Why this ‘Big Short’ billionaire bought a gold mine

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What is the last mind sale that
you've seen being bought by an

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individual?
On this scale, I can't think of

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1.
On this scale, yeah.

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Right on buddy morning as I've
ever observed this public

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holiday spectacular.
Another one tomorrow.

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Go it, buddy.
Go the Anzacs.

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It just keeps on giving.
Isn't it just a a great week

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when it when it starts on a
Tuesday and it ends on a

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Thursday?
Yeah, kinda does each week for

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me.
Just a casual edit off.

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Right, right.
What do we got?

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We've got a bit of quarters on
what?

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Longtown Paladin, Yesti, I think
it was Jada.

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You got a big gold mine sale for
the majors.

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A barrack sale to a couple of
interesting characters that I'm

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going to talk about.
Massive mate from the Big Short

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you've watched.
About to say you never think

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this relates to the Big Short.
It does, but it sort of does.

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Big gold ball from the Big Short
buying a big gold mine.

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And Trav, you're putting your
your beak into a bit of

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government policy.
Indeed, indeed.

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Yeah, mate.
Hence the shirt.

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Strategic stockpiles, Yeah,
you're gonna have a gonna give

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that a whale for the few people
out there that care about

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policy.
A week away.

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Travel went and had some
cornflakes with the outlier this

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morning for breaking yes.
It did.

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A week to our election.
So pretty topical, that one.

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Oh, is that it?
Oh, I better go get me bloody

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Democratic sausage sizzle in a
week's time.

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All right, take us away, mate.
Lontown Quarterly coming out

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today.
So as we've seen they've been

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on, they've been on the lithium
journey, but they're still

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bloody fighting and I reckon I
could sense it.

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Tony, the Tony O from he was
he's back.

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I could sense in the call there
was the OG Tony OS voice

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enthusiasm so.
Energy.

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Yeah.
And look, we'll go through the

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quarterly.
I think it's there's a lot of

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promising things in the
quarterly for how they're

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performing in a depressed
lithium market, but we'll get

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into it.
So as you can see here that

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they're still hovering around
that 5060 cent mark.

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So they're they're not there.
So they actually declared

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commercial production as of 1st
of January for the processing.

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So revenue was up 104 bucks in
the door.

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So that they said positive cash
flow generation from operating

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activities of 14,000,000, but
I'll we'll get into that it's.

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Always positive operating cash
flows, Yeah, yeah.

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Yeah.
Well, yeah, yeah.

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Don't say many that aren't so 94
bit over 95,000 of spot con

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produced so and 64% average
Lithia recovery which is up.

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And remember this is primarily
from open pit dirt at the

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moment.
So yeah, they've cash is sort

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of, I'll get into the waterfall
chart.

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Cash went backwards about 20
mil.

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So first stop was blasted at the
start of April.

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So that's a good achievement for
the for the underground.

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So you can see the they shipped
grade 5.2% for the spod console.

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That's I think we said earlier
that's sort of what they're

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going to be.
That's sort of the new norm that

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5.25 point three, I think it
said they produced 5.1 for the

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quarter, but they've shipped 5.2
average realised price US 815.

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And so the open pit, so if you
look at the grades, the grades

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is sort of where it you know
where it looks promising with

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the underground coming on soon.
So the all grade delivered to

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the rum this quarter for the
open pit was 1% lithium.

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They've said for the under.
And you look at the underground

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development for the quarter that
was mined at 1.5.

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So the and you look the you see
photos up in the presentations.

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I'm not sure if this is
everywhere, but I'm assuming it

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is because it is such a big ore
body.

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Your development ore grade will
probably be not too much

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different to your stoke grade
because it's just a big fucking

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pigment type.
So it's like they're mining a

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big type.
Yeah.

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So you're not going to have like
an Aravan goldmine.

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Yeah, pretty much that
development grade will be close

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to what the the stopping grade
is.

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So the fact and they've talked
about they did some periods in

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the processing plan of putting
the underground all through the

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1 1/2%.
That's when they said they were

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achieving over 70% Lithia
recovery in the plant so.

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Excuse my ignorance, I haven't.
I'm not across the detail like

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you, but is there anything to do
with all sorting?

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That's part of that too.
And that, yeah.

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Yeah, yeah, they've so when it
says, it says open pit mining

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continued, they moved two and a
half million ton.

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Some of that was clean or just
obviously pure or some of it was

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they call it OSP the OR sorting
products.

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So that's gotcha where the I
think they say the Gabro, it

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gets mixed in.
So Gabro is the sort of the host

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waste rock which contains the
iron, which is what they need to

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sort out.
So they've doing all sorting and

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that that was waste as well.
So and it said they added the

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OSP material in with the clean
or as well to the processing

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plan and they were able to still
get the recoveries with the low

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iron content.
So they're pretty bullish about

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the plant performance dealing
with the sorted or as well so

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that the open pit it says it
remains on track for completion

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Q3 FY20 6.
So essentially this time next

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year on the calendar year basis.
And that will see, and they've

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talked about they're targeting
that 70% recovery by essentially

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the same period, which means
that's when they'll be

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transitioning to full
underground or so it's going to

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be the fact that like looking at
as a look, very simply cash in,

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cash out, they've gone back 20
million, but they're progressing

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towards the point where the
underground oil will become the

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primary also.
So if they're, you know, I

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assume they're targeting the
high grade first as you would in

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this pricing environment.
And so when that sort of 1 1/2%

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oil starts coming in and it's
said to have shown better

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recovery as well, like I think
that'll all sort of work in

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their favour.
As I said, they're just basing

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everything on the lithium pros
staying the same at the moment.

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They're not anticipate.
They're not hoping for the I'm

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sure they're hoping for a turn
around, but they've looks like

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they've batten down the hatches
of the business to bloody

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anticipate that this process
stays the same.

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So which is probably, probably
what everyone wanted to say

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because they've come from a
very, you couldn't have a more

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bullish environment for where
they built this project and it

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wouldn't have got built unless
the environment was so bullish.

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So.
But this is where they are now.

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So digging into the question,
Maddie, that everyone wants to,

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to sort of hear answered, are we
any closer to finding out what

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costs might be once they go to
the toward being a full

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underground miner because
they're starting to make that

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transition now.
Yeah, yeah.

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And this is where the I guess
the 5B gets a bit, yeah, a bit

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confusing because at the moment
you look at they've got for cash

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flow from operating activities,
they've got zero and it's just

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production costs for what is
being produced in the open pit

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because they're still they're
still capitalizing all their

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underground development even
though So you look at other non

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current assets 27,000,000 for
the quarter as part of investing

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cash flows.
But like they're the all drives

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they're putting in will be once
that underground is properly

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producing which is just
commenced, those all drives are

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operating development.
So they're they're being

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capitalized at the moment, which
is not the case.

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It's obviously the way you can
account for it at the moment,

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but it is literally the, they
will be literally flipped to the

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top part of that cash flow
statement once once they start

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producing.
But remember the production

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costs, once the open pit
finishes, those production costs

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will translate from open pit
equipment to underground

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equipment.
And yeah, so they'll benefit

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from higher grade, higher
recoveries, but feel it on the

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unit costs obviously.
A tonne are are are vastly

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different.
Yeah.

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And what look of oh God, you can
read in the bloody try and back

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calculate numbers and
everything.

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I'll just, I'll just try to look
at it very simply in terms of at

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the moment they're not really,
they haven't really hit the 2.8

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million ton that they're going
to be at.

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So when they do get to that,
there's obviously a common

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enemies of scale for the
increased tonnage.

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It's going to be all
underground.

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So there's going to be a great
uplift.

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It might offset that you got to
offset that a bit with higher

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cost to mine underground
compared to the open pit.

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So you you sort of piece that
all together and you're

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thinking, well, the fact that
they went backwards 20 mil the

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they don't the the five year
point started in 1st of January

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for when that Ford facility will
have to be repaid.

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So that's like 20-30.
So they've still got, you know,

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700 million of debt.
They got a bit of a lot of it's

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getting capitalized on the
interest at the moment.

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So it's like, yeah, like you
like they could probably make

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this work at these prices.
Just it just feels when they go

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fully underground, so it's not
like they're gone hemorrhaging

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money and going backwards
because they're like, you know,

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they've developed the
underground with two jumbos.

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They haven't lot different to
Bellevue, which have gone like 6

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jumbos.
They're lot right.

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We have to like we've got to get
all this developed.

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A lot more rabbit warranty, a
lot more costs, a lot more

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pressure.
Whereas this has just ticked

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along.
They're hitting over 300 meters

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a month.
They've got the first start, a

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lot of the ore development, like
much bigger.

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They talked about the first
start being I think it was all

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shouted in the calling.
It was like 12,000 tonne or

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something or maybe less.
And they're talking about the

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future.
So it's going to be 80,000 ton,

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which a lot.
So it's like for that order of

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development, you're getting a
big fight, you're getting good

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bang for buck for when you get
there because it's a bulk mining

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scenario.
So yeah, I don't know if I've

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just unanswered the question of
giving myself, but it just like

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it just feels like they're,
they're in a position to, you

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know, survive this depressed
period.

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What Joe Joe say, even Big Joe
Larry said 2025, even he doesn't

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think there's might be a spike.
They're predicting a spike at

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some point.
But looking at this quarterly, I

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feel like they've got everything
in place to get through this

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00:10:37,680 --> 00:10:40,960
period.
And if lithium price does go up,

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they're the first beneficiaries
for it, just like PLS, because

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00:10:44,760 --> 00:10:46,600
they're producing and growing
bushes.

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Very interesting.
How how about if we look at the

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00:10:49,120 --> 00:10:53,160
the plant now because they are
so announced commercial

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production for the processing
plant, Yeah and I think from

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quickly skimming it, they did a
bit under 600,000 tons through

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00:11:00,400 --> 00:11:01,720
the plant this quarter.
Yep.

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00:11:02,000 --> 00:11:05,160
And given the the raging, they
were now targeted.

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00:11:05,160 --> 00:11:06,520
I think they were going for,
weren't they?

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00:11:06,520 --> 00:11:07,960
Yeah.
So they're they're under

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nameplate on that front.
Was there any sort of stand outs

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from the the call that spoke to
that or production in general?

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No, look they've, they've said
they've got 91% plant

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00:11:17,440 --> 00:11:19,760
availability.
Like they've still got, well

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00:11:19,760 --> 00:11:26,280
they got half a well, 1.3
million tonne of clean ore and

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OSP stockpile.
So it looks like, and it looks

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00:11:30,080 --> 00:11:33,760
like between the underground ore
trial, then adding the OSP

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00:11:33,760 --> 00:11:36,840
material in, like looks like
there was a bit of trialing

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00:11:36,840 --> 00:11:40,200
going on to see what they can
get away with in the future.

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00:11:41,080 --> 00:11:44,960
So yeah.
And the, yeah, I don't, I can't.

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00:11:45,960 --> 00:11:47,920
I reckon if you Add all those
together, that will probably

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00:11:47,920 --> 00:11:50,680
contribute to, anyway you'd
probably want to build a bit of

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00:11:50,680 --> 00:11:55,160
a stockpile as well.
So yeah, I think and recovery is

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00:11:55,160 --> 00:11:56,920
always the was the biggest
thing.

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00:11:56,920 --> 00:12:01,600
So the fact that they're nearly
approaching that 70%, which is,

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00:12:01,600 --> 00:12:06,720
you know, 70% in a flotation
plan is what you'd take any day

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00:12:06,720 --> 00:12:10,000
of the week.
So yeah, I think it's all

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00:12:10,480 --> 00:12:12,240
probably looking pretty
positive.

227
00:12:12,240 --> 00:12:15,240
There's a bit of money that's
going in to make it that good as

228
00:12:15,680 --> 00:12:19,160
they're they didn't really spare
any sense on building this

229
00:12:19,160 --> 00:12:20,880
project.
So I think everything's pretty

230
00:12:20,880 --> 00:12:23,120
rigid itch.
So all heading in the right

231
00:12:23,120 --> 00:12:29,520
direction.
I'll play a comment, which this

232
00:12:29,520 --> 00:12:33,680
was a narrative going around
that I'll just play and then

233
00:12:33,680 --> 00:12:34,440
I'll get in.
There.

234
00:12:34,680 --> 00:12:37,840
Morning, Tony and team.
Just firstly, could you make any

235
00:12:37,840 --> 00:12:41,560
comments around how the blast
went in your first stoke?

236
00:12:41,560 --> 00:12:44,040
I mean, there's obviously been
lots of concerns around how it

237
00:12:44,040 --> 00:12:47,880
may go, whether it'll fracture.
You obviously talked to us about

238
00:12:47,880 --> 00:12:50,600
having the the thin.
Layer around the outside which

239
00:12:50,600 --> 00:12:52,960
will give you some benefits.
So just how does that actually

240
00:12:52,960 --> 00:12:56,440
physically gone?
That's a very good question.

241
00:12:56,440 --> 00:13:02,680
Glenn and both Adam and myself
spent the weekend, last weekend

242
00:13:02,720 --> 00:13:06,600
on site so that we could go and
have a look at the first stop

243
00:13:06,600 --> 00:13:09,760
and the blast.
And we were very, very happy

244
00:13:09,760 --> 00:13:12,920
with clean breaks, exactly how
we predicted it.

245
00:13:14,080 --> 00:13:19,000
The team's got some more fine
tuning and optimization, but the

246
00:13:19,000 --> 00:13:23,560
fragmentation, I'll let Adam
speak out, but it was, it was

247
00:13:23,560 --> 00:13:25,920
almost like.
I think we're calling it sugar.

248
00:13:25,960 --> 00:13:29,640
Sugar, yeah, look really,
really, really good

249
00:13:30,080 --> 00:13:32,920
fragmentation, very clean
breaks.

250
00:13:33,920 --> 00:13:36,800
They're they're looking at
revising some of the way they

251
00:13:37,360 --> 00:13:40,240
they drill underground in terms
of the overdrill, they're

252
00:13:40,240 --> 00:13:43,720
looking at how they how much of
A skin they leave.

253
00:13:44,840 --> 00:13:48,880
But certainly recovery from the
stoke was excellent and there's

254
00:13:48,880 --> 00:13:50,080
a lot of learnings from that
stoke.

255
00:13:50,080 --> 00:13:54,080
So that's initial stoke was
about 12,000 tonnes to put it in

256
00:13:54,080 --> 00:13:56,240
perspective, was fairly small
one from what what we're going

257
00:13:56,240 --> 00:13:59,240
to see going forwards.
But yeah, very, very

258
00:13:59,240 --> 00:14:01,320
encouraging.
And the other point that we

259
00:14:01,320 --> 00:14:05,320
would make is again, this is the
differentiation between narrow

260
00:14:05,320 --> 00:14:07,960
vein mining of gold to versus
what we're doing.

261
00:14:08,720 --> 00:14:13,200
That one stoke, that 12,000
tonnes, that's two days of

262
00:14:13,200 --> 00:14:17,000
production just from one stoke
and that's as baby stoke.

263
00:14:17,400 --> 00:14:20,920
We've got Stokes coming up in
the next financial year where

264
00:14:20,920 --> 00:14:27,720
they're close to 80,000 tonnes.
So it this is, you know, an

265
00:14:27,720 --> 00:14:31,120
opportunity for this mine to
really get economies of scale.

266
00:14:31,960 --> 00:14:36,240
Yeah, so that I remember that
going around before, like when

267
00:14:36,240 --> 00:14:38,760
they're leading up, everyone's
like, oh, lithium's never been

268
00:14:38,760 --> 00:14:42,680
mined underground before, is it?
Got a blast out.

269
00:14:43,320 --> 00:14:48,320
I was just, I don't know.
I was I'm like fuck, am I

270
00:14:48,320 --> 00:14:50,800
missing something here?
Like it is AI think it's

271
00:14:50,800 --> 00:14:52,520
different.
It's because it looks like a

272
00:14:52,520 --> 00:14:53,560
quartz.
From what I hear.

273
00:14:53,560 --> 00:14:56,680
It does take a bit to blast out
the development, but if you can

274
00:14:56,680 --> 00:14:59,400
get the development heading to
fire out, which is the hardest

275
00:14:59,400 --> 00:15:03,120
thing to fire because it's very
confined and you got bugger all

276
00:15:03,120 --> 00:15:06,560
void to start with, like the
bloody Stokes are they're just

277
00:15:06,560 --> 00:15:09,240
big friggin.
Once you get the slot open, She

278
00:15:09,240 --> 00:15:13,360
just so I talked about it went
up to sight and she was like

279
00:15:13,360 --> 00:15:16,960
sugar.
It's looking, but I, I just

280
00:15:16,960 --> 00:15:20,200
sensed a bit of a bit of
bullishness in their voice

281
00:15:20,200 --> 00:15:21,440
about.
I reckon they're pretty happy

282
00:15:21,440 --> 00:15:24,120
with how it's gone operationally
considering.

283
00:15:24,240 --> 00:15:27,680
Second quarter on the trot, last
one was, you know, a bit more

284
00:15:27,680 --> 00:15:29,120
positive people feeling quite
good.

285
00:15:29,120 --> 00:15:31,040
There was a, it was a good tick
up on the last quarterly.

286
00:15:31,040 --> 00:15:33,720
So we're one step closer to
finding out what the what the

287
00:15:33,720 --> 00:15:36,680
final piece looks like.
And I reckon they're probably

288
00:15:36,680 --> 00:15:40,920
like shit with we're still alive
in this, we've ramp, we're

289
00:15:40,920 --> 00:15:44,280
ramping up a project in a
frigging an environment where

290
00:15:44,280 --> 00:15:46,840
lithium mines are going,
potentially shutting down.

291
00:15:47,280 --> 00:15:51,880
So if they can survive this and
get themselves in a position or

292
00:15:51,880 --> 00:15:54,800
I can, obviously I'm feeling
pretty bullish for the

293
00:15:54,800 --> 00:16:00,800
performance of everyone as well.
So paste plant is getting

294
00:16:00,800 --> 00:16:03,160
commissioned in May.
So that's going to be the

295
00:16:03,840 --> 00:16:06,560
integral part of that
underground 'cause it is a a

296
00:16:06,920 --> 00:16:09,440
bulk thing.
So I 'cause look, after

297
00:16:09,440 --> 00:16:13,800
personally witnessing A paced
line being blocked on the first

298
00:16:13,800 --> 00:16:19,160
pour like that, Degruso just
didn't come out and we spent two

299
00:16:19,160 --> 00:16:21,640
weeks, didn't come out with my
hands because I think I was

300
00:16:21,640 --> 00:16:24,280
doing my underground time.
Then I was doing shift boss and

301
00:16:24,280 --> 00:16:26,960
time or something with a
sledgehammer like hitting the

302
00:16:26,960 --> 00:16:29,880
fucking thing trying to loosen
up all the paste and having to

303
00:16:29,880 --> 00:16:31,920
flush it out to unblock this
line.

304
00:16:32,040 --> 00:16:33,680
Was it the system at fault or
was it the?

305
00:16:34,240 --> 00:16:37,720
Just the initial pace that was
just went down was wasn't

306
00:16:37,720 --> 00:16:40,760
supposed to obviously wasn't the
right thing, but it could have

307
00:16:40,760 --> 00:16:44,480
been avoided with a Quattro QD 2
valve because with the

308
00:16:44,480 --> 00:16:47,040
automation up to the pace, ice
planet would have detected the

309
00:16:47,040 --> 00:16:51,200
pressure spark and before it got
to the point of like, holy shit,

310
00:16:51,200 --> 00:16:53,320
what's happened?
It would have automatically

311
00:16:53,320 --> 00:16:56,880
dumped it into a sump and I
wouldn't have had to have used

312
00:16:56,880 --> 00:17:01,960
my bare hands to unblock this
pipe for two weeks, 2 weeks, 2

313
00:17:01,960 --> 00:17:04,440
weeks, 2 weeks.
It took to bloody unblock the

314
00:17:04,440 --> 00:17:07,000
pipe because you had to.
You had to do it in like 20

315
00:17:07,000 --> 00:17:10,920
meter sections that friggin that
drills with these metal things

316
00:17:10,920 --> 00:17:15,280
on it to rattle it to and then
you had to send a flush down to

317
00:17:15,680 --> 00:17:17,240
flush it.
Then you had to hook another

318
00:17:17,240 --> 00:17:19,079
chunk back up.
Then you had to.

319
00:17:19,240 --> 00:17:22,200
It was a freaking.
So the cost of not using Quattro

320
00:17:22,200 --> 00:17:23,599
is 2 weeks down.
Well, I don't think, I don't

321
00:17:23,599 --> 00:17:26,040
know.
If the QD twos were as big of a

322
00:17:26,040 --> 00:17:31,800
thing then they weren't rated to
the 1500 that they're rated to

323
00:17:31,800 --> 00:17:33,760
now.
I can tell you that cause any

324
00:17:33,760 --> 00:17:38,120
minds today though?
Oh mate, you you may as well

325
00:17:38,120 --> 00:17:42,360
hand if you want to run your
pace line without a QD twos in

326
00:17:42,360 --> 00:17:45,720
all the critical points.
Hand in your resignation and

327
00:17:45,720 --> 00:17:47,520
'cause you're just not worth
being on site.

328
00:17:47,520 --> 00:17:50,520
You need quattro QD twos to
protect your retake or.

329
00:17:50,560 --> 00:17:52,800
Keep you up at night.
Oh, mate, go work.

330
00:17:52,840 --> 00:17:55,080
Yeah, yeah.
You won't be working in the

331
00:17:55,080 --> 00:17:56,680
mining industry if you don't put
them in.

332
00:17:56,680 --> 00:17:58,760
Some bits of infrastructure you
take for granted, but mate,

333
00:17:58,760 --> 00:18:00,760
Quattro's got you covered
because this is their specialty.

334
00:18:00,880 --> 00:18:02,600
Mandatory.
Yep, mandatory.

335
00:18:02,600 --> 00:18:05,000
It's just like blonde zeros in
the morning.

336
00:18:05,120 --> 00:18:08,840
It's a mandatory requirement,
just like having QD twos in your

337
00:18:08,840 --> 00:18:09,880
system.
So.

338
00:18:10,080 --> 00:18:12,000
Thank you, Quattro.
Oh, there we go.

339
00:18:13,240 --> 00:18:17,040
So yeah, good on on.
As I said, it's been heavily

340
00:18:17,040 --> 00:18:20,920
covered line down, but back in
any ramp up if they're hitting

341
00:18:20,920 --> 00:18:23,960
targets and something that's as
complex as that pat on the back,

342
00:18:24,800 --> 00:18:27,160
good stuff.
Helps when they said fucking two

343
00:18:27,160 --> 00:18:30,680
jumbos instead of 6.
It all helps.

344
00:18:31,480 --> 00:18:35,000
Right now JD Barracks sale of
the Donlin.

345
00:18:35,240 --> 00:18:38,560
Donlin Stake, we're going to
North America, lads.

346
00:18:38,720 --> 00:18:40,760
We're going to Alaska
specifically.

347
00:18:40,760 --> 00:18:43,640
So I'm not sure if you guys have
heard of Donlin before.

348
00:18:43,640 --> 00:18:45,200
But I've never heard of this
project.

349
00:18:45,280 --> 00:18:49,920
Massive, massive, massive
undeveloped gold project in in

350
00:18:49,920 --> 00:18:52,280
Alaska.
Like I said, been around for a

351
00:18:52,280 --> 00:18:56,280
long time.
Probable reserves of 33 million

352
00:18:56,280 --> 00:18:58,920
oz.
Wow at over 2G a ton.

353
00:18:58,920 --> 00:19:01,480
So how has?
It not been built. 33 million oz

354
00:19:01,480 --> 00:19:05,560
at over 2G, Yeah.
Is it a big price tag to turn

355
00:19:05,560 --> 00:19:09,080
that into an actual mine?
So the the plan that they came

356
00:19:09,080 --> 00:19:13,680
out with in the latest numbers
in a 2021 study was for 1.1

357
00:19:13,680 --> 00:19:16,680
million oz per annum for 27
years.

358
00:19:16,680 --> 00:19:20,880
So big scale production.
Granted, those numbers have

359
00:19:20,880 --> 00:19:23,920
obviously not been refreshed for
a few years now.

360
00:19:23,920 --> 00:19:27,360
My God.
And it got close in the the bull

361
00:19:27,360 --> 00:19:31,400
run leading into 2012.
The the numbers came out as sort

362
00:19:31,400 --> 00:19:35,800
of technical report 22,009 and
then 11:00 and then 12 again.

363
00:19:35,800 --> 00:19:39,040
But like we've spoken about in
the past, the market got away

364
00:19:39,040 --> 00:19:41,320
from them.
The the gold price just crashed

365
00:19:41,800 --> 00:19:43,320
and here we are still
undeveloped.

366
00:19:43,480 --> 00:19:46,640
At face value, doesn't seem like
the sort of like just off that

367
00:19:46,640 --> 00:19:48,440
doesn't seem like the sort of
asset that Barrick would want to

368
00:19:48,440 --> 00:19:50,360
part ways with if it's got
enormous production.

369
00:19:50,640 --> 00:19:52,720
Your scale.
What's the catch?

370
00:19:52,720 --> 00:19:55,560
It's, it is an interesting one.
I was, I was sort of trying to

371
00:19:55,560 --> 00:20:01,600
answer the same question because
you know what, what makes a tier

372
00:20:01,600 --> 00:20:04,320
one these sorts of assets that
companies like, like Barrick,

373
00:20:04,440 --> 00:20:06,680
one of the biggest gold
producers on the planet want to

374
00:20:06,680 --> 00:20:08,240
produce?
And it tends to be, you know,

375
00:20:08,840 --> 00:20:11,800
costs in the lower half,
preferably lower quartile

376
00:20:12,120 --> 00:20:15,400
500,000 oz plus Tier 1
jurisdiction.

377
00:20:15,400 --> 00:20:19,880
So it meets a lot of those those
criteria points, but it's the.

378
00:20:19,920 --> 00:20:21,800
Cost.
It's the, I think it's the

379
00:20:21,800 --> 00:20:25,080
massive CapEx and the fact that
barracks seem to be pretty

380
00:20:25,080 --> 00:20:29,160
content with Rico Dick going
down that road and they've sort

381
00:20:29,160 --> 00:20:32,200
of got their eyes on being a
copper producer as well.

382
00:20:32,200 --> 00:20:36,080
I think for sort of confluence
of those factors, they have

383
00:20:36,280 --> 00:20:37,840
elected to sort of part ways
with this one.

384
00:20:37,840 --> 00:20:41,440
And I take it they're pretty com
comfortable given this bull

385
00:20:41,440 --> 00:20:44,880
market we're in gold now just to
take their chips off the table

386
00:20:44,880 --> 00:20:48,520
like they they sort of inherited
the the asset as I kind of

387
00:20:48,520 --> 00:20:51,200
understand it, they're through
acquisitions and those sorts of

388
00:20:51,200 --> 00:20:53,680
things.
So that's how we find ourselves

389
00:20:53,680 --> 00:20:56,000
here.
Maybe Alaska, maybe they're like

390
00:20:56,440 --> 00:21:00,120
look at how long on a much
smaller scale Northern Star with

391
00:21:00,120 --> 00:21:01,560
Pogo.
No, there's plenty of other

392
00:21:01,560 --> 00:21:03,360
assets.
They might be like, oh Jesus,

393
00:21:03,680 --> 00:21:08,320
could take a bit after the CapEx
socially to get this up to this

394
00:21:08,360 --> 00:21:10,640
level we want to get it to.
That's a that's a really good

395
00:21:10,640 --> 00:21:11,920
point, Maddie.
I'll, I'll put a pin in that for

396
00:21:11,920 --> 00:21:14,560
now and I'll talk about that
later and beautiful and try and

397
00:21:15,760 --> 00:21:18,600
understand what, what the buyers
of the asset think about the

398
00:21:18,600 --> 00:21:20,640
jurisdiction.
So I'll run through the deal to

399
00:21:20,640 --> 00:21:23,040
start with.
Donlin was formerly held 50% by

400
00:21:23,040 --> 00:21:27,480
Barrick, 50% by Nova Gold, so a
much smaller North American

401
00:21:27,880 --> 00:21:30,120
Goldie with this being their
their flagship asset.

402
00:21:30,840 --> 00:21:35,000
Now Barrick have agreed to sell
their 50% and the buyers of that

403
00:21:35,120 --> 00:21:39,520
is mostly John Paulson, famously
the manager of Paulson and Co

404
00:21:39,520 --> 00:21:43,800
who made a couple of dollars in
the financial crisis and Nova

405
00:21:43,800 --> 00:21:48,960
Gold taking up another portion.
So the outcome is that Paulson,

406
00:21:48,960 --> 00:21:51,800
on his or through his family
office, will own 40% of the

407
00:21:51,840 --> 00:21:54,480
asset, and Nova Gold will own
60%.

408
00:21:56,400 --> 00:22:00,160
What is the last mine sale that
you've seen being bought by an

409
00:22:00,160 --> 00:22:03,160
individual?
On this scale, I can't think of

410
00:22:03,160 --> 00:22:04,560
1.
On this scale, yeah.

411
00:22:05,200 --> 00:22:08,320
Yeah, I like the the deal itself
just reminded me of that, that

412
00:22:08,320 --> 00:22:12,080
that hedge fund guy who owns
that or N group, the gold mine

413
00:22:12,200 --> 00:22:15,760
in in Mount Ida here in WA
that's kind of like mysterious

414
00:22:15,760 --> 00:22:16,960
one.
But this is like completely

415
00:22:16,960 --> 00:22:19,080
different.
This is this is it's a hedge

416
00:22:19,080 --> 00:22:22,400
fund guy like big gold ball just
getting Max leverage, Max

417
00:22:22,400 --> 00:22:24,960
exposure to gold.
Yeah.

418
00:22:25,080 --> 00:22:28,440
And to talk to the scale, while
we say we haven't seen one this

419
00:22:28,440 --> 00:22:33,360
big is because this 50% has sold
for US $1 billion and there's a

420
00:22:33,360 --> 00:22:36,120
potential another 100 million
that Nova Gold can can Chuck in

421
00:22:36,120 --> 00:22:39,280
relating to debt that Barrick
chucked into the subsidiary that

422
00:22:39,280 --> 00:22:43,280
held the asset.
But the reaction to Nova God's

423
00:22:43,280 --> 00:22:46,040
share price has been phenomenal.
So they have surged, they've

424
00:22:46,200 --> 00:22:47,960
doubled in the last couple
weeks.

425
00:22:47,960 --> 00:22:50,680
I mean, they'd come off into
that sort of tariff lip that we

426
00:22:50,680 --> 00:22:55,160
kind of saw, but they're now
kept at US 1.6 billion with a

427
00:22:55,160 --> 00:22:57,640
couple shares that they're
raising to fund their $200

428
00:22:57,640 --> 00:23:00,440
million portion not having
settled just yet.

429
00:23:00,840 --> 00:23:02,960
They're a really interesting
company in and of themselves.

430
00:23:02,960 --> 00:23:07,760
So they've got this chairperson
in Thomas Kaplan, who is

431
00:23:07,760 --> 00:23:09,520
reported to be a billionaire in
his own right.

432
00:23:09,520 --> 00:23:12,720
He owns 25% of the company.
People might have heard of

433
00:23:12,800 --> 00:23:16,920
Electrum, That's the investment
unit that he invests through.

434
00:23:17,440 --> 00:23:20,040
He's been in the natural
resources space for quite some

435
00:23:20,040 --> 00:23:22,960
time, made money, like I told
you lads earlier in in silver

436
00:23:22,960 --> 00:23:26,800
through the the 90s and 2000s.
You've also got Copernic Global

437
00:23:27,080 --> 00:23:28,520
now.
I spoke about these guys a

438
00:23:28,520 --> 00:23:30,520
couple weeks ago.
They were topping up their

439
00:23:30,520 --> 00:23:34,240
stakes in some of the uranium
miners, specifically Paladin.

440
00:23:35,040 --> 00:23:38,800
They were early to the the
uranium trade that sort of sold

441
00:23:38,800 --> 00:23:39,720
out.
Now they've bought back in.

442
00:23:39,720 --> 00:23:42,080
Given everything we've seen,
they've been sort of getting

443
00:23:42,080 --> 00:23:46,800
more and more bullish gold.
Their value guys, they look at

444
00:23:47,320 --> 00:23:50,400
PGM, I mean the whole Subania
and other sorts of companies

445
00:23:50,400 --> 00:23:52,080
like that.
They manage a fair bit of money.

446
00:23:52,080 --> 00:23:55,560
You know, we're talking 5:00-ish
from what I could kind of gather

447
00:23:55,560 --> 00:23:58,800
billion U.S. dollars under
management and they're deep

448
00:23:58,800 --> 00:24:00,480
value investors.
We've actually included a couple

449
00:24:00,480 --> 00:24:03,360
of their really interesting
white papers on why they're like

450
00:24:03,360 --> 00:24:06,840
mining and how they invest in
mining in our in our newsletter.

451
00:24:07,480 --> 00:24:12,040
So the capital raising that Nova
Gold did to fund their portion

452
00:24:12,040 --> 00:24:15,600
of the acquisition was for US
$170 million.

453
00:24:15,600 --> 00:24:18,440
Now three parties took this up,
the three I've just mentioned

454
00:24:18,800 --> 00:24:20,960
Paulson.
So he's investing into Nova Gold

455
00:24:21,400 --> 00:24:26,000
as well as buying the asset
Thomas Kaplan and his unit.

456
00:24:26,000 --> 00:24:29,200
So the chair of the company as
well as Kapernick.

457
00:24:29,200 --> 00:24:31,400
Now that was a a tight, tight
capital raise.

458
00:24:31,400 --> 00:24:34,720
Just those 3 getting it.
The stock has surged 60% since

459
00:24:34,720 --> 00:24:37,400
they tipped in.
They all got themselves some

460
00:24:37,400 --> 00:24:39,840
some five year long dated
warrants as well for their

461
00:24:39,840 --> 00:24:41,120
trouble.
So are.

462
00:24:41,120 --> 00:24:44,800
They in the money already.
Very hard to find info on on

463
00:24:44,800 --> 00:24:47,080
what those warrants were I mean.
There's a good chance they will

464
00:24:47,080 --> 00:24:49,480
be if they're going up 60%,
yeah.

465
00:24:49,480 --> 00:24:52,600
Is there So would question
without notice based on what

466
00:24:52,600 --> 00:24:56,320
Paulson put in a Nova, is that
giving him more than half of

467
00:24:56,440 --> 00:24:58,760
beneficial ownership of the
asset?

468
00:24:59,040 --> 00:25:02,440
I I don't think so.
So he was an 8% shareholder in

469
00:25:02,440 --> 00:25:07,560
Nova Gold for this capital raise
and whilst they said those 3

470
00:25:07,560 --> 00:25:11,400
tipped in for the 170 million,
they didn't say who who got

471
00:25:11,400 --> 00:25:13,880
what.
Proportionately, I I wouldn't

472
00:25:13,880 --> 00:25:16,400
think so.
Right.

473
00:25:16,400 --> 00:25:20,520
So as we've alluded to an
individual or a family office

474
00:25:21,080 --> 00:25:25,480
buying a stake in a gold mine
would have been like bloody

475
00:25:25,840 --> 00:25:29,880
Willie Packer taken Jabaluka
like.

476
00:25:29,880 --> 00:25:31,560
He's got LP's I guess, but I
don't know if.

477
00:25:32,000 --> 00:25:33,200
I don't know if John.
Wilson has LP.

478
00:25:33,480 --> 00:25:37,240
'S family, I suppose family
offices very tight knit unit

479
00:25:37,240 --> 00:25:38,960
isn't?
It it's his money, Yeah.

480
00:25:38,960 --> 00:25:42,480
So he's shut down, so Paulson
and Co and essentially booted

481
00:25:42,480 --> 00:25:45,360
out general investors in in the
funds.

482
00:25:45,360 --> 00:25:48,000
So it's just his money now,
which is fascinating.

483
00:25:48,000 --> 00:25:49,280
So over.
You one day, JD.

484
00:25:50,440 --> 00:25:52,880
Might be all of us.
Let's see fingers crossed on

485
00:25:52,880 --> 00:25:55,360
that front, Maddie, but I I
think it's fascinating.

486
00:25:55,360 --> 00:25:57,640
So like you guys said, people
might know him.

487
00:25:57,640 --> 00:26:00,400
He he made money through the
financial crisis.

488
00:26:00,400 --> 00:26:03,080
It you know, it's very
interesting how he how he

489
00:26:03,080 --> 00:26:04,480
structured his bets and
everything.

490
00:26:04,480 --> 00:26:07,360
If you are kind of wondering
about that, he's not too heavily

491
00:26:07,360 --> 00:26:10,040
featured in the movie The Big
Short, but there's a book called

492
00:26:10,040 --> 00:26:11,720
The Greatest Trade Ever, I
think.

493
00:26:11,760 --> 00:26:13,560
And that's specifically about
his angle.

494
00:26:13,560 --> 00:26:16,680
So it's a, it's another
perspective on the financial

495
00:26:16,680 --> 00:26:19,920
crisis to Michael Lewis's
retelling of it.

496
00:26:19,920 --> 00:26:25,000
And he subsequently became very
bullish gold and he's been

497
00:26:25,000 --> 00:26:26,560
bullish sort of gold for a
while.

498
00:26:26,560 --> 00:26:28,600
You might have also seen his
name in the media because he was

499
00:26:28,600 --> 00:26:32,320
rumoured to be in the running
for Treasury Secretary, which

500
00:26:32,760 --> 00:26:36,200
Scott Besson is of course, now.
But he's been a yeah, he's been

501
00:26:36,200 --> 00:26:37,680
a backer of Trump for some time
as well.

502
00:26:37,680 --> 00:26:39,160
But anyway.
He's not related to Hank

503
00:26:39,160 --> 00:26:40,360
Paulson.
Not related.

504
00:26:40,360 --> 00:26:42,480
A lot of people asked that
question back in 2005.

505
00:26:42,480 --> 00:26:44,320
Six.
No, can confirm he's not.

506
00:26:44,960 --> 00:26:48,160
So the gold trade from his
perspective is really

507
00:26:48,160 --> 00:26:50,360
interesting.
He set up a gold fund back in

508
00:26:50,360 --> 00:26:55,160
2010 after the financial crisis
and started buying massive

509
00:26:55,160 --> 00:26:58,080
stakes because obviously he did
very well out of the financial

510
00:26:58,080 --> 00:27:01,840
crisis and his funds just grew
enormously, like over 30 billion

511
00:27:01,920 --> 00:27:04,520
U.S. dollars.
He was managing closer to 40 and

512
00:27:04,520 --> 00:27:08,040
he bought stakes in like Anglo
Gold Ashanti, over 10% stakes

513
00:27:08,560 --> 00:27:11,680
for over a billion dollars US
like closer to 2 billion

514
00:27:11,680 --> 00:27:13,600
Aussies.
So he just went in really,

515
00:27:13,600 --> 00:27:15,360
really hard.
And it's, it's interesting to

516
00:27:15,360 --> 00:27:18,320
reflect on those times and read
some of the comments from some

517
00:27:18,320 --> 00:27:21,120
of the people involved.
So I plucked out one from Mark

518
00:27:21,120 --> 00:27:24,120
Crudafani of all people who was
running Anglo Gold at the time.

519
00:27:24,640 --> 00:27:27,560
And he said hard currency is
coming to the fore as evidenced

520
00:27:27,560 --> 00:27:29,880
by the investment choices of
some of the world's most

521
00:27:29,880 --> 00:27:32,920
seasoned investors.
Now you might have heard that

522
00:27:33,320 --> 00:27:37,520
today or yesterday, but that was
said, you know, over over 15

523
00:27:37,520 --> 00:27:40,080
years ago.
I just had a flashback.

524
00:27:40,320 --> 00:27:42,120
Yeah, from underground
operators.

525
00:27:42,120 --> 00:27:44,880
Sorry to interrupt.
No, please, but Mark Cordefani

526
00:27:44,880 --> 00:27:46,800
was floating around.
Hey.

527
00:27:46,880 --> 00:27:48,880
Did you have a chat?
I might have had a skin full at

528
00:27:48,880 --> 00:27:54,320
the casino and he was like, God,
I'm like, hey Mark, I'm like

529
00:27:54,320 --> 00:27:57,480
make sure next time you come on
money of mine, I'm there.

530
00:27:59,000 --> 00:28:00,880
Sorry, I was a bit under the
weather that day.

531
00:28:02,360 --> 00:28:03,880
He's like, who the Hell's this
bloke?

532
00:28:03,920 --> 00:28:05,720
I.
Remember that podcast?

533
00:28:08,160 --> 00:28:10,400
Oh, anyway.
We digress.

534
00:28:10,440 --> 00:28:16,160
So, yeah, the, the gold trade
moved very much in his favour in

535
00:28:16,160 --> 00:28:20,120
2010, 11-12.
And then it started peeling back

536
00:28:20,120 --> 00:28:22,000
and, you know, people were sort
of bullish gold for all the same

537
00:28:22,000 --> 00:28:24,600
reasons, but the the timing
wasn't quite right.

538
00:28:24,600 --> 00:28:28,800
And then, you know, we came into
an era of massively, you know,

539
00:28:28,800 --> 00:28:32,960
massive fiscal easing across the
planet and here we are.

540
00:28:32,960 --> 00:28:35,560
But despite this, he's sort of
been bullish throughout.

541
00:28:35,560 --> 00:28:39,320
And you know, you can go back to
2018 did a massive investment in

542
00:28:39,320 --> 00:28:43,240
Detour Gold over $500 million.
And this is when his funds got a

543
00:28:43,240 --> 00:28:46,000
lot, lot smaller.
So that's a, a massive check to

544
00:28:46,000 --> 00:28:47,640
write.
I mean, he owns stakes in a

545
00:28:47,640 --> 00:28:49,120
couple other companies.
I'm not sure if you guys have

546
00:28:49,120 --> 00:28:54,880
heard of the Petura Resources.
They are kept at about 1.3

547
00:28:54,880 --> 00:28:57,320
billion.
He earns 35% of that one.

548
00:28:57,320 --> 00:29:01,720
He's, he's got quite a bit of
cash in Agnico as well, of

549
00:29:01,720 --> 00:29:04,920
course, Nova Gold.
So yeah, I just, I just find

550
00:29:04,920 --> 00:29:07,360
this fascinating.
He was on Bloomberg just last

551
00:29:07,360 --> 00:29:11,240
week talking about gold, the
narrative that central banks

552
00:29:11,240 --> 00:29:12,920
would just keep on buying and
buying gold.

553
00:29:12,920 --> 00:29:17,840
So I think he's deservedly
called a gold bull or a gold bug

554
00:29:18,000 --> 00:29:20,840
on Wall Street.
Yeah, and this is the best

555
00:29:20,840 --> 00:29:24,080
leverage you can get to gold is
owning a Gold Bond.

556
00:29:25,000 --> 00:29:26,440
Absolutely.
It's it's talk about.

557
00:29:26,440 --> 00:29:29,840
Leverage like the the scale of
potential production here and if

558
00:29:29,840 --> 00:29:33,560
it was high cost and as prices
rise, that's a tremendous

559
00:29:33,560 --> 00:29:35,000
difference to the valuation of
this asset.

560
00:29:35,000 --> 00:29:37,120
Yeah.
And it's also an asset that had

561
00:29:37,120 --> 00:29:40,600
a handbrake on it because Eric
weren't doing much with it, like

562
00:29:40,600 --> 00:29:42,080
they were going through the
motions.

563
00:29:42,080 --> 00:29:46,000
So consolidating the asset,
you've seen it in the reaction

564
00:29:46,000 --> 00:29:49,120
of Nova Gold's share price.
It's just put a lighter on them.

565
00:29:49,120 --> 00:29:52,360
They've gone sort of flying so.
And it's not it's not like a

566
00:29:52,360 --> 00:29:58,480
huge number really.
Like for high 30 million oz 2G

567
00:29:58,480 --> 00:30:02,400
at for what, a 2 billion US
project valuation?

568
00:30:02,400 --> 00:30:06,440
Like it's not huge dollars no
considering Spartan went for 2

569
00:30:06,440 --> 00:30:07,840
1/2 Aussie.
Yeah.

570
00:30:07,840 --> 00:30:10,920
So the I mean the the key
distinction there is that the

571
00:30:10,920 --> 00:30:16,720
CapEx, right, which is 7 1/2
billion US 2021, so bit of

572
00:30:16,720 --> 00:30:21,040
inflation on on that one.
But yeah, the, the, the high

573
00:30:21,040 --> 00:30:24,160
tide of gold prices is really
changing the economics.

574
00:30:24,160 --> 00:30:26,600
So they're going to refresh the
feasibility study of this one

575
00:30:26,600 --> 00:30:28,720
over the next two years.
And then they're talking about a

576
00:30:28,720 --> 00:30:32,080
four or five year engineering
and construction time frame, so

577
00:30:33,040 --> 00:30:37,240
early 30s talking about
production, which is, yeah, of

578
00:30:37,240 --> 00:30:38,880
course it's going to be around
sooner than we think.

579
00:30:38,880 --> 00:30:40,960
And like I said, the numbers
have been run through this

580
00:30:40,960 --> 00:30:43,000
already.
The reserves are virtually the

581
00:30:43,000 --> 00:30:47,280
same as what they were in 2009.
They've got stacks of data like

582
00:30:47,280 --> 00:30:50,920
350 odd 1000 meters have been
drilled in this thing.

583
00:30:50,920 --> 00:30:55,440
They, they know a lot about it.
But the 2021 numbers, like I

584
00:30:55,440 --> 00:31:02,280
said, big CapEx, MPV at 5% was
US $3 billion, which left it

585
00:31:02,280 --> 00:31:06,400
with an IRR of just over 9%.
So that's enough to put most

586
00:31:06,400 --> 00:31:12,040
people off even BHB, you know,
so that was using AUS $1500 gold

587
00:31:12,040 --> 00:31:15,840
price, which is not the world
we're living in today.

588
00:31:15,840 --> 00:31:20,200
And the oil and sustaining cost
was a touch under US $700.00.

589
00:31:20,640 --> 00:31:23,840
Although again, inflation and
just all these things, but 20

590
00:31:23,840 --> 00:31:28,480
million tonne per annum plant
pretty much big, big, big scale

591
00:31:28,480 --> 00:31:32,520
leverage to the gold price.
And you can start to run

592
00:31:32,520 --> 00:31:34,040
different numbers in different
scenarios.

593
00:31:34,040 --> 00:31:37,000
We'll flash out what different
gold prices would do to those

594
00:31:37,000 --> 00:31:39,280
numbers at the time.
And you can see the economics

595
00:31:39,280 --> 00:31:43,200
change quite substantially.
And in any case, these guys are

596
00:31:43,200 --> 00:31:44,880
gold bulls.
So that's not the thing they're

597
00:31:44,880 --> 00:31:46,280
worried about.
They're just thinking about the

598
00:31:46,280 --> 00:31:48,720
best way to play it.
They want leverage to that gold

599
00:31:48,720 --> 00:31:50,800
price.
So they're fixated on

600
00:31:50,880 --> 00:31:52,560
eliminating the risk here,
right.

601
00:31:52,920 --> 00:31:56,560
And to your point, before Maddie
on jurisdiction, you want to

602
00:31:57,120 --> 00:31:58,920
pick the bet and make sure
you're going to get paid for it,

603
00:31:58,920 --> 00:32:01,640
just like Paulson was thinking
back in the day how he

604
00:32:01,640 --> 00:32:06,840
structured his, his housing bet.
You don't want to do it in let's

605
00:32:06,840 --> 00:32:09,200
say Mali or news year, you know
where you're worried about

606
00:32:09,200 --> 00:32:10,880
getting paid.
You want to eliminate the risks.

607
00:32:10,880 --> 00:32:14,280
And to that point, Alaska is an
interesting choice because it

608
00:32:14,280 --> 00:32:19,080
wouldn't be the, the first point
on everyone's list, but maybe

609
00:32:19,080 --> 00:32:23,640
they've got a way of navigating
the, the, the social parts of

610
00:32:23,640 --> 00:32:26,680
this, the the permitting parts,
because that is undoubtedly a

611
00:32:26,680 --> 00:32:29,840
huge part of unlocking the value
here and bringing those people

612
00:32:29,840 --> 00:32:32,600
in the local communities along
the journey with you, I mean.

613
00:32:33,160 --> 00:32:36,920
Especially for a big pit like
surface disturbance.

614
00:32:37,600 --> 00:32:39,360
Exactly the hardest thing to
permit.

615
00:32:39,520 --> 00:32:41,760
So you, you want to bring the
people along with you, you want

616
00:32:41,760 --> 00:32:44,240
them to be involved, you want
jobs for the for the local

617
00:32:44,240 --> 00:32:47,880
communities, you want them to be
compensated and see some of the

618
00:32:47,880 --> 00:32:49,840
upside as well.
And if you think it's going to

619
00:32:49,840 --> 00:32:53,480
be a big payout like I suspect
they do, then might just have to

620
00:32:53,480 --> 00:32:56,200
break a bit off and share it
around.

621
00:32:56,200 --> 00:32:58,520
But I'm sure that's all the
stuff at the forefront of their

622
00:32:58,520 --> 00:33:00,680
mind that they're actually
thinking about refreshing the

623
00:33:00,680 --> 00:33:03,000
numbers.
So for all those kind of

624
00:33:03,000 --> 00:33:05,120
reasons, I just think this is a
like a fascinating deal.

625
00:33:05,520 --> 00:33:06,880
Yeah, really fascinating.
Is it?

626
00:33:07,160 --> 00:33:11,120
It'd be about is it 1,000,000 /
1,000,000 oz.

627
00:33:11,120 --> 00:33:14,560
About a million oz a year. 1.1
Yeah yeah 20.

628
00:33:14,640 --> 00:33:16,520
Million tonne of 2G, that's
yeah.

629
00:33:16,720 --> 00:33:19,400
Yeah, and they're gonna, they're
gonna front weight that as you'd

630
00:33:19,400 --> 00:33:22,760
suspect.
So the first 10 years were about

631
00:33:22,760 --> 00:33:24,240
1.4 million oz.
Wow.

632
00:33:24,760 --> 00:33:25,480
So.
So what?

633
00:33:25,480 --> 00:33:28,280
Bigger than Paul Grub.
Enormous.

634
00:33:28,280 --> 00:33:30,640
It's phenomenal, up there with
the biggest in the planet.

635
00:33:30,640 --> 00:33:34,120
I know it's a 20 million tonne
like plant, but that CapEx is

636
00:33:34,120 --> 00:33:37,200
enormous heaps that must be
pretty strip right like.

637
00:33:37,960 --> 00:33:41,640
I mean, this is in a very remote
part of the world.

638
00:33:42,120 --> 00:33:45,360
I think you need to develop a
bit better access than what

639
00:33:45,360 --> 00:33:49,960
they've got at the moment.
Strip as well as tailings and

640
00:33:50,040 --> 00:33:53,440
all, and all those sorts of
things are pretty, pretty

641
00:33:53,440 --> 00:33:55,680
substantial.
Talking another schematic in

642
00:33:55,680 --> 00:33:58,240
there so you can get a feel for
what the operation might look

643
00:33:58,240 --> 00:33:59,800
like.
It'd be interesting to say about

644
00:33:59,800 --> 00:34:04,120
what the type, because I know
I'm pretty sure Pogo they all

645
00:34:04,400 --> 00:34:08,760
all their tilings have to go
back underground like there's no

646
00:34:08,800 --> 00:34:11,600
surface.
So these guys positing of

647
00:34:11,600 --> 00:34:14,000
tilings.
These guys do have surface from

648
00:34:14,000 --> 00:34:16,480
what I could see at the time.
I don't know if that was a hold

649
00:34:16,480 --> 00:34:18,600
up on, on permitting and that's
something they're gonna try and

650
00:34:18,600 --> 00:34:20,360
address.
But there was also backfield

651
00:34:20,360 --> 00:34:24,199
taking place in certain parts as
well through the through the

652
00:34:24,199 --> 00:34:26,000
cycle.
So yeah, yeah, remains to be.

653
00:34:26,000 --> 00:34:30,320
Seen like more just alerting
they are strict the permitting

654
00:34:30,520 --> 00:34:34,000
for just like you just can't
just Chuck a tailings damn in

655
00:34:34,440 --> 00:34:36,480
that easily.
Like you can't track it easily

656
00:34:36,480 --> 00:34:39,120
in Australia, let alone Alaska.
Yeah, and think of.

657
00:34:39,120 --> 00:34:41,840
Serbia, apparently.
Yeah, Serbia.

658
00:34:41,840 --> 00:34:43,520
The rise of Serbia.
So Bosnia.

659
00:34:43,600 --> 00:34:46,159
Bosnia.
Yeah, I've got it wrong now.

660
00:34:46,159 --> 00:34:48,199
neighboring.
Someone's going to kill me in

661
00:34:48,199 --> 00:34:51,239
Serbia though.
Maybe in Bosnia too.

662
00:34:52,719 --> 00:34:54,480
Especially with your links to
yeah.

663
00:34:56,120 --> 00:35:00,280
I think the other the other
point would be like Pebble Creek

664
00:35:00,520 --> 00:35:02,400
is not far that's been in in
permitting.

665
00:35:02,400 --> 00:35:05,200
Hold up for Yeah, God, how many,
many decades now?

666
00:35:05,200 --> 00:35:09,240
So water bodies, rivers, these
sorts of things need to be very

667
00:35:09,240 --> 00:35:12,400
carefully studied.
And I'd imagine they've done a

668
00:35:12,400 --> 00:35:14,840
lot of the work since this thing
was discovered over 20 years ago

669
00:35:15,160 --> 00:35:17,600
on those aspects as well.
But I'll just leave it with a,

670
00:35:17,680 --> 00:35:20,640
with a chart that they chucked
in first time I've seen this

671
00:35:20,640 --> 00:35:23,440
that I can remember at least.
And they're, they're flexing the

672
00:35:23,440 --> 00:35:28,560
numbers with a discount rate of
0% just to just to show you the,

673
00:35:28,720 --> 00:35:31,960
the cash flow that this thing
could potentially generate.

674
00:35:31,960 --> 00:35:34,040
But maybe that's a a gold bug
mindset.

675
00:35:34,040 --> 00:35:35,440
You asked me if I remember this
project.

676
00:35:35,440 --> 00:35:37,360
I didn't, but I do remember that
slide.

677
00:35:37,360 --> 00:35:39,240
I've definitely seen that slide
posted on Twitter.

678
00:35:39,240 --> 00:35:40,280
Yeah.
That's hilarious.

679
00:35:40,280 --> 00:35:41,040
Yeah.
Yeah.

680
00:35:41,200 --> 00:35:41,920
Good one.
Yeah.

681
00:35:42,240 --> 00:35:44,600
It's you.
You think from a Barrick

682
00:35:44,600 --> 00:35:48,080
perspective when you put the
permitting and the the time

683
00:35:48,080 --> 00:35:50,240
frame of it, you're like fuck,
we could probably deploy our

684
00:35:50,240 --> 00:35:54,160
capital a lot better to get a
sooner return because this could

685
00:35:54,160 --> 00:35:57,280
go for a very long time to get
this developed.

686
00:35:57,360 --> 00:36:00,120
It's got to take him in probably
an equal long time for the the

687
00:36:00,120 --> 00:36:02,360
fruits of Rico Dick, but that
that's the horse that they're

688
00:36:02,400 --> 00:36:04,840
they're betting on instead.
Yeah, and you can't you've only

689
00:36:04,840 --> 00:36:07,280
got so much free cash flow to
actually reinvest.

690
00:36:07,280 --> 00:36:08,480
So.
Yeah, yeah.

691
00:36:08,600 --> 00:36:11,480
No snow at Pakistan.
That's the benefits of Rico

692
00:36:11,520 --> 00:36:13,640
Dick, I don't think.
I think.

693
00:36:14,720 --> 00:36:15,640
It's a bit colder than you
think.

694
00:36:15,640 --> 00:36:17,360
It's up in the mountains there.
Oh yeah, Maybe, maybe.

695
00:36:18,400 --> 00:36:18,800
Maybe.
No.

696
00:36:18,960 --> 00:36:19,960
Snow.
They got me face there.

697
00:36:19,960 --> 00:36:22,040
Does it snow in Pakistan?
Let me know.

698
00:36:23,000 --> 00:36:24,360
Right.
Let's go out Paladin.

699
00:36:25,520 --> 00:36:27,320
I think it was out yesterday.
They've had a bit of a run.

700
00:36:27,320 --> 00:36:30,000
So all EU stocks are having a
bit of a run.

701
00:36:30,000 --> 00:36:34,320
It's whether the people are
thinking, oh, is the $65 spot

702
00:36:34,320 --> 00:36:38,120
price the bottom out who knows,
but there are there's a bit of a

703
00:36:38,120 --> 00:36:40,440
bit of volatility on EU stocks
at the moment.

704
00:36:40,720 --> 00:36:44,840
So all and they pelled and went
up yesterday on the back of

705
00:36:44,840 --> 00:36:47,200
this.
So there looks like their

706
00:36:47,200 --> 00:36:50,080
production wise their quarter
improved a lot.

707
00:36:50,080 --> 00:36:54,240
They did have the what was it
the too much rain event.

708
00:36:54,320 --> 00:36:56,480
They had not enough water
previous quarter.

709
00:36:56,480 --> 00:37:00,920
Now they've had bloody too much.
There was a one in 50 year rain

710
00:37:00,920 --> 00:37:06,200
event, but even with that they
still they processed 900,000

711
00:37:06,200 --> 00:37:13,200
tonne feed grade improved 419
PPM up from four O 4 recovery's

712
00:37:13,200 --> 00:37:16,400
going good.
So they produced 3/4 of

713
00:37:16,400 --> 00:37:20,480
1,000,000 lbs of uranium realise
price 6990.

714
00:37:20,480 --> 00:37:24,240
So I think they'll because they
got a lot more contracting in

715
00:37:24,240 --> 00:37:26,480
place.
They're not chucking it in the

716
00:37:26,480 --> 00:37:31,000
spot as much in the spot.
So cost of production went down.

717
00:37:31,240 --> 00:37:32,560
So you look at the waterfall
chart.

718
00:37:32,560 --> 00:37:36,760
I'm just trying to again my
bloody me dumb thinking.

719
00:37:37,200 --> 00:37:41,160
They're they're processing
stockpiles only They've just

720
00:37:41,200 --> 00:37:45,640
fired the first part of and open
pit, not the original open pit

721
00:37:45,640 --> 00:37:47,920
they were planning to go into
because that one got flooded.

722
00:37:48,320 --> 00:37:53,600
So they're into another one now.
But they've if you take if you

723
00:37:53,600 --> 00:37:57,440
take away that money from the
Fission acquisition, the 81 US

724
00:37:57,440 --> 00:38:02,240
that came in from that deal, it
sort of means on a six month

725
00:38:02,240 --> 00:38:07,680
basis they still would have gone
backwards about what's that 8

726
00:38:07,680 --> 00:38:11,200
million that right, Yeah, about
8 million US going backwards.

727
00:38:11,200 --> 00:38:15,040
And it's and it's like, OK, what
does this mean for one Paladin

728
00:38:15,040 --> 00:38:17,640
and the rest of the Namibian
hopefuls?

729
00:38:17,640 --> 00:38:21,080
Because they've just been
processing stockpiles.

730
00:38:21,080 --> 00:38:24,760
Yes, it's in ramp up.
It is a, you know, a brownfields

731
00:38:24,760 --> 00:38:30,440
project that's being restarted.
They're processing 400 odd PPM

732
00:38:30,960 --> 00:38:33,320
from existing stockpiles.
So there's no mining costs.

733
00:38:33,320 --> 00:38:35,400
They're just just re handle and
throw it in.

734
00:38:35,760 --> 00:38:38,600
And they've sort of gone
backwards at these at these

735
00:38:38,600 --> 00:38:42,280
prices.
And I'm just thinking overall,

736
00:38:42,280 --> 00:38:44,560
I'll skip to the end.
I'm like, OK, well, if Deep

737
00:38:44,560 --> 00:38:51,200
Yellow are proposing 340 PPM
mining and Bannerman are

738
00:38:51,200 --> 00:38:57,120
proposing 240 PPM out of their
open pits in Namibia again,

739
00:38:57,120 --> 00:39:00,680
while we're at these prices, and
it's been reaffirmed by Deep

740
00:39:00,680 --> 00:39:05,480
Yellow postponing their FID,
Like these projects are just not

741
00:39:05,480 --> 00:39:09,560
even going to be considered to
be developed if Paladin aren't

742
00:39:09,560 --> 00:39:12,720
making money reprocessing
stockpiles at 400 PPM.

743
00:39:13,240 --> 00:39:16,400
So that that's essentially my
overall conclusion.

744
00:39:16,400 --> 00:39:19,840
So like there's not when we're
talking about what is the

745
00:39:19,840 --> 00:39:22,440
incentive pricing for those
projects.

746
00:39:22,440 --> 00:39:27,040
Like it'd have to be pretty
close to 100 I would imagine to

747
00:39:27,280 --> 00:39:30,800
consider deploying a shit load
of capital to build these

748
00:39:32,200 --> 00:39:34,640
projects and process low grade
open pits.

749
00:39:34,640 --> 00:39:36,960
So that was that was sort of
where I got to.

750
00:39:37,000 --> 00:39:41,200
Yeah, just to say what was said,
Maddie, what was the grade of

751
00:39:41,200 --> 00:39:43,000
the reserves that they're going
to mine?

752
00:39:43,280 --> 00:39:46,080
For Paladin, yeah, about 505
hundred.

753
00:39:46,080 --> 00:39:50,680
So they've talked about there's
like 800 pockets that they can

754
00:39:50,680 --> 00:39:53,160
go to to start with.
But I think they they said in

755
00:39:53,160 --> 00:39:58,040
the call that they're targeting
to try and maintain that 500.

756
00:39:58,560 --> 00:40:01,800
Yeah, you go to those high
pockets and you go lower later

757
00:40:01,800 --> 00:40:04,200
down the track, right?
Yeah, Rob and Peter to pay Paul

758
00:40:04,440 --> 00:40:07,360
later on.
So they're so I think once and

759
00:40:07,360 --> 00:40:11,280
once the tonnage sort of
increases and they're in

760
00:40:11,280 --> 00:40:13,640
production, it'd be interesting
to see how this goes.

761
00:40:13,640 --> 00:40:16,560
But it's not like, yeah, it's,
it's another one of those

762
00:40:16,560 --> 00:40:18,600
situations.
It's like the purpose of mining

763
00:40:18,600 --> 00:40:23,840
these stockpiles was to generate
cash flow to help set themselves

764
00:40:23,840 --> 00:40:28,360
up that they've ended up losing
money by doing it, but they've

765
00:40:28,360 --> 00:40:30,080
lost money.
But they've, it's a, it's a

766
00:40:30,080 --> 00:40:33,280
commissioning process as well.
So it has to be done at some

767
00:40:33,280 --> 00:40:34,960
point.
So you may as well, you may as

768
00:40:34,960 --> 00:40:37,560
well lose money while you're
processing lower grade and make

769
00:40:37,560 --> 00:40:39,480
more money when you're
processing the higher grade.

770
00:40:40,600 --> 00:40:43,040
Nevertheless, the stock jumped
18%, yes.

771
00:40:43,040 --> 00:40:44,640
Yeah, yeah.
So it.

772
00:40:45,360 --> 00:40:47,960
Was even higher, I think it.
Might have been that soon, yeah.

773
00:40:48,280 --> 00:40:51,240
25 But it was funny, you go on
on a one month time frame, it

774
00:40:51,240 --> 00:40:54,440
was still down like 21%.
But yeah, the daily, the daily

775
00:40:54,440 --> 00:40:57,640
volatility is, yeah, I guess it
goes to show how a volatile

776
00:40:57,640 --> 00:41:00,200
things can be when you've got
the the high short interest and

777
00:41:00,240 --> 00:41:02,120
a bit of short covering, you can
squeeze a bit.

778
00:41:02,280 --> 00:41:05,440
Yeah, well, and yeah, I think
the short, the short, and while

779
00:41:05,440 --> 00:41:08,840
these stocks have been down at
these levels like well the

780
00:41:09,000 --> 00:41:12,520
Aussie based ones anyway, boss,
Paladin, DPL, I think the bloody

781
00:41:12,520 --> 00:41:14,440
short interest has kept on
climbing.

782
00:41:14,440 --> 00:41:19,720
So they're continuing to pile
into it, whatever the mechanism

783
00:41:19,720 --> 00:41:22,520
or trading mechanics behind that
is.

784
00:41:23,440 --> 00:41:27,040
But we'll, it can, I think, as
you said before, it goes both

785
00:41:27,040 --> 00:41:28,360
ways.
When the price is going down,

786
00:41:28,360 --> 00:41:32,560
there's more bloody, more shorts
piling in and then prices going

787
00:41:32,560 --> 00:41:34,640
up.
She's just, it's one of those,

788
00:41:35,280 --> 00:41:38,840
it's just such a concentrated
set of companies you can do it

789
00:41:38,840 --> 00:41:41,720
to.
Hence why all the the narrative

790
00:41:41,720 --> 00:41:44,480
goes into a small amount of
stocks because there's not many

791
00:41:44,480 --> 00:41:47,880
bloody mobs that are producing
or that have a big enough market

792
00:41:47,880 --> 00:41:52,240
cap that are indexed to do it.
So looking at this bloody water,

793
00:41:52,280 --> 00:41:55,200
you can see how that, so that
appeared to be I think the

794
00:41:55,200 --> 00:41:59,360
bottom left photo or I reckon
that might be the pit that

795
00:41:59,360 --> 00:42:02,360
they're going to mine.
So you can see how much freaking

796
00:42:02,520 --> 00:42:05,640
rain they had.
So they've got to pump that out.

797
00:42:05,640 --> 00:42:08,240
There's this is probably the one
place on earth that doesn't need

798
00:42:08,240 --> 00:42:11,080
Gerald James at the moment to
find water because they've got a

799
00:42:11,080 --> 00:42:15,160
shit load to deal with it.
Like there's no shortage of

800
00:42:15,160 --> 00:42:19,720
water this quarter.
That's why they once it dries

801
00:42:19,720 --> 00:42:21,960
out and they start relying on
near water again.

802
00:42:21,960 --> 00:42:26,400
Maybe Jarrow James and the WA
water boards if people don't

803
00:42:26,400 --> 00:42:31,160
know the best mud Rotary
drillers in the world maybe

804
00:42:31,440 --> 00:42:32,920
might be a bit useful over
there.

805
00:42:32,920 --> 00:42:34,680
Take the reliance off near
water.

806
00:42:34,960 --> 00:42:38,320
That will The best thing the
Aussie mining companies could do

807
00:42:38,320 --> 00:42:43,400
right now is get Gerald James
working for them so he's not

808
00:42:43,400 --> 00:42:46,120
forced to go to Namibia because
once he's over there it's a big

809
00:42:46,120 --> 00:42:48,280
flight back to.
Get the beer back big flight

810
00:42:48,280 --> 00:42:51,520
back and in the they need buddy
did desal plant there mate James

811
00:42:51,520 --> 00:42:54,120
James helps you avoid the need
for desalinated water because he

812
00:42:54,440 --> 00:42:55,480
he.
Finds you fresh water.

813
00:42:55,480 --> 00:42:57,280
He finds the fresh stuff.
Yeah, it didn't.

814
00:42:57,280 --> 00:42:58,360
You didn't even know it was
there.

815
00:42:58,440 --> 00:43:00,960
He found it.
He's got revolutionary

816
00:43:00,960 --> 00:43:03,920
proprietary salt detection
technology on his mud Rotary

817
00:43:03,920 --> 00:43:06,200
equipment.
So you just not drill another

818
00:43:06,200 --> 00:43:09,040
one to sailon so.
You don't want the water?

819
00:43:09,040 --> 00:43:11,960
He'll get rid of it as well.
Yeah, I once asked him for the

820
00:43:11,960 --> 00:43:15,840
tricks of the trade and he said,
can't tell you, but you, you

821
00:43:15,840 --> 00:43:16,880
learned it growing up in
Geraldton.

822
00:43:16,880 --> 00:43:19,440
That's what they teach you in
Geraldton.

823
00:43:19,480 --> 00:43:23,440
It is how to find water.
All about water considered WA

824
00:43:23,520 --> 00:43:28,120
water boars, water hedging.
Like yeah, just thanks Jared

825
00:43:28,120 --> 00:43:29,440
James.
It's good to have him.

826
00:43:29,600 --> 00:43:31,560
Been great to have him back for
a couple of months.

827
00:43:31,560 --> 00:43:33,640
The bloody legend called.
WA water boars.

828
00:43:33,640 --> 00:43:35,040
Right.
What do we got?

829
00:43:35,680 --> 00:43:40,640
So Trav, you're this is a bit of
a bipartisan.

830
00:43:40,640 --> 00:43:43,960
Segment is it?
Yeah, yeah, yeah.

831
00:43:44,640 --> 00:43:50,120
How was breakfast?
I, I yeah, I'll get to that.

832
00:43:51,960 --> 00:43:56,720
I noticed that you tried to
force this on to JD and when

833
00:43:56,720 --> 00:44:00,960
you're out of the room he like
respective respectfully declined

834
00:44:00,960 --> 00:44:02,760
it to Ali.
Yeah, like, yeah, he.

835
00:44:03,240 --> 00:44:06,640
Didn't do it in front of you.
Yeah, yeah, I.

836
00:44:07,120 --> 00:44:08,440
Don't think I went out of my way
to.

837
00:44:10,480 --> 00:44:13,160
It was it was cool, it was cool,
it was cool to go that that's

838
00:44:13,160 --> 00:44:15,120
for sure.
So, you know, I'm appreciative

839
00:44:15,120 --> 00:44:16,480
of that.
But the the yeah, not sure if

840
00:44:16,920 --> 00:44:20,000
you guys call this policy news
surfaced last night.

841
00:44:20,000 --> 00:44:22,560
Grab some headlines again this
morning moved a few stocks in

842
00:44:22,560 --> 00:44:25,360
its process.
But the the Australian election

843
00:44:25,360 --> 00:44:29,200
literally just a week away.
And so the you know, the policy

844
00:44:29,200 --> 00:44:34,640
announcements from the Albanese
and Dutton kind of yeah, and

845
00:44:35,120 --> 00:44:36,880
keep rolling in.
And last I checked, the

846
00:44:37,240 --> 00:44:40,360
incumbent Prime Minister Anthony
Albanese is the heavy favorite.

847
00:44:40,360 --> 00:44:45,560
Polymarket odds are 83% for a
return of a Labour government

848
00:44:45,560 --> 00:44:48,320
that has implications on on our
industry that we care about and

849
00:44:48,320 --> 00:44:49,520
the miners that operate within
it.

850
00:44:50,200 --> 00:44:53,280
And it and to this policy
announcement matters because it

851
00:44:53,280 --> 00:44:56,000
came from the Labour government,
which means it's likely to

852
00:44:56,000 --> 00:44:58,360
become an actual policy based on
the current betting odds.

853
00:44:58,800 --> 00:45:02,340
The the announcement I'm
referring to is that under a re

854
00:45:02,340 --> 00:45:05,800
elected government, Australia
will create a critical minerals

855
00:45:05,800 --> 00:45:08,360
strategic reserve.
What does that mean?

856
00:45:09,080 --> 00:45:11,280
It means they're going to
increase the existing critical

857
00:45:11,280 --> 00:45:13,680
minerals facility by another $1
billion.

858
00:45:14,000 --> 00:45:17,680
They're going to spend initially
$250 million literally building

859
00:45:17,680 --> 00:45:20,680
a stockpile of of critical
minerals, not sure which ones.

860
00:45:21,440 --> 00:45:24,360
Here's here's where things get
even more spicy.

861
00:45:24,760 --> 00:45:27,480
Through national off take
agreements, the government will

862
00:45:27,480 --> 00:45:30,560
acquire agreed volumes of the
minerals from commercial

863
00:45:30,560 --> 00:45:34,040
projects and there's also going
to be selective stockpiling

864
00:45:34,280 --> 00:45:37,000
process involving specific
critical minerals deemed

865
00:45:37,000 --> 00:45:39,960
necessary for national security.
As you might imagine, I have

866
00:45:40,320 --> 00:45:42,960
other few thoughts about all of
this and big thank you to the

867
00:45:43,080 --> 00:45:46,320
the AMEC team who who invited me
to sit on their table at a

868
00:45:46,320 --> 00:45:49,520
breakfast this morning, which
was put on big song and dance

869
00:45:49,520 --> 00:45:52,120
put on by the West Australian
under this thing called

870
00:45:52,120 --> 00:45:54,960
leadership matters things.
And anyways.

871
00:45:54,960 --> 00:45:56,760
It's a bit of a right newspaper,
isn't it?

872
00:45:56,760 --> 00:46:00,600
Which is.
They are a newspaper, yeah.

873
00:46:00,680 --> 00:46:02,920
But they're a right winged 1.
The West.

874
00:46:02,920 --> 00:46:04,760
They're a bit, they're a bit
centre right, aren't they?

875
00:46:04,760 --> 00:46:06,200
They're not.
Or are they more left?

876
00:46:06,200 --> 00:46:08,480
This, this isn't supposed to be
like a partisan event.

877
00:46:08,480 --> 00:46:11,120
It's just the fact that it's
like, you know, they they did

878
00:46:11,400 --> 00:46:14,000
one a month ago and they, they
somehow got Twiggy to speak at

879
00:46:14,000 --> 00:46:15,320
it.
And, and you would have noticed

880
00:46:15,320 --> 00:46:18,160
because Twiggy spoke at it.
The West kind of toned back the

881
00:46:18,160 --> 00:46:21,840
anti Twiggy hydrogen stuff that
sorry rocked up.

882
00:46:21,840 --> 00:46:24,560
Yeah, so there's you know,
that's just the the way that the

883
00:46:24,560 --> 00:46:27,680
media works here with Carrie
Stokes, his influence in it all.

884
00:46:27,800 --> 00:46:32,760
And anyway, so so there's this
big event put on it's breakfast.

885
00:46:32,960 --> 00:46:37,120
Thanks to yeah, like the, you
know, Warren Neil Ryan at AMEC

886
00:46:37,120 --> 00:46:40,440
who let me sit on the table at
the brekkie elbow goes up and he

887
00:46:40,560 --> 00:46:43,760
he talks about his black policy
settings to this, you know, room

888
00:46:43,760 --> 00:46:47,600
full of of people at the Crown
Ballroom all having breakfast.

889
00:46:47,600 --> 00:46:50,280
And and yeah, you made it
because I'm a dance, especially

890
00:46:50,280 --> 00:46:52,120
about this policy.
But before I share my thoughts

891
00:46:52,120 --> 00:46:55,120
about it, I thought I'd get your
your initial views.

892
00:46:55,200 --> 00:46:57,440
Well, yeah, I'd love to.
You're obviously way more in the

893
00:46:57,440 --> 00:47:01,600
weeds than me on this.
I'm just thinking, OK, what

894
00:47:02,800 --> 00:47:05,720
don't you usually have a
critical minerals reserve for if

895
00:47:05,720 --> 00:47:09,080
you've got a big downstream
component in the country to feed

896
00:47:09,080 --> 00:47:12,240
it into, which we don't.
What the fuck's it for?

897
00:47:13,920 --> 00:47:17,640
Yeah, but got similar kind of
concerns, like it makes sense if

898
00:47:17,640 --> 00:47:20,880
it's oil that you need for your
country so you shelter yourself

899
00:47:20,880 --> 00:47:24,960
from from shocks.
But initial concerns are just

900
00:47:25,240 --> 00:47:27,960
fear that government starts
picking winners.

901
00:47:27,960 --> 00:47:30,120
But you know, I think we've also
got to understand that the the

902
00:47:30,120 --> 00:47:33,480
world is moving to a more
geopolitically fragile sort of

903
00:47:33,480 --> 00:47:37,960
space and it makes sense to sort
of protect, protect ourselves

904
00:47:37,960 --> 00:47:42,120
and look out for our interests
and partners that align with us.

905
00:47:42,120 --> 00:47:46,600
But I I tend to be filled with
concern about the the decisions

906
00:47:46,600 --> 00:47:48,560
that made on how we actually get
there.

907
00:47:49,480 --> 00:47:51,960
Big time.
If you have a quick, quick scan

908
00:47:51,960 --> 00:47:54,560
of the the share price movements
of the local rare earth stocks

909
00:47:54,560 --> 00:47:58,400
that I look is up 5% today line
is up 1% are fewer surprisingly

910
00:47:58,400 --> 00:48:02,280
flat Northern Minerals up 13%.
But it gives you a rough idea of

911
00:48:02,400 --> 00:48:05,720
of you know what the market
thinks today will be the big

912
00:48:05,720 --> 00:48:07,200
beneficiaries of this policy,
right?

913
00:48:07,400 --> 00:48:10,520
I look to me is the elephant in
the room because remember there

914
00:48:10,560 --> 00:48:15,120
any Abbott refinery is by miles
the dominant use of any funds

915
00:48:15,120 --> 00:48:17,040
from Australias critical
minerals facility.

916
00:48:17,040 --> 00:48:20,480
Already that critical minerals
facility was created recently

917
00:48:20,480 --> 00:48:25,120
only in 2021 and it was created
with with with $2 billion to to

918
00:48:25,120 --> 00:48:29,000
to allocate any other got
announced and that that alone

919
00:48:29,000 --> 00:48:31,640
accounted for 1.25 billion of
the two of the 2 billion

920
00:48:31,640 --> 00:48:34,680
committed just for Iluka.
Never fear though, the Albanese

921
00:48:34,680 --> 00:48:39,400
government doubled its size to 4
billion in 2023 and now it's set

922
00:48:39,400 --> 00:48:41,400
to reach 5 billion after the
election.

923
00:48:41,400 --> 00:48:44,640
Clearly all all the while Iluka
has been very transparent about

924
00:48:44,640 --> 00:48:46,960
the fact they need even more
money from the government to

925
00:48:46,960 --> 00:48:49,440
push ahead with any other.
What was initially supposed to

926
00:48:49,440 --> 00:48:53,000
cost 1.2 billion has already
risen to 1.8 billion by Iluka's

927
00:48:53,000 --> 00:48:56,880
latest admission, and the
government increased their non

928
00:48:56,880 --> 00:49:00,320
recourse loan to 1.7 billion.
So we're, you know, we're, we're

929
00:49:00,320 --> 00:49:00,960
good for it.
Don't worry.

930
00:49:01,640 --> 00:49:04,920
Just just for a moment, though,
let's disregard the you know,

931
00:49:05,160 --> 00:49:07,400
I've talked about my concerns on
the very optimistic ramp up

932
00:49:07,400 --> 00:49:10,120
assumptions underpinning a
phenomenally complex operation

933
00:49:10,120 --> 00:49:12,080
there, but we'll put that to the
side for a moment.

934
00:49:12,400 --> 00:49:16,200
There's there's a commercial
flaw in in this entire refinery

935
00:49:16,200 --> 00:49:18,960
proposition, right?
Who is going to buy the product?

936
00:49:19,600 --> 00:49:21,400
Who's going to buy the product?
You're producing something,

937
00:49:21,680 --> 00:49:25,160
who's going to buy it?
And Japan doesn't need any more

938
00:49:25,160 --> 00:49:26,800
like they, they, they get their
feel.

939
00:49:26,880 --> 00:49:31,280
China is the only buyer.
Any, any ABBA needs Chinese

940
00:49:31,280 --> 00:49:33,320
buyers of their product because
they're the only buyer.

941
00:49:34,280 --> 00:49:38,080
No, no buyer exists, right?
So, so if you're building this

942
00:49:38,080 --> 00:49:40,160
for your supply chain
independence, yada, yada, yada.

943
00:49:41,040 --> 00:49:43,160
One of the conditions of the
Australian government money is

944
00:49:43,160 --> 00:49:46,120
that it's, it's got to be to,
you know, he's like, you know,

945
00:49:47,160 --> 00:49:49,360
certified buyers or friendly
buyers, especially he's not, not

946
00:49:49,360 --> 00:49:51,960
Chinese buyers, right?
But they're the only buyer.

947
00:49:52,120 --> 00:49:54,040
And so if you've got this big
commercial roadblock, if you're

948
00:49:54,040 --> 00:49:55,480
going to build a thing to
produce something that there is

949
00:49:55,480 --> 00:49:59,680
no buyer for in your version of
the world, well, guess, guess

950
00:49:59,680 --> 00:50:01,000
what?
That's where the government

951
00:50:01,000 --> 00:50:03,480
comes in, because they're going
to solve the problem by buying

952
00:50:03,480 --> 00:50:05,720
the product themselves.
That's what the offtake is, the

953
00:50:05,720 --> 00:50:08,960
government commitment to buy the
product out of all the volume at

954
00:50:08,960 --> 00:50:12,200
a specific price.
What do you say?

955
00:50:12,200 --> 00:50:16,360
You mentioned the other day that
what America won't even be able

956
00:50:16,360 --> 00:50:20,320
to buy all of mountain passes.
What they they can do more

957
00:50:20,320 --> 00:50:23,080
mountain even mountain pass has
got leftover rare earths.

958
00:50:23,400 --> 00:50:25,000
That's not like it's going to go
over there.

959
00:50:25,040 --> 00:50:26,160
Well, that's what they're
banking on.

960
00:50:26,160 --> 00:50:29,520
They're banking on this being
the bargaining chip as Trump

961
00:50:29,560 --> 00:50:32,600
induces downstream demand in
America.

962
00:50:33,280 --> 00:50:35,400
But doesn't green light minds
that we're going to be the ones

963
00:50:35,400 --> 00:50:39,200
that can facilitate and send our
product there so that they can

964
00:50:39,200 --> 00:50:44,120
build their magnets.
But it's not, you're not setting

965
00:50:44,120 --> 00:50:47,800
up the incentives in the most
straightforward way.

966
00:50:47,800 --> 00:50:51,200
You're you're trying to get to
the outcome kind of first, you

967
00:50:51,200 --> 00:50:53,480
know, and encourage these guys
to build.

968
00:50:54,280 --> 00:50:56,200
You're hoping that they do the
same over that end.

969
00:50:56,200 --> 00:50:59,400
But there's a lot of pieces that
need to fall into place for this

970
00:50:59,400 --> 00:51:03,880
to work successfully.
But this is part of the tariff

971
00:51:03,880 --> 00:51:06,000
war.
If if you yeah.

972
00:51:06,000 --> 00:51:10,840
And like, sure, if you have if
all of a sudden you have your

973
00:51:10,840 --> 00:51:14,840
own, your own supply, you don't
need China for XYZ, then that

974
00:51:14,840 --> 00:51:17,080
gives you more leverage in
negotiating the bigger picture

975
00:51:17,080 --> 00:51:20,160
trade stuff.
But in terms of like the actual

976
00:51:20,160 --> 00:51:22,880
allocation of funds here, like
you need me, like you need me

977
00:51:23,080 --> 00:51:25,360
spell, spell it out.
The government is funding the

978
00:51:25,360 --> 00:51:27,040
development of this.
So it's the government's money

979
00:51:27,040 --> 00:51:28,800
that's going to build this
refinery, right.

980
00:51:29,120 --> 00:51:32,120
And as the cost keep blowing
out, we now have precedent that

981
00:51:32,120 --> 00:51:35,120
the government will keep writing
the check for the cost blowouts

982
00:51:35,120 --> 00:51:38,120
as they have happened so far and
in my opinion will continue to

983
00:51:38,120 --> 00:51:41,240
happen.
And when they produce something

984
00:51:41,280 --> 00:51:46,080
that there is no buyer for,
which will happen, the

985
00:51:46,080 --> 00:51:47,680
government will be the one to
buy it.

986
00:51:47,800 --> 00:51:50,600
They're going to buy the mixed
rare earth oxides that come out

987
00:51:50,600 --> 00:51:53,320
of any other.
If they come out of any other,

988
00:51:53,320 --> 00:51:56,320
there is no productive use of
any of that money.

989
00:51:56,320 --> 00:51:58,920
There is no product that
consumers or industry are buying

990
00:51:58,920 --> 00:52:02,800
to manufacture something.
That is the government's lending

991
00:52:02,800 --> 00:52:04,520
them, like providing the money
to build the thing, to produce

992
00:52:04,520 --> 00:52:06,200
the thing, and they're going to
buy the product for that.

993
00:52:06,200 --> 00:52:07,720
It's not going to get used for
anything.

994
00:52:07,720 --> 00:52:10,120
It may be 10 years time they'll
sell it to America.

995
00:52:11,360 --> 00:52:13,920
Who knows, Like I, I can't be
cynical.

996
00:52:14,720 --> 00:52:18,120
Yeah, it's, it's a, it's a
public sector circular reference

997
00:52:18,120 --> 00:52:19,840
dressed up as kind of
probusiness policy.

998
00:52:19,840 --> 00:52:23,240
And it, it, I find it, yeah,
incredibly disappointing that

999
00:52:23,320 --> 00:52:28,000
this is the, the level of, of,
of policy kind of ingenuity that

1000
00:52:28,000 --> 00:52:29,480
we've got in our, in our
country.

1001
00:52:30,520 --> 00:52:33,120
It's a headline grabber, right?
That's that's all it's designed

1002
00:52:33,120 --> 00:52:35,320
for.
As you know, I think you

1003
00:52:35,320 --> 00:52:38,720
mentioned before JD Lot, why
aren't they leading into our

1004
00:52:38,720 --> 00:52:44,520
strengths of mining dirt and
shipping it?

1005
00:52:45,440 --> 00:52:48,440
That is what we do best in
Australia.

1006
00:52:48,440 --> 00:52:50,520
Perhaps This is why we don't
like talking about politics so

1007
00:52:50,520 --> 00:52:52,920
much.
It's, it can be, it can be a bit

1008
00:52:52,920 --> 00:52:55,040
frustrating, right?
Especially the week before an

1009
00:52:55,040 --> 00:52:58,560
election when you're trying to,
when you're trying to take the

1010
00:52:59,240 --> 00:53:01,440
take the initiative and grab the
headlines for your party.

1011
00:53:01,760 --> 00:53:05,680
Ends up, you know, kind of being
being a bit frustrating to talk

1012
00:53:05,680 --> 00:53:06,800
about.
Because I think some of the

1013
00:53:06,800 --> 00:53:09,520
policies are short sided.
Some of them are sort of baked

1014
00:53:09,520 --> 00:53:14,120
up with not a whole lot of
thought out structure on what

1015
00:53:14,120 --> 00:53:15,880
this actually means and what
this is going to mean for the

1016
00:53:15,880 --> 00:53:17,880
for the companies and and the
market and the country.

1017
00:53:18,320 --> 00:53:20,120
That's cool.
Oh, very well timed this

1018
00:53:20,120 --> 00:53:24,200
announcement, the WA launch.
Yeah, it's all a big lobby for

1019
00:53:24,200 --> 00:53:27,320
the WA vote.
Yeah, it's just a typical

1020
00:53:27,320 --> 00:53:29,880
election trail kind of thing.
And I think there's like there's

1021
00:53:29,880 --> 00:53:32,400
legitimate, there's a lot of low
hanging fruit policy stuff that

1022
00:53:32,400 --> 00:53:35,360
could be had that benefit, you
know, the the industry in a very

1023
00:53:35,360 --> 00:53:37,440
meaningful way.
Things, things like permitting

1024
00:53:37,440 --> 00:53:41,120
timelines, things like yeah,
like like removing a bunch of

1025
00:53:41,120 --> 00:53:43,280
the the red tape involved in
yeah.

1026
00:53:43,480 --> 00:53:45,280
The common building
infrastructure.

1027
00:53:45,440 --> 00:53:48,040
Things to encourage investment
that actually, you know,

1028
00:53:48,720 --> 00:53:52,240
provide, you know, provide ways
for protected, you know,

1029
00:53:52,280 --> 00:53:54,840
external capital to, to build
and invest and all that sort of

1030
00:53:54,840 --> 00:53:56,160
stuff.
There's real low hanging fruit

1031
00:53:56,160 --> 00:54:00,000
that makes a world of difference
to to, you know, the equations

1032
00:54:00,000 --> 00:54:02,400
for a lot of mining companies
and investors out there.

1033
00:54:02,400 --> 00:54:06,800
But this, this is just a a,
yeah, an eye roller in my

1034
00:54:06,800 --> 00:54:08,360
opinion.
Was there anything in the

1035
00:54:08,360 --> 00:54:13,400
breakfast about streamline
permitting and project

1036
00:54:13,400 --> 00:54:15,640
development in Australia?
No, that and that's the like,

1037
00:54:15,640 --> 00:54:18,960
yeah, if if the money miners are
are interested in knowing more

1038
00:54:18,960 --> 00:54:23,800
about that, then let us know
because yeah, there's there's,

1039
00:54:23,920 --> 00:54:26,640
there's a bit to be said about
all of all of the the dismal

1040
00:54:26,640 --> 00:54:29,800
state of of of over regulation
of our industry.

1041
00:54:30,480 --> 00:54:35,800
There's, there's a like if, if
permitting or or native title or

1042
00:54:35,840 --> 00:54:38,440
or heritage or whatever, all of
these things all combined, if

1043
00:54:38,440 --> 00:54:42,160
they all of a sudden increase
your timelines by by three years

1044
00:54:42,160 --> 00:54:45,960
to four years, what does that do
to the IRR of any project?

1045
00:54:46,280 --> 00:54:50,600
Nothing is financeable, right?
Like it, it, it squashes capital

1046
00:54:50,600 --> 00:54:54,320
investment and the ability like
you don't get capital, then you

1047
00:54:54,320 --> 00:54:56,280
don't have an industry.
Like if new capital's not

1048
00:54:56,280 --> 00:54:59,280
willing to write a check because
the timelines are not sufficient

1049
00:54:59,280 --> 00:55:01,800
to get a reasonable return on
the risk, the risk you're

1050
00:55:01,800 --> 00:55:05,040
taking, like it just kills,
kills investment or capital.

1051
00:55:05,040 --> 00:55:07,480
The industry suffers massively.
I think there's a big issue

1052
00:55:07,480 --> 00:55:09,600
there and a lot of deregulation
that could be had.

1053
00:55:09,600 --> 00:55:12,880
But but the big trend on both
sides of of government is to to

1054
00:55:12,880 --> 00:55:14,800
add more regulation to our
industry, not less.

1055
00:55:16,440 --> 00:55:20,040
Yeah, I, I don't think any of us
will will stop being on the side

1056
00:55:20,040 --> 00:55:23,560
of this debate that we are that
we're on and, and thinking and

1057
00:55:23,560 --> 00:55:25,080
and doing what we think is kind
of right.

1058
00:55:25,080 --> 00:55:27,800
But I, I often think back to
sort of comments I heard from

1059
00:55:28,120 --> 00:55:32,760
from the late Ken Talbot and he
sort of left Australia for an

1060
00:55:32,760 --> 00:55:35,680
investment perspective 20 years
ago because it's just getting

1061
00:55:35,680 --> 00:55:38,840
too hard.
And that is the way that Western

1062
00:55:38,840 --> 00:55:41,760
country is moving.
And I think there was a bit of a

1063
00:55:41,760 --> 00:55:45,280
bit of realism in his decision
making there that's worth kind

1064
00:55:45,280 --> 00:55:47,960
of pondering on.
Not that that should stop us

1065
00:55:47,960 --> 00:55:50,760
from sort of sticking up in what
we think is right and that sort

1066
00:55:50,760 --> 00:55:55,880
of responsible mine development.
The the one of the electoral

1067
00:55:56,120 --> 00:55:58,560
announcement, the election
announcements that I did here

1068
00:55:58,560 --> 00:56:01,800
last night, that was whoever the
Prime Minister is going to be

1069
00:56:02,360 --> 00:56:06,240
will be attending the JRX
conference that was announced

1070
00:56:06,240 --> 00:56:07,440
last night.
There you go mate.

1071
00:56:07,440 --> 00:56:09,640
Twenty 22nd of May, the election
will be done.

1072
00:56:09,640 --> 00:56:12,680
Whoever gets elected will be at
JRX in Brisbane.

1073
00:56:12,680 --> 00:56:15,240
So I come go say good day to the
Prime Minister with me.

1074
00:56:15,560 --> 00:56:18,560
If meeting you wasn't incentive
enough, then that surely tips

1075
00:56:18,560 --> 00:56:21,080
him over the line.
Jeez, but that could be another

1076
00:56:21,080 --> 00:56:24,160
signed T-shirt.
Me and the Prime Minister.

1077
00:56:24,160 --> 00:56:28,080
We've already got me and Gov.
So get your ticket, choose the

1078
00:56:28,080 --> 00:56:31,080
discount code in the show notes.
JRX, the centre of tech and

1079
00:56:31,520 --> 00:56:33,640
innovation and the prime
minister's going to be there.

1080
00:56:34,280 --> 00:56:37,240
We've also got our partners
Mineral Mining Services, great

1081
00:56:37,240 --> 00:56:40,440
partners by the way, Grounded
CNB Ground Sports, CRE

1082
00:56:40,440 --> 00:56:44,840
Insurance, K Drill, WA Water
Boards, Quattro, Quattro sorry

1083
00:56:45,320 --> 00:56:49,040
KCI, Black Diamond Drilling
Services and Cross Boundary

1084
00:56:49,040 --> 00:56:53,240
Energy.
Information contained in this

1085
00:56:53,240 --> 00:56:56,000
episode of Money of Mine is of
general nature only and does not

1086
00:56:56,000 --> 00:56:58,640
take into account the
objectives, financial situation

1087
00:56:58,680 --> 00:57:00,680
or needs of any particular
person.

1088
00:57:01,000 --> 00:57:04,040
Before making any investment
decision, you should consult

1089
00:57:04,040 --> 00:57:07,080
with your financial advisor and
consider how appropriate the

1090
00:57:07,080 --> 00:57:10,800
advice is to your objectives,
financial situation and needs.