Right eye money miners. We were just about to record and
have a look what bloody rocked up we've.
Got a lovely gift from a money? Miner Oh shout out to WA gifts
and hampers. But this is like this is a
result of bloody great land gold getting Telfa because straight
from as you can see. I'll take a photo of it to serve
Matty Michael and his serfs from Sir Stewie the Pom.
Great Stewie Hinds. Oh.
Thank you. He's.
Trying to buy. Sorry Stewie, we're not talking
about bloody Telfer or Grayland or anyone today, but very
timely. Cause today's our 400th episode.
Oh money of mine. It's crazy, isn't?
It oh bloody it. It is the that that is our Super
Bowl, Jason. It is our Super Bowl.
Oh, poor old Taylor Swift to be upset.
Yeah, I know Trav didn't win. No, no luck for the No luck for
Kansas. The Eagles took it away this
year, Yeah. There you go.
It's amazing. They look back.
I think they played years ago and a few years ago, but Kansas
City beat them. The other way round.
Oh, it's just, it's just real NFL show, right?
Let's get to something we know a bit more about than NFL uranium.
We're gonna tour, there's a bit of bloody uranium news I'm gonna
mix together couple of podcasts in views, news articles and me
just making up things that might happen.
Love it, but it sounds the more I write about it, the more I
believe it. It's great.
J So you're heading out to Cobar?
Yeah, to covering a bit of Poly metals.
We're looking at a bit of a a peculiar small cap takeover bid
and just some lithium around the grounds as well.
But let's get into your uranium use.
What's what's going on? What?
Has happened. Educate me.
Nothing really, I don't think, but I'll just make a segment out
of. It let's do.
It the so as we've seen the old spot price back below 70 again
sitting at 69 bucks though you've got the long term, the
long term price, term price. Yeah, yeah.
Starting. Strong 82 bucks a pound midterm
sitting at 76 so yeah it's like that spot process continued to
have pressure on it and there is some comments from a podcast
that come out a YouTube vid that come out during the week with
from triangle investor who interviewed Grant Isaac from
he's pretty much the top dog second in charge you'd say for
Kamiko, which was I don't think I've ever seen him on a podcast
before I'm not sure but it's a pretty he's interesting.
Kamiko are the bloody alongside 'cause Adam Prom as we know the
most influential player in the uranium market globally.
So it was a good yarn. We'll get into that later.
But also seen out from our good friend, geez, we've got friends
everywhere. Looks like we're really
influenced. But I just like it.
I just like people. Shoot me.
Oh, Peter Kerr, our great friend Peter Kerr.
What do you have to? Say, well, he wrote an article
today about BHP boys uranium bulls with plans for small
increase in production. And I think I mentioned it the
other week saying that, you know, if it was completely
opposite to this, saying that if the there was that thought out
there that if BHP expanded Olympic dam, that the say, if
the copper production doubled, the uranium production would
increase at a higher factor because there was that there was
that narrative going around. So, you know, they're producing,
you know, 8 to 10,000,000 lbs already of uranium as, as a by
product, but still bloody chunky, chunky amounts.
So they were thinking if they, you know, doubled it, they could
really bring a lot of uranium into the market.
But then what I guess BHP have, you know, they've submitted
paperwork to the authorities about the smelter expansion,
which would double copper production and pretty much
saying that I'll, I'll bring it up here.
A lot of the extra feed coming from Carapatina and Prominent
Hill is said to not contain that much uranium, so the uranium
won't actually increase that much if they double double from,
you know, 300 odd 1000 tonne of copper to 600,000.
Which would have made a lot of uranium investors sort of calm,
calm down a little bit, I guess. Yeah, yeah, exactly.
So which is? Yeah, I don't, I don't know.
I guess it's one of those believe it when I see it things
because I know the logic the whole thing around caropotene
and prominent Hill being bought into BHP was that there is parts
of those mines that do have higher levels of uranium in it
and that was like a bottle a constraint for OS minerals
because they didn't have they couldn't effectively mine them
as easy because the uranium levels well they didn't have the
processing solution for it. And I think it would have
affected the concentrate like getting it shipped out if it had
high levels of radioactivity. But you know, combining it with
the Olympic dam and having that all together now you've got the
processing solution. So you don't have to be as
selective with the mining. So yeah, I'm not in the weeds
enough about Carapatina and Promil, but there was still will
be some uranium coming from those operations whether they
target that or not in the scheduling.
But they've pretty much said it for doubling in the copper,
it'll be a 1% increase in uranium.
I think I read SO. Not as much as paper we're
expecting. Basically no.
And so look, how do you read into that lot BHP's thoughts on
like they're trying to, I suppose the 10 eight to
10,000,000 lbs they're selling from Olympic Dam is pretty
bugger all compared to what BHP make a year out of iron ore and
copper. So you know, they're they're
trying not to lower the uranium price, but it doesn't really
have a material effect at all on BHP for how much they produce.
But they're not talking the price down that they want to buy
a heapy uranium. You could infer.
So don't know, maybe they're not a buyer of next Gen. but we'll
get to that later. OK, hold on for that one.
So. This potty now you mentioned
earlier with the Kamiko exec, So what?
What? Was that about shout out to
Lucian from Triangle Investor? Bloody highly recommend watching
the whole interview. It was very, very interesting
and very, you know, Kamiko, he's like he was swinging himself
around a bit as Kamiko's like, we're right.
Yeah, we're like, you know, we're we're the holding the keys
to the closet here. Is that a saying?
It is now the gate. Keys to the Kingdom?
Oh yeah, it's one of those. Something like that.
I love it out the YouTube comments talking about how much
I'll waffle on like I don't care.
The more you comment, the more I'm going to do it.
So whatever. So I guess I'll play a couple of
could play a couple of snippets to highlight and we'll and we'll
have a yarn about it. OK.
This first one from Grant was around I guess the spot market
and you know, Kamikow like very contracted.
They're actually talks about in the interview how they they're
contracted 30% more than they're going to produce like because in
over the long term because of their, you know what they've got
in other resources that are on care and maintenance or
brownfield stuff they could bring back on.
So they're, you know, in the spot market, they're not very
active, but they're talking about comments about people that
are active in the spot market. Let's play.
Around so you didn't have the demand building in the term
market and yet you had some people for whatever reason show
up with material to sell. I mean, January began with a
producer who's restarting an asset trying to sell 200,000 lbs
in the market in a non fundamental discretionary market
where utilities aren't focused. It's a dumb idea.
It's a dumb idea every time. And and I don't know how many
times we have to say it, but spot market will be under
pressure. If there are those who have
productive assets and they don't do the hard work of building a
home for them. I have no problem buying in the
market when when we show up to buy, there's a response.
But what we do not do is play the role of buyer of last
resort. If there's a producer out there
and they haven't planned things accordingly or they decided that
a spot strategy was going to be a really smart idea, you know,
they'll often phone us and they'll say, hey, you know, I've
got 200,000 lbs to sell. And, and if you don't buy it,
I'm going to put it in the spot market.
And I'll tell you our answer 100% of the time is put it in
the spot market. Then you'll push down the price,
you'll get a lower price for it. I might buy it at that lower
price and when the market corrects back up, I'll take that
trading margin. But if we start rewarding that
kind of behaviour, it will continue.
So, and the, but the mechanism behind Kamiko's revenue is, you
know, you could sense why it gets a bit rolled up about this.
So because from the, from the, the race star projects and my,
and because he's, as with every other uranium executive around
the world at the moment, every time they speak, they're talking
about the structural supply deficit, like the price is going
to do this. And like for, for the restart
projects, like selling into the spot is like, because they
believe that too. Everyone's believes it.
So it's like, why would you contract out right now or
contract a big chunk out and lock your price in?
If you believe the price is going up, there's no point
contracting it now unless you've got a, you know, a high, a high
floor and market referenced pricing that you know follows
the spot. If it does go up, like you,
you're going to maintain your flexibility and, you know, sell
bits into the spot saying, because you wouldn't think
200,000 lbs would move the spot price too much.
But it obviously, if people are, if the the spot price is falling
and if like anyone selling into the spot market is putting more
pressure on it, why is that piss chemical off so much?
Have a look at this chart. This is how they're based on the
old contracts that they've signed, like the market, and I
assume they must be not all fixed.
They're a majority of it is the market reference price, which
means it'll it'll be in a range, but it's like they're
effectively paid based on what the spot price is.
So as much as they say the spot price is a like no one's
interested in the spot market that what the spot price is is
what Kamiko gets paid for in their contracts.
So you can see here if the for 2025, if the spot price is 80,
they get paid $61.00 a pound. If the spot price is 60, they
get paid $55 a pound. So it.
Impacts their top line. That that downward pressure is
cost in the spot price is costing Gamiko money.
So whether it's the more you'd say direct way of saying it
don't sell into the spot market because you'll drive the price
down and we make less money because.
It effects their market referenced contract.
Exactly. Yeah, OK.
And and. Interesting.
And because there is becoming a big pretty decent gap between So
what the long term, long term price to the spot price now is
like you know a $13 a pound difference.
So there is a pretty big. Is that a historically big
difference? Is it normally?
Does it trade in a kind of band typically?
I know, I know, like the previous, the way the market was
previously set up back in the the previous days was that you
know every the term term process where all the action is and then
if you've got shit leftover, you'd have to throw it into the
spot market. Hence the spot market was always
below the term market. I'm not sure how much if it was
this much, but yeah, if it that that's like the sort of
equilibrium of how the market should operate.
And that's where. So when you know, when last year
when like spot price was over $100, the term price was oh,
that was bloody that way. It was what, down in the 60s or
70s or something? It's.
Still playing catch up? Yeah.
So that was just like the. So whether that happens again,
who who knows. But the term price didn't follow
the spot price up like it did. That was just a bit of short
term mania. So yeah, yeah, I found found
that very, very interesting. So and you can, you can see both
sides. If the as I said, if the develop
the new restarts are thinking it's going to go up, we're going
to keep flexibility and the lot because as soon as you sell it,
it's sold. But if you've still kept it, you
need to sell a bit for cash flow into the spot to keep things
going. The the longer you hold onto it,
the closer you get into that thesis changing if it does.
If it does, who bloody knows good and the way what else?
Not sure if he was who's talking about.
I don't know if he knew the actual company or not.
But interesting comments around the 200,000 lbs that got put
into the market by restart. Mine restart in January so on it
because I know boss sold 200,000 lbs into spot in their last
quarter and I think that was at 78 bucks a pound.
So I think based on based on the quarterly numbers.
So that ended up better than what the spot price is now.
So unless it was them again in January or it could be, it could
have been Paladin or Denison, like who who knows, But it's
very, very direct at those people that are selling into the
spot market cause hey, it's costing them money.
So 'cause you look at their average realised price, Kamiko
for last quarter was $60.00 a pound and look at what the I'll
bring up the graph of the spot price since then.
So their quarterly results are coming out.
I think it's 20th of February for the December quarter.
Couple weeks or so. Yeah.
So based on that spot price performance, I dare say we will
see Kamiko's realised price be in the 50's, the high 50s.
So if the spot price is going down as much and assuming there,
there's a good chunk of market reference to pricing in their
contracts. So like so when I say market
reference pricing, that's means you got a floor ceiling and it
tracks the spot price in that band.
If it goes below it doesn't matter, you get paid the floor.
If it goes above the ceiling, doesn't matter, you get paid the
ceiling. Whereas there's fixed contracts
where they'll say they'll Ford sell at, you know, 7075 or 82
and that's what you get paid for it for that that's fixed.
But then you get hybrid ones as well where you got a bit of
market reference bitter fixed. And then there's obviously
multiple contracts that's for for different bits of pounds.
So it's like a freaking, it's a bloody maze, but there.
Yeah, that's the difference between market reference and
fixed. OK, cool.
So yes, we'll that'll be very interesting to see because I
think Kameka will be feeling the pinch because you know there as
you can see, it looks like the Westinghouse division runs out
of net loss at the moment. Obviously a lot of capital going
into that, you know, the uranium, the production save and
that's where they're, you know where their profit is coming
from. So that is and if it's market
reference and they got a lot of years until they really get rid
of those old contracts and start getting the benefit of the new
ones. As you can see by 2028, even if
the spot price is 120, they're gonna get paid 77 a pound.
That's these are predicted prices.
That is not the exact one, but that's their sort of they update
that every quarter. OK, there you go.
God bit of bloody. Are you feeling the yellow cake
in your GC? I'm feeling it.
Have you got any at the moment? No you don't.
Any in the GCETF. No, no.
Oh no. I've ain't got an explorer.
But nothing, nothing bloody. I'm I'm, I'm still passionate
about it, but still interesting. I feel the passion.
Oh, I. Love it.
Now here's the another next snippet I wanna play.
I found this one. This was Now these are
hypotheticals. There's no names mentioned here
strategically, but we're going to do some hypotheticals.
Let's say who you think he's talking about.
Right now, I don't see anything out there in the development
phase that we could acquire that makes any sense at all.
So we just look at our portfolio different.
We know where our pounds are going to come from.
We're open to a whole bunch of different models.
We just see a bunch of assets out there that are not coming on
that time frame, They're not coming on that schedule.
There's a lot of hurt coming to those investors and they're, you
know, at, at that point our phone might ring because someone
might say, hey, maybe we should call the only guys who actually
mine in the Athabaska Basin. Look, I, I, I, I get the game.
You know, you, you've got to distinguish yourself somehow
from a bunch of others. And, and generally
distinguishing, distinguishing oneself requires all sorts of
inflated adjectives, world class, elite, all of these
adjectives that you know, somebody who's never done it
before probably shouldn't be using.
That's one way to distinguish yourself.
But the other way is just to say you're going to do it better
than anybody's ever done it in history.
And The thing is we don't have to take those views what, what
we simply do. And, and, and I, I mean this in,
in a very modest sense, we simply apply our own experience.
We apply our own experience how long it takes to get licenses
and permits. And we apply our own experience
how long it takes to build a Greenfield mine because we've
done the last couple of Greenfield mines in the
Athabaska Basin and, and to build a Greenfield mill and, and
to revitalize a mill. And, and when people are
proposing, they're building, they're going to build a
Greenfield mill, you know, the same size as McLean Lake, you
know, almost the same size as, sorry, the same size as Key
Lake, almost the same size as McLean Lake.
And they're going to do it for 1/3 of the mine of the mills
sustaining and replacement capital.
Like it's just it, it begs belief, but I, and this is just
an empirical problem. This will be solved by evidence.
And, and our view is there's a lot of hyper promotion and we
understand why. We understand why, but we don't
get caught up in it. We don't have to get caught up
in it. Yeah, right.
It is a pretty Now you could say, let's say hypothetically he
was talking about next Gen. They're Athabasca Basin
neighbor. Well, yeah, like sort of
neighbor on the other side, on the other side, the Athabasca,
like just hypothetically it's fair.
Like we're and especially talking about the inflated
adjectives shouldn't be used by people that haven't done it
before. So there's a lot of reference to
yeah, experience and having done it before and and and those
sorts of phrases. I think, I think fascinating.
Yeah. I think you wouldn't.
You wouldn't think if he was hypothetically talking about
next Gen. they wouldn't be. They don't look like they'd be
doing a deal right now, put it that way.
Because you don't. You don't really do a deal with
someone that's hanging shit on you.
I can't, cannot see that happening anytime soon.
They're and they're, you know, they're honing in on the
promotion, the wishful thinking on CapEx spend and the timeline.
So maybe they would look at it cheaper in the future, which was
which he also outlined that they, you know, look at value,
they are the logical owner of an asset like that being as the O
the OG uranium miner in the Athabasca Basin.
But you know, I what did you take from that GC?
Yeah, no, I think, well, he didn't mention names as as I
think it was. It's all hot, very pretty
reasonable to sort of infer from those comments or who he was
talking about. But you know, there are, I mean,
they're, they're in the they're in the same region.
It does sort of make sense, but it's, it's, it's like a lot of
other development players in other commodities as well where,
you know, the, the tried and tested sort of producer sort of
sees there's interesting, you know, development players come
online, perhaps they have a bit of difficulty with, you know,
ramp up or development, things like that.
And that's where that value play comes in and they can sort of
collect them should they choose to at at that point.
So that doesn't really surprise me.
No. And you look at look at value in
terms of OK, BHP paid Canadian 4 1/2 billion for FILO.
That's and that's, you know, long, long life, lot of
opportunity there. You know, next Gen. has that at
the moment based on what it's proven up.
It's got that seven years of high grade that seven years of
£30 million. But after that it's not, I think
there's a lot more to be proven up and a lot more like they
won't, they don't sustain that level for a long time.
You know, their market cap at the moment, what is it, 5 and a
bit Canadian billion. So you just cannot see, you just
can't really see anyone really coughing up right now 7810
billion Canadian like because it's you know, it's not at
record highs at the moment, but it'd need a bloody good premium
I think to be to be taken out. I just cannot see that
happening, especially, you know, approval is coming up possibly
this quarter, maybe like looks like the final administrative
part for the approval is just what's needed like the leg works
being done there. So that's going to be a big a
big catalyst for them. And you would think logically
that you'd think that would drive the price higher, but you
know, they're sitting at near all time highs with this.
You know, even though the the term prices increase, the spot
price has decreased with which is a is a sentiment thing, but
everything is still bullish. But you know, you know, they
might have to pay bloody 10 billion to take them out.
Which I don't still have the CapEx to spend as well to build
the thing too. Yeah, yeah, which I think
they've got it Canadian two and a bit.
So Chuck a heap a bloody Mayo on the top of that.
But I reckon post approval there could be.
But you you could throw a frigging curve.
They next Gen. might throw a curveball out and not sit there
And what? Well, look at what's happened
with Paladin fishing. So fission is it's not arrow
equivalent, but it's, you know, it's next door.
It's a still a decent uranium deposit.
Paladin are the they got the restart project in Langar
Heinrich. They've merged them together.
You know, the whole theory behind.
Yeah, well, you know, obviously the more more flows when you're
bigger JC. But you know, I think it worked
out. It was it 76, I think percent
Paladin, 24% fission. Use the pending cash flows from
Lang Heinrich to help assist fund fission in the future.
Fund the development of the PLS. Maybe next Gen. could do the
same. Next Gen. like especially when
they're at bloody, you know, near all time highs in and
there's, you know, post approval that could go high.
This script is pretty bloody valuable.
They reckon they'd be the acquirer.
Well no they no I. I reckon next Gen.
Might look to use to do something with their script if
it's that. Yeah, that's what I mean, yeah.
Or what if what's the equivalent of Paladin?
There's not many producers around.
No boss. He's from SA.
He's went to uni in South Australia.
I think he's born in Melbourne, Lee, but he's from South
Australia. Honeymoon's in South Australia.
If you're it's it's sort of the same theory.
Use a bit of the it's not gonna it's probably only a small chunk
of it, but pending the future cash flows of honeymoon can help
assist the development of arrow. It's not going to wouldn't cover
the bloody whole thing, but it sure as hell they.
Subsidise it a bit. They've bloody they've just
rebuild a plant in honeymoon. So you actually bring in a lot
of a bit of operational people that have actually, you know,
they've they didn't a lot of a lot of the plant was there, but
they did convert it from solvent extraction plan into an IX
plant. A lot of similarities in the
processing. Like you look at the flow sheet
for next Gen., like there's a whole leaching phase, which is,
you know, adding sulfuric acid, hydrogen per peroxide, the
ferric like the oxidizing agents to leach the uranium out exactly
the same as what gets flushed through the paleo channel at an
ISR project. So I think they do solve an
extraction after that, which is, you know, the kerosene version
instead of ion exchange. So, but like there's you know,
they've got the operational side that they could then transfer
over to help build the arrow projects.
That's sort of answers grants hypothetical challenges posing
that they haven't built a mill before.
And I think the actual if they if you did join them together,
the dilution would be to next Gen. will be heaps less than it
was to Paladin because I think what are their relative market
caps? I think next gen's market caps
about 6 bill Aussie at the moment.
Boss is 1.35 S. The pro forma would be bloody at
a minimum 8020 like so it wouldn't actually be as
dilutive. I don't know but.
Do you think mining in in processing in the Athabaska at a
scale that's much bigger compared to Adelaide at a
smaller scale I mean? All right, tight, the mining's
you'd need a whole new mining team like if you were gonna do
the actual that's the the mining side is one thing, like the
processing's one thing. That's it.
The only expertise you get to be for the processing of it, the
whole the mining of it. That is like a that is the
biggest challenge there, especially like the the whole
tilings, the tiling side, like the underground backfill side,
like the trying to bloody that'd be freezing all like to try and
like all or automated mining like at least you'd you'd sort
that you'd be ticking off the plant.
But at the moment they've got, I don't know what expertise
they've got in terms of you know what, they should take over an
underground mining company as well.
Yeah, what? What's if they can help?
If they could get boss for the plant and then take over,
They've got friggin, you know, script will be worth bloody
shit. Like script will be high.
They might as well take over. How could they take over in
Canada? Might as well just get Newmont
while you're at it. Yeah, just.
'Cause I just wonder, like how much experience and sort of cash
flow you can, like how much of that is really gonna help, you
know, in this hypothetical, you know, how much, you know, for
how much, you know, say if they were doing it through, you know,
using their script, how much dilution they'd have to do to
sort of get some experience and get some cash flow to subsidise
the development. I don't know.
Yeah, I think the the mining big job mining outweighs well see
what are they gonna do? They're like either gonna if
not, if they're if they remain too highly valued and no like
and no one's going to buy them at because they're so, so
expensive. Like, yeah, the value is there
for the uranium unless like a, you know, an Orano comes along
or like someone really takes a big a big swing at it or buys a
a part of the project. I'm not sure.
But it's like if no one's going to buy them like that is such a
such a big feat to take on. Like they nearly need to, they
need to, that's a lot of people to recruit there unless they
start pin. Maybe after that YouTube
interview, they'll start recruiting all the Kamiko
people. Well, this will get you back.
We'll start pinching all your people.
But it's it's getting the, you know, the technical experience,
but then you need the local experience as yeah, I think my
hypothetical is, I reckon 10 to 15% of the what's needed, it's
the local mining and bloody. Permitting and the.
Whole region that just the just trying to figure out how to
bloody build something in -40° like it is a big feat so
absolutely anyway it's been recorded I.
Check it on the dartboard. Happens of hey, you never know,
it's just it might solve just a just processing and a bit of
cash. Why not?
Why not?
I don't know. All right, Well, yeah, I don't.
It's just after hearing that I don't think chemical are going
to take them. Not just yet, at least.
Anyway, it doesn't seem like. It but then when like in terms
of waiting for value, like after, you know, construction
ramp up and that that could be bloody.
Years away. Oh.
That could be like 20-30. One, but it doesn't sound like
they're in a particular rush though.
Nah and like they've got to they won't know what ramp up is until
they're producing, which is like after mining down 600 odd metres
underground with shafts need all the, you know, the backfill
areas in place. Like it is a huge, huge project
to get down there. So oh God, I don't even know if
there will even be a bloody podcast by the time by the time
that's bloody producer. Who knows, we might all be on to
something else by then, who knows, who knows.
So we'll we will wait and see. Absolutely.
Oh, just anyway, buddy, although the one the one difference, but
well, the one thing that won't apply between friggin ISR and
because it's Hard Rock over there is like like as the
shafts. You got to pay all the shafts
like the the power is a lot more of a cost.
You got to between the shafts, the crushes, the bloody jumbos
underground, the ventilation ventilation will be huge.
Just bloody power everywhere. Global independent power
producer, cross boundary energy. I think they should be on the
ticket. JC.
Oh absolutely. Back for another round.
I think they might might go to the Athabaska to throw in a
quote. Welcome back CBE, Get a quote to
the Athabaska. Can you imagine after this
episode if if next Gen. takeover boss and CBE do the power plant
for next Gen. Like how good is that?
How good would I look? I look like a friggin genius.
Oh, but trusted name in international power GC and
they're now in Australia. They were last year too when
we're talking about them. So right you could you could say
mine sites are powered by CBE, but CBE Australia is powered by
Tim Taylor. I love it.
Hybrid power stations are their jam.
Build, own and operate. Give them a buzz.
Go CBE, right OGC, let's head to Coba for you know, it's only
just clicked to me why they're called Poly metals.
Why's that? Well, it's like, you know.
Multiple metals. LED zinc lights all.
It's in the name, isn't it? Silver lights.
There you go. What?
A great what a great find today. Oh.
Bloody hell. Anyway, just take it away.
Alrighty. So just wanted to touch on this
one today because so this is a Poly metals capital raise $35
million. It had a bit of an unusual start
to launching it's capital raise the other day, but also exciting
is we'll hopefully be seeing another Aussie base metals
restart getting restarted, restarted next quarter.
And they're mining Poly metals. Yeah, and that's it.
So as I mentioned before, Poly Metals raised 35,000,000 bucks
at $0.80 a share to progress their endeavour, restart
activities and accelerate exploration.
So it was done at reasonably tight discounts to last close
in, in V WAP. They also launched a 3.2 million
share purchase plan SPP. They raised Quantum's about 22%
of their their current market market caps of around 160
million early today. So what are they sort of getting
into the details on the use of funds here?
So if you look at slide six of their investor presser, it says
35,000,000 institutional placement to accelerate near
mine and regional exploration and in just across from it in
slightly smaller text funds will also provide additional working
capital as endeavour transitions into production.
So yes, there are funds certainly going to exploration,
but if you flick a few slides further down to slide 12, you
can see actually the majority of those funds are going to
basically working capital, you know balance sheet strength as
they call it. So, so it's probably probably a
bit the other way around, but you can see there between the
equity raising proceeds their their cash at 31 December and
some undrawn financing facilities that'll pretty much
look after the remaining restart capital They've got for
Endeavour that out of 22,000,000 dollars, $10 million worth of
near mine and regional exploration work and then the 34
million out of corporate general working cap and and offer costs.
So they reckon that remaining CapEx component, that 22 mil is
capable of being funded from basically the rest of their
prepayment facility from Ocean Partners.
So that was US 20 mil. They drew down US 5 mil of that
in December. So they got US15 of that to go.
So they post all of this raise, they'll end up with a pro forma
cash position of 37 million and they've still got, you know,
undrawn debt facilities around 26,000,000.
So the balance sheet must have been running pretty tight if the
pro forma cash is 37 after raising sort of gross proceeds
of of 35. But they've certainly done well
to raise, you know, predominantly for balance sheet
strength, you know purposes at a, at a decent issue price of
$0.80 a share. I mean, there, if you look at
the share price graph here, you know, that's sort of, you know,
12 month high dollar and one cent.
It was only sub $0.40 only a few months ago really in in
September. Oh, awesome.
RIP. That's whatever.
Yeah. But going back to sort of the
start of the capital raise, bit of a bumpy start to launching
it. So check out the timestamp of
this Street Talk article at 1:09 last week on the 6th of February
and check out the sort of the ASICS announcements for Poly
metals. You can see very promptly at
1:55 a pause and trading's come out and then soon after a a
trading halt. So it's not not the most ideal
way to launch a capital raiser, but it looks like they
ultimately got it across the line.
So that's, that's Sydney, that's in the market time, yeah.
That's so that's over east time. Over East time, yeah, that's.
Right, Jesus Christ. And that's oh.
Which look, it's it's yeah, sometimes can happen, but yeah,
they'll obviously got it away anyway.
Just bloody it's, I don't know. I don't know how I feel about
them putting articles out during market hours.
Yeah, it's if. They're not in trading out yet.
That doesn't sit right with me. Yeah, it's certainly not ideal.
That can cost people cash. So I think, 'cause I think the
share price did trade down a a little bit once they come out,
but because of how sort of reasonably quickly the pause in
shaded come through sort of stopped that.
Reasonably quickly. I could sell a few shares in
bloody 46 minutes. Yeah, yeah.
Yes, anyway. So bit of background on on Poly
metals and the Endeavour mines. So like I mentioned before,
about 160 million market cap company, they're restarting the
Endeavour's silver zinc mine in, in the Coba that's in in NSW.
So they actually completed the acquisition of the asset and and
a completed a mine plan for it last August.
So just flash up a a slide of so the outcomes of that so
producing 10.6 million ounces of payable silver, 260,000 tonnes
of papal zinc and 90,000 tonnes of payable LED over an initial
10 year mine life. So they're like you could say
that they're going to be zinc neutral like 'cause you think of
the zinc they're mining, 'cause they're gonna be jam and Sandvik
ground support in which is zinc coated for the galvanizing.
And then they're gonna every bolt they put in, they're
producing the zinc. So they're going to, they're
going to be a net, a net Zinc 0 operation as I said.
A net 0 zinc producer. Net 0 zinc.
It's like they're going to be producing green zinc like.
That is such a useful statistic that I I didn't need.
No, I needed. Some of the greatest zinc mines,
like you know, George Fisher or anyway anywhere else that
produces zinc, Woodlawn, they're going to be producing green
zinc. It's going to be because they're
going to be jamming in Sandvik ground support, the only ground
support you choose to jam in, and you're going to be sending
Sandvik the zinc as well. So it's just everyone.
Sandvik's winning. Poly Metals is winning.
Everyone's winning. It's like a complete circle life
cycle of zinc. Is it go zinc?
Who said zinc? Zinc if you you just need to
change the way you think about zinc, just think about Sambic
ground support. That was I like the note in the
show notes, the surprise Sandvik ad.
That was a surprise. I like the element of surprise
with the ad. Stand it was good fun it.
Just means I don't have to write them out, I'll just say
whatever. Comes up here it's.
All good. Oh anyway, sorry to interrupt.
No, you're good. And then so, yeah, so they'll,
they'll generate 609,000,000 predex free cash flow and a $414
million pretax MPV 8 from that. And they're just looking across
the time on sort of they started to see that big share price run
sort of late September, early October.
So they had a had a big hit at at Endeavour 67 metres at 517g
per tonne silver equivalent. Then sort of shortly after that
completed the project finance, which we mentioned earlier US 20
million prepaid from Ocean Partners.
I actually love their, their project ramp up updates.
They, they, they've got the whole like mega trend really
leading into it. They're going for a mega make
endeavour great again, really in the whole restart and mega
themes. So I love that in their in their
last ramp up progress update early this month, I said, you
know, surf and underground works will progress in a plan, mobile
fleet deliveries continuing, recruiting ongoing.
And they're sort of working on re establishing access to the
high grade silver Upper North Road and they're targeting first
silver and zinc production in April 2025 with first cashless
month after. But yeah, you know the yeah,
like I said, it's pretty much up to 100% from last September.
Yeah, but the commodity prices have gone up a bit as well too.
You know, silver's up 42% in the last 12 months.
It's about 32 bucks an ounce. US at the minute, zinc, even
zinc's gone up boring old zinc. So you know gone up about 20%
last 12 months about in the two eights USA tonne at at the
minute Mac copper or as as previously known Metals
Acquisition Corp actually has a shareholding in Poly Metals as
well. So.
Quite logical, yeah. So logical 1, you don't need
geography doesn't apply in M&A these days.
Don't worry about geographical synergies.
We're doing bloody, just go out Paladin Vision next Gen. boss
Westgold Korora. Don't worry about geography.
It's all good. So yeah, they, they took a 4.3%
stake in in Poly metal was about nine months ago at $0.35 a share
for 2 1/2 bill. So they've made some good bank
on that one. But they can invest another 2
1/2 mil at $0.35 a share when certain conditions precedent CPS
are met. So if we'll flash up the the
screen grab there from the announcement back in May of last
year. So and one of those being
polymetals securing sufficient funding to restart the Endeavour
mine and processing plant. And they're also sort of looking
at entering a tolling agreement together to treat the zinc ore
at Mac's plant and also a water offtake agreement where Mac can
draw some water from the Endeavour mine pipeline.
So I imagine now most of those should with this funding, I
imagine all of those CPS would have been probably ticked off.
I guess I'm not too sure, but just having I just wanted to
refresh myself where Mac or the CSA mine is sort of in in
relation to endeavour. And it looks like about roughly
30 cases as a as a crow flies in in this image here in the Holly
Metals Prezo. But yeah, hopefully they can get
their restart over the line without sort of any further
funding develops Woodlawn actually, because I thought, oh,
surely this would be, you know, you know, the most recent base
metals sort of race start sort of coming back online.
But Woodlawn's due, you know, for first production and and
cash flow in the June quarter as well.
I'm a Ding, Ding on, on develop, but yeah, I'll be curious to see
who will be first develop or Poly metals.
So yeah, no good to see some action back in base metals
again. Yeah.
And isn't it funny looking at like develop and Mac like
considering the whole how Mac became Mac with Bill being
involved in the the SPAC, you'd say to get to get bloody CSI
into Metals Acquisition Corp. Now what is it?
Mac Copper Mac. Copper now, yeah.
It went Metal Mails Acquisition Corp, Metals Acquisition Limited
and then Mac Copper. Yep.
So I got it right. Yeah, I think that's about
right. So I just wondered like and then
that was it. That was the link on a because
Mick McMullen was, he was on the board to develop.
Then he obviously resigned off the board.
And I don't know, it's just like they've part of bikes.
I wonder if there will be any interaction ever again, like
developed getting a contract there or rather than who who
knows, they've just or they're going to be now in competition.
Yeah, bizarre family tree. Oh, that's mining for you.
Oh. Right there, JC, we have now.
I don't know if this is I don't know if it's surely there's been
an on market takeover. The the on market takeover today
between for Patronus taking over matter proposing to it.
Just obviously I can. I can't think of what if there's
been any sense while you taking over Mincore because that was
the in terms of an on market takeover with the big huge
byline order. Sitting on screen.
Shit loads of hundreds of millions of shares sitting on
screen. I'm sure the M&A bankers in the
audience will be sure to let us know, but yeah, no.
Well, Ben Bailey about that, yeah, I'm sure he knows I'll
probably, there's probably been like fucking 8 or 9, but.
It's no, you're right. They're definitely on the on the
rarer side. So, so the context, yeah, as
Maddie was saying, the Patronus announced an on market takeover
for gold developer Matzer at at four and a half cents, sort of
valuing Matzer at 33 million. And so Patronus and their
associates, which is IE the Delphi Deutsche Belgium group
already hold about 19 1/2% of MATSA.
And Patronus said in their announcement today, Patronus has
made the offer with the intention of increasing its
ownership in MATSA and will seek to potentially restructure the
existing MATSA board and management and conduct a
strategic review of Matsa's asset base.
And they appointed EUR Hartley's broker to stand in the market to
purchase MATSA shares at the at the offer price from today.
A bit of statement came out today as well.
And MATSA subsequently later today issued a sort of a take no
action release in response to the unsolicited takeover.
Now I'm not going to touch too much on the on the deal itself
today, but what sort of caught both of our eye is that was the
takeover mechanism. Mechanism being an on market
takeover which you rarely say most mining deals are you know
more often than not an off market takeover or by way of the
scheme. So for those money miners who
are not so sure how on market takeover bid works.
Come into the Alley GC educational section.
Come. Come into the tent.
So basically the bidder in this example, Petrodus appoints a
stockbroker, which today's example EUR Hartley's to stand
in the market on ASICS and purchase the target securities,
which is Matson on behalf of the bidder.
So the stockbroker places a a buy order on the ASICS trading
platform equal to, you know, the bidders offer price, which in
today's offers four and a half cents a share, all quoted
securities in that target it doesn't already own.
And then the target shareholders then simply sell their shares on
ASICS to the bidder at that offer price, if you know, if
they choose to. And because an on market bid is
conducted on an ASICS trading platform, the offer must consist
of cash consideration only and it has to be unconditional.
And that's sort of one of the main reasons why they're often
not saying because, you know, you can't have conditions or you
might want to use your script. So in that case, you can't, you
know, do do it that way. Yeah, you literally need the
cash and and you've got no choice.
Of and just full send it. Yeah, yeah, yeah.
Full send. And, and obviously the, the key
advantage of, of using going about it this way is, is speed.
So, you know, you can start buying target shares within an
hour of announcing the sort of takeover bid to ASICS.
But the problem you can run into is if the stock is trading above
the offer price, then there's no real speed advantage because you
can't, you know, all the shares can be trading, but if they're
not at the offer price, you can't buy them and.
You've got people buy then selling shares and people that
are buying them above your offer price, they're going to be less
inclined to sell them at a loss. Yeah.
Well, that's right. So for example, I saw sort of
mats today trading in the sort of high fours, which is.
More than the 74.8, yeah. Which more than the offer price
of four and a half cents. So correct me if I'm wrong, I
don't think any actual they didn't increase their ownership
at all today. I don't think any shares traded,
let's just get the final NAP. So you can see on either the big
byline of 599,000,000 shares, which is not all them I don't
think, but most of them are at four and a half cents.
But everything today 2.83 million shares traded at 4.7 to
4.8. So they actually the price just
rose up 17 1/2 percent, but nothing actually cleared at that
four and a half cents. Today, yeah.
So you can with on market takeover bids, you can increase
the offer price at any time sort of before the last five trading
days of the offer period. But if they do, the bidder
doesn't need to pay that increased consideration to
target shareholders who have already accepted.
So say you in today's example sold into that four and a half
cents and then you know, 3 weeks later they up it to $0.05.
You know, you don't get that at half a cent.
That's too bad. You've sold your shares that's
even finished. Yeah, the bid in these
scenarios, the bids often driven by the bidder and doesn't
really, you know, require target consent or corporation.
So they tend to, more often than not be more hostile type deals
rather than friendly, unless obviously, of course, you know,
the target sort of comes out and says, yes, you know, we
recommend this deal. Go ahead, da, da, da, da da.
I could see Kamiko and Next Gen. being a on market takeover.
Oh, that's nice. Bit a bit hostile, yeah.
And on the same day you announce all this, you need to submit a
bit of statement which they did put it out today in today's
example on the targets has to respond in in two weeks to that.
So it'll be interesting to say how this deal plays out given
like where the share price is, has been trading relative to the
offer price and and what Matt's response is to to all of it.
So yeah, bit of a interesting one we don't always sort of see
day-to-day, but. He, I suppose, I suppose
Petronas had to figure out a way for us to talk about him.
So there's a lot, a lot to go on.
Maybe 'cause you think back to the Minkor Wailu thing.
Yes, they put in the Dollar 40 offer and then it started
trading above 'cause there was the thought that that was nickel
Mania time. They were thinking that, you
know. Something else going?
To come in. But then BHP gave Wailu the gift
in saying that some, I think it was some of the minkor or what
was stockpiled separately or wasn't accepted due to the high
arsenic levels. And once that news, once that
news came out, Wailu said Nah, dollar 40, best and final and
cause. That and then everyone sort of
sold into that, didn't they? Yeah, yeah, everyone.
Yeah. So that cause and then I know
there was mechanisms around 'cause once you go best and
final you can't obviously. No, that's it.
That's. Go up anymore and then so it
worked out good good for him. So this is obviously day one of
this, so we will. Wait and see, keep an eye on it,
yeah. Oh quick around the grounds,
can't wait till the boys get back and bloody all these half
One Financial results like talking that's.
Their that's. For sure underlying statutory
profit loss. Look, not that I don't care, but
it's not my. I'd rather just talk about
uranium speculation and underground mining like
geometry. Everyone's got their coming to
you, buddy. We'll limp limped through it
bloody. Also because Pilbara sort of
they've pre. I don't know is this a thing
pre? Reporting of reporting pre.
Reporting financial results instead of pre reporting
production. So pre reporting EBITDA of 71 to
75,000,000 for half one, but a net loss of.
So an underlying net loss estimated of five to seven
million. So because I think they're the
carrying value of let me say it without reading it, see how
smart I am, but like the the call option to purchase the
extra in the POSCO JV that the carrying value of that has been
reduced, which obviously then is like a statutory loss.
Yes, it impacts your pay now, that's right.
Yeah. So that's what that's why I say
their statutory loss is greater than their underlying net loss.
Underlying is just from the operations and the CapEx and
bloody everything with the carrying value that's a non cash
reduction. Yeah.
So it's just interesting because even despite their sort of
roughly, you know, US 400 bucks a tonne F of a unit cost for,
for the first half of this year, so far they've got $1.2 billion
cash a bank and they're still, you know, practically just shy
of, you know, breaking even on on an underlying basis.
So Jesus, what are that? You know, that the implications
for sort of other lithium, you know, players or, you know,
lithium spod players in particular, it's sort of, yeah,
sort of not, not awfully great. Well, I think and like prep to
prep everyone for the financial results like when they talk
about EBITDAR that's you know, like I, I think a rule of thumb,
I don't think it's exactly the same, but like a gold miner's
EBITDAR, if you take the all in sustaining cost away from the
sale price, effectively that margin is your EBITDAR, but it
doesn't include all the CapEx and the corporate overheads.
Yeah. And all that, but it's.
A rough rule of thumb. Yeah, so you could have positive
EBITDAR, but if you spend a shit load of capital, it doesn't you
still lose money. It's AI think it's an I don't
know how the best to explain it, but the what did they say?
Was it bloody Charlie Munger or Warren Buffett saying EBITDAR is
not the calculation to use in a capital intensive business?
Which mining is? What is it bullshit earnings?
Bullshit earnings? That's what he called EBITDA is
bullshit earnings. Oh no, always, always.
I like looking at at Cash, Cash in, cash out personally.
Yeah. But then they, but a lot of when
they talk about company valuations are on EV to EBITDA
multiple that I suppose that's how they look at, you know, how
much money the operations make. Yeah.
So yeah, I'll stop talking 'cause I'll of the more more
I'll talk digger the diaper. I'll dig.
No, you're all right. And then the the last one for
today was we saw the sort of the a, a flagged in a UBS note out
into last week saying that CATLS, the pedalite mine in
Jiangxi is apparently currently resuming operations according to
Shanghai Metals market. It's sort of featured in the in
the AFR today as well. So apparently they're sort of
suspended operations there last September.
So, you know, off the that, you know, on that news sort of last
Friday, you know, Hillbra Blind town means RGO, their share
prices all came off a few percent.
They're all sort of flattish today.
You know, why resume operations at at prices close to where they
were, you know, when that was sort of suspended operations
that sort of suggested maybe due to low inventories, you know,
trying to mix with high grade or, you know, reducing, you
know, sort of unit costs and sort of that sort of a thing.
You know, according to the latest production sort of stats
from CMM, this mine could contribute sort of five to 6000
tonnes LCE per month after it sort of resumes.
So it's decent volumes. But yeah, just the the whole
lithium supply demand roller coasters just just seems to
continue, doesn't it? Yeah, no, the IT was pretty
bearish that you UBS Snowden and like they were saying post
Chinese New Year, like, you know, inventories were were low,
which has sort of given a bit of a tick up in the lift price.
And but now this little bit of light mine restarting and yeah,
they reckon it might be they're they're predicting it being a
bit under pressure. Taking it going.
Forward so, but we will wait and see the the Chinese bloody
lapidolite tap. They can turn on and off
whenever they bloody want. Yeah, or something mad might
happen and it might go 5X, who knows.
One of the two. Bloody who bloody knows.
I know that I know that Underground Operators Conference
is the best underground conference in the world.
That is one thing I do now. That is a fact for sure.
And you can get another fact is you can get 100 bucks off using
the code MOM 100. Link it in the show notes to the
Ozil. MMM Underground Operators
Conference. Come bloody have a beer with me.
'Cause I'm hanging out with. Maddie, I'm gonna be having a
few there. Oh, I don't.
Mineral mining services won't be gone.
They're they're more an open pit contractor, but I don't think
they'll be. I got grounded.
I wonder Paul Natali, please come to underground operators
with me. Sambit ground support.
They will have a huge tent there.
I am probably just going to hang around with Derek Hurd all the
time at that conference. Or CR insurance it is.
Oh, it's in Adelaide, so it's right in the middle of Tari
Harrow. Not sure who.
Dads all of years come bloody K drill, surface RC drill and
probably not as applicable. Saltbush contracting.
Yeah, it'd be rude. Once it once it once it comes
out of the mine they get a time. Specialist.
Yeah, Swick absolutely by 17,000,000 meters drilled
underground. Yeah, they'll have a tent.
They might even have a deep X tent there.
Quattro Project engineering, the inventors of the bloody Oh
surely they'll pace the the the pace diverter the friggin the
fan or like the fan hangers, the AWP baskets like they are
underground as anything and cross be entry energy.
No point have an underground if you can't pay out the bloody
thing. Absolutely.
Right. I heard a room money morning.
Jeez, that was a long 1, Jason. You're just used to it, aren't
you? No, it's just.
Same shit. Different.
That's alright. Once the boys come back I'll
have a couple of weeks off. It's all good, I'll leave you
alone. See ya.
The 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.