at this point where they're
they've got enough third party

832
00:39:09,600 --> 00:39:12,080
contracts and validation.
I think the tap really is real.

833
00:39:12,360 --> 00:39:16,040
The DoD part is really
interesting because these guys,

834
00:39:16,040 --> 00:39:17,960
you can see the narrative being
painted that they'll be a

835
00:39:17,960 --> 00:39:21,600
Western champion of swords.
Yeah, but on the one hand, you

836
00:39:21,600 --> 00:39:24,680
want to have that kind of
support from your government.

837
00:39:24,680 --> 00:39:28,920
That's a handy thing to have,
but you don't want to be reliant

838
00:39:29,240 --> 00:39:31,480
on it.
So how do you think about that?

839
00:39:31,760 --> 00:39:34,480
Yeah, you're super.
You don't want to be beholden to

840
00:39:34,480 --> 00:39:36,760
them.
I went back to my predilection

841
00:39:36,760 --> 00:39:40,120
for low CapEx operations.
I think if you look at these

842
00:39:40,120 --> 00:39:43,960
guys balance sheet, I think they
had $66 million US on as of

843
00:39:43,960 --> 00:39:48,440
March 31st before, before they
got their $47 million DoD grant.

844
00:39:48,760 --> 00:39:51,800
They could have my understanding
and later this year we'll get

845
00:39:51,960 --> 00:39:54,880
they're going to release some
whole updated plan of what their

846
00:39:54,880 --> 00:39:58,000
expansion plans are going to be
and whether they'll all cost

847
00:39:58,000 --> 00:39:59,920
etcetera.
I know there's been projections

848
00:39:59,920 --> 00:40:03,480
of 2000 tons next and I'd be
essentially cloning the existing

849
00:40:03,480 --> 00:40:05,680
facility.
I think from conversation with

850
00:40:05,680 --> 00:40:07,840
them, it sounds like they may
try to scale that up further,

851
00:40:08,040 --> 00:40:10,280
but that'll take longer, higher
CapEx, etcetera.

852
00:40:10,280 --> 00:40:12,080
But again, this isn't a mining
company.

853
00:40:12,400 --> 00:40:16,440
It doesn't take that that much
money to and most of these the

854
00:40:16,440 --> 00:40:19,080
patents.
Are proprietary, but most of the

855
00:40:19,080 --> 00:40:24,120
actual equipment is shelf or
only requires some modifications

856
00:40:24,120 --> 00:40:25,520
etcetera.
It's not like they're having to

857
00:40:25,520 --> 00:40:27,000
build a ton of stuff from
scratch.

858
00:40:27,080 --> 00:40:28,800
That's.
Anyway back to your question

859
00:40:28,800 --> 00:40:32,520
about yeah, you don't want to be
only ADOD show.

860
00:40:32,520 --> 00:40:35,720
The first thing to say is
actually in the scheme of shows

861
00:40:35,720 --> 00:40:38,760
to be a 1 trick pony on it.
I've got a good buddy who's who

862
00:40:38,760 --> 00:40:42,880
basically mainly just invests in
the in defense, private equity

863
00:40:42,960 --> 00:40:46,240
and for better or worse being
beholden to the USDOD, there are

864
00:40:46,240 --> 00:40:48,360
worse sole customers to have in
this world.

865
00:40:48,440 --> 00:40:51,520
You can, you can get a pretty
good market cap and some pretty

866
00:40:51,520 --> 00:40:54,680
good margins from that.
But but I think ultimately if

867
00:40:54,680 --> 00:40:57,200
you can use those guys and
again, there's, there's Ford,

868
00:40:57,200 --> 00:40:59,560
there's Aprim.
I think I actually think some of

869
00:40:59,560 --> 00:41:02,360
the other civilian applications,
maybe not aerospace as much

870
00:41:02,360 --> 00:41:03,800
they're selling smartwatches as
well.

871
00:41:03,800 --> 00:41:07,000
There's I think some of that
stuff actually the sales cycle

872
00:41:07,000 --> 00:41:08,960
is going to be shorter.
So I think they're going to be

873
00:41:08,960 --> 00:41:11,120
able to build that in tandem
anyway.

874
00:41:11,200 --> 00:41:14,360
And for what it's worth, there's
obviously a huge push in the US

875
00:41:14,360 --> 00:41:17,680
right now in the city where I
sit with you see, to to make,

876
00:41:17,760 --> 00:41:20,160
make everything in America or
everything about critical

877
00:41:20,160 --> 00:41:21,840
minerals.
I think it was also a green

878
00:41:21,840 --> 00:41:23,920
story.
And if we ever get a shift in

879
00:41:23,920 --> 00:41:26,720
politics here again, I think I
fear in X in particular, it's a

880
00:41:27,120 --> 00:41:29,960
functionally A0 carbon
manufacturing process, etcetera.

881
00:41:30,000 --> 00:41:31,560
That's, I think, an underrated
thing as well.

882
00:41:31,880 --> 00:41:34,520
Fascinating mate.
Yeah, the the US military is

883
00:41:34,520 --> 00:41:36,320
known for handing out some big
contracts, so they're not the

884
00:41:36,320 --> 00:41:38,360
worst customer to have in the
world.

885
00:41:38,360 --> 00:41:42,000
And the but the DoD funding is
known for maybe maybe picking

886
00:41:42,040 --> 00:41:43,960
some curious choices to allocate
to as well.

887
00:41:44,120 --> 00:41:46,320
Also true, because yeah, I know.
Fantastic.

888
00:41:46,320 --> 00:41:48,080
Thanks a bunch for joining us,
Hank.

889
00:41:48,080 --> 00:41:51,160
I really enjoyed picking apart
through these stories and yeah,

890
00:41:51,160 --> 00:41:53,800
learning about some companies we
don't speak an awful lot about.

891
00:41:53,800 --> 00:41:57,600
So thanks for making the effort
quite late over your time.

892
00:41:57,960 --> 00:42:01,200
Absolutely, guys, next time
you're here or next time I make

893
00:42:01,200 --> 00:42:03,440
my way out to Australia, it'd be
great to get a beer.

894
00:42:03,920 --> 00:42:05,920
Absolutely, mate.
You should join us for thanking

895
00:42:05,920 --> 00:42:07,880
our partners.
Stay on the line for that one.

896
00:42:08,240 --> 00:42:09,040
A massive.
Thank you.

897
00:42:09,400 --> 00:42:12,040
Your favorite company, Hank
Mineral Mining Services as well

898
00:42:12,040 --> 00:42:14,640
as Grounded Sandy Ground
Support, K Drew and Cross

899
00:42:14,640 --> 00:42:16,120
Boundary Energy.
Who to Rove?

900
00:42:17,120 --> 00:42:19,920
Now remember, I'm an idiot.
JD is an idiot.

901
00:42:20,280 --> 00:42:22,360
If you thought any of this was
anything other than

902
00:42:22,360 --> 00:42:25,080
entertainment, you're an idiot.
Then you need to read out a

903
00:42:25,080 --> 00:42:25,520
disclaimer.