Will M&A spark life into lithium?

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So I'm, I'm just very curious to
see AI mean like this is, it's

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just a leak at this stage.
There's no binding deal on the

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table, although the rumour is DD
is underway.

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But if, if it actually
translates to an agreed deal,

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super interested to see if
there's, you know, more of this

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and like, is this a way that I
can recycle some, some capital

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and and endure?
Righto buddy miners, we're

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giving bloody.
We'll give gold a rest today.

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We'll get it's bit of lithium.
The Indians want in on lithium.

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We've got bloody, we've got
Lavato the OHH, the small cap

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that's now in the All Ords and
we've also got a bit of

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Adriatic.
A corporate update and you want

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a corporate update at
underground operators next week

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from the Samvic team, their
bloody tent and hopefully Derek

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Herb will be there talking
everything Samvic ground sport.

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Tell me about the.
Ground sport.

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I cannot wait to just stand in
front of that booth whether they

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want me there or not.
I can't wait.

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I can't wait for that.
I can't wait to to just hear

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about the innovation that
they've got underway.

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There's gotta be selfies coming
everywhere mate.

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I wanna, I wanna see their new
dynamic Bolt.

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I'm sure that's gonna be
showcased at the conference.

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Bloody just an old school split
set I can walk around with

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fending off fans with don't.
Forget the chemical innovation,

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Oh mate, there's a whole bunch
of different products coming out

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that aren't even bolts.
Well, you won't even.

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They've probably got resin
there, but you won't even know

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'cause you can't.
Smell it?

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Amazing, but.
I'm jealous you get to see the

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€1 billion man mate, enjoy it.
And the free set and the free

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ground support division that
come with him, right?

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Let's take it away.
The Indian groups that won in on

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lithium and notably Australian
lithium.

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This is yeah, this is the story
broken in Reuters a few days

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ago.
And, and their Intel or insight

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was that a consortium of four
Indian state firms they're

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looking to collectively acquire
20% stake in SQM Australia's

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lithium assets being a 30% stake
in Andover and a 50% stake in in

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Mount Holland.
The, the article kind of goes on

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to say that, you know, due
diligence is on and the

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companies have expressed their
interest with an initial offer.

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And the, and the number that's
quoted here is 600 million U.S.

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dollars, right?
This is interesting for a bunch

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of reasons, but the the thing I
wanted to focus on to for our

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discussion today is actually
just valuation.

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Because if there's a decent see
through, you know, value on the

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table here, that has some some
pretty big flow on effects for,

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for not just, you know, SQM, but
other other WA lithium Hard Rock

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players at the moment too.
Yeah.

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And considering what was paid
for Andover, what the bid was

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for Kathleen Valley back in the
day and 600 million to wrap up

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all those stakes, I'd like to
see what you come up with here.

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Yeah.
So, so this is, it's, it's look

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US 600 million is, is roughly
950 million Australian dollars.

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So that would, that would imply
evaluation if you, if you

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multiply that by 5, because if
they only want a 20% stakes,

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that would imply a, a valuation
of 4.75 billion Australian

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dollars for SQMS kind of you
know, entire lithium Australia

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business of those those two
assets.

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So I am keen to kind of
contextualise this here because

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just think about 18 months ago
Azua was gobbled up by Gina and

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SQM together for, for what was
you know, a fully diluted equity

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value of of 1.62 billion
Australian dollars.

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That that implied that SQ Ms.
share of of Andover would be

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worth 810 million / 2 right.
And 20% of SQM share, which is

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what the Indians would would
effectively be be be buying as

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part of it would be worth 1/5 of
that or 162 million Australian

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dollars.
And that that's for 60% of the

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project because crazy's got
still got the 40.

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Correct.
So that's, that's effective.

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That's that, that number that
I've deduced there is SQM, but

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they're going to have 30%.
But but you know, 1/5 of that is

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what the the Indians effectively
be buying.

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So I'm trying to, I'm trying to
contextualise that 162 and then

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trying to figure out, OK, so
what's, what's the, what's the

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Mount Holland value here?
And really frustratingly

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analysts that cover SQM, they
don't value it's mining assets

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on a sum of the parts basis.
They don't do DCFS on it.

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They group the lithium segment
and they apply this like

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chemicals multiple on, on
EBITDA, which is really

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frustrating.
So you know, I just wanted to

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see what the Street was valuing
Mount Holland at.

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And of course you just get
clueless when you're looking at

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the analyst coverage.
So I went to Wesfarmers and same

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thing.
Good luck finding a single NAV

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estimate of of Mount Holland by
reading Wesley's analyst

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coverage.
It's a big conglomerate.

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It's doesn't doesn't quite cut
the mustard with Bunnings, does

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it?
No, the closest you'll find like

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you can, you can see JP Morgan
estimating ramp up of Mount

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Holland to take 12 months longer
than the the planned 18 month

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management target on and on
their numbers.

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Mount Holland isn't even
positive until FY20 7.

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Flash up a chart here.
So I'll look through Wesley's

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annual reports.
And I was just trying to see how

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much money like they and, and
SQM have have sunk into, into,

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you know, building, building the
mine.

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And by reading a bunch of the
statements and, and everything

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like in the last few statements
specifically, they've, they've

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constantly brought up a
potential impairment on Mount

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Holland.
If, if their assumptions on the,

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on the lithium market aren't
accurate, but they, they get to

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actually impair it.
But yeah, I kept kind of

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trolling through and, and trying
to pick up a bit of a, a

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ballpark number of what at least
the carrying value of, of, of

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Mount Holland is.
And so Wesley, they paid 760

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776,000,000 for their 50% of
that project when they acquired

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Kidman in 2019.
And since then they've sunk

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ballpark 1.5 billion Australian
into into building their share

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of the mine and the refinery.
So Shum shum SQ Ms. 50% has kind

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of a you know, the same, the
same carrying value that'll be

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yeah, two 2.3 billion all up in
Australian dollars.

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Hence if you want to get 20% of
that, which is which is the

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reason what the Indians would be
acquiring here, 20% of 2.3

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million is 450 million
Australian dollars.

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So All in all, 450 million for
for you know, for the for the

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Mount Mount Holland minority
interest and plus 160 million

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for the for the Andover minority
interest equals 610 million

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Australian dollars.
That's that's kind of rough math

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kind of carrying value of those
two assets as as I interpret it.

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And remember the, the Reuters
rumour said 600 million US or

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950 million Australians.
So on my, on my in a very rough

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Bush math, this Indian offer, if
the number's right, would be a

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pretty, a pretty attractive
premium to the sunk capital or

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the carrying value of these
assets.

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And, and remember, like the end
over deal was done during

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Lithuania.
Like no way would that same deal

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get, get, you know, go through
for the same price that it, that

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it did, you know, 18 months ago
like it did.

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And Kathleen Valley, like,
sorry, not Kathleen Valley,

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Mount Holland, Yeah, I mean,
it's not profitable at the

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moment.
So you kind of this, this, this

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offer from the Indians, if the
value is right, yada, yada, then

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it's a pretty, it's a pretty
healthy kind of, it's a pretty

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healthy deal on the table.
You know, of course the, the,

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the the Indian consortium,
they're going to want the

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product and marketing rights
that comes with their respective

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ownership percentage.
But yeah.

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And the other thing about the
Reuters, the Reuters article, it

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makes no, no mention of Kwinana.
And so I don't know if the the

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interest kind of covers that any
respective share of you know,

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Covalence hydroxide facility
which is, which is being built

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in Commission there.
But if, if the value is true,

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like it's just a, it's a massive
kind of vote of confidence in

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the value of FWA Hard Rock
assets, which are are really in

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the doldrum right now.
Yeah, absolutely.

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It's it's huge.
I mean, just to go on from what

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you said there, I, I would
assume given the way the article

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was written and stuff, and it's
pretty, it's pretty early days

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and everything.
But the way it's kind of sounds

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is that they're after that stake
in Covalent, which is the same

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entity that owns the Mount
Holland stake and the refinery

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as well.
And given everything that's

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happened since those
transactions and you know, the,

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the way you're talking about it
being a carrying value, you

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know, you're not really taking
into account that everyone else

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that has tried to go downstream
hasn't had too much success in

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WA.
So those numbers and like you

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said, super early days are a lot
higher than I would have

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suspected.
Totally think about, think

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about, think about min res right
now, like if they could, if they

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could sell down a 20% stake of
their, if their, you know, W

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Australian lithium Hard Rock
business to, to an Indian group

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for, you know, when, when these
are the kind of numbers on the

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table, That's that that'd,
that'd be a huge, a huge win for

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them.
If if the equivalent kind of

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deal's on the table.
It doesn't.

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The Reuters league doesn't say
it's on the table.

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But heck, if I was at Monrez,
I'd be doing everything I could

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to try and to try.
Fine, yeah, to try and try and

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get an equivalent deal on the
table for for me.

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Even even a 50% premium on all
their minority interests

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collectively, I'd reckon they'd
take that.

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Yeah, totally.
It's, it's, it's a yeah.

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And we, we, we kind of saw, see
similar stuff whenever there's

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these minority sell downs of
the, of the, the big kind of

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copper assets.
There's, there's an entity,

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strategic entities who have a
strategic interest and they've

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got a much different kind of
cost of capital.

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And, and are willing to have to,
to, to buy a, a minority

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interest for a much higher
implied valuation than the

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market is giving that company
kind of credit for at that point

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in time, which, yeah, can really
assist any, any cash flow

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dynamics that the companies
might be, might be having.

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So I'm, I'm just very curious to
say I, I mean, like this is,

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it's just a leak at this stage.
There's no binding deal on the

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table, although the rumour is
DDS underway, But if, if it

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actually translates to an agreed
deal.

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Super interested to see if
there's, you know, more of this

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And, and also if, if, yeah, if,
if, if any of the, the lithium

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producers out there who are
either having kind of cash flow

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challenges or a forecast to have
cash flow challenges like is

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this a way that they can recycle
some, some capital and, and

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endure, endure the storm?
I think, and if you go back to

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that and I've saw a lot the
so-called lithomania, it was

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majority of that was driven by,
you know, M and a hype

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speculation, yeah, not
speculation, but like M and a

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activity like the underlying
lithium process dropped a shit

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load from the highs.
But it was all just everyone

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trying to the the rush to get
ground something like this,

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which could you know,
potentially create a bit of

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momentum in that is like you're
just saying what happened in

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lithium previously purely
dictated by M&A, not the actual

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price.
So whether this might get the

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ball rolling again for that
price, irrelevant.

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We're about to find out.
But they might be all licking

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their lips a bit.
The old lift pools.

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What are they called the the?
Bag lift bag holders, you'd say?

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Just to add to the the broader
point, I think action we've seen

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from Indian groups around the
world is really interesting and

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that's a trend that I think
continues.

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Australia's not the first spot
they've looked.

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They've tried to tie up deals in
Argentina, in Chile as well.

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Even in Africa, in the DRC in
particular, they're trying to do

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more deals.
India is a like a huge component

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of a lot of analysts growth, you
know, global GDP growth and

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these sorts of things over the
longer term.

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So to see them start to kind of
mimic what what China did 20

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plus years ago is an interesting
kind of different take on on

221
00:11:43,560 --> 00:11:46,320
what they're doing here.
What do you?

222
00:11:46,320 --> 00:11:49,400
What is, what's your prediction
do you think?

223
00:11:49,760 --> 00:11:52,640
I just watched it, reckon it's
going to come through or what is

224
00:11:52,640 --> 00:11:55,280
it going to be a get the ball?
Is it going to start a bit of

225
00:11:55,280 --> 00:12:00,200
momentum or it's it's probably
the first thing of recent times

226
00:12:00,200 --> 00:12:03,920
that we've seen anything related
to strategic investment in

227
00:12:03,960 --> 00:12:07,560
Australian lithium of light?
Yeah, it would be, I think.

228
00:12:07,600 --> 00:12:12,120
I think it's just wait and see
because you can't, you can't get

229
00:12:12,120 --> 00:12:14,160
the vote of confidence until
this is a binding deal on the

230
00:12:14,160 --> 00:12:16,280
table.
And then all of a sudden maybe

231
00:12:16,280 --> 00:12:18,760
you can extrapolate to the to
the other producers and, and

232
00:12:18,760 --> 00:12:21,920
back out a see through value,
which is, which is on their, you

233
00:12:21,920 --> 00:12:25,000
know, lithium portfolios, which
is, you know, either either more

234
00:12:25,000 --> 00:12:27,400
attractive than the market is,
is appreciating or in or in

235
00:12:27,400 --> 00:12:29,400
line.
And and if, if they just have a

236
00:12:29,400 --> 00:12:32,440
pathway to actually unlock some
of that capital and avoid kind

237
00:12:32,440 --> 00:12:35,880
of short term funding squeeze
because of, of, of market

238
00:12:35,880 --> 00:12:40,480
conditions, that'd be awesome.
But we've got no indication

239
00:12:40,480 --> 00:12:44,080
whether there's this deal is, is
going to be binding or if it's

240
00:12:44,080 --> 00:12:45,560
going to lead to future deals as
well.

241
00:12:45,760 --> 00:12:47,360
Yeah.
What do you reckon is going to

242
00:12:47,720 --> 00:12:50,440
you guys, Jadie?
Just to your point on strategic

243
00:12:50,440 --> 00:12:52,600
investment, the only other like
party that would have been keen

244
00:12:52,600 --> 00:12:55,160
lately is the Chinese and
there's just no way that that

245
00:12:55,160 --> 00:12:56,920
was going to happen in
Australia.

246
00:12:57,600 --> 00:13:00,320
So yeah.
Are we interested to see what

247
00:13:00,720 --> 00:13:04,680
happens with Christie's 40%
stake in Andover at whatever

248
00:13:04,680 --> 00:13:06,320
point if things do start heating
up?

249
00:13:06,320 --> 00:13:11,040
Because that's a yeah unless he
just keeps it forever, but he'd

250
00:13:11,040 --> 00:13:16,560
think some that'd be a bit of a
hot Ave. that people would mobs

251
00:13:16,560 --> 00:13:19,400
like this would be going after.
Yeah, especially when it comes

252
00:13:19,400 --> 00:13:23,240
to CapEx time, that's when
that's when we might see

253
00:13:23,240 --> 00:13:24,440
something come up front.
He's like I.

254
00:13:24,440 --> 00:13:26,320
Don't want to, Yeah, I don't
want to pay all that.

255
00:13:26,360 --> 00:13:27,760
Yeah, well, he doesn't have to
pay.

256
00:13:28,240 --> 00:13:31,120
Remember, his stake, there's no,
he doesn't have to pay it all

257
00:13:31,120 --> 00:13:34,160
for any of the the, the drill
out of the resource, all of the

258
00:13:34,160 --> 00:13:37,440
work until that decision to mine
is, is made.

259
00:13:37,440 --> 00:13:39,680
So he's kind of value is getting
added to that project in the

260
00:13:39,680 --> 00:13:41,960
interim and and he gets to
benefit that without selling his

261
00:13:41,960 --> 00:13:43,040
steak.
Yeah, yeah.

262
00:13:43,840 --> 00:13:45,520
Frozen.
Oh well, that's it.

263
00:13:45,640 --> 00:13:49,720
Good old NSW.
God, it's funny how this is

264
00:13:50,400 --> 00:13:52,920
this.
This probably could come in as

265
00:13:52,920 --> 00:13:58,160
one of your best value deals
going around JD 'cause once I

266
00:13:58,160 --> 00:14:00,880
put those numbers out, you'll
bloody fall off your chair.

267
00:14:01,240 --> 00:14:03,920
So as you said, love auto.
You look at the price here,

268
00:14:03,920 --> 00:14:08,600
they're nearly I think they're
$400 million market cap now and

269
00:14:08,600 --> 00:14:11,640
you're I still remember, I mean
it was in Lithomania.

270
00:14:11,640 --> 00:14:15,560
They would love auto were
drilling for bugger all down in

271
00:14:15,560 --> 00:14:18,800
the Dundas region.
I think down in the South of WA

272
00:14:18,800 --> 00:14:23,080
they'll just a lithium
exploration company and they did

273
00:14:23,080 --> 00:14:25,560
it, They've done a deal and I'll
go through the numbers.

274
00:14:25,560 --> 00:14:28,880
They pretty much paid 8,000,000
bucks for this Hill Grove

275
00:14:29,080 --> 00:14:33,720
Antimony gold mine in NSW and
now the companies worth 400 mil.

276
00:14:33,720 --> 00:14:37,160
But we'll go go through the
things like Antimony it it was

277
00:14:37,160 --> 00:14:41,440
the no, it wasn't it touted as
the best performing commodity

278
00:14:41,440 --> 00:14:44,360
last year.
It it it had an absolute ripping

279
00:14:44,640 --> 00:14:47,480
year last year, correct.
Yeah, previously, you know, a,

280
00:14:47,480 --> 00:14:50,040
a, a drag for people that have
been attracted to it.

281
00:14:50,120 --> 00:14:53,120
It's even had the nickname Anti
Money before, but you, yeah,

282
00:14:53,120 --> 00:14:56,240
Lovato's turned that around.
Yeah, yeah, well, I think it's,

283
00:14:56,480 --> 00:14:59,720
oh God, I think when they bought
it, it was well, sub of 10,000

284
00:14:59,720 --> 00:15:03,320
USA tonne for antimony and now
it's $40,000 US tonne.

285
00:15:03,320 --> 00:15:07,000
It's not the easiest commodity
to find a price chart for, I

286
00:15:07,000 --> 00:15:09,600
won't lie, but it's gone up a
bloody shit load.

287
00:15:09,840 --> 00:15:15,080
And I guess it was on the back
of early December last year is

288
00:15:15,080 --> 00:15:19,880
was when China banned the export
of antimony to the US, which is

289
00:15:19,880 --> 00:15:23,480
what really gave it the bloody
momentum to where it is now.

290
00:15:23,840 --> 00:15:25,640
Now everyone's drilling for
antimony.

291
00:15:25,880 --> 00:15:29,080
So this was so this was actually
the first well did VAC work

292
00:15:29,080 --> 00:15:33,880
there in 2009 at uni when
Straits Resources held it and

293
00:15:34,080 --> 00:15:39,200
Straits had just put it
effectively it was it wasn't

294
00:15:39,200 --> 00:15:42,240
full care and maintenance, but
it went from when I got there,

295
00:15:42,240 --> 00:15:46,720
there was just a skeleton crew
on doing still pushing a decline

296
00:15:46,720 --> 00:15:49,240
wasn't any production.
They just really trenched deeper

297
00:15:49,240 --> 00:15:51,640
people like.
Did they call it a gold mine

298
00:15:51,640 --> 00:15:54,080
back then?
No, it was, it was always known

299
00:15:54,080 --> 00:15:57,280
as one of the IT was a gold
antimony mine.

300
00:15:57,480 --> 00:16:01,920
Yeah, and it was, it was always
one of the only ones in

301
00:16:02,400 --> 00:16:05,600
Australia.
The other ones, Kosterfield,

302
00:16:05,840 --> 00:16:11,280
which is Mandalay Resources down
in Victoria, so they've one of

303
00:16:11,320 --> 00:16:14,240
their reserves, they've got
about 1010 1/2 thousand tons of

304
00:16:14,240 --> 00:16:16,760
antimony.
You see the reserves of Hill

305
00:16:16,760 --> 00:16:19,640
Graves that they've got at the
moment, they've got about 39,000

306
00:16:19,640 --> 00:16:23,880
tonne, 1000 tonne of antimony
with a bit pretty similar

307
00:16:24,640 --> 00:16:28,120
grades, a bit lower, but it's I
think Foster Field produces

308
00:16:28,160 --> 00:16:30,960
antimony as a byproduct.
You've got the other ones that

309
00:16:31,600 --> 00:16:36,560
Southern Cross Gold that's been
the the balter that's they, they

310
00:16:36,560 --> 00:16:38,000
haven't got a reserve out or
anything.

311
00:16:38,000 --> 00:16:39,600
That's going to be an
interesting one to wrap a

312
00:16:39,600 --> 00:16:42,160
reserve around with all the
bloody veins going everywhere.

313
00:16:42,160 --> 00:16:47,760
That's a bit that's .9% antimony
on their exploration target.

314
00:16:47,760 --> 00:16:51,960
So, but I think this like, you
know, hill Groves set to in

315
00:16:51,960 --> 00:16:56,040
their study, if it if they hit
the numbers to that's going to

316
00:16:56,040 --> 00:16:58,280
supply 9% of the world's
antimony.

317
00:16:58,520 --> 00:17:03,000
So it shows it's not a, not a
big bloody, it's a market that's

318
00:17:03,840 --> 00:17:07,119
controlled by, you guessed at
China, 80% of the world's

319
00:17:07,119 --> 00:17:12,040
antimony comes out of China.
So, so they, they acquired this

320
00:17:13,200 --> 00:17:16,240
project and it was sort of
before antimony.

321
00:17:18,720 --> 00:17:21,760
The, the price hadn't moved yet
as much as it did now.

322
00:17:21,760 --> 00:17:24,079
And they acquired it for
8,000,000 bucks.

323
00:17:24,079 --> 00:17:28,640
So $3,000,000 purchase price
plus $5,000,000 for replacement

324
00:17:28,640 --> 00:17:30,920
of government bonds.
And it come out of Red River.

325
00:17:30,920 --> 00:17:36,040
So Red River went into
administration based due to

326
00:17:36,040 --> 00:17:39,400
their Thalanga copper projects
up in Queensland.

327
00:17:39,520 --> 00:17:42,200
Yeah.
And you say that there was a

328
00:17:42,400 --> 00:17:46,200
shares issued to in the
investment in the transaction.

329
00:17:46,200 --> 00:17:49,320
Shares were issued to traffic
euro two and a half million

330
00:17:49,320 --> 00:17:53,080
dollars at .07 cents in Lavato
which is now a dollar.

331
00:17:53,080 --> 00:17:58,120
So they were, they were one of
the creditors for Red River and

332
00:17:58,120 --> 00:18:01,280
then they agreed to convert some
of the debt into shares in

333
00:18:01,280 --> 00:18:02,640
Lovato.
Hope they still got them.

334
00:18:03,080 --> 00:18:06,520
Which I, I, I, I'm pretty sure
they do.

335
00:18:06,680 --> 00:18:10,600
I'm pretty sure they do.
I couldn't say it's all do they

336
00:18:10,600 --> 00:18:14,480
try is I'll see there's like one
of the substantials holders like

337
00:18:14,480 --> 00:18:17,880
Bank of Nova Scotia.
Would traffic Europe be under

338
00:18:17,880 --> 00:18:18,560
that?
I couldn't.

339
00:18:19,200 --> 00:18:21,640
It was the first time I looked
at it today, so bear with me.

340
00:18:22,800 --> 00:18:24,600
Yeah.
And like another there was the

341
00:18:24,600 --> 00:18:26,720
one of the, I guess the
cornerstone investor that come

342
00:18:26,720 --> 00:18:33,120
in for 20% of Lavodo was Gauge
Capital Management of Beijing.

343
00:18:33,120 --> 00:18:35,600
So it's like a sort of a Chinese
major holder.

344
00:18:35,600 --> 00:18:38,320
I think they're back at about 15
and a bit percent now holder of

345
00:18:38,320 --> 00:18:42,360
Lavodo.
So yeah, and it was and you look

346
00:18:42,360 --> 00:18:45,440
at what like straights
resources.

347
00:18:45,440 --> 00:18:48,880
So straights actually become
effectively became heiress.

348
00:18:49,320 --> 00:18:53,920
So they actually sold it to
Bracken in 2013 for 27 and a

349
00:18:53,920 --> 00:18:56,920
half million.
So these guys have picked it up

350
00:18:57,320 --> 00:19:00,760
for effectively 8 million plus
the traffic year shares they

351
00:19:00,760 --> 00:19:04,400
issued.
And it's just talk about perfect

352
00:19:04,400 --> 00:19:09,880
timing for as I said, the
antimony process is effectively

353
00:19:09,880 --> 00:19:14,280
5X and yeah, that's how they've
bloody ended up with it.

354
00:19:14,280 --> 00:19:18,680
So it's and you, you look at the
commodity when they did the

355
00:19:18,680 --> 00:19:24,560
actual project study the the OR
reserve and the pay FS, it was

356
00:19:24,560 --> 00:19:30,440
based on spot price of 2350.
This was spot at the time US

357
00:19:30,440 --> 00:19:36,200
2350 for gold and $23,000 a
tonne for antimony.

358
00:19:36,200 --> 00:19:42,640
So Fast forward to today, gold
is what nearly 3100 US as of the

359
00:19:42,640 --> 00:19:46,840
other night and Antimony's 4040
thousand US.

360
00:19:46,840 --> 00:19:50,720
So it's just yeah, phenomenal
bloody rise.

361
00:19:50,720 --> 00:19:54,160
So you can see you can sort of
yeah see why it's getting this

362
00:19:54,560 --> 00:19:57,440
getting this attraction.
So and look they're touting

363
00:19:57,440 --> 00:20:00,800
about 88 million pre production
CapEx.

364
00:20:01,680 --> 00:20:06,000
They've they ended up rising $30
million the end of last year.

365
00:20:06,000 --> 00:20:07,880
So the joys of the big market
cap.

366
00:20:07,880 --> 00:20:10,240
So they've got about 28 left in
the bank.

367
00:20:10,240 --> 00:20:14,200
So I guess thinking.
Yeah.

368
00:20:14,200 --> 00:20:17,120
So because there's existing,
there's existing operation

369
00:20:17,120 --> 00:20:19,320
there.
It's funny, you like when you go

370
00:20:19,320 --> 00:20:21,760
from Kent, you go through this,
go down this road, through this

371
00:20:21,760 --> 00:20:25,080
gorge and then back up over to
the mines on the other side of

372
00:20:25,080 --> 00:20:29,360
this gorge to where all the
processing and offices are.

373
00:20:29,360 --> 00:20:31,160
Because it's like, it was like a
little pilot plan.

374
00:20:31,160 --> 00:20:34,800
It's only like a 250,000 tonne
mill that was there.

375
00:20:34,800 --> 00:20:38,400
It wasn't, wasn't a huge one.
And then so they're looking to

376
00:20:38,920 --> 00:20:42,640
expand, expand it to 500,000
tonne per annum.

377
00:20:43,440 --> 00:20:47,200
But obviously we're in, we're in
NSW here, we're in farmland.

378
00:20:47,200 --> 00:20:49,680
We've just seen not putting a
bloody knocker on it.

379
00:20:49,680 --> 00:20:52,920
But you we've seen I guess what
happened with the whole

380
00:20:53,480 --> 00:20:56,080
Mcphillamy's side of things.
We're in a much different.

381
00:20:56,080 --> 00:20:57,760
It's, it's not a mining town at
all.

382
00:20:57,920 --> 00:21:00,600
Armadale.
It's about 100 odd guys from the

383
00:21:00,600 --> 00:21:03,600
Bloody Sapphire City in Burrell,
my hometown.

384
00:21:03,600 --> 00:21:07,640
It's a beautiful part of.
It but it's not a like you don't

385
00:21:07,680 --> 00:21:11,640
you don't go around and see West
track buildings and stuff

386
00:21:11,640 --> 00:21:14,400
everywhere and like it's, it's
just not a mining error.

387
00:21:14,400 --> 00:21:17,600
I remember when I was there they
because they got a heap of, you

388
00:21:17,600 --> 00:21:20,280
know, old school follows in from
North Queensland to come and

389
00:21:20,280 --> 00:21:22,960
start the mine as the
superintendents and that and

390
00:21:22,960 --> 00:21:26,440
they said they like to employ a
local workforce there because

391
00:21:26,440 --> 00:21:28,920
they employed them as owner
operator like that to teach

392
00:21:28,920 --> 00:21:31,960
everyone, all these people out
of mine, like teaching me how to

393
00:21:31,960 --> 00:21:35,240
put Polly together like because
no one had ever never seen it

394
00:21:35,240 --> 00:21:37,280
before.
There was obviously people that

395
00:21:37,280 --> 00:21:39,320
had mine before that they
recruited.

396
00:21:39,320 --> 00:21:42,880
But it's yeah, it's totally,
totally different landscape to

397
00:21:43,360 --> 00:21:45,840
to over here.
I didn't, I didn't even know it

398
00:21:45,840 --> 00:21:48,560
existed till I went to uni and
it was only bloody an hour and a

399
00:21:48,560 --> 00:21:53,000
half or what.
So because if you look at the,

400
00:21:53,440 --> 00:21:57,600
well, the, I think this was in,
this was in their DFS or

401
00:21:57,600 --> 00:22:00,080
something like talking about
the, the development

402
00:22:00,080 --> 00:22:03,080
application, because there was
the development application that

403
00:22:03,080 --> 00:22:05,680
was I guess that you'd say the
development permit that was in

404
00:22:05,680 --> 00:22:11,040
place before was for a 250,000
tonne of ore per annum

405
00:22:11,120 --> 00:22:14,680
operation.
And that was like effectively

406
00:22:14,680 --> 00:22:17,840
expiring in December 2023.
So they're talking about

407
00:22:18,560 --> 00:22:22,280
increasing it to 500 and 550.
They're talking about the

408
00:22:24,000 --> 00:22:29,200
increasing the tilings capacity.
So that is all part of a new

409
00:22:29,200 --> 00:22:33,960
sort of development development
application They did just they

410
00:22:33,960 --> 00:22:37,880
did just release in February
this year that they've converted

411
00:22:37,880 --> 00:22:42,640
it from like a wet tilings
storage to a dry tiling storage

412
00:22:43,360 --> 00:22:47,920
option.
So that's the pretty sure it

413
00:22:47,920 --> 00:22:51,360
costs more like what I've been
told about dry, dry stack

414
00:22:51,360 --> 00:22:55,040
tailings is you only do it if
you have to because it's a lot

415
00:22:55,040 --> 00:22:57,720
more like machinery involved to
stack the tailings.

416
00:22:57,720 --> 00:23:01,600
You're not just bloody pissing,
pissing it through bloody pipes

417
00:23:01,600 --> 00:23:04,680
out into a dam.
So you could say that's probably

418
00:23:04,680 --> 00:23:10,120
a measure taken to get the NSW
permitting a bit bit on side.

419
00:23:10,120 --> 00:23:13,400
So it looks like they still have
to only they will have to get

420
00:23:13,600 --> 00:23:17,360
approval to increase it to
500,000 tonne per annum like

421
00:23:17,360 --> 00:23:19,760
that's all been submitted to the
regulators.

422
00:23:19,760 --> 00:23:22,240
But it's just that that's
probably the the key risk that

423
00:23:22,240 --> 00:23:27,320
you associate with this is
permitting in New South Wales.

424
00:23:28,120 --> 00:23:29,920
Beautiful country.
It's fucking cold there.

425
00:23:30,040 --> 00:23:42,560
Oh, cold is a mother in
This is.

426
00:23:42,600 --> 00:23:45,400
If you want to work there.
If you want to work there and

427
00:23:46,160 --> 00:23:51,120
there is a quite appropriate
company I'll attach this one to.

428
00:23:52,040 --> 00:23:55,160
If you don't wanna get a
grounded camp, this is what you

429
00:23:55,160 --> 00:23:58,040
have to do.
This is the only thing that is

430
00:23:58,040 --> 00:24:00,480
probably equivalent to a
grounded camp.

431
00:24:00,480 --> 00:24:05,280
They've purchased the Echidna
Gully, which looks like some,

432
00:24:06,240 --> 00:24:08,120
oh, looks like somewhere where
that host weddings.

433
00:24:08,280 --> 00:24:09,680
It is.
It's an event space for hire.

434
00:24:09,680 --> 00:24:12,360
Yeah, yeah.
So they've purchased it for

435
00:24:12,480 --> 00:24:18,320
$3,000,000, so $3,000,000 cash,
an issue of 770,000 shares.

436
00:24:18,320 --> 00:24:21,240
So they're pretty much they've
nearly paid the same for this

437
00:24:21,760 --> 00:24:24,160
block of land and accommodation
village as they did for the

438
00:24:24,160 --> 00:24:27,480
asset when they first bought it
excluding the bonds.

439
00:24:27,480 --> 00:24:33,080
So this this is the the best non
grounded camp I've ever seen in

440
00:24:33,080 --> 00:24:34,440
my life.
So.

441
00:24:34,440 --> 00:24:35,800
That's up there with a grounded
camp.

442
00:24:35,960 --> 00:24:41,280
It's almost as good.
I cannot confirm that maybe

443
00:24:41,280 --> 00:24:45,480
grounded had a may have built
this, I don't know like because

444
00:24:45,480 --> 00:24:50,160
it like it just looks like a
grounded camp in country NSW.

445
00:24:50,160 --> 00:24:51,200
Stunning.
It's beautiful.

446
00:24:51,200 --> 00:24:53,560
I think grounded are probably
going to have to add a bit of

447
00:24:53,560 --> 00:24:57,200
their capability here because
when I read it the, the the

448
00:24:57,200 --> 00:24:59,720
sleeping quarters, it's like 8
people in a room kind of thing

449
00:24:59,720 --> 00:25:01,800
now that that won't fly on a
FIFO camp.

450
00:25:01,800 --> 00:25:03,680
So you've got still going to
need grounded to get there and

451
00:25:03,840 --> 00:25:05,480
build some some sleeping.
Quarters be bad.

452
00:25:06,920 --> 00:25:10,960
Wouldn't be bad.
Oh, yeah.

453
00:25:10,960 --> 00:25:13,000
You know, it's like a bloody
school camp, isn't it?

454
00:25:14,800 --> 00:25:19,960
Shut up, Matt.
So, yeah, that was so the

455
00:25:19,960 --> 00:25:23,120
transformational accommodation
acquisition you'd say.

456
00:25:23,120 --> 00:25:26,320
So that's so there's if you want
to go work there, that's what

457
00:25:26,320 --> 00:25:28,400
you got to look forward to.
You might end up getting married

458
00:25:28,400 --> 00:25:31,200
on your days off looking at that
joint you've got too.

459
00:25:31,200 --> 00:25:33,400
Many price falls off a Cliff.
Maybe they can become an events

460
00:25:33,400 --> 00:25:34,760
company.
Yeah, yeah.

461
00:25:34,840 --> 00:25:39,680
So I think this probably, as I
said, based on the other well,

462
00:25:39,720 --> 00:25:43,240
that's selling Southern Cross or
what is it SX1 now.

463
00:25:43,440 --> 00:25:45,960
Now they're dual listed like
that still that hasn't even got

464
00:25:45,960 --> 00:25:48,760
a reserve or anything.
That's that's still a long way

465
00:25:48,760 --> 00:25:50,520
away.
This is an existing operation

466
00:25:50,520 --> 00:25:53,520
needs a needs a bit done to the
mill and they're they're doing a

467
00:25:53,520 --> 00:25:56,800
lot of you know, there's a lot
more talk about exploration now.

468
00:25:56,840 --> 00:25:58,800
So you might as well get the
bloody story going.

469
00:25:58,800 --> 00:26:02,120
But this would yeah, you got
cost to field as well.

470
00:26:02,120 --> 00:26:07,400
But in terms of near term
antimony, near term antimony

471
00:26:07,400 --> 00:26:09,320
production in Australia, this is
probably it.

472
00:26:09,320 --> 00:26:12,840
This was always known as the
what the antimony model I'd say

473
00:26:12,840 --> 00:26:14,920
because that's been in, well,
when was I there?

474
00:26:14,920 --> 00:26:18,880
2009, it sort of had AI think it
had a bit of a restart then it

475
00:26:18,880 --> 00:26:21,840
dropped off.
But it's just never had a

476
00:26:22,600 --> 00:26:25,280
seamless operation.
So, yeah, it's one of them ones

477
00:26:25,280 --> 00:26:27,920
that all all looks good on
paper.

478
00:26:27,920 --> 00:26:32,080
But I, I look at it with the
obviously just the NSW non

479
00:26:32,080 --> 00:26:33,880
mining area site.
It's one of those ones where

480
00:26:33,880 --> 00:26:36,720
you'd be like, right, get a
contractor there, like get a NSW

481
00:26:36,720 --> 00:26:40,120
contractor, come mobilize the
workforce, bring the bloody as

482
00:26:40,120 --> 00:26:42,920
many people with you as you can.
Because it's not a FIFO site.

483
00:26:42,920 --> 00:26:44,840
So you got to sort of bank on
you.

484
00:26:45,000 --> 00:26:48,520
You could make it FIFO, which is
increased the cost, but you want

485
00:26:48,520 --> 00:26:51,440
to bank on trying to make it
residential to save money.

486
00:26:52,560 --> 00:26:56,160
But you've got obviously find
the people that have the have

487
00:26:56,160 --> 00:26:58,400
the mining experience.
So there you go.

488
00:26:58,480 --> 00:27:01,440
Here's the bloody history of
sort of.

489
00:27:01,440 --> 00:27:04,440
You can pay for the play rugby
league for the Armadale Rams if

490
00:27:04,440 --> 00:27:06,680
you want.
That's super interesting.

491
00:27:06,680 --> 00:27:12,120
Maybe the the, the one area
which is like a a whole can of

492
00:27:12,120 --> 00:27:15,160
worms, but I'd be very curious.
Obviously, you highlighted the

493
00:27:15,520 --> 00:27:17,320
China impact on the market
there.

494
00:27:18,680 --> 00:27:21,640
These guys have a deal with with
Wogan Resources kind of

495
00:27:21,640 --> 00:27:24,760
specialty metals traders
British.

496
00:27:24,920 --> 00:27:26,440
I'd love to know.
Traders, aren't they?

497
00:27:27,000 --> 00:27:29,160
Yeah, yeah, exactly.
They, they do like mineral sands

498
00:27:29,160 --> 00:27:30,680
and all these kind of niche
products and stuff.

499
00:27:30,680 --> 00:27:34,120
But I'd love to know what the
what the payabilities, what

500
00:27:34,120 --> 00:27:37,760
these kind of terms are, given
that China is the one ultimately

501
00:27:37,760 --> 00:27:39,520
buying the vast majority of the
stuff.

502
00:27:39,760 --> 00:27:41,680
Yeah, what you're actually
getting paid for once you get it

503
00:27:41,680 --> 00:27:43,880
up, but.
And that's a life of mine off

504
00:27:43,880 --> 00:27:47,960
take binding off take agreement
too for all golden and too many

505
00:27:47,960 --> 00:27:51,000
concentrate.
So market marketing, marketing

506
00:27:51,000 --> 00:27:52,480
rights for it.
Yeah.

507
00:27:52,480 --> 00:27:55,040
The other thing I'd be curious
about too is like we all know

508
00:27:55,040 --> 00:27:57,760
high prices secure high prices.
Like how reasonable is the

509
00:27:58,880 --> 00:28:03,000
current spot price of antimedia
persist and and yeah, what what,

510
00:28:03,000 --> 00:28:05,080
what new supply could be coming
online around the globe?

511
00:28:05,440 --> 00:28:07,320
Yeah, yeah.
And but it looks like you look

512
00:28:07,320 --> 00:28:10,400
at this study, it's, it's
probably one of those ones that

513
00:28:10,400 --> 00:28:16,120
reminds me of sort of Pilgrim
Minerals in a way that the, it

514
00:28:16,120 --> 00:28:20,120
could operate at half the price,
spot price today.

515
00:28:20,120 --> 00:28:21,760
It appears like if it was
20,000.

516
00:28:21,760 --> 00:28:25,760
So it's going to be a rush to
get that to be a first mover and

517
00:28:26,240 --> 00:28:30,440
take advantage while it is high.
Because if this mine can produce

518
00:28:30,440 --> 00:28:33,360
9% of global antimony, you don't
need much more to come on to

519
00:28:33,800 --> 00:28:37,400
really start taking market
market share from you.

520
00:28:37,520 --> 00:28:39,720
Yeah.
So I think they'll be trying to

521
00:28:39,720 --> 00:28:43,640
get stuff out as bloody quick as
they can, at the mercy of the

522
00:28:43,640 --> 00:28:45,000
government.
Yeah.

523
00:28:45,000 --> 00:28:47,040
I mean, and on the on the
processing point, right, if

524
00:28:47,040 --> 00:28:51,160
China's not exporting finished
product, how keen are they going

525
00:28:51,160 --> 00:28:55,760
to be to buy Antimony right from
the training gift?

526
00:28:55,760 --> 00:28:59,000
That's all right.
They'll do what they can.

527
00:28:59,240 --> 00:29:02,520
But you know, if if that's where
all the downstream is to process

528
00:29:02,520 --> 00:29:04,720
the stuff, but they're not
allowed by their government to

529
00:29:04,720 --> 00:29:05,960
export it, then what do you kind
of do?

530
00:29:06,320 --> 00:29:08,840
Yeah, yeah.
And I and I, we're talking about

531
00:29:08,840 --> 00:29:11,320
the the permitting and stuff
like that.

532
00:29:11,320 --> 00:29:14,880
Like if you compare, I know I
mentioned Mcfillimy's before,

533
00:29:14,880 --> 00:29:18,600
but Mcfillimy's purely grown
field site that was all around

534
00:29:18,600 --> 00:29:21,040
tailings dams.
And I know it was native title,

535
00:29:21,040 --> 00:29:24,440
but which was coincidentally
where the tailings dam was

536
00:29:24,440 --> 00:29:27,480
supposed to go.
This one is if they go on dry

537
00:29:27,480 --> 00:29:30,560
stack, they've got an existing
mine, existing infrastructure

538
00:29:30,560 --> 00:29:33,160
that just needs to be expanded
in size.

539
00:29:33,160 --> 00:29:36,120
They've got, they've got a lot
more in their favour than Regis

540
00:29:36,120 --> 00:29:39,520
had with Mcphillimy.
So not a really like for like

541
00:29:39,520 --> 00:29:44,040
comparison, but still needs a
ticket for approval.

542
00:29:44,760 --> 00:29:46,680
So yeah.
All righty.

543
00:29:46,680 --> 00:29:50,480
Let's let's talk about Bosnia.
Adriatic, I reckon guys haven't

544
00:29:50,640 --> 00:29:51,680
talked.
About it for a while, eh?

545
00:29:53,360 --> 00:29:55,160
Yeah, it's been, it's been a
good six weeks, I reckon.

546
00:29:55,640 --> 00:30:01,000
They, I, I think we had a, so
we, we had a brief chat about

547
00:30:01,000 --> 00:30:04,880
them sort of off the top of my
head 6-7 weeks ago when they did

548
00:30:04,880 --> 00:30:07,320
that capital raise.
For.

549
00:30:07,440 --> 00:30:12,000
Expansion in in quotation marks
so they've they've come out now

550
00:30:12,000 --> 00:30:16,520
with and operations update as
well as their annual report and,

551
00:30:16,520 --> 00:30:21,800
and updated reserve, reserve and
resource statement and the the

552
00:30:21,800 --> 00:30:23,800
stock's down 8%.
So you can kind of tell that the

553
00:30:23,800 --> 00:30:27,280
market doesn't love it and what
the, what the problems really

554
00:30:27,280 --> 00:30:29,800
are here, that they're an
evolution of what we spoke about

555
00:30:30,160 --> 00:30:33,880
last time.
As we spoke, you know, starting

556
00:30:33,880 --> 00:30:36,520
a year and a half ago about the,
the mining challenges to start

557
00:30:36,520 --> 00:30:39,720
Maddie, the, the softer ground
and anticipated all these sorts

558
00:30:39,720 --> 00:30:41,840
of things.
And then as you, you work your

559
00:30:41,840 --> 00:30:45,240
way through it, you work your
way deeper into, into the

560
00:30:45,240 --> 00:30:48,080
processing plant and you test
the next bit of kit.

561
00:30:48,080 --> 00:30:50,160
Every time you go through,
you're finding out what's

562
00:30:50,160 --> 00:30:53,640
working, what's not all a part
of the, the kind of ramp up

563
00:30:53,640 --> 00:30:57,080
story.
So I'll start with mining

564
00:30:57,080 --> 00:30:59,480
because they kind of broke the
announcement out into mining

565
00:30:59,680 --> 00:31:01,240
processing.
And then we can quickly chat

566
00:31:01,240 --> 00:31:05,320
about the, the changes they made
to the, the resource statement.

567
00:31:05,320 --> 00:31:10,680
But they mined 67,000 tons,
which is down a few percent on

568
00:31:10,680 --> 00:31:13,480
last quarter.
It's it's not a great number to

569
00:31:13,480 --> 00:31:15,800
to be honest.
Remember the plant is for

570
00:31:15,800 --> 00:31:20,680
800,000 tons per annum.
So looking at the stockpiles as

571
00:31:20,680 --> 00:31:25,120
well, you can see the stockpiles
declined by 15% over over the

572
00:31:25,120 --> 00:31:29,760
quarter working in their favor.
They've got much higher silver

573
00:31:29,760 --> 00:31:34,520
grades going through the plant
then they've got in the reserve

574
00:31:34,520 --> 00:31:38,040
grade.
So comparing numbers about 316g

575
00:31:38,040 --> 00:31:41,480
per ton is what they've got
stockpiled at the moment versus

576
00:31:41,480 --> 00:31:45,240
like a bit under 200 grams per
ton in in the reserve.

577
00:31:45,240 --> 00:31:48,280
So that will be something that
they have to face up to down the

578
00:31:48,280 --> 00:31:49,560
track.
But that's kind of where they're

579
00:31:49,560 --> 00:31:51,520
at at the moment.
And I think they're actually a

580
00:31:51,520 --> 00:31:54,480
bit constrained with the ROM pad
at the moment.

581
00:31:54,480 --> 00:31:57,240
So they've got a bit over 50,000
tons there.

582
00:31:57,880 --> 00:32:00,360
Then they've got a bit of waste
and you know, a few other bits

583
00:32:00,360 --> 00:32:02,040
and pieces.
But if you guys can can

584
00:32:02,040 --> 00:32:04,120
visualize and remember what
Votesh kind of looks like, it's

585
00:32:04,120 --> 00:32:06,680
in the mountains, it's a foresty
kind of area.

586
00:32:06,680 --> 00:32:10,320
You're a bit space constrained.
You've got construction roads

587
00:32:10,320 --> 00:32:13,920
needing to be built to the the
tailings facility, which they've

588
00:32:13,920 --> 00:32:17,320
only just got the permits and
the agreements in place to do.

589
00:32:17,600 --> 00:32:20,440
So I think they might be a bit
constrained on that front,

590
00:32:20,440 --> 00:32:22,600
although we've only got like a
one page announcement today.

591
00:32:22,920 --> 00:32:26,240
So it's a bit hard to actually
work out what's slowing them

592
00:32:26,240 --> 00:32:29,600
down there.
But we're two years into mining

593
00:32:29,600 --> 00:32:34,280
here pretty much now and we're
talking about 67,000 tons per

594
00:32:34,280 --> 00:32:36,920
annum.
Obviously there was previous

595
00:32:36,920 --> 00:32:40,120
guidance numbers that came out
beginning of last year and you

596
00:32:40,120 --> 00:32:43,760
know again revised beginning of
this year, they were revised

597
00:32:43,760 --> 00:32:45,640
down pretty heavily because they
weren't meeting the targets

598
00:32:45,640 --> 00:32:48,080
there.
So the numbers they've got to

599
00:32:48,080 --> 00:32:54,360
meet for this half year is 250
to 275,000 tons to be milled as

600
00:32:54,520 --> 00:32:56,520
if you're just kind of assuming
that you you keep those

601
00:32:56,520 --> 00:32:58,520
stockpiles constant for this
half year.

602
00:32:58,800 --> 00:33:02,160
You need a pretty enormous
effort, you know, 2 1/2 times

603
00:33:02,280 --> 00:33:06,080
the best half you've had to try
and meet those numbers for this

604
00:33:06,080 --> 00:33:07,720
half year.
So I think they've got their

605
00:33:07,720 --> 00:33:10,440
work cut out for them.
But on a positive side on the

606
00:33:10,440 --> 00:33:13,520
mining front, they did get the
the development meters up

607
00:33:13,520 --> 00:33:16,880
slightly on on the last quarter.
It's, it's the development

608
00:33:16,880 --> 00:33:20,440
meters that have been a bit of a
bit of a drag because even even

609
00:33:20,440 --> 00:33:22,520
that.
The capital development made

610
00:33:22,520 --> 00:33:26,240
exactly, exactly.
Yeah, like that, that half half

611
00:33:26,240 --> 00:33:29,800
year 25275 to be milled, you
know in an 800,000 tonne per

612
00:33:29,800 --> 00:33:32,840
annum plant that's still not
full utilization, which sort of

613
00:33:32,840 --> 00:33:36,240
signals signals a mining
constraint, not a not a not a

614
00:33:36,240 --> 00:33:39,760
milling constraint, right.
I, I, I think it's, it's both

615
00:33:39,920 --> 00:33:43,360
it's mining and and mill that
the mill hasn't been tested yet.

616
00:33:43,360 --> 00:33:47,440
So they what they sort of
striving for, which you can see

617
00:33:47,440 --> 00:33:49,960
in the numbers up there is that
they want to be running at

618
00:33:49,960 --> 00:33:53,080
nameplate capacity next half
year.

619
00:33:53,640 --> 00:33:55,800
Again, it's it's very kind of
ambiguous in the statement we've

620
00:33:55,800 --> 00:33:59,280
got here, but I think they're
not quite kicking it out the

621
00:33:59,280 --> 00:34:01,320
park on both fronts.
So I'll talk to the processing

622
00:34:01,320 --> 00:34:04,400
now.
They got it to 5 million oz, the

623
00:34:04,400 --> 00:34:07,240
midpoint for silver equivalent
for this half year.

624
00:34:07,240 --> 00:34:10,360
They've done halfway through
that 1.3 million oz.

625
00:34:10,360 --> 00:34:12,880
So again, a big stretch to kind
of get there.

626
00:34:13,560 --> 00:34:17,280
The amount of tons that they
milled matched this quarter what

627
00:34:17,280 --> 00:34:21,080
they mined, which on the mill is
up 40%.

628
00:34:21,080 --> 00:34:24,280
So it's a a big record on the
milling front, but that's

629
00:34:24,280 --> 00:34:28,760
running at 30% of nameplate
capacity right now.

630
00:34:28,760 --> 00:34:33,480
So backing out there, the grades
and, and recoveries, you can

631
00:34:33,760 --> 00:34:35,960
they, they didn't provide the
specifics here, but you can kind

632
00:34:35,960 --> 00:34:38,920
of work out there in line with
expectations with, you know,

633
00:34:38,920 --> 00:34:41,600
expectations not being all that
kind of high.

634
00:34:42,520 --> 00:34:45,080
They do give a couple specifics
on what is causing the problems

635
00:34:45,080 --> 00:34:46,120
though.
They've got the tailings

636
00:34:46,239 --> 00:34:49,400
filtration cycle times, which
are just not up to scratch at

637
00:34:49,400 --> 00:34:51,159
the moment, which essentially
means they just can't get the

638
00:34:51,159 --> 00:34:54,800
water out of the tailings quick
enough, which becomes the

639
00:34:54,800 --> 00:34:56,800
bottleneck for the for the whole
plant.

640
00:34:57,520 --> 00:35:01,240
Then you've also got the road
that they need to build to the

641
00:35:01,240 --> 00:35:03,360
new tailing storage facility,
which they only just got the

642
00:35:03,360 --> 00:35:06,760
agreements in place for.
So that again took longer than

643
00:35:06,760 --> 00:35:09,680
it was meant to take and it's
holding them up in moving stuff

644
00:35:09,680 --> 00:35:12,160
out.
So commercial production was

645
00:35:12,160 --> 00:35:15,480
meant to be hit this quarter.
I think in reality they got they

646
00:35:15,480 --> 00:35:17,600
got nowhere near kind of
actually achieving that.

647
00:35:17,600 --> 00:35:21,320
So they're aiming to hit that in
the quarter that we're about to

648
00:35:21,320 --> 00:35:22,600
approach.
So.

649
00:35:23,280 --> 00:35:27,080
Interesting that they they also
released the updated reserve

650
00:35:27,080 --> 00:35:29,880
statement concurrent with this
announcement with it.

651
00:35:29,880 --> 00:35:33,920
Were there any any any any devil
in the detail with the reserves?

652
00:35:34,800 --> 00:35:38,160
Yeah, I think, I think there's
some fairly consequential read

653
00:35:38,160 --> 00:35:41,240
through some, some were guided
to already.

654
00:35:41,240 --> 00:35:43,320
But the first thing you notice
you open on the first page, you

655
00:35:43,320 --> 00:35:46,520
can see the tons have dropped by
a way bigger number than what

656
00:35:46,640 --> 00:35:51,000
the mining depletion was.
So we're talking over 10% less

657
00:35:51,000 --> 00:35:52,600
tons.
And then you can quickly see

658
00:35:52,600 --> 00:35:56,800
just to the right of that the
grades jumped up on almost all

659
00:35:57,000 --> 00:35:59,240
the medals they've got.
So you start thinking about what

660
00:35:59,240 --> 00:36:01,120
have they done with the the cut
off kind of mark.

661
00:36:01,520 --> 00:36:06,520
And you can see the NSR cut off
has nearly doubled from $68 a

662
00:36:06,520 --> 00:36:11,400
tonne to $130.00 a tonne.
So the NSR cut off being

663
00:36:11,400 --> 00:36:14,080
essentially the minimum value of
a block that they're going to

664
00:36:14,080 --> 00:36:19,680
mine or would mine if it, if it
makes a sort of value that

665
00:36:19,680 --> 00:36:22,200
essentially just reflects higher
cost assumptions.

666
00:36:22,320 --> 00:36:24,920
And I think it's a, it's a
pretty clear acknowledgement,

667
00:36:24,920 --> 00:36:28,520
like they spoke about last
quarter that operating costs are

668
00:36:28,800 --> 00:36:31,760
much higher than they'd
previously anticipated.

669
00:36:33,000 --> 00:36:35,560
You know, it's, it's, it's not
a, a massive surprise given the

670
00:36:35,560 --> 00:36:37,960
two years of kind of struggle
we've seen.

671
00:36:37,960 --> 00:36:40,200
But if you look at the mine
life, it just pulls it in a

672
00:36:40,200 --> 00:36:42,760
couple years.
So 15 years of mine life still

673
00:36:42,760 --> 00:36:44,240
they're they're not troubled on
that front.

674
00:36:44,240 --> 00:36:48,040
But you know, I think this might
be a middle, a bit of a middle

675
00:36:48,040 --> 00:36:49,400
ground.
And it'd be interesting to see

676
00:36:49,400 --> 00:36:52,800
what happens on that front and
what happens when analysts start

677
00:36:52,800 --> 00:36:54,320
to flush through those high
costs.

678
00:36:54,360 --> 00:36:56,960
That's fascinating, Double
basically doubling the cut off

679
00:36:56,960 --> 00:37:00,680
grade, but it's only only
results in an 11% reduction in

680
00:37:00,680 --> 00:37:03,920
tons after depletion, which,
yeah, I suppose thanks to the

681
00:37:03,960 --> 00:37:07,200
pretty, pretty high grade nature
of this whole body too.

682
00:37:07,520 --> 00:37:10,160
Yeah.
It's a solid, solid ore body.

683
00:37:10,360 --> 00:37:12,320
Just, you know, the, the, the
potential is there.

684
00:37:12,320 --> 00:37:15,560
And that's been the, the one
thing that the people that are

685
00:37:15,560 --> 00:37:16,920
along the stock always fall back
on.

686
00:37:16,920 --> 00:37:19,520
Like just just look at the cash
flow potential.

687
00:37:19,520 --> 00:37:22,240
You know, you might say, hey,
it's a bit expensive given how

688
00:37:22,240 --> 00:37:26,200
the, the track record of
performance has been and the

689
00:37:26,200 --> 00:37:28,640
fact that the royalties might be
jacked up because they're super

690
00:37:28,640 --> 00:37:29,920
low and all these sorts of
things.

691
00:37:29,920 --> 00:37:33,760
But if things kind of go to
plan, it's meant to print, you

692
00:37:33,760 --> 00:37:37,840
know, 200 million plus per annum
in cash for a number of years.

693
00:37:37,840 --> 00:37:40,680
So that's that's been the fall
back and hopefully they can kind

694
00:37:40,680 --> 00:37:44,800
of maintain that, right.
That's the the agile thing of

695
00:37:45,760 --> 00:37:49,640
looking great on paper, but just
going to a pretty fresh

696
00:37:49,640 --> 00:37:54,240
jurisdiction for mining, getting
the people there to do it, throw

697
00:37:54,240 --> 00:37:57,600
in poor ground conditions for
the capital.

698
00:37:57,600 --> 00:38:01,440
Like it's just been a, you can
tell how those things just start

699
00:38:01,440 --> 00:38:05,880
compounding together.
And you know, we've been talking

700
00:38:05,880 --> 00:38:09,040
about this since the show
started this project.

701
00:38:09,120 --> 00:38:10,400
Yeah, the stock's near all time
highs.

702
00:38:10,600 --> 00:38:14,240
Yeah, even despite all of the
the the challenges they faced.

703
00:38:14,240 --> 00:38:17,800
Great is king.
It's it's pretty wild, right?

704
00:38:17,800 --> 00:38:19,920
Like, yeah, yeah, what you guys
said is exactly right.

705
00:38:19,920 --> 00:38:22,440
I mean, there's a lot of
unanswered questions after this

706
00:38:22,960 --> 00:38:25,120
announcement.
You know, they gave a bit more

707
00:38:25,120 --> 00:38:27,400
on the processing
underperformance side of things

708
00:38:27,400 --> 00:38:30,360
than the other.
But I think if anyone had any

709
00:38:30,360 --> 00:38:34,040
doubt about what that placement
was for two months ago, I think

710
00:38:34,040 --> 00:38:36,480
it's pretty clear now.
And I keep thinking back to

711
00:38:36,880 --> 00:38:40,640
McNulty curves and what that
kind of what you can kind of

712
00:38:40,640 --> 00:38:44,240
infer from them in the context
of this project.

713
00:38:44,240 --> 00:38:47,160
So I'll flash one up now and
kind of talk to it so people

714
00:38:47,160 --> 00:38:50,600
know what we're speaking about.
But essentially you've got,

715
00:38:50,600 --> 00:38:55,600
you've got four types and type 1
is if the project with the the

716
00:38:55,600 --> 00:38:58,160
processing side of it
specifically gets off the ground

717
00:38:58,680 --> 00:39:03,080
very quickly and really hits
nameplate in a pretty swift

718
00:39:03,080 --> 00:39:05,880
amount of time, say say about a
year, That's that's a cracking

719
00:39:05,880 --> 00:39:09,280
ramp up.
And yeah, I mean, these guys are

720
00:39:09,280 --> 00:39:12,000
are pretty short of that at the
moment.

721
00:39:12,800 --> 00:39:15,960
These curves assume sufficient
ore feed to the plant, right.

722
00:39:15,960 --> 00:39:18,680
So there are shortfalls in using
this as the kind of be all end

723
00:39:18,680 --> 00:39:22,920
all analysis, but there have
definitely been problems at the

724
00:39:22,920 --> 00:39:27,240
processing plant side of things.
And I mean, my next point's a

725
00:39:27,240 --> 00:39:29,280
bit open-ended.
I'm came to hear what you guys

726
00:39:29,280 --> 00:39:30,640
think.
But I read through it and

727
00:39:30,640 --> 00:39:34,400
there's the customary two or
three paragraphs from the CEO

728
00:39:34,960 --> 00:39:37,400
and there's no real
acknowledgement of all, of all

729
00:39:37,400 --> 00:39:39,600
the problems.
Like I know they're faced up to

730
00:39:40,120 --> 00:39:42,960
analysts on a couple of the
calls and they've answered all

731
00:39:42,960 --> 00:39:44,320
the questions that have been had
of them.

732
00:39:44,320 --> 00:39:46,920
But I do find it kind of
interesting and perhaps it's

733
00:39:46,920 --> 00:39:50,120
just a strategy, a strategy
they're taking to to highlight

734
00:39:50,120 --> 00:39:54,640
the positives and, and just
emphasize that there's this

735
00:39:56,080 --> 00:39:58,360
things they need to do better
and, and they're going to get

736
00:39:58,360 --> 00:40:00,400
there.
But they, they really talked

737
00:40:00,400 --> 00:40:03,400
around a lot of the challenges
without addressing them face up.

738
00:40:03,400 --> 00:40:06,360
And yeah, I mean, I'm, I'm
curious if you guys have any

739
00:40:06,360 --> 00:40:09,160
other thoughts on that.
Maybe the marketing strategy is

740
00:40:09,160 --> 00:40:13,280
well, since it's I assume the
share price all time high as a

741
00:40:13,280 --> 00:40:17,520
function of zinc and silver
prices being very high.

742
00:40:17,520 --> 00:40:20,600
So it's like we've just we
haven't hit ramp up, but that

743
00:40:20,600 --> 00:40:23,760
means we've just left it in the
ground and mined at higher

744
00:40:23,760 --> 00:40:27,080
prices, which they are now.
So it might actually work out

745
00:40:27,080 --> 00:40:29,960
better for it because if they
hit it, that was less material,

746
00:40:30,160 --> 00:40:31,960
more material sold at lower
prices.

747
00:40:31,960 --> 00:40:36,080
So it's still in the ground.
Mate, if the if the share price

748
00:40:36,080 --> 00:40:38,560
is any guide to go by the the
strategy they're doing is

749
00:40:38,560 --> 00:40:41,520
working to tease so so I can't
fault them.

750
00:40:41,680 --> 00:40:44,880
Yeah, Yeah, we've our like our
question marks have always just

751
00:40:44,880 --> 00:40:48,040
been on what the, the interim
funding pathway looks like.

752
00:40:48,040 --> 00:40:50,320
You know, we, we sort of, I
think collectively think at some

753
00:40:50,320 --> 00:40:53,560
point they'll get to a, a period
where they'll be printing great,

754
00:40:53,640 --> 00:40:56,520
great money, but it's, what's
the interim pathway look like to

755
00:40:56,520 --> 00:40:57,960
getting there?
And when your, your share price

756
00:40:57,960 --> 00:41:02,240
is very high, then your cost of
capital is it, it's not that

757
00:41:02,240 --> 00:41:03,280
bad.
It's not like the market's

758
00:41:03,280 --> 00:41:05,960
punishing you if you, if you
need to bridge it with, with

759
00:41:05,960 --> 00:41:07,240
more equity or anything like
that.

760
00:41:07,240 --> 00:41:09,800
But they also when you, when
there might be question marks

761
00:41:09,800 --> 00:41:13,040
over the interim funding
situation, but the ore body will

762
00:41:13,040 --> 00:41:15,680
kind of get there.
Then you're also attractive for

763
00:41:15,760 --> 00:41:19,400
a, for a, for a takeover to, to
various parties who have, you

764
00:41:19,400 --> 00:41:21,400
know, better belt, better
balance sheets and all that sort

765
00:41:21,400 --> 00:41:22,440
of stuff.
In the same way we talk about

766
00:41:22,520 --> 00:41:24,200
kind of Bellevue, you know,
those sorts of things.

767
00:41:24,200 --> 00:41:26,560
So want to watch out for on all
fronts.

768
00:41:27,640 --> 00:41:29,440
Yeah.
Surprised no one had to dig at

769
00:41:29,440 --> 00:41:31,800
them a bit lower.
It's hard.

770
00:41:32,520 --> 00:41:34,360
To.
Know buying a company out in

771
00:41:34,360 --> 00:41:37,560
ramp up is not the most common
thing you see.

772
00:41:37,880 --> 00:41:39,880
Yeah.
Yeah.

773
00:41:39,880 --> 00:41:42,320
I mean like like there's a,
there's a couple more kind of

774
00:41:42,320 --> 00:41:43,720
points to it.
Firstly, they've started

775
00:41:43,720 --> 00:41:46,160
repaying debt now.
So they paid 20 million bucks

776
00:41:46,480 --> 00:41:48,760
USA couple days ago.
That'd be a quarterly ongoing

777
00:41:48,760 --> 00:41:51,960
thing.
And to the take out point, it's

778
00:41:51,960 --> 00:41:56,160
a tightly held stock, like five
groups of individuals hold 50%

779
00:41:56,160 --> 00:41:58,720
of the company.
So you need to Queens.

780
00:41:58,720 --> 00:42:03,400
Roads one of them, isn't it?
The so Helicon is 21 odd

781
00:42:03,400 --> 00:42:09,120
percent, L1 is over 15%.
Then you've got Paul Cronin, the

782
00:42:09,120 --> 00:42:13,840
former boss and and yeah, I
think T Rowe Price and and

783
00:42:13,840 --> 00:42:16,520
another individual up there.
They make up the 50%.

784
00:42:16,760 --> 00:42:18,680
Yeah, so Queens roads not in it
anymore.

785
00:42:18,680 --> 00:42:23,480
Other they converted their
convertible early and I think

786
00:42:24,080 --> 00:42:25,880
the read through was why.
Why'd you do that?

787
00:42:25,880 --> 00:42:26,960
Well, they probably sold their
shares.

788
00:42:27,000 --> 00:42:28,200
Yeah, yeah.
Yeah.

789
00:42:28,320 --> 00:42:32,000
Yeah, Yeah.
So I mean, it's a, it's a super

790
00:42:32,000 --> 00:42:33,160
interesting one to follow,
right.

791
00:42:33,160 --> 00:42:36,880
Like, wait, Trav, you mentioned
the the capital raising the, the

792
00:42:36,880 --> 00:42:39,800
sort of lower cost of capital
that you can get away within

793
00:42:39,800 --> 00:42:41,320
share prices higher.
But they've done quite a few

794
00:42:41,320 --> 00:42:44,600
raises now.
So curious to see how, how the

795
00:42:44,600 --> 00:42:47,480
support remains and how they
kind of delivered into it over

796
00:42:47,480 --> 00:42:49,120
the next few quarters.
Yep.

797
00:42:50,640 --> 00:42:51,400
Yeah.
Oh, there you go.

798
00:42:52,400 --> 00:42:54,560
That's bloody.
We've mixed it up.

799
00:42:55,160 --> 00:42:57,800
We've mixed it up because.
She's antimony, she's going to

800
00:42:57,800 --> 00:42:59,880
face medals.
She's going to fire up at the

801
00:42:59,880 --> 00:43:02,880
end of the week I reckon.
We might have to record a Friday

802
00:43:02,880 --> 00:43:04,880
episode.
Dog spectacular.

803
00:43:05,200 --> 00:43:09,640
Could be, could be.
Yes, indeed.

804
00:43:09,840 --> 00:43:12,480
And the smaller end of town.
Yeah.

805
00:43:12,560 --> 00:43:15,880
Oh no, no, I was thinking.
There's a we're thinking about

806
00:43:15,880 --> 00:43:17,480
different things.
Certain stock coming out of

807
00:43:17,480 --> 00:43:20,000
suspension on Friday.
We might have to do a live cross

808
00:43:20,080 --> 00:43:22,720
there.
Yes, yes, yes.

809
00:43:23,120 --> 00:43:24,400
No need to reveal what that one
is.

810
00:43:26,080 --> 00:43:28,200
So rolling out.
All right, good stuff lads.

811
00:43:29,760 --> 00:43:31,480
What have we got coming out?
We might have.

812
00:43:31,720 --> 00:43:33,560
AI was IMN mate, that's what
we've got coming.

813
00:43:33,600 --> 00:43:38,520
Oh yeah, we do bloody hell and
Jake Jane oh cannot bloody wait

814
00:43:39,120 --> 00:43:43,520
and continue on the Bender arm
for the gathering and conference

815
00:43:43,520 --> 00:43:45,240
as well.
I'm going to come back a ruined

816
00:43:45,240 --> 00:43:52,680
man cannot bloody wait and JRX
as well Bruce don't forget that

817
00:43:52,680 --> 00:43:54,520
one.
Once you've once you've had fun

818
00:43:54,520 --> 00:43:57,320
at all hug OPS go to the JRX one
in Brisbane.

819
00:43:57,320 --> 00:44:01,120
Dicks discounts bloody flying
out the door in the show notes

820
00:44:01,120 --> 00:44:03,560
click the links.
Our great partners as well.

821
00:44:03,560 --> 00:44:06,840
Can't think of enough mineral
mining services grounded See if

822
00:44:06,840 --> 00:44:10,240
the ground supports AR
insurance, K drill war WA water

823
00:44:10,240 --> 00:44:13,000
balls swing quattro and
crossboundary Energy.

824
00:44:14,680 --> 00:44:17,320
Information contained in this
episode of Money of Mine is of

825
00:44:17,320 --> 00:44:18,880
general nature only and does not
take.

826
00:44:18,880 --> 00:44:21,280
Into account the.
Objectives, financial situation

827
00:44:21,360 --> 00:44:23,360
or needs of any particular
person.

828
00:44:23,640 --> 00:44:26,680
Before making any investment
decision, you should consult

829
00:44:26,720 --> 00:44:29,760
with your financial advisor and
consider how appropriate the

830
00:44:29,760 --> 00:44:33,440
advice is to your objectives,
financial situation and needs.