Why Generalists Can’t Ignore Commodities Anymore (Sam Berridge)

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I mean, I suppose the only
frustration for, you know,

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people like me when you have
these generalists coming into

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the space, I mean, it's great on
the way in, but they don't like

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commodity investing is they they
hate the space.

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And so, you know, the moment
that something wobbles or goes a

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little bit wrong, like they sell
and sell hard and get out

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because they.
Never wanted to be there.

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Exactly right, Exactly right.
All right, money miners, we are

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a man and a half down with
Trevor being a good son,

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supporting his mother up in
Singapore for her birthday.

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But we have Sammy Berege to more
than make up for it.

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Sammy, what a start to the year
it's been.

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First two weeks.
It's it was enough to drag you

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away from the ashes.
You know, the 5th test like the

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headlines.
You know, the first couple of

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weeks a year, you just want
didn't know what was going to

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happen next between Iran and
gold going through the roof.

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And then now Trump wants
Greenland.

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And then you throw some, you
know, threatened criminal

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charges at the chairman and the
Fed all mixed up together.

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It's yeah, been a pretty good
start for hard assets like

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commodities.
Yeah, Yeah, it has.

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And to, to put it in a bit more
context, I mean your, your

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returns last year were
outstanding across the the two

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funds that you kind of managed.
So it's not as if we're in the

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in, you know, that the very
bottom and seen a kind of bounce

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out of nothing.
A lot of fundies in the the

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natural resources space had had
pretty decent 2020 fives, but

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it's a real continuation of the
theme, right?

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Yeah, it is.
It's, you know, just set like

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the December quarter last year
was quite strong for the entire

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sector.
And yeah, it's a lot of those

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themes just keeping on going.
Whereas I suppose the one

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observation in January is that
because the sector has moved so

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hard and so fast, it's
capturing, capturing the

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attention of of generalists and
investment advisors and, and

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various other asset allocators
who are underweight the space.

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And that underweight is hurting
their relative returns.

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And so, you know, the level of
inquiry, you know, just in

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January for, you know, getting
more money or putting money to

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work in the space has been quite
acute.

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So, you know, that can lead to a
bit of frothiness.

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So it's, you know, it can be a
double edged sword, but still

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that's what's happening at the
moment.

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How far along in that process do
you think we are?

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I think pretty early stage,
there was some interesting sort

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of recommendations coming out in
December about, you know, big

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banks advising their, you know,
high net worth clients that they

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should add, you know, another
percent or or so to their, to

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gold, for example, is part of
their, their asset allocation.

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And, and across, you know,
Europe and the US.

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Like what that means in terms of
gold demand is, is quite

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staggering.
So, you know, if people are

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looking to, you know, primarily
gold, but also secondary, the

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other commodities as alternative
stores of value to, you know,

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Fiat currency, well, that
process is in, it is in it's

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infancy.
And again, it can lead to

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frothiness, but I think we're,
you know, we're closer to the

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beginning than the end of of
that process.

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Yeah, you see a lot of top
investors around the world

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talking about a 6020 twenty
types of portfolios where the

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allocation to gold is, is unlike
anything we've seen in in the

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last 100 years.
But it still seems as if we're

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pretty far away from that
actually happening.

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Yeah, I mean, again, you know,
these people aren't idiots.

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They don't want to be buying the
top.

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So, you know, if prices start
running away too quickly, I

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suspect they'll hold back.
But that that latent demand, I

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think is still there.
So, you know, you'll end up with

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higher lows and higher highs as
dips continue to be bought, you

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know, until some point that the
macro changes.

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But yeah, I don't think it's
changing, you know, materially

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anytime soon.
So when you when you think about

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this period in history and, and
what commodities are doing what,

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what other period do do you
reflect most on?

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I know the the 70s is is 1
you've spoken about, but what

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what sort of matches and what
doesn't match with with that

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error?
Yeah, it's a, it's a, it's a

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good point.
And you know, everybody wants to

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sort of find the analogy to give
themselves a little bit more

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conviction in, in forecasting
what's going to happen next.

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And I think the, the environment
we are now is certainly has

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stronger similarities with the
70s than the last commodity

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boom, which was obviously China
demand LED.

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Whereas in the 70s, you know,
there was a, an energy crisis, a

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shortage of oil that was, you
know, geopolitically lead and

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then that, you know, was very
inflationary.

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And then that flowed into, into
a lot of other hard assets

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around the world.
So, you know, today we've got

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China and, and the US competing
over, you know, various metals.

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You know, certainly the, the US
has built up huge inventories of

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copper over the last 12 months.
They're discussing, you know,

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building strategic reserves of,
of rare earths.

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And I think there'll be more
metals added to that.

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So they're the echoes that we
get.

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It's more a a sort of a
restriction of flow of

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commodities around that's
driving prices as opposed to a a

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traditional sort of demand LED
deficit.

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That said, I mean going into
2026, I mean demand does look a

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little bit better than it did in
2025.

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So that's helpful.
But that sort of de

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globalization trade and and you
know, restocking event by

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countries around the world as
they look to secure their own

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commodities, that's really
something to watch to determine

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sort of the trajectory of metals
prices on the way forward.

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Yeah, when when we think about
how wild the the past year and

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the past couple weeks have been,
the the 70s are really

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interesting example because oil
jumps about four times in in one

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year.
I think in 1973, over the

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decade, gold I think was up 20X
from being pegged.

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Silver goes from like 8 bucks to
to to 50 bucks.

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So these are these are crazy
movements in the in the meadows.

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Yeah.
And it's, and then you think,

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well, you know what, what
brought that bull market to an

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end because it went, you know,
more or less for eight years.

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I mean, there were some spikes
along the way.

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And it ended when I think Paul
Volcker, you know, took up

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chairmanship of the Fed and then
he hiked interest rates to

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something like 20% to combat
inflation.

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And that's snuffed out the
market.

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And, and that was that, whereas
today, with the amount of debt

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sloshing around the world, if
any Fed chairman tried to do

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anything like that, like it
would cause massive, massive

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issues.
So, you know, pulling that

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interest rate lever is, is going
to be much more difficult.

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And, and obviously, you know,
Trump's railing hard against

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against any suggestion that that
could take place.

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So it's not clear what's going
to bring sort of this sort of

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scenario to an end.
I mean, you know, commodity

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prices go high enough, you end
up with, you know, supply,

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sorry, price induced demand
destruction.

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Like people just can't afford to
use the, the commodities for,

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for all applications.
So that brings demand down a

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little bit.
But again, you know, we're, I

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think we're at the more much
closer to the beginning of this

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this, you know, rally than than
the end.

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Yeah, yeah.
Well, love him or loathe him,

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Elon Musk was tweeting, I think
the other day that the silver

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rally is not good, given the,
the kind of industries he works

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in as well, how much silver is
used as, as one of the top

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conductors in, in the world and
humanoids and anything else they

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want to build battery related.
So there's very real kind of

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consequences on, on that kind of
front.

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If, if we look to, to Asia kind
of getting a bit closer to home

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from, from the US now it's
interesting to see some of the

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data and you flag some of the
PMI data, which in, in simple

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terms, I think people can think
of as a lead indicator

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potentially on, on metals
demand, commodities demand.

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What are you sort of sniffing
out from there?

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I think it's, we're finally
starting to see a bit of

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traction of the stimulus efforts
over 2025 sort of flow into the,

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the real, you know, the real
world.

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And, and, and that's reflected
in those PMI numbers for, for

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Asia.
So for March of 25, you know,

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you had the big sort of, you
know, hissy fit over Trump's

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imposition of tariffs in April.
You know, that did impact the US

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demand.
It did impact Chinese demand for

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commodities.
The Chinese were very selective

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in how they chose to stimulate
their economy to just can't try

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and keep things on an even
queue, you know, more focused on

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consumer electronics E VS
manufacturing basically.

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And bit by bit that stimulus
appears to have been, you know,

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effective now and we're starting
to see Pmis turn positive.

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But the other factor, which is
a, you know, different from the

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last commodities boom is that
the delta in Chinese demand

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seems to be flowing through
their exports.

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So it's basically rest of world
demand as you know as expressed

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through Chinese exports, which
is the area that's surprising to

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the upside.
So you know, this commodities

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rally at the moment feels much
more broad based from a demand

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point of view than you know the
very China centric rally that we

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had through the 2000s which is
which is interesting.

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Yeah, yeah.
I mean steel, steel is what

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comes to my mind like the the
the amount that China's

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exporting in steel has a bunch
of ramifications.

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But firstly, it tells you what
the demand overseas is like and,

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and secondly, what it's doing to
any other domestic steelmaking

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Bluescope here in Australia, the
bits that they do produce here

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and the the Europeans just
begging for, for tariff and

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subsidy type protection for
their their industry.

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Where, where does that kind of
go like yet I don't think you're

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too far off the mark in thinking
that part of this is, is

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deliberate from, from the
Chinese and how they think about

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it.
Or is it all just property

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market collapsing?
I think, I think it's a bit of a

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bit of both like the, you know,
the Chinese construction and

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property markets been, you know,
has been horrible for years now.

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It's not doesn't look like it's
going to get any help either.

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But at the same time, like
you've had legit growth through,

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you know, Vietnam, Indonesia,
you know, the ASEAN nations in

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general.
And you know, they, they do

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have, you know, they're drawing
more, more steel into those

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countries.
And so, you know, I think it's,

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it's just, you know, the that
sort of population base, which

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when you include India is
actually much bigger than China.

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You know, they've their growth
has been quite rapid for a long

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time, but finally it's starting
to compound off a, off a

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reasonable base and is and is
moving the needle a little bit

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more.
But just on the steel exports,

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there was a very interesting
headline in I think it was,

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yeah, first week of January
around China requiring any steel

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exports to get sort of, you
know, federal government

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approval before, you know,
before they're if they're

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allowed to export steel out of
the country.

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Now that's been, you know, sort
of a rubber stamping effort to

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date.
But as the world becomes more

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reliant on China for steel
because their exports are a

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bigger part of of rest of world
demand, if they were to slam the

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brakes on those steel exports,
it would, you know, it would be

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ruinous for, you know,
construction costs around the

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world because, you know, the
China exports is having such a

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big influence on setting the
price.

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And we can see, you know, the
amount of leverage they have in

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the rare earth market.
You know, there is potential for

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something similar in steel and
possibly an aluminium.

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So you know this weaponization
of commodities could spread and

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not say it will, but you know
the the mechanisms are there for

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it to do so.
So on on the back of that has

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has your thinking, I mean, I
remember having you in this room

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and about six months ago we we
were speaking about the all the

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checks that our government had
been writing to traffic EUR the

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Glen cause of the world here in
Australia for their downstream

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00:12:01,120 --> 00:12:03,360
metals processing mainly in the
base metal space.

224
00:12:04,440 --> 00:12:08,240
And that has all come off the
back of the the weaponization of

225
00:12:08,480 --> 00:12:11,120
of this.
And it's always a bit murky

226
00:12:11,120 --> 00:12:13,480
because then you're giving money
to traffic Euro Glencoe.

227
00:12:13,480 --> 00:12:16,480
It's not exactly a stand up
Australian producer.

228
00:12:16,480 --> 00:12:21,400
But you've if if you are of the
view that you need to have some

229
00:12:21,400 --> 00:12:23,680
sort of industry and they're the
only ones left, what do you kind

230
00:12:23,680 --> 00:12:25,640
of do is so has your thinking on
that changed at all?

231
00:12:25,960 --> 00:12:30,760
No, no, I think if anything,
it's probably a subset of that

232
00:12:31,160 --> 00:12:35,240
speech by the Canadian PM, Mark
Carney, which is, you know, gone

233
00:12:35,240 --> 00:12:37,280
sort of viral over the last
couple of days saying, you know,

234
00:12:37,280 --> 00:12:40,640
it's a, we're seeing a change in
the, you know, the the world

235
00:12:40,640 --> 00:12:43,840
order and, you know, all these
grandiose arm waving statements.

236
00:12:43,840 --> 00:12:48,000
But, you know, if globalization
does start to reverse and you

237
00:12:48,000 --> 00:12:51,760
can no longer rely on the free
flow of commodities and goods

238
00:12:51,760 --> 00:12:53,520
around the world.
And so we go back to an

239
00:12:53,520 --> 00:12:56,520
environment where, you know,
countries have to be, you know,

240
00:12:56,560 --> 00:12:58,760
to a much greater extent,
self-sufficient.

241
00:12:59,200 --> 00:13:02,720
That's massively inflationary
for for metals prices because we

242
00:13:02,720 --> 00:13:07,480
can't compete with, you know,
the refining costs, not the

243
00:13:07,480 --> 00:13:09,200
mining like we do mining
reasonably well, but the

244
00:13:09,200 --> 00:13:12,720
refining costs we we just can't
compete with because our power

245
00:13:12,720 --> 00:13:14,920
prices are too high and going
higher.

246
00:13:14,920 --> 00:13:20,400
So yeah, I think that theme, if
anything, is strengthening.

247
00:13:21,400 --> 00:13:23,680
So do we just have to be smarter
with with who we pick as

248
00:13:23,680 --> 00:13:25,680
partners?
Yeah, definitely.

249
00:13:25,680 --> 00:13:30,760
And I think I, you know, I think
you need to be realistic about

250
00:13:30,800 --> 00:13:35,880
the value of these industries
because I think it was one of

251
00:13:35,880 --> 00:13:40,440
the economists saw Kevonik, I
think his name is, you know,

252
00:13:40,440 --> 00:13:42,640
came out the other day said, oh,
you know, manufacturing jobs

253
00:13:42,640 --> 00:13:44,680
aren't any more important than
any other jobs.

254
00:13:44,680 --> 00:13:46,920
And on a superficial level, he
is right.

255
00:13:46,920 --> 00:13:48,920
I mean, it's, it's just dollars
and cents.

256
00:13:49,440 --> 00:13:54,120
However, the, the benefits or
the fringe benefits that you get

257
00:13:54,120 --> 00:13:57,840
from a big manufacturing
industry, you know, do help

258
00:13:57,840 --> 00:14:00,960
lower prices or do facilitate
other activities in the economy.

259
00:14:00,960 --> 00:14:08,240
And for example, take the power
station in New South Wales and

260
00:14:08,240 --> 00:14:12,600
produces I think maybe FIF, no,
a bit more than that, maybe 20%

261
00:14:12,600 --> 00:14:16,560
of NSW power like that was built
sort of hand in glove with their

262
00:14:17,240 --> 00:14:19,360
with the Tomago aluminium
refinery.

263
00:14:19,640 --> 00:14:22,440
So it produces power at a very
low price.

264
00:14:22,440 --> 00:14:25,880
And yes, it supports that
refinery going into production

265
00:14:25,880 --> 00:14:30,160
and making money, but it also
supports cheap power prices for

266
00:14:30,160 --> 00:14:34,200
the rest of the for the rest of
NSW and, and for a very long

267
00:14:34,200 --> 00:14:39,600
time, like that sort of
symbiosis helped Australia

268
00:14:39,600 --> 00:14:42,400
become a very low power and
power country.

269
00:14:42,400 --> 00:14:44,080
And, and that helps our
manufacturing.

270
00:14:44,080 --> 00:14:47,240
So, you know, if that
manufacturing dies, then also

271
00:14:47,240 --> 00:14:51,400
the demand for those big base
load power generation also dies.

272
00:14:51,400 --> 00:14:56,320
But that means we end up with,
you know, high power costs, you

273
00:14:56,520 --> 00:14:58,360
know, flowing through the rest
of the economy, which is a, you

274
00:14:58,560 --> 00:15:01,040
know, a bad thing.
Yeah, OK.

275
00:15:01,040 --> 00:15:03,960
If we if we change tack now,
there's a bunch of medals, a lot

276
00:15:03,960 --> 00:15:05,720
of them are breaking through all
time high semis.

277
00:15:05,720 --> 00:15:09,080
So I want to go through them
because not all the, the the

278
00:15:09,080 --> 00:15:11,280
reasons are alike.
Some of them are performing

279
00:15:11,280 --> 00:15:13,440
strongly for for quite varying
reasons.

280
00:15:13,440 --> 00:15:16,760
So Copper, I want to start with
what, what are you making of

281
00:15:16,760 --> 00:15:20,000
this incredible rally we're
seeing there and, and what's got

282
00:15:20,000 --> 00:15:23,280
us to this point?
Well, yeah, I think as as

283
00:15:23,360 --> 00:15:27,080
touched on earlier like that,
the big, big stockpiling by the

284
00:15:27,360 --> 00:15:32,600
US of copper has been a a major
driver of the of the rally to

285
00:15:32,600 --> 00:15:34,160
date.
Even copper inventories around

286
00:15:34,160 --> 00:15:36,440
the world have actually been
increasing while the price has

287
00:15:36,440 --> 00:15:38,760
been increasing.
So that's a bit counter

288
00:15:38,760 --> 00:15:41,720
intuitive.
I think the prices are where

289
00:15:41,720 --> 00:15:47,160
they are because there's a
little bit of concern in the

290
00:15:47,280 --> 00:15:50,920
copper market that those
inventories that are within the

291
00:15:51,040 --> 00:15:54,800
US won't be allowed to flow back
out to the rest of the world.

292
00:15:55,080 --> 00:16:00,240
Should the sort of LMA price
rise above the COMEX price,

293
00:16:00,240 --> 00:16:03,720
which would then incentivize the
flow of copper out of the US.

294
00:16:03,720 --> 00:16:07,760
Now if that doesn't happen,
yeah, it's throws back to what

295
00:16:07,760 --> 00:16:10,520
we're just just discussing and
that, you know, countries is

296
00:16:10,520 --> 00:16:11,920
sort of each country for
themselves.

297
00:16:11,920 --> 00:16:15,880
But you know, I think that is a
bit of a risk to the downside

298
00:16:16,480 --> 00:16:18,360
for.
I mean, if assuming that, sorry,

299
00:16:18,400 --> 00:16:20,240
assuming the copper does flow
out, that's a risk to the

300
00:16:20,240 --> 00:16:23,040
downside of those prices.
But I think it's $6.

301
00:16:23,040 --> 00:16:26,880
You're also going to see it $6 a
pound that is see an increase in

302
00:16:26,880 --> 00:16:30,400
scrap supply.
So I, I reckon cop is looking

303
00:16:30,400 --> 00:16:34,920
pretty full up here.
Where it pulls back to I I'm not

304
00:16:34,920 --> 00:16:36,160
sure.
I think it probably remains

305
00:16:36,160 --> 00:16:40,320
quite elevated because you know,
whilst there has been a, a big

306
00:16:40,320 --> 00:16:43,640
inventory build last year and
you know, maybe that's got a

307
00:16:43,640 --> 00:16:47,760
little bit of a head of itself,
you know, looking in to 272829

308
00:16:48,120 --> 00:16:51,240
like that structural deficit is,
is well and truly there.

309
00:16:51,600 --> 00:16:55,160
So, you know, that's, you know,
probably a little bit wary, but

310
00:16:55,400 --> 00:16:58,360
in the short term, but longer
term, you know, things still

311
00:16:58,360 --> 00:17:01,360
look pretty good.
Yeah, yeah, 22 follow-ups, the

312
00:17:01,360 --> 00:17:04,760
first one and I have almost no
experience in this.

313
00:17:04,760 --> 00:17:06,280
So I'm curious to to hear what
you think.

314
00:17:06,280 --> 00:17:10,680
But I've heard with the the
inventories that over the past

315
00:17:10,680 --> 00:17:12,640
20 years there's been a real
change in in where the

316
00:17:12,640 --> 00:17:14,760
inventories are held.
So it's much harder these days

317
00:17:14,760 --> 00:17:19,200
to actually surmise what the
global state of inventories is.

318
00:17:19,200 --> 00:17:22,160
Is this off base or does that
sound broadly right?

319
00:17:22,400 --> 00:17:24,760
I think.
It is, it is difficult, but

320
00:17:24,760 --> 00:17:29,560
there is also, you know, with a
big, big liquid market like

321
00:17:29,560 --> 00:17:34,440
copper, it is worth the while of
the various sort of commodity

322
00:17:34,440 --> 00:17:37,400
consultants and banks and
analysts etcetera, to, you know,

323
00:17:37,440 --> 00:17:39,720
try and put some numbers to that
as best they can.

324
00:17:40,040 --> 00:17:47,880
So I, you know, I'd, I'd be
surprised if that there's any,

325
00:17:47,920 --> 00:17:50,960
you know, if the, if the
rounding errors in these numbers

326
00:17:51,360 --> 00:17:53,800
undermine the, you know, the
premise that inventories

327
00:17:53,800 --> 00:17:56,480
actually have increased a bit
around the world.

328
00:17:56,480 --> 00:17:59,360
But yeah, I mean, that remains
to be seen.

329
00:17:59,560 --> 00:18:02,600
Yeah.
And the second follow up is

330
00:18:02,600 --> 00:18:05,560
TCRCS.
They've been a huge gift to the

331
00:18:05,560 --> 00:18:09,240
copper miners that we know here.
I mean, given given their money

332
00:18:09,240 --> 00:18:11,840
as opposed to the other way
around, how long does that

333
00:18:12,000 --> 00:18:15,440
continue?
I think for a while, I mean the

334
00:18:15,440 --> 00:18:18,600
shortage of copper concentrate
doesn't look like it's going

335
00:18:18,600 --> 00:18:23,520
away unless you start to see
refineries shut down and sort of

336
00:18:23,600 --> 00:18:28,040
you know reduce that supply
demand mismatch, you know by

337
00:18:28,040 --> 00:18:30,000
shutting refineries.
And then that should allow the

338
00:18:30,000 --> 00:18:32,880
balance of them to get some more
pricing power in terms of their

339
00:18:32,880 --> 00:18:36,600
TCRC negotiations.
Certainly you know, I don't

340
00:18:36,600 --> 00:18:39,320
think any anyones building any
more copper refineries anytime

341
00:18:39,320 --> 00:18:42,880
soon.
So I mean it should you know

342
00:18:42,880 --> 00:18:45,120
slowly correct itself, but I
don't think it's going to be a

343
00:18:45,120 --> 00:18:47,640
near term event.
It'll take time for the, the

344
00:18:47,640 --> 00:18:52,200
copper concentrate supply to bit
by bit, you know move in excess

345
00:18:52,200 --> 00:18:55,480
of of smelting capacity and at
some and at that point you start

346
00:18:55,480 --> 00:18:57,840
to see a normalization of
TCRC's.

347
00:18:58,080 --> 00:19:00,400
Yeah, yeah.
And at this point in the cycle,

348
00:19:00,400 --> 00:19:02,880
are there preferred ways for you
to to play the copper?

349
00:19:02,880 --> 00:19:04,840
Do you, do you like some of the
juniors at the moment?

350
00:19:04,840 --> 00:19:07,520
Are you safe in some of the
producers or do you think like

351
00:19:07,520 --> 00:19:10,840
copper is such a richly valued
place to be at the moment?

352
00:19:12,160 --> 00:19:15,040
It's, it's a good question.
I mean, you know, if, if a

353
00:19:15,040 --> 00:19:18,400
commodity price falls, you know,
doesn't really matter what your

354
00:19:18,400 --> 00:19:20,320
exposure is.
I mean, everything, you know,

355
00:19:20,360 --> 00:19:23,680
falls a, a reasonable amount,
regardless of sort of, you know,

356
00:19:23,680 --> 00:19:25,480
where it's trading for, for fair
value.

357
00:19:25,480 --> 00:19:31,520
But I think that the, you know,
the, the top tier or the, you

358
00:19:31,680 --> 00:19:34,320
know, better quality development
stories are probably where the

359
00:19:34,320 --> 00:19:37,440
value exists in the market
today.

360
00:19:37,960 --> 00:19:42,400
So, you know, the developers
never really price in spot at

361
00:19:42,400 --> 00:19:43,840
all.
So there is certainly there's

362
00:19:43,840 --> 00:19:45,880
discounts to to spot available
there.

363
00:19:47,120 --> 00:19:51,880
And you know, because of the
shortage of, you know, large.

364
00:19:51,880 --> 00:19:54,400
And when I say large, I mean
sort of 50,000 tonne and above

365
00:19:54,920 --> 00:19:57,520
copper projects in desirable
jurisdictions.

366
00:19:57,520 --> 00:20:00,400
I think if you know, any
development story that falls

367
00:20:00,400 --> 00:20:03,120
into that basket is, is an M and
a candidate.

368
00:20:03,120 --> 00:20:05,160
And so that's, you know,
probably where we'd prefer to

369
00:20:05,160 --> 00:20:07,440
look.
Do you do you spend much time

370
00:20:07,440 --> 00:20:09,360
looking at the overseas names?
Yeah.

371
00:20:09,360 --> 00:20:10,720
Yeah.
I mean there's, there's not much

372
00:20:10,720 --> 00:20:14,240
left of a of a copper industry
in, in Australia due to all, all

373
00:20:14,240 --> 00:20:17,600
the M&A and you know sand fires,
you know sits there as as being

374
00:20:17,600 --> 00:20:19,240
pretty richly priced as a
result.

375
00:20:19,240 --> 00:20:22,720
And, you know, a long way below
that there is a sort of a

376
00:20:22,720 --> 00:20:27,400
growing group of, of, of smaller
producers trying to get up and

377
00:20:27,400 --> 00:20:29,240
running.
And, you know, they, they've

378
00:20:29,240 --> 00:20:31,760
had, you know, had various
struggles over the years because

379
00:20:31,760 --> 00:20:32,960
they've, they've been higher
cost.

380
00:20:32,960 --> 00:20:35,880
But yeah, their, their margins
would be looking much better

381
00:20:35,880 --> 00:20:38,480
now.
So you know, there might be some

382
00:20:39,720 --> 00:20:42,400
some opportunities there, but
you know, you just always need

383
00:20:42,400 --> 00:20:45,440
to balance that risk and reward
with those guys.

384
00:20:46,000 --> 00:20:50,200
All right, next commodity
uranium, Uranium has been on an

385
00:20:50,200 --> 00:20:53,120
upward trend again and everyone
is bullish in in the space

386
00:20:53,120 --> 00:20:55,240
again.
Interestingly, spot has been

387
00:20:55,240 --> 00:20:59,360
buying quite a bit again.
So I think they're at over £70

388
00:20:59,360 --> 00:21:02,040
million locked up in the in the
vaults.

389
00:21:02,040 --> 00:21:06,160
They're never to be seen again.
So yeah, interesting dynamics

390
00:21:06,160 --> 00:21:09,360
with the the term and the spot
pricing that we're seeing.

391
00:21:09,440 --> 00:21:13,120
A lot of the the miners once
again are being priced very,

392
00:21:13,120 --> 00:21:15,160
very kind of richly.
So what do you make of the whole

393
00:21:15,160 --> 00:21:20,920
space?
I think uranium is or is

394
00:21:20,920 --> 00:21:25,120
enjoying some tailwinds as being
a bit of a proxy to the the AI

395
00:21:25,840 --> 00:21:29,720
data center build out and the
power requirements that that

396
00:21:29,720 --> 00:21:32,960
will that needs.
And so every time you know, the

397
00:21:33,160 --> 00:21:36,000
all the big tech stocks in the
US have a bit of a sell off will

398
00:21:36,000 --> 00:21:38,640
you know, the uranium stocks
usually go with it.

399
00:21:38,640 --> 00:21:41,480
So that's annoying and it
doesn't have anything to do with

400
00:21:41,480 --> 00:21:43,040
the fundamental supply demand
story.

401
00:21:43,040 --> 00:21:46,160
It's just something to be aware
of as as noise you're going to

402
00:21:46,160 --> 00:21:47,960
have the uranium market has to
contend with.

403
00:21:47,960 --> 00:21:52,000
But I think that, you know, it
doesn't make any sense for the

404
00:21:52,000 --> 00:21:53,920
spot price to be below the term
price.

405
00:21:53,920 --> 00:21:56,800
You know, if the term market's
where all the volume is, you

406
00:21:56,800 --> 00:21:59,000
know, why wouldn't you go and
soak up pounds in the spot

407
00:21:59,000 --> 00:22:02,160
market until, you know, until
such a point you get to the to

408
00:22:02,160 --> 00:22:04,560
the term price.
So I think that's, you know,

409
00:22:04,560 --> 00:22:06,960
that's probably the first move
that we're going to see.

410
00:22:07,280 --> 00:22:13,440
And certainly the, the split,
sorry, the spot ETF buying will

411
00:22:13,840 --> 00:22:17,880
help that happen.
But beyond that, yeah, I mean,

412
00:22:17,880 --> 00:22:21,960
it's, you know, the, the
deficits, you know, are looming

413
00:22:21,960 --> 00:22:26,200
and, you know, those reactors or
these new reactors, you know, do

414
00:22:26,200 --> 00:22:28,800
need to start contracting, you
know, a long time ahead when

415
00:22:28,800 --> 00:22:30,480
they're actually starting to to
Commission.

416
00:22:30,480 --> 00:22:32,840
And, you know, there's still a
few years away.

417
00:22:32,840 --> 00:22:35,440
But I suppose a sort of shorter
term, you know, these Japanese

418
00:22:35,600 --> 00:22:39,400
reactors continuing to restart
and, and other existing reactors

419
00:22:39,400 --> 00:22:42,920
around the world all prolonging
their life is probably where

420
00:22:42,920 --> 00:22:45,280
the, you know, the incremental
sort of fundamental demand is

421
00:22:45,280 --> 00:22:47,880
coming from.
But still today, like, I mean,

422
00:22:47,880 --> 00:22:51,520
we saw with Paladin's quarterly
report just a couple of days

423
00:22:51,520 --> 00:22:56,760
ago, like even at $85 a pound
and, and yeah, sure, the achieve

424
00:22:56,840 --> 00:22:59,520
Paladin's achieved price was a
bit below that, they're still

425
00:22:59,520 --> 00:23:03,720
not making any money.
So, you know, for big waves of

426
00:23:03,720 --> 00:23:06,280
new supply to come on, you know,
the price doesn't appear to be

427
00:23:06,280 --> 00:23:09,080
high enough just yet.
Yeah, it's remarkable how many

428
00:23:09,400 --> 00:23:10,760
all in sustainings, all in
costs.

429
00:23:10,760 --> 00:23:14,720
We can see at half the realized
cross money doesn't drop to the

430
00:23:14,720 --> 00:23:18,440
bottom line.
And on the on the macro, it was

431
00:23:18,440 --> 00:23:20,920
interesting to see Mertz, the
the leader of Germany or the

432
00:23:20,920 --> 00:23:24,280
Chancellor acknowledge finally
that it was a mistake to turn

433
00:23:24,280 --> 00:23:28,520
off the the reactors.
So a bit more of that rhetoric

434
00:23:28,520 --> 00:23:30,840
around the world.
I think we'll, we'll be saying.

435
00:23:31,520 --> 00:23:33,920
Yeah, definitely.
I mean, it's nice that he

436
00:23:33,920 --> 00:23:36,920
finally came out and said so,
but yeah, it was an absolute

437
00:23:36,920 --> 00:23:39,200
disaster both for Germany and
the environment as well.

438
00:23:39,200 --> 00:23:41,960
But anyway, Greenpeace can go
pat themselves on the back

439
00:23:41,960 --> 00:23:44,800
because they were championing
championing that initiative for

440
00:23:45,000 --> 00:23:47,160
years.
One more question on the the

441
00:23:47,160 --> 00:23:50,280
uranium discussion more broadly
is the US view.

442
00:23:50,320 --> 00:23:53,120
So they've been quite strategic
in how they've gone about

443
00:23:53,120 --> 00:23:55,680
certain projects, certain
metals, rare earths last year

444
00:23:55,680 --> 00:23:57,600
for instance.
Do you see them doing something

445
00:23:57,600 --> 00:24:01,400
similar in the uranium space,
picking a national champion?

446
00:24:02,480 --> 00:24:04,480
I think it's, I think it's quite
possible.

447
00:24:05,080 --> 00:24:08,080
Certainly, you know, in the when
you go through the list of

448
00:24:08,080 --> 00:24:11,080
medals the US seems most
concerned about, they've already

449
00:24:11,080 --> 00:24:12,640
underwritten the price for rare
earths.

450
00:24:13,000 --> 00:24:17,800
I think uraniums quite high up
there on the list and so. 20% of

451
00:24:17,800 --> 00:24:19,560
their their electricity.
It's huge.

452
00:24:19,600 --> 00:24:23,120
Yeah, and, and obviously the
demand for, you know, more and

453
00:24:23,120 --> 00:24:25,200
more and more power generation.
I mean, Trump just wants to

454
00:24:25,200 --> 00:24:29,120
saturate the country with as
much generation as he can to as

455
00:24:29,120 --> 00:24:32,520
a means of, of stimulating, you
know, GDP growth.

456
00:24:33,080 --> 00:24:38,360
So, yeah, it's it's very
difficult to sort of forecast,

457
00:24:38,720 --> 00:24:40,920
you know, what that what shape
that might take.

458
00:24:40,920 --> 00:24:45,400
But underwriting an increase in
domestic uranium production in

459
00:24:45,400 --> 00:24:48,000
the USI think is, you know, is a
sensible bet.

460
00:24:48,000 --> 00:24:52,560
Like I, you know, I just
wouldn't be surprised if they do

461
00:24:52,560 --> 00:24:53,360
it.
And I think there's maybe a

462
00:24:53,360 --> 00:24:55,480
little bit of expectation in
prices that that's going to take

463
00:24:55,480 --> 00:24:57,840
place.
But yeah, you know, we wait and

464
00:24:57,840 --> 00:25:00,720
see, but I think that makes a
lot of sense.

465
00:25:01,280 --> 00:25:03,240
Are there are there any names in
the uranium space you you're

466
00:25:03,240 --> 00:25:05,520
holding at the moment you think
are still quite cheap or you're

467
00:25:05,520 --> 00:25:07,960
more likely to trim in this kind
of environment?

468
00:25:11,040 --> 00:25:15,040
It's all, I mean I think most of
the you know, the more liquid

469
00:25:15,040 --> 00:25:17,720
names with the exception of you
know, things like Kamiko which

470
00:25:17,800 --> 00:25:21,400
traded a big premium to the rest
of the market are pricing in

471
00:25:21,920 --> 00:25:26,320
more or less spot.
But a lot of people as a lot of

472
00:25:26,320 --> 00:25:31,160
the sort of the the brokers and
banks don't have forecasts going

473
00:25:31,160 --> 00:25:34,760
material materially above where
we are at the moment.

474
00:25:35,280 --> 00:25:37,120
So that's where the opportunity
is.

475
00:25:37,120 --> 00:25:39,360
I mean, if you take a view that,
you know, uranium is going to go

476
00:25:39,360 --> 00:25:44,200
to 150, well, you know, things
look cheap, but you know, that

477
00:25:44,240 --> 00:25:47,680
requires you stepping away from
consensus by by a fair degree.

478
00:25:47,680 --> 00:25:52,360
So I think there's there's still
more to play out in terms of

479
00:25:52,360 --> 00:25:54,880
what the US is going to do and
what that will mean for prices.

480
00:25:54,880 --> 00:25:57,440
And that's probably keeping, you
know, keeping our holdings as is

481
00:25:58,840 --> 00:26:02,280
for the for the near term.
But yeah, if any of that

482
00:26:02,280 --> 00:26:04,160
changes, well, you know, we'll
change our mind.

483
00:26:04,240 --> 00:26:07,480
Money miners, I know we've said
it many Times Now, but this year

484
00:26:07,480 --> 00:26:11,520
has been a cracking start and
last year was just fantastic as

485
00:26:11,520 --> 00:26:13,920
well.
So you might be thinking it's

486
00:26:13,920 --> 00:26:16,040
time to diversify.
I know Trev and I spoke about

487
00:26:16,040 --> 00:26:19,720
this late last year and we might
be getting closer to that time

488
00:26:19,720 --> 00:26:23,000
and if you are thinking about
that, Exceed Capital is a name

489
00:26:23,000 --> 00:26:25,400
you should think about.
Exceed Capital is a commercial

490
00:26:25,400 --> 00:26:28,640
property group out of Brizzy QLD
and they have been in the game A

491
00:26:28,760 --> 00:26:30,880
a long time now.
They've got alignment, something

492
00:26:30,880 --> 00:26:34,200
we at Money and mine love.
They are aligned with their unit

493
00:26:34,200 --> 00:26:36,760
holders by investing in every
single one of the property

494
00:26:36,760 --> 00:26:40,120
trusts they put forward to you.
Now they've got a brand new

495
00:26:40,120 --> 00:26:42,680
property trust that I want to
tell you about, the SP property

496
00:26:42,680 --> 00:26:44,320
trust.
This is an A grade office

497
00:26:44,320 --> 00:26:47,600
building in the Gold Coast in
the mighty state of Queensland.

498
00:26:47,720 --> 00:26:51,600
They're targeting 8% per annum
cash returns over a five year

499
00:26:51,840 --> 00:26:54,440
time horizon and they're going
to be paying out distributions

500
00:26:54,720 --> 00:26:56,600
monthly.
If this is something you keen

501
00:26:56,600 --> 00:26:59,040
on, you want to find out more,
get into the show notes and

502
00:26:59,040 --> 00:27:01,640
click on Exceed Capital.
Massive thank you to Exceed

503
00:27:01,640 --> 00:27:03,040
Capital for backing money of
mine.

504
00:27:03,280 --> 00:27:06,200
Now back to Sammy.
OK, Next up, gold.

505
00:27:06,520 --> 00:27:08,840
We might be one or two slips
away from gold breaking through

506
00:27:08,840 --> 00:27:12,760
5000 US bucks, which is barely
believable.

507
00:27:12,840 --> 00:27:14,440
Even saying the word sounds kind
of funny.

508
00:27:15,000 --> 00:27:17,280
How do you how do you sort of
take into account everything

509
00:27:17,320 --> 00:27:22,160
we've kind of seen like this
latest kick up from sort of 4400

510
00:27:22,160 --> 00:27:25,360
where it kind of consolidated
for, for a while has been pretty

511
00:27:25,360 --> 00:27:28,960
electrifying again on the back
of geopolitics and the like.

512
00:27:28,960 --> 00:27:32,000
So how are you sort of chewing
it all up and and digesting

513
00:27:32,000 --> 00:27:34,600
this?
Yeah, it's, it's really, it's

514
00:27:34,600 --> 00:27:41,080
really difficult as a, as a
manager to try and you know, you

515
00:27:41,080 --> 00:27:45,400
know, manage your, your
exposures to this appropriately

516
00:27:45,400 --> 00:27:47,760
because on the one hand we, I
mean, we do have a big gold

517
00:27:47,760 --> 00:27:51,360
exposure and you know, that
becomes bigger as you, your gold

518
00:27:51,360 --> 00:27:55,800
holdings, you know, rally.
And I think undoubtedly we've

519
00:27:55,800 --> 00:27:59,000
had a confluence of quite
positive events for gold over

520
00:27:59,600 --> 00:28:01,720
over the last or sorry the first
couple of weeks of the year.

521
00:28:02,840 --> 00:28:05,200
And so that's probably added a
little bit of froth to, you

522
00:28:05,440 --> 00:28:09,160
know, over and above the, the
underlying support for gold,

523
00:28:09,160 --> 00:28:13,120
which is a bit of skepticism
that around the, the value of

524
00:28:13,120 --> 00:28:16,080
U.S. dollar and dollars and, and
just government debt levels

525
00:28:16,280 --> 00:28:21,240
globally.
But every time anyone sold, you

526
00:28:21,240 --> 00:28:24,480
know, their gold exposures over
the last 18 months, two years,

527
00:28:24,480 --> 00:28:29,040
it's been the wrong thing to do.
So, you know, I I must admit,

528
00:28:29,040 --> 00:28:32,360
like the melt up in price we've
had over the last couple of

529
00:28:32,360 --> 00:28:36,520
weeks does feel a bit like
October last year, after which,

530
00:28:36,560 --> 00:28:38,320
you know, things got a bit
overboard.

531
00:28:38,320 --> 00:28:40,680
There were stories about, you
know, people lining up in Martin

532
00:28:40,680 --> 00:28:43,560
Place to buy physical gold and
you know, sure enough, the price

533
00:28:43,560 --> 00:28:46,400
rolled over by, you know, a
couple 100 bucks an ounce

534
00:28:47,320 --> 00:28:50,160
straight after that.
But here we are back at all time

535
00:28:50,160 --> 00:28:53,800
highs and the drivers, I think
for a high gold price still

536
00:28:53,800 --> 00:28:58,160
remain very much in place.
So, yeah, I mean, we just again,

537
00:28:58,360 --> 00:29:01,000
you know, anything that's
looking a little bit frothy or

538
00:29:01,000 --> 00:29:04,800
we, we see, you know, or foresee
risks to production and

539
00:29:04,800 --> 00:29:09,760
downgrades, we'd, you know,
probably be trimming those as as

540
00:29:09,760 --> 00:29:11,760
as you know, where we see that
that opportunity.

541
00:29:11,760 --> 00:29:15,920
But, you know, I think the value
in the gold market at the moment

542
00:29:15,920 --> 00:29:18,480
still sits with the the
developers.

543
00:29:19,440 --> 00:29:24,080
And that's because I think a lot
of a lot of people in the market

544
00:29:24,080 --> 00:29:27,680
are sort of slow to, you know,
run numbers to what, you know,

545
00:29:27,680 --> 00:29:29,800
what a development proposition
might be worth.

546
00:29:29,800 --> 00:29:34,600
And you know, I've did this
recently the, you know, you take

547
00:29:34,600 --> 00:29:37,760
your generic, you know, 100,000
oz producer.

548
00:29:38,200 --> 00:29:41,000
Oh, sorry, yeah, 100,100
thousand ounce per annum

549
00:29:41,000 --> 00:29:42,680
project.
So you need about 1,000,000

550
00:29:42,680 --> 00:29:46,880
ounces in reserve or to to
achieve that, you know, I assume

551
00:29:46,880 --> 00:29:50,800
$300 million for for CapEx and
you know, even a pretty

552
00:29:50,800 --> 00:29:53,320
conservative cost of about 3000
bucks an ounce.

553
00:29:53,720 --> 00:29:56,960
Well, you're going to end up
with AMPV for that project of

554
00:29:56,960 --> 00:30:01,520
1.41 point $5 billion, you know,
but that's not what these

555
00:30:01,520 --> 00:30:03,240
development projects are being
valued at us.

556
00:30:03,240 --> 00:30:06,760
It's nowhere, nowhere near it.
So, you know, even if the gold

557
00:30:06,760 --> 00:30:09,200
price was to pull back, you
know, a couple 100 bucks an

558
00:30:09,200 --> 00:30:13,960
ounce, I think these, you know,
projects that look like they're

559
00:30:13,960 --> 00:30:16,600
able to be permitted, you know,
no fatal flaws.

560
00:30:17,520 --> 00:30:21,880
They will, you know, endure in
terms of their share price.

561
00:30:21,880 --> 00:30:25,200
And and you know what, we should
continue to outperform on the

562
00:30:25,200 --> 00:30:27,240
upside even, you know, even in a
bit of a pullback.

563
00:30:27,720 --> 00:30:30,920
And you're expecting some of the
producers to to jump on these

564
00:30:30,920 --> 00:30:32,680
opportunities?
Yeah, definitely.

565
00:30:32,680 --> 00:30:34,760
I mean, there's one of the
reasons that I suppose

566
00:30:34,800 --> 00:30:37,560
generalist investors hate
commodities is because it's an

567
00:30:37,560 --> 00:30:42,120
industry of depleting assets and
modeling that is is difficult is

568
00:30:42,120 --> 00:30:45,120
different to modeling an
industrial company and it just.

569
00:30:45,120 --> 00:30:46,920
Doesn't look as good when you
don't have the terminal value

570
00:30:47,320 --> 00:30:48,600
that goes on.
Yeah.

571
00:30:48,600 --> 00:30:52,080
You know, you got to replace
your resources and reserves, but

572
00:30:52,080 --> 00:30:54,960
for producing companies that's
becoming cheaper and cheaper.

573
00:30:54,960 --> 00:30:57,880
I mean, the margins of of some
of these gold companies now

574
00:30:57,880 --> 00:30:59,880
start starting to look like
software companies.

575
00:30:59,880 --> 00:31:03,400
I mean on the back of the
envelope looking at Capricorn,

576
00:31:03,400 --> 00:31:06,080
which you know, one of the lower
cost producers, like they're my

577
00:31:06,080 --> 00:31:09,200
EBITDA margins are like, you
know, high 70s, you know,

578
00:31:09,200 --> 00:31:12,160
possibly touching 80% today with
a spot price move.

579
00:31:12,160 --> 00:31:14,240
I mean, that's, that's like a
software company.

580
00:31:14,240 --> 00:31:19,120
But so the CapEx hurdle to
replace those reserves because

581
00:31:19,120 --> 00:31:22,040
CapEx and costs aren't going up
anywhere near as much as the

582
00:31:22,040 --> 00:31:24,680
gold price is, you know, it's
becoming smaller and smaller.

583
00:31:24,680 --> 00:31:29,160
And so that lends itself to to
M&A if they don't, you know,

584
00:31:29,160 --> 00:31:33,000
have the resources themselves.
And interestingly with, with the

585
00:31:33,000 --> 00:31:35,560
Capricorn example, they've been
very disciplined about not

586
00:31:35,760 --> 00:31:39,520
recutting the, the ore body and
and changing the assumptions

587
00:31:39,520 --> 00:31:41,120
going into that.
Do you think we've seen sort of

588
00:31:41,520 --> 00:31:44,080
discipline across the board from
the from the producers there?

589
00:31:44,360 --> 00:31:48,000
Yeah, I think to to the extent
possible, I think you have.

590
00:31:48,600 --> 00:31:53,600
I still feel that throughout the
mining industry in general, like

591
00:31:53,600 --> 00:31:58,640
the scars of the last commodity
boom are still present and the

592
00:31:58,640 --> 00:32:02,080
memory is still there where, you
know, people just let costs run,

593
00:32:02,200 --> 00:32:06,680
you know, unchecked because, you
know, revenue, the revenue line

594
00:32:06,680 --> 00:32:10,880
was growing so much.
Whereas this time round by and

595
00:32:10,880 --> 00:32:15,600
large, I think cost discipline
is much better and margins are

596
00:32:15,640 --> 00:32:18,440
you know, they are increasing.
Whereas you know, in, in

597
00:32:18,440 --> 00:32:21,600
previous cycles you sort of saw,
you know, the, you know, 90th

598
00:32:21,600 --> 00:32:24,480
percentile of costs almost
tracked the commodity price or,

599
00:32:24,480 --> 00:32:27,800
or the gold price specifically,
you know, almost in parallel.

600
00:32:27,800 --> 00:32:32,120
Whereas more recently gold price
you know, has gone sort of

601
00:32:32,120 --> 00:32:36,040
exponential and costs are, are
reasonably stable at the moment.

602
00:32:36,040 --> 00:32:40,160
So you know those margins are
increasing and you know to your

603
00:32:40,160 --> 00:32:42,240
point that that cost control is
much better.

604
00:32:42,600 --> 00:32:45,640
Yeah, you said Scars of the Last
Boom and I couldn't help but

605
00:32:45,640 --> 00:32:49,360
think of Rio Tinto.
And I haven't actually spoken on

606
00:32:49,360 --> 00:32:53,400
the show about Rio and and
Glencore because it's, it's just

607
00:32:53,400 --> 00:32:57,160
such a big deal and it's it's
hard for a lot of people and

608
00:32:57,160 --> 00:32:59,520
it's not that meaningful for a
lot of people at the smaller end

609
00:32:59,520 --> 00:33:02,560
of the market to have a strong
view on this one way or another.

610
00:33:02,560 --> 00:33:06,000
But are there sort of
ramifications of this type of

611
00:33:06,000 --> 00:33:09,120
deal or are there little caveats
to it that you think are kind of

612
00:33:09,120 --> 00:33:12,400
interesting for for investors or
or speculators to kind of think

613
00:33:12,400 --> 00:33:15,120
about?
Yeah, I think probably the the

614
00:33:15,120 --> 00:33:18,760
one factor that will jump to
particularly institutional

615
00:33:18,760 --> 00:33:22,520
investors minds very quickly is
what the index ramifications are

616
00:33:22,520 --> 00:33:26,720
for such a merger.
Because if you know BH PS

617
00:33:27,000 --> 00:33:31,040
waiting in the, you know, all
small or the ASX 200 I suppose

618
00:33:31,040 --> 00:33:33,800
is is monstrous.
And so it demands attention for

619
00:33:33,800 --> 00:33:35,800
people who are benchmarked
against that index.

620
00:33:36,200 --> 00:33:38,520
If something similar was, you
know, if Rio and Glencore were

621
00:33:38,520 --> 00:33:40,880
to get together, you're going to
end up with a similar scenario

622
00:33:40,880 --> 00:33:43,480
because it would be a bigger
company than than BHP.

623
00:33:44,000 --> 00:33:46,840
So yeah, that's certainly one,
one part of it.

624
00:33:46,840 --> 00:33:51,840
But from an operational point of
view, I suspect the cultures are

625
00:33:51,840 --> 00:33:58,040
quite different between the two.
I mean, you know, Rio's got, you

626
00:33:58,040 --> 00:34:00,680
know, has a has a finger in the
pie and sort of in terms of

627
00:34:00,680 --> 00:34:03,480
African developments via SIM.
And do you know how they go

628
00:34:03,480 --> 00:34:06,400
operating in the in the DRC with
Glencor's copper mines?

629
00:34:06,400 --> 00:34:08,920
There is a bit of an open
question.

630
00:34:08,920 --> 00:34:12,400
I mean Glencore seems to do OK,
but it is it is tough.

631
00:34:12,840 --> 00:34:15,320
Very hard to see Rio operate in
the DRC.

632
00:34:15,440 --> 00:34:19,000
Yeah, I'm not sure.
I'm not sure how, you know,

633
00:34:19,000 --> 00:34:21,360
they're very sort of straight
laced approach is going to going

634
00:34:21,360 --> 00:34:24,639
to work in in that country on a
number of fronts.

635
00:34:24,639 --> 00:34:27,320
But and then there's another
question of what happens to the

636
00:34:27,320 --> 00:34:30,520
coal assets that Glencore's got,
you know, do they get spun out

637
00:34:30,520 --> 00:34:35,360
as a sort of a, you know, Spinco
to try and clean up Glencore to

638
00:34:35,360 --> 00:34:37,440
make it a little bit more
palatable to the Rio investor

639
00:34:37,440 --> 00:34:39,120
base?
I mean, all these are, you know,

640
00:34:39,120 --> 00:34:41,880
quite sort of open-ended
questions, but there'd be some

641
00:34:41,880 --> 00:34:46,000
huge fees on the line for the
for the bankers on this merger.

642
00:34:46,000 --> 00:34:49,199
So I'm sure they'll find a way
to solve those problems as best

643
00:34:49,199 --> 00:34:51,560
they can.
Yeah, yeah, life changing fees I

644
00:34:51,560 --> 00:34:54,520
think in this one.
A couple of the other medals

645
00:34:54,520 --> 00:34:57,360
I'm, I'm keen to, to touch on
PGMS.

646
00:34:57,400 --> 00:35:00,120
They've really been working and
one for us here in Australia

647
00:35:00,120 --> 00:35:03,600
because it's just not that much
exposure on, on the ASX.

648
00:35:03,600 --> 00:35:07,880
And that's part of the, the
charm, if you like, of, of PGMS

649
00:35:07,880 --> 00:35:11,160
because it's South Africa, it's
it's Russia, it's these parts of

650
00:35:11,160 --> 00:35:14,120
the world.
Have have you played this in, in

651
00:35:14,120 --> 00:35:16,000
any way and do you have a strong
view on it?

652
00:35:16,040 --> 00:35:17,480
No, we haven't.
I was.

653
00:35:17,600 --> 00:35:19,440
I was getting.
Closer and closer to just buying

654
00:35:19,440 --> 00:35:23,080
the physical last year and I
didn't pull the trigger, which

655
00:35:23,080 --> 00:35:26,320
is, you know, one of many
mistakes that we made a good

656
00:35:26,360 --> 00:35:28,000
year for, for many mistakes.
I reckon.

657
00:35:28,000 --> 00:35:29,680
Oh yeah, yeah.
But I mean, you know.

658
00:35:29,720 --> 00:35:31,840
You can always be better and you
know, should always, you know,

659
00:35:31,880 --> 00:35:34,720
go through and you know, work
out what you know why you didn't

660
00:35:34,720 --> 00:35:37,320
or or whatever to try and not
avoid making that mistake again.

661
00:35:38,640 --> 00:35:43,480
But I think for for the for the,
the platinum group elements once

662
00:35:43,480 --> 00:35:47,120
again, like similar to what our
discussion about copper is that

663
00:35:47,120 --> 00:35:50,960
it it the move in price seems to
be investor LED rather than

664
00:35:50,960 --> 00:35:53,320
demand LED.
It had probably, I think

665
00:35:53,320 --> 00:35:58,600
probably had some quite tangible
foundations in that, you know,

666
00:35:58,680 --> 00:36:01,480
people came to the view that
internal combustion engines are

667
00:36:01,480 --> 00:36:03,880
going to be around for a lot
longer than, you know, what we

668
00:36:03,960 --> 00:36:05,720
might have thought three or four
years ago.

669
00:36:05,720 --> 00:36:08,360
And so that means the, you know,
PGE demand for the catalytic

670
00:36:08,360 --> 00:36:10,840
converters is, is going to be a
bit more enduring.

671
00:36:10,840 --> 00:36:14,000
And then, you know, OK, so we
need, you know, we're going to

672
00:36:14,000 --> 00:36:15,080
need this stuff for a bit
longer.

673
00:36:15,080 --> 00:36:18,480
And for a long time, you know,
platinum was trading, you know,

674
00:36:18,480 --> 00:36:20,920
well below the cost curve for
some of those South African

675
00:36:20,920 --> 00:36:23,760
mines.
And then the investors have sort

676
00:36:23,760 --> 00:36:27,640
of piled on top of that thematic
and push prices quite a long

677
00:36:27,640 --> 00:36:30,160
way.
You know, where does it end?

678
00:36:30,160 --> 00:36:33,320
I'm not quite sure.
You know, picking sentiment or

679
00:36:33,320 --> 00:36:35,880
second guessing sentiment can be
quite difficult sometimes.

680
00:36:35,880 --> 00:36:37,520
But, you know, that's my
understanding of what's

681
00:36:37,520 --> 00:36:39,520
transpired to date.
Yeah, Yeah.

682
00:36:40,240 --> 00:36:42,440
And and how?
About tin, this is 1 We do have

683
00:36:43,480 --> 00:36:47,840
a small little view into here in
Australia down in in Tassie with

684
00:36:47,920 --> 00:36:50,920
with some rich history as well.
But the tin market has been

685
00:36:51,280 --> 00:36:53,080
electric to the to start this
year.

686
00:36:53,080 --> 00:36:57,040
And there's yeah, there's a
whole bunch of different reasons

687
00:36:57,040 --> 00:36:59,440
why there's lots happening in
the in the small pockets that

688
00:36:59,440 --> 00:37:02,240
produce tin around the world.
And there seems to be a lot of

689
00:37:02,280 --> 00:37:05,040
attention on it.
I think you've got a bit of

690
00:37:05,080 --> 00:37:08,360
exposure from from what I kind
of know down in, in, in Tassie.

691
00:37:08,360 --> 00:37:09,400
But how are you thinking about
it?

692
00:37:10,800 --> 00:37:13,400
I mean this is one has.
A bit of a more sort of solid

693
00:37:13,400 --> 00:37:15,680
foundation to it to my think.
I mean, there's, you know, the

694
00:37:15,680 --> 00:37:18,920
demand through electronics and
data center building out is, you

695
00:37:18,920 --> 00:37:23,440
know, it's quite tangible.
It's difficult for investors to

696
00:37:24,160 --> 00:37:27,640
move the tin price around
because it's, it's a, you know,

697
00:37:27,640 --> 00:37:29,240
it's not a particularly liquid
market.

698
00:37:29,240 --> 00:37:32,160
It's hard for big financial
flows to come and to come and go

699
00:37:32,160 --> 00:37:33,960
like, you know, like copper, for
example.

700
00:37:34,640 --> 00:37:37,040
And then on supply side, like
through, you know, Cambodia,

701
00:37:37,040 --> 00:37:40,760
Southeast Asia and India and
sorry, Burma, I think is the

702
00:37:40,760 --> 00:37:44,160
other other countries, you know,
had their supply disrupted.

703
00:37:44,160 --> 00:37:47,080
I mean, you know, that looks
like it's going to be long, you

704
00:37:47,080 --> 00:37:49,480
know, long lasting.
And I think there was another,

705
00:37:49,480 --> 00:37:53,680
there was a one of the larger
tin mines just in on the border

706
00:37:53,680 --> 00:37:58,680
between DRC and Uganda.
Yeah, that's the one.

707
00:37:58,680 --> 00:38:01,440
So Alpha Men's mine.
In in the DRC, Yeah, yeah,

708
00:38:01,440 --> 00:38:02,720
that's the one.
And I mean.

709
00:38:02,720 --> 00:38:06,120
That I think that knocked out
something like 5% of global

710
00:38:06,120 --> 00:38:09,040
supply or something like that.
So I was, you know, when you've

711
00:38:09,040 --> 00:38:11,560
got a tight market and all of a
sudden somebody pinches, you

712
00:38:11,560 --> 00:38:15,080
know, knocks out 5%, will buyers
tend to start to get very

713
00:38:15,080 --> 00:38:17,800
nervous and and they will start
building, you know, building

714
00:38:17,800 --> 00:38:20,560
inventory to protect themselves
against further price rises.

715
00:38:20,560 --> 00:38:24,320
But, you know, that just leads
to the price moving anyway.

716
00:38:24,320 --> 00:38:27,760
So it's, yeah, it's a, you know,
positive feedback loop that the

717
00:38:27,960 --> 00:38:29,600
metal's in at the moment.
Yeah.

718
00:38:29,760 --> 00:38:32,520
A nice little project down.
In Tasmania seems seems a bit

719
00:38:32,560 --> 00:38:35,480
easier to manage than yeah, some
of the more eclectic parts of

720
00:38:35,480 --> 00:38:36,560
the world.
That's right.

721
00:38:37,080 --> 00:38:39,720
Yeah.
So aluminium is one of the other

722
00:38:39,720 --> 00:38:41,960
ones.
And this is a a whole supply

723
00:38:41,960 --> 00:38:42,840
chain.
There's lots to it.

724
00:38:42,840 --> 00:38:47,080
There's the the books that play
as alumina aluminium, but it's

725
00:38:47,080 --> 00:38:49,560
it's been kind of hot as well to
to start the year.

726
00:38:49,560 --> 00:38:51,040
It's had people talking about
it.

727
00:38:51,040 --> 00:38:54,520
And we've got a bit of insight
into it in Australia with the

728
00:38:54,520 --> 00:38:57,640
various parts of the supply
chain that we see in Australia.

729
00:38:58,040 --> 00:39:01,600
I know MMI was a company a
couple of years ago that we'd

730
00:39:01,600 --> 00:39:05,400
we'd spoken about, but are you
saying pockets of value in in

731
00:39:05,400 --> 00:39:07,560
the in the chain?
Yeah, definitely.

732
00:39:07,560 --> 00:39:10,200
And I think that it's.
You know, the rally and copper

733
00:39:10,200 --> 00:39:14,400
price is probably shown thrown
aluminium into sharper focus

734
00:39:14,400 --> 00:39:18,840
because there is a, you know, a
substitution trade there sort of

735
00:39:18,840 --> 00:39:21,400
at the margins.
But also the ratio of copper to

736
00:39:21,400 --> 00:39:26,000
aluminium, which usually sits
around I think 3.7 to 4 times as

737
00:39:26,240 --> 00:39:28,280
has blown out as as copper as
rallied.

738
00:39:28,280 --> 00:39:31,720
So you know that starts to look
show aluminium as being cheap.

739
00:39:31,720 --> 00:39:36,400
But again, on a sort of a longer
term view, the, the interesting

740
00:39:36,400 --> 00:39:40,520
story with aluminium is, is
that, you know, for a long time

741
00:39:40,520 --> 00:39:46,360
or for the last decade, your new
aluminium capacity has come from

742
00:39:46,360 --> 00:39:49,560
China, you know, with, with very
cheap power.

743
00:39:49,560 --> 00:39:52,000
Because you know, aluminium is
basically just congealed

744
00:39:52,560 --> 00:39:55,560
electricity.
Whereas China's now has put a

745
00:39:55,560 --> 00:40:00,760
45,000,000 tonne per annum cap
on their capacity and they

746
00:40:00,920 --> 00:40:02,680
certainly appear to be sticking
to that.

747
00:40:03,520 --> 00:40:08,360
So begs the question, I mean, as
demand grows, where is your

748
00:40:08,520 --> 00:40:10,680
spare?
You know, where, where is your

749
00:40:10,680 --> 00:40:12,320
additional aluminium going to
come from?

750
00:40:12,320 --> 00:40:16,000
And most people point to
Indonesia and you know, the

751
00:40:16,040 --> 00:40:19,120
potential for them to do, you
know, something similar as

752
00:40:19,120 --> 00:40:20,680
they've done with nickel with
aluminium.

753
00:40:20,680 --> 00:40:25,520
But Morgan Stanley shot up to
Indonesia in in January and, and

754
00:40:25,520 --> 00:40:29,800
their takeaways were that the
the power generation is just not

755
00:40:29,800 --> 00:40:33,960
there to really accelerate their
aluminium production growth

756
00:40:34,440 --> 00:40:35,960
anytime in the next two to three
years.

757
00:40:35,960 --> 00:40:37,760
Like it's, it's going to take a
take a while.

758
00:40:38,840 --> 00:40:41,680
So, you know, incremental supply
from Indonesia, but nothing

759
00:40:41,680 --> 00:40:43,040
much.
But at the same time you've

760
00:40:43,040 --> 00:40:47,600
seen, you know, S 32 shut down
their smelter in Mozambique

761
00:40:47,600 --> 00:40:51,480
because of high power prices.
An open question, what happens

762
00:40:51,480 --> 00:40:54,560
to the rest of or what's left of
Australian aluminium production

763
00:40:54,560 --> 00:40:58,320
due to high power prices again
and problems at Brazil?

764
00:40:58,760 --> 00:41:00,520
Yeah, as well.
Yeah.

765
00:41:00,520 --> 00:41:02,640
So it's it's really struggling
and.

766
00:41:03,560 --> 00:41:05,800
You know, again, because the
world's been reliant on China

767
00:41:05,800 --> 00:41:10,360
for so long for it's, it's, it's
refining industry there.

768
00:41:10,640 --> 00:41:13,320
We could end up in a world
where, you know, aluminium

769
00:41:13,320 --> 00:41:17,800
prices need to move to such a
point that you can produce it

770
00:41:17,800 --> 00:41:23,000
profitably at 100 and 3000 and
$40 per MW hour.

771
00:41:23,000 --> 00:41:26,760
Whereas I think the, the Tomago
refinery in New South Wales,

772
00:41:26,760 --> 00:41:29,360
they're power contracts that are
about to roll off.

773
00:41:29,360 --> 00:41:31,960
They're closer to $50 per MW
hour.

774
00:41:31,960 --> 00:41:36,240
And yes, I mean if, if that if
they're the sort of projects

775
00:41:36,240 --> 00:41:39,960
that need to be sustained.
Well, the aluminium price is

776
00:41:39,960 --> 00:41:42,000
going to have to move quite a
long way to sort of balance

777
00:41:42,000 --> 00:41:45,800
supply and demand.
And just the last point on that

778
00:41:45,800 --> 00:41:48,520
and it, it applies to copper and
it definitely applies to

779
00:41:48,520 --> 00:41:54,920
aluminium is as opposed to other
other much niche markets like

780
00:41:54,920 --> 00:41:58,760
lithium, which is more or less
about 100, sorry 1.5 million

781
00:41:58,760 --> 00:42:02,360
tonne market, you can bring on
decent chunks of supply.

782
00:42:02,680 --> 00:42:05,520
So if you know Wodgina was to
turn like the rest of their

783
00:42:05,520 --> 00:42:09,560
trains on, I think you add you
know maybe 5 to 7% of of global

784
00:42:09,560 --> 00:42:13,000
supply there pretty quickly
because it's a small market.

785
00:42:13,320 --> 00:42:16,840
Whereas with copper, which is a
26,000,000 tonne per annum

786
00:42:16,840 --> 00:42:19,360
market, or aluminium, which I
think is around about a 60

787
00:42:19,360 --> 00:42:23,360
million tonne per annum market,
it's much harder for the supply

788
00:42:23,360 --> 00:42:26,080
side to catch up.
And so you end up with a sort of

789
00:42:26,080 --> 00:42:30,040
an iron ore scenario from the
last commodity boom where, you

790
00:42:30,040 --> 00:42:33,520
know, you've got to build, you
know, significant infrastructure

791
00:42:33,800 --> 00:42:35,520
before that supply hits the
market.

792
00:42:35,520 --> 00:42:37,440
In aluminium's case, you're
going to have to build more

793
00:42:37,440 --> 00:42:41,040
power plants for that supplier
to before that supply comes on.

794
00:42:41,040 --> 00:42:43,840
So that just means that the
rally, you know, should last for

795
00:42:44,240 --> 00:42:46,720
for a while longer than you
know, for them for some of these

796
00:42:46,720 --> 00:42:49,160
niche commodities.
Yeah, you measure these things

797
00:42:49,160 --> 00:42:51,120
in years.
Instead of instead of months, I

798
00:42:51,120 --> 00:42:54,160
want to say going to an Illumina
plant is right up on the on the

799
00:42:54,160 --> 00:42:56,600
list.
It's just the, the amount of

800
00:42:56,600 --> 00:42:59,880
energy that goes into it.
The, the, the process is, is

801
00:42:59,880 --> 00:43:03,160
fascinating.
And to your point on Indonesia,

802
00:43:04,440 --> 00:43:07,640
I mean, you, you made the the
sort of link with with nickel

803
00:43:07,640 --> 00:43:10,280
and what we saw there with
Morawali and the other

804
00:43:10,280 --> 00:43:13,560
industrial parks, they, they
solved the energy problem that

805
00:43:13,600 --> 00:43:17,120
that nickel process is not short
of energy demands either.

806
00:43:17,560 --> 00:43:21,080
And they just square off a a big
plot of land and fit it all in

807
00:43:21,080 --> 00:43:23,120
there.
So you'd have to imagine that's

808
00:43:23,120 --> 00:43:25,640
something that just takes time
to work out if they're serious

809
00:43:25,640 --> 00:43:28,840
about this or they can solve it.
Yeah, definitely.

810
00:43:29,720 --> 00:43:32,240
Yeah, I mean, they've built,
built in, they can knock up coal

811
00:43:32,400 --> 00:43:35,800
power plants reasonably quickly
there, Although I suspect the

812
00:43:36,360 --> 00:43:39,720
like there has been some
environmental carnage, you know,

813
00:43:39,720 --> 00:43:42,320
in Indonesia recently.
I think that of of a few people

814
00:43:42,320 --> 00:43:47,840
that died due to floods late
last year, you know, which were

815
00:43:47,840 --> 00:43:51,040
tied to, you know, mining
industry and and the palm oil

816
00:43:51,040 --> 00:43:53,680
industry as well.
Not, you know, looking after

817
00:43:53,680 --> 00:43:59,120
their or rehabilitating their
land as as as as as well as they

818
00:43:59,120 --> 00:44:01,560
should have.
So, you know, it's not a

819
00:44:01,560 --> 00:44:05,120
complete free for all, but it
still takes time.

820
00:44:05,520 --> 00:44:09,720
And, you know, it's still, you
still need to secure the

821
00:44:09,720 --> 00:44:12,120
additional coal supply for those
power plants.

822
00:44:12,480 --> 00:44:14,360
You know, that's becoming a
little bit more difficult now.

823
00:44:14,360 --> 00:44:18,440
So yeah, again, it is certainly
much more likely also will

824
00:44:18,440 --> 00:44:20,000
happen.
Like I think definitely it's a

825
00:44:20,040 --> 00:44:24,320
matter of when rather than if,
but it's still, you know, a few

826
00:44:24,320 --> 00:44:26,760
years away at least it seems.
Yeah, yeah.

827
00:44:27,520 --> 00:44:28,760
All right.
Sammy, a couple, a couple kind

828
00:44:28,760 --> 00:44:32,000
of general ones to to finish
off, I'm pretty curious to hear

829
00:44:32,440 --> 00:44:36,880
you, you manage two different
funds, one sort of targets the

830
00:44:36,880 --> 00:44:40,360
smaller end of the market and
the other the slightly larger

831
00:44:40,360 --> 00:44:42,960
end of the market.
But how do you how do you think

832
00:44:42,960 --> 00:44:45,520
about these differently in this
in this type of market when,

833
00:44:45,760 --> 00:44:47,960
when everything's kind of
working and what you're, what

834
00:44:47,960 --> 00:44:50,320
you're targeting, what you're
avoiding and these sorts of

835
00:44:50,320 --> 00:44:52,640
things?
I think as much as possible, we.

836
00:44:52,640 --> 00:44:57,160
Try and we just try and do what
we tell our investors we're

837
00:44:57,160 --> 00:44:59,840
going to do.
So you know, the larger fund

838
00:44:59,840 --> 00:45:04,160
that that that myself and you
and run is called the strategic

839
00:45:04,160 --> 00:45:08,440
natural resources trust like
that is being sold from

840
00:45:08,440 --> 00:45:12,920
inception as being a a lower
beta way to enjoy commodities

841
00:45:12,920 --> 00:45:15,520
exposure.
And so, you know, we, we don't

842
00:45:15,520 --> 00:45:18,880
take as as big as swings.
We we're in probably later

843
00:45:18,880 --> 00:45:23,160
stage, you know, companies that
have, you know, a fairway down

844
00:45:23,160 --> 00:45:27,040
the D risking path.
And so, you know, the returns

845
00:45:27,040 --> 00:45:30,840
for that one should be more
reliable or be it, you know, we

846
00:45:30,840 --> 00:45:33,880
had a, we had a decent year last
year, whereas the micro

847
00:45:33,880 --> 00:45:39,040
resources trust, which I run, I
mean, that's more, you know,

848
00:45:39,080 --> 00:45:40,560
feel the wind in your hair type
thing.

849
00:45:40,560 --> 00:45:42,320
I will take, you know, bigger
swings.

850
00:45:42,920 --> 00:45:46,840
We'll go into earlier stage
investments and and you know,

851
00:45:46,840 --> 00:45:48,920
that worked last year.
So we, you know, just ticked

852
00:45:48,920 --> 00:45:52,880
over 100% return for that one.
And you know, hopefully we do

853
00:45:52,880 --> 00:45:55,800
something similar again this
year, but the returns will be

854
00:45:55,800 --> 00:45:57,760
more volatile for that sort of
product.

855
00:45:58,160 --> 00:45:59,720
But we're we're candid about
that.

856
00:45:59,720 --> 00:46:03,400
And you know, some investors,
you know, are happy to take

857
00:46:03,400 --> 00:46:05,960
that, you know that risk and and
hopefully the return that comes

858
00:46:05,960 --> 00:46:08,400
with it.
Yeah, huge, huge year last year

859
00:46:08,400 --> 00:46:09,920
and I can't.
Believe we haven't had you in on

860
00:46:09,920 --> 00:46:13,640
the on the show with the amount
of times we've had you on I'm

861
00:46:13,680 --> 00:46:14,960
I'm curious to.
Hear the the.

862
00:46:14,960 --> 00:46:17,680
Benchmark there right now
because this is a for a lot of

863
00:46:17,680 --> 00:46:19,560
fund managers.
You've kind of touched on this,

864
00:46:19,560 --> 00:46:24,080
but like gold for instance, if
we look at the ASX 300, I think

865
00:46:24,080 --> 00:46:27,720
it's like 2020% of the it's
getting up there the the market

866
00:46:27,720 --> 00:46:33,360
now so and and that's just gold
like resources beyond that is at

867
00:46:33,360 --> 00:46:35,840
at another number of percent.
I don't know what the exact

868
00:46:35,840 --> 00:46:38,680
number is, but if you're, if
you're one of those fundies that

869
00:46:38,680 --> 00:46:41,080
doesn't like to plant resources,
you're, you're between a rock

870
00:46:41,080 --> 00:46:43,520
and a hard place, aren't you?
100% and.

871
00:46:43,880 --> 00:46:48,000
Like last year I felt sorry for
calendar 25, the small resources

872
00:46:48,000 --> 00:46:52,000
index was up 70%.
You know, that's it's crazy.

873
00:46:52,000 --> 00:46:54,360
Yeah, it was an on an absolute
tear.

874
00:46:54,360 --> 00:47:00,120
So if you are sensitive to the
small ords index, which you know

875
00:47:00,200 --> 00:47:03,760
a large number of funds are and
you don't have any resources,

876
00:47:03,760 --> 00:47:08,600
well, it's going to really hurt.
And so you're, you're forced to

877
00:47:08,600 --> 00:47:11,800
cover that underweight.
Now, if you've got some resource

878
00:47:11,800 --> 00:47:13,560
investing experience, then yeah,
great.

879
00:47:13,760 --> 00:47:16,720
But if you don't or you're sort
of groping around in in the dark

880
00:47:16,720 --> 00:47:21,080
there, but you've got to solve
that problem somehow because

881
00:47:21,080 --> 00:47:23,160
otherwise you're going to end
up, you know, underneath your

882
00:47:23,160 --> 00:47:25,080
benchmark and you and you're not
going to get paid.

883
00:47:25,080 --> 00:47:30,120
So it just made it all.
The outcome for that is that

884
00:47:30,120 --> 00:47:34,480
more money should be flowing
into the space as as time goes

885
00:47:34,480 --> 00:47:35,560
on.
Yeah.

886
00:47:35,560 --> 00:47:39,680
And in a world in which the.
The ASX 10, ASX 20 are so richly

887
00:47:39,680 --> 00:47:42,840
valued like the banks, the con
banks of the world at 25 times

888
00:47:42,840 --> 00:47:46,920
earnings, it becomes a real
tough one for for the Super

889
00:47:46,920 --> 00:47:49,840
funds, all these Aussie fund
managers to kind of play Yeah,

890
00:47:49,840 --> 00:47:52,280
it does and I mean I.
Suppose the only frustration

891
00:47:52,280 --> 00:47:55,800
for, you know, people like me
and the rest of the commodity

892
00:47:55,880 --> 00:48:00,000
sort of fund managers that that
apply our trade is that when you

893
00:48:00,000 --> 00:48:02,400
have these generalists coming
into the space, I mean, it's

894
00:48:02,400 --> 00:48:06,000
great on the way in, but they
don't like commodity investing

895
00:48:06,000 --> 00:48:08,440
as they they hate the space, if
to be frank.

896
00:48:08,440 --> 00:48:11,440
And so, you know, the moment
that something wobbles or goes a

897
00:48:11,440 --> 00:48:14,280
little bit wrong, like they sell
and sell hard and, and get out

898
00:48:14,280 --> 00:48:16,120
because they, you know, they
never wanted to be there.

899
00:48:16,520 --> 00:48:17,960
Exactly.
Right, exactly.

900
00:48:17,960 --> 00:48:21,800
Right, but and that's fair
enough, that's fair enough, but

901
00:48:21,800 --> 00:48:26,360
it does make for a an
inefficient market where you

902
00:48:26,360 --> 00:48:28,520
know, a small wrinkle.
Can, you know, present us a

903
00:48:28,520 --> 00:48:32,240
buying opportunity, I suppose
if, you know, the problem is not

904
00:48:32,240 --> 00:48:35,680
as great as as what a given
share price reaction might

905
00:48:35,680 --> 00:48:38,600
imply, but you know, that's what
makes a market.

906
00:48:38,600 --> 00:48:41,000
So, you know, we take the other
side of that reasonably

907
00:48:41,000 --> 00:48:42,640
regularly.
Yeah, yeah, totally.

908
00:48:42,880 --> 00:48:44,200
Last one.
Because I know you're a busy man

909
00:48:44,200 --> 00:48:47,360
and you've got to shoot Sammy,
but humanoid robots, I know you

910
00:48:47,360 --> 00:48:50,200
like to, to see what the latest
is.

911
00:48:50,240 --> 00:48:52,800
And you, you write about them
fairly regularly.

912
00:48:53,200 --> 00:48:55,880
And the advancements,
particularly in some of the

913
00:48:55,880 --> 00:48:58,600
Chinese ones, has been pretty
astounding.

914
00:48:58,600 --> 00:49:03,200
Now you can you can see a lot
from a a YouTube promo video and

915
00:49:03,440 --> 00:49:05,640
maybe there's a bit more than
meets the eye with with some of

916
00:49:05,640 --> 00:49:08,400
these, but some of the stuff you
do see is pretty, pretty

917
00:49:08,400 --> 00:49:11,080
outstanding.
So how do you think about this

918
00:49:11,080 --> 00:49:13,560
or when when are you thinking
about buying your first one?

919
00:49:13,840 --> 00:49:19,600
I I reckon.
By 20-30 I suspect I'll probably

920
00:49:20,240 --> 00:49:22,600
have one in the house and I
won't be alone.

921
00:49:22,600 --> 00:49:24,880
I certainly won't be a first
adopter, but I might be a fast

922
00:49:24,880 --> 00:49:26,800
follower.
How much do you think you'd be

923
00:49:26,800 --> 00:49:27,760
paying?
At that point in time.

924
00:49:28,400 --> 00:49:32,560
Well, that unitary or the
humanoid robot from Unitary,

925
00:49:32,560 --> 00:49:35,240
which is sort of the price I've
been tracking of the, you know,

926
00:49:35,240 --> 00:49:41,160
of all of them for a while now.
That's down to $13,500 per unit.

927
00:49:41,440 --> 00:49:43,040
Is that, is that US?
Yeah.

928
00:49:43,040 --> 00:49:43,600
That's US.
US, yeah.

929
00:49:44,520 --> 00:49:49,080
But for context, in September
2024 when I first looked at

930
00:49:49,080 --> 00:49:52,200
that, that same unit was 90,000
US.

931
00:49:53,400 --> 00:49:56,960
So, you know, it's fallen in
price by what circa 80% in a,

932
00:49:57,240 --> 00:50:00,840
you know, say a year and a half
at while the functionality of

933
00:50:00,840 --> 00:50:03,280
these things has been getting
better and better and better.

934
00:50:03,480 --> 00:50:05,240
It's like a like the solar chart
that.

935
00:50:05,240 --> 00:50:06,520
Just got cheaper and cheaper and
cheaper.

936
00:50:06,520 --> 00:50:09,240
Except this sounds a lot more
complex than the PV.

937
00:50:09,240 --> 00:50:11,120
Yeah.
And I think the challenge for

938
00:50:11,120 --> 00:50:14,360
the functionality.
Of them is that, you know,

939
00:50:14,400 --> 00:50:18,600
unlike the large language models
that all the ChatGPT and all

940
00:50:18,600 --> 00:50:23,000
that stuff used for learning and
training, the Internet's just

941
00:50:23,000 --> 00:50:25,000
full of text and speech,
etcetera.

942
00:50:25,000 --> 00:50:28,480
So to learn to learn the
language is there's a massive

943
00:50:28,480 --> 00:50:32,240
data set there.
A same data set doesn't exist

944
00:50:32,320 --> 00:50:37,760
for how humans move around the
home, how you sort of open a, a

945
00:50:37,760 --> 00:50:40,840
washing machine and, and fill it
full of clothes, how you fold a

946
00:50:40,840 --> 00:50:42,280
shirt and all this sort of
stuff.

947
00:50:42,280 --> 00:50:47,920
So these training models need to
be built from scratch and that

948
00:50:47,920 --> 00:50:50,640
is that's probably the, the rate
determining step for the

949
00:50:50,640 --> 00:50:54,160
adoption of these robots is and,
and how competent they become

950
00:50:54,160 --> 00:50:57,440
around the house.
But it will be, it will be

951
00:50:57,680 --> 00:51:00,400
solved.
And whoever solves it first is

952
00:51:00,400 --> 00:51:04,920
going to be able to roll it into
their robots and then put them

953
00:51:04,920 --> 00:51:09,040
into, you know, invite various
environments, industrial as well

954
00:51:09,040 --> 00:51:11,560
as residential.
And that will accelerate the

955
00:51:11,560 --> 00:51:14,920
learning even more so as, as
that feedback mechanism starts

956
00:51:14,920 --> 00:51:20,640
to starts to sort of roll.
And then, you know, the, the,

957
00:51:21,040 --> 00:51:23,200
the functionality of these
things should go, you know,

958
00:51:23,200 --> 00:51:25,000
exponential.
And if you really want to get

959
00:51:25,000 --> 00:51:27,920
hyperbolic about it, you can,
you know, go down Elon's sort of

960
00:51:27,920 --> 00:51:30,120
rabbit hole where he reckons
that, you know, there won't be

961
00:51:30,120 --> 00:51:33,560
any surgeons in whatever it is 5
or 10 years time because the

962
00:51:33,560 --> 00:51:37,960
robots will learn to do that job
so quickly and, and, and better

963
00:51:38,040 --> 00:51:41,000
than humans can.
So, you know, he's obviously

964
00:51:41,000 --> 00:51:45,520
talking his own book, but it's
it's not, you know, it's not

965
00:51:46,880 --> 00:51:50,040
completely beyond the realms of
of possibility that something

966
00:51:50,040 --> 00:51:52,920
like that could happen.
And in 20-30, will you?

967
00:51:52,920 --> 00:51:57,280
Be will will the average person
in Perth be jumping into an an

968
00:51:57,280 --> 00:51:59,800
Uber or DD or whatever that is
drivers?

969
00:52:01,440 --> 00:52:02,880
I think the.
Technology will definitely be

970
00:52:02,880 --> 00:52:05,280
there.
I think in in Perth and and

971
00:52:05,280 --> 00:52:07,920
Australia in general is
regulation which holds these

972
00:52:07,920 --> 00:52:09,560
things back.
I mean, clearly you can already

973
00:52:09,560 --> 00:52:12,560
jump into driverless cabs in,
you know, many cities in the US.

974
00:52:12,560 --> 00:52:16,680
You can't do it here yet, but
it's coming for sure.

975
00:52:17,720 --> 00:52:19,480
All right.
As always, fantastic.

976
00:52:19,480 --> 00:52:22,080
To chat Sammy, thanks for making
the time for us and I'm sure the

977
00:52:22,680 --> 00:52:24,960
the listeners have taken a whole
bunch from your your views as

978
00:52:24,960 --> 00:52:26,640
always.
Absolute pleasure Jodie.

979
00:52:26,640 --> 00:52:29,240
Anytime, always.
Enjoy a a chat with you guys and

980
00:52:29,560 --> 00:52:31,480
a massive thank you to.
Our awesome partners.

981
00:52:31,480 --> 00:52:33,800
We hadn't had the privilege of
thanking these guys in a little

982
00:52:33,800 --> 00:52:37,080
while, but Sandy Ground support,
who we had in the show, Exceed

983
00:52:37,280 --> 00:52:42,680
Capital Intralinks and check out
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984
00:52:42,680 --> 00:52:44,680
Deck.
Hudaru Money minus Hudaru.

985
00:52:45,680 --> 00:52:48,520
Now remember, I'm an idiot.
JD is an idiot.

986
00:52:48,840 --> 00:52:50,920
If you thought any of this was
anything other than

987
00:52:50,920 --> 00:52:53,560
entertainment, you're an idiot
and you need to read our

988
00:52:53,560 --> 00:52:54,080
disclaimer.