Why Mega Deal "GlenTinto" is On (with Koala)

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Massive week in mining, JDA.
Massive week in mining, don't

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you think?
Huge mate.

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Rio Tinto board stashes.
We got potential mega mega mega

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mergers with Glencore and Rio
Tinto, name a few.

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That is kind of crazy.
What is this could be the deal

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of our generation if it
eventuates and it's kind of

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bizarre that it's resulted in
the MD being pushed out, pushed

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out of the company by the board,
it appears.

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Well, that's.
What drama drama's like.

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Clearly, Glen Glen Tinto in some
shape or form is on the cards,

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and we've called our friend the
Koala to help us talk through

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all of the what that means, plus
other important news.

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And Speaking of important, JD,
you know what's important to me?

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Mineral mining services.
Mineral mining services, They

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are the trusted mining
contractor.

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You got any stranded assets?
Have you got any gold that can

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be mined in this price
environment?

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Have you got absolutely anything
that can be mined?

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Well that they have a fleet,
they will deploy it straight

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away.
Mate, they've got the team,

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they've got the track record and
they've got the can do attitude.

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Get in touch with Mineral Mining
Services.

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Can do attitude, you can call
them right now.

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Get it done.
All right mate, but first.

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I'm keen to share this
conversation, mate, because I

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think it is a Ripper beyond what
you touched on there.

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We're going to talk about the
Adriatic and Dundee potential

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deal.
We're going to talk about

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whether we'll see an interloper
with Harmony and Mac, which is a

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super interesting one.
One for the tin barons as well,

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mate.
Alpha Min versus Meadows XA bit

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of a comp on who is the better
allocator of capital in that

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interesting neck of the woods
and the the uranium fans out

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there.
They can a bit of a special

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mention in why Koala has sort of
perked up his ears to Next Gen.

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in recent times.
Let's get to it.

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Here we go, Koala.
Why is Glencore's latest

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restructuring maybe indicative
of of of something a bit bigger?

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1 + 1 makes the big fella of
your homelands, gentlemen, the

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small fella.
Alas, in the passage of time,

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perhaps the shareholders of Glen
Tinto sell seek the Freeport

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multiple, while others shall
seek the franking dividends and

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capital returns that come from
Bolt Co.

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That for franking dividends and
tax treatment should probably be

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ASX Australia incorporated and
ASX listed with a USADR.

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With such lovely assets
including Tobra Iron ore, Evra

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thermal coal portfolio of
Australia, South Africa and

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Colombia, maybe we put IOCC in
there, maybe we don't.

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We'll put damn pure salt in
there because that creates

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traffic at Port Hedland, which
none of Rio's iron ore goes

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through, but it keeps the
competitors honest.

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We'll put Ferrell, always
Glencore in there because why

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not?
Kind of fits into that steel

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additive model, that manganese
Chrome joint venture, which to

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be honest, I think I know
Glencore better than most on the

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buy side and I can't name it off
the top of my head.

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Marafi, I think maybe So you
throw that in there, maybe throw

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a winnow in there because it's
Aussie Copper Project.

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But yeah, you would create a
bulk machine.

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We're jumping 4 steps ahead
here.

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So what you're saying is that
the Glencore Rio Tinto merger is

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on.
You're inferring that from all

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of the press that's come out
this wake, including Jacob's

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exit and the the flurry of of
speculation around maybe his

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resistance to a deal with
Glencore and now that he's

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departed, you think that's on
and you're already hypothesizing

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about a future separation of a
box business from the copper

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lithium business?
I mean, this could be the mother

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of all mining deals for this
generation and cycle and the

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Koala's accepted he's not going
to be getting a fee for it.

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What's going on here?
What like, OK, so, so Jakob's

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departure, it was very vanilla
to begin with.

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And then it quickly, you know,
everyone's suspicious, but it

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seemed vanilla in the press to
begin with.

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And then quickly it kind of
comes out that that he'd been

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pushed out of the board.
And the reporting seems to

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suggest there were differences
on two things, one being M&A

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strategy, which kind of seems to
be the big thing, right?

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And the other one was maybe a
lack of focus on, on cost

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reduction and you know, this
increased bloat in the in the in

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the structure there.
Rio, do you think it's valid?

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Yeah.
I mean, I think we we didn't

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talk about on money of mine, but
I think there is been this

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ongoing discussion since those
original talks or initial

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approaches leaked last year in
2024 that you know, Gary clearly

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has ambitions for one of the big
call it 300 + 1,000,000 ton iron

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ore portfolios with a long
believed Glencore hypothesis

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that if that went through our
marketing business, there's one

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to $2.00 a ton of EBITDA of
incremental margin just because

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we're the ones with the
marketing strategy.

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And I think it's a really tough
thing for a board to reflect on

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because if you gave Gary and the
Glencore iron ore team BH PS

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iron ore book, Rio's iron ore
book or Volley's iron ore book,

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and they actually delivered 1 to
$2.00 a ton of EBITDA

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improvement in a measurable way.
That would be so damning to so

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many generations.
Or frankly, the last 2530 years

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of management and leadership of
these businesses.

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And what kind of further drive
the point across that these big

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companies, Rio, BHP, Volley, I
mean, they would have probably

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been so much better off if they
had just gotten fat, drunk and

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lazy, digging holes in the
Pilbara, running trains and

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loading up ships and never
leaving WA because that's really

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where all the wealth comes from.
Up in the Pilbara, just like any

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mining region, productivity is
paramount.

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But lately we've been seeing
numbers showing a pretty

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concerning trend.
JD productivity's declined for

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four consecutive years.
The latest numbers showed a 2%

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plus decline a year, which
doesn't sound like much, but

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that was the worst print since
the GFC.

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Yeah, they're, they're pretty
astounding numbers, right.

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And compounding that issue is
employee turnover, right.

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So FIFO OPS across WA, not just
the Pilgrim now, they've had

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turnover rates of over 20% in
the recent years and at some

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operations they hit 31% mate.
That is, that's kind of wild.

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High turnover disrupts
operations.

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It increases your cost.
It hampers productivity.

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But what's driving workers away
often, mate, it's the quality of

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life on site.
Mate, that's where I think

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you've got to think of Grounded
construction.

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Grounded specializes in super
high quality, comfortable camps.

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They make remote work more
liveable for the teams doing the

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hard yards up at site.
These aren't just camps, mate.

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This is this is pristine
accommodation.

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It's it's it's super liveable.
Why would you ever want to

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leave?
And when you don't have to

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leave, guess what?
That's lower cost because

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Grounded have a track record of
building these over seventy 170

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projects. 170 mate, that that is
huge.

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And to spell it out more, by
improving camps, companies can

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reduce turnover.
They can boost the overall

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experience for all their workers
out at sight, enhance

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productivity, and help the
bottom line.

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Investing in better
accommodation isn't just about

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comfort, it's a move to improve
your bottom line.

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Go grounded construction.
Go grounded.

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And ventures abroad have not
been profitable anywhere to the

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scope that the Pilbara has been.
So it's always been this little

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conundrum to me that would, what
would any board have the courage

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to be like?
OK, let's actually all right,

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because Glencore is not going to
do any deal unless they run the

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show like it'll be a top down
Glencore management culture.

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What board says, you know what,
let's actually test this

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hypothesis out and different CE
OS have different cultures

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around this.
I think it's fair to say, I

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think we would all agree
unanimously BHP where it sits in

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Australia, there's just no way
with national pride and culture.

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It would be well received if
there was a merger with Glencore

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and Gary and the Glencore guys
were now in charge.

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Your thoughts would would that
be taken well?

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I think you're on the money
there.

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Yeah, there's a reason an
American has never run BHP last

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night checked, let alone a South
African.

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That's that's not true.
Marius.

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An American Anderson in 1998
came in and and then Good

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Goodyear came in in 2004.
So I stand corrected.

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Bravo.
Yeah.

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Yeah, that that is when BHB went
from an Australian company that

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had awesome cash flow and, you
know, drank in the at the

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Melbourne club and was the, you
know, a very Australian centric

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business to being Americanized
and with corporate management.

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And yeah, Chip came in as CFO
and then in 2004 later became

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the boss before the the South
Africans came into to run the

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show, which was a kind of bitter
pill to take.

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And even the the government came
in and was like, headquarters

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has to stay in Melbourne.
You know, you can't, you can't

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move this company out of our
country.

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And perhaps there's sort of
similar type discussions, even

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though, you know, Rio's a London
kind of company in a sense.

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But there's there's such
analogies right to the Billiton

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BHP merge.
I mean, Glencore's got pretty

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shit assets.
I mean, Evr's, yeah, phenomenal

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in the long run.
But but like you think of the,

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the assets that Glencore has,
they're not, they're not like

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they're not of the same quality
of there's, there's no, there's

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no Pilbury in Ore.
There and the Billiton assets is

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S 32, right?
Exactly so, so there, there,

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there's there are parallels to
what a potential merger.

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Well, let's think, let's think
about this guy's the copper

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business, Colossi.
That's something Rio and BHP

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would last for.
Sure.

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Yep.
Antamina 34% It's run as an

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independent joint venture.
Ant Pakai.

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It's not sexy, but it it makes
money and you're not ready, you

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have to worry through the cycle.
OK, Congo with cobalt in the

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ditch.
Not as great as we all hoped it

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would be, but Marin El Pichan
are probably more interesting

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gross projects than what we
knew.

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And LaGrange, which they farmed
off to 1st Quantum if you're

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real.
So there is a decent copper

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portfolio which what does Rio
have OTA share of Escondida,

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which has an incredible CapEx
profile out of it and Kennecott.

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So there is, I would argue a
superior copper Business Today.

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Nickel, I mean, Mirren, Mirren's
awash where if we're talking

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about Tilbra and like Colossi
assets, Sudbury's may be past

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its prime, but it is a good
asset in Canada.

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I mean zinc sawash, but then you
have the pole hunter value.

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I mean we all know Glencore at
the end of the day now is really

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a copper and a coal company.
Nothing else just really moves

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the deal.
And the marketing business,

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which I imagine in any
negotiation, how do you value

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that marketing business is a
huge factor here.

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But I mean, look right now at
call it 2.8 lbs a share, that's

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about 378 US 12.1 million shares
outstanding, 46 million £46

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billion market cap, 60 US 1.65
billion shares and 98 billion

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for Rio.
So the current split 6832, let's

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be sporting and put a 22%
premium on Glencore, the same

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premium Glencore offered tech.
You'd end up with a 6436 split.

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Gary, Gary, CEO, Dominic Chair.
You put the company together,

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you run it for a year or two,
you see how it works, but you

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have it all structured in a way
that you have the option to very

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efficiently split into base
metals Co and bulk capital

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return Co two to three years
down the track once the

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shareholder registers settled
out.

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I think one of the the obvious
questions, sorry about in Koala

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is just that the coal aspect and
the the ESG part with with

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proxies and institutions.
You think that's an actual point

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of contention or that just
washes through?

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What did Aussie Super just
become substantial shareholder

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in?
What haven't that?

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That'll make the argument that
they were 4.9 for a long time.

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Well, now they're not ashamed to
be seen in public.

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Yeah, absolutely.
Absolutely.

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00:13:17,800 --> 00:13:21,120
Like Glencore made an approach
last year, seems pretty certain

224
00:13:21,120 --> 00:13:23,840
at this point, like wanting to
do this deal or wanting to do a

225
00:13:23,840 --> 00:13:26,640
deal in some way shape or form.
Is there any rate here with

226
00:13:26,640 --> 00:13:30,360
Glencore like is desperate or
are they just thinking bigger

227
00:13:30,360 --> 00:13:33,200
picture here about the iron ore?
I think they see a huge

228
00:13:33,200 --> 00:13:38,960
opportunity in the margin
accretion of marketing and iron

229
00:13:38,960 --> 00:13:42,760
ore book and you can go back and
look at the Glen Tech slide

230
00:13:42,760 --> 00:13:45,960
deck.
I think one of the more cheeky

231
00:13:45,960 --> 00:13:48,360
observations, I think they said
I don't have in front of me like

232
00:13:48,360 --> 00:13:50,840
they thought they could be 300
million of incremental EBITDA

233
00:13:50,840 --> 00:13:56,760
for marketing if they had tax
volumes put through their

234
00:13:56,760 --> 00:14:01,280
marketing portfolio.
So there's clearly in the eyes

235
00:14:01,280 --> 00:14:05,240
of the 800,000 tons of real
copper, even though we have to

236
00:14:05,240 --> 00:14:07,880
acknowledge that the OT tons are
kind of spoken for.

237
00:14:07,880 --> 00:14:10,720
China, I'm not sure you really
add much to that.

238
00:14:12,040 --> 00:14:17,080
The 3.3 million tons of aluminum
and remember Lincorp bought into

239
00:14:17,080 --> 00:14:21,560
MRN and a few things in
Australia and I believe it was

240
00:14:21,560 --> 00:14:25,640
in Jamaica, some alumina bauxite
and has a stake in Century

241
00:14:25,640 --> 00:14:27,640
aluminum.
The Gulf War is very bullish

242
00:14:27,640 --> 00:14:31,040
aluminum, if you just look at
some of the deals they've done

243
00:14:31,880 --> 00:14:34,640
in the last couple years, small
dollars in the scope of like

244
00:14:34,640 --> 00:14:38,320
what they've done in coal, but
it's complementary.

245
00:14:40,600 --> 00:14:44,360
And then you have the titanium
and iron, you have the IOCC

246
00:14:44,360 --> 00:14:48,160
volumes, lithium.
Glencore is a trader already and

247
00:14:48,160 --> 00:14:51,440
Brio just bought arcadium and
done a few other deals.

248
00:14:53,000 --> 00:14:55,840
Yeah, you just kind of look and
go, there's clearly more

249
00:14:55,840 --> 00:15:00,880
marketing synergies beyond just
iron ore and then just you'd be

250
00:15:00,880 --> 00:15:04,120
creating 100.
And before you factor in the

251
00:15:04,120 --> 00:15:07,560
premium, and let's even assume
some of the premium to Glencore

252
00:15:07,560 --> 00:15:10,400
falls off of Real, it's just
called the unaffected 143

253
00:15:10,400 --> 00:15:14,440
billion market cap.
That's a much bigger company if

254
00:15:14,440 --> 00:15:18,480
it got primarily listed in the
US in some way could gain some

255
00:15:18,480 --> 00:15:20,560
indices, get into more passive
flows.

256
00:15:21,280 --> 00:15:23,760
What happens if you get an extra
turn of EBITDA on this thing?

257
00:15:24,960 --> 00:15:27,720
I don't have consensus EBITDA
for both of these, but I assume

258
00:15:27,720 --> 00:15:33,360
the combined EBITDA is north of
$40 billion, an extra 40

259
00:15:33,360 --> 00:15:38,400
billion.
I mean, 40 / 140 is an extra 20%

260
00:15:38,400 --> 00:15:44,240
uplift.
I mean, that's a lot of value.

261
00:15:44,600 --> 00:15:47,600
We're just arguing about how we
split the pie here and who runs

262
00:15:47,600 --> 00:15:51,120
it in a world where the tech
companies are trillion dollar

263
00:15:51,120 --> 00:15:54,760
companies.
What, what's Exxon's market cap

264
00:15:54,760 --> 00:15:56,720
right now?
I mean, that that's probably a

265
00:15:57,760 --> 00:16:00,880
like, we just don't really have
mining companies at the scale

266
00:16:01,400 --> 00:16:03,840
that they're in the current of
the passive flows in the same

267
00:16:03,840 --> 00:16:05,720
way that gets the lower cost of
capital.

268
00:16:06,400 --> 00:16:09,560
And then everyone asks, why
won't the mining companies

269
00:16:09,560 --> 00:16:11,960
invest in growth?
Why won't you do El Pechon?

270
00:16:11,960 --> 00:16:15,320
Why won't you do Mara?
Why won't you do LaGrange Winnu?

271
00:16:16,440 --> 00:16:19,440
Why did the Chinese have to drag
Rio kicking and screaming over

272
00:16:19,440 --> 00:16:22,280
Simindu?
Cost of capital matters.

273
00:16:22,280 --> 00:16:24,640
If not cost of capital, you need
higher commodity prices.

274
00:16:25,720 --> 00:16:29,240
And yeah, Exxon's a $443 billion
market cap company.

275
00:16:30,200 --> 00:16:33,480
You got to get something bigger
in the most liquid capital

276
00:16:33,480 --> 00:16:36,000
markets.
I mean, there are US investors

277
00:16:36,160 --> 00:16:39,720
who don't know what Glencore is
because it's just not in their

278
00:16:39,720 --> 00:16:42,360
benchmarks.
So it just doesn't matter.

279
00:16:42,480 --> 00:16:44,720
It's not relevant.
And there's no point taking the

280
00:16:44,720 --> 00:16:47,640
career risk to study this
company and put it in your

281
00:16:47,640 --> 00:16:51,600
portfolio.
And the US capital markets are

282
00:16:51,600 --> 00:16:57,280
the most liquid there are.
The the the other opportunity

283
00:16:57,280 --> 00:17:01,880
that that peers or sounds like
is kind of on the table for for

284
00:17:01,880 --> 00:17:04,640
Rio Tinto, or at least it could
have been or should have been.

285
00:17:04,920 --> 00:17:08,599
And maybe is the reason why, you
know, Jacob's go on is is the

286
00:17:08,599 --> 00:17:10,359
reluctance to do anything more
in copper.

287
00:17:10,359 --> 00:17:13,680
And I'm speaking specifically
the opportunity to to buy tech.

288
00:17:15,480 --> 00:17:17,680
Why should why should why should
Rio be more aggressive about

289
00:17:17,960 --> 00:17:19,280
Glencoe than tech right now?
I.

290
00:17:19,720 --> 00:17:22,640
Think the question is where
would the synergies be in a tech

291
00:17:22,640 --> 00:17:28,280
deal you send to QB 2?
I mean do you really want to get

292
00:17:28,280 --> 00:17:31,080
into red dog?
I mean RT is an RTZ anymore.

293
00:17:32,320 --> 00:17:35,760
In fact frankly the only owner
of red dog besides tech that

294
00:17:35,760 --> 00:17:39,200
makes sense is probably Glencore
but we don't need to revisit

295
00:17:39,200 --> 00:17:43,680
2023.
I look at.

296
00:17:43,680 --> 00:17:46,760
And then also you still have to
deal with the fact that Keevil

297
00:17:47,040 --> 00:17:50,880
still his suit, his super voting
rights and probably wants some

298
00:17:50,880 --> 00:17:54,880
insane premium like and and to
we are going to bring it up

299
00:17:54,880 --> 00:17:58,680
later, But I mean, you kind of
look at a harmony bidding for

300
00:17:58,680 --> 00:18:01,680
Mac.
What was Mac's original name

301
00:18:01,680 --> 00:18:04,120
Metals Acquisition Corp.
I mean, I think it's an open

302
00:18:04,120 --> 00:18:07,360
secret.
They were one of the silver

303
00:18:07,360 --> 00:18:12,120
bronze medalist on Nevis Corvo.
And I look at the whole this

304
00:18:12,120 --> 00:18:16,360
whole equation, you say if you
want to consolidate in decent

305
00:18:16,360 --> 00:18:20,760
jurisdictions producing base
metal, especially copper assets,

306
00:18:21,400 --> 00:18:24,840
you're not buying these at
accretive valuations anymore.

307
00:18:25,200 --> 00:18:29,760
You're buying them at like non
accretive or mildly dilutive

308
00:18:29,760 --> 00:18:36,440
with the premise that 1 + 1 = 2
1/2 three because bigger gets

309
00:18:36,440 --> 00:18:38,760
you an incremental generalist to
be able to look at your stock

310
00:18:38,760 --> 00:18:41,840
because there's more creating
liquidity and therefore you have

311
00:18:41,840 --> 00:18:46,400
potential to be in more indices.
And you see that in some of the

312
00:18:46,600 --> 00:18:51,360
proper royalty deals that are
done like when gold royalty

313
00:18:51,480 --> 00:18:54,560
GROYI might have butchered the
name, but that's the ticker.

314
00:18:55,080 --> 00:18:58,360
I think when they did a copper
stream on Adriatics of Rs

315
00:18:58,360 --> 00:19:02,400
project, from memory, it was
like almost like 4425 copper was

316
00:19:02,400 --> 00:19:05,840
like 8 times EBITDA on an 18
year mine life.

317
00:19:05,840 --> 00:19:07,360
And you're like really got
really.

318
00:19:08,000 --> 00:19:11,160
But hey, they did a bought deal
in 24 hours and they had all the

319
00:19:11,160 --> 00:19:15,480
money in the door.
So in these base metals and

320
00:19:15,480 --> 00:19:19,280
certain they're in the safe, if
you will, jurisdictions, people

321
00:19:19,280 --> 00:19:24,080
are just like, yeah, just
getting bigger is more value

322
00:19:24,080 --> 00:19:26,760
add.
So, but that's a tough pitch for

323
00:19:26,760 --> 00:19:29,880
some boards to take at least I
think was something like

324
00:19:29,880 --> 00:19:32,040
Glencore.
You have this marketing

325
00:19:32,040 --> 00:19:33,680
business, you have this
potential.

326
00:19:33,920 --> 00:19:37,240
You could split these companies
up one day, eventually create a

327
00:19:37,240 --> 00:19:42,880
capital return machine and then
create a call it US folk AUS

328
00:19:42,880 --> 00:19:47,160
domiciled base metals company
that could chase the Freeport

329
00:19:47,160 --> 00:19:50,000
multiple, which also by the way,
wouldn't have a problematic

330
00:19:50,000 --> 00:19:52,600
asset like grasper.
Phenomenal asset, but the

331
00:19:52,600 --> 00:19:54,640
Norwegian sovereign wealth fund
won't touch it.

332
00:19:55,240 --> 00:19:58,640
I mean you put a base metals
pier of the size and quantum

333
00:19:59,080 --> 00:20:03,800
that produces 3.3 million tons
of aluminum and right now more

334
00:20:03,800 --> 00:20:07,320
copper than Freeport on a
consolidated basis.

335
00:20:09,880 --> 00:20:12,320
That gets a crazy multiple
rewrite.

336
00:20:12,320 --> 00:20:15,440
And as we talked about with
Anglo BHP last year and before,

337
00:20:15,440 --> 00:20:18,120
everyone's kind of secretly
chasing that Freeport multiple.

338
00:20:19,560 --> 00:20:24,680
So I think there's just so much
more optionality in this

339
00:20:24,680 --> 00:20:27,640
Glencore deal.
And if you own iron ore, do you

340
00:20:27,640 --> 00:20:30,920
really care about on coal?
It's it's mostly steelmaking.

341
00:20:30,920 --> 00:20:32,600
The thermal comes along with
that fine.

342
00:20:32,600 --> 00:20:35,600
It is what it is.
Koala to to go to your earlier

343
00:20:35,600 --> 00:20:40,040
point about how you split up the
pie, the the relative

344
00:20:40,040 --> 00:20:45,800
performance of Glencore versus
Rio take it since discussions

345
00:20:45,800 --> 00:20:49,560
were rumored to have started
maybe 8 odd months ago has been

346
00:20:49,600 --> 00:20:52,600
much more to the detriment of
totally understand your case for

347
00:20:52,600 --> 00:20:55,720
just bigger is better, more
flows all these types of things.

348
00:20:56,640 --> 00:20:59,120
But do you think on, on the
margins that still kind of in

349
00:20:59,120 --> 00:21:03,680
does it deal with with Gary and
Co getting a smaller stake in

350
00:21:04,040 --> 00:21:06,640
the ultimate merged Co?
Glencore certainly wasn't in the

351
00:21:06,640 --> 00:21:09,720
twos last year.
They've they've with coal prices

352
00:21:09,720 --> 00:21:11,320
and everything peeling back,
they've been here.

353
00:21:11,760 --> 00:21:14,560
I'm sure there is.
I think it's a question of just,

354
00:21:17,160 --> 00:21:20,200
and we have this debate when
Glencore Tech came around and

355
00:21:20,200 --> 00:21:23,880
it's like, if you're doing an
all share deal, I don't think

356
00:21:23,880 --> 00:21:25,760
you quibble about premiums per
SE.

357
00:21:25,760 --> 00:21:30,680
You say there's a pie and what's
the right attribution.

358
00:21:31,800 --> 00:21:34,600
I I really like, I don't think
any day at Supremes is like,

359
00:21:34,680 --> 00:21:37,640
should this be a 7030 deal, a
6040 deal?

360
00:21:39,400 --> 00:21:42,000
I don't think actually the, the
premium will matter if you're

361
00:21:42,800 --> 00:21:45,240
deal speculating in the market
because you want to see that big

362
00:21:45,240 --> 00:21:48,440
juicy premium.
But I imagine any conversation

363
00:21:48,440 --> 00:21:51,800
here is like, OK, like we're
doing a deal that's going to

364
00:21:51,800 --> 00:21:56,160
define everyone's career here.
What do we think the right the

365
00:21:56,160 --> 00:22:01,080
right split of the pie is?
I don't think look that if it's

366
00:22:01,080 --> 00:22:04,800
moved, I don't know what the
internal calculations are, but

367
00:22:04,800 --> 00:22:07,600
if it's moved, I mean that's why
these deals so rarely happen.

368
00:22:07,600 --> 00:22:09,080
The stars have to align
perfectly, do.

369
00:22:10,440 --> 00:22:13,280
Do you think that it's a
certainty that, you know, the

370
00:22:13,600 --> 00:22:16,920
Glencoe's coal business actually
folds into red Like is, is there

371
00:22:16,920 --> 00:22:21,160
not another theory that's like
Glencoe want to take the coal

372
00:22:21,160 --> 00:22:23,840
business private themselves and,
you know, return to the good

373
00:22:23,840 --> 00:22:27,680
times of of the privacy that
comes and then then you can have

374
00:22:27,680 --> 00:22:29,680
like probably even better
trading margins on that.

375
00:22:29,680 --> 00:22:32,360
There's a lot of a lot of like
cold blood in that company from

376
00:22:32,360 --> 00:22:39,040
a trading perspective.
There's a lot of cold blood, but

377
00:22:39,040 --> 00:22:41,480
I think the people who would be
most inclined to take that

378
00:22:42,320 --> 00:22:45,960
company, say, private work for
Glencore.

379
00:22:45,960 --> 00:22:48,000
So that's a bit of a conflict of
interest.

380
00:22:50,880 --> 00:22:56,760
Management buyout mate.
But I mean, in that sense, then

381
00:22:56,760 --> 00:23:00,800
who would run the?
Who would run Rio Tinto?

382
00:23:00,960 --> 00:23:06,000
Well, I don't, I, I, I honestly
don't, don't know, but I, I

383
00:23:06,000 --> 00:23:08,240
would have thought that that'd
be a compelling proposition to,

384
00:23:08,400 --> 00:23:12,720
to sell, you know, the, the,
yeah, all of the, all of the

385
00:23:12,720 --> 00:23:14,920
base metal stuff all over the
like, get rid of it all.

386
00:23:14,920 --> 00:23:17,960
Keep, keep the coal, keep, you
know, the wonderful Elk Valley

387
00:23:18,320 --> 00:23:21,480
like business, the thermal coal
business trying business on top

388
00:23:21,480 --> 00:23:23,200
of that.
It's I think the take away from

389
00:23:23,200 --> 00:23:27,880
this week is it's very clear if
you think about October,

390
00:23:27,880 --> 00:23:34,360
November, the idea was Gary's
horny for this idea, but the

391
00:23:34,360 --> 00:23:36,880
British Rio board would, would
never.

392
00:23:37,600 --> 00:23:41,200
They they they, they told Sam
Walsh told Ivan to go to hell in

393
00:23:41,200 --> 00:23:46,080
2014, and Jacob and Dominic are
telling Gary to go to hell in

394
00:23:46,080 --> 00:23:48,360
2024.
You don't think Ivan's been a

395
00:23:48,360 --> 00:23:50,440
part of this conversation too?
Surely Ivan's been calling

396
00:23:50,440 --> 00:23:53,160
Dominic.
I don't think so at all.

397
00:23:53,440 --> 00:23:55,360
I think Ivan's very happy in
retirement.

398
00:23:55,520 --> 00:23:57,880
Wow.
Just picked up some more

399
00:23:57,880 --> 00:23:59,480
Glencore stuff.
There's a lot of stock.

400
00:24:00,200 --> 00:24:03,200
I think it's quite clear now
that Dominic Barton and the Rio

401
00:24:03,200 --> 00:24:10,760
board have a much more open view
to this new generation of

402
00:24:10,760 --> 00:24:15,200
Glencore leadership, led by
Gary, in a way that their

403
00:24:15,200 --> 00:24:18,680
predecessors maybe looked at
Ivan more guardedly.

404
00:24:20,360 --> 00:24:29,600
Dominic clearly is more open to,
well, what would Glen Tinto Glen

405
00:24:29,600 --> 00:24:32,960
Tinto be?
I'd love to read their Signal

406
00:24:32,960 --> 00:24:36,640
group chat.
I think that's a super valid

407
00:24:36,640 --> 00:24:42,000
view.
Well, also don't forget Dominic

408
00:24:42,000 --> 00:24:48,240
was the chair of tech before he
was given the ambassadorship in

409
00:24:48,240 --> 00:24:50,360
China.
I think it's very telling that

410
00:24:50,360 --> 00:24:54,680
when he left the ambassadorship,
he went to be the chair of Rio.

411
00:24:54,960 --> 00:24:58,400
He didn't go back to Vancouver.
Should we try and squeeze a bit

412
00:24:58,400 --> 00:25:01,560
more in Koala, you, you recently
sort of shared some thoughts on

413
00:25:01,600 --> 00:25:06,160
uranium as well, next Gen.
specifically, I think.

414
00:25:06,160 --> 00:25:09,640
Yeah, your thoughts were on the,
the wavelength of good

415
00:25:09,640 --> 00:25:13,160
exploration results and perhaps
they're not totally factored in,

416
00:25:13,160 --> 00:25:16,560
but it's been pretty eventful
this week in in the world of

417
00:25:16,680 --> 00:25:19,040
uranium in your neck, neck of
the woods as well.

418
00:25:19,040 --> 00:25:20,360
What are you making of the sort
of set up there?

419
00:25:20,360 --> 00:25:24,280
OK.
No view on the executive orders.

420
00:25:24,280 --> 00:25:27,160
I mean we seem to get one and
every other day of the week.

421
00:25:29,080 --> 00:25:34,800
Until I see the actual green
lighting and FID of western

422
00:25:35,680 --> 00:25:39,160
Greenfield reactors, I don't
really have a reason to get

423
00:25:39,160 --> 00:25:41,160
excited about the uranium
balances.

424
00:25:42,280 --> 00:25:46,360
It's really just a next Gen.
specific point, which is during

425
00:25:46,360 --> 00:25:49,240
that April meltdown.
I did just take a look at next

426
00:25:49,240 --> 00:25:52,760
Gen. at one point privately with
a few friends and just say, OK,

427
00:25:52,760 --> 00:25:56,920
like this thing's completely
like at levels we haven't seen

428
00:25:56,920 --> 00:26:00,280
in a few years.
Like what's it imply?

429
00:26:00,360 --> 00:26:04,840
I don't believe the feasibility
study that shows £25 million for

430
00:26:04,840 --> 00:26:08,160
like 5, whatever, 5 to 10,
whatever years then falls off.

431
00:26:08,520 --> 00:26:12,000
I don't think anyone's putting
£25,000,000 into a £200 million

432
00:26:12,000 --> 00:26:17,840
market with the audacity to say,
oh, we want spot pricing for

433
00:26:17,840 --> 00:26:20,880
everything.
You add 10 plus percent in one

434
00:26:20,880 --> 00:26:26,320
go to a spot market, we all know
where spots going, especially

435
00:26:26,320 --> 00:26:30,760
when you can see we're not going
to 10% growth in reactor builds

436
00:26:30,760 --> 00:26:33,960
all of a sudden.
So we all know that that

437
00:26:33,960 --> 00:26:36,760
feasibility study sort of front
loads the NAV.

438
00:26:36,760 --> 00:26:39,480
That's one of the reasons I
always find the NAV of the thing

439
00:26:39,480 --> 00:26:43,760
a little silly.
There's also the question that I

440
00:26:43,840 --> 00:26:46,520
offered, I asked publicly and I
don't have an answer to it, but

441
00:26:46,520 --> 00:26:47,920
I really wish someone would
answer.

442
00:26:47,920 --> 00:26:51,160
It is in light of the fact that
foreign mining realized that in

443
00:26:51,160 --> 00:26:54,600
Saskatchewan sales tax is not
refundable.

444
00:26:55,160 --> 00:26:58,920
What did Next Gen. assume for
their CapEx at Arrow?

445
00:26:58,920 --> 00:27:02,960
Is the sales tax assumed it's
refundable or recoverable or is

446
00:27:02,960 --> 00:27:07,800
it assumed not recoverable?
And the other thing though is

447
00:27:07,800 --> 00:27:14,000
this, if the Patterson Corridor
extension, this PCE continues to

448
00:27:14,000 --> 00:27:18,440
look this impressive, it's clear
that this the A2 formation which

449
00:27:18,440 --> 00:27:25,360
has like 200,000,000 lbs of like
4% at arrow and then the other a

450
00:27:25,400 --> 00:27:28,520
three formation is like under 2%
uranium.

451
00:27:29,800 --> 00:27:35,480
If there's another A2 like super
high grade formation, whatever

452
00:27:35,480 --> 00:27:38,640
the life of mine average is
going to be going through that

453
00:27:38,640 --> 00:27:43,800
mill, it might not be call it
1011.

454
00:27:43,800 --> 00:27:49,320
It might be closer to 15 to 20
once it's fully fleshed out and

455
00:27:49,320 --> 00:27:52,080
expanded.
My hypothesis has always been

456
00:27:52,080 --> 00:27:57,000
that you would do a phase one,
let arrow enter the market, get

457
00:27:57,000 --> 00:27:59,280
settled in and then you would do
a meal expansion.

458
00:27:59,680 --> 00:28:02,920
Some you will point between
years 5 and 10 and that way you

459
00:28:02,920 --> 00:28:06,120
wouldn't disrupt the uranium
market.

460
00:28:08,560 --> 00:28:11,920
But look, it's, it's great
exploration, it's western 4

461
00:28:11,920 --> 00:28:15,560
lands esque in a way, in the
sense of, you know, there's so

462
00:28:15,560 --> 00:28:19,800
much more optionality in this,
in this project.

463
00:28:20,240 --> 00:28:22,480
The, the management I'm not
impressed with.

464
00:28:24,560 --> 00:28:27,520
I mean, pretty sure the reason
the CEO wasn't at Canaccord is

465
00:28:27,520 --> 00:28:29,600
probably because he was at the
Monaco Grand Prix.

466
00:28:30,040 --> 00:28:33,200
Lord knows if I was a junior CEO
of a junior and I sponsored

467
00:28:33,200 --> 00:28:38,960
Aston Martin, I'd be in Monaco.
But I think there's just a lot

468
00:28:38,960 --> 00:28:41,720
of optionality, flexibility.
And it's a great project.

469
00:28:42,200 --> 00:28:48,760
So much so that it really allows
for so much annoyances, which

470
00:28:48,760 --> 00:28:51,640
we've all talked about before,
whether it's the M cap, physical

471
00:28:51,640 --> 00:28:55,240
uranium and convert and a few
other things.

472
00:28:55,680 --> 00:28:58,440
But look, I think it's very
fascinating.

473
00:28:58,440 --> 00:28:59,680
I think there's a lot of
optionality.

474
00:28:59,680 --> 00:29:04,160
I mean, but really, and I
haven't really been lazy and

475
00:29:04,160 --> 00:29:07,040
there's another better way to
play that news release, but I'm

476
00:29:07,040 --> 00:29:08,880
not going to tell you about that
quite yet.

477
00:29:11,080 --> 00:29:12,640
But it look, it's a good
project.

478
00:29:12,640 --> 00:29:17,760
And I think as you look forward
and if uranium doesn't continue

479
00:29:17,760 --> 00:29:23,080
to collapse, I think it's just a
good project.

480
00:29:23,080 --> 00:29:26,320
And yeah, it's a trade for me.
I'll be very blunt.

481
00:29:26,320 --> 00:29:28,280
This is by my standards of
trade.

482
00:29:28,280 --> 00:29:30,360
Now I've heard someone say my
trades or other people's

483
00:29:30,360 --> 00:29:34,880
investments, but those are great
at those are great assays and it

484
00:29:34,880 --> 00:29:36,760
shows that there's a lot more
flexibility in what this

485
00:29:36,760 --> 00:29:41,920
potentially can be.
So let's see, I don't see a

486
00:29:41,920 --> 00:29:44,360
nuclear renaissance in the West
without that thing coming

487
00:29:44,360 --> 00:29:48,840
online, whether that comes
online at the end of Cigar Lake

488
00:29:48,840 --> 00:29:52,800
or if it comes online in 20-30.
I mean, I didn't really care if

489
00:29:52,800 --> 00:29:57,000
you feel sulfide should have
been 35 or 40, so.

490
00:29:57,920 --> 00:29:59,920
It's what it is.
It's still the only deposit that

491
00:29:59,920 --> 00:30:03,400
really matters.
Have you got a view on on one of

492
00:30:03,480 --> 00:30:07,880
the majors coming in looking at
an asset like that or no

493
00:30:07,880 --> 00:30:09,560
interest in uranium for those
guys?

494
00:30:10,600 --> 00:30:13,760
I, I think it's too small of a
market for Rio, who's

495
00:30:13,760 --> 00:30:15,240
liquidated.
I don't think it's big enough

496
00:30:15,240 --> 00:30:18,320
for BHP to enter the market.
I don't think Glencore wants to

497
00:30:18,320 --> 00:30:20,720
start trading it.
I don't think Anglo can be

498
00:30:20,720 --> 00:30:25,080
bothered.
I mean, I think tech would face

499
00:30:25,080 --> 00:30:29,920
incredible scrutiny from their
shareholders for doing that

500
00:30:29,920 --> 00:30:33,880
deal.
And then so who's left?

501
00:30:33,880 --> 00:30:36,200
It's Camico and we all know the
story there.

502
00:30:37,280 --> 00:30:40,360
But I think there's actually a
sidewinder opportunity here,

503
00:30:40,360 --> 00:30:43,800
which is I think Franklin,
Nevada Wheat and Precious would

504
00:30:43,800 --> 00:30:48,800
write a royalty or a stream on
the Arrow PCE asset in an

505
00:30:48,800 --> 00:30:53,800
absolute heartbeat.
So I think there's incredible,

506
00:30:53,800 --> 00:30:56,120
there's probably a billion
dollar royalty or stream deal to

507
00:30:56,120 --> 00:31:00,560
do there.
And also, I mean, why wouldn't,

508
00:31:00,560 --> 00:31:06,520
because Adam Prom start looking
abroad at M&A opportunities?

509
00:31:07,120 --> 00:31:09,760
Is anyone going to bat an
eyelash because Adam Prom took a

510
00:31:10,480 --> 00:31:17,240
19.9% stake in Next Gen. to help
fund the build of Arrow where

511
00:31:17,240 --> 00:31:20,640
they're still hands off.
It's just a financial

512
00:31:20,640 --> 00:31:24,440
investment, but they've now
stood up a company that they

513
00:31:24,440 --> 00:31:27,480
still would have incredible
influence then and Camco could

514
00:31:27,480 --> 00:31:29,400
then basically never get their
hands on Arrow.

515
00:31:31,080 --> 00:31:33,640
I don't know.
It's just some creative

516
00:31:33,640 --> 00:31:35,400
thinking.
I've been pondering as you see

517
00:31:35,400 --> 00:31:39,320
this play out, there will be AI.
Don't know when the gun goes off

518
00:31:39,320 --> 00:31:43,720
on this, but it'll be fun when
it's actually time for Arrow to

519
00:31:44,800 --> 00:31:48,160
be in play.
But I could be out of that thing

520
00:31:48,160 --> 00:31:50,400
in a week.
It's one of those things you're

521
00:31:50,400 --> 00:31:52,560
constantly looking at and you
just.

522
00:31:53,240 --> 00:31:55,240
But those are great at those are
great assets I'd.

523
00:31:55,960 --> 00:31:58,640
Be curious what the Canadian
government said about a Casada

524
00:31:58,680 --> 00:32:02,200
prom 20% stake if they would
raise any issues.

525
00:32:02,800 --> 00:32:04,680
It's a couple more things I'd
love to get your thoughts on

526
00:32:05,240 --> 00:32:10,360
Koala 22 recent deals look well,
one of them's one of them's

527
00:32:10,360 --> 00:32:14,120
announced in Harmony Gold is
acquiring Metals Acquisition

528
00:32:14,120 --> 00:32:16,000
Corp.
We touched on another one,

529
00:32:16,240 --> 00:32:20,680
Dundee Precious Metals rumored
to be in advanced discussions to

530
00:32:21,200 --> 00:32:23,760
look bid on Adriatic as the UK
takeover laws.

531
00:32:23,760 --> 00:32:27,680
They're putting a timeline for a
firm, firm offer to happen.

532
00:32:28,120 --> 00:32:30,400
It's kind of trading above term,
sort of implying that that's

533
00:32:30,440 --> 00:32:34,000
almost a certainty or at least
you know, a competitive outcome

534
00:32:34,000 --> 00:32:35,800
is going to is going to
eventuate there, which is is

535
00:32:36,160 --> 00:32:38,920
pretty intriguing.
How do you read both of those?

536
00:32:39,080 --> 00:32:41,760
And also by the way, Max trade
was trading above terms when I

537
00:32:41,760 --> 00:32:45,280
last looked too, which, oh, it
seemed crazy because it's like a

538
00:32:45,280 --> 00:32:47,360
2% break free.
I don't think anyone else is

539
00:32:47,360 --> 00:32:48,680
coming in there.
But yeah, anyway.

540
00:32:50,360 --> 00:32:54,920
What's, as I said before, it
used to be called Mells

541
00:32:54,920 --> 00:33:01,760
acquisition, but it's a
producing pretty decent copper

542
00:33:01,760 --> 00:33:05,120
mine in a first world
jurisdiction.

543
00:33:06,800 --> 00:33:11,200
Those don't trade cheap.
Is Harmony the logical owner of

544
00:33:11,200 --> 00:33:13,920
that asset?
I don't know.

545
00:33:17,080 --> 00:33:19,160
Sure there's a few other folks
who are probably got to be

546
00:33:19,160 --> 00:33:22,360
pondering that puzzle right now.
I mean.

547
00:33:22,680 --> 00:33:24,400
I don't know.
I'll take the other side.

548
00:33:25,040 --> 00:33:26,840
Yeah.
I don't think harm like yeah,

549
00:33:27,880 --> 00:33:31,520
synergies are really hard in
that region and there's yeah, I

550
00:33:31,520 --> 00:33:33,200
get, I get the I.
Get the People don't, people

551
00:33:33,200 --> 00:33:35,280
don't, people don't.
People don't necessarily buy

552
00:33:35,280 --> 00:33:37,240
copper for synergies.
Oh yeah, of course.

553
00:33:37,360 --> 00:33:39,240
It's a special commodity in that
way.

554
00:33:39,400 --> 00:33:42,560
Yeah, Yeah.
I mean, if we called, if we if

555
00:33:42,560 --> 00:33:45,880
we change the name of Khobar to
De Grusso 2 point O, would we

556
00:33:46,480 --> 00:33:47,800
all have a little bit of a
chuckle?

557
00:33:51,600 --> 00:33:56,280
Maybe I mean.
S 32 between Sierra Gorda

558
00:33:56,320 --> 00:34:03,560
trilogy, I mean Formosa, I mean
there there's just in your guy's

559
00:34:03,560 --> 00:34:05,040
neck of the woods.
There's got to be a few people

560
00:34:05,040 --> 00:34:08,120
sitting there going it's right
there.

561
00:34:08,760 --> 00:34:13,760
It's a plane ride across
Australia, but it's still right

562
00:34:13,760 --> 00:34:15,960
there.
So we'll see.

563
00:34:16,000 --> 00:34:21,040
We'll see what happens yeah, but
bigger is better when it comes

564
00:34:21,040 --> 00:34:25,600
to these things.
So I think every mid cap small

565
00:34:25,600 --> 00:34:31,199
cap copper producer asked to be
at least asking the question, if

566
00:34:31,199 --> 00:34:33,760
Nick's not going to be a
consolidator, he's actually a

567
00:34:33,760 --> 00:34:36,159
seller.
All right.

568
00:34:36,159 --> 00:34:40,600
Well, if you had M&A ambitions,
what's it going to be?

569
00:34:45,000 --> 00:34:47,520
As for Adriatic, we don't have
terms.

570
00:34:47,719 --> 00:34:49,800
There's nothing been officially
announced other than they're

571
00:34:49,800 --> 00:34:53,120
talking.
I think they're though too.

572
00:34:53,120 --> 00:34:58,360
I mean, you have a Eastern
European producer, it's in the

573
00:34:58,440 --> 00:35:02,280
it's in the same region.
The cash flow of virus ramped up

574
00:35:02,280 --> 00:35:07,640
would be phenomenal.
Dundee has a pretty a balance

575
00:35:07,640 --> 00:35:10,000
sheet with a lot of flexibility
and a lot of cash.

576
00:35:10,560 --> 00:35:13,440
Adriatic on a standalone basis,
we're going to have to we're

577
00:35:13,440 --> 00:35:16,760
going to have to spend this year
paying back Orion and traffic

578
00:35:16,760 --> 00:35:20,640
era.
I mean, love the Adriatic team,

579
00:35:20,640 --> 00:35:24,000
but I mean, how many equity
raises to ramp up and extend the

580
00:35:24,000 --> 00:35:27,680
runway can you do?
But they actually have to

581
00:35:27,680 --> 00:35:30,640
deliver.
And I know that's an interesting

582
00:35:30,640 --> 00:35:34,120
idea where you put those two
together, put some nice cash

583
00:35:34,120 --> 00:35:36,680
flow into Dundee and Dundee has
a really interesting discovery

584
00:35:37,120 --> 00:35:41,120
within their portfolio.
And does this combined operating

585
00:35:41,120 --> 00:35:44,640
platform give them the cash flow
to really approach that

586
00:35:44,920 --> 00:35:49,280
discovery aggressively?
I think there's a lot of

587
00:35:49,280 --> 00:35:53,440
synergies in that opportunity.
I mean, the Dundee stock has

588
00:35:53,440 --> 00:35:57,480
done well from all I can tell
since this is this has been

589
00:35:57,520 --> 00:36:00,000
released, this has been leaked,
which is interesting.

590
00:36:00,000 --> 00:36:02,320
And that seems like a good, that
seems like a good management.

591
00:36:02,320 --> 00:36:04,440
I mean, well, that's the market
saying, hey, this actually makes

592
00:36:04,440 --> 00:36:06,040
sense.
Please proceed.

593
00:36:06,040 --> 00:36:07,920
We want to understand more.
Yeah.

594
00:36:07,960 --> 00:36:10,960
Do you think there's risk that
that deal falls away though?

595
00:36:12,840 --> 00:36:14,880
How so?
Well, there's a, there's a

596
00:36:14,880 --> 00:36:17,280
deadline on it.
It hasn't been a firm thing yet.

597
00:36:18,280 --> 00:36:21,160
And if Dundee, well, that's if
Dundee doesn't come to the party

598
00:36:21,160 --> 00:36:26,560
with a firm offer, then does
anyone else come for Adriatic?

599
00:36:26,760 --> 00:36:29,080
And then does Adriatic have to
wear, you know the the

600
00:36:29,080 --> 00:36:31,640
potential, you know, inflexible
period of of cash flow during

601
00:36:31,640 --> 00:36:35,680
ramp up still themselves?
Oh, the mine has to still run

602
00:36:35,680 --> 00:36:38,520
while this.
And if we've kind of learned

603
00:36:38,520 --> 00:36:41,600
from Anglo Peabody, just because
you announced a deal doesn't

604
00:36:41,600 --> 00:36:45,160
mean you can take your eye off
of operational excellence.

605
00:36:46,880 --> 00:36:49,440
So the ramp up has to continue.
Certainly.

606
00:36:51,360 --> 00:36:54,640
Certainly, yeah.
I but I mean, look, we saw this

607
00:36:54,640 --> 00:36:57,120
with Anglo BHP.
Remember there was like a one or

608
00:36:57,120 --> 00:37:00,800
two week extension to continue
the conversation.

609
00:37:00,880 --> 00:37:03,840
Yeah, it's just the way the UK,
the UK does these things.

610
00:37:04,280 --> 00:37:06,920
I mean, it clearly, just it
clearly puts an urgency on.

611
00:37:06,920 --> 00:37:14,160
OK, let's get on with that.
Yeah, yeah, Alfman, Middlesex, I

612
00:37:14,160 --> 00:37:18,520
know you've been buyers and
sellers of well, certainly

613
00:37:18,520 --> 00:37:22,000
Middlesex, but Ding, Ding, Ding,
Ding on that front.

614
00:37:22,120 --> 00:37:23,840
Elf min a long term position for
you.

615
00:37:23,840 --> 00:37:25,880
I'm not sure if you trimmed
anyone and then when the news

616
00:37:25,880 --> 00:37:28,920
came out or you just left it.
I own more, I own more, I own

617
00:37:28,920 --> 00:37:30,720
more than I did at the beginning
of the year.

618
00:37:30,720 --> 00:37:33,480
It's been a fun year so far.
Yeah, all.

619
00:37:34,480 --> 00:37:39,320
I'll say on that is it's truly a
case of what doesn't kill you

620
00:37:39,320 --> 00:37:42,960
makes you stronger.
There's an implicitly AUS flag

621
00:37:42,960 --> 00:37:45,840
at BC now.
And what does it tell you?

622
00:37:45,840 --> 00:37:49,760
If if in the years that I've
known you guys, if I told you

623
00:37:51,400 --> 00:37:53,480
doing the very rough mental
models in my head.

624
00:37:54,520 --> 00:37:59,800
If I told you that Alfaman, ADRC
pin producer in North Kivu that

625
00:37:59,800 --> 00:38:05,680
had to shut off for a month due
to rebel war activity, trades at

626
00:38:05,680 --> 00:38:12,240
a higher EV EBITDA multiple than
Metal Zacks, which owns 50% of a

627
00:38:12,240 --> 00:38:17,960
tin mine in Tasmania, Australia,
I think you all would have

628
00:38:17,960 --> 00:38:19,880
thought I'd lost my God damn
minds.

629
00:38:20,640 --> 00:38:22,920
But it tells you that the
market's kind of starting to

630
00:38:22,920 --> 00:38:25,440
understand the alphabet story a
little bit better.

631
00:38:25,760 --> 00:38:29,920
But also it's a condemnation of
metals X, which.

632
00:38:29,920 --> 00:38:32,360
You're buying the equity, not
the AV unfortunately with with

633
00:38:32,440 --> 00:38:36,760
Middlesex.
Yeah, except the problem is they

634
00:38:36,760 --> 00:38:38,640
seem to have very interesting
ideas of what to do with the

635
00:38:38,640 --> 00:38:44,600
cash and that's a problem.
I mean, and then life's just

636
00:38:44,600 --> 00:38:46,280
life's just too short to deal
with that.

637
00:38:46,280 --> 00:38:49,000
And if you think about it, if
you can get the commodity price

638
00:38:49,000 --> 00:38:52,920
right and you is can they
execute on the operating plan?

639
00:38:53,560 --> 00:38:55,840
A mining company generates a
certain amount of cash.

640
00:38:56,120 --> 00:38:58,400
So can we get the commodity
price right?

641
00:38:58,720 --> 00:39:01,840
Can you execute on the operating
plan generates cash slash

642
00:39:01,840 --> 00:39:04,200
capital.
Third question, most important

643
00:39:04,200 --> 00:39:07,200
question in this multiplication,
are they going to create value

644
00:39:07,200 --> 00:39:10,600
with the capital or are they
going to light it on fire and

645
00:39:10,600 --> 00:39:13,520
not do value creative things?
Now whether that's we give

646
00:39:13,520 --> 00:39:17,360
dividends, we do buybacks, we do
M&A, we do growth, we pay off

647
00:39:17,360 --> 00:39:19,320
debt to delever and de risk the
company.

648
00:39:19,680 --> 00:39:23,080
But capital allocation is a huge
multiplier in our business.

649
00:39:23,520 --> 00:39:29,280
And yeah, I just, I just don't
think chasing every little tin

650
00:39:29,280 --> 00:39:36,240
project around the world, I
mean, do something bold if

651
00:39:36,240 --> 00:39:39,960
you're going to do that.
But yeah, it's just kind of

652
00:39:39,960 --> 00:39:40,880
wild.
It's just wild to me.

653
00:39:40,920 --> 00:39:44,080
It's just wild to me.
You have a like you, you you're

654
00:39:44,080 --> 00:39:47,560
a shareholder, Travis.
I mean, it should bother you to

655
00:39:47,560 --> 00:39:52,800
no extent that Alpha given a war
zone, a war happened, the mine

656
00:39:52,800 --> 00:39:56,600
got evacuated, turned back on
and you're going.

657
00:39:57,640 --> 00:39:59,800
We don't get the same valuation
that they do.

658
00:40:00,480 --> 00:40:03,160
Yeah, I don't, I don't think
you'll find a, a massive catalog

659
00:40:03,160 --> 00:40:05,400
of me appraising the capital
allocation of Middlesex just by

660
00:40:05,400 --> 00:40:08,800
being a shareholder, but I think
it's less bad now.

661
00:40:08,800 --> 00:40:12,920
But it's yeah, I, I, I do find
the, the investments in the

662
00:40:13,240 --> 00:40:15,840
yeah, the, the junior tin
development story is kind of

663
00:40:15,840 --> 00:40:18,040
interesting.
I don't, I like, I think there

664
00:40:18,040 --> 00:40:20,560
are better ways to maybe use the
capital in the short, medium

665
00:40:20,560 --> 00:40:23,240
term, but I, I just wonder if
they're kind of land banking,

666
00:40:23,240 --> 00:40:25,320
like are they actually going to
finance those things?

667
00:40:25,320 --> 00:40:26,640
Not sure.
I kind of just feel like there

668
00:40:26,640 --> 00:40:28,600
might be land banking, but
that's smart.

669
00:40:28,600 --> 00:40:29,240
Yeah.
But then why?

670
00:40:29,360 --> 00:40:32,200
But then if you're going to do
that, I mean, I don't have the

671
00:40:32,240 --> 00:40:36,080
precise valuation on it, but I
mean solid core, the gold

672
00:40:36,080 --> 00:40:39,880
producer in Kazakhstan bought
55% of tin when holding which is

673
00:40:39,880 --> 00:40:42,920
the serum bet tin deposit in
Kazakhstan.

674
00:40:44,440 --> 00:40:50,080
And that was, if I get this
right, I mean that was a, that

675
00:40:50,080 --> 00:40:54,280
was maybe $100 million of cash.
It was a bit to that deal, it

676
00:40:54,280 --> 00:40:57,960
was a bit to that deal.
There's there's anything with

677
00:40:57,960 --> 00:41:02,960
solid core, there's a bit that
doesn't meet the eye. 82 and a

678
00:41:02,960 --> 00:41:06,280
half million 82 and a half
million bucks I mean that could

679
00:41:06,280 --> 00:41:08,280
have been metals X doing trying
to do that deal I.

680
00:41:08,280 --> 00:41:10,600
Don't think Metals X could have
bought it from $82 million.

681
00:41:10,600 --> 00:41:14,400
What?
Do you think about the the

682
00:41:14,400 --> 00:41:17,640
capital allocation with your
alpha men hat back on, they're

683
00:41:17,640 --> 00:41:19,800
going to start generating good
cash and hopefully that

684
00:41:19,800 --> 00:41:22,640
continues.
You just want that.

685
00:41:22,640 --> 00:41:24,320
I think there's a back.
Dividends.

686
00:41:25,600 --> 00:41:28,560
I think you they've been quite
clear they're going to take the

687
00:41:28,560 --> 00:41:33,200
debt down to 25,000,000 on the
local facility.

688
00:41:34,400 --> 00:41:38,600
I think it was the right thing
to let's print, let's see them

689
00:41:38,600 --> 00:41:43,720
print a clean 2 Q and three Q
the next dividend if it comes

690
00:41:43,720 --> 00:41:46,320
and it should come with being
declared in October, paid in

691
00:41:46,320 --> 00:41:52,240
November.
I have a few ideas for some

692
00:41:52,240 --> 00:41:57,680
creative things they could do
but I'll keep those to myself

693
00:41:57,680 --> 00:41:59,880
for now.
But I think you got to get back,

694
00:41:59,880 --> 00:42:04,320
you want to get back to those
that 6 cent Canadian semi annual

695
00:42:04,320 --> 00:42:06,200
dividends and maybe even a
little higher.

696
00:42:06,800 --> 00:42:09,560
Anything else you want to leave
us with before we part ways with

697
00:42:09,560 --> 00:42:09,880
you?
No.

698
00:42:12,520 --> 00:42:16,440
No, I'm I, I.
I thought you mentioned US

699
00:42:16,440 --> 00:42:16,960
Steel.
Glad.

700
00:42:19,080 --> 00:42:27,720
You brought it up. 17 months.
I'm one stubborn son of a bitch,

701
00:42:27,720 --> 00:42:36,000
aren't I?
Look, I think that the right

702
00:42:36,000 --> 00:42:39,360
thing was done there.
That's probably something I'm

703
00:42:39,360 --> 00:42:42,640
going to reflect on a lot more
over the next three months, that

704
00:42:42,640 --> 00:42:45,880
experience, that whole
investment in its entirety.

705
00:42:47,320 --> 00:42:51,520
But it's kind of wild to think
that 14 billion of investments

706
00:42:51,520 --> 00:42:56,200
coming from Nippon, I mean, for
a sector that we complain about

707
00:42:56,200 --> 00:42:59,960
being capital starving, capital
constrained, the US steel

708
00:42:59,960 --> 00:43:02,440
industry will not be capital
constrained.

709
00:43:03,320 --> 00:43:05,880
And it's all thanks to 1 new
participant.

710
00:43:06,240 --> 00:43:09,320
And I think it's kind of amazing
to think that Lorenzo kicked us

711
00:43:09,320 --> 00:43:16,160
all off with a hostile after US
Steel politicized the union to

712
00:43:16,640 --> 00:43:21,320
say I'm the only person who can
buy this and in doing so sparks

713
00:43:21,320 --> 00:43:25,840
a bidding war.
And now his peer, his peer

714
00:43:25,840 --> 00:43:30,120
competitor is someone who's, I
mean, the guy from Nippon who

715
00:43:30,120 --> 00:43:32,320
did this deal basically flew
between Pittsburgh and

716
00:43:32,320 --> 00:43:34,800
Washington, DC for the last year
and a half.

717
00:43:36,080 --> 00:43:41,560
Now he has to spend $14 billion
improving the US Steel assets

718
00:43:41,880 --> 00:43:47,320
and creating new capacity while
Cliffs is levered and has not

719
00:43:47,320 --> 00:43:51,280
made the same investments.
I just got an idea.

720
00:43:51,280 --> 00:43:55,400
He's going to enjoy watching
Lorenzo just stress out just

721
00:43:55,400 --> 00:44:00,480
watching Nippon just basically
bear hug the blast furnace steel

722
00:44:00,480 --> 00:44:04,640
industry in in the US because I
don't know what Cliffs does from

723
00:44:04,640 --> 00:44:06,760
here.
I just don't know.

724
00:44:07,840 --> 00:44:10,840
Well, that's a wicked, wicked
place to leave out our chat.

725
00:44:11,920 --> 00:44:13,720
Well, it's been a pleasure
speaking with you.

726
00:44:13,720 --> 00:44:16,840
As as always, there's always a
lot to reflect on and lots of

727
00:44:16,840 --> 00:44:18,720
different like parts of the
market that you've got your your

728
00:44:18,720 --> 00:44:20,800
eyes on.
Love your insight as always, so

729
00:44:21,000 --> 00:44:22,520
thank you very much.
Cheers Koala.

730
00:44:22,800 --> 00:44:24,800
Cheers.
Fantastic mate, that was an

731
00:44:24,800 --> 00:44:27,240
awesome conversation.
A massive thank you to all our

732
00:44:27,240 --> 00:44:28,840
partners that make this all
possible.

733
00:44:28,840 --> 00:44:31,360
Mineral mining services,
Grounded Sandy ground support,

734
00:44:31,600 --> 00:44:35,160
CRA insurance, K drill, KCA side
services, black diamond drilling

735
00:44:35,160 --> 00:44:37,080
services, Cross Boundary energy
go.

736
00:44:37,360 --> 00:44:38,120
To root, go to root.