Whitehaven Nail the Landing, Patriot look to the Future

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Brido buddy miners end of the
week.

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But the start of the rise of
Axis mining technology, that's

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just our just start of a never
ending rise trusted.

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Thursday is the end of the week.
Yeah, 'cause we've pre record

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tomorrow got a got a bloody.
We've got an episode that is

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quite in parallel with the
goodness of Axis and being the

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trusted drill old survey
instrumentation provider.

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We've got Mr Are we going to
reveal him who's on tomorrow?

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Yeah, why not?
Why?

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Not that's it.
Big Dave Franklin come back on.

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He's back about a.
Year after funds management,

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bloody mate shot the shit.
Great.

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It was awesome.
Bloody stay tuned late drop

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Friday Harvey like Big Arnold,
JJ Benedict darling, bloody

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Whitehaven mate, what is you're
going deep.

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I got a bit of the cold fever
again, so I'm going to talk

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about Whitehaven.
Two parts to it the the full

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year results mate.
And then we've also got the big

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sell down.
That's the real eye catcher.

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And then also one I saw tip
through last night, console and

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arch a big merger of vehicles in
the good old US of A.

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So that's one that I'll add a
few comments to.

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I didn't have the chance to go
super deep on it, but I found it

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pretty interesting.
Oh, me and bloody.

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Me and JC have headed over to
the bloody to Quebec gone in

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deep the Shaka chewy Wanan.
Yeah, buddy, we're just we're

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the P met PA is out and we're
we're just gonna the new name is

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the shaky mine.
We're just gonna say that's

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that's our abbreviation.
Abbreviation.

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The shaky show.
We're gonna get right into that.

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JD Whitehaven, mate, take us on
a journey.

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Me and me and JC have dressed in
black in honour of your segment.

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All righty, let's let's do a bit
to chat about here.

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So let's start with the the sell
down of Blackwater first,

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because that is, you know,
definitely the the more

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interesting part.
So selling 30% of Blackwater for

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those that didn't see it to
Nippon and JFE Steel.

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So both of them obviously
Japanese steel makers and

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importantly, they've been long
time buyers of the product that

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comes out of Blackwater back
when it was a ABMA owned

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operation.
Now it was actually pretty

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interesting.
You don't see these Japanese

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conglomerates come out with
punchy comments all that often.

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It's not really in their in
their nature at all.

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But they had commentary that
they gave to their market over

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in Japan and they were, they
were as punchy as you see these

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guys kind of get.
They're talking about the the

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QLD royalties here and I'll read
out a quick snippet.

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The royalties will certainly
contribute to a decrease in the

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supply of steel making coal from
Queensland in the long term.

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So I feel like we've sort of
said this every day of the week

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and it's a, a theme that's going
to continue on.

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This has materially shifted up
the cost curve in Queensland and

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we've seen it in other states.
We've seen it in other parts of

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the world too.
But that's going to be a, a

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theme we're talking about.
And if that's not like seriously

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bullish met call, then I don't
really know what is.

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But let's get into the the deal
itself.

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So obviously no surprise this
sale that they'd flagged it when

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they were buying the assets off
BMA in October of last year,

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talking about 10% to 30%.
They've gone with 30% and that's

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a sort of breakup, 20% to to one
of the partners, Nippon, and 10%

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to the other.
That would.

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So how much?
What's the, what's the dollars,

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JD?
How much cash we're talking

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mate?
So what they're selling it for

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is advertised as US 1.08
billion.

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But I'll, I'll just remind
everyone of what they actually

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paid for the mines themselves
because it's important to put it

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into context.
So you remember they bought 2

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mines, Blackwater and Dornea.
They're just selling 30% of one

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of them Blackwater and they
played US 2.1 billion upfront

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and then there was 500 million
in the first tranche of a

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deferred payment, another 500
million and another 100 million

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after that.
They're coming on the first,

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second and third anniversaries
of the deal.

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And then you've also got US 900
million in contingent payments

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depending on what the the
relevant met coal price does

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over that period.
Now once they've been a little

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quieter on is the 430 million
Aussie in stamp duty and

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transaction costs plus another
125 million in transition costs.

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So what they call is business
sort of readiness and IT

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transfers and stuff.
They're actually way more costly

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than I'd anticipated.
Yeah, they were the terms.

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But obviously you've got today's
deal, like I said, US 1.08

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billion upfront.
So you can almost chalk off, you

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know, almost half of that
upfront payment they had to make

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and obviously 30% of the future
production.

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So that upfront payment with a
bit of, you know, back of the

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envelope math becomes Aussie 2.1
billion or US 1.4 billion if

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you're adding in those
transition costs and those

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transaction costs.
So it's a a material change.

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And I think it's worth sort of
looking at the balance sheet and

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then we can kind of get into the
the thoughts I had after digging

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into.
The deal in the past couple of

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hours, the money loaners will
have to hold on to for J DS

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evaluation of this Is it good?
Is it bad?

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Is it cheap?
Is it expensive?

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We'll we'll have to hold 5 for
for two more minutes Maddie,

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because I think it's worth on
the edge of your seat.

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I think it's worth chatting
about the balance sheet because

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they finished the financial year
1.3 billion in net debt Aussie.

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Now the, the sell Down's going
to have a $150 million tax bill

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attached to it and then they're
going to get the rest of that

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cash in the first quarter of
next year.

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Now just bearing in mind US 500
million goes out the door at the

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beginning of April.
It's the first year anniversary.

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And then three months after
that, you've got a potential

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contingent payment that's capped
at US 350 million and it's sort

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of linked to a price of US 159
for the the index that they're

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using.
The current price is 40 bucks

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over that before you take into
account the relativity of what

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they actually get versus the
index.

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But it does look like there's
going to be a bit of contingent

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paid.
Yeah, right.

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It's bloody.
It's funny.

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Talking numbers in coal mines,
met coal mines after talking

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gold mines and stuff.
They're just.

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Amazing.
Heaps bigger like they're.

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Freaking huge.
It's pretty refreshing, isn't

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it?
Oh.

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Bloody hell.
And like, even when you were

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talking about Yankel the other
day about how much debt they

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paid off to get to this stage,
was it like 3 fucking billion

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dollars or something?
USU insane freaking friend.

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I'm crazy.
These are just huge.

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Yeah, just from a little bloody
seam of swamp shit.

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Bloody unbelievable.
Anyway.

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He's another big.
He's another big number, Maddie,

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another 500 million roughly.
That's the midpoint of CapEx to

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go out this year alone, this
financial year.

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But you know, I, I think they're
in the clear here.

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I think they've put to bed any
doubts that they're going to

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have to go to the market and,
and sell new shares in my mind.

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And you know, you, you kind of
think about the balance sheet

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more broadly.
They've said they're not

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actually going to retire the
debt.

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So they're going to keep a, a
bit of leverage on the cards,

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but they are in a, a super,
super healthy position now with

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this sell down and everything.
So now we can kind of get into,

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is this a good deal?
Is this a bad deal?

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Yeah, straight up the answer for
that ratio fare.

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Mate, this, this is a good deal.
And again, it's just worth

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looking at it in the broader
context of the acquisition of

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Blackwater and Dornia.
They are just it, it was a

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masterful transaction in, in
hindsight, it's just ageing

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phenomenally.
Like I said, the whole cost

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curve is moving up in Queensland
that that's not just because of

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royalties.
I mean, a lot of these these

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cash cost curves have moved up
because every single item that

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goes into that has moved up and
then you've got the royalties

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going in on top of it.
But just just think about this

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and, and think about the
business from where it was like

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one year ago.
You're bringing in great

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partners that are really aligned
with you today.

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The terms are great.
They're paid a pretty decent

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price.
The cash is coming in upfront.

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As soon as that settles in the
first quarter of next year,

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they're going to take a
management fee because it's, you

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know, it's going into a joint
venture type structure.

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They're going to get the cash
flows until that kind of closes

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from where they were one year
ago.

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They've brought in two decent
net coal operations.

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You can kind of say what you
will about about Queensland as a

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jurisdiction.
And here's the big one.

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They didn't even have to dial
out the shareholders.

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Yeah, that the dividends and the
buybacks went on hold for a

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period and everyone was up in
arms about it.

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And we'd been a bit critical
more from an angle of what

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management was incentivized to
do at the time because that was

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pretty opaque.
But they are in a seriously

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stronger position now than what
they were a year ago.

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They're going to be net cash
and, you know, not all that long

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a time.
They've got a great foothold in

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a market that is structurally
super attractive in my eyes.

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And, you know, hopefully they
can manage the costs and make

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good money out of this.
But I think they can be sort of

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pretty proud of the the work
that they've done over the past

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year.
So how they've executed it?

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What, what do you think would
happen if they didn't sell a

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stake?
Like what?

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What were the implications for
them?

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Just why?
More gear?

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That had only shorter term
bridging facilities in place, so

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they would have had to, to
refinance things.

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And you, you know, when you're
running with, you know, such a

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high, relatively high gearing
ratio, you're just exposed way

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more to any sort of cyclical
downturns, any bad weather, any

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of those sorts of things, It can
just whack you that much harder.

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So I, I think it's just a, yeah,
it's, it's the kind of prudent

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thing to do.
And it's, you know, what they

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were going to do all along.
Like I said, they've been

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flagging this from from day one.
Are they going to do the same at

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Dornier I?
I don't think so.

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Black Blackwater's the, the main
one here.

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It's, you know, far, far bigger
than than Dornier.

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So I I don't think they are
pressured to, I don't think they

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need to.
Yeah, right.

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OK.
So the what about the full year

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results that come out?
I so I'm glad you do all these

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full year results.
Fuck, and anytime I say that me

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bit Dar, I'm just like, wow, I'm
going to need to make.

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There was a fair bit to wrap my
head around.

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So I thought the best way to do
this because we got a bit to

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talk about today would just to
highlight the three most

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interesting parts of the call
today.

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Now, first up, costs.
This this one comes screaming

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out at you if you've followed
Whitehaven for a little one, the

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unit costs came in way higher
than expectations.

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So they're talking about 140 to
155 bucks a tonne.

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That is on track to double from
four years ago.

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Now, of course the, the QLD
assets have come in, they are

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structurally higher in, in cash
costs, but it's still a pretty

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phenomenal increase in their
cost base.

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And if you, if you look at where
the driver or what the drivers

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are of this increase in cost,
you've firstly got less tonnes

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coming out of NSW.
Like we always talk about less

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tonnes equals higher costs.
But on the Queensland front, I'm

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going to give them the benefit
of the doubt here because

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they've taken over assets that
are both, like I've said,

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structurally higher cost, but
they've also come out of BMA who

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just run things way more
expensive.

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They've got way more, you know,
matter, you know, they've got

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way more people in place than
they perhaps need to.

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00:11:25,960 --> 00:11:27,520
So it's hard to kind.
Of.

226
00:11:29,360 --> 00:11:32,800
Exactly all that, all that sort
of stuff.

227
00:11:32,840 --> 00:11:36,240
So it's only been four months
that they've had the assets now.

228
00:11:36,600 --> 00:11:38,760
And I'm I'm pretty confident
that they can run these Lena.

229
00:11:38,760 --> 00:11:41,080
We'll see like how much Lena
we're kind of talking about.

230
00:11:41,360 --> 00:11:44,360
It'll take a bit of time, but
they've already recalibrated the

231
00:11:44,360 --> 00:11:45,680
workforce.
Unfortunately, that meant

232
00:11:45,760 --> 00:11:47,480
letting go of a couple 100
people.

233
00:11:47,960 --> 00:11:51,120
There are a couple other
concerns on the unit cost front.

234
00:11:51,120 --> 00:11:54,760
This sort of same job, same pay
when you talk about labour hire

235
00:11:54,760 --> 00:11:58,160
and all these kinds of things
are hitting people to varying

236
00:11:58,160 --> 00:11:59,880
degrees.
It looks like it they they're

237
00:11:59,880 --> 00:12:01,800
getting whacked around quite a
bit by it.

238
00:12:02,280 --> 00:12:04,840
And then another thing that
we've spoken about a bunch this

239
00:12:04,840 --> 00:12:08,240
week, delayed approvals, just
amplifying all the above costs.

240
00:12:09,080 --> 00:12:11,040
I think from from their
perspective, they'll be hoping

241
00:12:11,040 --> 00:12:14,080
that amplifies the, the price of
the products they're selling.

242
00:12:14,560 --> 00:12:17,840
But for the time being that the
cost base has just got not, it's

243
00:12:17,840 --> 00:12:19,240
just notched up quite a bit
there.

244
00:12:20,880 --> 00:12:24,000
One more, one more sort of
comment to make on the on the

245
00:12:24,000 --> 00:12:26,640
cost base.
It's pretty disappointing when

246
00:12:26,640 --> 00:12:29,320
you look back at what they
guided to about a year ago when

247
00:12:29,320 --> 00:12:32,520
they bought the assets, they
were talking about the costs for

248
00:12:32,520 --> 00:12:36,000
the the five years to come and
they were talking about 119

249
00:12:36,000 --> 00:12:38,800
bucks at Blackwater and very
close to that at Dawnia.

250
00:12:38,800 --> 00:12:42,440
So it is significantly higher
than what they kind of guided to

251
00:12:42,440 --> 00:12:45,800
there.
But if they can, if the the coal

252
00:12:45,800 --> 00:12:49,160
price stays elevated, then it's
kind of water on the bridge.

253
00:12:49,600 --> 00:12:52,920
Talk, talk, talk.
Have a bit of.

254
00:12:53,120 --> 00:12:55,320
Talk.
Need a little breather before I

255
00:12:55,320 --> 00:12:57,480
get into the next one.
Geez, bloody mate.

256
00:12:57,920 --> 00:13:02,080
JD, JD, you bloody resident.
Mick Carl, expert now, right

257
00:13:02,080 --> 00:13:03,160
next.
Mate, you're talking me out.

258
00:13:03,560 --> 00:13:04,840
You're talking me out way too
much.

259
00:13:04,840 --> 00:13:07,880
So the second point that I found
super interesting is that they

260
00:13:07,880 --> 00:13:10,400
had pretty poor relatively
relativity.

261
00:13:10,680 --> 00:13:13,880
So what they achieve in pricing
versus the index they they could

262
00:13:13,880 --> 00:13:16,720
have benchmarked against them
specifically honing in on the

263
00:13:16,720 --> 00:13:22,200
QLD assets here, they realised
overall 74% relativity to that

264
00:13:22,400 --> 00:13:26,440
index that equated to a realised
price of USA 180 bucks.

265
00:13:26,440 --> 00:13:29,920
So historically a a pretty
healthy price, but they'll be

266
00:13:29,920 --> 00:13:32,840
hoping they can get again much
closer to what they guided to

267
00:13:32,840 --> 00:13:35,040
when they bought the things just
a year ago.

268
00:13:35,440 --> 00:13:37,160
It didn't.
It didn't take Einstein to

269
00:13:37,160 --> 00:13:39,120
figure out they had bad
relativity.

270
00:13:41,920 --> 00:13:44,240
Jesus Christ.
On fire.

271
00:13:44,840 --> 00:13:45,760
You.
Kill it, right?

272
00:13:45,760 --> 00:13:49,680
Well done.
Alrighty, last one before we

273
00:13:49,680 --> 00:13:54,440
talk about lithium guys, there's
a, there's no China sales from

274
00:13:54,440 --> 00:13:56,400
this business.
So if you, if you look at the

275
00:13:56,400 --> 00:13:58,440
the pie chart here where
everything goes, it's pretty

276
00:13:58,440 --> 00:14:01,600
interesting to see it goes, you
know, bar a little bit in Europe

277
00:14:01,600 --> 00:14:05,200
and what they call other
predominantly to Asia with Japan

278
00:14:05,200 --> 00:14:07,040
making the bulk of it.
And that's kind of interesting

279
00:14:07,040 --> 00:14:10,520
when you compare it to Yan coal,
who we spoke about a couple days

280
00:14:10,520 --> 00:14:12,400
ago.
Now obviously White Haven's a

281
00:14:12,400 --> 00:14:14,800
bit of a different blend now
they're, you know, it's got a

282
00:14:14,960 --> 00:14:20,440
60% met coal versus Yan coal
being way heavy, heavily

283
00:14:20,440 --> 00:14:24,200
weighted to thermal coal.
But I just thought that was kind

284
00:14:24,200 --> 00:14:27,520
of interesting and tying that in
with the, the bullishness that

285
00:14:27,520 --> 00:14:31,280
these met coal producers have
around India is pretty

286
00:14:31,280 --> 00:14:33,120
astounding.
I mean, we'll chalk up another

287
00:14:33,120 --> 00:14:35,360
chart here.
And, and the growth in India,

288
00:14:36,520 --> 00:14:38,520
you know, pretty much every
other country is either

289
00:14:38,600 --> 00:14:41,240
declining or staying relatively
flat.

290
00:14:42,120 --> 00:14:44,840
India's just growing
phenomenally according to the,

291
00:14:44,840 --> 00:14:46,640
the forecast that they kind of
use here.

292
00:14:47,040 --> 00:14:50,800
And we, we touched on I think on
Stan Moore's results quite a

293
00:14:50,800 --> 00:14:53,120
while back.
But it's interesting all these

294
00:14:53,120 --> 00:14:56,000
kind of met coal players have,
they've cottoned on to this and

295
00:14:56,000 --> 00:14:59,520
they're they're big India fans.
So it'd be interesting over over

296
00:14:59,520 --> 00:15:03,480
the next 5-10, fifteen years to
see how that kind of eventuates

297
00:15:03,480 --> 00:15:05,760
A lot of people hoping that
India obviously is that kind of

298
00:15:05,760 --> 00:15:08,920
China 2.0.
Isn't isn't that funny?

299
00:15:08,920 --> 00:15:13,480
Bloody looking at the yeah, it's
obviously the dynamic because

300
00:15:13,480 --> 00:15:16,080
China obviously mine a lot of
met coal.

301
00:15:16,200 --> 00:15:21,760
Is that right?
China have metcoal, they've gone

302
00:15:21,760 --> 00:15:24,920
very hard at it for the past
few, few decades.

303
00:15:24,920 --> 00:15:27,520
So they've, I mean they've got
thermal coal as well, which they

304
00:15:28,280 --> 00:15:32,320
used to, to power a lot of the
factories and industry across

305
00:15:32,320 --> 00:15:34,640
the country.
But they have historically come

306
00:15:34,640 --> 00:15:39,320
to Australia to buy the higher
quality bomb base and metcoal

307
00:15:39,320 --> 00:15:41,400
and.
Yeah, just like just looking at

308
00:15:41,400 --> 00:15:45,320
how much more is coming out of
India even, well there's more

309
00:15:45,320 --> 00:15:49,200
going into India seaborne to me
and for METCO going into India

310
00:15:49,200 --> 00:15:52,560
now than China like and it just
friggin spreads from there.

311
00:15:52,560 --> 00:15:54,440
That's bloody.
Would never have thought that.

312
00:15:54,680 --> 00:16:00,480
No, but even by the time you get
to 20402045, yeah.

313
00:16:00,480 --> 00:16:04,440
Even by the time you get to
20402045 like the the sum of

314
00:16:04,440 --> 00:16:08,960
India is almost equivalent to
the sum of every other country,

315
00:16:08,960 --> 00:16:10,760
right?
Very good, right?

316
00:16:10,760 --> 00:16:12,880
Good work chart.
Hey, what's the spark chart

317
00:16:12,880 --> 00:16:14,600
then?
Yeah, it's because Whitehaven

318
00:16:14,600 --> 00:16:18,000
really haven't had the big METCO
kick yet, have they?

319
00:16:19,440 --> 00:16:21,680
The, the market reacted very
well.

320
00:16:21,680 --> 00:16:25,040
They, when I last thought they
were up 6% on the, on the back

321
00:16:25,040 --> 00:16:27,000
of this news.
I mean you're sort of balancing

322
00:16:27,160 --> 00:16:28,920
high cost.
That was a, a down against

323
00:16:28,920 --> 00:16:31,920
expectations, but the sell down
really outweighed that which

324
00:16:31,920 --> 00:16:34,000
people were we're pretty stoked
about.

325
00:16:34,000 --> 00:16:37,320
And you know, they, they paid a,
a smaller dividend, but the, the

326
00:16:37,320 --> 00:16:41,000
proposition of those capital
returns is looking good again.

327
00:16:41,200 --> 00:16:45,600
Yeah, very good JBD Right, let's
get on to the next one.

328
00:16:45,600 --> 00:16:50,320
I'll payments out with the the
preliminary economic assessment.

329
00:16:50,320 --> 00:16:52,400
Is that the word Pai
preliminary?

330
00:16:52,400 --> 00:16:56,840
Yeah, yeah for the Shaka chewy
Wanan, which we're just gonna

331
00:16:56,840 --> 00:16:59,560
call shaky just to for
simplicity.

332
00:16:59,840 --> 00:17:04,480
So let's go through the figures,
the bloody, the, I guess the, I

333
00:17:05,359 --> 00:17:11,520
guess beyond James Bay, this is
like the next sort of big bloody

334
00:17:11,520 --> 00:17:13,599
spodumene deposit in North
America.

335
00:17:14,280 --> 00:17:18,359
You would say no, it's huge.
So go through the figures.

336
00:17:18,359 --> 00:17:25,200
What they've come out with after
tax MBV 2.9 bill Canadian 34%

337
00:17:25,200 --> 00:17:27,680
stage 1.
So they're doing a two stage

338
00:17:27,680 --> 00:17:32,080
approach.
So the stage 1 Nets CapEx of US

339
00:17:32,080 --> 00:17:36,640
487,000,000.
So look 24 year estimated mine

340
00:17:36,640 --> 00:17:42,880
life they're targeting after two
stages 800,000 tonne per annum

341
00:17:43,560 --> 00:17:47,440
of spodumene concentrate, which
is would put that around the

342
00:17:47,440 --> 00:17:51,840
fourth biggest operating mine in
the world when that does come

343
00:17:51,840 --> 00:17:54,920
along.
So look, we'll go, I don't want

344
00:17:54,920 --> 00:17:58,160
to get too much into bloody
operating costs and all that.

345
00:17:58,160 --> 00:18:01,280
I'll go through a bit, but far
out to sure.

346
00:18:01,280 --> 00:18:03,880
And bloody talk about cost for
something that's going to get

347
00:18:03,880 --> 00:18:06,080
mined in 20-30 is freaking hard
work.

348
00:18:06,920 --> 00:18:08,840
I suppose you've got to give a
guide at the moment.

349
00:18:09,160 --> 00:18:15,280
So the probably the biggest
change you'd say from where this

350
00:18:15,280 --> 00:18:20,080
was being touted before even by
the analysts route of what they

351
00:18:20,080 --> 00:18:23,360
thought was going to happen is
that there's going to be stage

352
00:18:23,360 --> 00:18:27,800
one's going to be an open pit
above sort of one end of CV5.

353
00:18:27,800 --> 00:18:30,120
And then stage two is going to
be underground.

354
00:18:30,360 --> 00:18:34,080
That is going to target the high
grade Novozone, the the, the

355
00:18:34,080 --> 00:18:39,480
honeypot and that high grade
novozone's got 22 million tonnes

356
00:18:39,480 --> 00:18:42,560
at 2.1% lithium in as a
resource.

357
00:18:42,680 --> 00:18:46,200
And look at that conversion will
be probably pretty good because

358
00:18:46,200 --> 00:18:49,920
it's thick and we'll go through
in terms of what the reserve

359
00:18:49,920 --> 00:18:52,200
grade would be.
So and we'll go go through that

360
00:18:52,200 --> 00:18:56,520
a bit later.
So yeah, it's frigging, she's a,

361
00:18:56,600 --> 00:19:00,080
she's a big humdinger.
So in terms of the amount for

362
00:19:00,080 --> 00:19:04,960
the CapEx they're predicting, so
stage one, 579 million.

363
00:19:04,960 --> 00:19:08,440
So that's for the 4th, 1st
400,000 tonne includes

364
00:19:08,440 --> 00:19:13,480
contingency and then stage two
is another US 393,000,000.

365
00:19:13,480 --> 00:19:15,800
So it's sort of two and a half
million tonne per time.

366
00:19:16,040 --> 00:19:19,400
And the second stage obviously
includes the development of the

367
00:19:19,400 --> 00:19:24,560
underground, but then they've
got this, I think this just came

368
00:19:24,560 --> 00:19:29,320
in this year, this Canadian
Clean Technology Manufacturing

369
00:19:29,600 --> 00:19:34,880
Investment Tax credit, CTMITC.
So I think and that's where they

370
00:19:34,880 --> 00:19:38,240
can actually they're saying
they're going to get back from

371
00:19:38,240 --> 00:19:42,240
that for stage 121 million back
in the door and stage

372
00:19:42,240 --> 00:19:45,400
295,000,000 back in the door.
I'm not sure if it's a.

373
00:19:46,320 --> 00:19:51,280
I'm unsure if it's like the flow
through taxing where you get it.

374
00:19:51,640 --> 00:19:54,080
It it read like a a tax credit,
pretty much.

375
00:19:54,080 --> 00:19:55,200
Yeah.
So I don't know if it's like

376
00:19:55,200 --> 00:19:58,560
flow through where you get it,
so after you spent it or if it

377
00:19:58,560 --> 00:20:02,080
offsets future income tax, I'm
just not sure about that.

378
00:20:02,080 --> 00:20:06,400
But they're sort of taking that
into account for the the net

379
00:20:06,400 --> 00:20:11,720
CapEx figure, so.
Now, Gary, they've got so it's

380
00:20:11,720 --> 00:20:16,840
DMS only 69% recovery in DMS
only with no flotation.

381
00:20:16,840 --> 00:20:19,640
I, I first saw that I'm like,
sheesh, that's pretty bloody,

382
00:20:20,080 --> 00:20:23,560
pretty bullish, but I.
Was going to say Maddie for the

383
00:20:23,560 --> 00:20:24,200
money.
Miners.

384
00:20:24,200 --> 00:20:25,640
What?
What actually is DMS?

385
00:20:25,680 --> 00:20:30,440
Oh, dense media separation.
So instead of cause spodger

386
00:20:30,440 --> 00:20:35,640
means denser than normal rock.
So you just in a basic term, I'm

387
00:20:35,640 --> 00:20:39,720
pretty sure you just spinning
around and the heavy shit goes

388
00:20:39,720 --> 00:20:44,160
to the outside and you take that
and if it's denser it means it's

389
00:20:44,520 --> 00:20:48,400
spodumain and not waste.
So it's just it separates things

390
00:20:48,400 --> 00:20:52,520
based on their relative density.
So my big Kenny Brisdon, he'd

391
00:20:52,520 --> 00:20:56,320
be, he'd be loving DMS only
after fucking around with the

392
00:20:56,320 --> 00:20:59,640
pill Gangora flotation for
bloody so long to get that up

393
00:20:59,640 --> 00:21:02,000
and go and be like all these
Christmas has come at once.

394
00:21:02,360 --> 00:21:05,480
Yeah, as I said, I looked at
69%, but then you look at the

395
00:21:05,480 --> 00:21:09,200
actual MET test work they've
done and it's like 20 plus

396
00:21:09,640 --> 00:21:13,520
samples and pretty much
everything above 1% seems to get

397
00:21:13,520 --> 00:21:19,280
well above 70% recovery, some
even into the 80s for DMS only.

398
00:21:19,280 --> 00:21:24,760
So it looks looks to be pretty
consistently course spodumene

399
00:21:25,000 --> 00:21:28,440
crystals.
So look, the test work backs up

400
00:21:28,440 --> 00:21:32,640
that bloody 69% and probably
yeah, shows.

401
00:21:32,640 --> 00:21:37,560
It's actually actually.
Can see exceeding that so and

402
00:21:37,560 --> 00:21:40,320
that's so this is for so you say
the numbers are quite so they'll

403
00:21:40,320 --> 00:21:46,480
talk about the list spot price
they've used I think it was like

404
00:21:46,480 --> 00:21:50,600
1375 but that's for SC 5.5.
So it works out that they're

405
00:21:50,600 --> 00:21:55,680
using in the deck 1500 US.
So obviously it's essentially

406
00:21:55,680 --> 00:21:59,920
half that at the moment.
But as we said, it's not getting

407
00:21:59,920 --> 00:22:03,840
more until 2030.
So we're you won't be turning it

408
00:22:03,840 --> 00:22:07,280
on tomorrow, no so.
How about on the operating cost?

409
00:22:07,480 --> 00:22:11,520
Well, what I think why like go
into the cost too much, but you

410
00:22:11,520 --> 00:22:15,400
can say that due to the
remoteness of it, because it's,

411
00:22:15,960 --> 00:22:19,000
you know in the frigging middle
of nowhere in Quebec, the

412
00:22:19,000 --> 00:22:21,760
transportation is one of their
biggest costs.

413
00:22:21,760 --> 00:22:26,120
Like transportation is about 30%
of the total operating costs.

414
00:22:26,120 --> 00:22:30,920
So that's after they've actually
mined it just transporting at

415
00:22:30,920 --> 00:22:34,800
the spot condo port, so 'cause
they've got a truck at 834

416
00:22:34,800 --> 00:22:37,960
kilometres and then get it on
trains to then take it to the

417
00:22:37,960 --> 00:22:39,720
port.
So it's a.

418
00:22:40,360 --> 00:22:42,960
Road trip and 1/2.
Yeah, that's that's that's sort

419
00:22:42,960 --> 00:22:46,320
of their biggest or not not
bottleneck, but where a lot of a

420
00:22:46,320 --> 00:22:48,880
bit of cost gets added on
compared to bloody, you know,

421
00:22:49,520 --> 00:22:53,760
shipping a bloody few 100K or
bloody badge and you know, build

422
00:22:54,400 --> 00:22:56,640
bloody handover.
Well that's only going to be 15

423
00:22:56,640 --> 00:22:59,560
K's to the poor far.
Got to just Chuck it in is the.

424
00:22:59,600 --> 00:23:02,960
Concept is the concept here
though, that they're selling

425
00:23:02,960 --> 00:23:04,720
everything into the North
American market?

426
00:23:04,840 --> 00:23:07,280
Well, it's like and the whole
thing is going to be it's this,

427
00:23:08,360 --> 00:23:12,080
you know, IRA compliant bloody
spodumene.

428
00:23:12,080 --> 00:23:16,000
So like this is going to be
potentially the an ex China

429
00:23:16,960 --> 00:23:20,480
supply of spod con.
So whether it or not they're,

430
00:23:20,480 --> 00:23:23,480
they're talking about like
what's going to happen with the

431
00:23:23,480 --> 00:23:26,960
downstream, like as whether like
a partner will come in and look

432
00:23:26,960 --> 00:23:29,520
at a maybe a integrated
downstream.

433
00:23:29,520 --> 00:23:31,160
Like God, you could build a
freaking plant.

434
00:23:31,160 --> 00:23:34,520
If someone you got a downstream
expert that wanted to build a

435
00:23:34,520 --> 00:23:36,720
bloody plant there should save a
bit.

436
00:23:36,800 --> 00:23:40,520
You still got to get that, still
get the hydroxide and and that

437
00:23:40,520 --> 00:23:42,320
out, but at least.
It's not spot.

438
00:23:42,600 --> 00:23:44,840
Yeah, tonnes, right.
I think I'll be interested in

439
00:23:45,520 --> 00:23:48,240
Survives at all in the end, but
it'll be interesting following

440
00:23:48,240 --> 00:23:52,920
this that they've got this out
now what sort of activity at

441
00:23:52,920 --> 00:23:56,160
these pretty depressed equity
prices in lithium.

442
00:23:56,440 --> 00:23:58,760
What actually comes to the table
because they've pretty they've

443
00:23:58,760 --> 00:24:00,760
laid it out.
It's like this is you know what

444
00:24:00,760 --> 00:24:03,760
we've got at the moment it is of
considerable scale.

445
00:24:04,160 --> 00:24:08,440
So they'll also hook into the
hydro power line.

446
00:24:08,640 --> 00:24:12,040
So real cheap electricity now.
I thought I'd actually do the

447
00:24:12,040 --> 00:24:15,000
numbers.
Everyone says hydro's cheap, but

448
00:24:15,760 --> 00:24:20,000
$0.05 a kWh is the predicted
price of electricity once it's

449
00:24:20,000 --> 00:24:22,160
gone.
What does that number mean?

450
00:24:22,360 --> 00:24:25,800
Well, that's when you call old
Timmy Taylor for some bloody

451
00:24:25,800 --> 00:24:28,240
power facts and figures.
I won't rattle these off like

452
00:24:28,240 --> 00:24:31,280
they're my my own.
Found out a diesel fired power

453
00:24:31,280 --> 00:24:33,960
station.
Just the fuel component alone.

454
00:24:33,960 --> 00:24:38,840
If diesel's around $1.50 a
litre, you'd be paying $0.37 a

455
00:24:38,840 --> 00:24:41,360
kWh and then add probably
another nine cents on top of

456
00:24:41,360 --> 00:24:44,040
that for the, if you've got an
independent power provider.

457
00:24:44,040 --> 00:24:46,480
So that's like 40 odd cents.
Wow.

458
00:24:47,160 --> 00:24:53,040
Trucked LNG just for the gas
itself is $0.22 a kWh hooked

459
00:24:53,040 --> 00:24:55,720
into a pipeline, probably 15
cents.

460
00:24:55,720 --> 00:25:01,280
So hydro at $0.05 a kWh is 32.
Shows how freaking cheap that

461
00:25:01,280 --> 00:25:03,920
is.
DM like Latin?

462
00:25:04,120 --> 00:25:08,120
They quoted 4 to $0.05 as well.
Yeah, yeah, so and look, D and

463
00:25:08,120 --> 00:25:11,560
it's DMS only.
So it will use a lot less power

464
00:25:11,560 --> 00:25:16,040
than a flotation circuit.
So because a shit load of power

465
00:25:16,040 --> 00:25:20,560
is required in required in the
grinding of of the processing

466
00:25:20,560 --> 00:25:22,360
operation.
So like you know, Kathleen

467
00:25:22,360 --> 00:25:26,080
Valley line town, they have to
their DFS said they have to

468
00:25:26,080 --> 00:25:29,760
grind down to about 180 Micron
'cause they're flotation.

469
00:25:30,320 --> 00:25:33,360
I've got you know, gold mines
will go down to 75 Micron.

470
00:25:34,120 --> 00:25:38,160
But these DMS projects they are,
they only grind to about friggin

471
00:25:38,160 --> 00:25:40,080
6 mil.
So heaps, heaps.

472
00:25:40,080 --> 00:25:42,560
Course, I think I don't think
that that's even grinding.

473
00:25:42,560 --> 00:25:45,600
I think that's just crushing
still plasters crushing to six

474
00:25:45,600 --> 00:25:48,600
mil though.
They I think they got to crush

475
00:25:48,600 --> 00:25:52,320
down to like .65 to 9 and a half
mil.

476
00:25:52,320 --> 00:25:56,120
That's the sort of three.
It's like a three stage DMS

477
00:25:57,040 --> 00:26:02,160
circuit where they have a like 3
different sizes to optimise the

478
00:26:02,160 --> 00:26:04,280
recovery.
So that's like the range of the

479
00:26:04,280 --> 00:26:07,480
crushed size of the rock.
So you do save power on

480
00:26:07,560 --> 00:26:10,000
processing.
It is an underground mine that

481
00:26:10,000 --> 00:26:11,440
they're proposing for the stage
two.

482
00:26:11,440 --> 00:26:15,480
So obviously the ventilation and
associated electrical machinery

483
00:26:15,480 --> 00:26:18,560
underground uses a lot more
power than an open pit.

484
00:26:18,840 --> 00:26:22,560
But when you when your power's
1/3 of the price of a frigging

485
00:26:22,560 --> 00:26:26,320
gas fired power station, you're
still saving shit loads anyway

486
00:26:26,320 --> 00:26:30,120
on power.
So there is the CapEx associated

487
00:26:30,120 --> 00:26:31,480
with it.
But because they do have to hook

488
00:26:31,480 --> 00:26:34,600
into the transmission line of
the hydropower, which is about

489
00:26:34,600 --> 00:26:37,680
55 KS away.
So you obviously got to Chuck

490
00:26:37,680 --> 00:26:40,120
that line in.
But just the fact that they can

491
00:26:40,120 --> 00:26:44,240
save so much power from the
hydro and then probably even

492
00:26:44,240 --> 00:26:49,440
save some of that power from
filling this joint with Smack

493
00:26:49,440 --> 00:26:52,120
VSD's in the underground.
Oh bloody.

494
00:26:52,120 --> 00:26:54,840
Imagine the shit load of
secondary event fans going in

495
00:26:54,840 --> 00:26:56,600
this underground.
Once you see the schematic

496
00:26:56,600 --> 00:26:59,320
you'll understand.
But like if you put them two

497
00:26:59,320 --> 00:27:02,480
together, it's like they're
actually going to make money out

498
00:27:02,480 --> 00:27:06,200
of using power.
Like if once you get the spec VS

499
00:27:06,200 --> 00:27:09,040
DS on there, it's like you're
going into negative power costs.

500
00:27:09,040 --> 00:27:10,560
Yes.
Like it's the people are just

501
00:27:10,560 --> 00:27:12,840
gonna give you money to use
power like.

502
00:27:13,160 --> 00:27:15,280
The Ultimate The Ultimate
battery is clean as a bloody

503
00:27:15,280 --> 00:27:19,280
whistle.
Hydro spec VS DS Bloody

504
00:27:19,320 --> 00:27:22,480
unbelievable.
And look, unfortunately most of

505
00:27:22,480 --> 00:27:26,640
the mining world isn't the
beneficiary of cheap hydropower.

506
00:27:27,560 --> 00:27:30,200
Not saying that you might as
well save a buck while you can.

507
00:27:30,200 --> 00:27:32,080
Like mate.
Oh, it's the collaboration.

508
00:27:32,080 --> 00:27:34,920
You ever thought you'd needed
Hydro and smack VSD's?

509
00:27:34,960 --> 00:27:37,040
Yeah.
Yeah, so pretty awesome.

510
00:27:37,040 --> 00:27:40,560
As I said, as I harped on last
week for the everyone that in

511
00:27:40,560 --> 00:27:44,760
Australia that is non hydro, the
only way you're gonna even get

512
00:27:44,760 --> 00:27:48,400
close to hydro is getting smack
VSD's in your underground mine

513
00:27:48,440 --> 00:27:50,840
to bloody 8.
They're in the tunnels over

514
00:27:50,840 --> 00:27:53,920
east, they're in the Sydney
tunnels, they're in the West

515
00:27:53,920 --> 00:27:55,760
Galbans.
They're in some Goldfields

516
00:27:55,760 --> 00:27:58,040
mines, like they're gonna be.
They're gonna be over at

517
00:27:58,040 --> 00:28:00,560
Windfall, I reckon, if they're
in Goldfields already.

518
00:28:01,080 --> 00:28:03,360
Marty, Marty Law, we're taking
you running.

519
00:28:03,360 --> 00:28:06,720
North America.
You're running on diesel.

520
00:28:08,720 --> 00:28:10,160
Just just silly not to use it.
Oh.

521
00:28:10,520 --> 00:28:11,920
Isn't it?
Isn't it what JD?

522
00:28:11,920 --> 00:28:16,200
So yeah, now look at the layout
of what they've proposed it's

523
00:28:16,200 --> 00:28:21,560
gonna look like.
So you'll see the CV 5 open pit

524
00:28:21,560 --> 00:28:25,040
on the left, that's what's
classed as stage one.

525
00:28:26,120 --> 00:28:29,720
And you'll you'll see the you'll
see an orange line to the right

526
00:28:29,720 --> 00:28:36,440
of that pit.
So that's where they term it as

527
00:28:36,440 --> 00:28:38,480
a dam.
So you've you've got the lake,

528
00:28:38,480 --> 00:28:41,040
which is essentially a big, it's
like a big fucking dam.

529
00:28:41,040 --> 00:28:43,920
It's like a Salt Lake where
where it's not like a flowing

530
00:28:43,920 --> 00:28:46,520
river or anything.
So they've got actually, that's

531
00:28:46,520 --> 00:28:48,720
where they after that orange
lines where they pretty much put

532
00:28:48,720 --> 00:28:51,840
a big fucking Bund and block it
off.

533
00:28:52,080 --> 00:28:56,200
And then so you you might have
water on one side, then on the

534
00:28:56,200 --> 00:29:00,040
other side, you just the water
sort of drains off by bloody by

535
00:29:00,040 --> 00:29:02,280
gravity.
So and that's the sort of the

536
00:29:02,280 --> 00:29:02,960
skin.
Yeah.

537
00:29:02,960 --> 00:29:07,080
And that's, that's guess the
skinny part of the lake where

538
00:29:07,080 --> 00:29:09,400
you're gonna where they put that
in.

539
00:29:09,400 --> 00:29:12,120
Because I think previously when
we're talking about it like that

540
00:29:12,320 --> 00:29:16,160
high grade Nova zone, which you
can see to the right where where

541
00:29:16,160 --> 00:29:19,240
it says CV 5 underground, that
was gonna be an open pit.

542
00:29:19,240 --> 00:29:24,160
So it's obviously to to Bund off
to the east of that to let

543
00:29:24,160 --> 00:29:27,760
everything trying off was like
obviously a lot, a lot bigger

544
00:29:27,760 --> 00:29:29,680
job.
But now they're going proposing

545
00:29:29,680 --> 00:29:33,320
to go underground.
That hate's fucking easy because

546
00:29:33,320 --> 00:29:35,240
they don't have to do anything
to that.

547
00:29:35,240 --> 00:29:38,400
The only time they'll have to,
you know, potentially bum that

548
00:29:38,400 --> 00:29:42,760
off and drain that part of the
lake is if they mine the open

549
00:29:42,760 --> 00:29:44,880
pit material above that Nova
zone.

550
00:29:44,880 --> 00:29:49,400
But that's fucking decades after
the freaking thing gets even

551
00:29:49,400 --> 00:29:52,480
started, so that's very, very
long term so.

552
00:29:52,720 --> 00:29:55,160
And how does the underground
sort of work, Maddie?

553
00:29:55,520 --> 00:30:00,720
Ohh, mate, so she's a fucking
she's a bloody these underground

554
00:30:00,720 --> 00:30:04,880
lithium mines like this in line
town, like they're fucking dream

555
00:30:04,880 --> 00:30:08,400
of dream ore bodies like 'cause
they're just fricking the strike

556
00:30:08,400 --> 00:30:11,520
length on them is that long.
It's all going to be mates that

557
00:30:11,520 --> 00:30:13,960
are working at Kathleen Valley.
They said you just go in and

558
00:30:13,960 --> 00:30:16,000
there's just fucking lithium
everywhere.

559
00:30:16,320 --> 00:30:19,760
Like it's just that it just goes
for fricking hundreds of metres.

560
00:30:19,760 --> 00:30:24,040
Like you look at you look at
this one like bloody it's I

561
00:30:24,040 --> 00:30:26,800
think it's like a kilometre of
strike or something like the

562
00:30:26,800 --> 00:30:29,720
actual length of the ore body.
And then you look along the

563
00:30:29,720 --> 00:30:34,720
actual cross section of it.
There's like 3 rows of of

564
00:30:34,720 --> 00:30:37,920
Stokes.
So you picture the best way to

565
00:30:37,920 --> 00:30:40,480
think about it is like think of
the never never ore body

566
00:30:40,480 --> 00:30:45,480
Spartans one.
That's like like, you know, one

567
00:30:45,480 --> 00:30:50,440
single stoke per chunk, but then
overlay that 2 two times.

568
00:30:50,600 --> 00:30:52,800
That's what that's what this is
in terms of the thickness.

569
00:30:52,800 --> 00:30:55,840
So you actually a court looking
at that cross section, you

570
00:30:55,840 --> 00:30:59,200
actually take one stoke, fill
it, then just go straight behind

571
00:30:59,200 --> 00:31:03,040
it and then start working
fucking yeah.

572
00:31:03,040 --> 00:31:05,520
There's just it's she's pretty
chunky.

573
00:31:05,520 --> 00:31:09,640
So and the best thing is if you
have overbreak in those Stokes,

574
00:31:09,640 --> 00:31:13,920
when you got these thick blobby
ore bodies, overbreaks ore, who

575
00:31:13,920 --> 00:31:17,280
gives a fuck?
Just bloody, just send it more

576
00:31:17,280 --> 00:31:20,440
overbreak, the better, more ore
if it's bloody, if you're in the

577
00:31:20,440 --> 00:31:23,240
middle of it.
So it could've like it could've

578
00:31:23,240 --> 00:31:26,160
been a sub level cave, this mine
looking at the ore body 'cause

579
00:31:26,160 --> 00:31:28,680
it's that thick sort of thing
that goes down.

580
00:31:28,680 --> 00:31:32,560
But I don't think a surface, a
sub level cave caving into a

581
00:31:32,560 --> 00:31:35,400
lake above it would be such.
A good idea?

582
00:31:35,800 --> 00:31:38,880
So.
No, so for it and we're talking

583
00:31:38,880 --> 00:31:41,480
22 million tonnes per annum from
the underground.

584
00:31:41,520 --> 00:31:43,760
Yeah, which will oh fucking piss
that in.

585
00:31:43,760 --> 00:31:49,280
You think Longtowns 3,000,000
tonne gonna ramp up to four one

586
00:31:49,280 --> 00:31:53,240
day, maybe 2 million done with
this size ore body and this

587
00:31:53,240 --> 00:31:56,880
struck length and just a pretty
I think it's saying they got the

588
00:31:56,880 --> 00:32:00,520
same philosophy as long town.
I think I read like a you know,

589
00:32:00,560 --> 00:32:03,520
it's a continuous loop.
He won a down decline and an up

590
00:32:03,520 --> 00:32:06,080
decline.
So should just be a frigging

591
00:32:06,600 --> 00:32:09,520
frigging rock factory.
So they'll have to pace fill

592
00:32:09,520 --> 00:32:14,040
everything.
But yeah, won't be sure.

593
00:32:14,840 --> 00:32:16,920
You just want big fucking fat
ore bodies.

594
00:32:17,080 --> 00:32:19,880
It's just easier.
So you look at the size of that

595
00:32:19,880 --> 00:32:25,000
to get 22 million tonne out of
that for a big thick ore body

596
00:32:25,000 --> 00:32:27,960
with multiple Stokes with big
long strike length and one

597
00:32:27,960 --> 00:32:31,960
access compared to Bellevue
saying they're going to get 1.6,

598
00:32:32,920 --> 00:32:35,560
It shows how much easier
2,000,000 tonne out of this is

599
00:32:35,560 --> 00:32:38,400
compared to trying to get 1.6
out of that mine that is a

600
00:32:38,400 --> 00:32:42,000
narrow vine ore body.
So that's a bit of, that's the

601
00:32:42,000 --> 00:32:46,360
bit of the contrast there.
And they've, they've definitely

602
00:32:46,360 --> 00:32:50,240
got options up their sleeve in
terms of the, the strategy.

603
00:32:50,240 --> 00:32:52,600
As I said, we're trying, we're
predicting the friggin future in

604
00:32:52,600 --> 00:32:57,720
six or seven years time.
But it's, it's when you look at

605
00:32:57,720 --> 00:33:02,440
how much Spodcon comes from the
underground like over for the

606
00:33:02,440 --> 00:33:06,120
800,000 tonne, over 500,000
tonne of that is from the

607
00:33:06,120 --> 00:33:09,080
underground in the, in the early
years, just because they got

608
00:33:10,040 --> 00:33:12,040
such high grade material down
there.

609
00:33:12,240 --> 00:33:14,560
That's based on the 2,000,000
tonne per annum coming out of

610
00:33:14,560 --> 00:33:16,960
there, all lithium price
dependent.

611
00:33:16,960 --> 00:33:19,920
But the like the case they're
putting forward is they got to

612
00:33:19,920 --> 00:33:24,560
mine this, the stage 1 pit and
then use the cash flow from that

613
00:33:24,640 --> 00:33:28,200
to build the second.
They'll build the first two and

614
00:33:28,200 --> 00:33:31,720
a half million tonne train, use
the cash flows from the pit and

615
00:33:31,720 --> 00:33:35,560
that trying to then do the
underground and build the second

616
00:33:35,560 --> 00:33:38,520
trying to go up to four and a
half 5 million tonnes.

617
00:33:38,520 --> 00:33:43,040
So that look the other option
they have is literally just you

618
00:33:43,040 --> 00:33:46,720
could just develop a high grade
underground mine 1st and then

619
00:33:46,720 --> 00:33:50,640
have that feed the first train.
So obviously pays pays things

620
00:33:50,640 --> 00:33:53,440
back a shit load faster.
If the materials coming out of

621
00:33:53,440 --> 00:33:57,960
the hole of friggin you look at
the grade prediction like 1.6 to

622
00:33:57,960 --> 00:34:02,240
1.8% lithium like considering
long towns like 1.4.

623
00:34:02,640 --> 00:34:05,200
So it shows what that
underground could do all as I

624
00:34:05,200 --> 00:34:08,520
said all price pending but we
who knows what the fucking spot

625
00:34:08,520 --> 00:34:10,719
price is going to be in 20-30
once this gone.

626
00:34:10,719 --> 00:34:14,800
But your lowest risk option is
always just to go straight to

627
00:34:14,800 --> 00:34:17,360
the high grade because grade
always wins.

628
00:34:17,360 --> 00:34:21,000
So probably similar to what a
Cisco and Goldfields have done

629
00:34:21,000 --> 00:34:23,159
at windfall that we talked about
the other week.

630
00:34:23,159 --> 00:34:27,800
Like where they actually fuck
that mine is developed friggin

631
00:34:27,800 --> 00:34:31,239
well ahead, they're at the OAR
and in there and just haven't

632
00:34:31,239 --> 00:34:33,280
even built a plant yet or
permitted it.

633
00:34:33,280 --> 00:34:37,480
So look, depending, depending on
the permitting and how that all

634
00:34:37,480 --> 00:34:40,480
works with this, if they can
assume they'll be able to, they

635
00:34:40,480 --> 00:34:42,679
could.
If you got a bloody take the

636
00:34:42,679 --> 00:34:45,960
risk, you could actually start
developing the underground mine

637
00:34:45,960 --> 00:34:51,920
in parallel with final FRD and
friggin all the final permits to

638
00:34:51,920 --> 00:34:54,760
come to actually start
processing and everything.

639
00:34:55,679 --> 00:34:58,400
Then once she's there, just
fucking start chucking

640
00:34:58,400 --> 00:35:01,800
underground high grade in.
So they they've got that option

641
00:35:01,840 --> 00:35:04,040
up their sleeve.
They could go either way.

642
00:35:04,040 --> 00:35:08,640
So that's bloody.
That's the mining.

643
00:35:08,880 --> 00:35:12,320
That's the mining.
Now in terms of finances, this

644
00:35:12,320 --> 00:35:13,840
is where I hand over to other
GC.

645
00:35:13,840 --> 00:35:18,320
You want to talk cash?
Let's talk cash, woman.

646
00:35:18,760 --> 00:35:21,480
Alrighty.
So as we said before, so that's

647
00:35:21,480 --> 00:35:26,040
an with the stage one and stage
two, we're looking at a, you

648
00:35:26,040 --> 00:35:30,160
know 800,000 tonne per annum
operation here, you know at

649
00:35:30,160 --> 00:35:37,320
steady state of SA 5 1/2 spot
con over 24 years.

650
00:35:37,320 --> 00:35:49,000
So all of that at AUS 1500 SC
six spot price gives you a post

651
00:35:49,000 --> 00:35:55,440
tax MPV 8 real of Canadian 2.9
billion and the post tax IR of

652
00:35:55,440 --> 00:35:58,280
34%.
So I'll definitely give them a

653
00:35:58,280 --> 00:36:02,200
tick and a tick for using
advertising their post tax on

654
00:36:02,200 --> 00:36:05,480
the front page and using a
proper real discount as well.

655
00:36:06,680 --> 00:36:12,400
One interesting thing to look at
is the the post tax MPV CapEx

656
00:36:12,400 --> 00:36:14,000
ratios.
Essentially, for every dollar

657
00:36:14,000 --> 00:36:17,680
I'm spending on CapEx, how much
MPMPV am I getting back in

658
00:36:17,680 --> 00:36:23,680
return?
So at the US 1500 per tonne SC6

659
00:36:23,680 --> 00:36:27,880
prices, again assuming stage one
and two CapEx, it's just shy of

660
00:36:27,880 --> 00:36:30,880
two times.
So US 2.2 odd billion dollars

661
00:36:30,880 --> 00:36:36,920
over of MPV over US 1.2 billion
odd CapEx.

662
00:36:37,120 --> 00:36:40,000
Does that does that include the
potential?

663
00:36:40,000 --> 00:36:43,960
Because it's not a not a set in
stone thing that the tax.

664
00:36:44,080 --> 00:36:46,800
That doesn't that doesn't
include the tax credit.

665
00:36:47,200 --> 00:36:48,400
So that that that's the cherry
on top.

666
00:36:48,440 --> 00:36:51,040
That's the cherry on top.
I mean, I wouldn't use it as my

667
00:36:51,040 --> 00:36:54,360
base case, but it's absolutely
something that can add a bit

668
00:36:54,360 --> 00:36:57,960
more sugar to the story.
Once that's firmed up, that's

669
00:36:58,400 --> 00:37:03,320
OK.
As a comparison, another company

670
00:37:03,320 --> 00:37:07,640
who's put out a Papa relatively
recently, Latin, which is

671
00:37:07,640 --> 00:37:11,920
currently subject to that
takeover from Pilbara, their PA

672
00:37:12,080 --> 00:37:15,320
showed about 400,000 tonnes from
over 11 years.

673
00:37:17,320 --> 00:37:21,960
They had us about US 300 million
of CapEx, that's across their

674
00:37:21,960 --> 00:37:27,400
stage one and two and a US 2 1/2
billion postex MPV 8 real.

675
00:37:28,080 --> 00:37:32,280
So if you do that ratio again
that's eight times, but

676
00:37:32,280 --> 00:37:38,280
admittedly they use AUS about
1850 a tonne SC6 price.

677
00:37:38,560 --> 00:37:45,040
If you apply that price to the
Patriot situation that generates

678
00:37:45,520 --> 00:37:51,360
AUS 4.4 billion MPV roughly.
So again, if you calculate that

679
00:37:51,360 --> 00:37:55,160
ratio, you brings it up to about
3 1/2 times.

680
00:37:56,160 --> 00:38:01,160
So it's interesting because both
are DMS only, both are SC 5 1/2.

681
00:38:01,480 --> 00:38:04,600
There is a bigger plant
throughput at Patriot and all in

682
00:38:04,600 --> 00:38:08,280
sustaining is they're relatively
similar, but it's marginally

683
00:38:08,280 --> 00:38:13,720
higher at at Patriot.
Also interesting to note they're

684
00:38:13,720 --> 00:38:15,880
they're both staged.
The two you're comparing there,

685
00:38:16,720 --> 00:38:19,240
stage one, stage 2.
And I think the key, the key

686
00:38:19,240 --> 00:38:24,200
differences are is probably
where where they are in a couple

687
00:38:24,200 --> 00:38:26,920
of because you can bond in stage
two.

688
00:38:26,920 --> 00:38:29,800
So you got, you know as I said,
they got the transmission,

689
00:38:30,320 --> 00:38:34,240
pretty big transmission line to
put in state like the

690
00:38:34,240 --> 00:38:36,800
underground is.
Component, yeah.

691
00:38:36,880 --> 00:38:39,200
Underground, so you got you got
the underground capital

692
00:38:39,200 --> 00:38:41,760
development obviously adds adds
a lot.

693
00:38:42,600 --> 00:38:45,520
They got a pace plan to put in.
They got I think they got costs

694
00:38:45,520 --> 00:38:49,560
for fish rehabilitation.
I think that was like another

695
00:38:49,560 --> 00:38:55,280
2020 million then all the yeah,
all the friggin ventilation

696
00:38:55,280 --> 00:38:57,920
infrastructure for the
underground, the ground

697
00:38:58,080 --> 00:38:58,520
container.
Yep.

698
00:38:58,520 --> 00:39:01,800
And fuck, it's probably, yeah,
probably shit loads on me

699
00:39:01,800 --> 00:39:05,280
underground, underground and the
fact that how remote remote it

700
00:39:05,280 --> 00:39:06,840
is as.
Adds to it as.

701
00:39:06,840 --> 00:39:09,440
Well, and, and I'll know that I
think we've touted the probably

702
00:39:10,080 --> 00:39:14,440
labour will be significantly
cheaper in Brazil compared to

703
00:39:15,480 --> 00:39:18,200
Quebec.
So yeah, like and when, when

704
00:39:18,200 --> 00:39:22,080
I'll, yeah, looking at those
CapEx numbers just from that's

705
00:39:22,080 --> 00:39:23,600
the thing.
These fuck are they, they work

706
00:39:23,600 --> 00:39:25,600
on these things for months.
We're supposed to bloody get an

707
00:39:25,600 --> 00:39:27,720
idea in four hours.
It's bloody hard work.

708
00:39:28,200 --> 00:39:31,240
But it did it, it looked, it
looked realistic, put it, put it

709
00:39:31,240 --> 00:39:35,800
that way, it didn't look like it
was frigging anything was out of

710
00:39:35,800 --> 00:39:38,400
the question.
So yeah, I think, I think that's

711
00:39:38,520 --> 00:39:40,080
there is some key differences
there.

712
00:39:40,480 --> 00:39:42,400
Absolutely.
And it's a it's APEA as well

713
00:39:42,400 --> 00:39:46,080
within a sort of plus and minus,
you know, 30 odd percent.

714
00:39:46,080 --> 00:39:48,800
So the numbers are a bit of a
rough and a good kind of

715
00:39:48,800 --> 00:39:51,520
starting point on the way to
seeing what it could be in a few

716
00:39:51,520 --> 00:39:53,080
years time.
Yeah, that's right.

717
00:39:53,080 --> 00:39:55,240
And I think, yeah, it's
important to take these things

718
00:39:55,240 --> 00:39:58,080
with a with a pinch of salt.
And and as you mentioned, JD,

719
00:39:58,080 --> 00:40:01,400
you know, these things aren't
getting produced or, you know,

720
00:40:01,840 --> 00:40:06,720
for another 4-5, six years.
So a lot to happen to between

721
00:40:06,720 --> 00:40:09,720
now and then.
Moving on to the pricing, so

722
00:40:09,720 --> 00:40:14,680
they the the pricing assumption
they used for the PA was as we

723
00:40:14,680 --> 00:40:20,960
mentioned SC 6 of US 1500 bucks
a tonne or SC 5 1/2 equivalent

724
00:40:20,960 --> 00:40:26,200
of US 1375 FoB.
This feels about right.

725
00:40:26,440 --> 00:40:32,840
Most people feel SC six should
eventually land in this sort of

726
00:40:32,840 --> 00:40:37,040
zone of US 12:50 to US 2000
bucks a tonne.

727
00:40:37,880 --> 00:40:42,600
Recent consensus SE6 forecasts.
Thanks to a money miner for that

728
00:40:42,600 --> 00:40:47,920
as well.
See prices sort of tick over

729
00:40:47,920 --> 00:40:54,520
that US $1500 mark in around
2028 and payments looking at

730
00:40:54,520 --> 00:40:58,560
commissioning and production at
their project in 2029.

731
00:40:58,560 --> 00:41:02,400
So you know assuming this is how
the future pans out should work

732
00:41:02,400 --> 00:41:04,880
out OK.
And the other thing to note as

733
00:41:04,880 --> 00:41:08,600
well as payments price
assumption looking at other

734
00:41:08,600 --> 00:41:12,160
peers studies and that is
definitely on the lower end or

735
00:41:12,160 --> 00:41:14,440
more conservative end, which is
which is good to say.

736
00:41:15,800 --> 00:41:19,520
And you can see that MPV
sensitivity table there as well

737
00:41:19,520 --> 00:41:21,840
at different prices.
You know, so right now it's sort

738
00:41:21,840 --> 00:41:26,680
of got got a negative MPV on it,
but you know, at those

739
00:41:27,800 --> 00:41:33,240
Goldilocks zone ranges, you know
it, it's pretty huge, right.

740
00:41:34,320 --> 00:41:39,040
Even just on the operating cost
front, not to get too deep in

741
00:41:39,040 --> 00:41:40,960
it, but like again, looking at
some peers.

742
00:41:42,360 --> 00:41:46,200
So payment have got US just shy
of 600 bucks a tunnel and

743
00:41:46,200 --> 00:41:50,920
sustaining Latin is about US536A
tonne.

744
00:41:53,000 --> 00:41:58,600
Pilbara for example, is US 483.
And then green bushes is oh God,

745
00:41:58,600 --> 00:42:01,200
that's even lower again, but
that's, that's huge.

746
00:42:01,960 --> 00:42:06,600
Probably more interesting is the
the funding strategy.

747
00:42:06,600 --> 00:42:10,960
So they've sort of, again, we've
spoken about that phase

748
00:42:10,960 --> 00:42:16,120
development, you know, intended
to obviously reduce that upfront

749
00:42:17,320 --> 00:42:19,760
funding requirement.
They've said they've, you know,

750
00:42:19,760 --> 00:42:22,720
received a lot of interest from
all these Tier 1 lithiums, you

751
00:42:22,720 --> 00:42:26,040
know, supply chain participants,
OEMs, trading houses, all the

752
00:42:26,040 --> 00:42:28,320
rest of it.
Then sort of looking at a

753
00:42:28,320 --> 00:42:34,920
combination of debt, equity, you
know, government programmes and,

754
00:42:35,000 --> 00:42:38,040
and internal cash flows.
With respect to the government

755
00:42:38,040 --> 00:42:41,200
side of things, there's those
tax credits we spoke about

756
00:42:41,200 --> 00:42:45,480
earlier.
The company reckons up to about

757
00:42:45,480 --> 00:42:50,640
790 million of expected project
costs may be eligible under this

758
00:42:50,880 --> 00:42:54,200
sort of tax credit programme,
Which could you know?

759
00:42:54,240 --> 00:42:56,800
They get up to 30% of that
maybe.

760
00:42:56,960 --> 00:43:01,400
Yeah, as a, as a tax credit.
The other government side of it

761
00:43:01,400 --> 00:43:04,720
is they're sort of targeting
senior debt funding from a

762
00:43:04,720 --> 00:43:08,040
government agencies and, you
know, export credit agencies.

763
00:43:08,040 --> 00:43:10,560
And, you know, the fact that
they're, you know, a potentially

764
00:43:11,240 --> 00:43:14,880
our, our a compliant lithium
projects certainly helps with

765
00:43:14,880 --> 00:43:18,280
that.
It was competing to say, at

766
00:43:18,280 --> 00:43:20,960
least in this disclosure anyway,
that there's no sort of

767
00:43:21,440 --> 00:43:26,840
royalties and streams sort of
touted as potential funding

768
00:43:26,840 --> 00:43:31,480
options as yet.
Anyway, I thought the the

769
00:43:31,480 --> 00:43:36,080
mention of strategic investments
was interesting.

770
00:43:36,080 --> 00:43:38,000
I mean, that could mean a whole
range of things.

771
00:43:38,000 --> 00:43:42,640
It could be, you know, in a
strategic investment at the

772
00:43:42,640 --> 00:43:46,240
project level, it could be a
strategic investment at the head

773
00:43:46,240 --> 00:43:51,240
code, the corporate level, you
know, be interesting to see how

774
00:43:51,240 --> 00:43:53,120
that plays out.
Given that, you know, the scale

775
00:43:53,120 --> 00:43:55,960
of this project, it's, you know,
it's looking like it's going to

776
00:43:55,960 --> 00:43:59,080
be in one of the top four
biggest producing, you know,

777
00:43:59,080 --> 00:44:01,880
lithium ions in the world.
I wouldn't be surprised if

778
00:44:01,880 --> 00:44:05,160
there'd be some project level
investment.

779
00:44:05,280 --> 00:44:08,240
Yeah, it depends if Big Kenny
wants to do it again, like,

780
00:44:08,320 --> 00:44:10,800
like, 'cause that's a, you know,
that's what he did at Pilgrim

781
00:44:10,800 --> 00:44:12,840
Minerals.
They still own fucking 100% of

782
00:44:12,840 --> 00:44:16,400
it.
So whereas, you know, look at

783
00:44:16,400 --> 00:44:20,240
the the way green, green bushes
was and then, you know, a lot of

784
00:44:20,240 --> 00:44:24,080
the min, the min red stuff was
all, you know, JV arrangements,

785
00:44:24,080 --> 00:44:27,840
whereas Pilgrim Minerals and
they were 100%.

786
00:44:27,840 --> 00:44:33,240
So if they're gonna repay that
process for this, it'd be, it'd

787
00:44:33,240 --> 00:44:34,800
be interesting to say.
I'm sure they're going to get

788
00:44:35,440 --> 00:44:38,400
fucking if there's any change in
sentiment on lithium there's

789
00:44:38,400 --> 00:44:40,840
going to be plenty of big mobs
looking to.

790
00:44:40,840 --> 00:44:46,240
They'll just be coming through
the door to enquire about 100.

791
00:44:46,240 --> 00:44:48,480
Percent.
Project stake or something so.

792
00:44:48,480 --> 00:44:51,040
I think yeah, it's just that
comparison, right.

793
00:44:51,040 --> 00:44:56,520
Again, sort of, you know, taking
away a project interest versus,

794
00:44:56,600 --> 00:45:02,720
you know, perhaps equity or
share dilution at the at the

795
00:45:02,720 --> 00:45:05,720
corporate head code.
You know, what's what's you

796
00:45:05,720 --> 00:45:07,840
know, it depends on their sort
of the equity markers at the

797
00:45:07,840 --> 00:45:09,920
time that you're, you know,
you're considering, you know,

798
00:45:09,920 --> 00:45:12,880
should I 2A or B as well.
So it'd be interesting to see

799
00:45:12,880 --> 00:45:15,920
what they'll do there it.
Depends on the lithium mark like

800
00:45:15,960 --> 00:45:18,360
very much most.
So in terms of like, look at the

801
00:45:18,360 --> 00:45:22,280
funding, how Longtown funded
this beside after that you

802
00:45:22,280 --> 00:45:25,280
really do and do the bit of a
bit of a rise and everything.

803
00:45:25,280 --> 00:45:28,720
But like when it was flying,
money just got thrown at it.

804
00:45:28,760 --> 00:45:31,800
Like they could get as much
fucking debt as they wanted.

805
00:45:32,440 --> 00:45:36,200
And it's just the sentiment was
just like, take my money, we

806
00:45:36,200 --> 00:45:40,840
want your product so.
We yeah, we saw it not that long

807
00:45:40,840 --> 00:45:42,240
ago.
Like obviously we saw the big

808
00:45:42,240 --> 00:45:43,920
off take ones.
You're kind of talking about

809
00:45:43,920 --> 00:45:47,600
their Maddie Ford that that
facility, but even the the LG

810
00:45:47,600 --> 00:45:49,760
one that was what was that two
months ago.

811
00:45:50,000 --> 00:45:52,400
So it'd be interesting to see if
there's any of these off takers

812
00:45:52,880 --> 00:45:56,400
forthcoming in the in the next
three or four years, obviously

813
00:45:56,400 --> 00:45:59,320
be very much centred around what
the temperature of the lithium

814
00:45:59,320 --> 00:46:01,960
market is at that point in time.
But yeah, that's one I'm keen to

815
00:46:01,960 --> 00:46:03,080
see.
Right.

816
00:46:03,080 --> 00:46:07,080
So JC, what about the the good
old approvals and permitting?

817
00:46:07,080 --> 00:46:09,360
That's the big bloody question
for North America.

818
00:46:09,360 --> 00:46:11,440
Always.
Yeah, Tell you what, fuck it.

819
00:46:11,480 --> 00:46:13,920
I'm I'm probably more
comfortable with Quebec than

820
00:46:13,920 --> 00:46:17,000
Australia at the moment.
After freaking this week between

821
00:46:17,240 --> 00:46:20,800
the Regis thing and then also
the Section 10 with Bellevue,

822
00:46:20,800 --> 00:46:24,480
it's like fuck me.
Oh jeez, maybe Quebec's a new

823
00:46:24,480 --> 00:46:26,160
place to go.
Far out.

824
00:46:26,160 --> 00:46:28,720
So Quebec, Look, it's a bit of a
bit of Brazil.

825
00:46:28,920 --> 00:46:32,040
Oh, and Brazil.
I like Brazil and Japan and

826
00:46:32,040 --> 00:46:34,800
South Korea.
Love it.

827
00:46:35,320 --> 00:46:39,360
So as usual, it's a bit.
It is a bit of a process this

828
00:46:39,360 --> 00:46:42,200
sort of, you know, right in the
thick of it as we speak.

829
00:46:42,200 --> 00:46:47,120
So the next sort of steps is
putting a environmental impact

830
00:46:47,120 --> 00:46:51,280
assessment report, which has got
a hot little flash up the the

831
00:46:51,280 --> 00:46:55,000
table here that sort of details
what that sort of involves, you

832
00:46:55,000 --> 00:46:58,920
know, advancing to a feasibility
study and then submitting that

833
00:46:59,400 --> 00:47:04,720
to Comex and also doing an
impact benefit agreement as

834
00:47:04,720 --> 00:47:06,520
well.
Sort of sort of commitments to

835
00:47:06,520 --> 00:47:07,960
the local committees and things
like that.

836
00:47:07,960 --> 00:47:10,040
You know.
So that'll, you know, all sort

837
00:47:10,040 --> 00:47:12,840
of happen over the next next few
years prior to, you know,

838
00:47:12,840 --> 00:47:15,640
construction and commissioning
and production sort of in the

839
00:47:15,640 --> 00:47:20,120
late twenty 20s.
But as far as what's next,

840
00:47:20,600 --> 00:47:25,800
there's that ECS submission, the
feasibility study next year,

841
00:47:26,360 --> 00:47:29,400
followed by sort of a, you know,
the, the funding process to get

842
00:47:29,400 --> 00:47:32,400
all this up and away.
You know, they've got 101

843
00:47:32,400 --> 00:47:36,960
Canadian million cash in the
bank as at 30 June.

844
00:47:37,520 --> 00:47:42,200
They've raised Canadian 75 mil
back in May through a flow

845
00:47:42,200 --> 00:47:46,160
through financing, which means
those funds can only be

846
00:47:46,440 --> 00:47:53,080
exclusively used on exploration
expenditure and it looks like

847
00:47:53,080 --> 00:47:55,160
that'll cover sort of pretty
much all the exploration till

848
00:47:55,160 --> 00:47:59,560
the end of next year.
It doesn't lay sort of too much

849
00:48:00,080 --> 00:48:03,800
leftover for for other costs,
but I think they should be

850
00:48:03,800 --> 00:48:07,880
pretty OK for now.
Yeah, I'll be in with this per

851
00:48:07,880 --> 00:48:10,320
the permitting and approvals.
I'll be I'll be just I'll be

852
00:48:10,320 --> 00:48:13,200
very interested to see how this
project goes in terms of the

853
00:48:13,200 --> 00:48:17,560
fact it's so remote when we're
talking lakes and the Cree and

854
00:48:17,560 --> 00:48:19,760
everything.
Like I can't, I can't imagine

855
00:48:19,760 --> 00:48:21,840
being that remote.
People go there fucking fishing

856
00:48:21,840 --> 00:48:26,120
on the weekends because it's
bloody it is in the middle of

857
00:48:26,120 --> 00:48:28,400
nowhere.
So yeah, I'd be interested to

858
00:48:28,400 --> 00:48:31,560
see, I'm interested to see how
this whole how this process

859
00:48:31,560 --> 00:48:33,760
works, if there's like, because
you've got the element of the

860
00:48:33,760 --> 00:48:37,400
Cree, like the, you know, the
native title approvals, but then

861
00:48:37,760 --> 00:48:41,720
obviously the the regulatory
side of approvals.

862
00:48:41,720 --> 00:48:44,880
But as we said, fucking
Australia shit these days as

863
00:48:44,880 --> 00:48:47,000
well.
So bloody God, I'd have to move

864
00:48:47,000 --> 00:48:48,600
to fucking Canada the right
week.

865
00:48:48,680 --> 00:48:52,200
No, we're going to Brazil, going
to Brazil Carnival, Carnival.

866
00:48:53,800 --> 00:48:57,320
What was so how much they raise?
So the flow through financing.

867
00:48:57,320 --> 00:48:59,440
What was that 75?
Bucks 75 mil.

868
00:48:59,440 --> 00:49:03,760
Like flight, that's that flow
through financing is handy over

869
00:49:03,760 --> 00:49:05,840
there.
It actually, it actually reminds

870
00:49:05,840 --> 00:49:09,360
me of like beer flowing through
Druba Harvey's throat.

871
00:49:09,960 --> 00:49:13,120
Like when I, when I think flow
through financing, like the

872
00:49:13,120 --> 00:49:17,680
amount of K drill exploration
contracts Druba's sorted out

873
00:49:17,680 --> 00:49:20,240
from bloody just sitting down,
having a couple of pints with

874
00:49:20,240 --> 00:49:23,040
someone who doesn't know.
And that's not many people,

875
00:49:23,040 --> 00:49:26,960
'cause he, he, he knows everyone
and they just, they sit down.

876
00:49:26,960 --> 00:49:28,760
They're like Druba.
Where do I sign?

877
00:49:29,280 --> 00:49:30,800
Let's solve the world problems.
Where do?

878
00:49:30,960 --> 00:49:33,720
Where do I sign?
Mate Kate K drill you'd you'd

879
00:49:33,720 --> 00:49:35,640
vouch for this JDK drill just
tick.

880
00:49:35,640 --> 00:49:38,280
They tick all the exploration
drilling boxes for me.

881
00:49:38,760 --> 00:49:41,520
Like mate, I heard they're the
best mob to work for.

882
00:49:41,640 --> 00:49:44,360
They they trade all the drillers
offside as like they're their

883
00:49:44,360 --> 00:49:48,200
own children, not stepchildren
like actual full blooded

884
00:49:48,200 --> 00:49:52,520
children.
Bloody the QA QC on the RC and

885
00:49:52,520 --> 00:49:56,000
diamond mate.
Elite industry elite and mate.

886
00:49:56,000 --> 00:49:58,720
They're just the heart and soul
of the WA Goldfields for

887
00:49:58,720 --> 00:50:01,320
exploration driller.
I'll get emotional talking about

888
00:50:01,320 --> 00:50:03,160
them sometimes.
Love drub no.

889
00:50:03,200 --> 00:50:06,040
Doubt about it, Maddie.
I can't wait, I'm actually well

890
00:50:06,040 --> 00:50:08,680
overdue for a pint with Druba.
I haven't seen him since

891
00:50:08,680 --> 00:50:11,240
Diggers.
Drobi better pop now isn't it?

892
00:50:11,240 --> 00:50:14,160
Drobu better pop in for one if
you're in West Perth mate.

893
00:50:14,600 --> 00:50:19,400
Mate go go drill.
Right JD Arch and we digress.

894
00:50:20,400 --> 00:50:23,240
Arch and console I just what?
Oh.

895
00:50:24,960 --> 00:50:27,880
Really, one one more on on on
Patriot.

896
00:50:29,160 --> 00:50:30,800
What was the what's the take
away?

897
00:50:30,800 --> 00:50:34,400
We weren't in the weeds heaps,
but interesting to, you know,

898
00:50:34,960 --> 00:50:37,160
kind of take the temperature and
what you guys thought.

899
00:50:37,160 --> 00:50:39,160
See what the the market kind of
reacted to it.

900
00:50:39,160 --> 00:50:41,640
It was from what I saw, it was
just flat on the day.

901
00:50:41,640 --> 00:50:43,280
So yeah, it was.
Just flat on.

902
00:50:43,280 --> 00:50:45,960
With expectations.
Flat or up, Marjorie, I think it

903
00:50:45,960 --> 00:50:48,040
was in line with the
expectations.

904
00:50:48,040 --> 00:50:51,400
I think they look, they
ultimately had to put even in

905
00:50:51,400 --> 00:50:57,000
this sort of lithium price and
you know, equities environment,

906
00:50:57,000 --> 00:50:59,160
they have to put something out
there that sort of said, hey,

907
00:50:59,160 --> 00:51:02,680
look, this is what it is.
Yes, OK, fully aware of the

908
00:51:02,680 --> 00:51:05,320
lithium price at the minute, but
you know, when she's ready to

909
00:51:05,320 --> 00:51:07,760
go, she'll be, you know, ready
to go and they, you know, seem

910
00:51:07,760 --> 00:51:11,080
to be all going full steam ahead
so.

911
00:51:12,160 --> 00:51:14,800
Yeah, it's fucking detailed,
although it was bloody very

912
00:51:14,800 --> 00:51:19,520
detailed.
And yeah, I just think now I

913
00:51:19,520 --> 00:51:23,240
don't know if this is was
something that companies were

914
00:51:23,240 --> 00:51:26,520
waiting for, like people that
would have any interest.

915
00:51:26,520 --> 00:51:29,360
Because as we said, between like
when we're talking about Latin

916
00:51:29,360 --> 00:51:33,920
the other day, you'd probably
take the, you'd take the shaky

917
00:51:33,920 --> 00:51:36,160
ore body over Latins.
There's.

918
00:51:36,160 --> 00:51:38,040
But as we said, there's
obviously between the

919
00:51:38,040 --> 00:51:40,880
transportation and a bit of
extra capital to go in.

920
00:51:40,880 --> 00:51:43,760
So there's a bit of a there's a
bit of a toss up there, but in

921
00:51:43,760 --> 00:51:46,320
terms of the that underground,
that's a pretty fucking

922
00:51:46,320 --> 00:51:49,000
phenomenal ore body.
And you know, you're thinking

923
00:51:49,000 --> 00:51:54,560
globally, what's out there.
If you want the like AI won't, I

924
00:51:54,560 --> 00:51:58,640
won't say the word tier one, but
like a a high quality, high

925
00:51:58,640 --> 00:52:01,920
quality ore body like this this
one's it.

926
00:52:01,920 --> 00:52:08,440
So whether this PEI is now a bit
of a a catalyst for your other

927
00:52:08,440 --> 00:52:12,320
fucking lithium companies to or
people that want to be a lithium

928
00:52:12,320 --> 00:52:15,800
company to get interested.
Like I know Rio's got a lot of

929
00:52:15,800 --> 00:52:17,560
ground around there by the
sounds.

930
00:52:18,800 --> 00:52:21,960
So if they're actually going to
bite the bullet or a friggin

931
00:52:21,960 --> 00:52:24,320
Albemarle might get interested
again, don't know.

932
00:52:24,320 --> 00:52:28,200
Or if they're going to fend them
off and do the go alone and

933
00:52:28,280 --> 00:52:33,400
bloody Kenny Brisdon 2.0.
So yeah, a lot lot happening,

934
00:52:33,400 --> 00:52:36,960
but Jesus Christ, after fucking
seeing them, looking at them 40

935
00:52:36,960 --> 00:52:40,520
to $0.50, and after seeing
what's happened with Latin, with

936
00:52:40,960 --> 00:52:43,560
Pilbury's investment, you'd
think this one would be in the

937
00:52:43,560 --> 00:52:46,480
targets as well.
What do you think, Charlie?

938
00:52:46,480 --> 00:52:51,800
Good stuff. 6640 market cap.
I mean at at the time when we

939
00:52:51,800 --> 00:52:54,280
spoke about it a year ago, I
thought it got way too carried

940
00:52:54,280 --> 00:52:56,480
away when it was.
Oh did you before the mineral

941
00:52:56,480 --> 00:52:58,040
resource?
Fuck, that was the that was when

942
00:52:58,040 --> 00:52:59,040
the mania.
That was crazy.

943
00:52:59,280 --> 00:53:01,520
Because you had the lithium
mania and then this one was at

944
00:53:01,520 --> 00:53:04,520
the top of the lithium mania.
So it was just fucking madness.

945
00:53:05,840 --> 00:53:08,200
You're just kind of in that, in
that part of the Lassen curve

946
00:53:08,200 --> 00:53:10,240
and you will be for for quite a
while to come.

947
00:53:10,240 --> 00:53:14,920
So it'll kind of move broadly in
line with with what lithium

948
00:53:15,160 --> 00:53:16,200
does.
But they're pretty well

949
00:53:16,200 --> 00:53:17,560
insulated.
You know, they've got a good

950
00:53:17,560 --> 00:53:19,240
cash amount, they've got their
work cut out.

951
00:53:19,240 --> 00:53:23,440
So they're not like an operator
that's losing money day after

952
00:53:23,440 --> 00:53:25,160
day, just operating in a, in a
loss.

953
00:53:25,160 --> 00:53:27,600
So I don't know, just keep
watching it.

954
00:53:27,600 --> 00:53:30,000
I don't think it's going to do
anything crazy anytime soon.

955
00:53:30,360 --> 00:53:32,680
Unless there's corporate
activity, effectively.

956
00:53:33,000 --> 00:53:34,440
Yeah, yeah, of course.
Or.

957
00:53:34,720 --> 00:53:36,360
Friggin listening.
Pretty bloody spark.

958
00:53:36,920 --> 00:53:42,960
Yeah, arch and console.
Biggest deal in the coal space

959
00:53:42,960 --> 00:53:44,880
in America in 13 years, that's
why.

960
00:53:44,880 --> 00:53:47,600
So it's sort.
Of an American coal got to get

961
00:53:47,600 --> 00:53:48,920
up to speedy.
American.

962
00:53:49,600 --> 00:53:50,800
Yeah.
So this one, this one's

963
00:53:50,800 --> 00:53:53,440
overseas.
You've got essentially, you

964
00:53:53,440 --> 00:53:56,440
know, roughly talking a met coal
company and a thermal coal

965
00:53:56,440 --> 00:53:59,760
company coming together.
The the pro forma company is

966
00:53:59,760 --> 00:54:02,600
going to have 13 operations.
There'll be a few moving parts,

967
00:54:02,920 --> 00:54:06,920
but a combined pro forma market
cap AUS 5.2 billion.

968
00:54:06,920 --> 00:54:09,400
So yeah.
You're like a bloody power

969
00:54:09,400 --> 00:54:12,320
station.
Coal fired power station turbine

970
00:54:12,320 --> 00:54:14,400
of information for the coal
industry.

971
00:54:14,400 --> 00:54:18,000
JD today mate, you're on fire.
The Steam.

972
00:54:18,000 --> 00:54:19,600
Company cards have fallen this
week.

973
00:54:20,520 --> 00:54:25,160
Oh mate, this is yeah so fucking
huge. 12, 12 million tonnes,

974
00:54:25,160 --> 00:54:28,600
that's the the old US tonnes and
met coal and 25,000,000 tonnes

975
00:54:28,600 --> 00:54:32,640
of thermal coal console brings
the thermal arch brings the met

976
00:54:33,280 --> 00:54:39,400
also to export terminals, which
is, you know, not not a part of

977
00:54:39,400 --> 00:54:44,640
the the combined assets.
That should be ignored because

978
00:54:44,640 --> 00:54:48,400
it adds real value and synergies
which we'll kind of get into in

979
00:54:48,400 --> 00:54:51,600
a SEC when you can tweak things
with the logistics and all these

980
00:54:51,600 --> 00:54:53,760
sorts of things.
I mean one of them's not totally

981
00:54:53,760 --> 00:54:57,040
owned outright, but I think it
adds quite a bit to the

982
00:54:57,040 --> 00:55:02,040
narrative here on the synergies
front, 110 to 140 million per

983
00:55:02,040 --> 00:55:04,520
annum in, in cost savings and
operational synergies.

984
00:55:05,000 --> 00:55:07,360
I think that is way more
achievable than some of the

985
00:55:07,360 --> 00:55:10,320
other ones we'd seen in, you
know, the the gold world.

986
00:55:10,320 --> 00:55:14,120
For example, recently in mergers
we'd spoken about, you guys can

987
00:55:14,120 --> 00:55:16,320
probably guess the company we're
talking about there.

988
00:55:17,160 --> 00:55:18,360
Why?
Why is that, JD?

989
00:55:18,760 --> 00:55:22,120
Why are they more realistic?
So there's a, there's a couple

990
00:55:22,120 --> 00:55:24,040
reasons for that.
Firstly, they're just a, a

991
00:55:24,040 --> 00:55:28,240
smaller quantum on a much bigger
combined market cap company.

992
00:55:28,240 --> 00:55:30,080
So they're just more achievable
on that front.

993
00:55:30,640 --> 00:55:33,280
You've got your standard
corporate overheads which get

994
00:55:33,280 --> 00:55:36,720
wiped away pretty quickly and
then you've got console being

995
00:55:36,720 --> 00:55:39,600
one of the best long wall
operators in the world.

996
00:55:39,960 --> 00:55:43,280
That'll help operational
efficiency at the the arch

997
00:55:43,280 --> 00:55:46,240
operations.
You've got logistical

998
00:55:46,280 --> 00:55:49,520
efficiencies because some of the
operations are nearby to one

999
00:55:49,520 --> 00:55:51,360
another.
There's facilities that are

1000
00:55:51,360 --> 00:55:54,520
nearby to operations from the,
you know, the previous other

1001
00:55:54,520 --> 00:55:58,400
company that can now sort of
bode in well together and just

1002
00:55:58,400 --> 00:56:01,840
bring down logistic costs.
Remember it's just a, an

1003
00:56:01,960 --> 00:56:04,760
economies of scale kind of game
in which they're operating.

1004
00:56:05,160 --> 00:56:08,400
So you, you pull down the cost
by a couple dollars a tonne and

1005
00:56:08,400 --> 00:56:11,920
that adds up when you're doing,
you know, like I said, 12 and

1006
00:56:11,920 --> 00:56:16,560
25,000,000 tonnes per annum.
And then there's the other part,

1007
00:56:16,560 --> 00:56:18,960
which I kind of touched on with
the terminals there you're

1008
00:56:18,960 --> 00:56:22,440
removing the the port costs
because now that they're opera,

1009
00:56:23,120 --> 00:56:26,760
now that they're owned rather by
the combined group, you're not

1010
00:56:26,760 --> 00:56:30,080
having to pay the port costs for
the party that didn't previously

1011
00:56:30,080 --> 00:56:31,200
own them.
So.

1012
00:56:31,440 --> 00:56:32,960
They're.
Real synergies.

1013
00:56:34,600 --> 00:56:38,480
Real well, I won't, I won't
count the the chickens before

1014
00:56:38,480 --> 00:56:42,360
they've hatched, but I think
there's synergies that can you

1015
00:56:42,360 --> 00:56:45,200
know, relatively easily be
achieved on this front.

1016
00:56:45,200 --> 00:56:49,160
So they've got more synergies
than Paladin and fission besides

1017
00:56:49,440 --> 00:56:54,960
uranium being the synergy.
This is true also more than than

1018
00:56:54,960 --> 00:56:57,760
West Gold and.
Carora, but gold.

1019
00:56:59,280 --> 00:57:01,280
Gold.
Underground WA.

1020
00:57:01,760 --> 00:57:05,880
Underground WA.
WA is a small state.

1021
00:57:08,000 --> 00:57:11,440
So there, there are a couple
downsides and we always talk

1022
00:57:11,440 --> 00:57:13,800
about this with the good old
coal names, the, the

1023
00:57:13,800 --> 00:57:16,720
shareholders get furious when
you stop the buybacks and you

1024
00:57:16,720 --> 00:57:19,400
stop the dividends.
So that's going to, that's going

1025
00:57:19,400 --> 00:57:23,560
to happen again here.
But I think that's, I mean, we,

1026
00:57:23,560 --> 00:57:25,200
we just spoke about it with
Whitehaven, right?

1027
00:57:25,200 --> 00:57:27,800
You flick them on in a few years
and they hopefully come on

1028
00:57:27,800 --> 00:57:30,640
bigger and better in future.
And I'll give a bit of credit to

1029
00:57:30,720 --> 00:57:33,800
to Maddie Water, who is
obviously stateside and follows

1030
00:57:33,800 --> 00:57:37,480
these coal names pretty closely.
But the way he kind of spoke to

1031
00:57:37,480 --> 00:57:40,080
this pausing of the buybacks
made sense to me.

1032
00:57:40,080 --> 00:57:43,920
So you get this seasonal
weakness in the in the shoulder

1033
00:57:43,920 --> 00:57:47,440
season over there and the
buyback on on console has sort

1034
00:57:47,440 --> 00:57:49,320
of supported the stock through
that period of time.

1035
00:57:49,520 --> 00:57:51,320
So you might get a bit of short
term weakness.

1036
00:57:51,320 --> 00:57:54,520
That's one of the other
downsides to the to the deal.

1037
00:57:54,720 --> 00:57:57,160
But again, that's just a that's
just a shorter term.

1038
00:57:57,160 --> 00:57:59,640
And then, you know, other things
to kind of expect.

1039
00:57:59,640 --> 00:58:03,760
You probably get a bit of asset
rationalisation, eight of the 11

1040
00:58:03,800 --> 00:58:07,360
operations, a long walls,
they're specialists at long

1041
00:58:07,360 --> 00:58:10,160
walls.
So kind of anticipate that a

1042
00:58:10,160 --> 00:58:13,360
couple of the open cuts maybe
get passed on in time, but we'll

1043
00:58:13,360 --> 00:58:16,320
kind of see how that goes.
Yeah, right, mate.

1044
00:58:16,320 --> 00:58:20,320
And that's about me, guys.
Mate, Maddie Water would be so

1045
00:58:20,320 --> 00:58:24,040
proud of you today.
Yeah, he'd be just like, oh.

1046
00:58:24,600 --> 00:58:27,200
Graduated from coal school.
Oh no, he'd be like a proud.

1047
00:58:27,200 --> 00:58:28,680
Dad, we might have to a proud
dad moment.

1048
00:58:29,560 --> 00:58:31,520
It would have been a whole lot
easier if we just patched him in

1049
00:58:31,520 --> 00:58:34,440
for this.
You don't need to eat all the

1050
00:58:34,440 --> 00:58:39,920
sensational job there, JD.
Likewise a pretty action packed

1051
00:58:39,920 --> 00:58:41,280
week, hey it.
Hasn't been.

1052
00:58:41,280 --> 00:58:42,680
Oh.
Yeah, I'm fucked.

1053
00:58:42,680 --> 00:58:45,920
Yeah, completely fucked.
Bloody probably going to go get

1054
00:58:45,920 --> 00:58:48,240
shitfaced.
This I'd say to celebrate how

1055
00:58:48,240 --> 00:58:50,480
much work I've done.
Just let.

1056
00:58:50,480 --> 00:58:53,320
Your head down a bit, Maddie.
Yeah, imagine how much bloody

1057
00:58:53,440 --> 00:58:56,560
Axis miner technology celebrate
after all the weeks they have.

1058
00:58:56,600 --> 00:58:59,480
Oh no, jeez, don't.
Be on the No, they're not.

1059
00:58:59,480 --> 00:59:02,200
They're a professional
establishment and they just know

1060
00:59:02,200 --> 00:59:06,440
a good win when they say.
It's just BAU for them though.

1061
00:59:06,840 --> 00:59:09,400
Just every week, every day, just
checking the box.

1062
00:59:09,480 --> 00:59:13,640
Today the office bloody Mineral
Mining Services open bit mining

1063
00:59:13,640 --> 00:59:15,440
contractors.
They'll be getting on getting on

1064
00:59:15,440 --> 00:59:19,080
the piss on Thursday for sure.
Bloody got on the piss with

1065
00:59:19,080 --> 00:59:22,040
grant from Verify diggers.
That was bloody good.

1066
00:59:22,280 --> 00:59:25,880
You met Grant at verify.
I met grant@verify.com.

1067
00:59:26,720 --> 00:59:29,760
Oh bloody yeah.
And good old SMET Bauer and

1068
00:59:29,760 --> 00:59:34,800
Technology, DSI Underground,
Silverstone, CRE insurance,

1069
00:59:34,800 --> 00:59:37,760
Greenlands equipment, K drill,
spark charts.

1070
00:59:37,880 --> 00:59:40,400
They're the partners by the way.
Can't thank them enough.

1071
00:59:40,880 --> 00:59:45,200
Giving us electricity uduru
money miners Uduru Information

1072
00:59:45,200 --> 00:59:47,680
contained in this episode of
Money of Mine is of general

1073
00:59:47,680 --> 00:59:50,000
nature only and does not take
into account the objectives,

1074
00:59:50,120 --> 00:59:53,360
financial situation or needs of
any particular person.

1075
00:59:53,640 --> 00:59:56,680
Before making any investment
decision, you should consult

1076
00:59:56,680 --> 00:59:59,760
with your financial advisor and
consider how appropriate the

1077
00:59:59,760 --> 01:00:03,440
advice is to your objectives,
financial situation and needs.