What the Ellison allegations mean for MinRes

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Righto money miners, another
week and another week of money

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of mine's marketing strategy
still available to everyone.

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Give MMSA contract and you get
your project displayed in the

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intro, like far out, like get
rid of investor relations.

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We're doing it for you.
How easy is that?

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And it's just a smart move to
give MMS the open big contract.

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Yeah, it's it doubles the
marketing strategy and just a

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smart thing to do.
It's pretty much a free bonus.

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Free bonus boys, how are we
today?

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Very well, very good mate.
I, I saw your message come

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through this morning.
You said you'd done a bit of

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thinking on, on what to kind of
talk about and, and hope there

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wasn't any, any big news.
And then Min Rez never, never

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ceases to, to disappoint us.
So I think we've got a bit to

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chat about.
Yeah, that was in circulation

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already.
So there's a big AFR article.

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Travis gonna go through all
that.

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I'm just gonna RIP through a few
quarter couple of quarters from

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last week or abanda evos that we
missed because the non show days

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didn't get time for Genesis bit
of Bellevue today.

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JD, what do you got?
I'm going to chat about the sort

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of strategy shift that we might
be seeing from Rio and BHP, as

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well as a sort of wine through
some of the the high grade

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stuff.
A bit of an interesting rabbit

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hole of falling down mate.
Yes, right, I tried.

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Might the IFR article coming out
about end of last week about

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mate tell you what long detailed
like this wasn't 2 day jobby

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mate take us into what is
actually going on here in the

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world of min raised?
A lot just keep the story just

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keeps getting juicier and
better.

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I remember saying like, I don't
know about a couple months ago,

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just that min raised is the most
fascinating corporate story of

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our court.
I think, you know, generation at

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the time, at that time and just
keeps just keeps delivering more

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and more juice, Goss,
excitement, talking infinite

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knowledge.
What what's happened here is

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Neil Chenoweth has has has
written an investigative piece

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on on Minrez's founder, Chris
Allison and some former top

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executives at at the company.
Neil is a a proper investigative

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journal.
Like, you know, we're talking

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multiple Walkley awards, like,
you know, when, when Neil writes

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an expose or, or an
investigative face like you, you

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pay attention, there's
implications, there's, you know,

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big, big things happening here.
He's done heaps of work, you

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know, this is a, you know,
pretty, pretty well respected

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journal.
And his, his article basically

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reads like a stunning expose of,
of, of some questionable use of

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corporate funds going way back,
which at a minimum could be

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described as, you know, the tax
evasion scheme and, and, you

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know, more damning
interpretation of the events

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could be something a fair bit
worse than that.

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And, and while we generally, we
generally like to steer clear of

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some of the more gossipy type
of, of, of corporate Australia

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stories from the, the podcast, I
think I've got to make the case

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of why this actually really
matters to, to the money miners,

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to our audience and everything
like that.

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Because all I've got to do is
just play this spark replay of

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Minarez on open today down 13%
more than $1.1 billion of market

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cap value kind of kind of going
on open.

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And it's, it's in, you know, I
think that's, that's a response.

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Today's an update on the market
that's in response to the

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implications of what this
investigative piece you know has

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on, on people's perceptions have
been raised in its in its

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leadership and its governments.
It's funny when you talk about

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by the the the mining community
and it was probably around that

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similar period, the history of
tax evasion schemes for like

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people that just worked in the
industry.

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There was all these the tea tree
scheme where they a lot of

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miners put into this thing that
was essentially these separate

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these schemes where you avoided
tax and a lot of them had to pay

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it all back like it was it was
Roth back in the day.

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I'm not sure if it was around
this time.

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And these were workers.
Yeah.

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So it's.
I don't.

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Know anything about that?
Yeah.

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Yeah, and it's like it got
uncovered eventually, but it was

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all the greatest thing ever when
they were doing it.

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Yeah, but it just catches up
with you.

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Yeah.
So Trev, what did Neil get into?

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What are the allegations I sort
of put forward?

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And obviously Minres came and
made a statement today when we

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start there.
Neils article alleges that Chris

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Allison was involved in a tax
evasion scheme from 2003 to 2014

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using a company named Far East
Equipment Holdings, based in the

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British Virgin Islands.
This scheme involved buying

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machinery with Minrez's
shareholder funds and then

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selling it back to Minrez at
inflated prices, creating

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unreported profits.
Far East was 51% owned by Chris

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Allison, while four other execs
had varying minority interests

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in that British Virgin Islands
company.

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Chris himself apparently
received an Ato audit notice in

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in August 2007, shortly after
Minres went public in 2006, and

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despite the audit, Allison
didn't disclose the extent of

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the dealings with Far East.
In 2019, Allison attempted to

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negotiate a deal with the Ato to
disclose the scheme voluntarily

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in exchange for reduced
penalties and and no referral to

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other law enforcement regulatory
bodies.

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The Ato identified behaviour
amounting to evasion for several

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income years with undisclosed
income from, you know, this

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scheme reaching around $13
million.

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And to be clear, what's going on
here is, is it like a transfer

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pricing scheme?
Min Res's staff apparently would

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buy machinery, you know, like
equipment, but it would later

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show up that it was actually Far
East Equipment Holdings that was

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that was buying the, the
equipment fire E.

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You know, they would then sell
these crushes or ball mills or

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or batching plants, etcetera to
Min Rez companies for, you know,

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sometimes multiples of the
original cost.

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And Min Rez would then use the
inflated purchase price to claim

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depreciation in its tax returns.
Where it gets worse, you know,

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one of the beneficiaries of the
scheme was Peter Wade, who was,

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he was actually MD of Min Rez at
the time of the IPO.

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But he was, importantly, he was
chairman of Min Rez from 2008

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until March 2022.
He, he reaped 10% of the, you

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know, the, the gains from the
scheme, which was about $663,000

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himself.
And on the, on the Far East sort

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of side of the, the Ledger,
they, you know, the profits

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we're, we're not taxed in the
sense that we have a corporate

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profits tax in Australia.
This is a British, urgent

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British Islands company, but
they, you know, appear to be in

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some way distributed to the, to
the, to the, you know, the

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owners or beneficiaries in, in a
peculiar way.

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And the, and the crux of the,
the writing is that this income

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was not sort of declared as
taxable income to the, to the

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Ato as in the way it should have
been.

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I want to read 1 sort of
sentence specifically to spell

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out the type of thing that we're
talking about here.

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In another example, a Minarez
subsidiary bought a used crusher

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in 2004 for $250,000, which was
stockpiled in the Philippines.

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But the paperwork showed that it
was actually acquired by Far

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East, which in 2008 sold the
crusher to Minarez $2,000,000

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for a project that was not in
existence at the time of the

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IPO.
Jesus, right?

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So on the back of all this, Trav
Minrez have put out an

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announcement today, like I guess
addressing the the media

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statement.
What did it say?

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I mean, I think the response of
yeah, the, the, the board is

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interesting to digest.
It's a statement from James

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McLennan Clements who is the the
chair of the board.

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What I find interesting is, is
the the statement is kind of

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quick to characterise the
payments in question as being

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adequately disclosed as
liabilities in the IPO

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prospectus.
It frames the issue at hand

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mostly as a personal tax matter
of of Chris's which you know he

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in quotation mark profoundly
regrets his areas of judgement

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and it and it reaffirms the
board's support of Chris in his

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leadership of the company.
And they've and said and they've

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engaged independent legal
independent lawyers to for this

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matter.
But is that for I assume that is

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for the min Res side, not for
his personal side, correct.

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That's how.
That's how I interpret.

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That they've talked about and
and, you know having appointed

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yeah having independent lawyers
investigate this, you know in

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the series of articles written
by Neil, there's like a lot of

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instances where you can he he
draws the string that there are

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these conflicts of interest that
appear in in what are supposed

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to be independent sort of
advises throughout it's history.

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You know, particularly it's, you
know, he points at RSM as a as,

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as having conflicts advising
both Chris on a personal matter,

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but also being the independent
auditor on the audit audit

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committee at times.
But yeah, there, there there's a

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lot going on here, which I think
when you say 13% of the share

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price come off today on you
know, quote unquote, no, no news

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from the company that relates to
the business operations.

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The company.
There's there's a bit more of a

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read through.
Yeah.

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What do you make of the timing
that?

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I think it's spectacular in a
lot of ways, not just because

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like of the wild ride Minarez
has has been having as a company

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in a volatile environment, but
we're extremely close to

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Minarez's next AGM.
In fact, the notice of meeting

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went out today, you know, like
so did the company's corporate

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governance statement.
You know, ironically, I think

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we're we're in for one hell of
an AGM at at Osborne Park this

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year.
I'll be interested to see if if

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the proxy advisors actually, you
know, recommend voting against

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on any of the resolutions given
the sort of the spotlight on the

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governance at the moment.
But this is like, you know, this

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this expose a doesn't come in a
vacuum this year.

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I I feel like this is the fourth
independent instance of a pretty

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damning, you know, governance
issue at the company in the last

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12 months that I can think of.
This board, this board should be

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under tremendous pressure, but
you know, they're probably not.

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There's there's so many the the
moving parts and permutations of

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this that I think permutations
is another word I use a lot.

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It just seems flash, but the,
the, the individual like the,

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the part of this story like
being it's not just a managing

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director or a chairman, it's the
founding shareholder of the

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business, which you know, has
effect on all this.

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The the time that this can take
the, these investigations and

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what whatever may come of these
investigations could be years,

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who knows.
But what, what is going to

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happen in, I guess the short,
medium and long term you can go.

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So it's, it's, yeah, it's just
going to be fascinating to

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follow.
That's like like as you're

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reading that IFR article, you
cannot go into any more detail

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or go into anything else because
it was like it covered

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everything.
It was long.

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Yeah.
It was like obviously months and

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months and maybe years of work.
Yeah, yeah, totally done.

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Together.
So it's yeah yeah.

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I don't know what to Yeah, it's
it's your eyes, feel, see what

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happens next.
It's there's so many different

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ways this could go.
Yeah, I think it's, it's worth

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like kind of just pointing out
that like I can't think of a

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single instance in history
where, where is the, the, the

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board ever advocated for
anything other than what, what

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Chris wants.
Like I think it's, I don't know

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of any instance where that's
happened.

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So I think it's, you know, it's,
it's a real equation for, for

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the, for the media, for
shareholders, for the board to

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sort of think, yeah, like, like
are there real, are there real

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question marks over the
governance of this, of this

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company?
I think I'm not sort of speaking

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in a vacuum here.
Like you had, you've had

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articles this year about
nepotism at the company, about

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undisclosed, you know, you know,
personal interests in relation

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to, to, to family involvements,
you know, conflicts of the, the

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company's own securities trading
policy in relation to the Kelly

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Metals IPO question marks that
ownership matters actually

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raised in relation to, to, you
know, board potential conflicts

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of interest to.
So yeah, like if it wasn't Chris

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Allison and wasn't min res,
something would have happened by

224
00:12:30,760 --> 00:12:32,040
now.
But it is Chris Allison and it

225
00:12:32,040 --> 00:12:34,880
is Min res.
Yeah, yeah, mate, you can't buy

226
00:12:34,880 --> 00:12:36,920
power.
You can.

227
00:12:36,960 --> 00:12:39,920
Oh yeah.
Yeah, you can.

228
00:12:43,600 --> 00:12:46,000
Yeah, I think, I think how
you've how you've laid it out

229
00:12:46,000 --> 00:12:50,120
and obviously the, the work that
Neil has done there, it in

230
00:12:50,120 --> 00:12:52,240
simple terms just doesn't pass
the pub test, right.

231
00:12:52,920 --> 00:12:55,240
That just, that stuff just
stinks.

232
00:12:55,240 --> 00:12:59,680
And yeah, I'm fascinated to see
what what Chris, the company,

233
00:12:59,680 --> 00:13:03,040
their lawyers and independent
accountants come out with and

234
00:13:03,040 --> 00:13:06,880
how they go about explaining,
explaining this sort of

235
00:13:06,880 --> 00:13:10,240
behaviour and more importantly,
what the what the sort of

236
00:13:10,240 --> 00:13:13,520
punishment that is handed down
will ultimately look like.

237
00:13:13,840 --> 00:13:16,120
And A and a shareholder might
even interpret the sell off

238
00:13:16,120 --> 00:13:19,800
today is like interpretation of
some risk that you know, like

239
00:13:20,240 --> 00:13:22,400
Chris will no longer be leading
the company and everyone wants

240
00:13:22,400 --> 00:13:25,600
Chris to be leading the company
because of truck wreck or blah,

241
00:13:25,600 --> 00:13:27,600
blah, blah.
So, you know, like it's not as

242
00:13:27,600 --> 00:13:30,960
straightforward as yeah.
The possibility of that could

243
00:13:30,960 --> 00:13:32,320
have been the reason for the
sell off.

244
00:13:32,320 --> 00:13:36,360
Yeah, like totally.
Yeah, yeah, 100% yeah.

245
00:13:36,360 --> 00:13:38,840
Or, or it could be a read
through about, you know, other

246
00:13:38,840 --> 00:13:43,400
other things like yeah.
And one, one last thing.

247
00:13:43,400 --> 00:13:45,960
I'm in raise Ding, Ding, Ding
for Allie, JC.

248
00:13:45,960 --> 00:13:47,280
Allie, how do you feel as a
shareholder?

249
00:13:47,480 --> 00:13:51,120
Allie, JC, ATF.
She doesn't know how to feel

250
00:13:51,120 --> 00:13:51,560
anymore.
Is.

251
00:13:52,640 --> 00:13:57,240
That just, is that just the ATF
in general, JC or what's coming

252
00:13:57,240 --> 00:13:58,160
back here?
All good.

253
00:13:59,480 --> 00:14:03,560
Right, let's, let's.
Anyway, we'll keep you posted on

254
00:14:03,560 --> 00:14:06,000
any more developments buddy on
that one, right.

255
00:14:06,000 --> 00:14:10,040
Next up, few let's do a bit of a
goldy quarterly RIP through and

256
00:14:10,040 --> 00:14:12,280
a bit of copper as goldies are
becoming copperish.

257
00:14:12,280 --> 00:14:16,160
Now start with evolution coming
out last Wednesday market

258
00:14:16,160 --> 00:14:19,840
appeared to lock their quarterly
finishing up around 7% for the

259
00:14:19,840 --> 00:14:22,040
day.
So gold and copper production

260
00:14:22,040 --> 00:14:27,480
193 1/2 thousand oz and 19 and a
bit 1000 tonnes respectively.

261
00:14:27,760 --> 00:14:32,200
Group cash flow 108 bucks, So
there's a 20% increase in their

262
00:14:32,200 --> 00:14:40,200
cash balance to 484 bucks, so up
from 403, but they only added 81

263
00:14:40,200 --> 00:14:44,080
because they didn't include 21
bucks worth of stamp duty for

264
00:14:44,080 --> 00:14:46,840
the Mangari acquisition from
2021.

265
00:14:46,840 --> 00:14:49,480
So I remember back at last week
talking about time it takes to

266
00:14:49,480 --> 00:14:51,480
pay stamp duty.
That's an example of it.

267
00:14:51,680 --> 00:14:54,400
And then seven mil for someone,
some, someone else.

268
00:14:54,400 --> 00:14:56,240
There's a bit of a theme in
these callers talking about

269
00:14:56,240 --> 00:14:58,840
group cash flow, but then
there's a bit of shit after it

270
00:14:59,160 --> 00:15:01,880
though, just like what's what
did start at?

271
00:15:01,880 --> 00:15:05,760
What did it end up?
So reduction in gearing

272
00:15:05,760 --> 00:15:11,400
continued, so ending the quarter
at 23.9%, down from 25.4%.

273
00:15:11,400 --> 00:15:15,800
So the gross debt is bit over
1.8 billion and the net debt

274
00:15:15,800 --> 00:15:20,880
reduced to 1.345 billion.
But no debt was actually paid

275
00:15:20,880 --> 00:15:22,400
off.
So just the addition of a bit of

276
00:15:22,400 --> 00:15:26,000
free cash flow is what has
reduced that gearing.

277
00:15:26,000 --> 00:15:31,040
So gearing refers to the total
debt divided by the book value

278
00:15:31,040 --> 00:15:35,240
of the equity.
So for the the financial people

279
00:15:35,240 --> 00:15:36,440
out there.
Did you Google that or did you

280
00:15:36,440 --> 00:15:40,080
chat 100?
Percent Googled that, so I'll

281
00:15:40,080 --> 00:15:44,240
show you, I'll show you that
book values based on the latest

282
00:15:44,560 --> 00:15:46,760
financials that way.
Yeah, yeah.

283
00:15:46,800 --> 00:15:51,760
So now red light red like the
North American assets.

284
00:15:51,760 --> 00:15:55,240
So it actually it produced a bit
over 37,000 ounces of gold and

285
00:15:55,240 --> 00:15:59,200
generated record quarterly
operating and net mine cash flow

286
00:15:59,200 --> 00:16:04,160
of 67 million and 27 million, so
27 million net mine cash flow.

287
00:16:04,160 --> 00:16:06,920
So yeah, I'll go into that
we've.

288
00:16:07,000 --> 00:16:09,640
Seen it make money before.
Oh God, I've got that coming up,

289
00:16:09,640 --> 00:16:11,880
Trav.
So they're on track to deliver

290
00:16:11,880 --> 00:16:18,200
their 710 to 780,000 ounces of
gold and 70 to 80,000 tonnes of

291
00:16:18,200 --> 00:16:21,720
copper.
So now cow God, if you could

292
00:16:21,720 --> 00:16:24,880
bloody God, you'd spin this out
into a company by itself.

293
00:16:24,880 --> 00:16:28,560
Fuck adding 125 bucks worth of
net more on cash flow.

294
00:16:28,560 --> 00:16:34,000
So that was 73% of the group's
mine cash flow come from the cow

295
00:16:34,000 --> 00:16:36,520
mine alone.
So, and as we said, red like

296
00:16:36,520 --> 00:16:42,080
appeared to make money.
So it says they had a 27 mine of

297
00:16:42,400 --> 00:16:45,600
27 bucks of mine cash flow.
So that's not including pretty

298
00:16:45,600 --> 00:16:49,280
much everything above and beyond
that for the corporate side and

299
00:16:49,280 --> 00:16:50,480
everything.
It's 'cause they obviously got a

300
00:16:50,480 --> 00:16:52,760
lot of spread it across a lot of
assets.

301
00:16:52,760 --> 00:16:57,320
But look, they lost 25 mil mine
cash flow last quarter.

302
00:16:57,320 --> 00:17:00,880
That was after they spent 4541
bucks on growth capital for

303
00:17:01,160 --> 00:17:03,800
obviously mine development,
tailings infrastructure, which

304
00:17:03,800 --> 00:17:07,520
may be a fed into this quarter.
But look, March quarter lost 30

305
00:17:07,520 --> 00:17:12,200
mil, 30 mil loss for Jan quarter
30 million, September quarter,

306
00:17:12,960 --> 00:17:17,119
June quarter, September quarter
last year, June quarter 202369

307
00:17:17,119 --> 00:17:19,319
million loss and it just keeps
bloody count.

308
00:17:19,319 --> 00:17:23,160
So you could say well overdue
for some mine free cash flow,

309
00:17:23,160 --> 00:17:26,200
but a lot to a lot to make up
for historically.

310
00:17:26,200 --> 00:17:30,320
So and the hit came from looks
like processing pretty much

311
00:17:30,320 --> 00:17:33,680
processing at a 1,000,000 tonne
per annum run right now process

312
00:17:33,680 --> 00:17:37,040
grade lifted to above 5 grammes
and so did the recovery.

313
00:17:37,040 --> 00:17:44,120
So, but let's not forget an
extra $391.00 per ounce of

314
00:17:44,120 --> 00:17:49,040
realised sales price.
So that extra 391 bucks per oz

315
00:17:49,040 --> 00:17:51,480
is worth 14 bucks for the oz
they produce.

316
00:17:51,480 --> 00:17:56,120
So previous quarter they would
have made 8,000,000 free mine,

317
00:17:56,120 --> 00:17:58,880
free cash flow.
So something to keep in mind at

318
00:17:58,880 --> 00:18:02,440
the moment at these prices of
what is a good mine and what is

319
00:18:02,440 --> 00:18:04,680
a marginal mine.
So don't forget what the gold

320
00:18:04,680 --> 00:18:07,200
price is.
Gold price just don't mind

321
00:18:07,200 --> 00:18:08,560
makes.
Everything look good?

322
00:18:08,760 --> 00:18:11,480
Gold price?
Who would have thought North

323
00:18:11,480 --> 00:18:14,520
Parks was pretty flat month on
month for copper production with

324
00:18:14,520 --> 00:18:17,560
a bit over 7000 tonne.
So it's sort of their second

325
00:18:17,560 --> 00:18:21,480
consecutive quarter down.
But you know the total copper

326
00:18:21,480 --> 00:18:25,120
production across N Parks and
Ernest Henry near the upper end

327
00:18:25,120 --> 00:18:27,880
of the copper garden.
So it seems all tracking along

328
00:18:27,960 --> 00:18:30,680
with what they've actually
guided lost.

329
00:18:31,720 --> 00:18:34,600
It says they lost 2 mil on net
more and cash flow for North

330
00:18:34,600 --> 00:18:37,800
Parks, but they pointed to
concentrate shipments sort of

331
00:18:37,800 --> 00:18:40,080
going out next quarter that
they've already got ready to go.

332
00:18:40,480 --> 00:18:44,280
So I guess overall where the
Evos look like they're heading,

333
00:18:44,880 --> 00:18:48,280
just looking at the Canaccord
model, it says they're saying

334
00:18:48,280 --> 00:18:50,800
they're heading towards sort of
like trying to get that gearing

335
00:18:50,800 --> 00:18:54,640
ratio down to about 15% by
December 2025.

336
00:18:54,960 --> 00:19:00,200
And look, their comments were
predicting that they see them

337
00:19:00,600 --> 00:19:06,320
having like enough of a bank
balance to easily cover all the

338
00:19:06,320 --> 00:19:10,560
sustaining and short term and
long term growth CapEx, 100 mil

339
00:19:10,560 --> 00:19:14,000
of debt repayment, 200 mil worth
of divvies and still have maybe

340
00:19:14,000 --> 00:19:17,760
circus sort of half a billion in
surplus cash flow for either,

341
00:19:17,760 --> 00:19:20,520
you know, special divvy buyback
M and I.

342
00:19:20,520 --> 00:19:24,760
So still, because they still got
that $525 revolver that's

343
00:19:24,760 --> 00:19:28,960
undrawn, they could get frigging
debt or body equity wherever

344
00:19:28,960 --> 00:19:31,840
they want for any frigging big M
and I they want to do.

345
00:19:31,840 --> 00:19:36,000
So essentially they got frigging
options galore when you're that

346
00:19:36,000 --> 00:19:39,240
size.
So, but it appears they're, you

347
00:19:39,240 --> 00:19:43,240
know, building towards a point
to get that leverage down a bit.

348
00:19:43,840 --> 00:19:46,080
Yeah.
There's on the M&A front with

349
00:19:46,080 --> 00:19:50,120
them.
It's rare to see evolution.

350
00:19:51,800 --> 00:19:54,600
Oh, like you know, it's been
nearly 12 months without seeing

351
00:19:54,600 --> 00:19:57,320
them on do a, do a deal and like
that's pretty damn rare for

352
00:19:57,320 --> 00:20:00,480
evolution.
Like normally, like normally you

353
00:20:00,480 --> 00:20:03,840
seem to do like 2 deals a year.
That's how if it's not selling

354
00:20:03,840 --> 00:20:05,440
something, you know, if it's not
buying something and selling

355
00:20:05,440 --> 00:20:07,840
something.
But they've just been quiet on

356
00:20:07,840 --> 00:20:11,080
the activity front, probably
trying to get back in sort of

357
00:20:11,080 --> 00:20:13,320
favour with the market by
delivering operationally, the

358
00:20:13,480 --> 00:20:15,920
commodity tailwinds have been
pretty damn helpful as to the

359
00:20:15,920 --> 00:20:17,880
share price has rebounded like
really strongly.

360
00:20:17,880 --> 00:20:21,000
But you know, I wouldn't be
surprised to see them getting.

361
00:20:21,840 --> 00:20:25,120
Active again, it's just, it's
just in their nature.

362
00:20:25,400 --> 00:20:27,520
Yeah, and because they've got
like a billion dollars worth of

363
00:20:27,520 --> 00:20:31,240
liquidity at the moment.
And then that's just like not

364
00:20:31,240 --> 00:20:33,400
including what they're going to
bring in the future quarters and

365
00:20:33,400 --> 00:20:34,440
the.
Yeah.

366
00:20:34,440 --> 00:20:37,240
So yeah, yeah.
Not sure to fire power, that's

367
00:20:37,240 --> 00:20:38,680
for sure.
And thank God they could raise

368
00:20:38,680 --> 00:20:40,440
fucking that much equity if they
wanted to.

369
00:20:41,360 --> 00:20:44,520
I do, I do think the market was
pretty cane after the the North

370
00:20:44,520 --> 00:20:48,640
Park's acquisition just to say
them go, go a little period and

371
00:20:48,640 --> 00:20:51,920
pull that that net debt balance
back in check, make sure

372
00:20:51,920 --> 00:20:55,360
everything's all, all tickety
Boo and just bed things down a

373
00:20:55,360 --> 00:20:58,240
bit before they go and spend or
or sell again.

374
00:20:58,240 --> 00:21:00,960
You know, selling would be
obviously sort of fine and rejig

375
00:21:00,960 --> 00:21:03,840
things as the the portfolio
changes over time.

376
00:21:03,960 --> 00:21:06,920
But more on the on the buying
front, I think a few quarters of

377
00:21:06,920 --> 00:21:09,520
cash flow doing well.
Yeah, I don't think they'll be

378
00:21:09,520 --> 00:21:13,120
selling kale at any point.
So anyway, it's it's just fine

379
00:21:13,120 --> 00:21:16,360
because it got pretty it's
pretty diverse now like, you

380
00:21:16,360 --> 00:21:20,880
know, operations is what WA,
NSW, Queensland, Canada and you

381
00:21:20,880 --> 00:21:23,560
know, life just becomes a bit
complex when you got that.

382
00:21:23,560 --> 00:21:27,440
But it the same big ground
support makes your life simpler.

383
00:21:27,440 --> 00:21:31,040
Like if you do become complex
like this is like the same big

384
00:21:31,040 --> 00:21:34,360
ground sports probably the only
organisation that could, like

385
00:21:35,240 --> 00:21:38,640
you'd feel safe that they could
service all those operations in

386
00:21:38,640 --> 00:21:41,080
all those jurisdictions.
Distribution in all of those

387
00:21:41,120 --> 00:21:43,440
jurisdictions.
Yeah, yeah, like mate, you could

388
00:21:43,440 --> 00:21:46,160
start a frigging mine in Mars
and Samvic could get the ground

389
00:21:46,160 --> 00:21:49,720
support over to you there.
Be that fast, Yeah, you Chuck

390
00:21:49,720 --> 00:21:52,000
and ordering there, Yeah, faster
than Amazon.

391
00:21:52,000 --> 00:21:55,040
The Samvic rocket.
It's like, yeah, yeah, it's

392
00:21:55,680 --> 00:21:58,200
that's probably why I read like
made money this quarter.

393
00:21:58,480 --> 00:22:01,040
I think, I think, you know, we
all talk about Neil Armstrong

394
00:22:01,040 --> 00:22:03,480
being the first person to walk
on the moon, but I can see Derek

395
00:22:03,480 --> 00:22:06,520
Hurd being the first person to
walk on the moon with a split

396
00:22:06,520 --> 00:22:09,520
set.
Like that's that's probably what

397
00:22:09,520 --> 00:22:11,560
we're going to be talking about.
That's what the kids are going

398
00:22:11,560 --> 00:22:13,680
to be talking about in a
generations time.

399
00:22:13,680 --> 00:22:17,600
So thank you Sambic for making
life simpler for everyone.

400
00:22:18,600 --> 00:22:20,520
Before you go to to the next
goalie.

401
00:22:20,520 --> 00:22:23,760
Sorry, Maddie, Can I just throw
in a a deal proposition to

402
00:22:23,760 --> 00:22:25,280
evolution?
Surely they want to buy Rand and

403
00:22:25,280 --> 00:22:27,000
Tribune.
I know that it's possible to get

404
00:22:27,000 --> 00:22:28,200
a deal done with those guys, but
I.

405
00:22:28,520 --> 00:22:29,800
Thought you were going to say
Ravenswood.

406
00:22:29,800 --> 00:22:32,600
No, no, no.
Yeah, maybe.

407
00:22:32,800 --> 00:22:38,520
But yeah, random tribune Yeah,
trading like yeah, negative AV

408
00:22:38,520 --> 00:22:42,080
despite having retained economic
interest in the evolution mine

409
00:22:42,200 --> 00:22:44,840
with the amount of bullion
they've got on hand, surely Evo

410
00:22:44,840 --> 00:22:47,720
just want to wrap wrap that up
while it's yeah where it is

411
00:22:48,440 --> 00:22:50,080
none.
It might might be easier said

412
00:22:50,080 --> 00:22:51,760
than done.
I think I doubt I'm the first

413
00:22:51,760 --> 00:22:53,960
person to suggest that, and I
I'm sure that they've.

414
00:22:53,960 --> 00:22:56,520
Tried a lot but short traffic.
But I imagine it's like in terms

415
00:22:56,520 --> 00:22:58,960
of, you know, deals that are
right up there on the shopping

416
00:22:58,960 --> 00:23:01,200
list for them, I reckon that's
fuck it as high as it gets.

417
00:23:01,360 --> 00:23:06,560
There we go, third of your first
money miners, but this is

418
00:23:06,560 --> 00:23:08,040
another thing you're going.
To do if they Chuck a bit of

419
00:23:08,040 --> 00:23:11,040
copper in the vault then.
Evolution will be all over.

420
00:23:11,760 --> 00:23:15,200
What do you reckon?
Another thing you're going to

421
00:23:15,200 --> 00:23:20,200
hear first, money miners today
or a band of made money and made

422
00:23:20,200 --> 00:23:22,360
a good chunk mate well.
Done to.

423
00:23:22,400 --> 00:23:24,760
Them what a bloody bumper
quarter.

424
00:23:24,760 --> 00:23:29,200
Good on to them, good on them
and as we said, like you know,

425
00:23:29,200 --> 00:23:32,440
starting to hopefully start
backfilling some of this

426
00:23:32,440 --> 00:23:34,960
valuation because of what
they're in the 80 odd cents

427
00:23:34,960 --> 00:23:36,400
today.
Well, they're fine.

428
00:23:36,440 --> 00:23:40,280
Unbelievable bloody run.
So and look at why exceeded

429
00:23:40,960 --> 00:23:45,040
Michael of just what we're
looking out for the quarterlies

430
00:23:45,040 --> 00:23:49,320
of some sort of neutral to free
cash flow generation added 21.9

431
00:23:49,320 --> 00:23:53,840
million to the balance sheet.
So look the gold sold increased

432
00:23:54,080 --> 00:23:57,520
by 7000 oz.
So selling 25 1/2 thousand oz at

433
00:23:57,520 --> 00:24:04,000
a gold price of 30, 747, 24,000
oz were mined from Riverina with

434
00:24:04,480 --> 00:24:07,480
17 1/2 thousand ounces of that
being from the stopping.

435
00:24:07,600 --> 00:24:11,680
So 73% of that came from
stopping, which is pretty high.

436
00:24:11,680 --> 00:24:15,120
And they because they did do a
huge development quarterback in

437
00:24:15,120 --> 00:24:16,680
June.
So they that's where they

438
00:24:16,680 --> 00:24:19,920
punched a bit over 2300 metres
and 1500 of that being

439
00:24:19,920 --> 00:24:21,880
operating.
So that's obviously that was a

440
00:24:21,880 --> 00:24:23,360
lot of the ore drives you'd
assume.

441
00:24:23,360 --> 00:24:25,200
So that's obviously set this
quarter up.

442
00:24:25,200 --> 00:24:28,520
So the development did drop off
a bit this quarter, but a bit

443
00:24:28,520 --> 00:24:32,240
over 9-19 hundred metres.
So, but the capital development

444
00:24:32,240 --> 00:24:35,400
was 70 metres high this month.
So I'd anticipate, I'd

445
00:24:35,840 --> 00:24:40,360
anticipate that paper or drives
available in the June quarter.

446
00:24:40,360 --> 00:24:43,240
So I punch them everywhere,
which is more headings, which

447
00:24:43,280 --> 00:24:46,480
you know, which is flowed
through to this really good

448
00:24:46,480 --> 00:24:49,880
result this quarter.
So usually good development 1/4

449
00:24:49,880 --> 00:24:52,880
or say good stop in the next and
hopefully it's just trying to

450
00:24:52,880 --> 00:24:57,680
sustain that.
So and I the answers they

451
00:24:57,680 --> 00:25:03,200
produced, we're actually at the
bottom end of FY25 OZ guidance

452
00:25:03,280 --> 00:25:06,320
which is 100 to 110,000.
And I reckon that's it.

453
00:25:06,320 --> 00:25:10,360
That's a pretty good effort
considering their guidance is a

454
00:25:10,360 --> 00:25:14,160
bit back end weighted with sink
and development all coming on

455
00:25:14,320 --> 00:25:17,400
probably this quarter sometime
and then the start stopping

456
00:25:17,400 --> 00:25:19,160
hopefully coming on March
quarter.

457
00:25:19,160 --> 00:25:22,200
But they've actually got the got
the guidance.

458
00:25:22,200 --> 00:25:24,720
They they probably did have the
Add all, you know, the

459
00:25:24,720 --> 00:25:26,320
stockpiles to Chuck through as
well.

460
00:25:26,600 --> 00:25:30,920
But that's a pretty that's set
them up to look because if they

461
00:25:30,920 --> 00:25:34,240
can keep that up at Riverina,
they could they should be able

462
00:25:34,240 --> 00:25:37,600
to easily achieve their
guidance, if not exceeded.

463
00:25:37,600 --> 00:25:39,960
But you don't you got to leave a
bit in the Kitty for next year.

464
00:25:39,960 --> 00:25:43,840
Don't get you don't want to get
too far ahead of that 110,000 oz

465
00:25:43,840 --> 00:25:45,320
that's bloody.
That doesn't do.

466
00:25:45,320 --> 00:25:48,360
That's just next year's target
then, which is going to be

467
00:25:48,360 --> 00:25:50,520
higher anyway, so.
What about?

468
00:25:50,520 --> 00:25:51,640
What about on the cost front
mate?

469
00:25:51,960 --> 00:25:58,640
Well, it's like obviously the
all in sustaining cost dropped

470
00:25:58,640 --> 00:26:03,680
considerably from 28782285.
It's actually like the first

471
00:26:03,680 --> 00:26:06,800
quarter where there's no open
pit mining line item on the

472
00:26:06,800 --> 00:26:09,200
cost.
So and but they sold an extra

473
00:26:09,200 --> 00:26:11,880
7000 oz.
So hence all in sustaining cost

474
00:26:11,880 --> 00:26:15,600
dropped 600 bucks an ounce as oz
is the denominator of that

475
00:26:15,600 --> 00:26:18,280
equation.
So and they still allocated

476
00:26:18,280 --> 00:26:22,640
their guided 22 mil 1/4 on mine
development growth CapEx and

477
00:26:22,640 --> 00:26:26,120
exploration a bit above that
they spent a 23.3 million.

478
00:26:26,360 --> 00:26:28,480
So it doesn't look like they've
held back any CapEx.

479
00:26:28,480 --> 00:26:32,560
But if you look at this quarters
waterfall chart in contrast to

480
00:26:32,560 --> 00:26:37,400
the previous one, it's been a
pretty big quarter for them with

481
00:26:37,400 --> 00:26:40,120
Riverina stopping starting to
produce the goods.

482
00:26:40,120 --> 00:26:45,000
So hey 1/2 billion dollar market
cap probably a bit odd today you

483
00:26:45,000 --> 00:26:48,440
know 22 mil free cash flow gives
a yield of 5.8%.

484
00:26:48,440 --> 00:26:52,960
So not going not going too bad
considering the growth ahead for

485
00:26:52,960 --> 00:26:56,960
FY20 6.
Looking to be 150,000 oz

486
00:26:56,960 --> 00:26:59,600
producer at sub 2000 bucks all
in sustaining.

487
00:26:59,600 --> 00:27:04,120
So the you know one of the
models has them generating about

488
00:27:04,120 --> 00:27:09,160
50 mil free cash per quarter in
FY20 6 when sinking hits steady

489
00:27:09,160 --> 00:27:12,320
state.
So that's and that contained a

490
00:27:12,320 --> 00:27:15,760
gold price of 4096 an ounce for
that model.

491
00:27:15,760 --> 00:27:18,520
So gold price stays on it gets
gone.

492
00:27:18,520 --> 00:27:20,880
It's setting up pretty bloody
good.

493
00:27:21,200 --> 00:27:23,240
So good on, good on to the team
there.

494
00:27:23,920 --> 00:27:25,480
It's good to.
See, 4000 bucks is a hell of a

495
00:27:25,480 --> 00:27:27,840
gold price.
Yeah, that's what she is.

496
00:27:27,920 --> 00:27:29,720
Good to see you.
Good to see you making money.

497
00:27:29,840 --> 00:27:34,840
Maddie, would you be using your
script if you were running our

498
00:27:34,840 --> 00:27:38,240
Evander to to do deals right
now?

499
00:27:38,600 --> 00:27:43,600
No, no, no, only based on the
organic opportunity at that

500
00:27:43,600 --> 00:27:47,360
tenement to be honest.
Well, I think.

501
00:27:48,800 --> 00:27:51,960
I would.
What if it was a shit one?

502
00:27:52,680 --> 00:27:57,000
A shit deal what easy script
when you market cap of all time

503
00:27:57,000 --> 00:28:00,640
high?
Yeah, I think it'd be hard to go

504
00:28:00,640 --> 00:28:02,720
wrong by an undeveloped dancers
here.

505
00:28:04,320 --> 00:28:06,440
Are you going to be paying a bit
for those undeveloped answers of

506
00:28:06,440 --> 00:28:10,160
4000 bucks an ounce?
Doesn't really, no.

507
00:28:10,160 --> 00:28:12,640
I think the the relative value
on like yeah.

508
00:28:12,720 --> 00:28:14,960
Just having runners hard have.
They not on the juniors.

509
00:28:14,960 --> 00:28:18,040
No, Yeah, I think relative value
is pretty, pretty compelling if

510
00:28:18,080 --> 00:28:19,840
if there's just something out
there you want.

511
00:28:19,840 --> 00:28:20,600
Something up?
Yeah.

512
00:28:20,720 --> 00:28:23,040
But what would you, what would
you pick up that would suit our

513
00:28:23,040 --> 00:28:25,200
abander as an underground mining
specialist?

514
00:28:25,520 --> 00:28:27,560
There's a lot of it out there is
probably open pit.

515
00:28:28,160 --> 00:28:29,760
Yeah.
Like, look, I'm, I'm not as

516
00:28:29,760 --> 00:28:31,360
familiar with all the
opportunities out there.

517
00:28:31,360 --> 00:28:34,800
This some regional stuff that
might be useful, some that might

518
00:28:34,800 --> 00:28:39,080
not be or maybe you can go a bit
further out and see, see

519
00:28:39,080 --> 00:28:43,200
opportunity somewhere else.
But yeah, yeah.

520
00:28:43,880 --> 00:28:46,520
I'll just look at them and want
to set them.

521
00:28:47,160 --> 00:28:51,960
I'll look at them at contrast to
Capricorn where Capricorn have

522
00:28:52,520 --> 00:28:57,680
made themselves Capricorn off
producing 100 to 120,000 oz and

523
00:28:57,680 --> 00:29:00,240
generating free cash.
And then they obviously got

524
00:29:00,240 --> 00:29:04,840
Mount Gibson in the pipeline.
But they've kept themselves very

525
00:29:04,840 --> 00:29:10,440
simple as a cash flow generating
business and it appears or a

526
00:29:10,440 --> 00:29:12,600
band that could set themselves
up to do the same.

527
00:29:12,600 --> 00:29:15,880
And they and they've got so much
opportunity on their tenement to

528
00:29:15,880 --> 00:29:20,360
just continue at Davyhurst.
So yeah, options are.

529
00:29:20,440 --> 00:29:24,760
This could go either way, but
either case is a positive.

530
00:29:26,360 --> 00:29:29,200
Yeah.
If there is a mount Gibson type

531
00:29:29,200 --> 00:29:32,640
thing out there, though, you'd
be you'd be hunting for it.

532
00:29:33,000 --> 00:29:37,080
Yeah, that's a that's a balance
like you say Maddie is also, you

533
00:29:37,080 --> 00:29:39,280
know, giving, giving your
exploration time, giving your

534
00:29:39,280 --> 00:29:43,120
GO's cash to fully study the
tenements that you do have

535
00:29:43,120 --> 00:29:46,000
because that should be the the
primary option.

536
00:29:46,000 --> 00:29:50,120
But it'd be it'd be mental not
to look at the options out there

537
00:29:50,120 --> 00:29:52,120
with your paper worth what it is
today.

538
00:29:52,720 --> 00:29:55,040
And don't forget, if lithium
bloody goes nuts again, they've

539
00:29:55,040 --> 00:29:58,520
still got the free carried
interest for the West Farms JV

540
00:29:58,760 --> 00:30:01,080
as well.
So there is stuff in the

541
00:30:01,080 --> 00:30:04,920
pipeline that is diversified.
So yeah, don't I?

542
00:30:05,040 --> 00:30:07,280
I don't, Jeez, I'll put me cock
on the block.

543
00:30:07,280 --> 00:30:10,400
I don't see I'm doing a deal.
I reckon they.

544
00:30:10,400 --> 00:30:14,200
Jeez, I'm going to look like a
don't do a deal.

545
00:30:14,920 --> 00:30:16,960
I think that's always the
default, right?

546
00:30:17,520 --> 00:30:19,680
Harder to do a deal than than
the opposite if you're going to

547
00:30:19,680 --> 00:30:23,080
choose one or the other.
Wow, I actually reckon.

548
00:30:23,120 --> 00:30:26,240
I think it's too early.
I think I need to prove it, no?

549
00:30:30,000 --> 00:30:31,440
Yeah.
I actually think the the the

550
00:30:31,440 --> 00:30:33,640
large shareholder probably has
more of a say in M&A than we

551
00:30:33,640 --> 00:30:34,320
think.
Yeah.

552
00:30:34,920 --> 00:30:39,400
Exactly, exactly.
Oh, Genesis ran out of time.

553
00:30:39,480 --> 00:30:42,840
I think that's actually I think
I added five mil free cash for

554
00:30:42,840 --> 00:30:46,120
the quarter, put it still doing
the growth CapEx commissioning

555
00:30:46,120 --> 00:30:49,720
of live and then going on.
So that's I think next quarter

556
00:30:49,720 --> 00:30:53,800
going to be interesting to see
what dirt and whose dirt is

557
00:30:53,800 --> 00:30:56,800
going to go through that Mount
Morgan's mill once that that's

558
00:30:56,800 --> 00:30:59,240
fully up and down 3,000,000
tonne mill.

559
00:31:00,240 --> 00:31:04,600
About Bellevue, mate, Yeah.
So Bellevue probably at the

560
00:31:04,600 --> 00:31:07,600
quarter that everyone was
expecting them to have after

561
00:31:07,600 --> 00:31:09,640
their sort of guidance update
and reset.

562
00:31:09,880 --> 00:31:11,840
So a lot of grain across the
Goldies today.

563
00:31:12,360 --> 00:31:15,280
So and Bellevue's up around 6%
on the Spark chart.

564
00:31:15,560 --> 00:31:17,720
So no negative reactions thus
far.

565
00:31:17,720 --> 00:31:20,840
So share price is actually
slightly above their capital

566
00:31:20,840 --> 00:31:25,160
raise price now after they, you
know, good did a good bit of

567
00:31:25,160 --> 00:31:29,840
time well below it.
So I produced nearly 36,000 oz,

568
00:31:30,040 --> 00:31:33,720
so a bit under the bottom end of
guidance range, which was it's

569
00:31:33,720 --> 00:31:36,720
just 41,000 oz.
But I think I think we all knew

570
00:31:36,720 --> 00:31:39,440
ahead of time that this was
going to be the quarter where

571
00:31:39,440 --> 00:31:43,680
the focus was going to be on
catching up, the catching up and

572
00:31:43,680 --> 00:31:46,840
extending the infrastructure,
the power, the pumping and the

573
00:31:46,840 --> 00:31:49,560
vent to get the mine flowing a
bit better.

574
00:31:49,560 --> 00:31:53,040
So it's and they said it's going
to be sort of heavily back end

575
00:31:53,040 --> 00:31:57,040
weighted this financial year
with the company like

576
00:31:57,360 --> 00:32:01,720
forecasting in Q4 that they're
going to pump out 50,000 oz with

577
00:32:01,720 --> 00:32:06,160
at that 200,000 oz run rate,
which was what everyone thought

578
00:32:06,160 --> 00:32:07,480
this was going to be at the
start.

579
00:32:07,480 --> 00:32:11,080
So generated it says they
generated free cash flow of

580
00:32:11,200 --> 00:32:16,640
11,000,000, but there was after
that an $11 million principal

581
00:32:16,640 --> 00:32:20,480
and interest debt repayment.
So cash neutral, cash neutral so

582
00:32:20,760 --> 00:32:23,920
and 146 bucks in the door after
the capital rise.

583
00:32:23,920 --> 00:32:27,240
So, so it looks pretty positive
on the development front like

584
00:32:27,240 --> 00:32:31,080
jumbo metres were up to nearly
3600 metres for the quarter.

585
00:32:32,040 --> 00:32:34,480
They did add a fifth jumbo
midway through the quarter for

586
00:32:34,480 --> 00:32:37,120
the Tribune portal, which look
that would have added some

587
00:32:37,120 --> 00:32:39,920
metres, but not sure.
Not sure if that jumbo was being

588
00:32:39,920 --> 00:32:43,880
like utilised elsewhere in
between portal or just stayed at

589
00:32:43,880 --> 00:32:48,400
the portal, which probably did.
But definitely a great quarter

590
00:32:48,400 --> 00:32:50,240
on the development front, that's
for sure.

591
00:32:50,560 --> 00:32:54,320
Stoke tonnes hold also increased
slightly, but you see the

592
00:32:54,320 --> 00:32:57,080
development all tonnes increased
by 20,000 tonnes.

593
00:32:57,080 --> 00:33:00,440
So a lot more positive on the,
you know the total movement, the

594
00:33:00,440 --> 00:33:04,560
jumbo metres and that's exactly
where they need to be tracking.

595
00:33:04,560 --> 00:33:07,040
So great grade hurt them this
quarter.

596
00:33:07,040 --> 00:33:11,760
So mine grade was 4 1/2 grammes
and process grade was 4.8 versus

597
00:33:11,760 --> 00:33:14,640
and that's versus their probable
underground reserve which

598
00:33:14,640 --> 00:33:17,280
includes high and low grade of
five.

599
00:33:17,280 --> 00:33:21,360
So a bit under, but you just you
just got to look at the grade

600
00:33:21,360 --> 00:33:25,360
control results of Deakin mine
and southern Bellevue and that

601
00:33:25,360 --> 00:33:28,480
and fuck, it's just some
impressive intersections like

602
00:33:28,480 --> 00:33:31,080
that.
The Deakin mine, like it ain't

603
00:33:31,080 --> 00:33:34,200
really narrow vine looking at
this, these intersections like

604
00:33:34,200 --> 00:33:37,440
not sure on the true width, but
like that most of the

605
00:33:37,440 --> 00:33:40,360
intersections above 5 metres
thick and well above 20 grammes

606
00:33:40,360 --> 00:33:42,920
a tonne.
So it's it's a freaking absolute

607
00:33:43,200 --> 00:33:45,680
honeypot and it's bloody pretty
impressive.

608
00:33:45,880 --> 00:33:49,240
And that and that thickness
obviously helps so much in

609
00:33:49,240 --> 00:33:52,160
getting out the tonnes that they
need.

610
00:33:52,160 --> 00:33:56,560
So it's, yeah, it's just one,
it's that once that operations

611
00:33:56,560 --> 00:33:59,040
in steady site and gets where it
needs to be.

612
00:33:59,040 --> 00:34:03,720
Like you've talking about using
your script and all that, but

613
00:34:03,720 --> 00:34:07,040
like far out the focus, like
shifting a bit of the focus so

614
00:34:07,040 --> 00:34:09,840
that like the organic growth
within that Bellevue tenement,

615
00:34:09,840 --> 00:34:13,000
like to grow the tenement like
you could create another friggin

616
00:34:13,000 --> 00:34:16,159
Jundee or Telfruit if there's
more gold near that gold.

617
00:34:17,560 --> 00:34:20,159
Obviously the K drill surface
holes are the first step towards

618
00:34:20,159 --> 00:34:24,000
that like to doing that, but
once you.

619
00:34:24,000 --> 00:34:26,120
Get on to something mate.
Yeah, once a debt sword or once

620
00:34:26,120 --> 00:34:28,360
the cash is coming in like
flicking a bit K drills.

621
00:34:28,360 --> 00:34:32,639
Why turn like?
The wise move is to make another

622
00:34:33,159 --> 00:34:36,880
freaking Jundee or Telfa like
which she Alder wouldn't like

623
00:34:36,880 --> 00:34:40,000
that.
Yeah, well, you run out of you

624
00:34:40,000 --> 00:34:41,679
run out of stuff to mine if you
don't putting holes in the

625
00:34:41,679 --> 00:34:42,960
ground, Matty.
Exactly.

626
00:34:43,040 --> 00:34:46,000
And like to put them in there
like, because the thing about

627
00:34:46,000 --> 00:34:50,600
cadre, like led by the Sergeant
Ron O'Sullivan, the Sergeant for

628
00:34:50,600 --> 00:34:55,600
productivity and safety culture,
yeah, fucking unparalleled.

629
00:34:56,040 --> 00:34:59,120
Like the X underground
experience of Drew Harvey.

630
00:34:59,440 --> 00:35:02,200
He knows what a surface gold
intersection looks like in an

631
00:35:02,200 --> 00:35:04,400
underground environment because
he's been down there.

632
00:35:04,880 --> 00:35:08,680
So by forced to be reckoned
with, do what's do what's right

633
00:35:08,680 --> 00:35:11,640
by your shareholders.
Any company out there make a

634
00:35:11,640 --> 00:35:14,600
John day or tell for using K
drill RC diamond holes?

635
00:35:15,200 --> 00:35:17,200
Makes sense, Maddie.
Like since everything I've said

636
00:35:17,200 --> 00:35:20,920
today makes sense, actually, I'm
on fire.

637
00:35:20,960 --> 00:35:23,360
What's it go with the?
I thought they I've been

638
00:35:23,360 --> 00:35:24,960
misremembering.
I thought they'd raise money and

639
00:35:24,960 --> 00:35:26,400
they capital raised and they
said they're going to pay down

640
00:35:26,400 --> 00:35:29,000
some debt with it, but it.
Hasn't happened yet, yeah.

641
00:35:29,760 --> 00:35:32,720
So it's still, yeah.
So it's still got to get the

642
00:35:32,720 --> 00:35:34,680
mine.
So that cash is sitting there.

643
00:35:35,120 --> 00:35:39,120
Still got to get the Macquarie
to like approve the updated mine

644
00:35:39,120 --> 00:35:40,960
plan.
So they can, right.

645
00:35:41,040 --> 00:35:45,760
That was the sort of the
condition to actually do the

646
00:35:45,760 --> 00:35:48,960
early repayment of that right,
proving the updated mine plan.

647
00:35:48,960 --> 00:35:52,120
So that'll be, I assume we'll
see that this quarter sometime.

648
00:35:53,240 --> 00:35:54,440
Yeah.
So you're getting a bit of

649
00:35:54,480 --> 00:35:56,000
getting a bit of interest out of
it.

650
00:35:57,000 --> 00:35:58,400
Nothing.
Nothing wrong with a bit of

651
00:35:58,400 --> 00:36:01,520
interest.
Charlie, I've been, yeah, we've

652
00:36:01,520 --> 00:36:05,920
both been sort of seeing the the
BHP Rio quarterlys come through.

653
00:36:05,920 --> 00:36:08,400
The theme across both of them
has been, you know, they're

654
00:36:08,600 --> 00:36:11,720
mining more of their lower grade
stuff and maybe maybe surprising

655
00:36:12,520 --> 00:36:14,080
the market as as a result of
that.

656
00:36:14,080 --> 00:36:15,960
What's going on here?
Is there a change in strategy

657
00:36:15,960 --> 00:36:17,600
from the from the iron ore
miners?

658
00:36:18,680 --> 00:36:22,040
Mate, I, I think there might be,
there was a few interesting sort

659
00:36:22,040 --> 00:36:25,880
of events coming at the back of
BHB and, and Rio reporting.

660
00:36:25,880 --> 00:36:30,080
So Rio's now running this review
of their sort of future product

661
00:36:30,080 --> 00:36:33,120
strategy.
And Simon Trott is a Rio exec

662
00:36:33,400 --> 00:36:35,920
that the head of iron ore there
spoke about this at the

663
00:36:35,920 --> 00:36:38,600
Melbourne Mining Club.
It's a few questions being being

664
00:36:38,600 --> 00:36:42,120
tossed up on on Friday.
So I think it's I think it's

665
00:36:42,120 --> 00:36:46,160
pretty interesting in a nutshell
to kind of summarise what why I

666
00:36:46,160 --> 00:36:48,560
think it's interesting and why
it's kind of worth talking

667
00:36:48,560 --> 00:36:51,960
about, mate, is I think it can
ultimately spell bad news for

668
00:36:52,280 --> 00:36:56,440
the earnings of the majors.
BHB Rio up in up in the

669
00:36:56,440 --> 00:36:59,080
pilgrass.
So Long story short, Rio have

670
00:36:59,080 --> 00:37:01,360
been producing more lower grade
product.

671
00:37:01,360 --> 00:37:04,920
This is sort of becoming a
bigger and bigger portion over

672
00:37:04,920 --> 00:37:07,720
recent quarters and years of
their overall mix.

673
00:37:07,720 --> 00:37:10,800
And it's a sort of combination
of a bunch of factors.

674
00:37:10,800 --> 00:37:14,080
You've got depletion of high
grade resources, slower approval

675
00:37:14,080 --> 00:37:15,440
times.
It's a pretty important one for

676
00:37:15,440 --> 00:37:17,040
the new mines they want to bring
online.

677
00:37:17,720 --> 00:37:20,800
And it's also a a lack of
investment that happened a long

678
00:37:20,800 --> 00:37:22,200
time ago.
So you can't underweight that

679
00:37:22,200 --> 00:37:24,840
one.
But I think the analogy we gave

680
00:37:24,840 --> 00:37:27,240
the other day, we we, we were
speaking about in the office the

681
00:37:27,240 --> 00:37:29,960
other day was that these things
are like aircraft carriers.

682
00:37:29,960 --> 00:37:32,200
The decisions take a while and
then they're kind of hard to

683
00:37:32,200 --> 00:37:34,160
stop.
But what you're sort of seeing

684
00:37:34,440 --> 00:37:37,440
is the fruits of a decision that
was made a number of years ago.

685
00:37:37,480 --> 00:37:41,080
And you know, Rio's the one I'm
going to focus on today, but BHB

686
00:37:41,080 --> 00:37:44,880
is not immune from this
challenge and it's not really

687
00:37:44,880 --> 00:37:48,440
changing anytime soon, Rio said.
They're going to be producing

688
00:37:48,440 --> 00:37:51,720
more of this SP10 product,
they're lower grade product for

689
00:37:51,880 --> 00:37:55,840
many years to come.
That likely means lower realise,

690
00:37:55,960 --> 00:38:01,480
lower price realisations to the
sort of 62% index and ultimately

691
00:38:01,520 --> 00:38:04,240
negative for earnings.
They they normally, I mean, the

692
00:38:04,240 --> 00:38:06,720
flagship product is the the
Pilbara blend and they, they

693
00:38:07,080 --> 00:38:10,960
famously sort of, yeah, mind a
bunch of it, but then sort of,

694
00:38:10,960 --> 00:38:14,560
you know, blend it near the port
in the various stockpiles there.

695
00:38:14,600 --> 00:38:17,160
But like, why is this showing up
now, JD?

696
00:38:18,320 --> 00:38:20,720
Yeah, like I sort of said, Matt,
I think, I think it's a long

697
00:38:20,720 --> 00:38:23,720
time in the making and the, the
blending strategy is important.

698
00:38:23,720 --> 00:38:24,920
What you're kind of talking
about.

699
00:38:25,280 --> 00:38:26,720
And I went down a bit of a
rabbit hole.

700
00:38:26,720 --> 00:38:29,880
I found some interesting sort of
presentations from 5 odd years

701
00:38:29,880 --> 00:38:32,760
ago where they, they kind of
talk about this, but essentially

702
00:38:32,760 --> 00:38:34,600
all these miners, they, they
blend their product.

703
00:38:34,760 --> 00:38:37,000
They want to get the iron ore
grade right.

704
00:38:37,000 --> 00:38:40,400
They don't want to be sending
out 63 percent one quarter, 61%

705
00:38:40,400 --> 00:38:42,360
the other.
They want it nice and consistent

706
00:38:42,720 --> 00:38:44,800
for their customers.
They want to control the

707
00:38:44,800 --> 00:38:46,760
impurities.
They want to meet the, the

708
00:38:46,760 --> 00:38:50,520
demands of the, the steel mills
and they always want to be able

709
00:38:50,520 --> 00:38:53,040
to make the most of the assets
that they've got.

710
00:38:53,280 --> 00:38:55,920
So they don't want to just not
have to mine a mine because it's

711
00:38:56,160 --> 00:38:58,800
59% whatever.
If you've got a bit of that and

712
00:38:58,800 --> 00:39:01,520
you've got higher and it sort of
works with the impurities, you

713
00:39:01,520 --> 00:39:04,200
want to be able to blend it
together and just produce that

714
00:39:04,200 --> 00:39:08,240
consistent product and make the
most of the assets you've got so

715
00:39:08,240 --> 00:39:10,880
you can obviously have the the
best cash flow.

716
00:39:10,880 --> 00:39:13,520
So like you said.
Yandy's the Yandy's the

717
00:39:13,520 --> 00:39:16,520
exception there for Raya.
Yandy's its own little beast

718
00:39:16,520 --> 00:39:19,480
that doesn't go into the Pilbara
blend, but I think the the

719
00:39:19,480 --> 00:39:22,040
Japanese steel mills are more
amenable to it.

720
00:39:22,040 --> 00:39:25,440
I forget the reason why, but I
know that's the that's sort of a

721
00:39:25,440 --> 00:39:27,520
standalone one that doesn't get
blended.

722
00:39:28,280 --> 00:39:29,480
Mate, I've got a wicked chart
for you.

723
00:39:29,480 --> 00:39:30,760
I'll show, I'll show you in a
moment.

724
00:39:30,760 --> 00:39:33,120
It, it breaks out all the ones
that Rio talk about.

725
00:39:33,120 --> 00:39:37,200
So Pilbara blend like you said
there Trev, that is the that's

726
00:39:37,200 --> 00:39:40,760
the go to that has been the
benchmark for all Aussie iron

727
00:39:40,760 --> 00:39:45,160
ore miners for a couple decades
now. 62% iron, it's a fines

728
00:39:45,160 --> 00:39:49,280
product in demand because that
grade and quality is good.

729
00:39:49,280 --> 00:39:51,840
It works for a lot of the the
steel mills out there.

730
00:39:51,840 --> 00:39:55,280
And you can sort of see in this
2019 slide from a Rio

731
00:39:55,280 --> 00:39:59,040
presentation, that Hilbra blend
sort of hits the sweet spot of

732
00:39:59,040 --> 00:40:03,520
what a lot of these meals want.
That's both in iron content,

733
00:40:03,640 --> 00:40:05,480
impurities and all those sorts
of things.

734
00:40:05,480 --> 00:40:08,200
And then you've got the SP10.
This is the one they're going to

735
00:40:08,200 --> 00:40:12,080
be churning out more and more of
iron content, closer to 60%.

736
00:40:12,080 --> 00:40:14,880
So it's a lower grade product,
more impurities.

737
00:40:15,320 --> 00:40:17,880
EG you got a bit more alumina in
there.

738
00:40:18,200 --> 00:40:19,520
It's a bit of a, a newer
product.

739
00:40:19,520 --> 00:40:22,080
They only started shipping and
selling this one in 2014.

740
00:40:22,320 --> 00:40:26,320
And what they were targeting
with here is the smaller steel

741
00:40:26,320 --> 00:40:30,880
mills in China.
It's gone from like 6% of what

742
00:40:30,880 --> 00:40:34,840
Rio was shipping not that long
ago to 20 ish percent in the the

743
00:40:34,840 --> 00:40:37,400
most recent results that we saw
last week.

744
00:40:37,440 --> 00:40:39,840
And kind of interestingly, they
didn't disclose the specific

745
00:40:39,840 --> 00:40:42,800
price they got for this.
So I'll, I'll get into how these

746
00:40:42,960 --> 00:40:46,040
kind of spread in prices and how
that all plays in.

747
00:40:46,040 --> 00:40:49,400
But what they do, what they've
done recently with the SP10 is

748
00:40:49,400 --> 00:40:53,440
blended with the Iron Ore
Company of Canada product, which

749
00:40:53,440 --> 00:40:57,800
is a sort of 65% product to get
a bit of a mix depending on what

750
00:40:57,800 --> 00:41:01,600
their customers want.
So Rio's got stuff from Canada,

751
00:41:01,600 --> 00:41:04,480
from Australia and soon Guinea
as well, which plays into this

752
00:41:04,800 --> 00:41:06,040
importantly.
And they're blended at the

753
00:41:06,040 --> 00:41:09,960
mines, at the ports and recently
at this port in China.

754
00:41:10,520 --> 00:41:12,480
So that's on a relatively
smaller scale, but I think

755
00:41:12,480 --> 00:41:14,480
that's going to get bigger and
bigger as they send the stuff

756
00:41:14,480 --> 00:41:17,520
from Guinea to that port in
China and blend it.

757
00:41:17,520 --> 00:41:20,080
And they also get a bit of third
party product if they need it.

758
00:41:20,400 --> 00:41:23,120
So like I said, they're going to
spend a bit of while studying

759
00:41:23,560 --> 00:41:26,920
the implications of bringing the
stuff from Simandu there and

760
00:41:26,920 --> 00:41:30,920
what that does for their overall
sort of blend and product and

761
00:41:30,920 --> 00:41:34,400
what they have to negotiate with
customers ultimately.

762
00:41:34,440 --> 00:41:38,920
So to bring it back to the the
question you you put towards me

763
00:41:38,920 --> 00:41:42,760
first there Trav miners
obviously always go for the

764
00:41:42,960 --> 00:41:46,640
highest grade, best dirt burst.
That makes perfect sense.

765
00:41:46,640 --> 00:41:50,320
Everyone understands that Rio's
been mining for over 50 years in

766
00:41:50,320 --> 00:41:52,440
the Pilbara.
And if you don't have the mines

767
00:41:52,440 --> 00:41:55,800
to replace the depleting grades,
your overall grade is obviously

768
00:41:56,320 --> 00:41:59,520
going to go down.
So that kind of brings us in to

769
00:41:59,520 --> 00:42:03,000
how Rio Tinto is going to
address the the challenge.

770
00:42:04,360 --> 00:42:08,440
So what?
So how do the so under the steel

771
00:42:08,440 --> 00:42:10,720
mills where this is going?
JD what?

772
00:42:10,720 --> 00:42:13,440
What effect does these different
grades have?

773
00:42:14,720 --> 00:42:16,280
That, that's a great question,
man.

774
00:42:16,280 --> 00:42:20,440
We've sort of spoken, we've
we've sort of spoken about it

775
00:42:20,440 --> 00:42:24,600
with Min Rez recently talking
about how their lower grade

776
00:42:24,600 --> 00:42:28,200
Onslow product is going to be
blended like Bao, who said

777
00:42:28,200 --> 00:42:31,040
they're going to blend it with
the stuff from Simando and

778
00:42:31,040 --> 00:42:33,080
whether that's actually kind of
viable.

779
00:42:33,080 --> 00:42:35,520
So this is pretty important
because it changes through the

780
00:42:35,600 --> 00:42:39,880
the cycle and it changes the the
relative demand of one product

781
00:42:39,920 --> 00:42:43,120
versus another.
So lower product versus high

782
00:42:43,120 --> 00:42:45,200
product and that can change
pretty substantially.

783
00:42:45,200 --> 00:42:49,120
But at the end of the day,
you've got steel mills who

784
00:42:49,120 --> 00:42:52,480
demand lower grade product when
their margins are low, when

785
00:42:52,480 --> 00:42:54,800
they're not making much money,
they're going to get the lowest

786
00:42:54,800 --> 00:42:57,160
grade product.
They sort of can within reason,

787
00:42:57,160 --> 00:43:00,200
within what their mills will
take and all that to reduce

788
00:43:00,200 --> 00:43:02,560
their costs and reduce
production output.

789
00:43:03,000 --> 00:43:05,760
And then when they are making
money, they want the highest

790
00:43:05,760 --> 00:43:09,120
grade product possible so that
they can maximise their

791
00:43:09,120 --> 00:43:11,960
productivity.
So when they're making money,

792
00:43:11,960 --> 00:43:14,840
you're going to see bigger
spreads between the 58, the 62

793
00:43:15,240 --> 00:43:19,520
and the 65% benchmarks with a
few caveats as a few obvious

794
00:43:19,520 --> 00:43:22,120
ones like value in use, super
important.

795
00:43:22,680 --> 00:43:24,680
It's not just the grade, it's
the impurities, all these

796
00:43:24,680 --> 00:43:26,360
things, how they go with the
meal that you've got.

797
00:43:26,360 --> 00:43:29,400
But that's a, a rule of thumb to
to keep in mind.

798
00:43:29,760 --> 00:43:33,280
And one of the key reasons why
that is Maddie is because it's

799
00:43:33,280 --> 00:43:35,520
not easy to switch off these
blast furnaces.

800
00:43:35,520 --> 00:43:37,760
You can't just switch them off
when you're not making a margin

801
00:43:37,880 --> 00:43:40,680
flick them back on.
So for a bit of context, I'll

802
00:43:40,680 --> 00:43:44,400
Jack up today's prices and you
can see 101 bucks for the 62

803
00:43:44,400 --> 00:43:50,320
percent, 117 bucks for the 65%
and 88 bucks for the the 58%.

804
00:43:50,320 --> 00:43:53,440
And this is on the back of last
month, I think we saw on the

805
00:43:53,440 --> 00:43:57,480
Finn Them report that 1% of
Chinese steel mills are

806
00:43:57,480 --> 00:44:00,480
currently profitable.
Wow, that's the thing that.

807
00:44:00,920 --> 00:44:04,560
Yeah, since should have shivers
down my spine a little bit is

808
00:44:04,640 --> 00:44:09,880
and Hugh Mackay talked about it
is if if Chinese policy makers

809
00:44:10,000 --> 00:44:13,440
focus on improving the
profitability of of the steel

810
00:44:13,440 --> 00:44:17,960
mills as a as a measure to
increase, you know, consumer and

811
00:44:18,200 --> 00:44:20,520
investor sentiment, which is a
big focus of theirs.

812
00:44:21,200 --> 00:44:24,040
How would you do that?
Supply side policy would result

813
00:44:24,040 --> 00:44:28,200
in some effectively like, you
know, the beer shutdown of some

814
00:44:28,200 --> 00:44:31,560
of the least profitable like
steel mills and resulting in the

815
00:44:31,560 --> 00:44:33,720
ones that are remaining become
profitable.

816
00:44:33,960 --> 00:44:37,720
But that's a policy which would
massively reduce the demand for

817
00:44:38,160 --> 00:44:39,880
Australian iron ore in the
process.

818
00:44:40,000 --> 00:44:42,640
And yeah, rapidly.
One way to make more profit?

819
00:44:42,640 --> 00:44:47,240
Make the iron ore cheaper.
Well, the, the, the read through

820
00:44:47,240 --> 00:44:50,000
is particularly bad what you're
getting to there on the, the

821
00:44:50,000 --> 00:44:54,000
lower grade product, right.
The, you know, min raise a kind

822
00:44:54,000 --> 00:44:57,200
of elephant in the room there
when just as they need good cash

823
00:44:57,200 --> 00:44:59,960
flows as they're bringing Onslow
online.

824
00:45:00,040 --> 00:45:03,160
So that is a yeah.
And I'll just Chuck up a chart

825
00:45:03,160 --> 00:45:05,000
here.
So you can kind of see this sort

826
00:45:05,000 --> 00:45:08,320
of trend between the 5862 and 65
over time.

827
00:45:08,320 --> 00:45:11,800
Obviously there's there's other
sort of factors at play, but you

828
00:45:11,800 --> 00:45:14,840
can sort of see how they've sort
of trended over the over a

829
00:45:14,840 --> 00:45:16,120
period of time there.
Wow.

830
00:45:17,080 --> 00:45:19,040
So is that this lower grade
stuff?

831
00:45:19,360 --> 00:45:21,720
JD?
That doesn't sound like

832
00:45:21,720 --> 00:45:25,840
something you'd associate with a
Rio Tinto or a BHP.

833
00:45:27,280 --> 00:45:32,480
Yeah, I mean loud and clear they
want Tier 1 low cost operations

834
00:45:32,480 --> 00:45:35,320
and I mean this, this is a part
of it, right.

835
00:45:35,320 --> 00:45:38,960
So it's we're not definitively
saying that lower grade product

836
00:45:39,480 --> 00:45:41,600
is what they're going to be
doing indefinitely.

837
00:45:41,600 --> 00:45:45,280
They need to get higher grade
mines into operation and they've

838
00:45:45,280 --> 00:45:47,120
been trying to do this for a
number of years.

839
00:45:47,120 --> 00:45:51,080
So I'll rattle through a couple,
but you've got Western Range 80%

840
00:45:51,080 --> 00:45:52,800
complete now coming online next
year.

841
00:45:53,040 --> 00:45:58,400
That's JV with BAU 25,000,000
tonne per annum capacity once

842
00:45:58,400 --> 00:46:01,600
it's fully ramped up, Roads
Ridge targeting 40 million

843
00:46:01,600 --> 00:46:03,000
tonne.
This is a a base of the thing.

844
00:46:03,000 --> 00:46:07,200
That's a 5050 JV with right
prospecting a number of years

845
00:46:07,200 --> 00:46:09,720
away, though Rio said they're
going to build a new mine in the

846
00:46:09,720 --> 00:46:12,800
Pilbara every year for the rest
of the decade.

847
00:46:12,800 --> 00:46:16,000
You go West Angeles, Hope Downs,
Brooklyn Ford, just to name a

848
00:46:16,000 --> 00:46:19,080
couple of them.
Ultimately by 2028, they're

849
00:46:19,080 --> 00:46:22,040
talking about bringing 120
million tonne per annum online

850
00:46:22,640 --> 00:46:25,280
while seeing a depletion of
19,000,000 tonnes there.

851
00:46:25,280 --> 00:46:29,920
So bit one way, bit the other,
but overall more coming online

852
00:46:29,920 --> 00:46:34,640
and should see them balance out
in time and help them continue

853
00:46:34,640 --> 00:46:36,240
to produce that that Pilbara
blend.

854
00:46:36,240 --> 00:46:40,200
But there could be like I said
earlier, a few years of lower

855
00:46:40,200 --> 00:46:42,440
sort of product coming out
overseas.

856
00:46:42,440 --> 00:46:45,280
You've of course got SIM and do
as well on track to come on next

857
00:46:45,280 --> 00:46:46,560
year.
It'll be just 5 million tonnes

858
00:46:46,560 --> 00:46:52,720
next year, 75,000,000 tonnes in
26 going to 12027 percent,

859
00:46:52,840 --> 00:46:56,400
27,000,000 tonnes per annum
rather is Rio's share of that

860
00:46:56,400 --> 00:46:57,440
one.
And of course that's a high

861
00:46:57,440 --> 00:46:59,840
grade product.
That's why they're starting

862
00:46:59,840 --> 00:47:03,200
blending that one at the at the
ports with the lower grade

863
00:47:03,200 --> 00:47:04,200
stuff.
And that's that's gonna.

864
00:47:04,200 --> 00:47:08,800
Be 27 JD Is that 27 of the 120
or 27 of the 7?

865
00:47:08,800 --> 00:47:11,760
Yeah, that, that's right.
So the way the way people talk

866
00:47:11,760 --> 00:47:17,960
about Semandu is 260,000,000
tonne per annum mines and what's

867
00:47:17,960 --> 00:47:19,840
Rio got?
I think they've got like a 47

868
00:47:19,840 --> 00:47:23,960
ish percent interest in one of
those, yeah.

869
00:47:24,160 --> 00:47:28,280
Who's got the other ones?
So one of them is part of this

870
00:47:28,280 --> 00:47:33,240
winning consortium and the other
one is almost entirely Chinese

871
00:47:33,240 --> 00:47:36,600
consortium of various companies
there.

872
00:47:36,880 --> 00:47:38,080
None of them is just outright
owned.

873
00:47:38,080 --> 00:47:40,440
It's a whole bunch of companies
that have interests.

874
00:47:40,440 --> 00:47:45,000
Yeah, right.
So the other factor in this sort

875
00:47:45,000 --> 00:47:47,960
of becoming the new norm is
approval delays.

876
00:47:47,960 --> 00:47:50,040
And I feel like we're talking
about it every other week, but

877
00:47:50,040 --> 00:47:54,360
it's, it's just so, so common.
Getting minds online is super,

878
00:47:54,360 --> 00:47:57,880
super hard work.
And we saw Rio speak out to

879
00:47:57,880 --> 00:48:01,520
something they've, you know,
been a bit cagey with, you know,

880
00:48:01,520 --> 00:48:03,920
since Stew can Gorge.
But they've sort of spoken out

881
00:48:03,920 --> 00:48:07,880
to the government and told them
to think practically about

882
00:48:08,080 --> 00:48:11,280
environmental law reforms.
And actually they, they want a

883
00:48:11,280 --> 00:48:15,960
few plaudits from various
conservation and environmental

884
00:48:15,960 --> 00:48:17,800
groups from the way they sort of
approach this.

885
00:48:17,800 --> 00:48:21,040
But it, it's not just REO
thinking this they, they at the

886
00:48:21,040 --> 00:48:23,800
end of the day, want less sort
of duplication between state and

887
00:48:23,800 --> 00:48:28,240
federal laws and lex less
complexity overall.

888
00:48:28,240 --> 00:48:31,320
And that'll sort of help them
streamline getting those, those

889
00:48:31,320 --> 00:48:33,600
mines online that they that they
want.

890
00:48:34,640 --> 00:48:38,800
Yeah, right.
So the SIM and do the Pilbara

891
00:48:38,800 --> 00:48:42,480
killer and all this low grade
stuff, what's it mean for the

892
00:48:42,520 --> 00:48:44,880
other iron ore players, Mr
Dawling?

893
00:48:46,280 --> 00:48:49,480
I, I think the, the thing that
kind of rings through reading

894
00:48:49,480 --> 00:48:52,720
all this is that just grade
really, really matters.

895
00:48:52,800 --> 00:48:56,760
I think it's not an awful lot
that BHB or Rio can do that

896
00:48:56,760 --> 00:48:59,000
they're not already doing,
they're working hard.

897
00:48:59,000 --> 00:49:01,320
But there's, there's something I
just keep thinking about and all

898
00:49:01,320 --> 00:49:04,880
this and it came up with our,
our chat with alumni Mau just

899
00:49:04,880 --> 00:49:06,600
the other day.
And it's come up a few times

900
00:49:06,600 --> 00:49:10,400
this, this sort of topic of
commodities being fungible.

901
00:49:10,760 --> 00:49:14,880
And you know, you, you need to
do a heap of work to make them

902
00:49:14,880 --> 00:49:18,560
fungible, right?
It every, every mine, every iron

903
00:49:18,560 --> 00:49:21,000
ore mine's got different sort of
characteristics and a, and a

904
00:49:21,000 --> 00:49:23,400
heap of work needs to, to go
into.

905
00:49:23,400 --> 00:49:25,920
And it's got a lot of
ramifications on the, the price

906
00:49:25,920 --> 00:49:29,800
realisation when you're talking
about iron ore that you get.

907
00:49:30,200 --> 00:49:32,760
Another thing I've kind of been
thinking about is this kind of

908
00:49:32,920 --> 00:49:35,880
delicate game that some of these
big producers, I don't know if

909
00:49:35,880 --> 00:49:37,600
they're, they're thinking about.
Well, I'm sure they're thinking

910
00:49:37,600 --> 00:49:40,680
about, I'm not sure how much
they can do about it, but they

911
00:49:40,680 --> 00:49:44,720
want to produce as much as they
possibly can without pushing off

912
00:49:44,720 --> 00:49:49,800
that higher cost shelf that we
talk about being like 180

913
00:49:49,960 --> 00:49:53,560
million tonnes per annum.
That sort of sits between 80

914
00:49:53,560 --> 00:49:56,840
bucks and 100 bucks to, to
produce that tonne.

915
00:49:56,840 --> 00:49:59,880
And it's a kind of delicate act.
I'm sure they're thinking about

916
00:49:59,880 --> 00:50:02,240
it heaps and every now and then
they, they share a bit of their

917
00:50:02,240 --> 00:50:06,240
research.
But yeah, I think it's a, a bit

918
00:50:06,240 --> 00:50:09,040
of a balancing act for what they
do going forward.

919
00:50:09,040 --> 00:50:11,200
And I'm, I'm keen to keep
following that and sort of

920
00:50:11,200 --> 00:50:14,000
seeing the, the research and the
words that come out of the

921
00:50:14,000 --> 00:50:15,960
mouths of these, these majors on
that one.

922
00:50:15,960 --> 00:50:18,560
That that iron ore cost curve is
shown here.

923
00:50:18,560 --> 00:50:20,560
That's just so fascinating,
isn't it?

924
00:50:20,560 --> 00:50:23,560
Just showing how much iron ore
is produced by the majors at a

925
00:50:23,560 --> 00:50:26,520
low cost, and then just that
rapid bloody.

926
00:50:27,000 --> 00:50:29,400
Cube could barely.
Could barely lift.

927
00:50:30,560 --> 00:50:33,880
Could barely draw a more perfect
cost curve if you're sitting in

928
00:50:33,960 --> 00:50:36,400
that, if you're sitting in Q1
there.

929
00:50:36,560 --> 00:50:39,480
Oh, even God you'd take Q3?
God.

930
00:50:41,080 --> 00:50:42,920
You would for a while.
You would for a while.

931
00:50:43,320 --> 00:50:47,040
Yeah, very, very good.
But Speaking of that aluminium

932
00:50:47,040 --> 00:50:50,160
Alchat, if anyone hasn't
listened to it far, I just did a

933
00:50:50,160 --> 00:50:53,080
good job there.
You know what bloody the the the

934
00:50:53,080 --> 00:50:55,640
bit I loved, and it's pertinent
to Rio.

935
00:50:55,880 --> 00:50:56,880
Pertinent.
I said it.

936
00:50:56,880 --> 00:51:02,680
Sorry, when you prompted the
Alkene question about and the

937
00:51:02,680 --> 00:51:06,880
comments about and AL's comment
of saying it might have been the

938
00:51:06,880 --> 00:51:10,960
poison pill that Rio swallowed
to defend themselves from BHP

939
00:51:10,960 --> 00:51:13,480
taking them out like that.
That was fascinating.

940
00:51:13,720 --> 00:51:16,360
That was interesting.
That was a bloody good yarn.

941
00:51:16,640 --> 00:51:19,800
Oh mate, oh 30 years of his.
Credit to Al Yeah, because.

942
00:51:19,840 --> 00:51:23,560
Wicked could speak to him for
five hours I reckon, maybe

943
00:51:23,560 --> 00:51:24,960
longer.
Easy, yeah.

944
00:51:25,160 --> 00:51:29,720
Do it, Joe Rogan make potty.
Get on the mushies.

945
00:51:33,160 --> 00:51:35,880
Oh, very good, boys.
Sensational.

946
00:51:35,880 --> 00:51:41,080
I could talk to the founders of
MMS for five hours easily.

947
00:51:41,760 --> 00:51:44,520
I could do that without a beer.
I love them.

948
00:51:44,960 --> 00:51:46,280
Yeah, love them.
You could.

949
00:51:46,280 --> 00:51:48,600
You could have them for five
years moving your open pit dirt

950
00:51:48,600 --> 00:51:51,480
if you're smart.
Give them a buzz, mate.

951
00:51:51,480 --> 00:51:54,440
All our other bloody partners
that I could talk to, we can

952
00:51:54,440 --> 00:51:57,840
talk the leg off a chair with
Grounded Construction Group.

953
00:51:57,840 --> 00:52:01,560
How good of life, the Sicilian
God himself, Cross Boundary

954
00:52:01,560 --> 00:52:05,160
Energy, Sandvik Ground Support,
CRE Insurance, Greenland's

955
00:52:05,160 --> 00:52:10,320
Equipment, K Drill, MMTS,
Australian Earthworks and

956
00:52:10,320 --> 00:52:13,600
College, and our great bloody
friends at Spark.

957
00:52:14,480 --> 00:52:17,680
Hey girl, that's good.
Money minus information

958
00:52:17,680 --> 00:52:20,160
contained in this episode of
Money of Mine is of general

959
00:52:20,160 --> 00:52:22,480
nature only and does not take
into account the objectives,

960
00:52:22,640 --> 00:52:25,800
financial situation or needs of
any particular person.

961
00:52:26,120 --> 00:52:29,160
Before making any investment
decision, you should consult

962
00:52:29,160 --> 00:52:32,240
with your financial advisor and
consider how appropriate the

963
00:52:32,240 --> 00:52:35,920
advice is to your objectives,
financial situation and needs.