Will we see respite for lithium miners?

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Righto Buddy Waters.
It's Lithium Day.

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We've got bloody men's Lyontown
Pilbara, Bloody and Maker.

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Maker aren't mine and lithium.
Good on you.

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That's why the share price is
going up.

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Good stuff, Maker.
I think this is the last day

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live besides tomorrow's episode
that we get to mention MMS at

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the start of the show because
pretty much they've done a lot

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of work, but because of me,
their business has got to a

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point of getting contracts and
it's just flying.

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So I don't want to take all the
credit but.

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Keeps flying OK.
Well done MMS they're just

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they've taken off and thank them
for the support lot.

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Hey JC, money of mine, if you
want to want me to turn you into

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an MMS, what a bloody you can.
What a bloody offer to the

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punters out there, right?
Let's start Mineral Resources,

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the most talked about company on
this show this week.

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And if it keeps on giving, hey.
And in the bloody newspaper,

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quarterly's out bringing in some
dosh for some gas, right?

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Let me guess, Trevor, you'll be
talking about this today.

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No, Yeah, yeah.
Take it away, sunshine.

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What's going on?
Yeah, mate, there's so much news

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out today.
Unfortunately, we can only like

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talk about, you know, that like
4 stories or whatever, but if

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you want to make sure you're
getting all of the stories, make

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sure you sign up to the director
special.

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Just go to moneymind.com, sign
up and you won't miss any of

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them because you know, we've got
limited talking capability so

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it.
Can't be a more simpler web

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address.
It's.

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Pretty easy, leave your email.
Pick that every time.

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Get it?
First thing in the morning.

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Moneymind.com.
But Minres Maddie, there's,

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there's a lot of talking points
today.

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It's, you know, the, the, the,
the first one obviously is the

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fact that the share price is up
like 14%, which is amazing.

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But why is it up?
Well, it's, I think it's got a

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lot the fact that there was a,
a, a gas sale for with, you

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know, mini raisers, like most of
the energy business, this sale

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like is I think being the
driving force behind that, that

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share price hike.
But mini raisers effectively

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sold.
It's like entire interest in, in

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the, the, the gas, in the gas
assets that had sort of

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substance to Gina Rinehart's
Hancock Prospecting and it's,

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and it's retained a 50% interest
in the less kind of meaningful

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Birth Basin and Kanabin Basin
exploration assets.

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For simplicity, just assume
Minres has divested its gas

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assets to, to, to GNA.
In exchange, Minres is getting

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paid $804 million in cash
upfront and depending on how

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some drilling results go with
some of the the assets it's it's

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divesting, there's no additional
300 million that min res can can

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get paid from from Hancock.
And if you just look at that

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waterfall chart, some of that
cash is like ring fenced for

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drilling in the expiration JV
that you know min retain with

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Hancock in a 5050 ratio.
So the number that really

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matters in that waterfall chart
is the $780 million upfront.

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The CFO on the call guided to a
17% tax on that.

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So in reality, there's like $650
million after tax cash coming in

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the door shortly, which
certainly helps the the fears in

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the market around the balance
sheet.

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God.
That'd be bloody pry, and Gina

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finds something on those
expiration assets since they're

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very carried for their 50%
interest.

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Yeah, yeah.
So yeah, go Gina.

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Yeah.
What?

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What do you reckon of the deal,
mate?

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We, we spoke about it God, a
couple months ago when it was

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sort of doing the rounds when
the, the balance sheet troubles

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first started to, to hit home
and we sort of quoted a few

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energy analysts the numbers
they'd kind of tossed up.

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What, what did you could have
come to?

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And you're you're digging on the
price tag.

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I think it's like relatively
healthy.

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Probably, Yeah, probably,
probably probably kind of par

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like the numbers it was sort of
thrown around like six weeks

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ago.
Soul Cabin excited 500 to 900

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million and Adam Martin cited
500 million to equity research

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analysts out there.
What's changed in the interim,

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though, is the WAS domestic gas
policy emerged, which gave some

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certainty of some exports from
development, which I guess like

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bolsters the the economics of
these undeveloped assets here.

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Because you've, you've got some,
you know, I think, I think you

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just, you changed your risk
you're risking on, on these

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undeveloped projects.
It's like less risky now and

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you've got more, more visibility
on what the policy regime is

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going to be that can help you
get a higher, higher price for a

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proportion of that gas for a
period of time.

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That point there on the on the
gas policy was actually

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explicitly called out in
Hancock's own press release.

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So actually just I think there's
a few things in Hancock's own

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press release that were worth
pointing out.

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I'll, you know, flash it up here
on the screen.

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But but the first one that like
just stands out straight away is

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this quote from Gina, which says
I welcome the opportunity to

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work alongside my friend Chris
Allison and his Munra's team.

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I think that's a telling
sentence in itself, right?

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I think just a.
Couple of powers, how good?

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Well, yeah, it's I'll let you
suck I.

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Think she She chooses her words
pretty carefully, You know, in

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media releases that that to me,
suggests two things.

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One, Gina believes Allison is
hanging around to steam in Rez

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into the future.
And two, she's willing to lend

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her own credibility by calling
him her friend at a time when

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his character is massively under
the microscope.

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Yeah, yeah, a lot that the only
way you could you could other

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interpret it as saying that
working slot long my friend

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Chris and his Minrez team which
he created saying that they were

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separate.
But I don't I don't think that

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is the case because that as as
you said, if it comes out a week

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later, that's not the case.
It'll yeah, it'll yeah, choose

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it.
You've got to choose it

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carefully.
When you're that bloody rich and

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powerful.
I don't have to choose me words

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carefully.
The the same rhetoric is is even

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sort of parroted by Hancock CEO
further down in the release.

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If you care to get to read the
rest, you'll you'll also see

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like some lobbying effort for
enhanced export capability has

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already begun because you know
that that bolster the economics

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of the development of these
assets even even further.

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One last thing on the gas
though, I think you can you can

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sort of see in this map here
Gina's you know she's

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consolidated some acreage near
her existing interest in West

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Erigala and Erigala deeps there
those those that's where she's

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got the JV with Strike Energy
after the acquisition of

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Warigal.
Strike Energy an intraday winner

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here on the On the News.
Their their share price is up,

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up 9%.
Yeah, right.

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So OK.
The that's the that's the sale.

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What about the the quarterly,
which is lithium and iron ore?

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Exactly.
Yeah, mostly Mining services is

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the the big driver of that too.
And that's what the quarters

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will be now, just lithium and
iron ore because the gases.

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Yeah, yeah, they'll they'll
still separate the.

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And mining service.
Yeah, CSI, Yeah, Firstly,

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there's like nothing on on
Allison on the core or you know,

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the core leak sort of has a has
a snippet, but everything's just

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deferring kind of any
conversation around that or

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questions around that or answers
around that until Monday, which

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was already flagged earlier in
the week.

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So like the call wasn't very
juicy from like a drama

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perspective, unfortunately.
But to to I do think there's a

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bunch of talking points here,
Onslow in particular.

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So now we're getting some ramp
up data come through as at

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October in res sites doing 10.6
million tonnes per annum

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annualised, They say 35,000,000
tonnes per annum nameplate by

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June is still expected.
And the last stretch of the

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whole Rd was just completed.
So they're now using of all the

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150 kilometres of that whole Rd.
So the whole the whole the whole

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Rd is completed effective.
It's, it's completed from like a

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practical perspective.
There's still some, a bunch of

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underpasses and things like that
that are required for, for I

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think, you know, drainage and
stuff like that, which, you

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know, with cyclone season
approaching, like, you know,

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it's kind of important to, to
get that stuff sorted out too.

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Yeah, there's a, you know, on on
Onslow min Res.

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They do claim that Onslow's now
operating cash flow positive in

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the month of October, if you
include the mining services

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business as well, operating
being the, the keyword there as

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well.
And I'm, I'm curious what's

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being capitalised, but there's
still a bit of work to do like

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on the underpasses.
So there's still still a bit of

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capital spend.
Like I mentioned, there's a few

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caveats to make here before kind
of jumping for joy that that

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that's all cash flow positive
because you know, operating cash

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flow excludes investing cash
flow and you know, financing

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cash flow and it's the interest
repayments that we're, you know,

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we're all that stuff matters,
right?

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So, yeah.
And then the other point to keep

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in mind is I kind of picked up
in the call that the mining

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services contract is sort of is
structured to I think charge

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higher rates during ramp up to
kind of account for yeah, for

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that.
So physicals.

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So you can't just if the mining
services business is is an

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outsized contributor during ramp
up, you know, you expect that to

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taper off as you as your volumes
increase.

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So, yeah, but on the plus side,
like Onslow ramps the volumes

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efficiency should lower unit
cost too.

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Another point is just on the
realisations that they're

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selling the the INR for out of
out of Onslow.

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This this surprise to the
upside.

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I was worried on this front, but
they got 88% realisation of the,

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the plat's 62% index at Onslow.
And that's, you know, a fair bit

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higher than the 81% realisation
that they're getting from the

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Yogan and Pilgrim hub as well.
So it's positive front on the

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product quality so far, albeit
not much, not much volume has

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gone there, but it's still still
a plus.

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And the Third Point I wanted to
talk about there, it's actually

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some, you know, clues on maybe
like a reject in long term costs

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as well.
There was some verbiage in the

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in the cold that like the, you
know, $45 per tonne FoB at

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nameplate might have some, you
know, escalation pressure

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applied to it, which was alluded
to by the CFI.

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So yeah, some some positive
stuff there, but I think there's

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enough there for the bears to to
grab hold of too.

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And what?
So what about CSI?

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00:10:00,320 --> 00:10:02,160
The mining services business,
this is pretty interesting.

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00:10:02,160 --> 00:10:05,640
Right on the call was also the,
you know, the the head of the

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mining services business.
And as usual, there was a a

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00:10:08,120 --> 00:10:10,880
question from Ben Lyons, a
Jardin, which is worth playing.

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00:10:10,880 --> 00:10:13,240
Oh.
Yes, it's greatly appreciated.

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00:10:14,640 --> 00:10:17,280
Just in the comments, in the
context of your comments about

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00:10:17,280 --> 00:10:21,160
the strong level of external
customer inquiry, I also note

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some other recent high profile
wins by others, for example the

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Rio Godadry contract which was
won by DES Tech.

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So it appears that the
competitive environment may have

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increased.
And I'm also concerned about how

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some of those high quality
counterparties like Rio and BHP,

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for example, might respond to
the recent press disclosure and

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those blink the internal and
external investigations which

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are currently under.
So I'm not expecting you to

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comment upon those
investigations, but I'm more

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00:10:48,400 --> 00:10:52,760
concerned about what Minrez is
doing to shore up CSI protective

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00:10:52,760 --> 00:10:57,200
mode and approved vendor status,
the clients such as as Rio.

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00:10:57,720 --> 00:11:00,120
And secondly, if you can
possibly confirm whether there's

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any major CSI contract renewals
coming up?

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00:11:05,080 --> 00:11:07,320
Yeah, I mean, I can talk to
that, Ben, it's Mike.

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00:11:08,720 --> 00:11:10,880
Great question and it's an
interesting environment, but

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essentially I'll I'll just
answer you the Cadogy question

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00:11:16,240 --> 00:11:18,720
that's two 2 1/2 years old that
news.

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00:11:19,520 --> 00:11:22,920
And as you'd expect in the
market when you got a

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00:11:22,920 --> 00:11:28,120
significant footprint like we do
across multiple commodities, we

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00:11:28,120 --> 00:11:32,600
get tested and you know the
environment creates competition

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00:11:32,720 --> 00:11:34,920
and that will that will always
occur and that's actually quite

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00:11:34,920 --> 00:11:38,120
healthy for it to occur.
So we live with that every day.

224
00:11:38,120 --> 00:11:41,720
And there's, there's jobs that
we win and there will be jobs

225
00:11:41,720 --> 00:11:45,240
that we lose.
But on, on the main, we, we, we

226
00:11:45,240 --> 00:11:46,840
don't lose too many at all.
And.

227
00:11:48,520 --> 00:11:51,120
That was a kind of interesting
question, right?

228
00:11:51,120 --> 00:11:55,360
And the Des Tech contract point.
Yeah, it's a, it's AI think it's

229
00:11:55,360 --> 00:11:58,840
a, you know, kind of an
interesting, it's an interesting

230
00:11:58,840 --> 00:12:00,600
point.
Even though it is 2 1/2 years

231
00:12:00,600 --> 00:12:03,640
old, it's, it's topical at the
moment, partially because of all

232
00:12:03,640 --> 00:12:04,840
the other headlines that are
going on.

233
00:12:04,840 --> 00:12:09,960
But in in February 2022 Des Tech
won a crushing contract with Rio

234
00:12:09,960 --> 00:12:15,080
Tinto for for their $4.6 billion
Good Audrey iron ore expansion

235
00:12:15,080 --> 00:12:18,440
project.
Then things appear to get a bit

236
00:12:18,440 --> 00:12:21,540
spicy because Test Tech is led
by Chris Allison's old Co

237
00:12:21,540 --> 00:12:24,920
founder Steve Wyatt.
They Co founded CSI together all

238
00:12:24,920 --> 00:12:28,880
the way back in 1996.
Minarez started suing Steve

239
00:12:28,880 --> 00:12:32,280
Wyatt for alleged intellectual
property misappropriate

240
00:12:32,800 --> 00:12:36,440
misappropriation that was used
to win that contract with Rio

241
00:12:36,440 --> 00:12:38,320
Tinto.
It all got a bit messy with the

242
00:12:38,320 --> 00:12:41,600
Supreme Court giving the go
ahead for Minres to rifle

243
00:12:41,600 --> 00:12:44,400
through the files of Des Tech
and even Rio got caught in the

244
00:12:44,400 --> 00:12:46,840
crossfire getting subpoenaed for
documents too.

245
00:12:47,480 --> 00:12:50,920
And by the way, if you even if
you go all the way back to like

246
00:12:51,120 --> 00:12:54,640
Min Res's prospectus back when
they listed in 2006, you'll see

247
00:12:54,640 --> 00:12:57,680
Steve Wyatt in their name with
Chris Ellison and, and Peter

248
00:12:57,680 --> 00:12:59,320
Wade and some of the related
party transactions.

249
00:12:59,320 --> 00:13:03,000
So, you know, like you can make
your own hypothesis about some

250
00:13:03,000 --> 00:13:05,480
intertwinement that, you know,
could, could be with the Far

251
00:13:05,480 --> 00:13:07,840
East tax stuff too.
But all of that's kind of

252
00:13:07,840 --> 00:13:10,800
uncertain still at this stage.
But you know, I'm kind of

253
00:13:10,800 --> 00:13:12,920
digressing here because the,
the, the mining services

254
00:13:12,920 --> 00:13:14,720
business, I think is the
backbone of Min Res.

255
00:13:14,720 --> 00:13:17,080
And the broader point is
interesting one is it, is it

256
00:13:17,080 --> 00:13:21,000
getting more competitive like
what's the what's the the

257
00:13:21,160 --> 00:13:24,880
outlook look like for, you know,
min rails to continue to to grow

258
00:13:24,880 --> 00:13:28,320
that business, especially in the
face of kind of the decline of

259
00:13:28,320 --> 00:13:31,200
its more marginal operations in
the lithium and ion all parts of

260
00:13:31,200 --> 00:13:33,840
their business.
Can they continue to, you know,

261
00:13:33,880 --> 00:13:35,400
win and grow that mining
services business?

262
00:13:35,920 --> 00:13:37,280
Is the competition getting for
you?

263
00:13:37,280 --> 00:13:40,000
So do they still have the
ability to to Jack up rights?

264
00:13:40,520 --> 00:13:44,200
You know, what like how how does
react into and BHP and the likes

265
00:13:44,200 --> 00:13:47,000
Think about, think about that.
That's a that's an interesting

266
00:13:47,000 --> 00:13:50,880
question, I think.
They didn't answer the ones

267
00:13:50,880 --> 00:13:53,120
coming up for renewal, That's
unknown, no.

268
00:13:53,560 --> 00:13:55,920
Yeah.
I think there's always ones that

269
00:13:55,920 --> 00:13:59,120
kind of come up to renewal over
time, although I don't have a

270
00:13:59,440 --> 00:14:03,360
particular amount of, you know,
colour on that There's but yeah.

271
00:14:03,520 --> 00:14:07,680
It was a big talking point in
the in the last quarterly, just

272
00:14:07,680 --> 00:14:12,400
the the margins and I guess how
how superior they are and the

273
00:14:12,400 --> 00:14:15,080
fact that they continued to
grow.

274
00:14:15,160 --> 00:14:17,480
It's been a big part of the, the
men's narrative.

275
00:14:17,480 --> 00:14:19,760
So thank you.
You're asking the right question

276
00:14:19,760 --> 00:14:21,040
there.
It's a tough one to answer

277
00:14:21,040 --> 00:14:23,840
though.
The the the last kind of, well

278
00:14:24,000 --> 00:14:27,920
two last big talking points in
the in the news today 1 is just

279
00:14:27,920 --> 00:14:31,280
the severe kind of lithium
business rationalisation.

280
00:14:31,520 --> 00:14:35,480
I won't go into it in too much,
but there's like it appears the,

281
00:14:35,560 --> 00:14:37,760
the lithium business has been
under a tremendous amount of

282
00:14:37,760 --> 00:14:40,160
pressure.
There's again, no detail on what

283
00:14:40,160 --> 00:14:43,400
the unit costs are and they're
reporting across their their

284
00:14:43,400 --> 00:14:47,040
operations, but they said 570
employees have been, you know,

285
00:14:47,040 --> 00:14:50,320
already laid off, which reflects
the mostly the lithium business

286
00:14:50,320 --> 00:14:52,680
and and some of the onslake
construction sort of winding

287
00:14:52,680 --> 00:14:54,720
down.
It doesn't include the the yield

288
00:14:54,720 --> 00:15:00,800
gun impact yet on Wodgina.
That's yeah, had a had a hard

289
00:15:00,800 --> 00:15:03,600
time with transitional oil.
Transitional oil, Matt, Marion

290
00:15:04,000 --> 00:15:06,400
Capital spends tapered massively
like you know, even the

291
00:15:06,760 --> 00:15:09,920
expiration decline client work
on that sort of ending by the

292
00:15:09,920 --> 00:15:12,040
end of the year.
They're exercising like a no

293
00:15:12,040 --> 00:15:14,840
fault early termination with
develop on that one at.

294
00:15:14,880 --> 00:15:17,800
The end of the year old heel,
like the rhetoric there has not

295
00:15:17,800 --> 00:15:20,040
changed in the in the 12 months
they've had the project.

296
00:15:20,040 --> 00:15:22,560
They keep saying the line, you
know, we're still figuring out

297
00:15:22,720 --> 00:15:26,040
what we've got and geologies,
they're still getting their

298
00:15:26,040 --> 00:15:27,920
heads around it, apparently
spent 12 months now.

299
00:15:28,080 --> 00:15:31,880
Well, yeah, laying off 570
people and putting all the

300
00:15:31,880 --> 00:15:34,240
lithium business on two and one
as well.

301
00:15:34,240 --> 00:15:35,400
So that's all good.
Yeah.

302
00:15:35,400 --> 00:15:37,360
There's a lot of cost out
initiatives going on.

303
00:15:37,360 --> 00:15:39,880
There's a bunch of fleet that's
been sort of freed up, which

304
00:15:39,880 --> 00:15:43,720
this they said that was going to
sell like 7060 to 70% of that

305
00:15:43,760 --> 00:15:46,400
sort of fleet that's been freed
up as well.

306
00:15:47,960 --> 00:15:50,040
And which of course brings us to
the last talking point which is

307
00:15:50,040 --> 00:15:53,280
the balance sheet.
I think like a notable omission

308
00:15:53,280 --> 00:15:56,040
from the quarterly any colour on
on leverage as at 30th of

309
00:15:56,040 --> 00:16:00,080
September, even when when I
asked on this point to see if I

310
00:16:00,120 --> 00:16:02,400
mark said you know no comment
where it is right now.

311
00:16:03,840 --> 00:16:06,560
It was the first time I heard
Minres speak to the PET

312
00:16:06,760 --> 00:16:11,960
potential to refinance its first
bonds, which they can do around

313
00:16:12,000 --> 00:16:15,720
April next year marks it at par.
And I think those first bonds

314
00:16:15,720 --> 00:16:20,000
are the $700 million bonds which
are due to be repaid in May

315
00:16:20,000 --> 00:16:22,680
2027.
It's I think it's worth pointing

316
00:16:22,680 --> 00:16:26,680
out that the credit rating
agency, Fitch, they downgraded

317
00:16:26,680 --> 00:16:30,240
Min Reza's credit rating last
month from from double B to

318
00:16:30,240 --> 00:16:33,680
double B negative, the minus
there being the, the outlook.

319
00:16:33,680 --> 00:16:37,240
So, you know, any refi is likely
going to be a much more punitive

320
00:16:37,240 --> 00:16:40,280
interest rate than you know, we
see in Min's bonds to to date.

321
00:16:41,360 --> 00:16:45,160
And but likely a much lighter
maturity day.

322
00:16:45,320 --> 00:16:47,600
Yeah, that's the.
You can roll it, but yeah, you

323
00:16:47,720 --> 00:16:49,720
pay higher interest right there.
Yeah.

324
00:16:49,800 --> 00:16:53,800
I mean, so, yeah, pay more in
interest, roll it, refi it.

325
00:16:53,800 --> 00:16:56,280
Yeah, that's, that'll be the the
play.

326
00:16:57,960 --> 00:17:00,600
And then when when kind of
asked, the CFO rattled off the

327
00:17:00,600 --> 00:17:04,440
remaining leavers if things get
more skinny on the cash front,

328
00:17:04,440 --> 00:17:06,359
which I I thought was worth
playing as well.

329
00:17:06,960 --> 00:17:12,319
It's something we're looking at
in terms of other levers.

330
00:17:12,760 --> 00:17:15,960
We've said for quite a while
that we've had levers in the

331
00:17:15,960 --> 00:17:21,319
business that we could pull in
terms of, yeah.

332
00:17:22,040 --> 00:17:25,640
And we've got, I don't know what
the number is, maybe 10-12

333
00:17:25,640 --> 00:17:27,560
different things on our list of
things we can do.

334
00:17:28,160 --> 00:17:30,520
I mean, if I needed to, I could
sell the other half of the whole

335
00:17:30,520 --> 00:17:33,360
Rd as an example.
Not that I want to do that.

336
00:17:33,360 --> 00:17:36,720
I'll need to do that.
We've got other opportunities in

337
00:17:36,720 --> 00:17:39,960
terms of releasing capital from
surplus fleet.

338
00:17:41,480 --> 00:17:44,560
We've got some lithium
investments that are listed.

339
00:17:44,560 --> 00:17:49,480
We could sell if we absolutely
had to, still got the Onslow JV

340
00:17:49,560 --> 00:17:55,280
carry loan receivable, which is
got real value and we've had

341
00:17:55,280 --> 00:17:58,360
interest from third parties in
relation to that.

342
00:17:59,560 --> 00:18:01,200
We've got other divisions we
could make.

343
00:18:01,200 --> 00:18:03,520
So there's a range of choices.
That we have.

344
00:18:04,560 --> 00:18:06,600
What do you guys make of of that
list?

345
00:18:06,600 --> 00:18:08,640
He rattled off.
At least he's got, they've got

346
00:18:08,640 --> 00:18:12,560
gold exposure with delta lithium
now, so at least they're in

347
00:18:12,560 --> 00:18:15,960
that.
I mean, I think the the overall

348
00:18:15,960 --> 00:18:22,000
market reaction today is a sign
of slightly less concern about

349
00:18:22,000 --> 00:18:25,040
the balance sheet.
I think that's the the main

350
00:18:25,040 --> 00:18:27,680
driver in, in the tick up that
we're seeing obviously on the

351
00:18:27,680 --> 00:18:32,160
back of the the transaction as
to the other ones, you know, you

352
00:18:33,160 --> 00:18:36,800
yeah, yeah, you might be saving
yourself for foregoing earnings

353
00:18:36,800 --> 00:18:39,360
in the long term, but that's,
that's the situation they kind

354
00:18:39,360 --> 00:18:42,520
of find themselves.
And just just to comment quickly

355
00:18:42,520 --> 00:18:45,160
on the on the bonds as well,
they might catch a bit of luck

356
00:18:45,160 --> 00:18:50,360
as well as rates decline, US
rates decline that is that might

357
00:18:50,360 --> 00:18:53,760
offset the potentially more
expensive rates that they have

358
00:18:53,760 --> 00:18:55,560
to pay.
So I'm sure that's another thing

359
00:18:55,560 --> 00:18:56,600
that we're hoping for.
I.

360
00:18:57,320 --> 00:19:00,320
Yeah, I know that rates are
declining, but like you look at

361
00:19:00,320 --> 00:19:04,040
that what Fitch did on the on,
they said that pre they'd

362
00:19:04,040 --> 00:19:09,880
previously forecasted net, net
leverage to be at 2.2 times and

363
00:19:09,880 --> 00:19:12,280
it was 4.9 times.
So you can see the ratings

364
00:19:12,280 --> 00:19:16,520
agencies have had a pretty big
kind of pivot in, in, you know,

365
00:19:16,520 --> 00:19:19,880
leverage expectations.
I don't think that that will be

366
00:19:19,880 --> 00:19:22,240
paying.
I didn't say I was going to I.

367
00:19:22,760 --> 00:19:24,000
Didn't say I was going to save
them.

368
00:19:24,000 --> 00:19:25,440
I said it's just, you know,
there's one.

369
00:19:25,440 --> 00:19:26,240
Thing going in.
There.

370
00:19:26,240 --> 00:19:28,560
Yeah, yeah.
Yeah, I think, I think it'll be

371
00:19:28,560 --> 00:19:30,160
a higher interest rate if they
can refire.

372
00:19:30,160 --> 00:19:35,640
But on the look at the.
Lithium, the lithium stuff is

373
00:19:35,640 --> 00:19:40,160
like, you know, we'd talk about
kind of cyclical investment,

374
00:19:40,160 --> 00:19:43,520
which is what would buying
lithium be right now?

375
00:19:44,480 --> 00:19:49,480
Is it the same if you hold it?
Keeping it versus disposing of

376
00:19:49,480 --> 00:19:51,600
it?
Probably just more a safe facing

377
00:19:51,600 --> 00:19:53,200
thing, a face saving thing in
some way.

378
00:19:53,240 --> 00:19:56,080
So yeah.
So it's like, would you get rid

379
00:19:56,080 --> 00:19:58,720
of them at the lower prices or
would you like?

380
00:19:59,680 --> 00:20:01,440
Well, that's we're we're in.
I think.

381
00:20:02,040 --> 00:20:05,120
Yeah, I think it makes her in a
super interesting chat and maybe

382
00:20:05,120 --> 00:20:07,800
worth bringing up again after
you speak about Lion Town and we

383
00:20:07,800 --> 00:20:10,960
we mentioned Pilbara as well,
because you know that each of

384
00:20:10,960 --> 00:20:15,640
those companies have made
decisions as well that, you

385
00:20:15,640 --> 00:20:19,720
know, market condition dependent
makes it very, very interesting

386
00:20:19,720 --> 00:20:20,440
time.
Yeah.

387
00:20:20,440 --> 00:20:22,840
And that's the.
Like I think that's the like I

388
00:20:22,840 --> 00:20:25,880
don't think that their equity
positions in the like lithium

389
00:20:25,880 --> 00:20:29,200
companies are really moved the
dollar too much if you if you

390
00:20:29,200 --> 00:20:31,240
sold them, but the one of a
billion maybe.

391
00:20:31,440 --> 00:20:33,200
Yeah, and the one.
The one interesting one there is

392
00:20:33,200 --> 00:20:36,800
like the opportunity maybe for,
for Pilbury to actually like,

393
00:20:36,880 --> 00:20:39,640
you know, be kind of cyclical
and buy the, the Wildcat stake,

394
00:20:39,640 --> 00:20:42,920
for example, you know, where
they can probably choose some

395
00:20:42,920 --> 00:20:46,320
synergies in some respect.
So that, that that's the one

396
00:20:46,320 --> 00:20:48,840
that sort of stands out to me is
kind of interesting if, if

397
00:20:48,840 --> 00:20:50,280
people were being a bit
opportunistic.

398
00:20:50,280 --> 00:20:55,040
But yeah, the, the, it was the
first time I heard Mark talk

399
00:20:55,040 --> 00:20:59,600
about the carry loan receivable.
So there's just like the way the

400
00:21:00,360 --> 00:21:02,560
carry loan is structured with
the JV partners at Onslow,

401
00:21:03,120 --> 00:21:06,840
there's the ability to actually
have a third party acquire that

402
00:21:06,840 --> 00:21:09,080
receivable.
So min res gets money in the

403
00:21:09,080 --> 00:21:12,640
door, but then the, the the
early cash flows out of Horsley

404
00:21:12,640 --> 00:21:14,040
actually got to that third party
instead.

405
00:21:14,040 --> 00:21:16,520
So that's another interesting 1.
I don't think it's going to be

406
00:21:16,520 --> 00:21:19,600
cheap if they did that though.
But boys are what what he means

407
00:21:19,600 --> 00:21:23,160
when he talks about levers, they
it's, you know, he didn't

408
00:21:23,160 --> 00:21:28,240
actually mention selling any of
the, the lithium assets.

409
00:21:28,920 --> 00:21:30,960
So that was that was kind of
interesting in terms of like the

410
00:21:30,960 --> 00:21:32,720
actual processing facilities or
anything like that.

411
00:21:32,720 --> 00:21:39,240
But yeah, regardless, like there
are levers, I think there's also

412
00:21:39,240 --> 00:21:43,640
enough sort of, you know, doubt
on the on the ability to kind of

413
00:21:45,120 --> 00:21:48,160
really move the dial too much
on, on, on, on the things that

414
00:21:48,160 --> 00:21:51,440
he mentioned there as well.
If if iron oil price came under

415
00:21:52,080 --> 00:21:54,120
a fair bit more pressure too.
It didn't.

416
00:21:54,120 --> 00:21:55,520
It didn't.
Mention an equity raise, yeah.

417
00:21:57,400 --> 00:21:59,000
Yeah, yeah.
Yeah, I mean it it.

418
00:21:59,000 --> 00:22:01,920
Is a genuine lever.
As much as they don't want to do

419
00:22:01,920 --> 00:22:05,400
it, you know it is something
that would hold them out of a

420
00:22:05,400 --> 00:22:07,840
bit of trouble.
So yeah, we'll sort of see, but

421
00:22:07,840 --> 00:22:11,080
obviously they're not going to
be flatten the intentions to do

422
00:22:11,080 --> 00:22:13,600
that the last.
Thing I, I wanted to sort of ask

423
00:22:13,600 --> 00:22:17,560
you guys is any, any predictions
for what comes out on Monday as

424
00:22:17,560 --> 00:22:20,320
a result of the, you know, the
clues that we've, we've, we've

425
00:22:20,320 --> 00:22:23,080
had so far?
Oh the other the other one,

426
00:22:23,080 --> 00:22:26,120
which before you say that was
just looking at the map.

427
00:22:27,680 --> 00:22:32,280
Imagine if Jana bought Wodgina
their.

428
00:22:32,280 --> 00:22:34,880
Share of it to send.
Andover down there.

429
00:22:35,840 --> 00:22:39,560
Maybe.
Maybe it's just South.

430
00:22:39,560 --> 00:22:42,160
Of South of Headland.
I don't know how far it is, it's

431
00:22:42,160 --> 00:22:45,680
a bit, but wonder if that's
another lever.

432
00:22:46,640 --> 00:22:49,320
Maybe because that'll be.
That's a processing.

433
00:22:49,360 --> 00:22:51,560
I would say that is a processing
solution.

434
00:22:53,280 --> 00:22:54,800
Well, just keep that, it's
recorded.

435
00:22:56,480 --> 00:22:57,760
Yeah, and she'll be running the
numbers.

436
00:22:57,760 --> 00:22:58,600
For sure.
And that's like a.

437
00:22:58,600 --> 00:23:00,640
Talking point too, right?
It's like, you know, Gina's sort

438
00:23:00,640 --> 00:23:05,320
of signalling that, yeah, she's
pretty supportive of of Allison

439
00:23:05,320 --> 00:23:08,600
and and they could do deals.
Together in some ways.

440
00:23:08,600 --> 00:23:11,400
There's a, you know, like maybe,
maybe min shareholders feel a

441
00:23:11,400 --> 00:23:13,600
bit protected from the balance
sheet front knowing that, you

442
00:23:13,600 --> 00:23:17,680
know, Gina might save the day in
some respects too if things got

443
00:23:17,680 --> 00:23:19,920
too dire.
But yeah, can't count on it.

444
00:23:20,120 --> 00:23:23,760
So yeah, all right, predictions
for Monday, What are you, what

445
00:23:24,840 --> 00:23:30,520
are you putting more weight on
him retaining the MD position or

446
00:23:32,120 --> 00:23:35,080
being removed from the MD
position but still being in the

447
00:23:35,080 --> 00:23:38,520
company of some capacity?
Either one.

448
00:23:39,280 --> 00:23:43,640
I think he's probably the the
same thing, which is Chris is

449
00:23:43,640 --> 00:23:46,920
still steering the business.
I think everything is we've seen

450
00:23:46,920 --> 00:23:50,880
today and you know is setting
up, it looks like to be setting

451
00:23:50,880 --> 00:23:53,760
up a strategy that is going to
be a Monday announcement that

452
00:23:53,760 --> 00:23:57,240
he's either directly or
indirectly still steering this

453
00:23:57,240 --> 00:23:59,600
business.
I don't think you'll be I think

454
00:23:59,600 --> 00:24:01,760
you'll be fired.
Like that's the reader I get in

455
00:24:01,760 --> 00:24:05,040
genius comments.
I wish they had this on being

456
00:24:05,080 --> 00:24:10,000
removed from the board.
I I that's like, I think that's

457
00:24:10,160 --> 00:24:12,360
maybe possible.
Like I don't yeah, I don't know.

458
00:24:12,360 --> 00:24:19,440
I think the in the in terms of
like does anything really change

459
00:24:20,040 --> 00:24:22,560
from the way that business is
right run whether he's on the

460
00:24:22,560 --> 00:24:24,440
board or not?
Probably not, but Hammer.

461
00:24:24,520 --> 00:24:28,640
Like do you think that it
appease the media?

462
00:24:28,720 --> 00:24:32,840
Like not appease, but in terms
of removing as much of A

463
00:24:32,840 --> 00:24:38,040
spotlight.
I suspect it might light a fire

464
00:24:38,040 --> 00:24:40,800
up the media.
Like the big unknown is like,

465
00:24:40,800 --> 00:24:42,480
what's the media still sitting
on?

466
00:24:42,480 --> 00:24:44,680
Like what's the, what's left to
come out?

467
00:24:44,720 --> 00:24:50,160
You know, because that that
that's, yeah, it's, it's

468
00:24:50,160 --> 00:24:52,680
appeared like there's been a
strategy to strategically

469
00:24:52,680 --> 00:24:55,920
release information, wait for
the board to respond to that

470
00:24:55,920 --> 00:24:59,640
information, and then discredit
the board by revealing more

471
00:24:59,640 --> 00:25:02,280
evidence he was sitting on.
That basically shows that the,

472
00:25:02,360 --> 00:25:04,240
you know, the board's initial
comments are maybe not

473
00:25:04,320 --> 00:25:06,000
particularly truthful in all
respects.

474
00:25:06,000 --> 00:25:07,720
It's not like.
Every article's just been

475
00:25:07,720 --> 00:25:10,120
researched after the last one
was released.

476
00:25:10,200 --> 00:25:13,080
Yeah, it looks like it's all
been strategically drip fed as

477
00:25:13,120 --> 00:25:15,800
you said and I think.
There's still plenty of risk

478
00:25:15,800 --> 00:25:20,080
that the, you know, what what
might be yet to come out is is

479
00:25:20,960 --> 00:25:22,640
is worse than what's been out so
far.

480
00:25:22,640 --> 00:25:25,520
And that could put, that could
put, you know, renewed pressure

481
00:25:25,680 --> 00:25:30,400
on his spot contrary to, to, to,
you know, the strategy that

482
00:25:30,400 --> 00:25:32,360
appears to be for him to, to
hang around.

483
00:25:32,800 --> 00:25:35,840
But, you know, you can't comment
on the likelihood of that until

484
00:25:36,080 --> 00:25:39,120
it comes to the market or, or to
the media.

485
00:25:39,120 --> 00:25:41,760
Yeah.
Oh God won't be able to sleep

486
00:25:41,760 --> 00:25:42,560
this weekend.
It would.

487
00:25:43,720 --> 00:25:45,800
Be a big deal.
I think you guys have nailed it.

488
00:25:45,840 --> 00:25:48,040
I'd love if they had it on like
Polly Market or something.

489
00:25:48,040 --> 00:25:51,080
You could see the odds of him
sort of staying in the business

490
00:25:51,480 --> 00:25:53,200
or even the business on sports.
Pet.

491
00:25:54,200 --> 00:25:56,040
Oh, it should be.
It should be like if the.

492
00:25:56,080 --> 00:25:58,640
Election.
This is pretty much the federal

493
00:25:58,640 --> 00:26:01,000
election in the mining industry,
right?

494
00:26:01,440 --> 00:26:06,600
This is huge, you know.
It's this huge Maddie Lion town

495
00:26:06,600 --> 00:26:10,000
that was a very, very highly
anticipated quarterly.

496
00:26:10,000 --> 00:26:13,240
What did you sort of get at in
your in your findings and how's

497
00:26:13,240 --> 00:26:17,960
it sort of looking well?
First quarter of production

498
00:26:18,040 --> 00:26:23,400
results, as I said, they did,
you know, it was like started I

499
00:26:23,440 --> 00:26:28,240
think July 31st was like the
sort of the start of what they'd

500
00:26:28,240 --> 00:26:30,760
say production.
So this was, this was going to

501
00:26:30,760 --> 00:26:33,960
be the telling quarter.
But remember ramping up a whole

502
00:26:33,960 --> 00:26:37,640
of all flotation circuit is
pretty much like telling me to

503
00:26:37,640 --> 00:26:39,520
learn Mandarin in a couple of
months.

504
00:26:39,600 --> 00:26:43,480
Like it's frigging, it's like, I
don't know, maybe I could do it.

505
00:26:43,480 --> 00:26:45,480
You know what I'm like when I
put my mind to something.

506
00:26:46,480 --> 00:26:49,640
So they threw in.
It's just one of them things,

507
00:26:49,640 --> 00:26:52,000
not no matter how much bloody
planning goes into it now.

508
00:26:52,000 --> 00:26:54,760
Good, they reckon they've built
the bloody thing.

509
00:26:54,760 --> 00:26:56,400
It's always gonna be very hard
work.

510
00:26:56,400 --> 00:27:00,120
But it appears there it's going
in the right direction 'cause I

511
00:27:00,120 --> 00:27:04,920
threw in 282,000 tonne of dirt
in two months, produced 28,000

512
00:27:04,920 --> 00:27:10,240
tonne of dry metric spot con.
So recoveries of average have an

513
00:27:10,240 --> 00:27:15,280
average of 51% in September.
So last couple of weeks of

514
00:27:15,280 --> 00:27:18,600
September they were hitting sort
of the 55 to 56% mark.

515
00:27:18,800 --> 00:27:21,360
They said in the call there's
been some days where they're in

516
00:27:21,360 --> 00:27:24,040
the 60s.
They didn't, they didn't

517
00:27:24,040 --> 00:27:27,840
disclose what the actual feed
grade of the dirt is.

518
00:27:28,320 --> 00:27:31,680
I don't think couldn't find it.
So we're unsure what if they're

519
00:27:31,680 --> 00:27:36,200
putting through 1% lift or one
percent, 1.2% or whatever.

520
00:27:36,200 --> 00:27:39,920
We just know the the grade of
the con that has been coming

521
00:27:39,920 --> 00:27:41,960
out.
So remember they aren't stopping

522
00:27:41,960 --> 00:27:45,200
yet.
So they it it's just open pit or

523
00:27:45,200 --> 00:27:48,680
a little bit of underground
development or I'd say it was

524
00:27:48,680 --> 00:27:52,600
only 19,000 tonne of development
or for the quarter, June quarter

525
00:27:52,600 --> 00:27:55,480
did say first development or was
going to be hit in August.

526
00:27:55,760 --> 00:27:59,360
So and it also said in the June
quarter that first stopping was

527
00:27:59,360 --> 00:28:02,720
to commence at the end of this
year calendar year.

528
00:28:02,880 --> 00:28:06,760
But no comment in this quarterly
about when stopping will

529
00:28:06,760 --> 00:28:08,720
commence.
They didn't reaffirm that or

530
00:28:08,720 --> 00:28:15,160
anything.
So if you're look at even

531
00:28:15,160 --> 00:28:17,760
though, look at the waterfall
chart, even though the title

532
00:28:17,760 --> 00:28:21,720
reads cash increase by 140
million, that's as a function of

533
00:28:21,720 --> 00:28:25,000
the convertible note issue.
But expenditure for the quarter

534
00:28:25,000 --> 00:28:30,360
was 231 million.
So closing cash 263,000,000 that

535
00:28:30,360 --> 00:28:34,520
come in a bit under some of the
analyst models that they had of

536
00:28:34,520 --> 00:28:38,920
what they're closing cash would
be deposition 662,000,000.

537
00:28:39,160 --> 00:28:42,800
So it appears all the
construction costs of the

538
00:28:42,800 --> 00:28:46,240
project will be completed by the
end of the December quarter.

539
00:28:46,560 --> 00:28:51,080
So another about this own about
another 65,000,000 outflows for

540
00:28:51,080 --> 00:28:54,480
that December quarter that
includes like 13 to 15,000,000

541
00:28:54,480 --> 00:28:57,440
for the PACE plant.
That sounds like that's about

542
00:28:57,440 --> 00:29:00,320
91.
I've been over 91% complete not

543
00:29:00,320 --> 00:29:03,520
required for first production,
but only for when you start

544
00:29:03,520 --> 00:29:06,520
filling the bloody Stopes.
Still got to get the re tick and

545
00:29:06,520 --> 00:29:08,840
the ball holes and all that in
place, but you can start ripping

546
00:29:08,840 --> 00:29:11,600
the arse out of the Stopes.
Well, well ahead of that going

547
00:29:11,600 --> 00:29:14,960
in.
So it it appears the that

548
00:29:14,960 --> 00:29:19,320
updated mine plan has been
delayed I think just in terms.

549
00:29:19,320 --> 00:29:21,120
Of the cost guidance, everything
like that, everything.

550
00:29:21,120 --> 00:29:23,720
Like what?
What what they're going to do

551
00:29:23,720 --> 00:29:27,120
Like the what the cons going to
be like everything because I

552
00:29:27,160 --> 00:29:30,680
because I remember hearing all I
thought I was told it was sort

553
00:29:30,680 --> 00:29:33,600
of going to be potentially close
to when this quarterly come out.

554
00:29:33,920 --> 00:29:38,920
But they've said in the
announcement though it'll be an

555
00:29:38,920 --> 00:29:41,240
update by the end of this
calendar year.

556
00:29:41,240 --> 00:29:44,200
So that might have been though
we are getting close.

557
00:29:44,200 --> 00:29:47,000
So it might be another fucking
month and a half away.

558
00:29:47,000 --> 00:29:48,840
By the sounds, the trend has
been they've.

559
00:29:48,840 --> 00:29:50,160
Just kept pushing this back
though.

560
00:29:50,160 --> 00:29:53,600
Remember it was going to be
before the and that got pushed

561
00:29:53,600 --> 00:29:56,480
back and it was going to be, you
know, around the con and then

562
00:29:56,680 --> 00:29:58,400
con note and then it just kept
getting pushed.

563
00:29:58,400 --> 00:30:02,000
I think you what I mean, like,
obviously the actuals are pretty

564
00:30:02,000 --> 00:30:03,880
variable and improving.
You're trying to figure out

565
00:30:03,880 --> 00:30:05,640
where where steady state's going
to be there.

566
00:30:05,640 --> 00:30:08,120
But you're also like, you don't
really want to put out numbers

567
00:30:08,120 --> 00:30:09,960
to the market to show you're
losing a fair bit of money on

568
00:30:09,960 --> 00:30:12,560
every time, like while the
market's still kind of busted up

569
00:30:12,560 --> 00:30:14,360
from a realised prosper.
Yeah, and.

570
00:30:14,720 --> 00:30:16,840
I think there's there's a lot to
come out of that and there's

571
00:30:16,840 --> 00:30:20,120
obviously a lot of iterate
iterating to do to figure out

572
00:30:20,560 --> 00:30:23,680
the balance that of what it is
at the moment, which they

573
00:30:23,680 --> 00:30:25,520
probably never thought they'd
have to fucking do.

574
00:30:25,520 --> 00:30:28,040
Because I thought probably just
kind of we're going to make so

575
00:30:28,040 --> 00:30:31,080
much money out of this joint
when the prices were high.

576
00:30:32,280 --> 00:30:35,480
Things like are they going to
hone in on because it's

577
00:30:35,480 --> 00:30:40,520
underground, so much more
flexibility to go down down here

578
00:30:40,520 --> 00:30:43,280
instead of going over there.
If that's high grade like you

579
00:30:43,280 --> 00:30:46,080
got, they got a lot more
flexibility so that that's the

580
00:30:46,080 --> 00:30:49,280
advantage of the underground,
whereas a pit you got to it's

581
00:30:49,280 --> 00:30:52,440
all in the sequence effectively.
So are they going to hone in on

582
00:30:52,680 --> 00:30:56,680
high grade areas and high grade
it to reduce the, you know,

583
00:30:56,720 --> 00:30:58,960
reduce the all in sustaining
cost effectively?

584
00:30:59,320 --> 00:31:02,040
Are they going to other one is
around the con?

585
00:31:02,320 --> 00:31:08,600
Because if they produce a lower
grade con, so low fives or could

586
00:31:08,600 --> 00:31:12,560
even go lower if they want, you
can, you can throw more tonnes

587
00:31:12,560 --> 00:31:15,800
through and get a better
recovery for a lower grade con

588
00:31:15,880 --> 00:31:18,280
at the expense of the
concentrate sale price.

589
00:31:18,760 --> 00:31:23,040
But Tony, I did mention on the
call that it's whatever method

590
00:31:23,440 --> 00:31:26,280
yields the highest amount of
lithium units.

591
00:31:26,520 --> 00:31:30,040
He said if it doesn't produce
more lithium units, it doesn't

592
00:31:30,040 --> 00:31:32,520
make sense.
So you could, you could produce

593
00:31:32,520 --> 00:31:35,600
a low grade con and smash the
tonnes through as quick as you

594
00:31:35,600 --> 00:31:40,080
can and create more lithium at
a, at a low sale price per con

595
00:31:40,080 --> 00:31:41,640
tonne.
So it'd be interesting to see

596
00:31:41,640 --> 00:31:44,000
where they strike that balance
of what that products going to

597
00:31:44,000 --> 00:31:47,480
be.
Yeah, $2 billion company at

598
00:31:47,480 --> 00:31:48,920
these prices.
Still.

599
00:31:49,400 --> 00:31:52,400
I, I just, and we've mentioned
it before, I just don't think

600
00:31:52,400 --> 00:31:57,720
the market would sneeze if they
raise 300 bucks plus right now

601
00:31:57,720 --> 00:32:02,280
to de stress the balance sheet.
Because having $662,000,000 in

602
00:32:02,280 --> 00:32:06,600
debt for a single asset producer
in a depressed pricing

603
00:32:06,600 --> 00:32:10,080
environment that in a way is
living on a bit of hope at the

604
00:32:10,080 --> 00:32:11,560
moment.
The prices are going to turn

605
00:32:11,560 --> 00:32:15,000
around sooner rather than later.
It just doesn't sound right.

606
00:32:15,880 --> 00:32:17,880
It's not sustainable, those
numbers not sustainable.

607
00:32:18,160 --> 00:32:21,000
What sort of discount?
Do you reckon they'd have to do?

608
00:32:21,000 --> 00:32:22,760
I mean, it's a bit of a sign
that.

609
00:32:23,640 --> 00:32:25,640
You know.
You're not quite getting there.

610
00:32:25,640 --> 00:32:28,800
And to incentivize investors to
come on board, you're obviously

611
00:32:28,800 --> 00:32:32,280
you're going to have to do.
I think it'd be a healthy

612
00:32:32,280 --> 00:32:33,440
discount.
What do you reckon?

613
00:32:33,600 --> 00:32:39,160
Don't I?
20% 15 or maybe 1520 Nah that

614
00:32:39,160 --> 00:32:40,680
that's.
Your stock standard, I reckon

615
00:32:40,680 --> 00:32:44,320
it'd be I reckon it'd be
heavier, but it but it's.

616
00:32:44,320 --> 00:32:48,160
Try like, yeah, it's trading at
the price at the moment.

617
00:32:48,240 --> 00:32:49,800
It's based on what they're
doing.

618
00:32:49,800 --> 00:32:52,720
Like that's the market's valuing
at $0.80 right now.

619
00:32:53,840 --> 00:32:54,320
I.
Hear.

620
00:32:54,320 --> 00:32:56,760
Yeah, yeah, I mean, it kind of,
it kind of puzzles me that it

621
00:32:57,160 --> 00:32:58,640
still trades where it kind of
does.

622
00:32:58,640 --> 00:33:03,280
But I think there's a bit of a,
you know, unquantifiable backer,

623
00:33:03,280 --> 00:33:06,520
you know, you got Gina there and
other sort of forces and just to

624
00:33:06,520 --> 00:33:08,160
sort of belief that it kind of
gets through.

625
00:33:08,320 --> 00:33:10,600
Yeah, and.
Like because as I said, like the

626
00:33:10,760 --> 00:33:14,480
Platts and Fast Market spot
prices have haven't moved still

627
00:33:14,480 --> 00:33:21,000
at 7:50 to 750 bucks a tonne.
So maybe on the back of Pilbara

628
00:33:21,000 --> 00:33:25,000
taking out effectively 150,000
tonne out of the market with the

629
00:33:25,000 --> 00:33:28,840
pay 8:50 to pay 1000, maybe
another operation going on care

630
00:33:28,840 --> 00:33:31,680
and maintenance could be a
catalyst for a bit of a spot

631
00:33:31,680 --> 00:33:34,640
price lift.
But at the moment it's all just

632
00:33:34,640 --> 00:33:39,320
a bit of a waiting game and a
gamble for things to turn around

633
00:33:39,760 --> 00:33:40,800
the.
Zimbabwean.

634
00:33:40,800 --> 00:33:43,160
Asset came offline as well.
Yeah, the.

635
00:33:43,560 --> 00:33:48,000
The, the, I don't think they're
limited to doing a cap raise to

636
00:33:48,800 --> 00:33:52,040
relieve kind of, you know,
pressure, but they, they, they

637
00:33:52,040 --> 00:33:54,320
can sell Baldania.
They can also sell like a colour

638
00:33:54,320 --> 00:33:57,080
30% interest in Kathleen Valley
if they wanted to and end up

639
00:33:57,080 --> 00:34:00,480
with the JV and both would bring
in some some, you know, short

640
00:34:00,480 --> 00:34:03,280
dated cash that that might be
handy for a period of time.

641
00:34:03,280 --> 00:34:05,240
But you brought a point.
It's like, you know the IT

642
00:34:05,640 --> 00:34:07,160
wouldn't just.
Perceived that bad?

643
00:34:07,160 --> 00:34:08,600
The status quo is not
sustainable.

644
00:34:08,639 --> 00:34:13,960
Yeah, it's like you, you kind of
yeah, yeah, yeah, you're playing

645
00:34:13,960 --> 00:34:18,639
the way the game is.
Yeah, it's like a it's a tough

646
00:34:18,639 --> 00:34:22,000
strategy when there's a bunch of
other, you know, things in the

647
00:34:22,000 --> 00:34:24,080
market.
The point to depress prices for

648
00:34:24,080 --> 00:34:25,000
longer.
Like what?

649
00:34:25,000 --> 00:34:27,400
Bloody Pilbury just did as well
themselves.

650
00:34:27,400 --> 00:34:28,560
So yeah, do you think?
Do you?

651
00:34:28,560 --> 00:34:32,000
Think the we're talking
different commodities here, but

652
00:34:32,000 --> 00:34:35,040
we're saying sort of the equity
interesting gold at the moment.

653
00:34:35,040 --> 00:34:37,040
There's a lot, there's a lot of
rises going on.

654
00:34:37,639 --> 00:34:40,719
Do you think that is commodity
agnostic?

655
00:34:40,840 --> 00:34:42,639
No.
No, I don't think so.

656
00:34:42,719 --> 00:34:44,880
Do you think it's a broader?
Market thing that it might be a

657
00:34:44,880 --> 00:34:48,440
good time that equity will
you'll be able to fill books

658
00:34:48,440 --> 00:34:50,760
pretty easily across the market.
I think Pilbara could.

659
00:34:51,239 --> 00:34:52,880
Sorry, I think Line Time could
fill their book.

660
00:34:52,880 --> 00:34:56,400
I mean, their short interest is
like sort of just sub 10% I

661
00:34:56,400 --> 00:34:58,240
think.
I mean, it's a bit over, a bit

662
00:34:58,240 --> 00:34:59,680
over.
So I mean like 10.9 or

663
00:34:59,720 --> 00:35:01,760
something.
Like, yeah, you're gonna fill a

664
00:35:01,760 --> 00:35:04,320
book just with a good chunk of
the shorts closing out, you

665
00:35:04,320 --> 00:35:07,120
know, in a placement.
So yeah, no stress on the

666
00:35:07,120 --> 00:35:10,640
discount.
On Bodania, you mentioned there

667
00:35:10,640 --> 00:35:13,400
Trev, do you, do you think
they'd get more than a few bucks

668
00:35:13,400 --> 00:35:15,600
for that is?
IT 15,000,000.

669
00:35:15,600 --> 00:35:19,040
Tonnes at 1%, but no.
No, no idea to be honest.

670
00:35:19,040 --> 00:35:21,400
Surely there's some?
Frigging gold rights down there

671
00:35:22,360 --> 00:35:24,720
or something.
Or maybe something next to the

672
00:35:24,720 --> 00:35:28,400
tenement that's got gold
potential they could get some

673
00:35:28,400 --> 00:35:32,200
cash of cash out of.
Ask Shannon McMahon, I reckon.

674
00:35:33,000 --> 00:35:37,920
Or or Shannon McMahon's kids I
know and also know tenements

675
00:35:38,120 --> 00:35:40,760
anything.
The word with McMahon in it

676
00:35:41,080 --> 00:35:44,880
means historical tenement
expertise so hence the name Mine

677
00:35:44,880 --> 00:35:49,160
McMahon mining title services.
So mate, bloody not.

678
00:35:49,240 --> 00:35:51,360
Not just Shannon.
Mate doesn't doesn't stop there.

679
00:35:51,480 --> 00:35:54,400
No bloody.
Look, Eva, Helen, Shannon, if

680
00:35:54,400 --> 00:35:58,280
you're bloody listening, fire up
that friggin Generation 7 AI

681
00:35:58,280 --> 00:36:01,360
driven quantum computer and go
just check Baldania.

682
00:36:01,360 --> 00:36:04,400
Check around Baldania, give
Lontown a call.

683
00:36:04,400 --> 00:36:07,000
Just see if there's any ways
they can get a bit of cash in

684
00:36:07,000 --> 00:36:08,720
the door.
Lontown, get your hand on that

685
00:36:08,720 --> 00:36:13,040
landline right now because MMTS
are probably going to give you a

686
00:36:13,040 --> 00:36:17,480
buzz very shortly with something
that'll blow your mind.

687
00:36:18,400 --> 00:36:20,400
Even gold rights near Kathleen
Valley.

688
00:36:21,520 --> 00:36:22,920
Yeah.
Yeah, there'll be.

689
00:36:22,920 --> 00:36:24,880
Something there, there's
something somewhere, probably,

690
00:36:24,880 --> 00:36:28,640
probably actually would be Eva.
Call me first.

691
00:36:31,440 --> 00:36:34,960
Spin it out.
Oh, right.

692
00:36:34,960 --> 00:36:37,080
Pilbara.
JDPLS.

693
00:36:37,080 --> 00:36:40,640
Yeah.
The lithium trend continues, but

694
00:36:40,760 --> 00:36:43,120
a slightly different sort of
tone here.

695
00:36:43,120 --> 00:36:46,120
So they came out with the Cordly
and they a quick update on the

696
00:36:46,120 --> 00:36:49,800
the midstream venture that
they'd signed a year and a bit

697
00:36:49,800 --> 00:36:51,960
ago now.
So quite a bit going on.

698
00:36:51,960 --> 00:36:55,520
But in short operations were
pretty solid, but there was some

699
00:36:55,520 --> 00:37:01,200
big sort of calls that they made
that outweighed the operational

700
00:37:01,200 --> 00:37:03,440
performance that they had this
quarter.

701
00:37:03,440 --> 00:37:07,560
So starting on operations and
then I'll go through some of the

702
00:37:07,560 --> 00:37:11,440
the bigger talking points.
Volumes were kind of down just a

703
00:37:11,440 --> 00:37:13,640
little bit.
Mining rates ahead of their

704
00:37:13,640 --> 00:37:16,040
internal plans.
So looking good on that front.

705
00:37:16,480 --> 00:37:19,880
Significantly more waste has
moved this quarter and that'll

706
00:37:19,960 --> 00:37:23,280
sort of help them unlock new ore
bodies all kind of as planned.

707
00:37:23,640 --> 00:37:28,480
Recovery's ticked up a bit.
So 75% up, 3% pretty decent and

708
00:37:28,760 --> 00:37:31,040
partially that's thanks to all
sorting.

709
00:37:31,360 --> 00:37:35,840
So the P680 commissioning is all
done, then our rampant that up

710
00:37:36,440 --> 00:37:41,560
and P-1000 is 80% complete.
And the, the messaging here is

711
00:37:41,560 --> 00:37:43,640
that they're, they're in way too
deep.

712
00:37:43,640 --> 00:37:46,280
There's no turning back.
They've got to spend the rest of

713
00:37:46,280 --> 00:37:50,160
the CapEx, get that finished and
sort of get it online.

714
00:37:50,920 --> 00:37:53,120
There was another line that sort
of stood out to me.

715
00:37:53,120 --> 00:37:56,240
Maddie, you'll love this one.
Water exploration and production

716
00:37:56,240 --> 00:37:59,640
board drilling needs to be done
to meet future expansion.

717
00:37:59,840 --> 00:38:02,640
Water requirements will
continue.

718
00:38:02,680 --> 00:38:05,000
Oh, hi is.
That Greenland's on the phone,

719
00:38:06,120 --> 00:38:08,520
Bloodies that that'd be.
That's how that conversation

720
00:38:08,520 --> 00:38:10,320
went.
JD No.

721
00:38:10,320 --> 00:38:14,160
Doubt about it we know there are
good, good operators up in that

722
00:38:14,160 --> 00:38:17,960
area and it's it's sort of no
hard in the fact that you need

723
00:38:17,960 --> 00:38:20,520
water to run these mines, don't
you Maddie right you need.

724
00:38:20,520 --> 00:38:23,080
Water to run mines.
Sometimes you need to get rid of

725
00:38:23,080 --> 00:38:26,600
water to run mines, if that is
also.

726
00:38:26,600 --> 00:38:28,360
Something that Greenlands do, if
the word.

727
00:38:28,360 --> 00:38:33,400
Water is in your problem.
Greenlands are the solution.

728
00:38:34,080 --> 00:38:36,280
Turn key solution Turn key
Martin.

729
00:38:36,400 --> 00:38:38,880
The bloody.
Oh, what a service to the

730
00:38:38,880 --> 00:38:40,520
industry.
Thank you, Carla.

731
00:38:40,760 --> 00:38:42,360
Get up.
Get up to bloody.

732
00:38:42,360 --> 00:38:46,240
He loves the Pilbara, loves
flies, loves heat, loves

733
00:38:46,240 --> 00:38:49,760
cyclones, loves dust.
He is your man.

734
00:38:49,920 --> 00:38:51,320
Green lands are the men and
women.

735
00:38:51,320 --> 00:38:53,440
They sort it all the works.
Beautiful.

736
00:38:53,440 --> 00:38:54,840
Yeah.
Anyway, we digress.

737
00:38:55,720 --> 00:38:58,480
We digress.
So getting into the cash and

738
00:38:58,480 --> 00:39:01,400
kind of I think it's interesting
to to bear in mind the other

739
00:39:01,400 --> 00:39:03,840
operations we're kind of talking
about even though they're a bit

740
00:39:03,840 --> 00:39:07,880
short on on details, but the
unit operating costs for Pilbara

741
00:39:07,880 --> 00:39:12,200
were US 480 bucks a tonne.
That's your price including the

742
00:39:12,240 --> 00:39:14,360
CIF I'm quoting there.
So including your freight and

743
00:39:14,360 --> 00:39:17,480
your royalties, that's
relatively steady quarter on

744
00:39:17,480 --> 00:39:19,160
quarter.
So pretty solid.

745
00:39:19,680 --> 00:39:24,240
It's even less than the revised
guidance that they've given,

746
00:39:24,240 --> 00:39:28,600
which I'll get into.
So I mean they they did sort of

747
00:39:28,800 --> 00:39:32,440
preface that with these aren't
indicative of what the rest of

748
00:39:32,440 --> 00:39:36,440
FY25 costs will be like.
Unfortunately on your sales

749
00:39:36,440 --> 00:39:42,320
side, revenue was down over 30%.
So the sales volume were down

750
00:39:42,320 --> 00:39:49,760
marginally and your price was US
$682 for their 5.3% product.

751
00:39:49,760 --> 00:39:53,840
So all up that leaves you a
margin of about $50 million.

752
00:39:54,480 --> 00:39:57,640
But if you're talking about your
cash margin minus you capitalise

753
00:39:57,640 --> 00:40:00,320
development costs and you're
sustaining CapEx, which kind of

754
00:40:00,320 --> 00:40:04,040
has to be done, you're losing
money or you're sort of

755
00:40:04,040 --> 00:40:08,560
marginally break even.
So that is the problem that they

756
00:40:08,560 --> 00:40:11,280
had to address essentially and
that's why they've made the

757
00:40:11,280 --> 00:40:14,240
decisions that they've made.
That culminates in the first

758
00:40:14,240 --> 00:40:16,680
sort of three big talking points
I've got with putting the

759
00:40:16,680 --> 00:40:20,040
smaller plant they've got on
care and maintenance.

760
00:40:20,040 --> 00:40:22,600
So the Pilgrim plant is going to
be prioritised.

761
00:40:22,920 --> 00:40:25,800
That's the lower cost, better
plant that they've got.

762
00:40:25,880 --> 00:40:28,760
Unfortunately, this means 50
jobs will go.

763
00:40:29,400 --> 00:40:33,200
It also means 100,000 less
tonnes of spod will go out

764
00:40:33,200 --> 00:40:35,760
versus their previous FY25
guidance.

765
00:40:36,200 --> 00:40:39,480
And if you're looking at over a
full financial year, say FY20 6,

766
00:40:39,880 --> 00:40:46,560
it becomes P850AS opposed to
P-1000, but you've got your cash

767
00:40:46,560 --> 00:40:48,040
flow benefits.
So the company's talking about

768
00:40:48,040 --> 00:40:51,040
$200 million in cash flow
improvements.

769
00:40:51,040 --> 00:40:55,440
If you're taking into account
AUS $700.00 spod price and this

770
00:40:55,440 --> 00:40:58,840
is a factor of the mining fleet
gone from 7 fleets down to four.

771
00:40:59,120 --> 00:41:03,320
That'll save you 45 bucks a
tonne and reduce CapEx.

772
00:41:03,480 --> 00:41:07,440
Another $63 million saved there
and then a couple, you know,

773
00:41:07,800 --> 00:41:10,800
bucks saved in reduced corporate
costs as well.

774
00:41:10,800 --> 00:41:12,600
Interesting.
They said it'd take four months

775
00:41:12,600 --> 00:41:15,240
if they want to reverse that
decision.

776
00:41:15,240 --> 00:41:18,080
But ultimately, like you were
saying with Lion Town, Maddie,

777
00:41:18,320 --> 00:41:21,680
this is tonnes coming out of the
market and it's something some

778
00:41:21,680 --> 00:41:24,720
of the other operators out there
are going to be pretty, pretty

779
00:41:24,720 --> 00:41:26,840
happy about I reckon.
Good to, good to.

780
00:41:26,840 --> 00:41:31,600
Say even with 1.4 billion in the
bank, they're being prudent on

781
00:41:31,720 --> 00:41:34,000
the millions?
Well, yeah.

782
00:41:34,000 --> 00:41:35,400
Absolutely.
I want, I want to talk about

783
00:41:35,400 --> 00:41:38,120
that more in, in a moment.
So the other, the other big

784
00:41:38,120 --> 00:41:39,920
talking point is price
realisations.

785
00:41:39,920 --> 00:41:43,040
And I've, I've got a neat chart
here that Citi put out.

786
00:41:43,960 --> 00:41:46,880
It's no sort of secret, but
Pillbro gets, you know,

787
00:41:46,880 --> 00:41:49,000
relatively bad price
realisations.

788
00:41:49,000 --> 00:41:50,760
You can see they're sort of
bottom of the pack there.

789
00:41:50,760 --> 00:41:56,720
So US 682 bucks that, you know,
you compare that with what RGO

790
00:41:56,720 --> 00:42:00,800
put at US 872.
That's on an FoB basis.

791
00:42:00,800 --> 00:42:03,200
It's not sort of perfectly
comparable, but it's a pretty

792
00:42:03,680 --> 00:42:06,960
big difference by what that's
partially a factor of them

793
00:42:07,200 --> 00:42:09,720
having their shipments waited to
the September month.

794
00:42:10,040 --> 00:42:12,880
So the last of the three in a
sort of downward trending market

795
00:42:12,880 --> 00:42:15,360
that doesn't do them any kind of
favours.

796
00:42:15,400 --> 00:42:17,960
And then on the balance sheet,
like you said, Maddie, so about

797
00:42:17,960 --> 00:42:23,240
1.35 billion Aussie in cash, 370
million is what they last

798
00:42:23,240 --> 00:42:25,800
reported in debt.
So it leaves your net cash of 1

799
00:42:25,800 --> 00:42:30,440
billion.
This came off 270 odd $1,000,000

800
00:42:30,760 --> 00:42:33,400
over the quarter and mainly due
to CapEx.

801
00:42:33,600 --> 00:42:36,480
So that again just tells you
that they're about kind of break

802
00:42:36,480 --> 00:42:41,840
even at these prices roughly.
And of course, they did sort of

803
00:42:42,240 --> 00:42:47,440
sign up the $1 billion in debt,
but it sort of leads into the

804
00:42:47,680 --> 00:42:50,920
the, the decision making which
the company's kind of gone

805
00:42:50,920 --> 00:42:53,760
through and the decision to shut
down the plant and what.

806
00:42:53,760 --> 00:42:56,320
About So what about the the the
down string?

807
00:42:56,760 --> 00:42:58,800
Our goods down string?
Oh.

808
00:42:59,360 --> 00:43:01,120
It's not as flash, although it
could be worse.

809
00:43:01,120 --> 00:43:04,360
So of course they've got the,
the POSCO downstream, Train 1

810
00:43:04,440 --> 00:43:07,320
coming online did 50% of
nameplate in August.

811
00:43:07,480 --> 00:43:09,560
Train 2 is completed, that's in
commissioning.

812
00:43:10,200 --> 00:43:13,160
They've got a bit of debt.
Remember they sort of own 18% of

813
00:43:13,160 --> 00:43:16,120
that JV with the option to go a
bit higher.

814
00:43:16,320 --> 00:43:19,520
And then on the midstream with
Calyx, that's essentially just

815
00:43:19,520 --> 00:43:22,640
been been paused.
So they're in a very

816
00:43:22,640 --> 00:43:26,480
conservative kind of mode now.
There we go.

817
00:43:26,920 --> 00:43:28,520
It's it's.
Super interesting though, right?

818
00:43:28,520 --> 00:43:33,440
Like the the, the rhetoric up
until I felt like this quarterly

819
00:43:33,440 --> 00:43:36,200
was from from people who was
yeah like continue the kind of

820
00:43:36,600 --> 00:43:39,720
CapEx lower, lower unit costs
and survive the cycle that way.

821
00:43:39,720 --> 00:43:42,120
And this is, and now you're
seeing, yeah, like

822
00:43:42,200 --> 00:43:45,280
rationalisation on quantity,
which is a bit of a bit of a

823
00:43:45,280 --> 00:43:49,240
detour from from, from prior.
But you know, if you if you just

824
00:43:49,240 --> 00:43:53,440
look at all of the the produce
appears of there's still the

825
00:43:53,960 --> 00:43:56,600
kind of maybe best equipped from
a balance sheet perspective to

826
00:43:56,600 --> 00:43:57,760
ride out a storm.
Like, yeah.

827
00:43:58,880 --> 00:44:02,800
I think, I think start of next
year is going to be D day for

828
00:44:02,800 --> 00:44:05,760
lithium or it's going to be
action packed I reckon because

829
00:44:06,840 --> 00:44:10,320
all these other producers can't,
you can't survive like this.

830
00:44:10,800 --> 00:44:12,400
They won't.
They won't be able to do this

831
00:44:12,760 --> 00:44:19,040
forever at these prices, which
will either mean or the lithium

832
00:44:19,360 --> 00:44:24,200
global bloody demand increases.
Something's going to happen

833
00:44:24,200 --> 00:44:26,960
which will be a catalyst for
something like because if they

834
00:44:26,960 --> 00:44:29,680
can't survive, tonnes are going
to come out of the market, which

835
00:44:29,720 --> 00:44:33,880
will be that's what's going to
bring in the prices or exactly

836
00:44:33,960 --> 00:44:36,440
as you said, the it's the.
Distress, it's the distressed

837
00:44:36,440 --> 00:44:39,720
care maintenances that are the
kind of required to sort of, you

838
00:44:39,720 --> 00:44:41,920
know, take enough tonnes out of
the market to you know, low

839
00:44:42,240 --> 00:44:43,800
prices.
The cure flow prices because it

840
00:44:43,800 --> 00:44:46,120
can take curtail supply.
You need more of that supply

841
00:44:46,120 --> 00:44:49,480
curtailment, absent demand,
just, you know, go on, go on,

842
00:44:49,480 --> 00:44:51,000
bonkers again.
It's like, who's going?

843
00:44:51,000 --> 00:44:56,200
To blink first, Yeah, I think.
I like I, yeah, agree with what

844
00:44:56,200 --> 00:44:58,760
you guys are saying.
I had to kind of go back to

845
00:44:58,760 --> 00:45:02,680
basics in in thinking about what
what all this kind of means and

846
00:45:02,720 --> 00:45:03,880
you know, is it good?
Is it bad?

847
00:45:04,480 --> 00:45:07,960
And just just going back to the
the cost curve again, that's

848
00:45:07,960 --> 00:45:10,160
what that's what really matters.
And that's sort of implicitly

849
00:45:10,440 --> 00:45:13,880
what you guys are talking about.
Like you say, Maddie Pilgrim

850
00:45:13,880 --> 00:45:17,480
have a strong balance sheet
relative to all the other

851
00:45:17,480 --> 00:45:21,000
players in the in the market and
they've got, you know, decent

852
00:45:21,000 --> 00:45:22,440
enough assets.
If you sort of think about

853
00:45:22,440 --> 00:45:26,400
Pillgang and the and the smaller
plant for a moment separately,

854
00:45:26,400 --> 00:45:28,720
because it's kind of how Pilbara
thought about it here.

855
00:45:29,720 --> 00:45:34,880
It is kind of puzzling.
Or maybe maybe conservative is

856
00:45:34,880 --> 00:45:37,760
just the right word or maybe
discipline's the right word that

857
00:45:37,960 --> 00:45:40,760
these are the guys that are
curtailing production.

858
00:45:40,760 --> 00:45:43,600
I had sort of similar thoughts
when when it happened with Green

859
00:45:43,600 --> 00:45:47,800
Bush's half a year or so ago.
I find it super interesting that

860
00:45:47,800 --> 00:45:50,360
these are the, the, the players
that are doing it before the

861
00:45:50,360 --> 00:45:54,240
higher cost peers.
And essentially the, the

862
00:45:54,240 --> 00:45:56,960
decision they've made today is
to save money in the short term

863
00:45:57,280 --> 00:45:59,400
and forego earnings in the long
term.

864
00:45:59,720 --> 00:46:02,720
Pretty much every broker has
come out and marked down the,

865
00:46:03,000 --> 00:46:06,200
the price target and the, the
NAV for this company for the

866
00:46:06,200 --> 00:46:07,720
decision.
The share price rallied though,

867
00:46:07,760 --> 00:46:12,960
but it yeah, it, it did and it
sort of divided analysts out

868
00:46:12,960 --> 00:46:16,200
there because a lot of them, to
your point, Trev, we're happy to

869
00:46:16,200 --> 00:46:19,640
see that they're responsive to
market conditions and pulling

870
00:46:19,640 --> 00:46:23,760
supply out and not just going
for that volume decision volume

871
00:46:23,760 --> 00:46:26,920
over cost.
Whereas others, you know, not

872
00:46:26,920 --> 00:46:30,800
too many, but there were a
couple analysts sort of who were

873
00:46:30,800 --> 00:46:32,960
not quite as positive about this
decision because they think the

874
00:46:32,960 --> 00:46:36,240
company's just being overly
conservative because they are

875
00:46:36,240 --> 00:46:39,040
the pre eminent player in the
market.

876
00:46:39,040 --> 00:46:42,440
So I mean, maybe given
everything Pilbara's been

877
00:46:42,440 --> 00:46:46,680
through, it's a pretty hard one
lesson to be conservative and

878
00:46:46,680 --> 00:46:49,880
see yourself through no matter
what, even if that means you get

879
00:46:49,880 --> 00:46:51,800
a bit less of the cream at the
other end.

880
00:46:52,280 --> 00:46:55,000
And you know, who could kind of
blame them given how how close

881
00:46:55,000 --> 00:46:57,320
things got a few years back for
them making that decision, but

882
00:46:57,480 --> 00:46:59,200
they.
They could turn this back on

883
00:46:59,200 --> 00:47:04,160
pretty quickly, yeah. 4:00-ish
months is the the kind of

884
00:47:04,360 --> 00:47:08,920
guiding that they've given, but
you'd only do that after an

885
00:47:08,920 --> 00:47:11,640
indicator that the market's
improved prices have picked up.

886
00:47:11,640 --> 00:47:15,240
So you you're sort of implicitly
there missing out on on some

887
00:47:15,240 --> 00:47:18,840
earnings I think taking.
Taking 150,000 tonnes out

888
00:47:18,840 --> 00:47:20,840
yourself, they're thinking would
they?

889
00:47:20,840 --> 00:47:22,920
Would they?
I don't think we might get paid

890
00:47:22,920 --> 00:47:24,560
more for the other 850.
I don't.

891
00:47:25,000 --> 00:47:27,840
I don't think that it's a big
enough impact back in the day

892
00:47:27,920 --> 00:47:30,320
that's well with your market
like, you know, I think what

893
00:47:30,320 --> 00:47:33,720
I've heard is that was the way
album model used to think about

894
00:47:33,720 --> 00:47:36,600
the market was that could sort
of you know, their their own

895
00:47:36,600 --> 00:47:39,120
curtailments here or there
influenced the market a hell of

896
00:47:39,120 --> 00:47:41,000
a lot and they thought they
could still do that.

897
00:47:41,120 --> 00:47:42,840
That was the green Bush's
decision.

898
00:47:42,840 --> 00:47:45,280
You saw earlier in the year was
sort of album miles aren't

899
00:47:45,280 --> 00:47:47,680
thinking on a niche, you know
chemicals business, but it's

900
00:47:48,080 --> 00:47:52,000
it's much more fragmented kind
of market these days and and I

901
00:47:52,000 --> 00:47:54,680
don't think you can move it too
much with 150,000 times.

902
00:47:54,720 --> 00:47:57,400
Yeah, I think the.
The the last sort of thought

903
00:47:57,400 --> 00:48:00,960
that comes off the back of
talking about Pilgrid there is

904
00:48:00,960 --> 00:48:03,680
just relating it in the context
of other commodities and other

905
00:48:03,680 --> 00:48:06,920
companies out there and, and
gold is the one that comes to

906
00:48:06,920 --> 00:48:09,720
mind.
Can't help but think now is the

907
00:48:09,720 --> 00:48:11,680
time to secure your balance
sheet.

908
00:48:11,920 --> 00:48:13,880
You know, you've seen some of
the, the smarter companies out

909
00:48:13,880 --> 00:48:15,880
there, some of the better
operators grab at the

910
00:48:15,880 --> 00:48:18,880
opportunity and just raise the
capital while you can.

911
00:48:18,880 --> 00:48:22,120
It's it's not applicable to
everyone, but it's something I'm

912
00:48:22,120 --> 00:48:25,080
sure all of the companies are
seriously considering.

913
00:48:25,400 --> 00:48:27,080
You know, you've got to kind of
take the cash.

914
00:48:27,640 --> 00:48:29,880
All these 13 players wish they
would have done more of it back

915
00:48:29,880 --> 00:48:32,560
in the day.
And yeah, I think it's just a a

916
00:48:32,560 --> 00:48:36,160
lesson as an investor as well to
sort of carry in and think about

917
00:48:36,160 --> 00:48:38,200
how how commodities sort of
cycle.

918
00:48:39,600 --> 00:48:44,600
Right, Good work, JD.
Next stop, Maker, the bloody

919
00:48:44,760 --> 00:48:49,120
prospective gold developer.
First thing I saw here.

920
00:48:49,120 --> 00:48:51,360
I'm like fuck they're raising
money again.

921
00:48:52,760 --> 00:48:56,120
Like because they just raised 35
bucks at $0.05 on the 3rd of

922
00:48:56,120 --> 00:48:57,240
September.
I mean that.

923
00:48:57,480 --> 00:49:00,720
Exactly my thought.
And they put the. 26 mil gold

924
00:49:00,720 --> 00:49:03,920
loan and 12 mil gold stream in
place, but as you can see on the

925
00:49:03,920 --> 00:49:07,720
Spark chart, since that raise,
maker's been on a bit of a run

926
00:49:07,720 --> 00:49:10,800
along with the other gold.
He's actually hit 9.2 cents

927
00:49:11,200 --> 00:49:14,520
after raising at 5:00.
But today they're raising 35

928
00:49:14,520 --> 00:49:18,480
bucks, a minimum 35 bucks.
Yeah, at 7 cents.

929
00:49:18,480 --> 00:49:21,200
And they'll accept overs and
also possibly put in a share

930
00:49:21,200 --> 00:49:25,000
purchase plan, so might end up
raising a bit more. 9 1/2%

931
00:49:25,000 --> 00:49:27,000
discount to the last close
price.

932
00:49:27,240 --> 00:49:30,160
Why you're about to ask Travis
Ricciardo, I can guess.

933
00:49:30,160 --> 00:49:33,840
I'll tell you.
Well, in a move positive moves

934
00:49:33,840 --> 00:49:36,320
similar to what we talked about
with Black Cat on Tuesday,

935
00:49:36,320 --> 00:49:40,160
they're effectively removing the
Oremic Gold line and gold

936
00:49:40,160 --> 00:49:43,200
stream, which they put in place
early September to fund the

937
00:49:43,200 --> 00:49:47,800
Merchants and Gold project.
Now, why would they do that?

938
00:49:48,560 --> 00:49:52,120
What is it worth?
Why don't we go for a trip back

939
00:49:52,120 --> 00:49:54,560
in time?
Because if I talk about it, it

940
00:49:54,560 --> 00:49:57,560
doesn't do it justice.
When we've got the merchants and

941
00:49:57,560 --> 00:50:03,000
gold expert Ally JC in our
building everyday, why don't we

942
00:50:03,000 --> 00:50:06,760
listen to the wise words of her?
Essentially, regardless of the

943
00:50:06,760 --> 00:50:11,480
gold price, Auromet give Maker
26,000,000 bucks to get $35

944
00:50:11,480 --> 00:50:15,600
million roughly worth of gold
over a 12 month period.

945
00:50:16,040 --> 00:50:19,880
So that's a 35% return in a
year?

946
00:50:21,120 --> 00:50:22,760
For auromet.
For Auromet.

947
00:50:22,920 --> 00:50:24,120
Yeah.
And.

948
00:50:24,120 --> 00:50:29,680
That's not including, but
they've sold them some gold call

949
00:50:29,680 --> 00:50:34,640
options as well, and they're
also getting 25,000,000 warrants

950
00:50:34,920 --> 00:50:38,800
from Maker, so that would sort
of juice up their return even

951
00:50:38,800 --> 00:50:42,440
more as well.
That's a good deal, yes.

952
00:50:43,800 --> 00:50:46,160
So then moving on to the gold
stream, which we sort of touched

953
00:50:46,160 --> 00:50:49,240
on before, Maddie's Maker get
$12 million from Oromet.

954
00:50:49,600 --> 00:50:54,280
In exchange, they have to
deliver 4.25% of the total gold

955
00:50:54,280 --> 00:51:00,400
that they produce to Armet until
5000 ounces in total is

956
00:51:00,400 --> 00:51:06,920
delivered to Armet and Armet by
those oz at 20% of whatever the

957
00:51:06,920 --> 00:51:09,680
prevailing spot price is at that
point in time.

958
00:51:10,560 --> 00:51:14,800
Then they've actually got sort
of an additional stream on top

959
00:51:14,800 --> 00:51:18,040
of that.
Once the 5000 oz from the main

960
00:51:18,040 --> 00:51:22,000
gold stream is delivered then
there is a what's called a tail

961
00:51:22,000 --> 00:51:25,640
stream.
So 1 1/2 percent of gold

962
00:51:25,640 --> 00:51:29,040
produced for whatever the
remaining life of mine

963
00:51:29,040 --> 00:51:33,920
production profile is, they can
purchase at the same price of

964
00:51:33,920 --> 00:51:37,400
20% of the spot price.
Make actually have the option to

965
00:51:37,400 --> 00:51:42,440
buy back 80% of the tail stream.
So that 1 1/2 percent component

966
00:51:42,440 --> 00:51:47,480
I spoke about for $5,000,000 to
reduce it to .3% of gold

967
00:51:47,480 --> 00:51:49,280
production rather than 1 1/2 as
well.

968
00:51:50,320 --> 00:51:55,520
So if you assume the same Ford
gold price we spoke about for

969
00:51:55,520 --> 00:52:00,200
just shive 3900 Aussie.
Armet.

970
00:52:00,200 --> 00:52:04,240
Basically giving make it 12
million to get back 15 and a

971
00:52:04,240 --> 00:52:07,600
half million, you know, sort of
worth of gold that that that's

972
00:52:07,600 --> 00:52:14,040
the first 5000 oz.
My very rough excel calcs on the

973
00:52:14,040 --> 00:52:18,480
gold loan and the gold stream
inclusive of the tail stream

974
00:52:18,880 --> 00:52:23,040
based on the DFS production
profile and that gold forward

975
00:52:23,040 --> 00:52:28,360
price we discussed earlier.
Just show 3900 and oz have aura

976
00:52:28,360 --> 00:52:32,720
met generating at least a 30%
IRR over the life of mine.

977
00:52:32,720 --> 00:52:36,480
And that does not include, you
know, the the call option and

978
00:52:36,480 --> 00:52:39,560
doesn't include the warrants
'cause that was too hard for me

979
00:52:39,560 --> 00:52:43,360
to figure out so.
Good work, Ali.

980
00:52:43,360 --> 00:52:45,560
GC plagiarism at its best,
Matthew.

981
00:52:47,000 --> 00:52:51,160
So that's effectively, as we
established Oramet do these

982
00:52:51,160 --> 00:52:53,320
things, People like Oramet do
these things because they make

983
00:52:53,320 --> 00:52:56,200
money out of it.
So raising the dosh now has

984
00:52:56,200 --> 00:53:00,680
removed like all that extra
margin that we're going to have

985
00:53:00,680 --> 00:53:04,960
to pay Oramet for that funky,
funky debt, you'd say.

986
00:53:05,360 --> 00:53:08,200
Obviously don't have to issue
the 25,000,000 warrants now

987
00:53:08,200 --> 00:53:11,560
either.
And Ormed also had first ranking

988
00:53:11,560 --> 00:53:15,320
security over the maker assets
as part of that gold line and

989
00:53:15,320 --> 00:53:17,560
gold stream.
So no one has security over it

990
00:53:17,560 --> 00:53:18,920
now.
So yeah, I don't.

991
00:53:18,920 --> 00:53:20,760
I don't mind.
That to be honest, like, yeah,

992
00:53:21,400 --> 00:53:26,120
we've seen so many times and
like yeah, WA Gold history where

993
00:53:26,680 --> 00:53:30,440
there's just troubled
negotiating with whoever's got

994
00:53:30,440 --> 00:53:33,000
the senior secured.
Like alone it's just they've got

995
00:53:33,000 --> 00:53:35,160
all these covenants and I'm not
saying this won't have that, but

996
00:53:35,360 --> 00:53:37,040
yeah, it's just it's just better
and easier and you have more

997
00:53:37,040 --> 00:53:39,960
flexibility to ride whatever
comes at you without that in the

998
00:53:39,960 --> 00:53:41,640
cap structure.
Yeah, so.

999
00:53:41,680 --> 00:53:44,440
Like pending though, you assume
they're going to fill the book

1000
00:53:44,640 --> 00:53:47,840
and which you could, you know,
bet me bottom dollar on that

1001
00:53:48,560 --> 00:53:50,880
they're obviously saving a good
chunk of future cash that would

1002
00:53:50,880 --> 00:53:54,520
have otherwise went to Oremet,
removed any risk association,

1003
00:53:54,800 --> 00:53:59,160
risk associated with delivering
the gold and security over the

1004
00:53:59,160 --> 00:54:02,480
assets, fully equity funded,
completely unhedged.

1005
00:54:02,480 --> 00:54:05,800
And they've done this rise at a
40% higher price than the

1006
00:54:05,800 --> 00:54:09,600
previous capital rise.
So that because that 27 1/2

1007
00:54:09,600 --> 00:54:14,480
bucks worth of cash 29th October
add another minimum 35 bucks to

1008
00:54:14,480 --> 00:54:18,160
come in the door here.
So 62 1/2 pro forma.

1009
00:54:18,320 --> 00:54:22,640
So 22 mil of that is for working
capital buffer contingency,

1010
00:54:22,640 --> 00:54:24,240
other working cap and corporate
costs.

1011
00:54:24,240 --> 00:54:28,560
Those big chunks still allocated
for that set up 5,000,000 bucks

1012
00:54:28,560 --> 00:54:31,040
for an accelerated underground
mining strategy.

1013
00:54:31,200 --> 00:54:34,280
So it looks like they'll be re
establishing and rehabbing and

1014
00:54:34,280 --> 00:54:36,960
getting back into Andy well
early next year.

1015
00:54:37,800 --> 00:54:40,280
That's obviously where the, you
know, your high grade dirt is,

1016
00:54:40,480 --> 00:54:44,040
higher grade dirt is.
So if they can raise even more

1017
00:54:44,040 --> 00:54:46,600
than 35, they're going to be in
a pretty bloody good spot.

1018
00:54:46,600 --> 00:54:51,880
So first goal will be due start
of bang on the scheduled FY20 6

1019
00:54:52,360 --> 00:54:54,520
Yeah, but you to be anticipating
they'll be pushing like

1020
00:54:54,520 --> 00:54:56,520
motherfuckers to get poor and
before then.

1021
00:54:56,840 --> 00:55:00,840
So, yeah, I think, I think good
equity support that we're saying

1022
00:55:00,960 --> 00:55:04,520
in the gold junior miners at the
moment.

1023
00:55:05,160 --> 00:55:06,800
Great.
All right, great for the

1024
00:55:06,800 --> 00:55:09,960
industry in terms of because the
equity funding removes so much

1025
00:55:09,960 --> 00:55:12,600
risk for the developers
themselves, more tents for them

1026
00:55:12,600 --> 00:55:15,960
succeeding, a lot less risk for
the mining services companies

1027
00:55:16,240 --> 00:55:18,680
that are supporting those
developers and working for them.

1028
00:55:18,800 --> 00:55:21,200
Because how many situations have
you seen recently where a

1029
00:55:21,200 --> 00:55:24,480
developer is debt funded, the
lender calls on the debt, the

1030
00:55:24,480 --> 00:55:27,160
mining services companies are at
the bottom of the barrel trying

1031
00:55:27,160 --> 00:55:30,840
to get paid.
This is what we call a true win

1032
00:55:30,840 --> 00:55:33,640
win.
Yeah, and Caledis is like the

1033
00:55:33,640 --> 00:55:35,480
distressed example that comes to
mind, right.

1034
00:55:35,560 --> 00:55:38,760
In that case they they put so
much debt in there.

1035
00:55:38,760 --> 00:55:40,520
I think it was maybe an
intentional strategy, but they

1036
00:55:40,560 --> 00:55:44,640
also like getting the equity was
hard Yaka for them it was like

1037
00:55:44,640 --> 00:55:48,120
they could their market cap was
so kind of de minimis relative

1038
00:55:48,120 --> 00:55:52,160
to you know it was it was always
a bit on demanding that the way

1039
00:55:52,160 --> 00:55:54,680
that could actually get that
bill was with a maximum debt

1040
00:55:54,680 --> 00:55:58,400
funding kind of structure.
So I don't like things are

1041
00:55:58,400 --> 00:56:00,920
different now because gold price
is humming to the extent where

1042
00:56:00,920 --> 00:56:04,480
you don't you can just fully
equity fund the the restart and

1043
00:56:04,560 --> 00:56:07,320
and development here, which is
yeah, I just don't you're not

1044
00:56:07,320 --> 00:56:09,400
going to get situations like
calories, right because it's

1045
00:56:09,680 --> 00:56:11,760
equity.
It's just worst case scenario

1046
00:56:11,760 --> 00:56:13,280
you raise more money.
Good on them.

1047
00:56:13,480 --> 00:56:15,960
Good work.
Oh, go under the fucking

1048
00:56:15,960 --> 00:56:18,400
underground.
Love it, love it.

1049
00:56:18,480 --> 00:56:20,440
Love mineral mining services,
buddy.

1050
00:56:20,440 --> 00:56:24,360
Tell you what maker you want.
Another mention, highly

1051
00:56:24,360 --> 00:56:26,160
recommend giving MMS to the
contract.

1052
00:56:26,280 --> 00:56:27,840
Means a screenshot.
Fuck.

1053
00:56:27,840 --> 00:56:30,480
Can't make it any simpler boys.
Who else?

1054
00:56:30,760 --> 00:56:31,960
Who else should they get on
board mate?

1055
00:56:32,680 --> 00:56:36,640
Well, they should grounded for a
bit of a refurb of the camp or

1056
00:56:36,640 --> 00:56:39,120
an expansion.
If they find more gold cross

1057
00:56:39,120 --> 00:56:42,240
boundary energy for the hybrid
power station up there, that'd

1058
00:56:42,240 --> 00:56:44,680
be a wise move.
Obviously Sambic Ground supports

1059
00:56:44,680 --> 00:56:49,320
what's going to be going into
Andy Well mate, Steve Tarr will

1060
00:56:49,320 --> 00:56:52,520
broker probably the best
insurance policy with absolutely

1061
00:56:52,520 --> 00:56:56,920
no holes in it for the merchants
and gold project Greenlands.

1062
00:56:57,640 --> 00:57:01,320
I have feeling they've been used
already up at Maker so well done

1063
00:57:01,320 --> 00:57:04,720
Maker Kay Drill.
Hey, you can't find it.

1064
00:57:04,920 --> 00:57:09,200
You can't find too much gold,
can you go find a bit more buddy

1065
00:57:09,200 --> 00:57:11,320
MMTS.
They probably got the tenements

1066
00:57:11,680 --> 00:57:14,880
for him when they chucked it in
the back door to into the shell.

1067
00:57:14,880 --> 00:57:17,560
Anyway, that's a given buddy
race will get up there.

1068
00:57:17,560 --> 00:57:21,080
He'll he'll start clearing for
whatever they need just to get

1069
00:57:21,080 --> 00:57:24,000
this humming.
So first goal before FY20 6

1070
00:57:24,000 --> 00:57:26,440
easily, if Australian earthworks
and all that you're helping you

1071
00:57:26,800 --> 00:57:29,240
And as we said, we've just
watched the maker share price go

1072
00:57:29,320 --> 00:57:31,440
up on the spark chart.
Who drew?

1073
00:57:31,720 --> 00:57:35,440
Who drew money minus and in this
episode of Money of Mine is of

1074
00:57:35,440 --> 00:57:37,480
general nature only and does not
take into account the

1075
00:57:37,480 --> 00:57:41,080
objectives, financial situation
or needs of any particular

1076
00:57:41,080 --> 00:57:43,120
person.
Before making any investment

1077
00:57:43,120 --> 00:57:46,200
decision, you should consult
with your financial advisor and

1078
00:57:46,200 --> 00:57:49,320
consider how appropriate the
advice is to your objectives,

1079
00:57:49,560 --> 00:57:51,520
financial situation and needs.