What Twiggy’s deal tells us about Fortescue

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Righto buddy boy does enjoy
these two faces here.

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You won't be seeing them for a
couple of weeks boys.

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You're going over to the and
we're going to get into going

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over to the hotspot.
We are.

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Africa play out tonight, Maddie.
Yeah, got a bit recorded though,

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so you won't be completely rid
of our faces.

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Leaving me unsupervised for a
fortnight.

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Sorry if the director's special
ain't out at 8:30.

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Just letting everyone know.
Allergy.

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So you'll be all over that.
Make it work.

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Right, catch it buddy, I'm sure
he's got a big schedule it in

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Darba but mate, bloody say good
day.

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Exactly, get in touch.
We're going to be there for for

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quite a while as well as a few
site visits to different parts

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of Africa that I'm very pumped
about Maddie.

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But more importantly to the
money miners, there's been a lot

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happening over the.
Week there is bloody news,

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right?
Let's bloodbath on the used

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stocks, mate.
Bellevue's quarterly out bit of

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M and I.
Fortescue buying Red Hawk?

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When's the last time you saw
Fortescue by WA Iron Ore

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project?
Right?

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I've always just said we've got
enough iron ore I bought.

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They're buying Red Hawk.
I had a Red Hawk hat on the

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table from ages ago too.
That's first M and I deal with a

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hat.
Ironed random fact JD Bit of

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bloody bit going on in the Congo
as well.

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Unfortunately, the, the Tin
Barons would be paying close

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attention, but there's been some
very unfortunate events in the

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east of the country there that
we'll yeah, that we'll touch on

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and try and make it relevant to
to our audience.

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But quite, quite a bit going on
and obviously a long history

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with all that sort of stuff
happening there all.

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Right, let's get into it.
Bring up the bloody uranium

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watch list.
Holy snap and duck shit.

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There's some red and there's
some double digit red.

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Look like Bantam down nearly 20%
body, you know, deep yellow down

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17.
Oh yeah, she's Boston Paladin

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down 11 and 10 each.
So yeah, some big, big, big

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moves and probably on.
Look, I was celebrating

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Australia Day in the public
holiday and I missed it till

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Trav pointed it out this
morning.

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I won't lie.
But the Kazaks put out their

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Q2O, sorry, Q4 update.
They work on calendar year so

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they pumped out got the
announcement here. 6519 tons of

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you so you 308 value times that
point 2.6 to get £1,000,000.

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So that it was a 10 percent 10
1/2 percent increase in

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production since their last
quarter which was 5894.

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And look maintaining 2025
guidance already exceeded the

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guidance upper bound rate of 26
1/2 thousand ton a year for

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2025.
And it also announced that JV

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Inkai, the one that is because
Adam Prom and Kamiko has

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recommenced operations.
I got a laugh out of this old

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old praise kick on Twitter,
querying if Kamiko announced

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that Inkai had resumed
operations after reading Kasatam

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Prom's announcement.
Like inciting that possibly they

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just found out that way along
for the ride.

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No, I got a good bloody laugh
out of that.

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And another interesting point
for the Kasatam Prom update.

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If you control F acid, no
results.

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One of the probably the first
announcements in a while that

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has not mentioned anything about
sulfuric acid issues or just

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sulfuric acid in general.
Found that very interesting.

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We'll have to go.
Listen to the call.

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I'm sure there must have been a
question or two.

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Yeah, I didn't get to all over.
The on the topic.

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That later, but yes, it was
probably surprised the Street, I

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think that it was a bit more
bullish for what is coming out

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of Kazakhstan compared to a lot
of people pricing in they'll a

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potential downgrade for the
2025, but it doesn't look like

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that's the case at the moment.
So yeah, she went the other way.

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By that with the the the deep
seek, which is just yeah,

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throwing the market into a a
real conundrum which I imagine

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has had its implications on EU
stocks where a lot of the ball

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thesis was from big data center
build out might be might be a

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risk.
Can you just explain what deep

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seek is please?
I mean, for the money miners to

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to cut straight to what really
matters, why it matters for EU

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names is way less power is going
to be used.

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That's what's taken the sting
out of the narrative.

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And like what, what a bloody
week.

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The the same week you had the
news of the $500 billion

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Stargate project.
You know, the first question

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everyone asking where's the
power going to come from to

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power this US theme?
And then the the Chinese, you

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know, momentarily sort of
proving that, hey, you might not

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need as much power as you think.
Because we've got a better AI

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tech.
Yeah, the the algorithm was

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supposedly trained at only $6
million.

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Like it only cost $6 million to
train that algorithm on the on

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the data.
And every time it's OP X is like

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like a yeah, substantially lower
whenever you put a query through

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to it as well.
So just like the the projected

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kind of power costs from from
the world's adoption of of AI

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and everything may have may have
some question marks over it

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given the energy intensity you
know looks to looks to be

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decreasing substantially.
Yeah, very, very interesting.

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Fascinating.
Yeah, we'll keep a bloody eye on

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that.
Good.

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For the world like you just
think.

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About Well, less energy is good
for the world.

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And we get more, more
productivity, more.

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Yes, it's a bonus.
Yeah, it's not.

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About just making money out of
uranium stocks, the world like

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to be a thought.
Who would have thought?

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So any let's close that one off.
Got to listen to the call, but

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that's a.
Yeah.

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Can you say, I mean looking at
the big tech side of things, I

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think the the fall off in NVIDIA
stock is many many, many many

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multiples of all the uranium
socks peeling off combined.

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A few BHPS?
How much was it?

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It was for 16% of what, fucking
3?

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Trillion dollar fucking yeah.
2.9 trillion after after the

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peel off.
Wow.

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So it was, Yeah, well known for
three beforehand.

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Wow, yeah, super duper.
That's about what, A BHP and a

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bit.
And a bit and a good bit, yeah.

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A million Exxon.
Funny, right Next up Bellevue

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Gold BGL Ding Ding, Ding.
I had the position in the Steve

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Ray Thunt for the BGL.
So I already reported their pre

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quarterly and dropped their
guidance which we previously

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discussed dropped it from 160
five, 180,000 oz down to 150 to

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165.
So they've they've produced

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62,000 oz so far this financial
year.

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They need 88,000 to hit the
bottom end of gardens.

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They're saying it'll be a 4060
split across Q3Q4.

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So it's like back end half
weighted.

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We're back end half weighted
now.

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So I love the back end
weighting.

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So this that'll be, you know,
35,000 oz next quarter, 53 in

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Q4.
So to hit 53,000 oz 1/4, they

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need to be at the 250 to 270,000
tonne throughput, which they're

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achieving.
The mill seems to be, yeah, it's

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getting, it's getting the tonne
through.

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No dramas there.
That was 17% of that was open

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pit dirt.
So that probably helps lifting

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above that 250 because she's a
bit easier to crush through 92

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to 94% recovery.
They need to be hitting, they've

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hit 94 this quarter.
So that's looking good on that

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front.
But they need about 6 1/2 to

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7.2g head grade to sort of get
if you're upper and lower bounds

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to get 53,000 oz.
If you mix all them together,

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that's where they're they need
to be at.

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And considering the probable
high grade reserve is now 6.1g

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per tonne.
So they're likely going to have

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to exceed that in Q4 to make
this bottom end of guidance.

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But we'll go into that reserve
grade a bit a bit lighter.

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So pretty much like all those
factors they seem that they've,

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they've shown glimpses of bits
of it during the past four

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quarters.
Two of those, you'd probably say

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we're still, we're still
commissioning phase like 2 full

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quarters or you'd say they've
been in full blast.

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But they just need to string
them all together to, to meet

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that guidance.
Because if you look at the

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physicals, I'll bring them up
here, everything is moving in

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the right direction other than
grade graders that got

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absolutely hammered this
quarter.

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So look, as I said, process
276,000 tonnes.

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So that's over well over the
1,000,000 tonne per annum rate.

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7-8 bit of that was open pit, so
nearly 4000 metres of jumbo

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development and that was mostly
with five jumbos and now got a

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6th jumbo there.
So that's heading in the right

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direction.
The mine tonnes were nearly at

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the 1,000,000 tonne, right.
So 240,000 tonne they had their

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but that that's their best
quarter on underground mine

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material and the highest amount
of stock tonnes at.

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But they said they had the
1,000,000 tonne right in

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December recoveries up to 94%.
That's the highest yet.

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But grade 3.1g per tonne.
So the reserve 6.1, the total

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underground reserves 5.
So they've they've said and they

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mentioned it before they were
going through the outer edges of

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the ore body simultaneously like
you, you would have probably

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scheduled for this.
It probably indicates that the

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development wasn't where it
needed to be to blend the grade

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like, which was probably
stopping being held up.

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So you kind of buy that, you
just think it's.

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Yeah.
Well, you could, yeah, Yeah.

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Well, you could infer that if
they've gone through all those

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lower edges, then the next
quarter or the next quarters,

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they should be going through all
the high grade all at once and

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they should say a great spark.
So that's a possibility.

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No mention of dilution or
overbreak being A cause of the

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lowering ingrade with how hard
the ground is there, I don't

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00:10:09,920 --> 00:10:12,160
think dilution would be much of
a problem.

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00:10:12,280 --> 00:10:14,480
Assuming that it's hard in most
places.

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00:10:14,480 --> 00:10:17,560
It's not probably hard
everywhere like like the

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hardness varies at minds.
It's not just fucking one

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00:10:20,000 --> 00:10:22,920
blanket hard.
It's there's different patches

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could be yeah, it could be
drilling error like it could be

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coming out low dilution, but it
might have deviated.

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00:10:30,920 --> 00:10:34,840
Don't, don't know could, but
it's a, it is a big drop in

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00:10:34,840 --> 00:10:36,680
grade, which is a bit
concerning.

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00:10:36,680 --> 00:10:39,000
So we'll see how that is going
forward.

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00:10:39,000 --> 00:10:42,680
There's then the the point on
power with obviously Bellevue

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00:10:42,680 --> 00:10:46,680
have really focused on on
renewables bit of change in the

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00:10:46,680 --> 00:10:49,440
thinking when they did the
capital raise and they had to

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00:10:50,240 --> 00:10:52,200
bring in a bit more power,
right.

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00:10:52,360 --> 00:10:53,080
What?
Yeah.

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00:10:53,080 --> 00:10:56,360
What was the sort of case?
More power to get to that 1.6

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00:10:56,720 --> 00:10:58,400
million tonne, right?
As they scale.

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00:10:58,440 --> 00:11:01,440
Eventually like, but like they
got that fucking there's,

202
00:11:01,800 --> 00:11:05,800
there's a lot of power there.
Like is it you can get the, but

203
00:11:05,800 --> 00:11:10,880
it's like 27 Meg solar farm and
then they're now and then

204
00:11:10,880 --> 00:11:14,600
they're also getting another 4-6
MW wind turbines.

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00:11:14,920 --> 00:11:18,520
That's like nearly bloody,
that's 50 Meg of renewables.

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00:11:18,520 --> 00:11:21,360
Then they've got the the gas on
top of that.

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00:11:21,360 --> 00:11:23,200
So there there is a shit load of
power.

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00:11:23,200 --> 00:11:25,960
So it's obviously it's.
Distributing the power.

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00:11:25,960 --> 00:11:29,240
And you've got the the point on
capacity versus generation.

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00:11:29,240 --> 00:11:34,080
You can't always get all that
flowing through because you know

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00:11:34,200 --> 00:11:36,880
the sun shines at certain times
when it blows these sorts of

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00:11:37,320 --> 00:11:40,440
points that you always kind of
hear, but that that is a huge

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00:11:40,440 --> 00:11:42,120
amount.
It's a lot of better and and

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00:11:42,120 --> 00:11:45,280
they said they're in one day in
December, they had 11 hours just

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00:11:45,280 --> 00:11:48,240
on renewables pretty much like
engines off, which means gas

216
00:11:48,240 --> 00:11:50,560
off.
No, obviously no diesel elements

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00:11:50,560 --> 00:11:52,160
start low.
It's just consistent.

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00:11:52,520 --> 00:11:55,400
So I'll say I would assume that
the if they've spent the capital

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00:11:55,400 --> 00:11:58,880
for all that, the operating cost
of running on that much

220
00:11:58,880 --> 00:12:02,520
renewables will be lower because
of if the capital's been spent.

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00:12:03,720 --> 00:12:06,440
But they're still yeah,
separating themselves from the

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00:12:06,440 --> 00:12:09,800
peers in for that net 0
aspirations, which, you know, I

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00:12:09,800 --> 00:12:12,240
know the flavours not as much,
but like, you know, Blackrock's

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00:12:12,240 --> 00:12:16,840
15% shareholder, it would
attract a lot of global

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00:12:16,920 --> 00:12:22,600
investment for people that have
want ASG credential gold miner,

226
00:12:22,600 --> 00:12:25,000
which is this is probably the
best one of them like because

227
00:12:25,000 --> 00:12:27,720
it's been a lot of capital's
going into to get it that way.

228
00:12:27,880 --> 00:12:30,760
So, but yeah, I don't think, I
don't think they're going to be

229
00:12:30,760 --> 00:12:35,160
sure to pay out or run a friggin
think something like like mount

230
00:12:35,160 --> 00:12:39,520
magnet for Emilius that mine's
like 8 Meg.

231
00:12:39,720 --> 00:12:42,480
I think of power from memory,
something like that.

232
00:12:42,480 --> 00:12:45,720
And this has got what, 70 or 80?
It's huge, huge amount of power.

233
00:12:45,760 --> 00:12:49,640
It's just it's distributing it
through the places which needs

234
00:12:49,640 --> 00:12:54,920
the like.
It's the ongoing thing CapEx for

235
00:12:54,920 --> 00:12:57,640
the remainder of Fr 25,
interesting point.

236
00:12:57,640 --> 00:13:00,480
They've they downgraded CapEx
and exploration spend to

237
00:13:00,480 --> 00:13:04,920
155,000,000 from 175, but
they've sorted lower than

238
00:13:04,920 --> 00:13:07,600
achieved capital development
rates in half one.

239
00:13:08,080 --> 00:13:11,240
So they're saying that they've
saved CapEx by not developing as

240
00:13:11,240 --> 00:13:14,600
much which which is an
indication that the capital

241
00:13:14,600 --> 00:13:19,560
development was not getting far
enough ahead of the production

242
00:13:19,560 --> 00:13:21,480
and I assume would possibly
still be the case.

243
00:13:21,480 --> 00:13:26,160
So looks like the primary vent
rises and nearing completion.

244
00:13:26,160 --> 00:13:29,040
So it's saying there's two rise
balls that will be completed

245
00:13:29,040 --> 00:13:31,400
this half with no more currently
planned.

246
00:13:31,400 --> 00:13:34,200
So that's a bit less CapEx going
out the door once the the big

247
00:13:34,200 --> 00:13:37,800
rise balls stop, which will and
then that's going to be extra

248
00:13:37,800 --> 00:13:40,320
vent and everything, which was
all bloody good stuff.

249
00:13:40,320 --> 00:13:45,120
So on the cash front, all known
previously as well, they went

250
00:13:45,120 --> 00:13:48,080
backwards 25 mil.
So they've got 81 mil in

251
00:13:48,080 --> 00:13:51,600
liquidity and 100 mil of bank
debt which is not due for

252
00:13:51,600 --> 00:13:55,240
payment till 2027.
Most of the gold was delivered

253
00:13:55,240 --> 00:13:59,440
into the hedge book because of
the lower amount of Oz so hence

254
00:13:59,440 --> 00:14:03,680
the realised price was 3339.
So about 1000 bucks below the

255
00:14:03,680 --> 00:14:07,360
spot today.
So it looks to be around 50 to

256
00:14:07,360 --> 00:14:10,720
55,000 ounces to deliver in the
next two quarters as you can see

257
00:14:10,720 --> 00:14:13,960
here.
And 2/3 of it is a 2800 an ounce

258
00:14:13,960 --> 00:14:17,080
and the other third is at the
3800 an ounce colour.

259
00:14:17,080 --> 00:14:22,720
So any oz they can get bloody
above those chunks is going to

260
00:14:22,720 --> 00:14:26,920
make a big difference.
So 100 and still $320 million

261
00:14:26,920 --> 00:14:29,840
out of the money.
That hedge book 196,000 oz.

262
00:14:30,200 --> 00:14:33,520
So big out of the money.
Yeah, that's that's more of A

263
00:14:33,520 --> 00:14:35,320
and.
It keeps going up.

264
00:14:35,320 --> 00:14:37,480
More of a hiccup.
More of a hiccup than the debt

265
00:14:37,720 --> 00:14:38,840
remaining.
Debt quantum, yeah.

266
00:14:38,880 --> 00:14:40,800
Oh yeah.
Well, that's what, a $420

267
00:14:40,800 --> 00:14:44,120
million liability effectively
long term.

268
00:14:44,480 --> 00:14:49,400
So there is on the street, it's
all on the street.

269
00:14:49,760 --> 00:14:53,240
There is, there is distinct ball
case and distinct bear case for

270
00:14:53,240 --> 00:14:55,960
Bellevue.
It's polarising, like very like

271
00:14:56,360 --> 00:14:59,360
and and you talk to different
people and people have got a

272
00:14:59,360 --> 00:15:04,000
very different view on it.
So and both, both of them are

273
00:15:04,000 --> 00:15:06,160
not out of the question.
Both of them make a lot of

274
00:15:06,160 --> 00:15:07,480
sense.
Any views make a market.

275
00:15:07,480 --> 00:15:09,160
Oh isn't it?
What so mate?

276
00:15:09,160 --> 00:15:10,800
More so it could be more sellers
and buyers.

277
00:15:10,800 --> 00:15:13,920
Could be more buyers and sellers
like the bull case.

278
00:15:13,920 --> 00:15:16,920
Let me go through that.
Like infrastructure seems to be

279
00:15:16,920 --> 00:15:20,440
catching up or caught up.
Physicals are all heading in the

280
00:15:20,440 --> 00:15:22,360
right direction.
Like development meters are

281
00:15:22,360 --> 00:15:24,160
increasing with the lift in the
stoke.

282
00:15:24,160 --> 00:15:29,320
Tons recoveries up throughput
mill throughputs above 9 plate

283
00:15:29,760 --> 00:15:32,680
potentially hitting a high grade
period going after going through

284
00:15:32,680 --> 00:15:36,080
a lot of lower grade.
Good ASG credentials say you're

285
00:15:36,080 --> 00:15:39,960
attracting bloody good
international investment like

286
00:15:39,960 --> 00:15:45,200
market cap 1.4 bills.
So that's about an EV 1.75 if

287
00:15:45,200 --> 00:15:48,520
you take into account the debt
and in the out of the money

288
00:15:48,520 --> 00:15:52,280
hedge book.
So the EV is less than Regis and

289
00:15:52,280 --> 00:15:55,360
considering the expiration
upside and the high grade nature

290
00:15:55,360 --> 00:15:58,560
of Bellevue compared to the low
grade at Duketon, like if you

291
00:15:58,560 --> 00:16:02,600
put it side by side there early
in the operation like that's

292
00:16:02,880 --> 00:16:07,000
there's a lot of yeah as in the
in a lot of valuation, there's

293
00:16:07,000 --> 00:16:10,120
probably not as much exploration
upside taking into account

294
00:16:10,120 --> 00:16:15,320
there's still a lot at that mine
belief at depth and laterally

295
00:16:15,320 --> 00:16:16,800
so.
And the other side?

296
00:16:16,800 --> 00:16:21,720
Maddie the Bear.
Case well, like anytime you see

297
00:16:21,720 --> 00:16:25,440
a mine like this, that was, I
guess going to be the next like

298
00:16:25,440 --> 00:16:28,960
such a what was it 200,000 oz
for five years.

299
00:16:28,960 --> 00:16:31,400
But they're you know, they're
negative free cash flow in

300
00:16:31,400 --> 00:16:34,560
record high gold prices that
were much above what they

301
00:16:35,120 --> 00:16:36,560
thought they were going to be
mining at.

302
00:16:37,160 --> 00:16:39,680
That's obviously concerning.
And like because they've over

303
00:16:39,680 --> 00:16:42,400
promised under delivered since
the get go.

304
00:16:42,680 --> 00:16:47,360
Clearly, like they've they have
they have to achieve over the

305
00:16:47,360 --> 00:16:50,280
high grade underground reserve
to meet the guidance.

306
00:16:50,280 --> 00:16:52,800
But when they did that plan
update, remember the high grade

307
00:16:52,800 --> 00:16:57,760
underground reserve was dropped
from 7.9 grams to 6.1 grams.

308
00:16:58,080 --> 00:17:04,520
So will we see a 7 gram order
again to offset the three gram

309
00:17:04,520 --> 00:17:07,720
one we've seen?
Like I don't know, jury's out on

310
00:17:07,720 --> 00:17:09,520
that.
Like they're adding another

311
00:17:09,520 --> 00:17:12,920
jumbo like that'll increase
costs, put more demand on moving

312
00:17:12,920 --> 00:17:15,599
the development dirt with the
production dirt.

313
00:17:15,599 --> 00:17:19,400
Like then they might have to add
extra machinery to complement A1

314
00:17:19,400 --> 00:17:21,119
jumbo.
I'm not sure if that is the

315
00:17:21,119 --> 00:17:26,000
case, but it's it is extra cost,
yeah, still got what 40 mil of

316
00:17:26,000 --> 00:17:28,800
growth capital and exploration
per quarter, still got four wind

317
00:17:28,800 --> 00:17:33,640
turbines to build and you know,
420 mil of liability with debt

318
00:17:33,760 --> 00:17:38,080
and hedging.
Will Macquarie put pressure on

319
00:17:38,080 --> 00:17:41,080
for that last 100 mil if they
have another negative free cash

320
00:17:41,080 --> 00:17:44,600
flow quarter?
Because I think we could infer

321
00:17:44,600 --> 00:17:48,560
that they put the pressure on to
for the last $150 million rise

322
00:17:48,560 --> 00:17:50,760
to clear a good chunk of the
debt.

323
00:17:52,520 --> 00:17:56,080
And you know, half the over half
the forecasted answers they're

324
00:17:56,080 --> 00:17:58,840
going to produce aren't exposed
to the higher gold price.

325
00:17:58,840 --> 00:18:06,160
So it's could go either way.
And if they will like in the

326
00:18:06,160 --> 00:18:08,280
position they are now, look at
what happened to Regis.

327
00:18:08,720 --> 00:18:13,640
Like just the narrative of Regis
changed so quickly from clearing

328
00:18:13,640 --> 00:18:16,560
that, Oh no, it's like gold
process really fricking helped

329
00:18:16,560 --> 00:18:19,240
them.
But that's like they've cleared

330
00:18:19,240 --> 00:18:23,160
the hedge book debt free and
they are just flying in a matter

331
00:18:23,160 --> 00:18:26,280
of a year.
Like would Bellevue need to do a

332
00:18:26,280 --> 00:18:31,000
big stonken rise to clear the
debt, pay out some of the hedge

333
00:18:31,000 --> 00:18:33,960
book and just change that
narrative of risk that is

334
00:18:34,040 --> 00:18:39,080
associated with them, whether
that gets done or allowed?

335
00:18:39,440 --> 00:18:40,840
It appeal after the rise.
Oh.

336
00:18:40,960 --> 00:18:44,360
It'd be huge, but the three will
they be made to?

337
00:18:44,800 --> 00:18:48,600
The three big gold producer
underperformers last year were

338
00:18:49,080 --> 00:18:51,840
were Bellevue, Gold Road and
Regis.

339
00:18:51,840 --> 00:18:57,320
Now since about, yes, call it
September, October, Gold Road

340
00:18:57,320 --> 00:19:00,200
and and Regis are both like, you
know, outperformed.

341
00:19:00,360 --> 00:19:01,840
There's a bit of a main
reversion.

342
00:19:01,840 --> 00:19:05,360
People are saying the long term,
well for Gold Rd. they're saying

343
00:19:05,360 --> 00:19:07,680
the long term, the strip ratio
is actually going to kind of

344
00:19:07,720 --> 00:19:10,920
decline after FY20 seven.
Yeah, some of the issues have

345
00:19:10,920 --> 00:19:13,080
been resolved which led to that
underperformance.

346
00:19:13,560 --> 00:19:16,240
And in Regis's case, the cash
generation subsequent to the

347
00:19:16,240 --> 00:19:19,080
hedge book pay down and higher
gold prices have helped the

348
00:19:19,080 --> 00:19:20,960
market rethink what its
appropriate value.

349
00:19:21,240 --> 00:19:23,600
This is what?
Kicker for Old Road on to Gray

350
00:19:23,640 --> 00:19:25,240
as.
Well, and you think Regis more

351
00:19:25,240 --> 00:19:28,080
so they've done it with the
Mcfilimys and everything

352
00:19:28,080 --> 00:19:31,000
considering that.
So they've really turned it

353
00:19:31,000 --> 00:19:32,360
around.
This is the one that hasn't been

354
00:19:32,360 --> 00:19:34,200
reverted yet.
It's not yet there.

355
00:19:34,520 --> 00:19:38,400
The positive story to wrap
around for the market to, you

356
00:19:38,400 --> 00:19:41,800
know, back it in, in mean
reverting on a on a performance

357
00:19:41,800 --> 00:19:43,960
basis.
And that and that narrative was

358
00:19:43,960 --> 00:19:47,760
supposed to be the 1.6 million
ton expansion for the future,

359
00:19:47,760 --> 00:19:50,920
but I don't think it's stuck.
It didn't, it didn't resonate

360
00:19:50,920 --> 00:19:54,880
because on the one hand the
market is reading that there's

361
00:19:54,880 --> 00:19:58,000
challenges getting, you know,
the, the tons out of the ground

362
00:19:58,120 --> 00:19:59,720
that are required because the
complexity.

363
00:19:59,720 --> 00:20:01,800
And then on the other hand,
looking to increase the

364
00:20:01,800 --> 00:20:04,920
throughput, surely that puts
even more more stress on getting

365
00:20:04,960 --> 00:20:07,480
tons out of the ground which?
I think people read through that

366
00:20:07,520 --> 00:20:09,760
very quickly that they
understood that that was a

367
00:20:09,760 --> 00:20:12,320
narrative you wrapped around a
capital raise because you OS

368
00:20:13,480 --> 00:20:15,040
rapid narrative around a capital
raise.

369
00:20:15,040 --> 00:20:18,120
You can't just do it because
things are shit ass.

370
00:20:18,120 --> 00:20:21,360
You know, you do it because
there's this growth opportunity

371
00:20:21,360 --> 00:20:22,640
and we're going to make even
more money.

372
00:20:22,640 --> 00:20:24,480
But people read through that
super quickly.

373
00:20:25,000 --> 00:20:30,320
Yeah.
And I think that and there's no

374
00:20:30,360 --> 00:20:32,960
open pit material going through
the mill next quarter either.

375
00:20:32,960 --> 00:20:34,920
It's I think they said that
they're going to be full

376
00:20:34,920 --> 00:20:38,400
underground feed, which is good
for grade hopefully, but you

377
00:20:38,400 --> 00:20:42,000
need the underground feed.
So pray and look, they've hit it

378
00:20:42,520 --> 00:20:44,520
in December.
They got to string it together

379
00:20:44,520 --> 00:20:48,560
for six.
It's just will they be more

380
00:20:48,560 --> 00:20:53,840
acquirable if they've cleared a
lot of that shit out or imagine

381
00:20:53,840 --> 00:20:56,720
like that out of the money hedge
book in the debt.

382
00:20:57,800 --> 00:21:00,720
You know a company would rather
them sort it out than sort it

383
00:21:00,720 --> 00:21:03,160
out themselves if they acquire
them, because it doesn't just go

384
00:21:03,160 --> 00:21:06,240
away.
Yeah, it it doesn't go away, but

385
00:21:06,360 --> 00:21:08,960
everyone has an out of the money
hedge book to an extent.

386
00:21:08,960 --> 00:21:11,560
Obviously this one looks worse
than most.

387
00:21:12,240 --> 00:21:15,640
A debt isn't surmountable.
I mean, 1.4 market cap.

388
00:21:15,640 --> 00:21:19,600
You said they've got 80 odd in
cash and 100 in debt.

389
00:21:19,600 --> 00:21:22,800
It's like I could easily see.
On the other hand, you know, two

390
00:21:22,800 --> 00:21:26,360
quarters of decent production
and people are just looking at

391
00:21:26,360 --> 00:21:28,200
the blue sky again.
They've forgotten about all the

392
00:21:28,200 --> 00:21:30,880
troubles.
They're, you know, looking down

393
00:21:30,880 --> 00:21:33,120
the track, they're starting to
see more of that four and a bit

394
00:21:33,120 --> 00:21:36,880
$1000 Aussie gold price as the
answers start to come through.

395
00:21:36,880 --> 00:21:39,920
So like you said, it's awesome
for us because it's in that sort

396
00:21:39,920 --> 00:21:43,960
of balance point and you know,
it could kind of go both ways.

397
00:21:43,960 --> 00:21:48,000
But for an acquirer, you're not
going to be stumbling over that,

398
00:21:48,000 --> 00:21:52,040
that hedge book and that and
that portion of debt given,

399
00:21:52,080 --> 00:21:53,360
given everything that could go
right.

400
00:21:53,360 --> 00:21:56,360
If you think you can get people
in there, make it humming, get

401
00:21:56,360 --> 00:21:58,800
the answers out the ground that
that's not going to be a massive

402
00:21:58,800 --> 00:22:01,240
impediment in my eyes.
But do you, don't you think that

403
00:22:01,440 --> 00:22:04,120
if it's still there, the
acquirers would think is there a

404
00:22:04,120 --> 00:22:07,400
bit potentially it's more risk
and they might get them cheaper

405
00:22:07,400 --> 00:22:09,400
because they they might be a bit
more pain to come?

406
00:22:09,400 --> 00:22:11,840
People don't think that, yeah,
on on the flip side, like to the

407
00:22:11,840 --> 00:22:14,200
extent the market's punishing
you because your own funding

408
00:22:14,200 --> 00:22:16,240
dynamics are in doubt, you're
going to have to dilute more

409
00:22:16,640 --> 00:22:19,520
that like if you're trading at a
discount because of that, that's

410
00:22:19,640 --> 00:22:22,600
the opportunity when your peers
kind of get acquisitive and

411
00:22:22,600 --> 00:22:24,720
think, well, they're trading at
a discount for an issue which we

412
00:22:24,720 --> 00:22:26,360
solve on day one because we've
got balance sheet.

413
00:22:26,360 --> 00:22:29,360
Yeah, to draw on the string, the
string that Trev, you mentioned

414
00:22:29,360 --> 00:22:32,480
just before in the context of
the gold market where everything

415
00:22:32,480 --> 00:22:35,360
else is pretty expensive, you
know, we're talking about these

416
00:22:35,360 --> 00:22:38,760
kind of unheard of deals that
are assets with a bit of hair on

417
00:22:38,760 --> 00:22:40,200
them.
They're the only ones you can

418
00:22:40,200 --> 00:22:43,400
kind of find.
Now finding 1 like this, you

419
00:22:43,400 --> 00:22:47,040
know, there's, there's not many
peers that are so beaten up

420
00:22:47,040 --> 00:22:49,800
trading at half of what they
were trading a year ago.

421
00:22:50,040 --> 00:22:54,400
That's like, that'd be putting
it near the top of most people's

422
00:22:54,400 --> 00:22:56,200
kind of shopping list, I'd say.
I think so.

423
00:22:56,200 --> 00:22:57,560
There's.
Still a lot to like and there's

424
00:22:57,560 --> 00:22:59,720
a lot to, you know, to, to iron
out still.

425
00:22:59,720 --> 00:23:03,000
But yeah, like you say, those
are diverging opinions and the

426
00:23:03,040 --> 00:23:04,920
the the past dependency is very
interesting.

427
00:23:05,120 --> 00:23:07,360
Yeah, yeah.
Oh, it just excites me.

428
00:23:07,360 --> 00:23:09,840
I know they don't want me
talking about it probably, but

429
00:23:09,840 --> 00:23:14,560
it just, it is such an exciting
stock, I feel for all those

430
00:23:14,560 --> 00:23:19,040
reasons 100%.
Can you Speaking of the bull and

431
00:23:19,040 --> 00:23:24,600
bear case, can you actually come
up with a bear case for using

432
00:23:24,600 --> 00:23:27,720
salt Bush as a mind and mill
specialist?

433
00:23:27,720 --> 00:23:31,080
Is there a bear case of why like
why you wouldn't use them I'm.

434
00:23:31,280 --> 00:23:33,960
Going to give a bull case.
It's a big, it's a big bull

435
00:23:33,960 --> 00:23:35,160
case.
Very bullish.

436
00:23:35,360 --> 00:23:38,560
Well, the only bear case, the
only bear case I could think of

437
00:23:38,640 --> 00:23:42,440
is that you will exceed guidance
by too much.

438
00:23:42,960 --> 00:23:44,240
Yeah.
And and it'll look like the

439
00:23:44,240 --> 00:23:46,800
market will perceive it as that
you've tried to keep the share

440
00:23:46,800 --> 00:23:48,800
price down to line your own
pockets.

441
00:23:49,000 --> 00:23:51,720
An ASX speeding ticket.
And it's like that's that's the

442
00:23:51,720 --> 00:23:54,240
only bear case I could come up
with, but the bulk case, as you

443
00:23:54,240 --> 00:23:56,480
said, trap.
Overproductivity from your your

444
00:23:56,640 --> 00:23:59,720
haulage contract.
Oh mate they just love moving

445
00:23:59,720 --> 00:24:02,560
tons mate.
They love they love driving

446
00:24:02,560 --> 00:24:05,760
tons, they love they love
building a road for themselves

447
00:24:05,760 --> 00:24:11,000
to move the tons and they love
doing any random shit ass job on

448
00:24:11,000 --> 00:24:15,240
a mine site that will help
towards saltbush moving tons for

449
00:24:15,240 --> 00:24:18,560
you.
So it's the best analogy I can

450
00:24:18,560 --> 00:24:19,840
come up with.
I'll bring it up here.

451
00:24:19,840 --> 00:24:23,280
They're like a chain link fence.
See those posts?

452
00:24:23,680 --> 00:24:28,040
They are just saltbush are the
posts that keep the fence

453
00:24:28,320 --> 00:24:30,840
growing longer and they keep the
fence up.

454
00:24:30,840 --> 00:24:35,120
They are integral to.
They are the structural

455
00:24:35,120 --> 00:24:39,720
dependency for your mind site.
They are that analogy reminds me

456
00:24:39,720 --> 00:24:42,320
of how you describe you know
your your impact in the mind

457
00:24:42,320 --> 00:24:44,840
site, Maddie, you would just you
would lift everyone else up.

458
00:24:44,840 --> 00:24:48,040
You're so you know, it's the the
spirit that gets everyone that

459
00:24:48,080 --> 00:24:50,600
has it for you it.
Was the occasional bloody

460
00:24:50,600 --> 00:24:53,520
cyclone Sean that come through
and knocked the fence over, but

461
00:24:54,520 --> 00:24:59,040
for most of the time I was just
good for morale just turning up.

462
00:24:59,360 --> 00:25:03,360
Absolutely. 0 natural talent and
0 skill but good for morale.

463
00:25:04,600 --> 00:25:08,400
Oh go salt Bush right?
Speaking of fucking tons,

464
00:25:08,720 --> 00:25:12,080
Fortescue is buying Red Hawk
Mining.

465
00:25:12,280 --> 00:25:14,840
Big, big.
Well, it's not massive from a

466
00:25:14,840 --> 00:25:17,360
quantum perspective, but it's,
it's a, you know, big in the

467
00:25:17,360 --> 00:25:20,480
context of Fortescue, Fortescue
doing public markets M&A like we

468
00:25:20,480 --> 00:25:23,880
just yeah, for AWA iron ore
stock, I find that super, super

469
00:25:23,880 --> 00:25:26,640
interesting.
And in a nutshell, Red Hawk

470
00:25:26,640 --> 00:25:29,760
Mining, they've been progressing
their blacksmith iron ore

471
00:25:29,760 --> 00:25:32,560
project to and that they're now
set to be gobbled up by

472
00:25:32,560 --> 00:25:36,040
Fortescue.
Red Hawk's board has agreed to

473
00:25:36,040 --> 00:25:38,720
this, this bid.
So it's in a great deal to, it's

474
00:25:38,720 --> 00:25:42,520
a, it's a cash takeover for
$1.05 in cash.

475
00:25:42,720 --> 00:25:48,440
But there's a, a kicker if, if
they get 75% acceptances within

476
00:25:48,440 --> 00:25:51,880
seven days, then shareholders
will get $1.20 per share

477
00:25:52,200 --> 00:25:56,760
instead, which would imply a, a
market cap of Red Hawk of $254

478
00:25:56,760 --> 00:25:58,840
million for other blacksmith
project.

479
00:25:59,840 --> 00:26:01,800
There's, there's, there's a few
elements of the, the deal

480
00:26:01,800 --> 00:26:04,080
structure worth kind of wrapping
your head over and I'll get to

481
00:26:04,080 --> 00:26:05,360
them.
But for now, take a look at the

482
00:26:05,360 --> 00:26:07,520
blacksmith project.
This is, it's what I've talked

483
00:26:07,520 --> 00:26:10,560
about a couple of times on the,
on the potty and as far as ASX

484
00:26:10,560 --> 00:26:13,440
listed iron ore development
projects go, you know, in my

485
00:26:13,440 --> 00:26:15,080
opinion, this, this one is the
pick of them.

486
00:26:15,640 --> 00:26:19,240
You see, I've put a map up here
where you can see the location

487
00:26:19,240 --> 00:26:23,040
of their blacksmith project in
proximity to like the rail

488
00:26:23,040 --> 00:26:26,360
networks of the, the majors in
the, in the West Pilbra there.

489
00:26:26,800 --> 00:26:29,440
I've coloured the rail because
they weren't coloured in

490
00:26:29,520 --> 00:26:31,640
coloured.
So Rio's is red, Fortescue's

491
00:26:31,640 --> 00:26:35,520
there is blue, BHP put in
orange, but it's pretty far

492
00:26:35,520 --> 00:26:37,760
away.
And you can see like blacksmith

493
00:26:37,760 --> 00:26:41,120
is, is relatively close to both
Fortescue's Solomon hub there

494
00:26:41,120 --> 00:26:43,520
and and Rio's rail network
itself.

495
00:26:44,320 --> 00:26:47,800
And what's not on that map, But
I've drawn it in on the left

496
00:26:47,800 --> 00:26:51,200
hand side in, in purple.
That's where Min Rez's whole Rd.

497
00:26:51,200 --> 00:26:53,600
kind of ends at the moment
around Ken's Ball.

498
00:26:54,800 --> 00:26:56,600
So what's the attraction of, of,
of Red Hawk?

499
00:26:56,600 --> 00:26:59,080
It's all about, it's all about
grade here with their blacksmith

500
00:26:59,080 --> 00:27:01,720
projects.
So they've got 243,000,000 tons

501
00:27:01,720 --> 00:27:05,600
at 59.3% iron across the five
deposits in the project.

502
00:27:05,600 --> 00:27:08,680
But a lot of that comes in well
north of 60%.

503
00:27:09,240 --> 00:27:12,360
And the Cinta samples in the
last quarterly of Red Hawks,

504
00:27:12,360 --> 00:27:17,680
which showed 61.1% iron for
years, one to two, remember this

505
00:27:17,680 --> 00:27:21,600
was a framed as a DSO project.
So that's not, not beneficiated,

506
00:27:21,600 --> 00:27:24,480
not concentrated.
So that's just crashed and you

507
00:27:24,480 --> 00:27:27,840
get, you know, 61.1% iron for
the first couple of years, you

508
00:27:27,840 --> 00:27:29,360
know.
Fortescue won't know what to do

509
00:27:29,360 --> 00:27:32,360
with that sort of grade.
Yeah, it's just, it'll be a

510
00:27:32,360 --> 00:27:35,160
small contribution to to that
There are, you know, everything

511
00:27:35,160 --> 00:27:37,040
overall, but it's like it's a
sugar hit, right?

512
00:27:37,040 --> 00:27:39,560
Because yeah, yeah, you can help
lift everything else up.

513
00:27:40,080 --> 00:27:43,400
And because Fortescue's facing
declining grades at their

514
00:27:43,400 --> 00:27:46,680
projects like like all of them,
the majors are this is a big

515
00:27:46,680 --> 00:27:48,400
theme that's emerged in the last
year or so.

516
00:27:49,520 --> 00:27:53,320
If you if you look at Red Hawks
PFS on Blacksmith, they released

517
00:27:53,320 --> 00:27:57,360
last year ticked a lot of boxes,
You know, strip ratio 1.63.

518
00:27:57,720 --> 00:28:00,320
It made decent money.
Even assuming that they would

519
00:28:00,320 --> 00:28:04,720
haul at 450 kilometers to Utah
port for, for export, that's a

520
00:28:04,720 --> 00:28:08,120
really long haulage route, which
you could see in the study would

521
00:28:08,120 --> 00:28:12,040
equate to 59% of their US $51
per tonne C1 operating costs.

522
00:28:12,040 --> 00:28:15,400
So it's, and it's not hard to
see the synergies on the on the

523
00:28:15,400 --> 00:28:18,520
table by utilizing Fortescue's
existing, you know, rail network

524
00:28:18,520 --> 00:28:21,720
and they've got like a plant
like 30 kilometers away and just

525
00:28:21,720 --> 00:28:24,400
sort of shrinking the, the OpEx
you got, you know, the sugar hit

526
00:28:24,600 --> 00:28:27,600
a few tons.
But what's more is Red Hawk,

527
00:28:27,600 --> 00:28:30,920
they in their PFS, they limited
the mining to 5 million tons per

528
00:28:30,920 --> 00:28:34,760
annum in the, in the PFS.
But if if you're, if you're the

529
00:28:34,760 --> 00:28:39,320
rate that you're, you're mining
was, was, was was restricted for

530
00:28:39,320 --> 00:28:42,360
haulage reasons or, or port
capacity with a constraint, then

531
00:28:42,560 --> 00:28:45,560
a Fortescue you could produce
more than that per annum from

532
00:28:45,720 --> 00:28:47,880
from the Blacks project.
But if they if they wanted to as

533
00:28:47,880 --> 00:28:51,280
well, I'm sure they they'd
rethink their their production

534
00:28:51,400 --> 00:28:53,160
capacity.
Yeah, absolutely.

535
00:28:53,160 --> 00:28:55,840
That with that cap gone, you can
sort of change your thinking

536
00:28:56,080 --> 00:28:57,920
completely.
So, so how do you think about

537
00:28:58,040 --> 00:29:00,880
Fortescue's needs going forward?
You obviously talk about the

538
00:29:00,880 --> 00:29:04,320
declining grades, massive theme.
We've heard Rio talk about it.

539
00:29:04,320 --> 00:29:07,440
Hey, it's we've seen it at
length, but put it, put it in

540
00:29:07,440 --> 00:29:10,640
the sort of Fortescue context.
These there's like I reckon 3

541
00:29:10,880 --> 00:29:14,640
three points.
Why, why Fortescue need this?

542
00:29:14,880 --> 00:29:17,480
Number one, approvals in this
project are actually super

543
00:29:17,480 --> 00:29:22,640
advanced #290% of the the
minimal inventories above the

544
00:29:22,640 --> 00:29:24,880
water table.
Big issues kind of mining below

545
00:29:24,880 --> 00:29:26,320
the water table comes more
expensive.

546
00:29:26,320 --> 00:29:27,760
What do you do with the water
and Pilbara?

547
00:29:28,560 --> 00:29:31,520
And the third, this is by far
the most important, just the

548
00:29:31,520 --> 00:29:34,520
grade decline like you speak of
JDI just wanted to bring up

549
00:29:35,120 --> 00:29:37,680
Fortescue's production from from
the last quarter.

550
00:29:39,280 --> 00:29:44,000
So just for context back in, in,
you know, financial year 18,

551
00:29:44,680 --> 00:29:48,520
Fortescue got smashed on their
price realization front for its

552
00:29:48,520 --> 00:29:51,080
lower grade product.
Remember that their products are

553
00:29:51,280 --> 00:29:56,400
generally between 56 percent,
59%, you know, versus the index

554
00:29:56,400 --> 00:30:01,600
is like 62%.
And, and in FY18, I think their

555
00:30:01,600 --> 00:30:05,920
realization was as low as 67% of
the of the index, which is like

556
00:30:05,920 --> 00:30:07,680
super low, might have even been
lower.

557
00:30:08,320 --> 00:30:11,720
So they subsequent to that they,
they publicly have been

558
00:30:11,720 --> 00:30:14,880
embarking on the strategy where
they plan to bring online

559
00:30:15,360 --> 00:30:19,120
substantial higher grade
production to, to combat the,

560
00:30:19,200 --> 00:30:21,760
the realization punishment that
they, you know, were having back

561
00:30:21,760 --> 00:30:25,400
then that, you know, realization
punishment is moderated a fair

562
00:30:25,400 --> 00:30:27,640
bit at the moment.
But the two parts of that

563
00:30:27,640 --> 00:30:30,000
strategy of getting more high
grade production into the mix

564
00:30:30,280 --> 00:30:34,280
where magnetite concentrate from
from Iron Bridge and the second

565
00:30:34,280 --> 00:30:38,120
one was bringing on high grade
fines from West Pilbara.

566
00:30:38,120 --> 00:30:43,600
Once Aliwana came online between
those two sort of facets of it,

567
00:30:44,080 --> 00:30:46,760
W Pilbara was supposed to
contribute 40 million tons of

568
00:30:46,760 --> 00:30:49,160
high grade fines and Iron Bridge
was supposed to produce 22

569
00:30:49,160 --> 00:30:52,880
million tons of high grade
concentrate, a total of 62

570
00:30:52,880 --> 00:30:56,920
million tons of, you know, high
grading in quotation marks on

571
00:30:56,920 --> 00:30:59,000
all production per annum.
It's not been going great, has

572
00:30:59,040 --> 00:31:01,600
it?
On both of those fronts, there's

573
00:31:01,680 --> 00:31:06,800
yeah, been a big challenge.
I'd say look at the, the

574
00:31:06,800 --> 00:31:09,160
production numbers in, in, in
the quarterly if you, if you

575
00:31:09,160 --> 00:31:12,640
just annualized the
contributions of of West Pilbara

576
00:31:12,640 --> 00:31:15,800
and, and an iron bridge.
Iron bridge is still ramping up,

577
00:31:15,800 --> 00:31:18,120
but doing an annualized rate of
only 6,000,000 tons per annum

578
00:31:18,120 --> 00:31:20,920
right now.
And the Westfield refines doing

579
00:31:20,920 --> 00:31:23,760
an anemic, you know, 14,000,000
tons per annum annualized.

580
00:31:24,040 --> 00:31:28,400
In in the case of, of, of that
product, there's been heritage

581
00:31:28,560 --> 00:31:31,640
issues which have really limited
production areas that they were

582
00:31:31,640 --> 00:31:34,440
actually hoping to bring online
postcard chook and gorge.

583
00:31:35,640 --> 00:31:40,200
On the flip side of I'll bring
up the the, the production by

584
00:31:40,200 --> 00:31:43,080
product again, but this time you
can see the, the difference

585
00:31:43,080 --> 00:31:44,760
versus a year ago.
And what I've what I've

586
00:31:44,760 --> 00:31:49,720
highlighted there, like look at
look at the the tons of super

587
00:31:49,720 --> 00:31:53,320
special finds produced.
This is this is FMGS lowest

588
00:31:53,320 --> 00:31:55,320
value product.
It's like the really low grade

589
00:31:55,320 --> 00:31:58,760
crap finds.
It's like the SP10 equivalent of

590
00:31:59,080 --> 00:32:03,280
Rio or lower grade stuff.
Lower grade and also finds.

591
00:32:03,280 --> 00:32:05,000
So you get kind of, you know,
doubly punished.

592
00:32:05,000 --> 00:32:08,360
It's pretty, pretty shit, yeah.
It's even, it's even worse, like

593
00:32:08,360 --> 00:32:14,160
the the norm for Fortescue sits
much below the classic Pilgrim

594
00:32:14,160 --> 00:32:17,000
blend, which is a 62% product.
Yeah.

595
00:32:17,120 --> 00:32:19,520
At Rio Pride themselves.
Yeah, yeah.

596
00:32:19,600 --> 00:32:21,400
Low phosphorus.
Yeah, yeah.

597
00:32:21,400 --> 00:32:24,760
I mean, all the all the
tenements in the land that the

598
00:32:24,760 --> 00:32:27,560
whole Fortescue narrative was
built on was tenements they

599
00:32:27,560 --> 00:32:30,560
picked up because the other
majors kind of had the thought

600
00:32:30,560 --> 00:32:33,680
that it was not really feasible.
It was too low grade.

601
00:32:33,680 --> 00:32:36,400
But then China came along and
the whole playing field kind of

602
00:32:36,880 --> 00:32:39,120
shifted.
Yeah, but Super Special Finds is

603
00:32:39,120 --> 00:32:40,800
a hell of a name to give you
worst product.

604
00:32:41,880 --> 00:32:44,640
Special.
But what you can see just like

605
00:32:44,640 --> 00:32:47,440
on those arrows I've drawn, so
the Fortescue blend which you

606
00:32:47,440 --> 00:32:50,040
mentioned is, is it's higher
grade than the Super special

607
00:32:50,040 --> 00:32:52,080
finds.
That's like declining kind of

608
00:32:52,320 --> 00:32:54,520
commensurate with the amount
that the Super special finds

609
00:32:54,520 --> 00:32:59,080
production is kind of increased,
which again is is speaking to

610
00:32:59,080 --> 00:33:02,600
the whole, you know, and they're
pretty big year on year moves,

611
00:33:02,880 --> 00:33:04,560
but it's speaking to that whole
decline in grade.

612
00:33:04,560 --> 00:33:07,080
You're producing more of your
lower value product and then the

613
00:33:07,080 --> 00:33:10,200
price realizations are going to
hurt you more if that kind of,

614
00:33:10,440 --> 00:33:13,480
you know trends the direction it
was in, in 2018 again.

615
00:33:14,040 --> 00:33:15,920
I think, I think a bit of a call
out, which would be an

616
00:33:15,920 --> 00:33:21,880
interesting episode would be on
the products for all the for Rio

617
00:33:21,920 --> 00:33:24,920
BHP Fortescue, because I'm not,
I've actually got a follow on me

618
00:33:24,920 --> 00:33:26,280
street.
I've been doing a bit of digging

619
00:33:26,280 --> 00:33:29,320
about like just, you know, like
because Yandy's a stand alone

620
00:33:29,320 --> 00:33:29,960
product.
Rd.

621
00:33:29,960 --> 00:33:32,640
Valley's similar to Yandy, but
it doesn't go into the Pilbury

622
00:33:32,640 --> 00:33:36,560
belt blending because they're
higher silica and I think it's

623
00:33:36,560 --> 00:33:39,160
low phosphorus.
But Japanese smelters like that

624
00:33:39,160 --> 00:33:41,080
product and there's a market for
it.

625
00:33:41,080 --> 00:33:43,640
So there's a bloody iron ore
guru.

626
00:33:44,200 --> 00:33:47,240
I would love to have a yarn
about that in detail about the

627
00:33:47,240 --> 00:33:48,880
different products.
It'd be fascinating.

628
00:33:48,880 --> 00:33:51,920
I think there's an equal chat in
in Cold to be had, just like we

629
00:33:51,920 --> 00:33:56,080
had with Aluminium Owl with
regards to Bork site and how

630
00:33:56,080 --> 00:34:00,160
specialized it is for the
specific plant that it's going

631
00:34:00,160 --> 00:34:02,200
to.
And I remember after I spoke

632
00:34:02,200 --> 00:34:06,360
about it, talking about Rio's
shift down the the grade curve

633
00:34:06,600 --> 00:34:08,800
with everything that's gone on.
I had some awesome feedback from

634
00:34:08,800 --> 00:34:12,159
people that have spent years
just studying this stuff.

635
00:34:12,159 --> 00:34:14,840
There's there's a wealth of
knowledge for these people that

636
00:34:14,840 --> 00:34:16,320
some people here in WA have
given.

637
00:34:16,320 --> 00:34:18,600
They spend the whole career just
looking at this stuff.

638
00:34:18,600 --> 00:34:22,440
Like the the index is 62%, which
is supposed to be, you know,

639
00:34:22,480 --> 00:34:25,520
that's like REO, say 6 yes,
supposed to be REO bent blend,

640
00:34:25,520 --> 00:34:27,719
but they're like the one and
they're lucky if it starts with

641
00:34:27,719 --> 00:34:29,159
a six these days when that
people blend.

642
00:34:29,159 --> 00:34:31,639
I think it's kind of been, you
know, get going lower every time

643
00:34:31,639 --> 00:34:33,480
itself.
Well, like it's your old school,

644
00:34:33,480 --> 00:34:35,679
like your Tom prices and all
that.

645
00:34:35,679 --> 00:34:38,880
Like they're getting, you know,
pretty, they're getting mined

646
00:34:38,880 --> 00:34:42,239
out like Hope Downs, like
they're all getting, they've

647
00:34:42,239 --> 00:34:45,639
been going a while and you know,
your new ones like Rogue Valley

648
00:34:45,639 --> 00:34:51,639
and what is it?
Rock, Gouda Di and yeah.

649
00:34:51,639 --> 00:34:54,360
And then they're the Rio ones
and they're obviously Rio move

650
00:34:54,360 --> 00:34:55,800
the most.
Yeah.

651
00:34:55,960 --> 00:34:57,720
So yeah, it's all very
interesting.

652
00:34:57,760 --> 00:35:02,800
And the other point you made on
yeah, heritage and just getting

653
00:35:02,800 --> 00:35:05,800
approvals ties in with that
massively because part of the

654
00:35:05,800 --> 00:35:09,120
reason Rio talk about declining
grade is because they haven't

655
00:35:09,120 --> 00:35:11,080
got approvals.
What they thought they'd get

656
00:35:11,080 --> 00:35:13,720
years ago, it's only now coming
to the fore.

657
00:35:13,920 --> 00:35:16,720
So it all goes together and
there's a very interesting

658
00:35:16,960 --> 00:35:21,000
discussion to add on that.
Like we sorry for excuse me to

659
00:35:21,080 --> 00:35:24,360
be doing three times the right
they're doing for the West

660
00:35:24,360 --> 00:35:28,120
Pilgrim.
You know, mine that they brought

661
00:35:28,120 --> 00:35:30,600
online and it's the reason
they're not is because they had

662
00:35:30,600 --> 00:35:32,200
to rethink their production
areas.

663
00:35:32,800 --> 00:35:34,280
This is a common theme we've
heard.

664
00:35:34,480 --> 00:35:37,320
We've heard it Speaking of
people at at at Rio BHP and

665
00:35:37,320 --> 00:35:39,800
Hancock.
Like this is just a big, big

666
00:35:39,800 --> 00:35:42,600
theme and driving great decline,
higher costs and you've got to

667
00:35:42,600 --> 00:35:44,840
mine into the water table as
well, which adds complexity.

668
00:35:44,960 --> 00:35:47,600
Yeah, well, I think Cloudbreak
for Fortescue, that was like

669
00:35:47,800 --> 00:35:51,040
freaking wet or notoriously wet.
So that must have been below the

670
00:35:51,040 --> 00:35:54,480
water table that and you know,
that's the ones they they pick

671
00:35:54,480 --> 00:35:57,040
up and it's a double whammy from
you know, this has been going on

672
00:35:57,040 --> 00:35:59,440
for years.
So you can bet your bottom

673
00:35:59,440 --> 00:36:01,400
dollar most of the high grade
has been taken.

674
00:36:01,440 --> 00:36:04,520
It's not going to just magically
pop up under exploration.

675
00:36:04,720 --> 00:36:08,920
I think BHP real the like know
where the high grade is or was,

676
00:36:09,240 --> 00:36:12,640
But then you double double that
with the heritage stuff these

677
00:36:12,640 --> 00:36:14,960
days compared to when they built
a lot of these projects.

678
00:36:14,960 --> 00:36:17,920
It's, you know you.
Get timelines High Road.

679
00:36:17,920 --> 00:36:21,280
Huge increase in importance and
the complexity of that.

680
00:36:21,480 --> 00:36:26,120
Yeah, and you know, if you can
pick up something like Red Hawks

681
00:36:26,120 --> 00:36:30,400
Blacksmith, which is advanced
approvals higher grade, you

682
00:36:30,400 --> 00:36:34,600
know, maybe even for enforce use
case, they could they could if

683
00:36:34,600 --> 00:36:37,560
they wanted to beneficiate it at
the facility.

684
00:36:38,000 --> 00:36:40,400
You know, if you're just 30 KS
away or whatever, then then they

685
00:36:40,400 --> 00:36:43,440
can get a fair bit higher grade
out of it too if they wanted to.

686
00:36:43,440 --> 00:36:45,400
But it's it's a shortly hit,
right.

687
00:36:45,400 --> 00:36:48,560
It stacks up.
When I saw the deal pop up, I

688
00:36:48,560 --> 00:36:51,920
had in my head that this was a
project that was on in Reza's

689
00:36:51,920 --> 00:36:54,120
shopping list eventually because
they, you know, that that

690
00:36:54,120 --> 00:36:58,680
ambitions to unlock a lot of the
a lot of the the stranded iron

691
00:36:58,680 --> 00:37:01,120
ore deposits.
It would have made sense from an

692
00:37:01,120 --> 00:37:05,800
OpEx perspective for it would
lower the OpEx versus the PFS.

693
00:37:05,800 --> 00:37:07,440
If you could if you could put it
on the whole road and the whole

694
00:37:07,440 --> 00:37:10,160
Rd. kind of got extended or
maybe you found a different

695
00:37:10,160 --> 00:37:12,680
transportation route to get the
walls to get from Red Hawks

696
00:37:12,680 --> 00:37:14,320
perspective.
That is yeah.

697
00:37:14,360 --> 00:37:17,880
Or just whoever like like you
would you would lower the OpEx

698
00:37:18,040 --> 00:37:21,160
to send it on the whole road
from Red Hawks perspective.

699
00:37:21,160 --> 00:37:23,800
But you know, it's also gonna
have lower OpEx again by putting

700
00:37:23,800 --> 00:37:26,480
it on, you know, FMDS rail,
which is right next to it'll.

701
00:37:26,480 --> 00:37:27,880
Be lower on the a row, wouldn't
it a?

702
00:37:27,880 --> 00:37:30,240
100% lower, yeah, but if you
were, absolutely.

703
00:37:30,320 --> 00:37:33,800
Yeah, But from the min rays
perspective, can't hear your

704
00:37:33,800 --> 00:37:36,560
thoughts obviously it's you know
one of the big questions we have

705
00:37:36,560 --> 00:37:39,240
is can they get the tons that
they already have over the whole

706
00:37:39,240 --> 00:37:41,640
Rd.
Yeah, I let's, let's see what

707
00:37:41,640 --> 00:37:43,360
happens there.
You know, a bit of time we'll

708
00:37:43,360 --> 00:37:46,600
have to, to evolve before we,
before we see what the whole Rd.

709
00:37:46,680 --> 00:37:48,240
can sustainably do and all that
sort of stuff.

710
00:37:48,240 --> 00:37:52,960
But the one of the
considerations is, again, this

711
00:37:52,960 --> 00:37:55,640
is higher grade than what?
But they'll be mining from the

712
00:37:56,360 --> 00:37:58,840
West O'Brien oil project in, in
general.

713
00:37:58,840 --> 00:38:00,560
It's, you know, pockets of high
grade and all that sort of

714
00:38:00,560 --> 00:38:02,200
stuff.
But yeah, this, this would be a

715
00:38:02,200 --> 00:38:04,800
sweetener.
I'm sure Mins would have loved

716
00:38:04,800 --> 00:38:08,640
the scenario where they get
mining services contract and

717
00:38:08,640 --> 00:38:10,760
yada, yada, yada, all those
sorts of things in a JV.

718
00:38:10,760 --> 00:38:14,760
But yeah, the reality is, yeah,
I think it didn't happen.

719
00:38:15,080 --> 00:38:18,320
I just doubt that Mins are kind
of in a position to do anything

720
00:38:18,320 --> 00:38:22,320
that's particularly, yeah,
that's, you know, particularly

721
00:38:22,320 --> 00:38:24,600
chunky at this point in time.
They're just, yeah, Max pressure

722
00:38:24,600 --> 00:38:26,160
on the financial front.
Ding Ding Ding for allergy.

723
00:38:26,160 --> 00:38:28,120
I was just about so we've just
had a lot of food.

724
00:38:28,120 --> 00:38:33,520
Update in the notes D Allergy
CETF and min res Go J Go allergy

725
00:38:33,520 --> 00:38:35,480
C.
I'm with you there on on the min

726
00:38:35,480 --> 00:38:38,000
res thoughts.
But we've we've spoken at length

727
00:38:38,000 --> 00:38:39,560
about them.
Let's get into the the structure

728
00:38:39,560 --> 00:38:43,400
of this this deal for a minute.
Kind of snazzy, yeah.

729
00:38:43,400 --> 00:38:47,200
Interesting how how it sort of
come about and how it's

730
00:38:47,200 --> 00:38:50,080
prompting people to take quick
action.

731
00:38:50,200 --> 00:38:52,120
I like, yeah, I liked it.
I like the structure.

732
00:38:52,120 --> 00:38:55,080
It's a bit different.
There's a few parameters which

733
00:38:55,360 --> 00:38:58,080
would be a big consideration for
the, for the bankers behind it,

734
00:38:58,080 --> 00:39:01,120
namely like Red Hawk has two
shareholders which account for

735
00:39:01,160 --> 00:39:04,600
82% of the, the, the
shareholding, which is, you

736
00:39:04,600 --> 00:39:06,960
know, you don't see that
everyday at the rate, think of

737
00:39:06,960 --> 00:39:12,760
them as Todd, they've got 60.7%
and OCJOCJ has 21.2%.

738
00:39:13,200 --> 00:39:15,920
So Fortescue would, you know,
hopefully be able to wrap things

739
00:39:15,920 --> 00:39:18,680
up pretty quickly if those two
shareholders are on side and,

740
00:39:18,760 --> 00:39:21,280
and accept.
Hence what we see is those two

741
00:39:21,280 --> 00:39:24,120
shareholders, they've been, you
know crossed in some capacity on

742
00:39:24,120 --> 00:39:27,400
the deal because they have both
signed call option deeds with

743
00:39:27,400 --> 00:39:30,480
Fortescue for a portion of their
shares which would allow

744
00:39:30,480 --> 00:39:36,480
Fortescue to buy 19.9% of Red
Hawk from them for for $1.05 per

745
00:39:36,480 --> 00:39:38,640
share.
The the pace of the deal that

746
00:39:38,640 --> 00:39:42,840
makes it accelerate though is
the the uplift in offer price if

747
00:39:42,840 --> 00:39:47,480
Fortescue can get 75%
acceptances in in seven days.

748
00:39:47,720 --> 00:39:49,360
Which is those two?
That's all you need.

749
00:39:49,760 --> 00:39:50,880
That's all you need, right?
Yeah, that's.

750
00:39:52,160 --> 00:39:53,680
Kind of telling me it's just a
bloke.

751
00:39:53,760 --> 00:39:57,240
It's like TONZ but they
abbreviated as Todd.

752
00:39:57,240 --> 00:39:59,080
But it's like, yeah, got to look
into it one day.

753
00:39:59,840 --> 00:40:01,320
They're right.
We'll definitely be looking into

754
00:40:01,320 --> 00:40:02,320
that.
Is the MD.

755
00:40:03,600 --> 00:40:05,280
Not a major shareholder yeah, it
has shares yeah.

756
00:40:06,840 --> 00:40:12,120
Now what what all of this means
is that there's a there's a, you

757
00:40:12,120 --> 00:40:15,840
know, very high probability that
those two shareholders they're

758
00:40:15,840 --> 00:40:17,880
going to accept the offer in
seven days time.

759
00:40:17,880 --> 00:40:20,280
Now, they haven't provided an
intention statement here, but if

760
00:40:20,280 --> 00:40:22,480
they've been, you know, crossed
on the deal, I think they've

761
00:40:22,480 --> 00:40:25,920
both got board nominees as well,
both the shareholders and the

762
00:40:26,560 --> 00:40:28,320
They've been crossed on the deal
in some capacity where they've

763
00:40:28,320 --> 00:40:31,080
signed call options.
You'd imagine like I'm inferring

764
00:40:31,080 --> 00:40:33,200
that they're going to accept
into it in seven days time.

765
00:40:33,800 --> 00:40:36,240
All all that means to say is
that like an interloper has to

766
00:40:36,240 --> 00:40:39,520
move stupidly fast from here to
stand a chance.

767
00:40:39,520 --> 00:40:42,360
You've got to mobilize a lot of
different work streams in order

768
00:40:42,360 --> 00:40:46,200
to kind of, you know, publicly
announce a superior proposal or

769
00:40:46,200 --> 00:40:49,800
bid that is, yeah, capable of
acceptance in some capacity,

770
00:40:50,120 --> 00:40:53,840
which, yeah, which I, I think
it's just an, it's an

771
00:40:53,840 --> 00:40:56,560
intentional structure to to, to
mitigate that as an option.

772
00:40:56,960 --> 00:41:00,480
And, and, you know, we can think
of examples in the past where

773
00:41:00,480 --> 00:41:02,680
people have disrupted deals.
We've got billionaires in the

774
00:41:02,680 --> 00:41:05,520
state who have exposure to iron
ore who like disrupting deals.

775
00:41:06,200 --> 00:41:09,160
Maybe you'll say Delphi Rocker
Minority.

776
00:41:09,960 --> 00:41:11,560
Yeah, they might be mates with
old Todd.

777
00:41:12,160 --> 00:41:14,480
Who knows?
Anyways, it's a kind of clever,

778
00:41:14,600 --> 00:41:16,600
clever mechanic.
We'll see how it plays out.

779
00:41:16,600 --> 00:41:20,040
The last tidbit on the structure
that encourages an expedited,

780
00:41:20,320 --> 00:41:23,560
expedited timeframe, though,
I've read that Red Hawk, they

781
00:41:23,560 --> 00:41:26,480
ran a strategic process after
the PFS.

782
00:41:26,480 --> 00:41:29,680
So you know, they this was like
a put out the financing parties

783
00:41:29,680 --> 00:41:32,920
off tape, blah, blah, blah.
Iron ore producers exploring the

784
00:41:32,920 --> 00:41:35,040
full gamut of ways to go into
production.

785
00:41:35,480 --> 00:41:38,720
And you know, the offer from FMG
was the best of that, you know,

786
00:41:38,960 --> 00:41:41,280
strategic review process that
was that was run.

787
00:41:41,280 --> 00:41:44,440
So they've, they've actually,
they've launched this proved

788
00:41:44,440 --> 00:41:48,000
deal already with an independent
experts report, you know, in

789
00:41:48,000 --> 00:41:49,920
favour of the transaction.
You really see that kind of

790
00:41:49,920 --> 00:41:52,080
component sort of done before or
an announcement.

791
00:41:52,960 --> 00:41:57,200
Hence things can are capable of
just being, being over pretty

792
00:41:57,200 --> 00:41:59,560
damn quickly on this front.
But if you just zoom out like

793
00:42:00,000 --> 00:42:02,760
the big story here is that
declining, declining grades.

794
00:42:03,680 --> 00:42:06,480
And yeah, I just think there's,
there's, there's a lot, a lot to

795
00:42:06,480 --> 00:42:09,520
that part of our our industry
has a lot of flawing

796
00:42:09,520 --> 00:42:12,520
implications and something that
I think we've got to do some

797
00:42:12,520 --> 00:42:18,040
work to pry into over time.
Correct me if I'm wrong, the MD

798
00:42:18,160 --> 00:42:20,640
of Red Hawk also did the Vimy
deal.

799
00:42:20,640 --> 00:42:23,800
He was MD Vimy.
He was which deep yellow Mr.

800
00:42:23,800 --> 00:42:26,080
Michael?
Yeah, so Jeezy can pump out a

801
00:42:26,080 --> 00:42:28,520
deal.
Yeah, yeah, yeah, very well.

802
00:42:28,520 --> 00:42:32,400
I think he came in, came into
that from the FDI side.

803
00:42:32,400 --> 00:42:35,560
I could be wrong.
But he did the deal with

804
00:42:35,560 --> 00:42:38,560
Borshoff with Deep Yellow, now
doing one with Twiggy.

805
00:42:39,600 --> 00:42:40,560
That's right.
Good on you.

806
00:42:40,840 --> 00:42:43,400
Now, Speaking of the majors,
we've talked about the majors.

807
00:42:43,440 --> 00:42:45,680
I was just on the phone to the
land man.

808
00:42:46,120 --> 00:42:48,040
The man himself.
Kind of a man that deals with

809
00:42:48,040 --> 00:42:50,160
majors.
Do you know for any people that

810
00:42:50,160 --> 00:42:53,440
don't know, that's Maddie Hall
from Get Wet Solutions, the

811
00:42:53,440 --> 00:42:56,640
Australian land man.
He's informed me that the land

812
00:42:56,640 --> 00:43:00,920
man and get wetter now in the
rehab game with the majors re O

813
00:43:00,920 --> 00:43:02,640
Tinto.
Rehab.

814
00:43:02,920 --> 00:43:04,400
Rehab what?
Sort of rehab.

815
00:43:04,400 --> 00:43:07,200
They're bloody.
It's a good rehab.

816
00:43:07,680 --> 00:43:12,120
It's installing a get wet
bladder for to assist with the

817
00:43:12,120 --> 00:43:16,240
irrigation requirements for
rehabbing post mining.

818
00:43:16,520 --> 00:43:20,360
So even when mining finishes,
get wet are still the key

819
00:43:20,360 --> 00:43:23,480
ingredient to a mining
operation.

820
00:43:24,240 --> 00:43:26,000
That is all I can say.
And they're dealing with the

821
00:43:26,000 --> 00:43:27,680
majors.
That's pretty awesome, The land.

822
00:43:27,960 --> 00:43:31,480
Of course the land man is going
to work with the majors, so.

823
00:43:31,480 --> 00:43:33,120
Very impressive.
Not just Rio, either.

824
00:43:33,400 --> 00:43:37,720
Yeah, and well, Rio obviously
knew that Get Wet are the the

825
00:43:37,720 --> 00:43:42,400
only company in Australia that
supply and install the bladders

826
00:43:42,840 --> 00:43:47,000
get wet bladders.
So just get Rio getting wet.

827
00:43:47,080 --> 00:43:49,000
I would suggest you Get Wet as
well.

828
00:43:49,280 --> 00:43:51,080
Thank you.
Get wet, go land man.

829
00:43:51,360 --> 00:43:53,480
He answered the phone.
He's like get a land man here.

830
00:43:54,600 --> 00:43:58,200
So good.
JD on a bit of a more somber

831
00:43:58,200 --> 00:44:01,760
note, unfortunately bit of
unrest in the DRC.

832
00:44:02,120 --> 00:44:07,600
Yeah, there's been conflict
intensify in the eastern part of

833
00:44:07,920 --> 00:44:11,480
the DRC.
Pretty, pretty sort of sad news.

834
00:44:11,800 --> 00:44:16,320
It's an area that's had conflict
for quite some time now on the

835
00:44:16,320 --> 00:44:18,960
border with Rwanda.
So we sort of flash up a map

836
00:44:18,960 --> 00:44:22,400
where it all sits.
I'll give a bit of context

837
00:44:22,400 --> 00:44:26,080
briefly on, on the conflict, all
sort of sourced from the the

838
00:44:26,080 --> 00:44:30,040
major news outlets and then tied
in with how it's kind of

839
00:44:30,400 --> 00:44:34,120
relevant to the, to the money
miners and the the sort of

840
00:44:34,120 --> 00:44:35,640
companies and, and the mining
industry.

841
00:44:35,640 --> 00:44:38,720
It sort of plays a significant
role in this area.

842
00:44:38,720 --> 00:44:43,480
And we'll touch on Alpha Min
specifically, so to to hone in

843
00:44:43,480 --> 00:44:45,520
and give the context for the
money miners on what's going on

844
00:44:45,520 --> 00:44:47,680
here.
You've got the city of Goma in

845
00:44:47,680 --> 00:44:51,840
the eastern DRC.
It borders with Ksenyi, which is

846
00:44:51,840 --> 00:44:54,400
on the Rwandan side of the
border.

847
00:44:54,400 --> 00:44:58,400
It sits on the shores of Lake
Kivu and just to the South of an

848
00:44:58,400 --> 00:45:02,800
active volcano within the Great
Rift Valley, which is a sort of

849
00:45:03,040 --> 00:45:06,880
corridor which people will refer
to runs NS through the area

850
00:45:06,880 --> 00:45:10,520
there decent sized city as well.
2 million people is the official

851
00:45:10,520 --> 00:45:14,360
population.
You've got over 500,000 people

852
00:45:14,360 --> 00:45:16,480
that have been displaced living
in that area.

853
00:45:16,480 --> 00:45:20,360
And looks like they're they're
sort of moving again now because

854
00:45:20,360 --> 00:45:24,240
of everything that's gone on.
But it's a pretty sizable number

855
00:45:24,240 --> 00:45:27,520
of people that live in this area
and that have been disrupted by

856
00:45:27,520 --> 00:45:30,800
the the regional conflict that's
gone on for some time there.

857
00:45:31,480 --> 00:45:35,120
Yeah, so I give what's, what's
the the history like the context

858
00:45:35,120 --> 00:45:37,680
of why this conflict, why it is
happening in the East?

859
00:45:37,680 --> 00:45:40,840
There, I'll, I'll keep it brief
mate, because there's a super,

860
00:45:40,840 --> 00:45:43,760
super long history that people
can chase up online if they're,

861
00:45:44,040 --> 00:45:45,880
they're interested.
But essentially yesterday, the

862
00:45:45,880 --> 00:45:50,240
Dr. CS foreign minister accused
Rwanda of a declaration of war

863
00:45:50,520 --> 00:45:54,000
after this group that people may
have heard of, the M23 rebels,

864
00:45:54,200 --> 00:45:59,080
claimed to have seized the city.
Rwanda reportedly hasn't denied

865
00:45:59,080 --> 00:46:03,560
that they backed this M23 group,
but they accuse Congolese

866
00:46:03,560 --> 00:46:06,920
authorities of supporting
various other militias trying to

867
00:46:06,920 --> 00:46:09,840
topple their own government in
Rwanda.

868
00:46:10,680 --> 00:46:14,080
That rebel group, M23, they've
been fighting the Congolese army

869
00:46:14,080 --> 00:46:17,920
as well as UN peacekeepers in
the region there for quite some

870
00:46:17,920 --> 00:46:20,600
time.
The DSC sort of replied by

871
00:46:20,600 --> 00:46:24,000
cutting all ties with Rwanda,
calling for sanctions to be

872
00:46:24,000 --> 00:46:27,840
placed on the country, although
Rwanda just flipped it the other

873
00:46:27,840 --> 00:46:32,000
way and blamed the DRC for
causing the escalation in

874
00:46:32,000 --> 00:46:35,560
tensions in the area.
So you've got the the UN chief,

875
00:46:35,560 --> 00:46:39,320
Antonio Gutierrez calling for
Rwanda just to pull their their

876
00:46:39,320 --> 00:46:43,080
troops out of the DRC.
But Rwanda pretty quickly

877
00:46:43,080 --> 00:46:46,320
rejected this.
So that is in, you know, 30

878
00:46:46,320 --> 00:46:47,920
seconds.
What's kind of gone on there?

879
00:46:47,920 --> 00:46:49,800
Plenty still unfolding.
And the president of each

880
00:46:49,800 --> 00:46:52,920
country is going to meet on
Wednesday to try and peacefully

881
00:46:53,280 --> 00:46:55,760
sort this out.
And let's hope that can happen.

882
00:46:56,360 --> 00:46:58,520
Just to go back a little bit
though, this has happened

883
00:46:58,520 --> 00:47:01,320
before.
In 2012, the same group, M23,

884
00:47:01,480 --> 00:47:03,640
seized the city of Goma for
about 10 days.

885
00:47:03,640 --> 00:47:06,440
Then there was an agreement and
things settled down for for

886
00:47:06,440 --> 00:47:09,000
quite some time.
But yeah, thousands of people

887
00:47:09,000 --> 00:47:11,960
have unfortunately passed away
and over a million have been

888
00:47:12,040 --> 00:47:14,120
displaced throughout all of
this.

889
00:47:14,120 --> 00:47:19,280
So long long history there that
you know not quite the right

890
00:47:19,280 --> 00:47:24,240
forum to chat about it here.
DRC is freaking like it's huge.

891
00:47:24,240 --> 00:47:29,120
Like it's not a, not a, it's not
like a bloody South NSW or

892
00:47:29,120 --> 00:47:31,000
anything.
She's pretty big, so.

893
00:47:31,000 --> 00:47:33,040
Massive.
So this is way away from the the

894
00:47:33,040 --> 00:47:35,720
cop operations that we've often
spoken about in the South of the

895
00:47:35,720 --> 00:47:38,600
country.
It's massive as well as like

896
00:47:38,600 --> 00:47:41,080
thick jungle and mountainous at
times as well.

897
00:47:41,080 --> 00:47:44,200
Maddie, so long, long, way away
from all of that.

898
00:47:44,640 --> 00:47:46,840
But you don't have the copper
mines, but you've still got

899
00:47:47,040 --> 00:47:50,360
mining, a lot of mining that
goes on in this area, although a

900
00:47:50,360 --> 00:47:55,000
lot of the operations here are
artisanal mines, very small

901
00:47:55,000 --> 00:47:57,400
operations.
It's not your, your Glencore Sea

902
00:47:57,400 --> 00:48:01,280
MOX and these sorts of groups
that operate in the eastern part

903
00:48:01,280 --> 00:48:06,400
of the country, but you're
getting decent amounts of tin on

904
00:48:06,400 --> 00:48:10,840
a global scale, Tantalum coming
out, a lot of artisanal gold

905
00:48:10,840 --> 00:48:13,960
mines in the area, tungsten.
So a lot of these minerals come

906
00:48:13,960 --> 00:48:17,800
out, but artisanal mines, they
get smuggled across the borders,

907
00:48:17,800 --> 00:48:20,600
they go out eastward and into
the global market.

908
00:48:20,600 --> 00:48:23,720
And the the narrative is pretty
similar to what a lot of people

909
00:48:23,720 --> 00:48:27,040
think of Cobalt, which happens
again in another part of the

910
00:48:27,040 --> 00:48:31,120
country, but the the execution
of it with people taking their

911
00:48:31,120 --> 00:48:34,720
cut along the way.
A lot of middle men is, you

912
00:48:34,720 --> 00:48:37,960
know, similar in in nature.
There is one major mining

913
00:48:37,960 --> 00:48:41,200
operation that's, you know, not
not too far away from, from

914
00:48:41,200 --> 00:48:44,360
Gomer though, and that's, that's
Alpha Men's spicy tin mine,

915
00:48:44,360 --> 00:48:46,760
which similar to the reasons
you're interested in Bellevue.

916
00:48:46,760 --> 00:48:49,760
Single asset developer, single
asset developer, lots of.

917
00:48:50,000 --> 00:48:53,120
And whenever you hear that the
bear case on on, on Alpha Men,

918
00:48:53,840 --> 00:48:56,920
it's people like #1 on that list
is the M23 Rebels.

919
00:48:57,240 --> 00:49:00,720
Yeah, 100% and.
One of the only pureplay.

920
00:49:00,720 --> 00:49:03,120
Yeah, one of the investable like
one of the two, you know,

921
00:49:03,280 --> 00:49:04,880
Western listed investable stuffs
you'd say?

922
00:49:04,920 --> 00:49:07,480
Yeah.
Do they produce as much as

923
00:49:07,680 --> 00:49:09,760
renison?
More, more, more.

924
00:49:09,760 --> 00:49:11,440
Yeah.
And have growth, whereas

925
00:49:11,440 --> 00:49:13,360
renison, you know, arguably
doesn't have as much growth.

926
00:49:13,400 --> 00:49:13,840
Yeah.
Yeah.

927
00:49:13,880 --> 00:49:16,920
So we're talking in the, in the
ballpark of 20,000 tons per

928
00:49:16,920 --> 00:49:21,400
annum of tin with people hoping
that gets to 25 over over time.

929
00:49:21,960 --> 00:49:25,040
And just to throw up a few maps
here and show kind of where the

930
00:49:25,080 --> 00:49:28,280
the conflict is.
And you can see sort of various

931
00:49:28,280 --> 00:49:32,400
artisanal minds that have been
militarized with these groups

932
00:49:32,400 --> 00:49:35,280
kind of relying, taking control
of these artisanal minds so that

933
00:49:35,280 --> 00:49:37,720
they get funding to, to run
their operations.

934
00:49:38,320 --> 00:49:43,000
But the, the Alpha Min project
sits much more to the West and

935
00:49:43,000 --> 00:49:45,640
like I said, up into the
mountains through kind of

936
00:49:46,160 --> 00:49:49,480
jungle.
So it's it's not easy land to

937
00:49:49,480 --> 00:49:53,280
sort of just get across to.
And that from the alpha min

938
00:49:53,280 --> 00:49:57,040
perspective definitely minimizes
the risk of the mine itself

939
00:49:57,040 --> 00:49:58,840
being taken.
I don't think that's going to

940
00:49:58,840 --> 00:50:00,520
happen.
I think there's quite a way away

941
00:50:00,520 --> 00:50:03,040
and I don't think that's
necessarily the interest.

942
00:50:03,040 --> 00:50:06,080
While M 23 will definitely want
to get their hands on some of

943
00:50:06,080 --> 00:50:10,280
these small operations to fund
what they do, getting their

944
00:50:10,280 --> 00:50:16,600
hands on an Alpha Min is, yeah,
not, not a high probability

945
00:50:16,600 --> 00:50:21,520
event the way I kind of see it.
And yeah, to to kind of support

946
00:50:21,520 --> 00:50:25,400
Alpha Min for a moment, the, you
know, having Western reputable

947
00:50:25,400 --> 00:50:29,920
companies there that support the
communities, that pay for a lot

948
00:50:29,920 --> 00:50:32,680
of people is a huge positive.
And it's, it's something quite

949
00:50:32,680 --> 00:50:36,120
awesome that Western miners can
go and do with, with high

950
00:50:36,120 --> 00:50:38,120
standards.
Obviously we sort of, we sort of

951
00:50:38,120 --> 00:50:41,280
talk about it being harder for
Western companies to operate in

952
00:50:41,280 --> 00:50:43,920
parts like this, but there's a
lot of positivity that these

953
00:50:43,920 --> 00:50:45,960
companies can bring in, in going
there.

954
00:50:45,960 --> 00:50:50,480
So that's something just to to
underline on Alpha Min.

955
00:50:51,520 --> 00:50:54,760
So I'll flash up the, the map
here and you can see again,

956
00:50:54,760 --> 00:50:57,480
looking at the logistics, you
can see the red dot is roughly

957
00:50:57,480 --> 00:51:00,200
where the operation that Alpha
Min have is.

958
00:51:00,200 --> 00:51:04,200
You can see highlighted to the
right is Goma, but they don't

959
00:51:04,200 --> 00:51:06,200
actually get a lot of their
supplies from Goma.

960
00:51:06,480 --> 00:51:09,560
What they're kind of doing is
they're sending stuff outward

961
00:51:09,800 --> 00:51:14,160
and then they send it to the
northwest to Kasangi and then

962
00:51:14,160 --> 00:51:19,560
across in the sort of eastern
direction to to Benny and then

963
00:51:19,840 --> 00:51:22,840
outward to the global markets
through Uganda that way.

964
00:51:22,840 --> 00:51:25,360
So they're not heavily reliant
on the roads that come through

965
00:51:25,680 --> 00:51:28,240
from Goma.
It's a pretty poor quality Rd.

966
00:51:28,680 --> 00:51:33,520
People previously flew in from
Goma into the operation.

967
00:51:33,520 --> 00:51:36,240
They weren't driving on that
road, although the company did

968
00:51:36,240 --> 00:51:39,800
have a small satellite office in
Goma.

969
00:51:39,800 --> 00:51:43,120
So just to kind of clear up that
point, logistically, they're not

970
00:51:43,120 --> 00:51:47,240
super, super reliable on that
pathway through the country.

971
00:51:47,400 --> 00:51:52,040
They're they're actual Yeah.
The ability for them to ship out

972
00:51:52,040 --> 00:51:57,640
their tons and also access in is
not direct direct viaggre at

973
00:51:57,640 --> 00:51:59,520
all.
Yeah, that's right.

974
00:51:59,520 --> 00:52:01,840
So, I mean, on the fringes,
there will be some sort of

975
00:52:01,840 --> 00:52:04,920
disruptions, but that's not a
massive disruption like a key

976
00:52:04,920 --> 00:52:06,960
Rd. coming in.
It's going to cut them off from

977
00:52:06,960 --> 00:52:11,640
everything that they needed.
But the share price fell down,

978
00:52:11,640 --> 00:52:14,800
mate.
It's just another kind of, yeah,

979
00:52:15,040 --> 00:52:18,120
typical, you know, Western
markets get get a little bit

980
00:52:18,120 --> 00:52:20,560
fearful or is it just, you know,
probably they've been somewhat

981
00:52:20,560 --> 00:52:22,440
resilient given the market term
all today anyway.

982
00:52:22,600 --> 00:52:26,000
That's the big question, right?
So down 13% for people that

983
00:52:26,000 --> 00:52:27,280
didn't see it.
I think this one's quite

984
00:52:27,280 --> 00:52:31,120
different to what we spoke about
with like Resolute and and Mali

985
00:52:31,120 --> 00:52:33,120
for, you know, partly the
reasons are just outlined.

986
00:52:33,120 --> 00:52:36,120
I don't think the the rebel
group gets that far in.

987
00:52:37,320 --> 00:52:39,160
So many people wouldn't have
invested.

988
00:52:39,160 --> 00:52:41,320
And this is the big risk that
kind of pointed to, right?

989
00:52:41,400 --> 00:52:42,720
Something like this was going to
happen.

990
00:52:42,720 --> 00:52:46,400
Specifically the M23 group was
going to come and disrupt the

991
00:52:46,400 --> 00:52:50,040
area and do something.
So if you're an affirming

992
00:52:50,040 --> 00:52:51,800
shareholder, you're probably
thinking, hey, it could have

993
00:52:51,800 --> 00:52:56,600
been a whole lot worse than the
share price peeling back 13%.

994
00:52:57,000 --> 00:53:00,600
It's not all flowery.
I mean, the small chance of MNA

995
00:53:00,600 --> 00:53:03,160
happening, I think it's gotten
even smaller.

996
00:53:03,160 --> 00:53:06,560
I don't put many odds on people
coming in and scooping them up.

997
00:53:07,240 --> 00:53:09,880
Who comes in and bids the stock
in the meantime?

998
00:53:09,880 --> 00:53:11,720
I think it's going to take a
little while for people to

999
00:53:12,240 --> 00:53:15,760
forget about this for this to
sort of calm down like.

1000
00:53:15,760 --> 00:53:17,720
They'll see that, they'll see
the dividend in April, and

1001
00:53:17,720 --> 00:53:19,120
they'll buy.
Exactly.

1002
00:53:19,160 --> 00:53:22,120
So you're getting paid to sort
of wait if you are a

1003
00:53:22,120 --> 00:53:25,560
shareholder, I think you're
talking Canadian $0.05 maybe

1004
00:53:25,560 --> 00:53:31,080
plus on a 93 cent stock as a
dividend in April that's two and

1005
00:53:31,080 --> 00:53:34,720
a bit months away.
So that's not bad payment for

1006
00:53:34,720 --> 00:53:36,000
just holding the thing.
And then you've got that

1007
00:53:36,000 --> 00:53:39,200
optionality.
The the tin price narrative is

1008
00:53:39,200 --> 00:53:40,600
intact.
Maddie, you asked me if if the

1009
00:53:40,600 --> 00:53:42,360
tin price is going to sort of
rocket before we started

1010
00:53:42,360 --> 00:53:44,920
recording.
I don't think there's a massive

1011
00:53:44,920 --> 00:53:48,040
change to what amount of tin is
going out to the world market

1012
00:53:48,040 --> 00:53:51,440
with with these sorts of events.
So I think this is.

1013
00:53:51,680 --> 00:53:54,760
The tin still going out, it's
just who's getting the money for

1014
00:53:54,760 --> 00:53:55,840
it might change.
Yeah.

1015
00:53:55,840 --> 00:53:58,800
So from a global perspective, I
think it's a relative like non

1016
00:53:58,800 --> 00:54:00,800
event.
It's not like an, A mind going,

1017
00:54:01,000 --> 00:54:05,880
a massive mind going offline.
So I, I don't think Alfman

1018
00:54:05,880 --> 00:54:08,880
shareholders will be fretting
massively.

1019
00:54:08,920 --> 00:54:11,920
You know, I think this is the,
the first question management

1020
00:54:11,920 --> 00:54:14,280
have always been asked and
they've been well prepared and

1021
00:54:14,760 --> 00:54:17,640
they would have been talking
their shareholders through what

1022
00:54:17,640 --> 00:54:20,160
kind of goes on for, for a long
sort of time.

1023
00:54:20,160 --> 00:54:21,800
It was, it was pretty
interesting to see that they

1024
00:54:21,800 --> 00:54:25,400
didn't put out an announcement
on, on the back of this.

1025
00:54:25,400 --> 00:54:29,720
We might see one, you know, in,
in the next few days, in the

1026
00:54:29,720 --> 00:54:33,520
next little, little period when
like these guys are Joe Berg as

1027
00:54:33,520 --> 00:54:37,480
well as TSXV listed.
Reminds me of WAAF last time

1028
00:54:37,480 --> 00:54:39,200
there was a coupe.
You know, it's just don't feel

1029
00:54:39,200 --> 00:54:41,560
the need to yeah, put an
announcement off.

1030
00:54:41,560 --> 00:54:47,240
It's just I'm possible has.
There been many of these like

1031
00:54:47,480 --> 00:54:53,560
events or is this a similar to
WAAF in terms of like risk or

1032
00:54:53,560 --> 00:54:56,480
risk on moments with these
rebels?

1033
00:54:56,480 --> 00:54:59,160
Probably different to what I
mean, they've supposedly taken a

1034
00:54:59,160 --> 00:55:02,560
city, these rebels, which is
the, you know, nearest big city

1035
00:55:02,560 --> 00:55:05,440
to the to the mine.
But for the logistics reasons,

1036
00:55:05,880 --> 00:55:08,400
yeah, they articulated probably
not a big threat to the mine.

1037
00:55:08,400 --> 00:55:12,320
And, and also the historical
precedent is that that rebels

1038
00:55:12,320 --> 00:55:14,720
have only taken the city for a
maximum of 10 days before the,

1039
00:55:14,720 --> 00:55:17,040
you know, pressures have been
sufficient enough for them to to

1040
00:55:18,240 --> 00:55:19,600
not take the city.
Yeah.

1041
00:55:19,680 --> 00:55:21,360
And I mean, we've, we've
stressed this before, we've

1042
00:55:21,360 --> 00:55:24,000
stressed it in the in the
context of WAFF and so on.

1043
00:55:24,000 --> 00:55:28,160
But like the advantages that
these guys bring to that part of

1044
00:55:28,160 --> 00:55:30,080
the country can't be
understated.

1045
00:55:30,080 --> 00:55:32,640
They do, they do an awesome job.
They employ, employ so many

1046
00:55:32,640 --> 00:55:37,200
people in the area, so many
people along the the logistics

1047
00:55:37,200 --> 00:55:40,880
routes rely on this.
It would be very detrimental to

1048
00:55:40,880 --> 00:55:44,240
that area for thousands of
people and you know many

1049
00:55:44,240 --> 00:55:47,400
thousands who are indirectly
supported by the operation were

1050
00:55:47,400 --> 00:55:49,840
that to go offline.
That said, that's not stopped

1051
00:55:49,840 --> 00:55:53,320
people in the past from doing
things like that, but there's a

1052
00:55:53,320 --> 00:55:56,680
lot of reasons there everyone to
keep this operation going and

1053
00:55:56,680 --> 00:56:00,440
keep things humming.
So, yeah, I think, I think

1054
00:56:00,440 --> 00:56:02,920
shareholders will have that in
the back of their mind.

1055
00:56:02,920 --> 00:56:07,720
And I think things were sort of
steady for the for the interim

1056
00:56:07,720 --> 00:56:10,720
period.
And yeah, I think they'll be

1057
00:56:10,760 --> 00:56:13,040
focused on that dividend like
you say, Trev coming through in

1058
00:56:13,320 --> 00:56:17,000
in due course with the the
optionality of the the 10th

1059
00:56:17,000 --> 00:56:19,040
thesis playing out in the
background, which gets every tin

1060
00:56:19,040 --> 00:56:21,560
Baron Yeah, pumped.
You'd love you'd love to see him

1061
00:56:21,560 --> 00:56:26,480
as a you like, you know,
disperse some degree of the the

1062
00:56:26,480 --> 00:56:29,640
risk geographically if the
trouble is it's just not another

1063
00:56:30,280 --> 00:56:31,680
in mind to own in a different
country.

1064
00:56:31,880 --> 00:56:33,760
Yeah.
It's such a small number of

1065
00:56:33,760 --> 00:56:35,960
investors that can buy the stock
as well.

1066
00:56:35,960 --> 00:56:39,600
Yeah, it's, you know, you're
never going to get those those

1067
00:56:39,600 --> 00:56:42,440
awesome sort of multiples unless
you get to a scale where you can

1068
00:56:42,640 --> 00:56:45,440
diversify out of the place and
then it's going to be a probably

1069
00:56:45,440 --> 00:56:48,680
a lower quality project.
So it's it's one of those ones.

1070
00:56:48,680 --> 00:56:51,600
So you kind of have to be
content with with how you get

1071
00:56:51,960 --> 00:56:54,840
compensated by the returns and
dividends as being an owner of

1072
00:56:54,840 --> 00:57:00,080
the project, so.
Very good, very good, bloody

1073
00:57:00,400 --> 00:57:02,360
very good.
Everything there, JD?

1074
00:57:02,920 --> 00:57:04,640
Thanks mate.
So it's an interesting 1.

1075
00:57:04,640 --> 00:57:05,840
So let's.
Correspondent.

1076
00:57:06,000 --> 00:57:10,160
Yeah, let's really hope that
that can sort of safely and

1077
00:57:10,240 --> 00:57:13,160
peacefully just cool down in in
that area.

1078
00:57:13,520 --> 00:57:16,120
I assume you 2 aren't going
there to.

1079
00:57:16,200 --> 00:57:19,240
Alpha man, we're, we're flying
into Lumumbashi.

1080
00:57:19,560 --> 00:57:21,240
Lumumbashi.
Copper hard in our South.

1081
00:57:22,280 --> 00:57:25,560
Best of luck boys, I'm going to
be awesome safe here.

1082
00:57:26,240 --> 00:57:32,880
Righto Speaking of safe mineral
mining services delivering the

1083
00:57:32,880 --> 00:57:37,400
open pit tons safe as a house
grounded OH.

1084
00:57:37,480 --> 00:57:40,480
Speaking of safe houses.
Safe safe houses, grounded

1085
00:57:40,520 --> 00:57:43,720
Sambic ground support.
Keep people safe, it's on there.

1086
00:57:43,960 --> 00:57:44,680
Oh T-shirt.
Oh.

1087
00:57:45,400 --> 00:57:49,040
CRE Insurance.
Do I need to say anymore?

1088
00:57:49,760 --> 00:57:52,040
It's in the name.
K drill I've got it written

1089
00:57:52,040 --> 00:57:54,400
here.
Safe, reliable and productive

1090
00:57:54,400 --> 00:57:56,760
surface RC drilling.
So safe they sat.

1091
00:58:00,200 --> 00:58:03,600
It's just a safe bet to do the
JF ES before you do the drill

1092
00:58:03,600 --> 00:58:06,800
and just make it easier.
It's selfish contracting.

1093
00:58:06,840 --> 00:58:10,800
I've seen how safe they are but
but it ain't ripped Airbus

1094
00:58:10,800 --> 00:58:13,760
contracting.
It is blue chip contracted with

1095
00:58:13,760 --> 00:58:18,680
salt Bush contracting and well
get wet solutions must be

1096
00:58:18,680 --> 00:58:21,520
freaking safe if they've got a
Rio Tinto vendor number.

1097
00:58:22,720 --> 00:58:26,760
They're not easy to come by.
Right I uro money might it's

1098
00:58:27,280 --> 00:58:30,480
stay safe.
Information contained in this

1099
00:58:30,480 --> 00:58:33,200
episode of Money of Mine is of
general nature only and does not

1100
00:58:33,200 --> 00:58:35,840
take into account the
objectives, financial situation,

1101
00:58:35,880 --> 00:58:37,880
or needs of any particular
person.

1102
00:58:38,200 --> 00:58:41,240
Before making any investment
decision, you should consult

1103
00:58:41,240 --> 00:58:44,320
with your financial advisor and
consider how appropriate the

1104
00:58:44,320 --> 00:58:48,000
advice is to your objectives,
financial situation and needs.