Righto buddy Motors Happy Monday GC How was your barn me just
then? You know what, Maddie?
I didn't actually get a barn me today.
Why don't you go? No, no.
So I went to saw Q&T now going on a bit of a bit of clean
eating post post diggers to feel a bit better about myself.
So I went to Q&T at let's say at lunch bar.
I said QTI need something a bit healthier today.
What have you got for me? So they use their culinary X
Factor. It's to recommend me a roast
pork bowl and it was actually so good.
And you know who else does that? A lot access mining technology.
So you went to them with a request a problem.
Q&T are the trusted barn me advisers in bloody Australia
essentially. Pretty much quite the metaphor
for Axis being the trusted advisor for drill survey
instrumentation. Experts in what they do, always
available to help their clients when they're in a sticky
situation. Ohh, turnkey solution, JD.
G'day, JD. OK, I love how do you I love how
the roast pork bowl was the the healthy option to cleanse you
out of a week of drinking Pierce.
Better than crispy chicken I guess.
Oh, JC's had six saunas this weekend.
Oh. Literally cleansed, right?
We're gonna be going on today. We're gonna be to.
We're gonna get into. What's gonna happen?
What are red gonna do? Next we've we've started at red
five and then going down into the Leonora Laverton abyss
essentially, JD, you got a bit you're you're our foreign
correspondent for what's going on in Serbia with Rio and black
rocks lithium on holy snap of duck shit.
Yeah, fair bit on, on X and pretty much every mainstream
media channel under the sun reporting on that one.
And then there was a few other bits and pieces out.
We spoke about beach energy and there their strategy that came
out a couple months ago. Now they've had a a massive
downgrade today on reserves. So they're getting whacked.
And the other one was Galan, remember on Monday of Diggers,
this supposed takeover offer came out of out of nowhere
really late on the day the AFR reported it.
And yeah, there's been a bit more water under the bridge
since then, so we'll touch on that one later on.
Beautiful JC. Now before we get started, oh
I'm glad to see everyone enjoyed our unofficial Diggers and
Dealers awards. But one story I forgot to add to
your Best on Grand Award was the fact that you received some
phenomenal praise on the potty and the Director's Special from
a very highly regarded head of the Insto desk at one of
Australia's biggest stockbroking houses.
And he even went on to offer you a job on the desk should money
or mine go put. So guys and girls who are on the
desk and just want to excel at life, get that Comm up in this
market. Get onto the director's special
links in the show notes. But jeez, Maddie, I reckon you
be an absolute animal. I love it on the desk.
I'll be like mate, I'll be like, I'd make everyone on the other
line end of the line feels special.
It'd be absolutely love it. I'd love, I'd love to.
Hear the the sign off you adopt you know, if we got a a go
Australia or something the Maddie version of that let's.
Make money. I mean, forget the Wolf of Wall
Street, we've got the the dingo of Saint George's Terrace.
Oh, actually, let's play the snippet like you know how the
oh, Jordan Belfort did his Steve Madden like big ramp up for the
dare slot. I'd love to see you do something
like this. You'd.
Be ferocious. You'd be relentless.
You'd be telephone fucking. Let's knock this motherfucker
out of the box. Oh, oh, I love you work JC,
Right. We better get onto the news.
Let's get through too much fun. OK, and just before you start,
Maddie, just a Ding, Ding, Ding for me on Genesis.
Oh there you go you got bloody sneaky Ding Ding Dings
everywhere JC right now. Let's get into it then.
So this this coming up last week, which was essentially Red
Red 5 selling their own shares sort of in.
Yeah, effectively. And this, this comes from the, I
guess the history of Silver Lake buying the stake in Red Five and
then Red 5 and Silver Lake merging.
And there's been this, this set of shares sitting there that can
either be sold to the market to bring in money or they could
essentially cancel them 'cause like Silverlight could sell them
to Red 5, which is essentially selling it to themselves.
It's like a buy back effectively.
But take us through what's happened here.
Alrighty, so Red last week sold around 412 million red shares it
acquired through this process. They originally bought Silver
Lake, originally bought them for 108 million and they sold them
last week for 137,000,000. So a very tidy little 30 million
profit there. So Red now have cash and bullion
of almost $500 million and no debt lens discussion and tone on
on this particular matter. These these red shares was was
mentioned in his diggers Prezzo last week and it gave him the
way he talked about it and the tone at least to gave me the
impression that this is sort of a medium term thing they were
looking at sort of dealing with and evaluating.
There was gonna be some action on it by June of next year.
Have a listen to what he said here.
The unique situation of holding 6% of our shares provides a
potential non diluting source, non dilutive source of liquidity
out to June 2025. The investment has generated a
strong return and we now have significant flexibility to
realise this return, which has only been somewhat recognised by
the market today through either a recycling of the capital or
cancellation of the shares. So then literally the next day
the there was a block trade to to sell the.
State like it was going to be a bit more Elon like.
Yeah, No, it's definitely going to some, whether they cancelled
the shares or sold the shares, it was definitely going to be
happening at some stage. But one could definitely read
into the mismatch between how Len was talking about it versus
sort of the very expedient nature of what was actually
done. And it, it doesn't seem like
they were trying to take advantage of, you know, a
rocketing share price or something because the stock's
been off about 2025% since three months ago.
So that leads us to believe that there must be some near term
need for the cash to sort of exercise this option right now
and especially in sort of cancelling the shares.
But what actually is that? Yeah.
So like if they so they've cancelled it, they've now got
more cash, but they're they haven't really, they haven't
really gained anything because it was classed as a listed
investment before that. But if they cancelled it, they
would have had less shares on issue and like maybe had a
better, you know, price, share price almost.
What's the play Earnings per share?
Yeah, No, that's right. So it had, it would have had a
similar impact to say a, a, a share buyback or something like
that. So I mean, as far as the options
on the table for them with this, this huge pile of cash, I mean,
here's a snapshot from the Reds Diggers presentation on their
FY25 outlook and priorities. And that sort of gives us a few
hints. I mean, King of the Hills or or
cough as it's known, a lot of options there as far as doing
the northern and the southern cutback.
They've got at least 2,000,000 ounces in resource between those
two. You know, they could expand the
mill which is currently operating at nameplate.
And they say in their presentation that the the cough
mill is constrained, sorry, cough is mill constrained.
They've got about 7 million tonnes in all stockpiles at the
moment, let alone the extra or from cutbacks, exploration and
anything else, you know, outside of red that they might choose to
pursue. And they're processing costs,
you know, super cheap there. You know, could we see a sugar
zone race star? I don't know.
I feel like there's more interesting and exciting options
in the in the local asset based than than sugar zone.
Oh. My, I've got some comments about
that later, José, José, we'll. Get on to that.
Very good tidying up the hedge book could be an option.
They've got around 290,000 oz at Aussie $2769 an ounce for
delivery between FY25 and FY20 7.
Mind you, this is just like roughly 2/3 of, you know, this
year's current production and about 7% of reserve.
So it's not massive, but. That could what, 250 mil out of
the money about that? Yeah, so I mean it.
I mean, 250 mil is 2 50 mil, right?
So hedge book cleanups like for for Capricorn and Catalyst we've
seen recently have worked pretty well in a rising gold price
market. So, you know, that could be an
option. They could do a, you know,
special dividend, a share buyback.
But here's the juicy one. Could they do some M&A?
Here's what Len has to say about M&A in his recent Diggers
presentation. There's always a lot of noise
around M&A, particularly for those who are not in the arena.
The merger was underpinned by the strategy to combine the
strengths of two companies to leverage the compelling
commercial logic to create a stronger, better company with a
platform for further growth. It was not about trying to fix
the problem or combine more of the same.
Oh, we're outside the arena and we love talking about M&A,
whether it happens or. Not let's talk about it, Ted.
Good. Fun, Oh, what a day job.
Oh, it's it's very interesting where they're sitting.
They've got a shit load of cash now and then.
And this all I guess makes them very appealing for if someone
did want to go with them and we want to expand the king of the
Hill mill and we got bloody half a billion dollars sitting in the
bank account. Very appealing because I haven't
released any FY25 guidance yet. OK, so I guess you got you got
your got your eyes peeled a bit to see if now I've talked about
it divesting some of the the smaller silver like assets,
maybe spinning sugar zone out into another vehicle as a North
American play with another North American Gold Bond or something.
There is some links with other smaller ASX listed companies and
ex Silver like people that have North American assets.
Look, word on the decline the contractor change out at Rothsay
is having some hiccups so I just yeah, I I still wouldn't be
surprised to see red 5 and Silver Lake just become red 5
again, but. Just with more money.
With heaps of cash, I'll just Yeah, I just think that so yeah,
until they we see some guidance about what this year's gonna
look like with what they've got at the moment, Yeah.
Got me your eyes peeled, JC. No, very good.
So as far as the the M&A angle we'd like to throw, this is
rabbit wire #1 magnetic. And to be honest, I think when
we went through this exercise, I sort of felt a certain way
before doing the work, and I feel a bit of a different way
after. So let's let's go on.
The Jay dude, I believe we want a bit of research.
We've been mate, me and JC have been on WAMEX and everything
today like we are on fire. Converting longitude and
latitude to easting and northings and stuff.
It's just like we. Gotta, but once you get in deep,
geez, can't things change, Jason?
Oh, it's amazing. So what was your, what was your
thoughts before doing the research then seeing as you say,
there's there's been a bit of a change?
Yeah. So I mean, look on, on the face
of it, it is, you know, outside the grey.
And I mean we've touched on this in our fantastic gold piece we
put out the other week. So check that out.
It is pretty much one of the larger undeveloped open pit
assets is not held by a major in WA pretty much, yeah, other than
degrade in Ozgold. It's in such an active region,
not just operationally, but M&A wise as well.
And there's a lot of underutilised processing
infrastructure in that region as well.
So on the face of it, you know, it sort of does it, it does tick
those sorts of boxes as far as and you know an interesting
proposition. But like we always say, you know
the devil is always in the details.
So let's get into that a bit now.
So Magnetic, they're now capped it around just over $400 million
and they're one of the only stocks that went up last week
and on big volume as well. Admittedly, they did put out an
update to their PFS they did earlier in the year.
So here's here's Magnetic on the Spark chart.
And that was that. And that's pretty high volume
for them 'cause there's not much free float with magnetic, is
there? No, that's right.
It's pretty tightly held between the major shareholders.
So that is the to have a period of quite sustained high volume
is a bit unusual. But like I said, they did put
that pretty interesting PFS out. Major shareholders, which are
funny. I'll bring them up now.
Chinese and Dial Alcock. Just to throw something into
some. Pics get some checked dollars
out. Western Australian property
developer so and like I said before, Magnetic appears to be
one of the larger undeveloped assets that isn't owned by Major
in in the region and that's open pit as well.
So let's set the scene and let's take a look at the map.
This is we'll pull up the map here from red fives
presentation. Magnetic is roughly where that
little red dot I've drawn is between Goldfields Granny Smith
three and a half million tonne per annum plant which is
operating about 50% below capacity and the the town of
Laverton. Genesis is Mount Morgan's 2.8
million tonne per annum, which is in care and maintenance at
the moment. About a year away from
restarting is not too far to the West.
Both I. Think, I think it's about 10 to
15 KS or. Something that's quite close and
yeah, and then Grady Smith's about 35 KS away.
And then if you look further to the West, you'll see Red Fives,
King of the Hills, five and a half million tonne per annum,
you know, mine and plant and that's around 150 KS away from
magnetics Lady Julie Asset now. So what there's a, as you said,
it doesn't sort of stack up as logical, but we've seen Silver
Lake, which is now Red Five, do some things that haven't been
too logical to do with Genesis. No, that's right, history.
We certainly can't forget recent history, the Battle of Leonora,
which certainly underpinned at the beginning of this podcast
for Saint Barbara's Leonora assets.
Silver Lake sort of bought a pre pre bid stake in Red, which at
the time sort of seemed quite strange because there was no
sort of, you know, direct, immediate, obvious operational
synergies. And many at the time sort of
argued it was to sort of piss off Genesis.
And then, you know, they then accepted Silver like then
accepted a deal from Red where they got acquired at a bit of a
discount. And basically the sort of a bit
of a feeling that there's the long game is some sort of
eventual tie with with Genesis. So you know, how how do they
make Genesis need red more than Red needs Genesis?
And that one way to do that is land banking, their regional
synergies in the area. So you know, Mark Morgan's needs
higher grade and you know more feed where they're going to get
it from it. The Lady Julie asset purely on
a, you know, a proximity basis makes sense to fit into the
Genesis or or Goldfields portfolio.
And it's, I think it's pretty bloody obvious it's up for sale.
Of madness. I mean, you only have to have
George Sekoledy's literally body almost explicitly say it in his
digs presentation. Have a listen to this.
The Genesis and Morgan's operation, they're on caring
maintenance and the goldfields at Granny Smith.
In both cases, we believe that there's a chance to be
interested in our project that have been in our data room for a
while. And at the same time, we're
increasing the size of what we have.
So we think there's synergy there.
So they're in the data room. They're in the data.
Room if you didn't know. So there you go.
So for so for context, so the Lady Julie project that Magnetic
has it's 1.8 million oz at 1.7 grammes a tonne gold in an open
pit resource. It's obviously near with these
mills and processing infrastructure.
They put out a updated PFS on the first day of dig is just you
know, perfectly timed as they always do, you know, sort of
putting forward a 104,000 oz per annum production profile for
eight years, almost a billion dollar pre tax project MPV eight
at 3200 Aussie mind you spots another, you know, 500 bucks an
ounce more than that now as well.
I was you looked at building a 2.2 million tonne per annum mil
that they said is planned. If they did go out alone for
74,000,000 bucks, I don't know, I reckon if you you might be
able to get it built for that in China, but I don't know, she
might be a bit tough out at Laverton to.
Yeah. Sub hundred mil for that.
I saw a few of the, the brokers sort of chirp in and the, the
numbers they'd kind of put to it was about double the, the CapEx
that the company had provided. And you know, this is, this is
APFS. So we'll kind of see what comes
out in, in the DFS. But there was also some kind of
discussion that they they might tweak the sizing like you said
maybe 2.2 million tonne per annum, but they might look at a
slightly smaller thing with bearing in mind that this could
go underground. That was their sort of
commentary in the in the longer term.
Yeah, yeah. And I think like the other ones
that I've heard might be in the data room or you'd think might
be as well would be like your Regis and Anglo Gold Ashani
cause Tropicana and Sunrise Dam are in very close.
They're not too far away either. There as well so hey, everyone's
probably everyone goes in the data room all the time for
everything no doesn't mean you're gonna block buy the
bloody thing but. No, that's right.
Don't, definitely don't take that as a.
It's like saying, oh, I had a beer with Shane Warne.
Yeah, cool. Yeah.
Yeah, I didn't know him. I haven't added it.
I played pool against David Warner once.
Oh, did ya? Yeah, that's a good.
And he introduced himself as a different name.
I'm like. I know you're Dave Warner.
I know you Dave. Oh, that's fantastic.
Anyway, so yes, OK, you've set, you've set a good scene there,
GC Yes. When did your when did your life
start to change? My life started to change when
we started looking at appendices and Geo view and Webex is when I
just have a few questions so because.
I and because I just trying to and where I was where I landed
as well is just trying to think of this will be.
Much of a bug. Even if Red did purchase this
for whatever reason, would it be a bargaining chip to get
Genesis? I'm not sure we're going to
figure that out, right? Let's figure it out together.
Change of life point #1. The magnetic price tag is
getting expensive now market cap, like we said before,
they're just over 400 million market cap now.
If you whack the standard 30% M and a premium, I think arguably
given the shortage of sort of big simple open pit assets in
Australia or WA even you could argue that premium might be even
more if a prospective deal went ahead.
So that's taking you to a ticket size of, you know, five, $600
million and you haven't actually built anything just yet.
Yeah. And and because it's got that
low free float, it's like whether I think of the, it's
been turned to me price discovery in terms of what it
what it's trading at at the moment on a very low free float,
it's like, well, is that the most accurate valuation for this
stock? We don't know and that certainly
would have an impact. Probably the bigger question for
me is PFS with no reserve And look, I haven't been in the
market as long as some others which you know that's fine.
But in the time that I have, I've rarely if not ever seen
something that's been at APFS level or beyond not have a
reserve. I just and even in our recent
gold piece we did that was the case.
Everyone who had APFS onwards had a reserve except magnetic.
But, and the question isn't more so why wouldn't you?
Why wouldn't you put one forward and getting stuck into the
appendices a little bit, sort of, I don't know, gave us some
hints or some sort of answers. I mean, having a look at the
excerpt from the updated PFS appendix.
And this is more so in relation to, you know, delineating an oil
reserve said the current focus is on expanding the resource
base rather than infill and the resource to be mined in the
first four years is largely indicated.
So would fit the probable reserve category.
Now that makes in light of a few single asset gold developers in
recent history. We've heard this before and it
sort of makes us a little nervous, you know, and they've
appointed Argonaut as dead advisor.
So we can imagine, in light of the recent Daisy and Gascon
Caledis sort of debacles, any potential project financier.
Look, they would do this anyway, but even more so now they would
want a very high level of confidence in the geological
model. And so that infill work will
have to come eventually. Yeah.
And and like look, yeah. And it is coming across that
there needs to be a lot more work done on that resource
definition because and it even says in the job table here that
no independent verification of drilling sections has yet been
carried out. Yeah, right.
That would be something that banks and like people providing
debt, I assume would require of course, 'cause like you know
like the hits look good inside as the resource done, but look
20 metres at 3.8 grammes for a drill hit.
You'd bloody take that any day. The friggin wait.
But you you say on the maiden mineral resource estimate that
73% of the drill hole metres, 130,000 metres worth of call
well worth of chips were done with RC.
Yep, so and you also which. Is pretty standard.
Yeah, yeah, yeah. And you also see it here where
it talks about like the the risk with RCS, like drill holes,
samples are sometimes wet, which may result in sample bias.
So like, and what happens there, like the muddy muddiness of the
sample coming back up the string can sort of bits of gold can get
stuck and then sort of smear over a longer length side look.
And it's just an example why they're having an independent
geologist sign off on all the historical drilling is, you
know, very important. It's definitely very useful to.
Make a bloody bank happy. So yeah, that's yes.
I I still I just find that really strange in this day and
age and sort of going along on to the next point there.
There isn't currently an ML or a mining lease on the Pro SEC just
as yet. That's.
Probably that's probably the most thing that gets undecided
the most with M and I I'd reckon is like whether it is on a
mining lease or not or exploration or prospecting
lease. So 'cause that not having that
mining lease can slow down, that could be like another freaking
two years. Like 'cause they, they, they did
put mining lease application in for Lady Julie N for last year,
yeah. Late in December.
Yep, that's where it hosts most of it, and that's where the
where the project's gonna be. But like that could.
So it's in the wings, but it's, there's still, there's still a
bit bit to go. And you know, again in the, in
the lovely PFS appendices, they say that they're still working
on ML applications, so that sort of other deposits as well and
wrapping a mining proposal around the whole thing is
underway right now. However, it says the grant of a
mining lease and approval of a mining proposal is subject to
signing of a native title agreement, negotiations for
which are currently in progress. So we all know how slow project
approvals are going these days, you know, Australia, WA in
particular. So you know, by the time you
sort of native title, then OK, they've got the application in
for the ML, which is fantastic. Then they've got to get that
granted. Then they've got to submit a
mining proposal, then they have to have that approved.
Then they've got to do ADFS and you know, if FID and funny there
is at least, you know, another at least another 12 months, if
not more. There's a lot more water to go
into the Bridget. Not saying it's not going to get
there, but you know, we hope that it does.
But there's still a lot more work that needs to be done as as
part of getting a mine up and underway.
It just goes to exactly what we spoke about as one of the
takeaways from Diggers last week, right, permitting and all
these things taken a bit longer than they used to.
And I mean for for this company, it seems kind of appropriate
that the PFS level they're going to work that in tandem while
hopefully they have a you know, diamond programme and then
tighten up the drilling and build the confidence in the
resources all sort of comes together over time, but it takes
time. I think that's the take away.
Oh, and you look at what what line town in Bellevue went
through to get their native title agreements and the people
and energy that goes into that process for them to get to the
stage of mining now, it's a huge, huge effort, huge job.
100%. Is there This is where big Wham
X got involved. Equal hair goods Wham X.
I'm a friggin that's my new That's my front tab.
Now you look at look at where the pit is.
So I'll bring up that there that Lady Julie N pit is right on
that northern extent like literally looks like a tenement
batting the tenement boundary. And look that this square.
I'll I'll bring up the the Wamex stuff, the square with the
little top right corner chopped off.
That's the magnetic tenement. They did recently acquire the
tenements to the east from Rincon resources.
So that's for the potential sort of East extensions down dip,
but. Look at your Webex.
Screenshot scroll through so many Webex pitches.
But right to the north of the Lady Julie N pit boundary are
two tenements owned by Focus Minerals and that's where the
pit abuts to at the north. And I, I just think looking at
where that's all situated, that would make things a bit
difficult. At the moment.
It's like especially I'm I'm not sure if the ore body if it just
goes out to the east to Rincon, if there's any other extensions.
That go the other way. At depth go venture into the
focus things to the top. It just it just might be tidier
owning the neighbouring one as well.
But I'll tell you. But a bloody a verify model
would be handy, right? Oh.
God, trying to do all these bloody conversions and stuff on
where it sort of sits and oh God, the verify would have
helped so much. Yeah, yeah.
And I'll just want, I want to know if it's trending that way
or that way. I probably could have checked
Azzie's and all that. I'm, I'm, I've taken the first
step to understanding this. I've probably, actually, I've
probably been a bit lazy with, you know, reading drill tables
and like plotting things because I, I've only ever used verify
models and I've just, I've just started getting used to it.
So I WAMEX give verify a ring and try and integrate verify
software into the WAMEX platform and I'm a happy camper.
And they could brawl fight and the drill aisles and bloody,
they could actually put the AI in there to tell WAMEX where the
probably the next Yeah, fuck it. Unbelievable turnkey solution.
Turnkey government should cough up some decent money for it.
Look at 'cause you look at Focus Minerals as interesting ones.
I think it's like 30 mil market cap.
But look at where all the ground that they have in and around
Laverton. Yeah, it's freaking everywhere.
And obviously, well, a lot to the north of Lady Julia.
But Focus is 63% owned by Shandong Gold International
Mining Corp Chinese Magnetic are also about.
It appears the major shareholders make up about 30%,
which are Chinese. So even even a tenement sale
from focus to magnetic would need or vice versa or whatever,
or be focused to magnetic, that'd even need FURB approval,
yeah. Potentially.
Yeah, let alone a frigging merger of a Chinese to Chinese
in Australia be a bloody, bloody difficult one.
So yes, I think we've we've landed.
Oh, and the oh and then oh and the bloody CapEx.
Yeah. And the CapEx and OpEx seems to
be a bit undercooked as well, which you know we've sort of
touched on in, in previous chats and, and and newsletters as
well. So I guess the question here is,
do you think Red will pop up here just for the sake of
frustrating Genesis? What do you think, JD?
I'm not sure how long a a business strategy can just be
the frustrated it'd. Be good fun, it keeps you
interested. It would be I I, I do, I do
think the you know, the point you mentioned earlier, Maddie,
of trimming down the portfolio of getting rid of the, the non
core as the company sort of migrates upward in the chain and
becomes bigger. You know, Northern Stars a good
example of evolution bit by bit as they get bigger, they trim
the the, you know, less tier one type ones and they acquire even
better deposits. So that's the kind of natural
progression of all companies. And I think that's definitely
going to happen with the the more fringe assets here.
Oh yeah, to be I don't think, but always that really I'm
throwing darts now things not happening.
Haven't I evolved? I'm usually saying bloody trying
to think of what's going to happen now I'm saying what's not
going to happen. But I, I don't think anything
will happen here in terms of like Genesis are obviously
focused on probably getting Mount Morgan's back up and going
even though it is 10K away or whatever.
But look, no mining lease, no native title agreement, no
mining proposal. Probably a bit more work to be
done on the resource and, and everything like that.
Even without building a mill there, you know, it could be
frigging 2 years away. So if they're right starting
Mount Morgan's, they can't get the dirt for frigging ages
anyway. So look, maybe.
It's rubbish. Might be something that could
come in later on, but I reckon if Red 5 bought it for whatever
reason that Genesis would be like, Oh well, ain't enough to
suck us in yet because we're restarting Mount Morgans anyway.
But I think more the key thing is that if because I think
Genesis, what have they got about?
I think they've got 100 and 100 odd million cash 140 mil yeah
they've got a lot to do right there I know they're busy
they'll get fucking debt like that.
Oh big row will just walk in and say in her over big follow but
he but I think now red red with all that cash as well like that
look it it's going to happen eventually it's just the
timeline of when Genesis and red five will tie up.
I, I noticed in, if you get where I think maybe it was the
Aspire 400 thing in Genesis where they were talking about
the Leonora mill expansion potentially to 4 million tonne
at Gualia. So then Tower Hill didn't go
have to go to Mount Morgan's. But then watching that Diggers
presentation, it was sort of reverted back to just talking
about Tower Hill going to Mount Morgan's, which I which I cannot
personally ever see happening for that deposit.
Everything belongs in that king of the hill mill.
It's just when that actually happens.
But if they're going to sort of do a lot of work in pacing this
whole thing together, Red five's half a billion in cash would
that's. Just half a billion in cash now,
let alone what they build in the next, you know, quarters and.
Especially if they start divesting stuff like yeah for
for cash, like yeah, I think yeah, I wouldn't.
I wouldn't be surprised if it happens sooner rather than
later. Yeah, I think with my with my
old bank I had on the only thing that sort of made a little bit
of sense to me is get doing a Remelius Spartan types, you
know, strategic investment into a magnetic purely for option
value as far as putting a foothold on it.
And whether you wanted to acquire the company later when
you're ready yourself or if someone else bit over the top of
you, you'd make a bit of money on your stakes.
So you sort of ideally it's sort of you're not losing all the way
and you've got that option there.
But I think, yeah, my conclusion after going through the weeds,
it's, you know, definitely a very interesting large open pit
development story in a very active region.
A lot of underutilised processing infrastructure in
that region as well. But like you say, Mehdi, there's
a lot more water to go under the bridge until this fade can
actually get mined and put into someone's or their own, you
know, processing schedule. These are out there.
One, if it's going to happen, I reckon it's going to be a block
trade for Dal Lawcock steak. Yeah, that'd be.
Because there's there's not really the free float or
anything to. So he's got 111%.
So that'll. Cash, well, that that can block,
it's enough to block a compulsory acquisition.
It's more than 10%, Maddie. Jeez, you.
Would be good on the desk. Don't you worry about me.
Oh Bunny, give us a ring mate. I'll pop in and do a bit of work
experience for you Cover. Oh, Jesus.
Oh, there you go. Good stuff, Jay.
So actually I learned a lot today.
I did learn a bit and also as an aside, I thought this was a bit
cheeky for for those who are in the know, have a listen to this
snippet here of again, this is Red 5 Slen.
Who do you? Which gold producer do you think
you might be having a crack at here?
Have a listen. We have significant financial
strength with $520 million of liquidity to pursue and
internally fund projects, exploration and growth with the
business facing no existential imperative to pursue M&A, an
increasingly differentiated position in the gold industry
today. Who do you reckon?
Must be rageous, I. Surely, Surely.
But isn't it funny that I reason he can say that now it's because
he's got King of the Hill? Because.
I think that was. Silver like not long ago.
Oh, what goes around comes. Around.
I love it good work JC. We've taken we're going into a
new frontier today, mate. Step change.
Bloody. Oh, brilliant.
You wouldn't believe it. It'll work hard when you're not
supervising me, JD. You should be proud.
Rather but. I'm very, I'm very proud of you.
You should actually give a couple comments onto what Wymax
is, I think a few punters out there, yeah.
They're publicly available. It's like Geo view dot WA.
It's like WA, yeah, mineral exploration, bloody whatever.
It's the government website where you can see all the all
the tenements, whether they're prospecting, exploration or
mining lease. Who owns?
It takes a bit to get bloody
used to and. Pretty handy, hey?
Yeah, yeah, mate, I told you might pick up some ground, sell
it on the desk. Righto.
JD Rios. JD Rios Jadar.
Yeah, we're we're going back to back to Serbia and I think it's
actually yada Maddie, I got that, got that one after we
spoke about it last time. So we'll we'll play a couple
videos while we're talking here. You can see sort of how Rio
envisioned the project. It's their sort of mock up of
what it's going to look like if Slash when it gets developed.
But essentially when we spoke about this a couple months ago,
things were looking to be back on track.
If you're if you're Rio Tinto from their perspective, and
we'll give a brief timeline, about 20 years ago is when they
discovered this thing. Since then, it's been in study
after study as the the the broader lithium market has kind
of matured. They've spent €500 million on
the project over various studies to date.
Get get lubricated, JD. That's it mate.
The the throat's still a bit rusty after the years.
So essentially in Jan 2022, the Serbian government revoked the
licences or some key licences. And then what we saw in July or
late June was that the court had ruled that unconstitutional and
essentially given back the licences.
Now over the weekend, there's this massive protest.
It was all all over Twitter, all over the the various news
stations out there, between 24 and 30,000 people, with the
bearing reports of how many people were in the streets of
Belgrade, the capital of Serbia, fighting against the development
of this project. So we've got in Times Square,
that's. Just amazing.
Bloody unbelievable. Yeah, it looked, it looked quite
busy and to, to try and get a feel for who's actually out
there. From reading into it, you know,
you've got farmers from the, the Yadda Valley and then you've got
environmental groups, you've got people from a sort of political
band, people from, you know, more just out and out
environmental kind of left leaning political groups there.
But it seemed to be a pretty broad range of people that are
kind of anti Rio Tinto, anti development, all with the, the
crux being that they are scared that the mining will pollute the
land, it will pollute the waterways that flows a couple of
rivers there through the whole of the country.
That, that really seems to be the, the core issue that all the
people there have with the, with the development and it's, you
know, it's not completely like unfounded.
Serbia is a country with some of the worst air pollution in all
of Europe. I just found that out doing a
bit of digging. That comes from industry they
had from, you know, back in the, the Yugoslav when, when it was
all Yugoslavia throughout the sort of 1950s to 1990s.
And that is, you know, led to a whole bunch of health problems
with a lot of people there. So it's very front and centre,
this issue of pollution, bad air quality.
And they're kind of, you know, a bit traumatised by that in a
way, and they don't want to risk anything, not to mention all the
farmers, they don't want to ruin their lifestyle.
That's what they were kind of want to pass on to their
children and so on. And there's this interesting
sort of comment floating around from various political groups.
They're saying, essentially, why should we develop lithium for
electric vehicles that we can't even afford?
And that's sort of pushing back firmly against the Western
European countries like Germany, France, England and Spain, who
are very pro the development of this project that's, you know,
not in their backyard, but still in the EU.
So a bit of, you know, not in, you know, Nimbyism is still very
prevalent here. They don't want the mining to go
ahead. But clearly the EU is still
trying to push on with its goals of getting the project online.
There right, God fragging. Good luck being a copper there
with 30,000 angry Serbians coming at you.
Jesus Christ. Mate.
It is scary a lot of. Shivering just thinking about
it. Yeah, and it's it kind of flies
into the face of what's unfolded over the past couple of months.
So like I said, the EU wants this to go ahead.
You've seen Mercedes Benz, you've seen Stelantis, they've
signed deals to get, you know, early stage off take kind of
agreements to to get the lithium.
And we've spoken a bunch about the the E US Critical Raw
Materials Act. This project alone would provide
90% of the lithium needed for that, you know, if they can
build the downstream battery facilities in time in the EU as
well. But that that whole goal is
looking very shaky because there's not a whole lot of other
off scale mining projects out there that could fill in the the
supposed 90% slot that this project would would come up
with. So how's Serbia as far as the
government? How have they if if they have
responded to to these protests? It, I mean it, it's really
interesting. You've got this guy, Alexander
Vukich, he's been there since 2017 from memory.
So he was there when the project was pulled.
He was there and sort of championing it when they gave
the licence back. And he's actually called a
crisis meeting and said this is all a kind of ruse to overthrow
me via a coup. So he's saying this isn't
actually to do with yada. This is the people uprising
under the guise of another sort of cause and they want to
overthrow him. So I, I don't know how much to,
to kind of read into that. Into you.
It's me, yeah. It's.
It seems a bit far fetched from the outside, but what I don't
haven't even been to to Serbia, but I think the real consequence
is with Rio Tinto. We know with without a, a social
licence, you just can't operate and Rio Tinto more than any
company on earth knows that one. In the mining space, the the
Serb energy minister said it's going to take at least two years
to get the permits to start construction, but that all
hinges on an environmental impact study.
The AAP, AP, existing JD, what's the what's the metrics on it?
She's going to be a big hum digger. 58,000 tonnes of lithium
carbonate equivalent. Yeah, right.
So that's what times that by 858, so like bit under half a
million tonne of spot equivalent, so exactly.
Similar. Exactly, people are long town so
it's a pretty decent size. Mate, it's, yeah, it's it's
chunky. And I mean, I'm thinking about
Rio Tinto. I'm thinking about what we've
spoken about in the last week or two, Jabiluka, their kind of
stance on that once you guys need to need to find another.
Water. Oh God, this happened to me at
the bloody the mining club. Oh no MC thing.
I was up there talking and I started getting a tickle in the
throat and someone, someone was actually telling it.
Like a very. Important story.
A very personal story and I'm like I'm so sorry mate I've got
a lot. Then lucky they got me a bloody
water and fixed me up. Oh bloody.
The timing is just like then I started sweating and then once
you start sweating you start sweating more because you're
thinking about sweating, sweating.
Oh, once I got myself back on track, got it again this bloody
this Wednesday actually I'm up for another round.
Very good bloody. So I'm taking up a pint of water
with me. This.
Time, Yeah, Take up a pint. That's my fair, so I'll get a
dingo all. Right, so you've got it into
contour now. I've got you.
I'm fit and fighting. Back on my feet.
Go, brother. So you, you got Rio Tinto,
Jabiluka, obviously what we spoke, spoken about, they're
obviously going to continue to try and change the sentiment in
Serbia in the background. But if you're in the boardroom
now at Rio Tinto, you're having a serious conversation asking
are we serious about lithium? They're kind of said they are
for a while. And the follow on, if you say
yes to that is what are we going to buy?
Is that a project? Is that a company that I mean,
that's where you're kind of left at, right?
Because this, this is going to take forever.
It's it's kind of been in the background.
I mean, I'm sure they've known this for a while.
We saw the protests in Jan 22. But I think that's where they
kind of left it and maybe we say something.
You know, but you look at like you look at how much they
fucking make out of iron ore and copper, like like how big scale
it is, their iron ore, their copper and you know everything
else. But you see the the effort they
would have to go to for this just to get it's not like it's
the biggest friggin lithium mine in the world.
Like it's sounds like it's a bit smaller than line town.
So it's like. Still chunky It's.
It's chunky, but it's not like if they're going to really have
a swing at lithium, it probably goes back to what you're saying
the other week, JD, they'd just fucking buy Pilbara, wouldn't
they? Like.
Yeah, I mean. Then it's got proper proper
scale. Kind of got to weigh out the
differences between the, the amount you'd have to buy the
thing out for. I mean, this, this thing's got a
40 year mine life as it stands at the moment.
So it's, it's not small. But yeah, I guess we'll kind of
we'll kind of say I'm sure there'll be some stern
conversations in the back. You've also, I mean, the the
other kind of takeaways right are that this is long term
bullish polythium on on the margins at least it was down the
track and our conversations in the West about taking power from
China, they just keep going. This is, you know, they're
actually doing stuff over there. They're actually building things
and we keep going back and forth so.
Look, I wouldn't want to, I wouldn't want to put those guys
in the bloody trenches after seeing those videos.
But I reckon there might be a need for the CRE insurance team
to get over to Serbia and sort of give Rio some assistance
here. ISIP because like talk
international mining, international insurance in tough
mining jurisdictions like that's just another day in the office
for CRE like they they love it. Anything in Australia is just a
bonus. Like easy, they love
international. They absolutely.
Africa. Big in Africa?
Do it in Perkina, they do it all over West Africa.
Said you'd be a walk in the park, you'd think.
And I think that it's probably good for them as well because
they could actually insure themselves when they go over
there in case they get stuck in one of these bloody blockades in
the middle of the city. So there's there's insurance
going everywhere. So that'd.
Be everyone gets they'd. Be protected themselves, they'll
go and protect the mining right and we are going to have it
sucked down a couple of points with not true Harvey, the CRE
insurance team, the savvy. So looking looking forward to to
them. I do send us a message if you
were lucky enough to have a point with Druber at Diggers,
but he we'll draw up some T shirts.
Sure, I'm sure that he wanted 2. Messages chase money more if you
had a point with Druber. I love it right JD?
Finish it off mate, before your bloody throat caves in.
That's it Galan. I was getting a few WhatsApp
messages about this. Oh what's the talk about Galan
diggers? I'm like oh shit, sorry I
haven't talked about mining all day.
But anyway. I'll give it, I'll give it one
last hurrah. So the deal is not going ahead
at Galan. So this this fuss came up late
Monday while the stock was still trading.
If you guys remember, it was, you know, quickly put into a
pause after the stock had jumped kind of 15% and then the day
kind of closed. More information surfaced before
stocks started trading the next day.
But the, the headline we saw from straight talk was US $150
million takeover, which you know, sounds sounds pretty juicy
before you start scratching beneath the surface because they
were kept at 64,000,000 Aussie at the time.
Now the, the reported bid came from a group called Energy X.
They're not listed. They're a a start up.
They are, they're an American company, although there's kind
of varying reports out there. One headline said they are
headquartered in Austin, TX, Another one said in San Juan,
PR. So you know, you can, you can
dig into this company and, and watch a few videos on YouTube.
They are trying to get their DLA technology advanced and they
thought that Galan's project would be the ideal sort of
vehicle to kind of do it through.
But digging into the detail, you can see the the supposed
takeover in quotation marks isn't exactly what it seemed at
first. The ASICS queried Glenn and you
know, overtime Glenn came out with a bit more information, but
this was essentially an unsolicited conditional non
binding indicative proposal. It actually came about around a
month ago on the 12th of July is when the company started talking
before St Talk broke the news. But this was not AUS $150
million takeover by any means. What Galan came out and said was
that there was US 50 million in cash, 50 million in Energy X
stock, plus 50 million in project financing.
That's all very kind of airy fairy because they're a private
company. They were going to value their
own stock, that 50 million. It'd be like us trying to do a
bit of a takeover using money and mine paper.
Of course we give it a quite a generous valuation, I think, and
of course I could. Probably basically.
They'd probably be an independent valuer in between
there as well. But you know, those things can
get a bit blurry. And not to mention the other 50
million was for project finance. Now that was going to go to the
project that Energy X we're going to own.
So of course, Galan isn't getting that cash at all.
And then there was talk of a 10% royalty as well.
But essentially here we are a week later and Galan has come
out and said there is no chance of this turning into a solid
deal. You know, we're just going to
move on from here and keep developing and yadda, yadda,
yadda. It reflects well on the project
and all these sorts of things. But you know, it was a
interesting week for the stock. It jumped up from circa 12 cents
up to 17 and then now it's back down in 12.
There's a bit of a a spike in volume as you'd expect in
between. But here we are.
I think, you know, the lithium market is still kind of in the
doldrums and these guys are just going to have to keep chipping
away at trying to develop this thing.
Oh, JD, mate, you have done sensationally because I know
you. I know though, isn't that the
worst thing? I'm just going to finish this
sentence because and I'll just the tickle.
The tickle is right there. It's just won't go away.
Mate, Do you want to scrap the last one because since you're
struggling or you want me to read through it for you?
Go for it mate, go. For it mate.
I'll tell you what nothing more than I'll dive into each day
more than beach energy fucking beach energy first thing I look
at all the time. Love me beach mate.
Having a bit of a shocker ajd down 12% like coming out with
their full year results today. I guess look, the stand out
point to me was, you know, 2P reserves fell by 20 percent,
20%. So that's pretty big.
That's 1/2 years of potential production losses from the
revision. So it's a bit of a kick in the
guts look, which I think, look, when I wasn't looking at beach
and you were JD, we spoke about when the new strategy came out a
couple of months ago there, there was a bit of a expectation
that the new management had cleaned the closet, you'd say.
And look, add, add everything negative that needed to be
aired, leaving them to, you know, get on with the job, get
on with the beach story. So look, this point is far out,
Sean. Anything else the company had to
say? Maddie, what was what was kind
of behind the the reserve down. There oh look I bloody look I
Dave right into it look they've they've hooked up the enterprise
enterprise field in the Otway and look that that's the one
that just sits north of Port Campbell on the Victorian
coastline. So I.
I think you'll find it's just to the South in in the in the water
there. South, I was just testing ya but
yeah, bloody. Yeah, you're all over it, man.
Just sits South of Yeah, 'cause it can't sit north of Victoria
coastline. Yeah, look.
Oh, it's just that friggin clustered how much time I put
into this. And look, they, they've said
they've observed a bit of a pressure decline JC over the
past few weeks. And look, that's look, that's
consistent with the reservoir being smaller than I guess
originally estimated. So look, two pay reserves
dropped from 50 M MB OE. Yeah, barrel equivalent.
Oil barrel equivalents? Yep.
Yep to 2:05. Yeah.
And a, and a good bit of that came from the the enterprise
downgrade, not to mention, you know, yet the the production
that they spat out over FY24. But here they are that 12%
chalking off is over $300 million in in market cap.
So they've got their work, they've got their work cut out
for them. And I think it's just, you know,
kind of perennial disappointment for Beach shareholders.
It's been a disappointing stock to hold for quite a while.
Geez, you know who's not perennially disappointed?
The customers of Axis Mining Technology.
Great Segway. They're always happy.
Go Access. I thought you're gonna say
seeing barrage there from go access go the rest of the bloody
partners MMS the go the go to mining contractor, verify Smeg
power and technology, DSI underground Silverstone CRE
insurance, Greenlands equipment, K drill and you saw a couple of
spark charts in there. Bloody great, thanks for
carrying me through team. Ohh mate, I'll interject on
beach anytime you want. Jada Hodoro, Honest.
Hodoro. Information contained in this
episode of Money of Mine is of general nature only and does not
take into account the objectives, financial situation
or needs of any particular person.
Before making any investment decision, you should consult
with your financial advisor and consider how appropriate the
advice is to your objectives, financial situation and needs.