1
00:00:00,240 --> 00:00:06,160
Rhino money miners another week 
and Big M and a possibility 

2
00:00:06,880 --> 00:00:09,800
we're in that end of town. 
Hopefully not another bloody BHP

3
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angle I think because that just 
eventuated to nothing. 

4
00:00:13,400 --> 00:00:16,960
But it might not be. 
Hold on dear seats. 

5
00:00:16,960 --> 00:00:20,240
And jeez, we've got a who? 
Who? 

6
00:00:20,640 --> 00:00:25,000
We've got a guest coming on to 
divulge a bit more about this 

7
00:00:25,360 --> 00:00:31,160
potential Rio Arcadium merger 
who is obviously saying need to 

8
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get that bloody get that price 
up dogs. 

9
00:00:35,840 --> 00:00:37,360
We do. 
This is exciting, mate. 

10
00:00:38,080 --> 00:00:40,440
We try, yeah. 
We, we always try and wedge 

11
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ourselves into deals in some 
way, shape or form. 

12
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And this time we've managed to 
get the shareholder who's making

13
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the most noise at the moment to 
come on the potty and dial in. 

14
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Easy to contact when they're 
making heaps of noise. 

15
00:00:50,160 --> 00:00:50,920
It's great. 
Cool. 

16
00:00:50,960 --> 00:00:52,960
Yeah, yeah. 
Start bloody bit girl. 

17
00:00:52,960 --> 00:00:55,720
Or better. 
Better AR, better the The 

18
00:00:55,800 --> 00:01:01,560
Takeovers panel Backflip ERA 
WAFF has plummeted today on the 

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00:01:01,560 --> 00:01:06,720
back of some, you know you'd say
scepticism around Burkina Faso 

20
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nationalising. 
But is this another by the coup 

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00:01:10,280 --> 00:01:12,080
moment by the dip? 
Who knows? 

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00:01:12,080 --> 00:01:16,480
That's a big question, isn't? 
It Oh mate you a big question JD

23
00:01:16,720 --> 00:01:19,640
Does mineral mining services 
still have gear available for a 

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contract? 
The answer is yes. 

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00:01:21,120 --> 00:01:23,560
Yes they do. 
Yes, same as last week, same as 

26
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this week. 
They're still ready and rocking 

27
00:01:26,360 --> 00:01:29,280
to go for an open pit mining 
contract. 

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Mate. 
They can do JVS. 

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00:01:30,720 --> 00:01:33,600
They can just RIP, tear, bust 
and get it all out as quick as 

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00:01:33,600 --> 00:01:35,160
possible. 
Give you cash flow. 

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Give them a call. 
If your rocks can make money 

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they'll they can do it for you 
ASAP. 

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00:01:39,440 --> 00:01:43,880
And that's another website 
header I think. 

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00:01:43,880 --> 00:01:46,160
Trap. 
Well done mate, I like it. 

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00:01:46,600 --> 00:01:48,960
Right now. 
Let's RIP in so the coming out 

36
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on the weekend, not Friday. 
The article about the Rio 

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00:01:54,040 --> 00:01:56,560
Arcadium. 
It was Ghost Friday because in 

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after market trade Arcadium 
teared up 30 plus percent, so 

39
00:02:01,440 --> 00:02:03,640
it. 
Started super exciting, right? 

40
00:02:03,640 --> 00:02:07,000
This is the beginning of town 
for those who don't know Mario 

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00:02:07,000 --> 00:02:09,039
Chinto's confirmed that they 
have submitted an on mining bid 

42
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for Arcadia and like these 
rumours around the rumours 

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around the potential deal. 
I think they could be traced to 

44
00:02:16,360 --> 00:02:19,040
the back end of last week was 
actually was actually a 

45
00:02:19,040 --> 00:02:21,800
favourite column that penned a 
column penned an article on 

46
00:02:21,800 --> 00:02:25,520
Thursday data room saying that 
Rio was eyeing off a big deal. 

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Then she named both Arcadium and
Albemarle in that one. 

48
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I mean, there's been some 
rumours before that, but let's 

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00:02:31,480 --> 00:02:34,280
just, let's just. 
Good to say hit a one. 80 We'll 

50
00:02:34,280 --> 00:02:39,680
give her credit on on Saturday, 
though, it was Reuters who had 

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00:02:39,680 --> 00:02:42,880
the scoop that Rio taught us 
that Rio Tinto was in talks 

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00:02:42,880 --> 00:02:46,040
specifically with Arcadium in a,
in a deal which was suggested to

53
00:02:46,040 --> 00:02:49,840
be worth between US four and $6 
billion. 

54
00:02:50,320 --> 00:02:54,560
And then this morning's ASX 
release, Rio Tinto, they, they 

55
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confirmed, I said we're, we're, 
we're in talks with Arcadium. 

56
00:02:57,800 --> 00:03:00,640
And and that's where it gets 
pretty interesting because 

57
00:03:00,640 --> 00:03:03,440
they've confirmed it right then 
to throw another spanner into 

58
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the mix, one of Arcadium 
shareholders, a, a Sydney based 

59
00:03:07,240 --> 00:03:08,960
kind of fund called Black 
Waddle. 

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00:03:09,240 --> 00:03:12,560
They've promptly penned this 
letter to the board of Arcadium,

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00:03:12,560 --> 00:03:15,680
which is, is chaired by Peter 
Coleman, suggesting that the, 

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you know, a deal in the vicinity
of that, you know, US 4 to $6 

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billion would be, would severely
undervalue the business. 

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00:03:21,200 --> 00:03:24,720
And of course is much lower than
than where share price was 

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itself earlier this year too. 
So must have just been an 

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absolute whirlwind of a, a 
weekend for the, you know, for 

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00:03:30,440 --> 00:03:33,920
the deal teams at Rio, at 
Arcadium, the the respective 

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advisors and the the chairs, 
etcetera. 

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00:03:36,880 --> 00:03:39,920
But there's a lot of talking 
points to cover in relation to 

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this news guys. 
We're going to go through why 

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00:03:43,200 --> 00:03:46,400
Arcadium and not Albemarle or, 
or Pilbara or any development 

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project out there. 
Why now? 

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00:03:47,840 --> 00:03:50,880
What are Rio's plans here? 
What's the likelihood of a deal 

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00:03:50,880 --> 00:03:54,240
actually going ahead? 
And and what about the Arcadium 

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00:03:54,240 --> 00:03:56,800
shareholders that will be 
frustrated by any offer that 

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00:03:56,800 --> 00:03:58,600
doesn't get the share price back
to where it was recently? 

77
00:03:58,600 --> 00:04:02,360
Well, that point if we're going 
to have certain person dial in 

78
00:04:02,360 --> 00:04:04,840
very soon. 
It's obviously on one side of 

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00:04:04,840 --> 00:04:08,320
the fence, probably probably a 
refresh for for people who don't

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00:04:08,320 --> 00:04:11,200
know arcadium and you wouldn't 
bloody blame them because it's 

81
00:04:11,240 --> 00:04:14,520
the the bloody movements that's 
created it. 

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00:04:14,520 --> 00:04:17,760
That was it was aura cobre 
Galaxy made all chem all chem 

83
00:04:17,760 --> 00:04:20,839
merge with live it. 
Now you've got Arcadium, now 

84
00:04:20,839 --> 00:04:24,800
potentially Rio Tinto. 
Isn't it funny how both of those

85
00:04:24,840 --> 00:04:27,600
mergers that they did, they 
renamed the company to neither 

86
00:04:27,600 --> 00:04:29,320
of the like merging entity 
server? 

87
00:04:29,320 --> 00:04:32,040
Like Oracle bread Galaxy became 
all chem and all chem live and 

88
00:04:32,040 --> 00:04:33,840
became OK. 
Why keep renaming? 

89
00:04:33,840 --> 00:04:35,920
It's just so confusing. 
Merger vehicles. 

90
00:04:36,560 --> 00:04:39,600
Merger of vehicles, no name is 
better than the other. 

91
00:04:39,680 --> 00:04:42,560
Yeah, right, JD, Give us the 
bloody, give us the view, give 

92
00:04:42,560 --> 00:04:44,400
us the share price asset, all 
that shit. 

93
00:04:44,400 --> 00:04:46,880
Bloody overview. 
Who is Arcady? 

94
00:04:46,880 --> 00:04:49,680
The thing that jumps out 
obviously is the share price 

95
00:04:49,680 --> 00:04:53,760
reaction today up I think last 
time like 47% just absolutely 

96
00:04:53,760 --> 00:04:56,000
flying. 
You can see on the the spark 

97
00:04:56,000 --> 00:04:57,680
chart there which. 
That. 

98
00:04:58,280 --> 00:05:00,640
That's pretty wild right that 
that is, you know a pretty 

99
00:05:00,640 --> 00:05:03,920
violent move to the to the kind 
of upside there. 

100
00:05:03,920 --> 00:05:08,680
So that leaves the company kept 
at US 3.3 billion. 

101
00:05:08,680 --> 00:05:11,680
So quick reminder, like you said
on the back of all those deals 

102
00:05:12,440 --> 00:05:15,320
US is now their their call 
listing, but they've got ACDI 

103
00:05:15,320 --> 00:05:20,120
here in Australia on the ASX 10 
operating sites up and 

104
00:05:20,120 --> 00:05:21,560
downstream. 
Again, like you said, Maddie, 

105
00:05:21,560 --> 00:05:25,480
these guys are real mishmash of 
everything lithium related. 

106
00:05:25,480 --> 00:05:31,720
So in 2024 terms, their upstream
capacity, what they produce from

107
00:05:31,720 --> 00:05:36,080
their brines, Oleros and Fenix, 
both in Argentina is sort of 

108
00:05:36,080 --> 00:05:40,160
circa 75,000 tonnes of lithium 
carbonate equivalent. 

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00:05:40,720 --> 00:05:43,000
Now they've got all these growth
assets that they talk about and 

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00:05:43,000 --> 00:05:45,920
you'll remember on the Investor 
Day they sort of trimmed back 

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00:05:45,920 --> 00:05:49,520
the spending to kind of tighten 
the belt a bit and give the 

112
00:05:49,520 --> 00:05:52,040
investors confidence that they 
wouldn't be running short of 

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00:05:52,040 --> 00:05:56,520
cash, are still reaching their, 
you know, stated sort of 2828 

114
00:05:56,880 --> 00:05:59,600
goals. 
So they've got downstream 

115
00:05:59,760 --> 00:06:03,440
opportunities in Argentina and 
then they've got Galaxy and 

116
00:06:03,440 --> 00:06:05,320
Namaskar Lithium, both in 
Canada. 

117
00:06:05,360 --> 00:06:09,800
They are Hard Rock growth assets
that at varying stages. 

118
00:06:09,800 --> 00:06:13,920
One of them, Namaskar, they're 
looking to turn the spot into 

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00:06:13,920 --> 00:06:16,680
hydroxide as well. 
Of course they've got Mount 

120
00:06:16,680 --> 00:06:21,320
Catlin, which has been recently 
mothballed here in WA. 

121
00:06:21,320 --> 00:06:22,680
Not. 
Yet 25. 

122
00:06:22,800 --> 00:06:27,360
To be down to be mothballed yet 
and then yeah in terms of 

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00:06:27,360 --> 00:06:30,480
downstream they talk about 
producing hydroxide chloride, 

124
00:06:30,760 --> 00:06:35,160
butyl lithium, high purity metal
in that investigate they they 

125
00:06:35,160 --> 00:06:39,280
sort of really pride themselves 
on not being pinned on just the 

126
00:06:39,600 --> 00:06:41,680
EV sector. 
So they talk about producing to 

127
00:06:41,680 --> 00:06:45,200
the, the farmer space, the 
ceramics and glass making 

128
00:06:45,200 --> 00:06:46,640
sectors and all these other 
things. 

129
00:06:46,920 --> 00:06:50,440
And that sort of comes at the 
history of, of live and, and 

130
00:06:50,720 --> 00:06:53,960
everything that they had done 
over the sort of previous 50 odd

131
00:06:53,960 --> 00:06:55,680
years that they'd been in 
production. 

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00:06:56,520 --> 00:06:59,320
And they also speak a lot about 
building the sort of flexibility

133
00:06:59,320 --> 00:07:02,600
of kind of toggling between 
carbonate and hydroxide 

134
00:07:02,600 --> 00:07:04,680
depending on what gets them 
better value. 

135
00:07:04,680 --> 00:07:08,000
So they're definitely building 
in capacity to produce both of 

136
00:07:08,000 --> 00:07:09,800
them. 
They've got downstream in China,

137
00:07:09,800 --> 00:07:13,120
Japan, the USA. 
Yeah, that, that recent strategy

138
00:07:13,120 --> 00:07:16,200
day was like super interesting. 
I remember, you know, 1 slide 

139
00:07:16,200 --> 00:07:18,480
that did the rounds there was, 
you know, they, they, they talk 

140
00:07:18,480 --> 00:07:22,000
about and, and expect their Max 
kind of leverage to, to reach 

141
00:07:22,000 --> 00:07:27,720
sort of 2.1 times that's EBITDA.
And then they, they actually, 

142
00:07:27,720 --> 00:07:31,320
they actually point like they 
illustrate what their projected 

143
00:07:31,320 --> 00:07:34,880
EBITDA will be assuming a, a 
$1400 per per tonne sort of spot

144
00:07:34,880 --> 00:07:37,840
price in 2028. 
And that that very number 

145
00:07:37,840 --> 00:07:41,000
actually became subject to, you 
know, the multiples that we saw 

146
00:07:41,000 --> 00:07:43,640
kind of talked about on Twitter 
and also in in the letter penned

147
00:07:43,640 --> 00:07:46,600
by Black Waddle, because, you 
know, that gives them gives 

148
00:07:46,600 --> 00:07:48,920
their share out a lot of 
creators to argue that a bit in 

149
00:07:48,920 --> 00:07:51,320
the vicinity of four to $6 
billion would undervalue the 

150
00:07:51,320 --> 00:07:53,240
company. 
If it's the lower end of that 

151
00:07:53,240 --> 00:07:55,600
bound, then what you talk you're
talking around like three times 

152
00:07:55,600 --> 00:07:59,520
that that that that 2028 
projected EBITDA on those 

153
00:07:59,520 --> 00:08:00,560
consensus numbers. 
Yeah. 

154
00:08:00,560 --> 00:08:03,760
For those that hadn't caught the
number 1.3 billion EBITDA was 

155
00:08:03,760 --> 00:08:05,720
the one that was, you know, 
commonly quoted. 

156
00:08:06,480 --> 00:08:09,440
Yeah. 
And would be better to to talk 

157
00:08:09,440 --> 00:08:13,440
about that letter then like 
we've got, we've got Michael 

158
00:08:13,560 --> 00:08:17,080
Doran from who's a portfolio 
manager at Blackwater dialling 

159
00:08:17,080 --> 00:08:19,920
into the show. 
So pretty keen. 

160
00:08:19,920 --> 00:08:22,400
I mean, in Full disclosure, 
Black Waddle, they they're 

161
00:08:22,680 --> 00:08:24,560
obviously long Arcadium. 
In the letter they disclosed 

162
00:08:24,560 --> 00:08:26,440
that they bought their stake 
shortly after the merger 

163
00:08:26,440 --> 00:08:29,160
completed, which that merger 
completed January 4th of this 

164
00:08:29,160 --> 00:08:31,040
year. 
Since then the share price is 

165
00:08:31,040 --> 00:08:36,400
still down about 40% even after 
today's 45% price spike. 

166
00:08:36,400 --> 00:08:37,120
Oh really? 
Yeah. 

167
00:08:37,799 --> 00:08:40,039
Oh, he's snapping dark shit. 
Yeah, yeah, right. 

168
00:08:41,280 --> 00:08:44,159
Mike. 
Come on, Mike, let's do it. 

169
00:08:44,480 --> 00:08:46,480
Thanks man. 
OK, so having me on. 

170
00:08:46,600 --> 00:08:49,960
This is this is so awesome. 
We're we're privileged that 

171
00:08:49,960 --> 00:08:52,880
you're, you're making noise 
about a deal and you agree to 

172
00:08:52,880 --> 00:08:54,840
come on the podcast to, to get 
loud. 

173
00:08:54,840 --> 00:08:56,120
This is the best place to get 
loud. 

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00:08:56,120 --> 00:08:58,400
You know, when you're unhappy 
about terms and who better, who 

175
00:08:58,400 --> 00:09:02,120
better to be unhappy about than 
Rio Tinto in your view with a a 

176
00:09:02,120 --> 00:09:06,000
low ball offer for Arcadium. 
What what was your like? 

177
00:09:06,000 --> 00:09:08,680
How were you feeling when you 
were reading the the leak from 

178
00:09:08,680 --> 00:09:12,440
from Reuters over the weekend 
that there's AUS 4 to $6 billion

179
00:09:12,720 --> 00:09:15,120
deal that's on the table? 
Yeah. 

180
00:09:15,120 --> 00:09:18,400
So, I mean, look, Rio's been 
talked about as a potential 

181
00:09:18,400 --> 00:09:19,880
acquirer for Acadia for a little
while. 

182
00:09:20,760 --> 00:09:23,600
You know, the, the combination 
of the assets, you know, really 

183
00:09:23,600 --> 00:09:27,160
makes sense for Rio. 
But I mean, the timing for them,

184
00:09:27,160 --> 00:09:30,280
good, good, good on for Rio. 
But yeah, for Arcadium 

185
00:09:30,280 --> 00:09:33,240
shareholder, this is a very 
opportunistic time for Rio to to

186
00:09:33,240 --> 00:09:35,920
get the assets. 
And when, you know, when we saw 

187
00:09:36,000 --> 00:09:40,160
that 4 to $6 billion number 
being floated by Reuters, you 

188
00:09:40,200 --> 00:09:42,760
know, we thought that really 
undervalued the the assets. 

189
00:09:43,440 --> 00:09:45,640
And that's you know why we 
decided we'd, you know, just 

190
00:09:45,640 --> 00:09:48,720
provide some feedback to the the
board of management at Arcadia. 

191
00:09:49,160 --> 00:09:51,240
But what we think you know as 
long term investors, what we 

192
00:09:51,240 --> 00:09:53,120
think about the value of of the 
assets there. 

193
00:09:53,520 --> 00:09:56,320
So, so Mike, as you laid out in 
in the letter, for those that 

194
00:09:56,560 --> 00:09:59,840
haven't sort of seen it, you 
started accumulating shares 

195
00:09:59,840 --> 00:10:04,200
shortly after the merger earlier
this year and you've, you know, 

196
00:10:04,200 --> 00:10:07,000
been been buying a little bit. 
Why don't you sort of like lay 

197
00:10:07,000 --> 00:10:10,120
out the picture of the the value
you kind of see and the sort of 

198
00:10:10,560 --> 00:10:12,880
horizon you had on your 
investment when you sort of 

199
00:10:12,880 --> 00:10:14,600
bought into the company and 
these sorts of things? 

200
00:10:15,240 --> 00:10:16,960
Yeah. 
So I mean our investment style 

201
00:10:16,960 --> 00:10:18,680
Blackwater was that we're really
focused on quality. 

202
00:10:18,680 --> 00:10:21,280
So you know we're looking to 
sort of build a portfolio of the

203
00:10:21,360 --> 00:10:25,120
the highest quality businesses 
in every industry across the 

204
00:10:25,120 --> 00:10:27,200
ASX. 
And you know, we're sort of 

205
00:10:27,200 --> 00:10:28,920
looking through the lithium 
space. 

206
00:10:29,280 --> 00:10:33,240
You know, we, we sort of doubled
in Nigel and Pilbara and then we

207
00:10:33,240 --> 00:10:35,960
sort of start looking a little 
bit more at Arcadium, which is, 

208
00:10:35,960 --> 00:10:37,920
you know, a combination of two 
businesses. 

209
00:10:37,920 --> 00:10:42,200
So it was the US listing live in
and then the Australian listing,

210
00:10:42,200 --> 00:10:44,000
OK. 
And they'd only combined in 

211
00:10:44,000 --> 00:10:46,960
December last year. 
And you sort of look at those 

212
00:10:46,960 --> 00:10:49,600
assets and we think they're 
quite unique within the 

213
00:10:49,600 --> 00:10:52,280
industry. 
So this is a, a vertically 

214
00:10:52,280 --> 00:10:55,120
integrated business. 
So unlike, you know, an IGO or a

215
00:10:55,120 --> 00:10:57,360
or a Kilbra, which is, you know,
sends this forge main straight 

216
00:10:57,480 --> 00:11:01,800
to China to get processed, but 
it's a vertically integrated 

217
00:11:01,800 --> 00:11:04,960
business that's has an ex China 
supply chain. 

218
00:11:05,640 --> 00:11:07,560
So there's no really there's not
really any other business in the

219
00:11:07,560 --> 00:11:09,760
world like it. 
You know, Albemarle has, you 

220
00:11:09,800 --> 00:11:14,440
know, large Chinese processing. 
And so we thought this is a very

221
00:11:14,440 --> 00:11:17,560
unique asset and the market's 
not properly evaluating it. 

222
00:11:18,320 --> 00:11:22,680
That vertical integration allows
it to to have these long term 

223
00:11:22,680 --> 00:11:26,640
contracts with the likes of Ford
and Tesla and that gives them, 

224
00:11:26,720 --> 00:11:28,760
you know, floor pricing and 
protection in their long term 

225
00:11:28,760 --> 00:11:31,640
contracts and so allows them to 
give have a profitability 

226
00:11:31,640 --> 00:11:33,960
through the cycle. 
And then they have this huge 

227
00:11:33,960 --> 00:11:37,000
growth pipeline. 
So they're expanding in 

228
00:11:37,000 --> 00:11:40,520
Argentina, they're growing in 
Canada and you know, they could,

229
00:11:40,600 --> 00:11:42,520
they're doubling, looks like 
they're doubling production into

230
00:11:42,520 --> 00:11:45,400
2028 and then they have another 
opportunity to double production

231
00:11:45,400 --> 00:11:47,320
beyond that. 
So you know, it's a huge 

232
00:11:47,320 --> 00:11:49,920
resource base. 
And so we put all that together 

233
00:11:49,920 --> 00:11:52,600
and thought, you know, the 
valuation in a few years time, 

234
00:11:52,600 --> 00:11:55,040
you've got to be a longer term 
investor, you know, go for 

235
00:11:55,360 --> 00:11:58,600
lithium cycles is pretty tough. 
But you know, if you sort of 

236
00:11:59,160 --> 00:12:01,280
step back and think about what a
business looks like in a few 

237
00:12:01,280 --> 00:12:04,160
years time, it was, you know, 
incredibly undervalued asset. 

238
00:12:07,480 --> 00:12:09,360
The number you kind of pointed 
to, you sort of didn't even have

239
00:12:09,360 --> 00:12:11,840
to back out your own kind of 
potential value that the 

240
00:12:11,840 --> 00:12:14,400
business could could be worth 
because they did the work for 

241
00:12:14,400 --> 00:12:19,520
you in the strategy day slide by
by pointing to, you know, FY20 

242
00:12:19,520 --> 00:12:22,600
8, you know, potential EBITDA 
under their kind of growth 

243
00:12:22,600 --> 00:12:27,240
plans. 
You're arguing for, you know, a 

244
00:12:27,240 --> 00:12:31,200
total kind of evaluation of 
Arcadium that starts at $8 

245
00:12:31,200 --> 00:12:33,240
billion and and is is north of 
that. 

246
00:12:33,240 --> 00:12:35,560
That's a fairway from the $3.3 
billion evaluation. 

247
00:12:35,560 --> 00:12:38,600
It is right right now. 
But your math is basically 

248
00:12:38,600 --> 00:12:44,880
saying that that's that's like 9
times kind of the EV EBITDA that

249
00:12:44,880 --> 00:12:47,640
you're you're projecting out in 
in FY20 8. 

250
00:12:48,520 --> 00:12:52,600
Is, is a if you know, is that 
how do you come to that, that 

251
00:12:52,600 --> 00:12:54,880
kind of that, that, that 
arithmetic? 

252
00:12:54,880 --> 00:12:56,480
Yeah. 
Yeah, just just on those 

253
00:12:56,480 --> 00:12:58,200
numbers. 
So you know, if you sort of look

254
00:12:58,440 --> 00:13:00,840
at like companies like Albemarle
through the cycle, they trade 

255
00:13:00,840 --> 00:13:03,920
about 9:00 to 11:00 times sort 
of a chemical business, you 

256
00:13:03,920 --> 00:13:06,280
know, huge demand lithium, you 
know, they sort of trade 

257
00:13:06,280 --> 00:13:08,840
slightly higher multiples than 
an iron ore miner, which is 

258
00:13:08,840 --> 00:13:10,240
maybe six or seven times even 
done. 

259
00:13:11,560 --> 00:13:15,520
And So what we thought was OK, 
you know, arcadium's talked to 

260
00:13:15,520 --> 00:13:17,840
this this number only three 
weeks ago, they have some 

261
00:13:17,840 --> 00:13:21,800
confidence in this number. 
If you put that on that multiple

262
00:13:21,800 --> 00:13:24,520
and then you discount it back. 
So 10% per annum discount back. 

263
00:13:24,520 --> 00:13:27,640
So you MPV it back and you 
should get towards a, you know, 

264
00:13:27,680 --> 00:13:31,080
a $8 billion number. 
And so if the management really,

265
00:13:31,240 --> 00:13:33,560
you know, believe in what they, 
you know, they can execute and 

266
00:13:33,560 --> 00:13:37,080
deliver those projections, then,
you know, we think that, you 

267
00:13:37,080 --> 00:13:39,440
know, the value value that, you 
know, talk to Rio has to be in 

268
00:13:39,440 --> 00:13:42,400
that sort of ballpark of a 
discounted valuation back from 

269
00:13:42,520 --> 00:13:46,680
the, you know, that that target.
Mike, like you, you lay it out 

270
00:13:46,680 --> 00:13:49,680
in the in the note. 
Yeah, LTM has just been 

271
00:13:49,680 --> 00:13:53,960
completely smashed this year in 
in a sector of companies that 

272
00:13:53,960 --> 00:13:56,240
have been really, really sort of
beaten up. 

273
00:13:56,240 --> 00:13:58,120
And I think the the question a 
lot of people had is that what, 

274
00:13:58,120 --> 00:14:00,760
why have they been whacked so 
hard? 

275
00:14:00,840 --> 00:14:03,720
You know, given as as people 
like to say they do have, you 

276
00:14:03,720 --> 00:14:07,160
know, relatively top tier, lower
quartile, all these sorts of 

277
00:14:07,160 --> 00:14:08,160
things, projects. 
What? 

278
00:14:08,160 --> 00:14:11,000
Why do you have they've been hit
so hard by the downturn? 

279
00:14:12,520 --> 00:14:13,880
Yeah, I mean, it's it's a couple
of things. 

280
00:14:13,880 --> 00:14:15,560
I mean, we've been thinking 
about that as well as we've sort

281
00:14:15,560 --> 00:14:17,560
of been, you know, watching it 
go all the way down. 

282
00:14:19,200 --> 00:14:23,520
Look, I think the US market in 
particular seems to be very 

283
00:14:23,520 --> 00:14:24,960
focused and worried about their 
balance sheet. 

284
00:14:25,840 --> 00:14:28,280
And so, you know, they've got 
this big growth pipeline. 

285
00:14:28,520 --> 00:14:31,640
They're spending a lot of CapEx.
And I think part of the, the 

286
00:14:31,720 --> 00:14:34,400
Investor Day only a few weeks 
ago was to sort of, you know, 

287
00:14:34,400 --> 00:14:36,560
calm everyone's fears and say, 
look, you know, we can actually 

288
00:14:36,560 --> 00:14:39,840
face this CapEx spread it over 
many years and, you know, 

289
00:14:40,040 --> 00:14:42,760
provide a lot of yeah, headroom 
for about balance sheet. 

290
00:14:42,920 --> 00:14:44,840
So I think that was one of the 
reasons it got sold off. 

291
00:14:46,560 --> 00:14:48,560
I think in, in Australia, the 
stock's a bit of an orphan 

292
00:14:48,560 --> 00:14:51,840
stock. 
You know, it's, it's unlike the 

293
00:14:51,840 --> 00:14:54,360
other, the other lithium 
players, which are sort of Hard 

294
00:14:54,360 --> 00:14:57,880
Rock miners, which, you know, as
you know, mining investors in, 

295
00:14:57,880 --> 00:15:00,320
in Oz, it's easier to get our 
heads around while this one's 

296
00:15:00,320 --> 00:15:02,800
vertically integrated. 
And I feel like, you know, 

297
00:15:03,160 --> 00:15:05,360
people haven't done the work to 
really understand what that 

298
00:15:05,360 --> 00:15:08,000
actually means. 
And so I think those two things 

299
00:15:08,000 --> 00:15:09,920
have sort of put the pressure on
the share price. 

300
00:15:10,120 --> 00:15:13,000
Does it being a ACDI as well, 
does that sort of play into it? 

301
00:15:13,000 --> 00:15:15,320
People think, you know what, why
play it on the the secondary 

302
00:15:15,320 --> 00:15:17,240
kind of listing? 
Is that a big factor at all? 

303
00:15:17,840 --> 00:15:19,440
Yeah. 
It's, it's, it's funny that like

304
00:15:19,440 --> 00:15:23,280
the, when it first listed, I 
think about 55% of the 

305
00:15:23,280 --> 00:15:28,720
shareholders were ASX listed and
then 45 in the US, But that sort

306
00:15:28,720 --> 00:15:30,840
of that flow is just moved 
towards the US and I think it's 

307
00:15:30,840 --> 00:15:34,360
been over 60% now in the US. 
And so that just makes it that 

308
00:15:34,360 --> 00:15:36,680
much harder. 
And you know, if you look at 

309
00:15:36,680 --> 00:15:40,960
like the, the stock indexes in, 
in ASX, you know, Arcane has 

310
00:15:40,960 --> 00:15:44,480
fallen out of there ASX 100 now 
into a small cap only a couple 

311
00:15:44,480 --> 00:15:46,280
of weeks ago as well. 
So it doesn't help. 

312
00:15:46,840 --> 00:15:50,600
Do do you think this was always 
the end game for Arcadium that 

313
00:15:50,920 --> 00:15:55,440
Rayo would take him out? 
Yeah, feels like that that'll 

314
00:15:55,440 --> 00:15:58,880
help them all. 
You know, the the big assets 

315
00:15:59,040 --> 00:16:02,760
that will require capital, you 
know, patience and and long term

316
00:16:02,760 --> 00:16:05,280
thinking. 
And you know, I think the 

317
00:16:05,280 --> 00:16:07,600
shareholder base is showing that
that's not really what they're 

318
00:16:07,600 --> 00:16:10,000
looking for, right. 
And so, you know, it makes sense

319
00:16:10,000 --> 00:16:12,360
that a larger a larger player 
takes them. 

320
00:16:12,600 --> 00:16:15,600
And how amenable do you think 
Real are going to be for price 

321
00:16:15,600 --> 00:16:18,480
negotiation or do you think it's
more opportunistic and it's 

322
00:16:18,480 --> 00:16:20,880
going to be like a BHP Anglo 
situation? 

323
00:16:22,360 --> 00:16:23,840
Yeah. 
I mean, I think this is still 

324
00:16:23,840 --> 00:16:27,000
strategic for them. 
You think about like the the 

325
00:16:27,000 --> 00:16:30,320
other options they have, you 
know, they've got issues in in 

326
00:16:30,320 --> 00:16:34,400
Serbia, they've got a small 
asset in Argentina is they seem 

327
00:16:34,400 --> 00:16:37,440
to really like Brian. 
There aren't really many other. 

328
00:16:37,440 --> 00:16:39,240
I don't think there's a second 
prize if you know, if they don't

329
00:16:39,240 --> 00:16:41,680
take Arcadian, Albemarle doesn't
fit the bill. 

330
00:16:41,680 --> 00:16:44,440
It's got, you know, China, 
Chinese processing, it's got 

331
00:16:44,440 --> 00:16:46,200
some other non lithium parts of 
the business. 

332
00:16:46,800 --> 00:16:49,880
SQM with the issues around Chile
just make it too hard. 

333
00:16:50,240 --> 00:16:53,400
So I feel like for real, this is
all or nothing and this is the 

334
00:16:53,400 --> 00:16:55,760
strategic asset that they need 
if they actually want to chase 

335
00:16:55,760 --> 00:16:58,120
off their lithium dreams. 
So, so how do you think about 

336
00:16:58,120 --> 00:17:00,560
then getting the other 
shareholders to to sort of see 

337
00:17:00,560 --> 00:17:03,400
your point of view? 
I'm sure plenty of them will be 

338
00:17:03,400 --> 00:17:06,119
sort of pegged to a higher price
given where the stocks kind of 

339
00:17:06,119 --> 00:17:08,880
come from. 
But as we kind of talked through

340
00:17:08,880 --> 00:17:13,200
earlier, sort of breaking down 
the the register, you've got a a

341
00:17:13,200 --> 00:17:16,440
large number of passive funds 
and then you've got a whole heap

342
00:17:16,440 --> 00:17:21,440
of, you know, non substantial 
stakes below 5%, a lot sort of 1

343
00:17:21,440 --> 00:17:24,400
to 2% type stakes. 
How do, how do you think about 

344
00:17:24,520 --> 00:17:28,600
getting them on the side on to 
to sort of see, see your value? 

345
00:17:28,600 --> 00:17:32,000
Have you reached out and got a 
bit of a feel for how they're 

346
00:17:32,000 --> 00:17:35,880
kind of thinking as well? 
Yeah, we've, we've, you know, 

347
00:17:35,960 --> 00:17:39,400
since since that letter sort of 
went went out, we've had quite a

348
00:17:39,400 --> 00:17:41,240
few inbounds and had a few chats
with some. 

349
00:17:41,960 --> 00:17:45,200
Look, everyone's got different 
views, they've got different 

350
00:17:45,320 --> 00:17:47,840
time horizons. 
So some are happier to take, to 

351
00:17:47,840 --> 00:17:51,800
take a short term sugar hit. 
Others are sort of a bit long 

352
00:17:51,800 --> 00:17:53,520
term like us. 
So I mean, there's a variety of 

353
00:17:53,520 --> 00:17:55,480
views. 
Everyone believes that the 

354
00:17:55,480 --> 00:17:58,240
assets are undervalued and it's 
just about what the what the 

355
00:17:58,240 --> 00:17:59,960
premium is if if the deals to 
get done. 

356
00:18:01,000 --> 00:18:04,440
You've got a good sugar hit 
today and a 45% kick up must 

357
00:18:04,440 --> 00:18:07,000
make you a bit happier. 
Yes, it helps. 

358
00:18:07,000 --> 00:18:09,560
It does help. 
I just Chuck Chuck inbounds to 

359
00:18:09,560 --> 00:18:12,000
mark in the YouTube comments. 
While he's listening. 

360
00:18:12,640 --> 00:18:15,560
Everyone. 
Does it, if it, you know, a deal

361
00:18:15,560 --> 00:18:19,040
at six billion US, does that cut
the muster? 

362
00:18:22,000 --> 00:18:25,680
Well, we think 8 billion is is 
closer to the right number. 

363
00:18:25,800 --> 00:18:29,600
We. 
Put that number out there and 

364
00:18:30,240 --> 00:18:32,840
you know, today you've had a 
couple of the, the research 

365
00:18:32,840 --> 00:18:34,920
houses come out with similar 
numbers. 

366
00:18:34,920 --> 00:18:37,240
So cities said look, a 
replacement value. 

367
00:18:37,240 --> 00:18:40,560
So if you were to rebuild Arcade
from from from scratch, it's 

368
00:18:40,560 --> 00:18:43,680
going to cost you a bit over $8 
billion to do it. 

369
00:18:43,680 --> 00:18:45,640
Macquarie have come and said, 
look, you know, if you value the

370
00:18:45,640 --> 00:18:49,080
full resource base, they've got 
8 1/2 billion US valuation. 

371
00:18:50,000 --> 00:18:51,960
So, you know, there's a few 
numbers out there. 

372
00:18:52,920 --> 00:18:56,120
We we we think you know towards 
Adeline is the right number. 

373
00:18:56,200 --> 00:19:01,400
The challenge might be in that 
if if Rio walked what what 

374
00:19:01,400 --> 00:19:05,560
happens to Arcadium share price?
It probably might come off a 

375
00:19:05,560 --> 00:19:06,400
bit. 
Maybe it doesn't. 

376
00:19:06,520 --> 00:19:08,920
I'm I'm not sure. 
But there's also, you look at 

377
00:19:08,920 --> 00:19:11,120
the field of potential like 
Interlopus here. 

378
00:19:11,120 --> 00:19:14,520
And like, I don't, I don't think
anyone comes to play other than 

379
00:19:14,520 --> 00:19:15,280
Rio, right? 
Yeah. 

380
00:19:16,840 --> 00:19:18,640
Yeah, yeah, you're probably 
right. 

381
00:19:20,760 --> 00:19:23,280
Maybe there is a fit there for 
for Albemarle, but, you know, 

382
00:19:23,280 --> 00:19:26,520
they've got their own issues and
otherwise, you know, Rio's the 

383
00:19:26,520 --> 00:19:29,400
one, you know, the outsider who 
wants to get into the industry. 

384
00:19:29,400 --> 00:19:31,640
You have the deep pockets so 
that, you know, it makes sense 

385
00:19:31,640 --> 00:19:37,480
for them. 
I guess. 

386
00:19:38,280 --> 00:19:40,200
Look, everyone's going to have 
their their perspective. 

387
00:19:40,920 --> 00:19:44,720
But we're, our view was, look, 
if you're going to be closer to 

388
00:19:44,720 --> 00:19:49,960
that $4 billion mark, you know, 
share, we think it's better 

389
00:19:49,960 --> 00:19:53,600
valued for for acadium to walk 
away from the deal, just go 

390
00:19:54,080 --> 00:19:55,760
alone. 
Yeah, look, yeah, the management

391
00:19:55,760 --> 00:19:57,280
team have pulled out these 
targets. 

392
00:19:57,520 --> 00:19:59,160
They're, you know, they're 
confident in executing them. 

393
00:19:59,440 --> 00:20:02,200
So they should back themselves 
to go after it. 

394
00:20:02,360 --> 00:20:05,440
You know, our personal view is, 
you know, on the on the lithium 

395
00:20:05,800 --> 00:20:08,200
sort of cycle that we're, you 
know, probably closer to the 

396
00:20:08,200 --> 00:20:10,800
bottom. 
You know, we're pricing is now 

397
00:20:10,800 --> 00:20:12,920
you're hitting cost curve, 
you're sitting, you're hearing 

398
00:20:13,040 --> 00:20:17,760
people curtailing minds. 
You know, you sort of CATL. 

399
00:20:18,640 --> 00:20:22,960
You know it's tough out there, 
but demand is, is is still OK 

400
00:20:23,920 --> 00:20:27,000
and you know the queue up for 
low prices, low prices and with 

401
00:20:27,000 --> 00:20:30,920
patients we probably expect an 
all time price cycle to happen 

402
00:20:30,920 --> 00:20:34,000
in the next couple of years. 
Is there can you? 

403
00:20:34,160 --> 00:20:38,440
Do you have any info on whether 
the offer was cash script mix or

404
00:20:38,440 --> 00:20:42,720
and as a shareholder, what would
you be looking for from real? 

405
00:20:43,760 --> 00:20:46,520
Look, all we got to go by is 
that Reuters article and I mean 

406
00:20:46,520 --> 00:20:48,520
there was a mention of the 
script as well. 

407
00:20:50,720 --> 00:20:53,880
I think script might be hard 
just because of the US investor 

408
00:20:53,880 --> 00:20:55,840
base. 
Do they really want reoscript? 

409
00:20:56,400 --> 00:21:00,280
Like if you're, if you're, you 
know, ASX, you know, investor, 

410
00:21:00,280 --> 00:21:03,920
then you know, maybe reoscript 
is OK at the right premium. 

411
00:21:04,040 --> 00:21:07,120
But yeah, I mean, just the US 
investor base might be a bit too

412
00:21:07,120 --> 00:21:09,640
hard for them. 
How do you sort of think about 

413
00:21:10,320 --> 00:21:11,840
value across the, the lithium 
space? 

414
00:21:11,840 --> 00:21:14,720
I mean, on the on the back of 
this news, we've seen almost 

415
00:21:14,720 --> 00:21:17,400
every name on the watch list 
kick up. 

416
00:21:18,400 --> 00:21:21,280
Are you sort of getting excited?
Obviously you mentioned you 

417
00:21:21,280 --> 00:21:24,200
think we're sort of eaten, eaten
right into the cost curve near 

418
00:21:24,200 --> 00:21:26,400
the bottom of the the kind of 
cycle. 

419
00:21:26,400 --> 00:21:29,480
But like you also said, if Rio 
is not going to swing for some 

420
00:21:29,480 --> 00:21:32,280
of these names, who else kind of
is? 

421
00:21:32,280 --> 00:21:34,400
So it seems a little bit 
premature that a lot of these 

422
00:21:34,400 --> 00:21:37,160
names are starting to run. 
Are you still excited looking 

423
00:21:37,160 --> 00:21:40,360
out there? 
Well, we're so excited. 

424
00:21:40,360 --> 00:21:43,760
We're Arcadia for sure. 
Any other names? 

425
00:21:45,600 --> 00:21:48,400
Like I said, we've, we've our 
preference is to look at the 

426
00:21:48,400 --> 00:21:51,320
larger guys, you know who are, 
you know, low on the cost curve 

427
00:21:51,320 --> 00:21:54,280
they're producing. 
So you know, we have looked at 

428
00:21:54,280 --> 00:21:55,840
Pilbara, we have looked at IGO 
before. 

429
00:21:58,120 --> 00:22:02,240
Yeah, there, there is value 
there, but people will have to 

430
00:22:02,240 --> 00:22:05,440
be patient. 
I don't even though we're, we 

431
00:22:05,440 --> 00:22:08,320
think we are towards the bottom 
of that cycle, that doesn't mean

432
00:22:08,320 --> 00:22:11,240
that prices RIP tomorrow, right?
It's going to take a little 

433
00:22:11,240 --> 00:22:16,160
while, but you know, demand is 
still solid and you've seen this

434
00:22:16,200 --> 00:22:19,760
all those supply determined. 
So you know, you need listing 

435
00:22:19,760 --> 00:22:22,920
prices to be at an incentive 
price to to get you production 

436
00:22:22,920 --> 00:22:24,080
online. 
Otherwise we're just going to 

437
00:22:24,080 --> 00:22:25,840
have the same price cycle again.
We're going to have a price 

438
00:22:25,840 --> 00:22:28,800
spike at some point. 
And then we'll have, you know, 

439
00:22:29,120 --> 00:22:31,920
everyone go gang Busters and 
then spend a lot of capital and 

440
00:22:31,920 --> 00:22:35,400
we'll have a, you know, go, go 
find the bottom again, right? 

441
00:22:35,960 --> 00:22:37,480
That's that's the way commodity 
markets work. 

442
00:22:39,320 --> 00:22:42,720
Beautiful, beautiful mate. 
Oh well, we'll we'll look 

443
00:22:42,720 --> 00:22:45,000
forward to engaging with you on 
this journey mate. 

444
00:22:45,080 --> 00:22:47,520
This won't be the last time 
we're talking this deal. 

445
00:22:47,520 --> 00:22:51,280
I don't reckon early stages. 
So thanks for coming on short 

446
00:22:51,280 --> 00:22:52,600
notice mate. 
Appreciate it, Mike. 

447
00:22:52,680 --> 00:22:53,200
Thank. 
You great. 

448
00:22:53,520 --> 00:22:55,080
It's great to chat. 
Thanks so much, Mike. 

449
00:22:55,440 --> 00:22:56,280
Thanks guys. 
Yep. 

450
00:22:56,520 --> 00:22:58,320
How good was that? 
Good stuff. 

451
00:22:58,560 --> 00:23:02,120
The one thing we didn't mention 
The xx China. 

452
00:23:02,640 --> 00:23:06,240
That's that's an interesting 
point that we probably didn't 

453
00:23:06,240 --> 00:23:07,760
cover. 
It's bits and pieces right 

454
00:23:08,000 --> 00:23:09,560
there. 
There is some bits, but you can 

455
00:23:09,560 --> 00:23:12,880
sort of divide. 
If you send your South American 

456
00:23:12,880 --> 00:23:18,560
product to your US facilities, 
then you're on side, but there 

457
00:23:18,560 --> 00:23:20,680
are downstream facilities that 
have in in China too. 

458
00:23:20,680 --> 00:23:24,160
So yeah, sort of ebbs and flows,
but awesome to hear it's sort of

459
00:23:24,160 --> 00:23:28,280
first hand from the the guys 
themselves at Black Waddle. 

460
00:23:28,720 --> 00:23:32,280
Very, very long term view. 
Like yeah, it's appearing like 

461
00:23:32,280 --> 00:23:34,960
because, you know, ex John is a 
long term thought. 

462
00:23:35,600 --> 00:23:37,600
Yeah, that's right. 
You sort of carve out your view 

463
00:23:37,600 --> 00:23:39,960
of where you think the company 
will be in sort of three or four

464
00:23:39,960 --> 00:23:42,560
years and that often tends to be
much easier than where the 

465
00:23:42,560 --> 00:23:44,160
company's going to be in six 
months time. 

466
00:23:44,280 --> 00:23:45,920
Yeah. 
Very much so, right. 

467
00:23:45,920 --> 00:23:49,120
Let's get into the other talking
points that you alluded to at 

468
00:23:49,120 --> 00:23:52,600
the start of the show. 
And the I guess the big one was 

469
00:23:53,080 --> 00:23:58,040
why, why is Rio Tinto picked 
Arcadian, which you wouldn't say

470
00:23:58,040 --> 00:24:02,680
is the frigging most stellar 
blue chip lithium company in the

471
00:24:02,680 --> 00:24:07,000
world by I guess reputation 
complex, very complex, not like 

472
00:24:07,000 --> 00:24:11,200
doesn't have like the one of the
two biggest Braun. 

473
00:24:11,640 --> 00:24:14,720
Lots of operation. 
Cost curve, Yeah, it's not. 

474
00:24:15,000 --> 00:24:19,080
So it's not Albemarle, No. 
So why haven't they gone for 

475
00:24:19,080 --> 00:24:21,240
Albemarle? 
It's a, it's a really good 

476
00:24:21,240 --> 00:24:23,120
question, Maddie. 
Like there's a lot of, I think 

477
00:24:23,120 --> 00:24:25,640
the, the, the rationale, there's
a bunch of different reasons 

478
00:24:25,640 --> 00:24:28,760
that I've written down here, but
the one that sort of sits well 

479
00:24:28,760 --> 00:24:31,080
the most is Arcadium just became
way too cheap on a, on a 

480
00:24:31,080 --> 00:24:33,520
relative basis. 
Look at their underperformance 

481
00:24:33,520 --> 00:24:36,080
versus Albemarle or Pilbara. 
Like, you know, Mike actually 

482
00:24:36,080 --> 00:24:39,720
outlines in the, in the letter 
pen to, to the, to the board of,

483
00:24:40,160 --> 00:24:42,960
of Arcadium. 
It's like down 60 odd percent 

484
00:24:43,040 --> 00:24:45,880
year to date versus like, you 
know, 40 odd for, for the other 

485
00:24:45,880 --> 00:24:49,440
two. 
My Intel suggests that Rio took 

486
00:24:49,440 --> 00:24:54,840
a good look at it actually doing
a deal here about a year ago, by

487
00:24:54,840 --> 00:24:58,360
the way, So you know, the the 
the merger of of all Cam and 

488
00:24:58,360 --> 00:25:02,480
live Ant was still completing 
and and Rio had taken a I 

489
00:25:02,480 --> 00:25:04,640
understand Rio has taken a 
pretty good look under the hood,

490
00:25:04,640 --> 00:25:07,040
but couldn't get there on value 
at that time. 

491
00:25:07,040 --> 00:25:10,200
In fact, I'd heard from someone 
that you know, part of putting 

492
00:25:10,600 --> 00:25:14,120
all Cam and live and together 
was actually, you know, to get 

493
00:25:14,200 --> 00:25:17,320
sufficient scale to actually 
warrant being kind of acquired 

494
00:25:17,320 --> 00:25:19,360
by Rio in the long run to. 
Dress up. 

495
00:25:19,720 --> 00:25:20,960
Yeah, yeah. 
And. 

496
00:25:21,440 --> 00:25:23,320
So that and that when you say 
that we're having a good look 

497
00:25:23,320 --> 00:25:27,000
that we're going to have a good 
look post merger then. 

498
00:25:27,000 --> 00:25:28,880
Yeah, Yeah, it was. 
You're looking at, you're 

499
00:25:28,880 --> 00:25:32,520
looking at the combined entity 
and look at it didn't get over 

500
00:25:32,520 --> 00:25:35,080
the line. 
We've, we've sort of, but that's

501
00:25:35,080 --> 00:25:38,240
changed now because it's down 
truckload on a relative basis. 

502
00:25:38,240 --> 00:25:40,120
So it probably just got a bit 
too cheap. 

503
00:25:40,200 --> 00:25:43,320
I think, I think also just to go
on that point on an absolute 

504
00:25:43,320 --> 00:25:47,400
basis as well, right, because 
you go back to years and you can

505
00:25:47,400 --> 00:25:49,720
talk if one's relatively cheaper
than the others, but they're all

506
00:25:49,720 --> 00:25:52,240
very expensive. 
But now we're talking in terms 

507
00:25:52,240 --> 00:25:55,120
of the the EBITDA number that 
was quoted and stuff in absolute

508
00:25:55,120 --> 00:25:58,080
terms, it could be quite cheap 
if you're believing that's the 

509
00:25:58,120 --> 00:26:00,640
the lithium pricing environment 
we're going to see in a couple 

510
00:26:00,640 --> 00:26:01,480
years time. 
Yeah. 

511
00:26:02,160 --> 00:26:05,720
The other point is in putting a 
bunch of kind of like phone 

512
00:26:05,720 --> 00:26:07,480
calls out today to kind of make 
sense of this. 

513
00:26:08,040 --> 00:26:10,360
I learned that I didn't know 
this before, but I learned that 

514
00:26:10,880 --> 00:26:13,240
Rio actually has been really 
focused on DLE. 

515
00:26:14,040 --> 00:26:16,120
Apparently they've built out a 
pretty substantial technical 

516
00:26:16,120 --> 00:26:19,200
team in Lithium. 
Apparently they've been working 

517
00:26:19,200 --> 00:26:21,480
pretty hard on the technology 
side themselves. 

518
00:26:21,800 --> 00:26:25,000
Apparently they're much more 
interested in in in the 

519
00:26:25,000 --> 00:26:28,720
application of the technology 
they've been working on in Brian

520
00:26:28,720 --> 00:26:31,040
rather than spot. 
You mean, because they think the

521
00:26:31,040 --> 00:26:33,680
cost optimization of the 
industry will make, you know, 

522
00:26:33,680 --> 00:26:37,160
some of these Brian projects 
even more cheaper over time, 

523
00:26:37,600 --> 00:26:40,360
which complicates things for the
larger kind of spot 

524
00:26:40,440 --> 00:26:44,120
opportunities out there. 
And look, Albemarle comes with 

525
00:26:44,120 --> 00:26:46,360
plenty of spot, don't get me 
wrong, like you know, but but 

526
00:26:46,360 --> 00:26:48,960
Grand Bushes has a kind of 
complex joint venture with 

527
00:26:48,960 --> 00:26:52,040
Tianchi and then what you know, 
like you know, you got to accept

528
00:26:52,040 --> 00:26:53,760
that means is operator of that 
instead. 

529
00:26:53,760 --> 00:26:58,920
So it's kind of a more complex 
kind of spod, semi spod 

530
00:26:58,920 --> 00:27:01,040
portfolio. 
But it does open them up to 

531
00:27:01,280 --> 00:27:05,640
obviously the, the Atacama lot, 
the evaporation side of things. 

532
00:27:05,640 --> 00:27:10,640
But if they're very interested 
in DLA, it opens up the what is 

533
00:27:10,640 --> 00:27:13,920
it, the shale oil fields, the 
what's the American ones? 

534
00:27:14,040 --> 00:27:15,480
What are they called? 
The GSML. 

535
00:27:16,000 --> 00:27:17,720
Nah, not the Jr thermal, the 
ones in America. 

536
00:27:17,720 --> 00:27:21,040
The bloody deep deep ones in the
oil field that they can't 

537
00:27:21,040 --> 00:27:24,360
evaporate but need to be DLA. 
Yeah, I think, I don't think DLA

538
00:27:24,360 --> 00:27:27,640
is going to be like A11 size 
fits all like I think I think 

539
00:27:27,640 --> 00:27:29,440
you'll have sort of bespoke 
applications. 

540
00:27:29,880 --> 00:27:32,960
I don't even really know if 
there's a commercial, you know 

541
00:27:33,080 --> 00:27:36,280
use yet or how far it is. 
It's all you know let's wait and

542
00:27:36,280 --> 00:27:39,040
see what eventuates there. 
But my Intel suggests that Rio 

543
00:27:39,040 --> 00:27:40,840
is pretty optimistic about the 
application. 

544
00:27:40,840 --> 00:27:43,600
They might also like, keep in 
mind they, they, they acquired 

545
00:27:43,600 --> 00:27:48,200
Rincon, which is in Argentina 
and but that that project in 

546
00:27:48,200 --> 00:27:51,320
itself might actually like need 
DLA in order to, to sort of 

547
00:27:51,320 --> 00:27:53,040
stack up. 
So they probably allocate a lot 

548
00:27:53,040 --> 00:27:55,280
of resources to this technology 
side of things. 

549
00:27:55,280 --> 00:27:58,360
And as a result, they might have
gotten bullish on it and they, 

550
00:27:58,440 --> 00:28:01,080
they might have, they might 
actually see the, the kind of 

551
00:28:01,080 --> 00:28:04,640
the long term cost curve as the,
the, the, the flat bronze kind 

552
00:28:04,640 --> 00:28:08,320
of kind of coming lower. 
And, and you keep like, it's 

553
00:28:08,320 --> 00:28:10,520
the, it's the spot that's the 
marginal stuff there. 

554
00:28:10,680 --> 00:28:13,000
And and you get, you know, if 
the spot's still in the market, 

555
00:28:13,000 --> 00:28:15,600
then heck, you have even higher 
margins for that if you're part 

556
00:28:15,600 --> 00:28:18,080
of the really low cost stuff 
with the right technology that 

557
00:28:18,240 --> 00:28:20,040
that's what I believe their view
could be at the moment. 

558
00:28:20,120 --> 00:28:22,760
Yeah, the smack over. 
That's what I was trying to say.

559
00:28:22,920 --> 00:28:25,200
The smack over. 
Yeah, fulfilled bronze. 

560
00:28:27,080 --> 00:28:30,160
The the interesting thing will 
be to see what they if if like 

561
00:28:30,680 --> 00:28:33,920
Fast forward a shit load if this
did happen, what they did with 

562
00:28:33,920 --> 00:28:36,760
the spot like like you'd say 
Mount Catlin's probably pretty 

563
00:28:36,760 --> 00:28:40,880
immaterial to the whole of. 
Arcade they declared that non 

564
00:28:40,880 --> 00:28:42,120
core. 
Yeah, yeah, yeah. 

565
00:28:42,200 --> 00:28:45,600
But you look at the James Bay 
stuff, it's like, would that be,

566
00:28:46,120 --> 00:28:48,440
is this? 
Could you assure him, right. 

567
00:28:48,680 --> 00:28:52,240
If this happens, they'd probably
flog James Bay off and 

568
00:28:52,360 --> 00:28:55,840
spodumain. 
Hard Rock is not a focus and 

569
00:28:55,840 --> 00:28:58,000
that sort of feeds into the 
narrative as well. 

570
00:28:58,000 --> 00:29:00,320
Why they didn't go for 
Albemarle? 

571
00:29:00,320 --> 00:29:05,400
Because Albemarle is good chunk 
of value is green bushes yeah 

572
00:29:05,400 --> 00:29:08,240
and a bit of Wodgina which 
they're a non operator at and 

573
00:29:08,240 --> 00:29:09,440
it. 
Could it could be very 

574
00:29:09,440 --> 00:29:13,000
spodumainy, Yeah. 
And my like, like I think 

575
00:29:13,000 --> 00:29:15,480
there's I think there's a 
potential there like for for 

576
00:29:15,480 --> 00:29:16,520
sure. 
And if you look at what 

577
00:29:16,760 --> 00:29:19,720
Arcadium's announcements have 
have been in the last few 

578
00:29:19,720 --> 00:29:23,200
months, they've actually been 
substantially to you know, 

579
00:29:23,400 --> 00:29:26,800
minimise their marginal 
expenditure on any of their spot

580
00:29:26,800 --> 00:29:29,240
projects. 
So started in in August, they 

581
00:29:29,320 --> 00:29:34,640
basically announced that that 
they pause, pause their spend on

582
00:29:34,680 --> 00:29:36,440
on their Galaxy mine in James 
Bay. 

583
00:29:37,000 --> 00:29:39,880
And then a month later they 
declared that they pause the cut

584
00:29:39,880 --> 00:29:43,200
back at Mount Catlin and that 
was non core do an asset in 

585
00:29:43,200 --> 00:29:45,040
James Bay. 
They're looking for a partner to

586
00:29:45,040 --> 00:29:47,120
even fund the fund the rest of 
that now. 

587
00:29:47,120 --> 00:29:50,880
So, you know, those are kind of 
steps that maybe dress the 

588
00:29:50,880 --> 00:29:53,080
company up to be even more 
attractive for an eventual deal 

589
00:29:53,080 --> 00:29:56,240
with Rio Tinto in that sense. 
So I can I could I could get on 

590
00:29:56,240 --> 00:30:01,640
board with that logic. 
I also think like Arcadium's 

591
00:30:01,640 --> 00:30:04,920
brine assets are in Argentina, 
not not Chile, right. 

592
00:30:04,920 --> 00:30:09,800
And you know, the CEO of Rio 
Tinto, he Yakab, he used to live

593
00:30:10,120 --> 00:30:12,440
in Argentina when he worked for 
Shell. 

594
00:30:12,960 --> 00:30:14,800
You know, he's, it's a familiar 
jurisdiction that we're 

595
00:30:14,800 --> 00:30:16,880
comfortable enough to, to buy a 
ring on. 

596
00:30:17,080 --> 00:30:20,960
You had the regime change there,
which is supportive of of of 

597
00:30:20,960 --> 00:30:23,520
investment of mining investment 
all of a sudden with the Malay 

598
00:30:23,520 --> 00:30:26,040
government. 
At the same time, if you 

599
00:30:26,040 --> 00:30:30,360
acquired like Albemarle, you're 
getting outsized exposure to the

600
00:30:30,360 --> 00:30:34,200
to the Atacama in Chile, where 
there's some uncertainty on how 

601
00:30:34,520 --> 00:30:38,880
the the royalty regime might 
evolve in the post twenty 30s 

602
00:30:38,880 --> 00:30:40,600
there. 
I don't quite remember what the 

603
00:30:40,600 --> 00:30:42,120
what happens then, JD, what is 
it? 

604
00:30:42,120 --> 00:30:43,680
Well. 
That the mine permit is mine, 

605
00:30:43,680 --> 00:30:46,760
which became a a big point of 
discussion not too long ago. 

606
00:30:46,760 --> 00:30:51,360
And yet you've heard a lot more 
in recent times about Chile 

607
00:30:51,360 --> 00:30:53,920
wanting to build out a Cadelco 
of lithium. 

608
00:30:54,080 --> 00:30:59,280
So a deal earlier this year, 
they paid 3 or $400 million to 

609
00:30:59,360 --> 00:31:02,440
to scoop up some assets there as
well. 

610
00:31:03,400 --> 00:31:08,600
So I think that people have been
a bit more risk off on Chile, 

611
00:31:09,280 --> 00:31:12,320
operating in Chile. 
Is the would the royalty be 

612
00:31:12,320 --> 00:31:15,520
different in Argentina than 
Chile because you'd say the cost

613
00:31:15,520 --> 00:31:19,400
curve like the Atacama ones that
SQM and Albemarle are the lowest

614
00:31:19,400 --> 00:31:22,800
cost producing assets. 
But in terms, I think it's like 

615
00:31:22,800 --> 00:31:26,720
the all in cost of it is the 
other end of the spectrum for 

616
00:31:26,720 --> 00:31:30,560
what Albemarle actually get 
because of the huge royalty that

617
00:31:30,560 --> 00:31:32,640
goes to Chile. 
Yeah, everywhere's got its own. 

618
00:31:32,640 --> 00:31:35,560
Sort of problems, the royalty 
regime is different but remember

619
00:31:35,560 --> 00:31:37,960
for a long time the challenges 
in Argentina, we're not being 

620
00:31:37,960 --> 00:31:40,120
able to actually get the cash 
out of the country. 

621
00:31:40,280 --> 00:31:43,400
There's capital controls. 
So that's all you know 

622
00:31:43,400 --> 00:31:45,880
supposedly in the works to 
improve. 

623
00:31:45,880 --> 00:31:49,960
That's why BHP has invested a 
huge amount of money, then the 

624
00:31:49,960 --> 00:31:51,640
London group have gotten 
comfortable. 

625
00:31:51,880 --> 00:31:55,160
These things are apparently on 
on a changing trajectory for the

626
00:31:55,160 --> 00:31:56,040
better. 
But. 

627
00:31:56,200 --> 00:31:59,320
I think we're going to put an 
interview up either tomorrow or 

628
00:31:59,320 --> 00:32:04,160
Friday, but we spoke with Hugh 
Mackay and and he talked about 

629
00:32:04,160 --> 00:32:08,480
this dynamic that oftentimes, 
you know, big kind of countries 

630
00:32:08,480 --> 00:32:12,800
will have where they're like 
receptive to wanting investment.

631
00:32:12,800 --> 00:32:15,080
So they'll give some sweetheart 
deals to kind of encourage 

632
00:32:15,360 --> 00:32:18,040
mining companies to to actually 
invest. 

633
00:32:18,080 --> 00:32:21,680
But then those in the long run 
is more investment kind of comes

634
00:32:21,680 --> 00:32:24,000
in because the first move is 
demonstrated it was OK. 

635
00:32:24,400 --> 00:32:26,880
Then all of a sudden those 
early, those early like 

636
00:32:26,880 --> 00:32:29,360
agreements actually kind of 
create conflict because then it 

637
00:32:29,360 --> 00:32:31,560
seems unfair and it kind of 
creates this unrest. 

638
00:32:31,560 --> 00:32:34,320
I think with Chile, there's 
something like that that's sort 

639
00:32:34,320 --> 00:32:35,520
of happening around the twenty 
30s. 

640
00:32:35,520 --> 00:32:37,240
I need to get more information 
about it. 

641
00:32:37,240 --> 00:32:40,240
But yeah, he explicitly, 
explicitly mentioned something 

642
00:32:40,240 --> 00:32:42,960
there. 
Is it, it was interesting to 

643
00:32:42,960 --> 00:32:45,680
look at the look at the 
watchlist today and it sort of 

644
00:32:45,680 --> 00:32:48,520
happened, didn't happen right at
the starter trade, but like 

645
00:32:48,520 --> 00:32:51,960
lithium is they're all tearing 
like I think God. 

646
00:32:52,840 --> 00:32:55,240
Everything Linetown was up 
almost 20%. 

647
00:32:55,240 --> 00:32:58,920
Yeah, like, you know, Wildcat 
28%, like, you know, pay made 

648
00:32:58,920 --> 00:33:01,920
up. 
It wasn't up as much, but yeah, 

649
00:33:01,920 --> 00:33:06,520
like huge, huge moves. 
But the underlying splodge main 

650
00:33:06,520 --> 00:33:09,920
price has not changed. 
Hasn't changed any, any frios 

651
00:33:09,920 --> 00:33:14,800
view is actually, you know, 
bullish, bullish Brian bearish 

652
00:33:14,800 --> 00:33:17,080
spot. 
Then again, that sort of what's 

653
00:33:17,080 --> 00:33:20,000
a question mark over that spot? 
And if they want to do this deal

654
00:33:20,000 --> 00:33:23,720
and it's all on no commodity 
price movement and potential, 

655
00:33:24,040 --> 00:33:28,120
you know M&A and everything, 
this looks like it had time up 

656
00:33:28,120 --> 00:33:31,960
for a bit. 
This would be a big deal to DD 

657
00:33:31,960 --> 00:33:35,960
was yeah, to get through, to get
over the line. 

658
00:33:35,960 --> 00:33:38,920
And we're at the start of the 
potential frigging price 

659
00:33:38,920 --> 00:33:41,760
negotiation of it. 
And I remember people telling us

660
00:33:42,160 --> 00:33:45,160
maybe a month or so ago, a bit 
less than a month ago when all 

661
00:33:45,160 --> 00:33:49,720
this news came out of cattle in,
in China and they said you're 

662
00:33:49,720 --> 00:33:51,560
not going to see the the prices 
move straight away. 

663
00:33:51,560 --> 00:33:54,400
But give it sort of three or 
four weeks and they'll move 

664
00:33:54,400 --> 00:33:57,360
because we saw the futures jump 
up, you know, the GFX ones jump 

665
00:33:57,360 --> 00:33:59,840
up 8 sort of percent. 
But we're here now 3 or 4 weeks 

666
00:33:59,840 --> 00:34:03,120
later and all the indications 
we've got from granted not the 

667
00:34:03,120 --> 00:34:06,080
most transparent of pricing is 
that it hasn't actually moved 

668
00:34:06,080 --> 00:34:11,760
yet and it's still around usus 
750 to 806% so. 

669
00:34:11,760 --> 00:34:14,960
There's a comment there to like,
you know, at least Rio Tinto's 

670
00:34:14,960 --> 00:34:16,960
embarking on counter cyclical 
M&A for once. 

671
00:34:17,520 --> 00:34:19,679
Like they had to be commended 
for that. 

672
00:34:19,679 --> 00:34:22,960
Like, you know, yeah, genuinely,
you know, it's kind of 

673
00:34:22,960 --> 00:34:25,719
surprising to see Rio actually 
confirmed that they'd bid for 

674
00:34:25,719 --> 00:34:28,000
something in what feels like a 
through. 

675
00:34:28,320 --> 00:34:30,560
And certainly on any price chart
looks that way. 

676
00:34:30,560 --> 00:34:35,120
But there's. 
Yeah, I'm not, I, I've, I've 

677
00:34:35,239 --> 00:34:37,360
come around to the view that 
there's a lot of merit in in 

678
00:34:37,360 --> 00:34:40,159
Arcadia, if you believe the Rio 
view of the world. 

679
00:34:40,639 --> 00:34:43,040
I haven't completely come around
to the view that they wouldn't 

680
00:34:43,040 --> 00:34:45,159
subsequently look at Albemarle 
down the track, too. 

681
00:34:45,400 --> 00:34:47,080
I think there is a consensus 
view out there. 

682
00:34:47,080 --> 00:34:49,920
There's more pain on the horizon
for Albemarle. 

683
00:34:51,000 --> 00:34:53,400
A lot of debt, a lot of debt. 
Like, you know, there's. 

684
00:34:53,840 --> 00:34:55,960
Yeah. 
It'll be interesting to see how 

685
00:34:55,960 --> 00:34:57,600
things unfold for that company 
over time. 

686
00:34:57,600 --> 00:35:00,400
And there might be, you know, a 
more opportunistic moment for 

687
00:35:00,480 --> 00:35:05,600
Rio, like if you could scoop up 
both Albemarle and and and 

688
00:35:05,600 --> 00:35:07,720
Arcadium, that gives you a 
pretty commanding position in 

689
00:35:07,720 --> 00:35:09,480
this market. 
I understand that the fully 

690
00:35:09,480 --> 00:35:14,600
integrated, like the fully 
integrated kind of lithium 

691
00:35:14,600 --> 00:35:18,400
production is, is what is really
attractive to to Rio as well. 

692
00:35:18,400 --> 00:35:20,560
You know, they, they're less 
attractive to just sort of 

693
00:35:20,560 --> 00:35:22,880
having only upstream. 
They love the integration part 

694
00:35:22,880 --> 00:35:24,080
of it. 
They want value across the value

695
00:35:24,080 --> 00:35:25,520
chain. 
They've done sort of similar. 

696
00:35:25,520 --> 00:35:28,640
They had a similar strategy in 
aluminium historically and it 

697
00:35:28,640 --> 00:35:31,160
looks like they've done 
technical work sort of along 

698
00:35:31,160 --> 00:35:34,680
that value chain as well. 
I think and the the Hulk Braun 

699
00:35:34,680 --> 00:35:38,040
and DLA and whether it's all 
field Brauns, everything that's 

700
00:35:38,040 --> 00:35:43,160
it's it's resembles iron ore in 
a way, high CapEx, long life, 

701
00:35:43,240 --> 00:35:49,440
low cost, whereas spodumene 
besides green bushes maybe like 

702
00:35:49,440 --> 00:35:53,760
they they aren't that as long a 
lot like the bronze will just 

703
00:35:53,880 --> 00:35:56,280
they're freaking huge. 
Yeah, the beautiful thing about 

704
00:35:56,280 --> 00:35:59,840
what made iron ore such a 
phenomenal commodity to be in is

705
00:35:59,840 --> 00:36:04,560
that you, you, you could have 
the majors produce it, you know,

706
00:36:04,640 --> 00:36:09,080
the teens dollars per tonne. 
And then the price was, was 

707
00:36:09,080 --> 00:36:11,600
always underpinned at a much 
higher like price never 

708
00:36:11,600 --> 00:36:15,160
gravitated down that way because
you had higher cost production 

709
00:36:15,160 --> 00:36:17,320
out of out of China. 
You just had some high cost out 

710
00:36:17,320 --> 00:36:20,800
of, you know, India and Brazil 
was high cost and also like W 

711
00:36:20,800 --> 00:36:23,800
Australia had other high cost 
producers, which was 

712
00:36:23,800 --> 00:36:26,800
sufficiently large that it kept 
the marginal production and 

713
00:36:26,800 --> 00:36:29,400
hence the, you know, the price 
floor, it was way, way, way 

714
00:36:29,400 --> 00:36:30,640
higher. 
So you could have phenomenal 

715
00:36:30,640 --> 00:36:32,800
margins if you'd sunk the rail 
and you could produce it a 

716
00:36:32,800 --> 00:36:35,920
really low cost and a decent 
deposit lithium. 

717
00:36:36,360 --> 00:36:38,200
Time will tell what that cost 
curve looks like. 

718
00:36:38,360 --> 00:36:40,520
VHP is too scared because they 
think it'll be too flat in the 

719
00:36:40,520 --> 00:36:41,720
long run. 
Rio. 

720
00:36:42,200 --> 00:36:45,040
Rio looks like actually thinks 
it could be a lot steeper 

721
00:36:45,040 --> 00:36:48,920
because they think that the 
brine with DLE could actually 

722
00:36:48,920 --> 00:36:51,600
come even lower, which gives you
more margin if the marginal 

723
00:36:51,600 --> 00:36:54,560
producer is is spot. 
Yeah, yeah. 

724
00:36:54,920 --> 00:36:57,680
Do you do you think there's ever
a chance Albemarle to dress 

725
00:36:57,680 --> 00:37:03,120
themselves up, would spin out 
their Hard Rock and separate 

726
00:37:03,120 --> 00:37:05,960
that from their broadband and 
converters? 

727
00:37:06,000 --> 00:37:09,200
You got a non controlling 
interest in green bushes and 

728
00:37:09,200 --> 00:37:12,560
watching making up over half 
your value. 

729
00:37:12,720 --> 00:37:16,160
You know, if you kind of use IGO
is a bit of a, a proxy of the 

730
00:37:16,160 --> 00:37:19,440
value. 
It's an interesting type of 

731
00:37:19,440 --> 00:37:21,800
proposition. 
I think that in itself could be 

732
00:37:21,800 --> 00:37:24,400
something, you know, such a 
deterrent for enough of a 

733
00:37:24,400 --> 00:37:28,200
deterrent for, for Rio right to 
to spend that much money and not

734
00:37:28,200 --> 00:37:30,280
be in control. 
Yeah, that's what I mean. 

735
00:37:30,280 --> 00:37:31,800
What if they spun it out? 
Yeah. 

736
00:37:31,800 --> 00:37:36,200
And then made the brine and the 
brine and converter yeah, 

737
00:37:36,400 --> 00:37:39,000
vehicle as the one that. 
I was looking at more from the 

738
00:37:39,000 --> 00:37:42,680
Rio, more from the lens of who 
would be interested in buying 

739
00:37:42,680 --> 00:37:44,440
the Hard Rock. 
Maybe that's the bit that 

740
00:37:44,440 --> 00:37:46,320
becomes Album. 
The end of the day, Green Bush 

741
00:37:46,320 --> 00:37:50,240
is just like competitive with 
the lowest cost Bryans. 

742
00:37:50,240 --> 00:37:55,360
It's yeah, it's a phenomenal 
kind of like yeah asset from 

743
00:37:55,360 --> 00:37:56,440
every stretch of the 
imagination. 

744
00:37:57,240 --> 00:37:58,560
I wouldn't be surprised to see 
album. 

745
00:37:58,560 --> 00:38:02,600
I'll keep selling stuff like 
looks like they're yeah, selling

746
00:38:02,600 --> 00:38:04,480
everything they can. 
They've got some real sort of 

747
00:38:04,480 --> 00:38:07,480
balance sheet stress. 
So let's let's see what pops out

748
00:38:07,480 --> 00:38:08,600
of there kind of stress over 
time. 

749
00:38:08,600 --> 00:38:11,560
Maybe you can maybe maybe some 
other companies can pick up 

750
00:38:11,560 --> 00:38:14,200
interesting assets that pop out 
of there and maybe what's left 

751
00:38:14,200 --> 00:38:17,120
is actually interesting to Rio. 
If it's mostly Brian that could,

752
00:38:17,120 --> 00:38:18,960
that could be interesting. 
What about getting a deal done 

753
00:38:18,960 --> 00:38:22,280
mate? 
Yeah, I'm a basketball. 

754
00:38:22,400 --> 00:38:24,160
I do. 
I think the leak complicates 

755
00:38:24,160 --> 00:38:27,480
things and but I do think a deal
can get done here. 

756
00:38:27,680 --> 00:38:30,600
I've like if it doesn't get 
done, then we've got to have a 

757
00:38:30,600 --> 00:38:34,280
conversation about how by three 
O and BHP suck at getting deals 

758
00:38:34,280 --> 00:38:36,760
done. 
This they'd be they'd be like 2 

759
00:38:37,240 --> 00:38:40,160
late large measures that they 
just couldn't do I. 

760
00:38:40,520 --> 00:38:42,080
Think I think they'd call that 
discipline mate. 

761
00:38:42,840 --> 00:38:44,320
Unless. 
They're not getting. 

762
00:38:44,640 --> 00:38:46,320
A deal done at stupid prices, 
yeah. 

763
00:38:46,880 --> 00:38:50,960
I, I think, I think both Rio and
Arcadium are motivated to do 

764
00:38:50,960 --> 00:38:52,160
this deal. 
The big question, it's just 

765
00:38:52,160 --> 00:38:54,680
going to come come down to an 
agreement on price and you know,

766
00:38:54,760 --> 00:38:57,440
you can hear how the 
shareholders think about that 

767
00:38:57,440 --> 00:38:59,400
based on what what Mike had to 
say. 

768
00:39:00,520 --> 00:39:03,200
But like I said, the last few 
months of announcements out of 

769
00:39:03,240 --> 00:39:07,680
Arcadium to me look like they 
are making their portfolio more 

770
00:39:07,680 --> 00:39:11,760
attractive to, you know, what, 
what Rio likes about the company

771
00:39:11,760 --> 00:39:14,480
as in a sort of pausing 
incremental spend on the things 

772
00:39:14,480 --> 00:39:16,080
that are less interesting to 
them. 

773
00:39:16,560 --> 00:39:18,160
But there's still a risk that it
slips away, right. 

774
00:39:18,160 --> 00:39:21,960
Like you said, the market cap 
even after the 45% uplift is 3.3

775
00:39:21,960 --> 00:39:26,320
billion, yet the, the, the 
rumoured deal that like value 

776
00:39:26,320 --> 00:39:27,840
that's going around is four to 
six. 

777
00:39:27,840 --> 00:39:31,960
So the markets clearly pricing 
in a substantial risk that the 

778
00:39:32,320 --> 00:39:35,800
kind of deal falls off. 
At the same time, there's like 

779
00:39:35,920 --> 00:39:39,040
room for an uplift there again, 
if, if the deal eventuates. 

780
00:39:39,040 --> 00:39:43,000
So the market's not sure, right?
And I, I think it, it could go 

781
00:39:43,000 --> 00:39:45,800
either way. 
Like, yeah, these things are at 

782
00:39:45,800 --> 00:39:47,880
the margin a lot harder to get 
over the line when once they've 

783
00:39:47,880 --> 00:39:50,000
leaked because you have 
shareholders sort of. 

784
00:39:50,480 --> 00:39:54,040
Bloody podcast talking about. 
It exactly totally yeah like 

785
00:39:54,120 --> 00:39:57,760
there's no shortage of of views 
and but I also look at the the 

786
00:39:57,760 --> 00:40:02,360
register of Arcadium and bring 
it up there that's a that's a 

787
00:40:02,360 --> 00:40:06,520
beautiful register to get a deal
done there's there's no blocking

788
00:40:06,520 --> 00:40:11,080
stake there from like a a 
shareholder that's got stars in 

789
00:40:11,080 --> 00:40:14,120
their eyes there's heaps and 
heaps of passive money there 

790
00:40:14,440 --> 00:40:17,160
there's. 
And there's a lot of like, you 

791
00:40:17,160 --> 00:40:19,480
know, it's just, it's just a 
beautiful share shareholder 

792
00:40:19,480 --> 00:40:21,720
registry of 1 to 2% interest 
here and there. 

793
00:40:21,720 --> 00:40:24,640
So in terms of actually like the
execution side of things, like 

794
00:40:24,640 --> 00:40:27,400
it's going to be hard to get a 
block of shareholders there to 

795
00:40:27,400 --> 00:40:30,400
sort of fight against it. 
I think, I just think, I think 

796
00:40:30,400 --> 00:40:33,760
there's a, there's motivation, 
there's a history here, I think 

797
00:40:33,760 --> 00:40:36,720
of wanting to actually create 
this marriage over a longer 

798
00:40:36,720 --> 00:40:41,000
period of time. 
I think the, the, the Rio can 

799
00:40:41,000 --> 00:40:43,600
clearly actually see value at 
these levels for once. 

800
00:40:43,920 --> 00:40:47,080
Just depends like are they, are 
they both going to get enough of

801
00:40:47,080 --> 00:40:49,400
an uplift that shareholders are 
happy at the same time, you 

802
00:40:49,400 --> 00:40:52,600
know, Rio still sees value. 
That's TBA, but I I think a deal

803
00:40:52,600 --> 00:40:54,440
is very doable. 
All cash. 

804
00:40:54,440 --> 00:40:58,160
You just show script from Rio? 
Or do you reckon Rio? 

805
00:40:59,080 --> 00:41:02,760
I I, I think that's the most 
likely thing you would see, but 

806
00:41:04,680 --> 00:41:07,600
I think script is an easier sell
to shareholders because they get

807
00:41:07,600 --> 00:41:11,120
the rollover relief on it and 
they, you know, yeah, it would 

808
00:41:11,120 --> 00:41:13,360
be like, I actually think Rio. 
Oh. 

809
00:41:13,640 --> 00:41:15,840
So so that happens it that's 
America as well. 

810
00:41:15,840 --> 00:41:17,960
Rollover relief with script is 
it? 

811
00:41:18,040 --> 00:41:20,160
I think you can get you. 
Have to apply for it. 

812
00:41:20,160 --> 00:41:22,760
Yeah, it's not. 
It's not a given, but yeah. 

813
00:41:23,120 --> 00:41:24,120
Cold. 
Would they have any? 

814
00:41:24,840 --> 00:41:26,480
So. 
Anything to roll over? 

815
00:41:29,400 --> 00:41:32,680
Yeah, like, yeah, I mean, I 
mean, what do you mean by that? 

816
00:41:32,680 --> 00:41:35,040
The. 
Isn't rollover relief for 

817
00:41:35,040 --> 00:41:37,120
capital gains? 
Capital gains, yes. 

818
00:41:37,200 --> 00:41:39,400
Would they be capital gains? 
Yeah. 

819
00:41:40,840 --> 00:41:43,480
They went in the IPR. 
Yeah, holding it from Galaxy 

820
00:41:43,480 --> 00:41:44,320
days. 
Yeah, well. 

821
00:41:44,400 --> 00:41:46,560
You know it would have been up 
to hold it for a while. 

822
00:41:46,560 --> 00:41:50,080
Yeah, yeah. 
It's a fairpoint, but yeah, I 

823
00:41:50,080 --> 00:41:53,840
would like if I were a 
shareholder and I would, I think

824
00:41:53,840 --> 00:41:55,760
script kind of makes the deal 
easy, but I think it's just 

825
00:41:55,760 --> 00:41:58,680
unlikely. 
You know, he's got heaps of 

826
00:41:58,680 --> 00:42:00,960
cash. 
They should spend that cash on 

827
00:42:00,960 --> 00:42:03,680
what I think is a creative way 
to spend it in this deal, yeah. 

828
00:42:04,080 --> 00:42:06,360
This has been a winner for the 
investment banks as well. 

829
00:42:07,080 --> 00:42:10,000
Year after year there's a deal 
with if you've latched yourself 

830
00:42:10,000 --> 00:42:12,320
onto to Galaxy or a Cobra or 
something like that. 

831
00:42:12,320 --> 00:42:15,000
I mean remember the the fees 
involved in the last one was my 

832
00:42:15,000 --> 00:42:17,040
mind blowing. 
They were the biggest fees I'd 

833
00:42:17,040 --> 00:42:18,960
ever seen for a deal of that 
size. 

834
00:42:18,960 --> 00:42:21,240
L can and live in merger. 
I think we put up the scheme, 

835
00:42:21,240 --> 00:42:23,520
Doc. 
It was like the north of US 150,

836
00:42:23,640 --> 00:42:26,440
yeah. 
It was something obscene for a 

837
00:42:26,440 --> 00:42:28,280
merger. 
I just put a bit of food on the 

838
00:42:28,280 --> 00:42:31,080
table, got A and mentioned it 
before. 

839
00:42:31,080 --> 00:42:36,400
But it interesting that because 
if you collate the rumours going

840
00:42:36,400 --> 00:42:40,320
around like maybe Royale by 
Pilbara, maybe Royale by 

841
00:42:40,320 --> 00:42:46,040
payment, right? 
Like this is change and whether 

842
00:42:46,040 --> 00:42:49,480
this opens up a lot of different
parties for those. 

843
00:42:49,760 --> 00:42:52,240
And it's just so interesting 
that none of the other majors, 

844
00:42:52,440 --> 00:42:56,920
obviously we mentioned BHB, but 
we haven't seen Glencore Anglo. 

845
00:42:56,920 --> 00:42:59,320
They've got enough problems of 
their own, but none of the other

846
00:42:59,320 --> 00:43:03,600
big guys have shown any 
interest. 

847
00:43:03,880 --> 00:43:07,200
We're doing a a lithium deal 
that's a. 

848
00:43:09,200 --> 00:43:12,520
No, Glencore did have interest 
in there was. 

849
00:43:12,520 --> 00:43:15,600
No trading, wasn't it? 
They were rumoured to want to 

850
00:43:15,600 --> 00:43:18,440
pick up Bald Hill and IPO it for
a billion dollars. 

851
00:43:19,480 --> 00:43:21,480
If you could pick up that for 
pocket change, you'd do it. 

852
00:43:21,760 --> 00:43:25,680
And, and capitalists, yeah, 
they, they, they, they are, 

853
00:43:25,800 --> 00:43:28,200
their lithium trading business 
has been incredibly profitable 

854
00:43:28,200 --> 00:43:29,440
and they're looking to grow 
that. 

855
00:43:29,440 --> 00:43:32,680
Yeah, yeah. 
I'm sure they'll get creative if

856
00:43:32,680 --> 00:43:34,640
there are some distressed 
opportunities out there and they

857
00:43:34,640 --> 00:43:39,560
might end up, yeah, learning to 
own in some, some instances, 

858
00:43:39,760 --> 00:43:41,280
yeah. 
If there if there's enough value

859
00:43:41,280 --> 00:43:43,920
that they'd do it, but that 
hasn't exactly presented itself 

860
00:43:43,920 --> 00:43:49,040
in in lithium land just yet. 
Bloody very, very interesting. 

861
00:43:49,040 --> 00:43:52,880
I think it bloody for because 
this day to day process is going

862
00:43:52,880 --> 00:43:56,320
to be frigging huge. 
Mandatory CRE insurance, a 

863
00:43:56,320 --> 00:43:59,640
review of all these bloody 10 
assets you talk about, JD. 

864
00:43:59,640 --> 00:44:00,960
Took the words out of my mouth 
mate. 

865
00:44:01,000 --> 00:44:04,840
But you know, when you're that 
vertically integrated with brine

866
00:44:04,840 --> 00:44:07,880
and chemicals, I need one asset 
to fall off. 

867
00:44:08,200 --> 00:44:10,040
The whole tower comes tumbling 
down. 

868
00:44:10,040 --> 00:44:11,840
You're not vertically integrated
anymore. 

869
00:44:14,640 --> 00:44:17,080
Go you go, Jodi. 
Just think Arcade and there's so

870
00:44:17,080 --> 00:44:20,480
much going on, it's so complex. 
But CRA, they just thrive on the

871
00:44:20,480 --> 00:44:23,120
complexity now. 10 assets, not a
problem. 

872
00:44:23,120 --> 00:44:25,640
More complex the better. 
Bloody probably the only way 

873
00:44:25,640 --> 00:44:29,480
it's going to get over the line.
Rio cross your T's dot your eyes

874
00:44:29,880 --> 00:44:34,280
get bloody CRE insurance to go 
bloody review these assets for 

875
00:44:34,280 --> 00:44:35,720
you. 
I want to see it in the in the 

876
00:44:35,720 --> 00:44:39,120
dock. 
The takeover dock CRE approved. 

877
00:44:40,160 --> 00:44:41,400
That's it. 
They're happy to go to Japan, 

878
00:44:41,400 --> 00:44:43,600
China, Argentina, Canada to 
doodle. 

879
00:44:43,680 --> 00:44:46,560
Keep it every bloody global 
mining company safe, no matter 

880
00:44:46,560 --> 00:44:48,560
what commodity or jurisdiction. 
JD. 

881
00:44:48,720 --> 00:44:53,080
Go CRA. 
Speaking of oh jeez, yeah anyway

882
00:44:53,080 --> 00:44:58,600
more more negative news, but 
another W African resources that

883
00:44:58,600 --> 00:45:02,000
have to be the most like if you 
go through historic massive 

884
00:45:02,000 --> 00:45:07,640
drops in a day, it would have to
be accumulated the most with all

885
00:45:07,640 --> 00:45:10,920
the coups and. 
Everything operating in West 

886
00:45:10,920 --> 00:45:12,960
Africa. 
Became a fossa and and today is 

887
00:45:12,960 --> 00:45:17,120
one of them tried it down, you 
know 25% shortly after open then

888
00:45:17,120 --> 00:45:20,680
went into a pause in trading, 
then reopened. 

889
00:45:21,000 --> 00:45:25,400
Yeah, yeah. 
Then the I guess the the all 

890
00:45:25,400 --> 00:45:29,520
around the possibility, 
scepticism, whatever you want to

891
00:45:29,520 --> 00:45:34,560
call it of nationalising mining 
and became a fossa, but nothing 

892
00:45:35,040 --> 00:45:37,120
confirmed yet, just fear. 
Yeah. 

893
00:45:37,120 --> 00:45:40,320
So that's the that's the sort of
drama we're talking about here. 

894
00:45:40,360 --> 00:45:44,000
You remember about a month or 
two months ago we spoke about 

895
00:45:44,360 --> 00:45:46,160
potential changes to the mining 
code. 

896
00:45:46,160 --> 00:45:50,560
So not nationalisation, but 
equally quite worrying for 

897
00:45:50,560 --> 00:45:53,480
shareholders. 
And that one turned out to be a 

898
00:45:53,760 --> 00:45:56,200
by the dip moment. 
So you started by saying, 

899
00:45:56,200 --> 00:46:00,200
Maddie, more negative news, but 
perhaps there is a bit of silver

900
00:46:00,200 --> 00:46:02,520
lining to this one. 
If you remember that one a 

901
00:46:02,520 --> 00:46:05,640
couple months ago now, within a 
week, the share price had 

902
00:46:05,640 --> 00:46:08,600
completely recovered and they 
just sort of took it in its 

903
00:46:08,600 --> 00:46:11,320
stride. 
So it's worth looking at how 

904
00:46:11,320 --> 00:46:15,520
this one's kind of shaping up. 
A lot of people still digesting 

905
00:46:15,520 --> 00:46:17,880
the news. 
So I think that'll be more to 

906
00:46:17,880 --> 00:46:21,800
come in the, you know, the next 
couple weeks about this one. 

907
00:46:21,800 --> 00:46:26,600
It all comes off the back of the
military hunter leader Ibrahim 

908
00:46:26,600 --> 00:46:30,520
Traore speaking on the the 
national radio on Saturday. 

909
00:46:31,240 --> 00:46:33,920
Essentially what he said about 
mining. 

910
00:46:33,920 --> 00:46:36,280
This was in a, a broader 
conversation talking about 

911
00:46:36,640 --> 00:46:40,080
corruption, talking about the 
the, the military kind of 

912
00:46:40,080 --> 00:46:42,720
challenges in the the North East
of the country. 

913
00:46:42,720 --> 00:46:46,040
But there was a segment on 
mining and potentially pulling 

914
00:46:46,040 --> 00:46:49,440
the permits of some foreign 
operators. 

915
00:46:49,440 --> 00:46:52,040
So this was then covered by 
Reuters and all these other sort

916
00:46:52,040 --> 00:46:54,880
of publications. 
There was a sort of quote that 

917
00:46:54,880 --> 00:46:58,360
particularly stood out. 
I will just read it out now we 

918
00:46:58,360 --> 00:47:01,600
know how to mine our gold and I 
don't understand why we are 

919
00:47:01,600 --> 00:47:03,960
letting multinationals come in 
and mine it. 

920
00:47:03,960 --> 00:47:07,680
So again, he didn't name any 
companies specifically but of 

921
00:47:07,680 --> 00:47:10,080
size in Bikini you've got Wolf 
who we're talking about today, 

922
00:47:10,080 --> 00:47:13,080
but overseas you've got 
Endeavour Nord Gold, they're 

923
00:47:13,160 --> 00:47:18,560
Russian group as well as Ozone. 
So it's worth mentioning these 

924
00:47:18,560 --> 00:47:20,880
these couple other operations 
because I think they might cut 

925
00:47:21,080 --> 00:47:26,400
come relevant in a little bit. 
But Bongu and Waggon Yon. 

926
00:47:26,440 --> 00:47:28,240
Not sure if I'm pronouncing that
one right. 

927
00:47:28,920 --> 00:47:31,240
Definitely got that right. 
Thank you, gents. 

928
00:47:31,240 --> 00:47:35,360
But these assets were previously
owned by Endeavour. 

929
00:47:35,680 --> 00:47:41,440
There was a transaction with 
Lilium Mining in 2023. 

930
00:47:41,800 --> 00:47:45,440
This led to a bit of a dispute 
in which the government came in.

931
00:47:45,920 --> 00:47:47,840
They now own it. 
The government has scooped up 

932
00:47:47,840 --> 00:47:49,280
these assets. 
They've said they'll pay 

933
00:47:49,280 --> 00:47:53,200
Endeavour US $60 million by the 
end of the year. 

934
00:47:53,200 --> 00:47:55,000
Now we just put a pin in them 
for now, but I think they could 

935
00:47:55,000 --> 00:47:59,960
come relevant in terms of 
companies acting in line with 

936
00:48:00,040 --> 00:48:02,800
the the mining code. 
But like we sort of said at the 

937
00:48:02,800 --> 00:48:05,240
beginning, is, is a by the dip 
moment. 

938
00:48:05,360 --> 00:48:07,840
That's the kind of big question 
people are trying to answer 

939
00:48:07,840 --> 00:48:09,640
here. 
And the investors that are 

940
00:48:09,640 --> 00:48:12,640
familiar with West Africa, 
they've invested in West African

941
00:48:12,640 --> 00:48:14,240
miners before. 
They will have seen this stuff 

942
00:48:14,400 --> 00:48:17,000
hundreds of times before. 
It happens, you know, across the

943
00:48:17,000 --> 00:48:22,000
continent many times a year. 
So off in that trading pause 

944
00:48:22,000 --> 00:48:25,040
that you mentioned, Maddie came 
out with an update as well, just

945
00:48:25,040 --> 00:48:28,560
a simple one page trying to 
alleviate the fears of 

946
00:48:28,560 --> 00:48:30,320
shareholders. 
And I actually think they did a 

947
00:48:31,120 --> 00:48:34,840
a bit of a decent job at it. 
If you see in the the course of 

948
00:48:34,840 --> 00:48:39,040
sales for those listening in, 
shares closed at $1.66 on 

949
00:48:39,040 --> 00:48:42,240
Friday. 
They opened today at $1.30 

950
00:48:42,240 --> 00:48:45,120
before trading downwards to 
$1.24. 

951
00:48:45,560 --> 00:48:48,680
Then they went into a 80 minute 
pause in trading in which this 

952
00:48:48,680 --> 00:48:51,920
announcement came out. 
West African just took the 

953
00:48:51,920 --> 00:48:53,880
stance that they have adhered to
everything. 

954
00:48:53,880 --> 00:48:55,880
They've got a good relationship 
with the government. 

955
00:48:55,880 --> 00:48:59,240
They've won a couple awards for 
being the best operators in 

956
00:48:59,240 --> 00:49:01,000
country. 
And there was a segment here 

957
00:49:01,000 --> 00:49:05,240
that specifically stood out to 
me talking about this being a 

958
00:49:05,240 --> 00:49:09,080
stance against miners who have 
not adhered to the mining code. 

959
00:49:09,680 --> 00:49:11,640
So that leads to people pointing
fingers to those couple 

960
00:49:11,640 --> 00:49:16,080
operators before and perhaps 
some actions that, you know, 

961
00:49:16,480 --> 00:49:19,360
we're not quite aware of, but 
other type of operators who 

962
00:49:19,360 --> 00:49:23,040
haven't followed the letter of 
the law and paid the taxes they 

963
00:49:23,040 --> 00:49:25,200
need to pay and these sorts of 
things and. 

964
00:49:25,520 --> 00:49:27,800
Right. 
I'm so keen to go deep on those 

965
00:49:28,160 --> 00:49:31,040
two projects that you talk that 
you mentioned there, which were 

966
00:49:31,040 --> 00:49:34,760
previously owned by Endeavour. 
Endeavour Yeah, there's some 

967
00:49:34,760 --> 00:49:37,880
juicy word on the decline about 
what happened there. 

968
00:49:37,920 --> 00:49:39,680
There is some very juicy word on
the decline. 

969
00:49:39,680 --> 00:49:44,120
So that Lilium Group is owned by
a Lilium Capital, which is also 

970
00:49:45,000 --> 00:49:49,360
from Burkina, which is all tied 
to this one bikini businessman. 

971
00:49:49,360 --> 00:49:52,160
And there was. 
He accused Endeavour of not 

972
00:49:52,160 --> 00:49:55,640
revealing all that needed to be 
revealed in the sales process. 

973
00:49:55,640 --> 00:49:58,040
And then essentially Endeavour 
said you haven't paid us the 

974
00:49:58,040 --> 00:50:00,840
money you said you'd pay. 
And the Bikini government tried 

975
00:50:00,840 --> 00:50:05,960
to step in and mediate that. 
Overlay that with the departure 

976
00:50:05,960 --> 00:50:07,960
of Endeavour's. 
Former CEO. 

977
00:50:08,160 --> 00:50:13,280
Former CEO as well in an 
unexplained transaction. 

978
00:50:14,040 --> 00:50:16,560
It's just a whole. 
There's a whole story there that

979
00:50:16,560 --> 00:50:20,280
is not being published in the 
the local media reports. 

980
00:50:20,280 --> 00:50:23,360
I can guarantee that. 
Just to the point on how the 

981
00:50:23,360 --> 00:50:26,360
West African response had been 
taken by the market. 

982
00:50:27,280 --> 00:50:29,640
They went into that pause of 
trading $1.24, they came out 

983
00:50:29,640 --> 00:50:31,880
$1.37. 
So it looked like investors 

984
00:50:31,880 --> 00:50:33,480
also. 
There's like 80 minutes for 

985
00:50:33,480 --> 00:50:36,800
people's to sort of mall over 
and see what what's actually at 

986
00:50:36,800 --> 00:50:39,920
risk here, what's going on and 
they seem to like it. 

987
00:50:39,920 --> 00:50:42,280
It's sort of trading in and 
around that level at the the 

988
00:50:42,280 --> 00:50:46,120
time where recording on volume. 
That's a good few multiples of 

989
00:50:46,120 --> 00:50:48,880
the average daily trading 
multiples. 

990
00:50:48,880 --> 00:50:52,840
So a lot still to digest as 
we've kind of spoken about West 

991
00:50:52,840 --> 00:50:57,000
African a bunch in the past, you
know by 2026 four 160,000 oz, 

992
00:50:57,480 --> 00:51:01,240
you know on sort of conservative
numbers that could be a bit 

993
00:51:01,240 --> 00:51:05,280
under a billion dollars in 
EBITDA, bit over 600 in free 

994
00:51:05,280 --> 00:51:08,680
cash for a $1.5 billion Business
Today. 

995
00:51:08,680 --> 00:51:12,840
So it's just how you kind of tie
a number to the risk of 

996
00:51:12,840 --> 00:51:16,880
operating in this country and. 
They, I think they get tainted 

997
00:51:16,880 --> 00:51:21,120
by like Burkina Faso is decent 
size, so there's different parts

998
00:51:21,120 --> 00:51:24,720
of Burkina Faso, but they get 
tainted as everything that 

999
00:51:24,720 --> 00:51:27,360
happens in Burkina Faso taints 
the whole of Burkina Faso. 

1000
00:51:27,640 --> 00:51:29,680
Yeah. 
And it's it is not the case. 

1001
00:51:29,680 --> 00:51:32,480
It's, it's similar with Mali as 
well, but you like 

1002
00:51:32,480 --> 00:51:34,920
geographically as you're kind of
explaining it there, Maddie, the

1003
00:51:34,920 --> 00:51:37,760
northeast of the country, the 
north of the country is, you 

1004
00:51:37,760 --> 00:51:41,160
know, a much more challenging 
and dangerous place to to 

1005
00:51:41,160 --> 00:51:43,800
operate. 
So, and that was again, that was

1006
00:51:43,800 --> 00:51:47,760
another thing that was addressed
by the the military junta in 

1007
00:51:47,760 --> 00:51:51,280
their announcement on Saturday, 
how they're going about making 

1008
00:51:51,280 --> 00:51:54,680
the country safer and removing 
the terrorist groups that that 

1009
00:51:54,680 --> 00:51:57,520
sort of reside in the the north 
of the country there. 

1010
00:51:57,520 --> 00:52:01,560
So the one of the things to look
out for if you're a Wolf holder 

1011
00:52:01,560 --> 00:52:02,800
interested in this company is 
that. 

1012
00:52:02,800 --> 00:52:06,120
OJC is, by the way, Ding. 
Ding for Ding, Ding, Ding. 

1013
00:52:06,120 --> 00:52:10,000
Yeah, the the mining code 
potential changes that hasn't 

1014
00:52:10,000 --> 00:52:12,880
played out yet. 
So that was going from a 10% 

1015
00:52:12,880 --> 00:52:16,320
free carried interest for the 
government up to 15. 

1016
00:52:16,320 --> 00:52:20,520
And what Wolf said at the time 
was that they believe they are 

1017
00:52:20,600 --> 00:52:24,440
grandfathered in that system and
that former 10% rate will apply 

1018
00:52:24,440 --> 00:52:26,400
to them. 
There was no confirmation from 

1019
00:52:26,400 --> 00:52:28,320
the government that that that is
in fact true. 

1020
00:52:28,320 --> 00:52:30,800
So we'll have to sort of wait 
and see how that kind of plays 

1021
00:52:30,800 --> 00:52:33,000
out in time. 
That's one to keep your eyes on 

1022
00:52:33,000 --> 00:52:35,440
as a as a wolf holder or 
somebody interested there. 

1023
00:52:36,200 --> 00:52:38,920
But you know, As for what's 
happened sort of today, I'm keen

1024
00:52:38,920 --> 00:52:42,480
to see what Endeavour does when 
they trade overnight kind of 

1025
00:52:42,480 --> 00:52:45,120
Canada, if they're hit as 
severely, they're a bit more 

1026
00:52:45,400 --> 00:52:49,240
sheltered in that they're not 
just a pure play Bikina minor 

1027
00:52:49,600 --> 00:52:53,120
like W African is. 
But yeah, we'll see if this 

1028
00:52:53,120 --> 00:52:55,680
ultimately ends up being a buy 
the dip situation or not. 

1029
00:52:55,840 --> 00:52:59,680
I'd say Richard Hodge phone is 
permanently plugged into power 

1030
00:52:59,680 --> 00:53:02,280
today. 
Bloody ringing off the hook. 

1031
00:53:03,240 --> 00:53:05,040
I'm sure he's handled on a 12 
days in his time. 

1032
00:53:05,040 --> 00:53:09,520
Making a fortune, mate. 
Right, Next up, So we've seen a 

1033
00:53:09,600 --> 00:53:14,520
very unexpected backflip from 
the Takeovers panel in regard to

1034
00:53:14,520 --> 00:53:19,560
the proposed ERA entitlement 
offer, which this is very 

1035
00:53:19,560 --> 00:53:22,760
interesting, especially to me 
because you know me. 

1036
00:53:23,640 --> 00:53:27,040
So brief one for people who 
don't know when we say, alright,

1037
00:53:27,040 --> 00:53:31,120
that's a Jabiluka uranium 
deposit in NT, £300 million at 

1038
00:53:31,480 --> 00:53:37,400
.55% uranium decline already to 
the ore body, Rio owns 86% of 

1039
00:53:37,400 --> 00:53:40,240
it, just shy of compulsory 
acquisition. 

1040
00:53:40,240 --> 00:53:45,000
But to minority shareholders, 
Packer and Co, 9.3%, Sentry 

1041
00:53:45,000 --> 00:53:49,120
another 3%. 
So 25th or so, I'll go through 

1042
00:53:49,120 --> 00:53:51,280
what happened in the lead up and
where, where we are today. 

1043
00:53:51,280 --> 00:53:54,240
So on 25th of September, the 
that's when the takeovers panel 

1044
00:53:54,240 --> 00:53:59,040
declined to conduct proceedings 
from the application by Packer 

1045
00:53:59,040 --> 00:54:04,200
and Carl and Zemtree about Rio 
wanting to raise $880 million 

1046
00:54:04,200 --> 00:54:07,400
via an entitlement offer at 
Point OO 2%. 

1047
00:54:07,640 --> 00:54:11,120
So essentially, if the minority 
shareholders didn't tip in their

1048
00:54:11,120 --> 00:54:14,200
pro rata amount and continue 
riding the pump, rail would go 

1049
00:54:14,280 --> 00:54:17,400
over 90% and proceed to 
compulsory acquisition. 

1050
00:54:17,560 --> 00:54:21,520
And this was then after 
obviously Prime Minister said 

1051
00:54:21,520 --> 00:54:24,080
that they're going to 
incorporate it into Kakadu 

1052
00:54:24,080 --> 00:54:27,480
National Park and pretty much 
squash it forever. 

1053
00:54:27,680 --> 00:54:30,400
Yeah, so. 
And that that price that they 

1054
00:54:30,400 --> 00:54:33,560
were going to raise your time, 
it was just, it was a severe 

1055
00:54:33,560 --> 00:54:37,880
discount was like 90. 
I think the the 80 million that 

1056
00:54:37,880 --> 00:54:40,760
didn't be worth 14 for Yeah. 
And Carl, something like that. 

1057
00:54:40,760 --> 00:54:42,840
Was a crazy discount, but that 
also would have said the 

1058
00:54:43,520 --> 00:54:46,520
probable acquisition price of 
the remaining interest as well. 

1059
00:54:46,520 --> 00:54:49,240
And it actually, yeah, it 
actually said that the IT says 

1060
00:54:49,240 --> 00:54:51,200
it right here. 
Rio intends to proceed with 

1061
00:54:51,200 --> 00:54:55,320
compulsory acquisition of all 
remaining ERERI shares at an 

1062
00:54:55,320 --> 00:54:57,600
offer price of .002. 
Yeah. 

1063
00:54:57,600 --> 00:54:59,560
So what then happened after the 
takeover? 

1064
00:54:59,560 --> 00:55:00,920
This panel made that initial 
ruling. 

1065
00:55:00,920 --> 00:55:03,720
Well, the next day, that's when 
the minority shareholders when 

1066
00:55:03,800 --> 00:55:05,640
or say minority are referred to 
the two. 

1067
00:55:06,080 --> 00:55:10,920
They wrote to the Takeover's 
panel to review the decision and

1068
00:55:10,920 --> 00:55:15,840
based on today's announcement, 
it appears because they said 

1069
00:55:17,280 --> 00:55:19,000
they didn't even conduct the 
proceedings. 

1070
00:55:19,000 --> 00:55:21,600
So it appears that they've 
written to the president of the 

1071
00:55:21,640 --> 00:55:28,040
Takeovers panel and they have 
decided that a fair process was 

1072
00:55:28,040 --> 00:55:30,480
not followed because they didn't
even conduct the proceedings. 

1073
00:55:30,480 --> 00:55:32,520
They just said no, it's not 
happening. 

1074
00:55:33,400 --> 00:55:36,920
And based on that, they've now 
got a independent board 

1075
00:55:36,920 --> 00:55:42,280
committee that will actually 
review the application made by 

1076
00:55:42,400 --> 00:55:46,520
Packer and Co and and Zentry, 
which was, you know, pretty, 

1077
00:55:46,880 --> 00:55:48,640
yeah, pretty. 
It was pretty clear cut that 

1078
00:55:48,640 --> 00:55:51,600
they said we we do not intend to
conduct proceedings. 

1079
00:55:51,840 --> 00:55:56,520
And now they said, no, we will 
review the review. 

1080
00:55:57,000 --> 00:55:59,480
Essentially it's like a bit of a
double review. 

1081
00:55:59,880 --> 00:56:01,920
So and there's. 
No guarantee that conducting 

1082
00:56:01,920 --> 00:56:04,160
proceedings would deliver. 
No, it just means they're 

1083
00:56:04,160 --> 00:56:06,560
actually, they're now got an 
independent committee that's 

1084
00:56:06,560 --> 00:56:09,200
going to actually, because 
because their whole thing is 

1085
00:56:09,200 --> 00:56:13,160
their, you are saying like 
you're not going to conduct 

1086
00:56:13,160 --> 00:56:15,600
proceedings, you're going to let
this entitlement offer go 

1087
00:56:15,600 --> 00:56:18,880
through when there's actually a 
federal Court case in play 

1088
00:56:20,040 --> 00:56:23,040
regarding this and say, hey, can
you actually do an entitlement 

1089
00:56:23,040 --> 00:56:27,480
offer when there's an ongoing 
federal Court case about what 

1090
00:56:28,720 --> 00:56:31,920
you know, the Prime Minister and
Madeleine King of the decision 

1091
00:56:31,920 --> 00:56:34,200
they made and the, the 
interesting facts that came to 

1092
00:56:34,200 --> 00:56:37,840
light just at the end of last 
month, about a week ago, was 

1093
00:56:37,840 --> 00:56:42,960
that so Resources Minister 
Madeleine King was advised by 

1094
00:56:42,960 --> 00:56:48,000
her office that prior to making 
this decision to incorporate it 

1095
00:56:48,000 --> 00:56:53,320
in the to not extend the permit.
The legal challenge was unlikely

1096
00:56:53,320 --> 00:56:56,360
because Rio Tinto, the major 
shareholder, does not support 

1097
00:56:56,360 --> 00:57:00,600
mining at Jabaluka and they 
would not fund AR as challenge 

1098
00:57:00,600 --> 00:57:04,800
because of the public backlash. 
So The Who she was advised by 

1099
00:57:04,800 --> 00:57:10,040
clearly missed the point that 
minority shareholders also have 

1100
00:57:10,040 --> 00:57:14,120
a say, think that they'll sort 
of say, oh, Rio Tinto owns the 

1101
00:57:14,120 --> 00:57:15,600
whole thing and they won't do 
it. 

1102
00:57:16,480 --> 00:57:21,000
And ARA pretty much immediately 
sued them, effectively. 

1103
00:57:21,080 --> 00:57:23,640
So it was now. 
The takeover span would 

1104
00:57:23,720 --> 00:57:27,800
typically have to operate pretty
quickly, so we should see an 

1105
00:57:27,800 --> 00:57:30,120
update in the next few weeks 
again. 

1106
00:57:30,240 --> 00:57:32,320
Yeah, I assume they didn't put a
timeline on this one. 

1107
00:57:32,320 --> 00:57:35,560
No, no, not for the review, no. 
So like, yeah, so there's the 

1108
00:57:35,560 --> 00:57:39,520
review, but then there's the 
obviously the the court thing 

1109
00:57:39,520 --> 00:57:42,560
going on as well. 
So it's like what I guess what's

1110
00:57:42,560 --> 00:57:45,760
the, what's the possibilities if
that review comes back in the 

1111
00:57:45,760 --> 00:57:47,480
favour of the minority 
shareholders? 

1112
00:57:47,720 --> 00:57:50,240
Obviously they want the 
entitlement office squashed for 

1113
00:57:50,240 --> 00:57:52,680
the moment while the Federal 
Court case is ongoing. 

1114
00:57:52,880 --> 00:57:55,000
They want to drag that. 
I assume they want to drag that 

1115
00:57:55,000 --> 00:57:57,360
out as long as possible that 
because that means they don't 

1116
00:57:57,360 --> 00:57:59,880
have to stump up the cash yet to
stay in the game. 

1117
00:58:00,360 --> 00:58:03,840
And will it, I've mentioned this
before, will it drag on long 

1118
00:58:03,840 --> 00:58:06,360
enough before the federal 
election, which is likely going 

1119
00:58:06,360 --> 00:58:10,040
to be next year? 
Will that then, if there was a 

1120
00:58:10,040 --> 00:58:13,880
change, see that decision to 
incorporate Jabaluka in the 

1121
00:58:13,880 --> 00:58:17,320
Kakadu National Park Park 
overturned by a new government? 

1122
00:58:17,520 --> 00:58:20,800
Lot of balls in the air. 
But because it is a renounceable

1123
00:58:20,800 --> 00:58:23,880
entitlement, which means that 
the minority shareholders can 

1124
00:58:23,880 --> 00:58:28,240
find some other parties to take 
up their entitlement to stay in 

1125
00:58:28,240 --> 00:58:30,320
the game. 
But you know, while there's a 

1126
00:58:30,320 --> 00:58:34,520
court case going on, it's pretty
fucking hard to do that when 

1127
00:58:34,520 --> 00:58:36,720
when they did the investor 
sounding and the only person 

1128
00:58:36,720 --> 00:58:39,400
that wanted the only company 
that wanted to tip in was Rio 

1129
00:58:39,400 --> 00:58:42,800
Tinto. 
So could be another fund. 

1130
00:58:43,040 --> 00:58:46,400
But don't forget old buddy. 
Yeah, like someone like a boss 

1131
00:58:46,400 --> 00:58:49,200
energy as well, because they 
were putting in a bid before all

1132
00:58:49,200 --> 00:58:54,200
this decision happened. 
So who who knows, like, you 

1133
00:58:54,200 --> 00:58:57,040
know, propose they'll propose in
a free carried interest for the 

1134
00:58:57,040 --> 00:58:58,880
mirror people. 
I just don't. 

1135
00:58:58,880 --> 00:59:03,680
I think this is far from over. 
It's juicy, juicy story. 

1136
00:59:03,680 --> 00:59:05,760
Drag on. 
Yeah, see where it goes. 

1137
00:59:06,120 --> 00:59:09,000
It's very interesting. 
It's and, and because the whole,

1138
00:59:09,000 --> 00:59:12,320
the whole critic of the, the 
whole process for this rehab is 

1139
00:59:12,320 --> 00:59:15,520
just like the cost of the rehab 
is just being astronomical for, 

1140
00:59:15,960 --> 00:59:18,360
for Ranger. 
I'll just, I'll just think of 

1141
00:59:18,360 --> 00:59:20,520
the shareholder money that could
have been saved for the 

1142
00:59:20,520 --> 00:59:24,160
minorities if bloody race and 
Australian Earth movement and 

1143
00:59:24,160 --> 00:59:27,040
haulage were doing it for him. 
Geez, they'd do it economically,

1144
00:59:27,080 --> 00:59:29,200
wouldn't they? 
Bloody Packer and Cowan's entry 

1145
00:59:29,200 --> 00:59:32,920
be in much a better spot if the 
bloody race was up there on his 

1146
00:59:32,920 --> 00:59:35,000
D sixes and D eights and even. 
Rio. 

1147
00:59:35,080 --> 00:59:38,360
Trucks and trailers mate, Rio 
would be mate, they'd be able to

1148
00:59:38,360 --> 00:59:41,160
actually afford to pay a bit 
more for arcadium because they 

1149
00:59:41,160 --> 00:59:42,840
would have saved this much on 
the rehab. 

1150
00:59:42,840 --> 00:59:47,040
Yeah, like tell you what anyway,
but luckily we're. 

1151
00:59:47,040 --> 00:59:50,280
Doing a Rio Tinto version of 
Rehab, not a not a nimble miner.

1152
00:59:50,280 --> 00:59:53,920
Man, but that's the thing race 
and IAH can actually do a Rio 

1153
00:59:53,920 --> 00:59:57,440
Tinto quality job. 
Yeah, quality at a like a a 

1154
00:59:57,920 --> 01:00:02,800
small cap price effectively. 
That's that is unparalleled 

1155
01:00:02,800 --> 01:00:04,800
expertise in earth moving and 
haulage. 

1156
01:00:04,800 --> 01:00:08,360
So lucky for all you mining 
companies out there, race and 

1157
01:00:08,360 --> 01:00:11,680
IAH are not consumed by Rio 
Tinto at the moment and 

1158
01:00:11,680 --> 01:00:14,880
available right now for make 
clearing for construction, 

1159
01:00:14,880 --> 01:00:19,560
drilling, building dams. 
Rehabilitation works post mining

1160
01:00:19,640 --> 01:00:21,920
which they could have done at 
Jabaluka Bloody. 

1161
01:00:22,040 --> 01:00:23,160
Right now I can just call them 
up. 

1162
01:00:23,160 --> 01:00:25,520
Right, that easy? 
Do you want to do it? 

1163
01:00:25,800 --> 01:00:27,080
You can call him right now if 
you want. 

1164
01:00:27,400 --> 01:00:29,800
Quick, quick break. 
JD just called him and he picked

1165
01:00:29,800 --> 01:00:30,720
up. 
Easy as that. 

1166
01:00:32,520 --> 01:00:36,160
Say it Very Yeah. 
Oh, Oregon. 

1167
01:00:36,160 --> 01:00:39,480
It's bloody cool. 
That is a very very interesting 

1168
01:00:39,480 --> 01:00:40,600
survey. 
Super keen. 

1169
01:00:40,600 --> 01:00:42,680
I'm in. 
The history already up to today 

1170
01:00:42,680 --> 01:00:45,800
is sort of mind bogglingly 
fascinating, so we'll see where 

1171
01:00:45,800 --> 01:00:47,880
it goes from here and what kind 
of happens. 

1172
01:00:47,880 --> 01:00:49,680
I think you might be right. 
I think there might be a little 

1173
01:00:49,680 --> 01:00:52,000
bit left in this one, so wait 
and see. 

1174
01:00:52,400 --> 01:00:54,640
Looking at like I was reading a 
little bit over the weekend 

1175
01:00:54,640 --> 01:00:58,920
about the, the Betaloo gas basin
in the NT and that's got mad, 

1176
01:00:58,920 --> 01:01:01,840
mad support behind. 
Yeah, there's kind of like 

1177
01:01:02,120 --> 01:01:06,560
onshore gas projects sort of 
getting up off the ground in, in

1178
01:01:06,560 --> 01:01:10,600
the NT and like it's kind of 
confusing. 

1179
01:01:10,600 --> 01:01:14,120
Why Like why can't, Yeah, why 
there's sort of support for some

1180
01:01:14,120 --> 01:01:15,800
projects and others. 
I mean, we've heard about the 

1181
01:01:16,080 --> 01:01:20,120
like the, yeah, tremendous 
amount of like solar projects 

1182
01:01:20,120 --> 01:01:22,520
that kind of got off the ground 
and got approved in, in very 

1183
01:01:22,520 --> 01:01:24,520
short order and all the 
territory as well. 

1184
01:01:24,800 --> 01:01:27,640
Don't know mate. 
There's some some some some 

1185
01:01:27,640 --> 01:01:29,720
forms of fucking. 
Some forms of projects are easy 

1186
01:01:29,720 --> 01:01:31,560
to to happen and others just get
squashed. 

1187
01:01:31,680 --> 01:01:35,080
Maybe, maybe it's all is good in
NT because of the wet season and

1188
01:01:35,080 --> 01:01:38,200
everything so the IT washes the 
dust off the solar panels what 

1189
01:01:38,200 --> 01:01:40,120
you don't need to wash them. 
So it just shows you how 

1190
01:01:40,120 --> 01:01:43,640
important efficient managing 
that, you know, social licence 

1191
01:01:43,640 --> 01:01:46,720
is right from the off, you get 
to sort of manage it. 

1192
01:01:47,520 --> 01:01:51,000
If you like the project you just
mentioned, you know how good, 

1193
01:01:51,000 --> 01:01:54,200
Like if you've got the people on
your side, you've got the people

1194
01:01:54,200 --> 01:01:57,480
in power on your side as well, 
then yeah, you got a much 

1195
01:01:57,480 --> 01:01:59,680
clearer line of sight to 
actually producing and returning

1196
01:01:59,680 --> 01:02:02,440
money for your shareholders. 
And I think this was the first, 

1197
01:02:02,640 --> 01:02:07,400
this was the first of like the 
what would you say what the, the

1198
01:02:07,440 --> 01:02:12,720
flow on of traditional owner 
mining news stories before, like

1199
01:02:12,720 --> 01:02:14,720
this was officer before the 
Mcfillimmys thing. 

1200
01:02:14,720 --> 01:02:17,640
Because the, the, the thing at 
the start was though, it was 

1201
01:02:17,640 --> 01:02:20,520
like there was 2 sets of people 
talking to each other. 

1202
01:02:20,520 --> 01:02:22,760
You got the Prime Minister 
talking to the obviously the 

1203
01:02:22,760 --> 01:02:25,920
leader. 
But then like the you got that 

1204
01:02:25,920 --> 01:02:29,440
sounded like ARA, like the the 
you hear that the mirror people 

1205
01:02:29,440 --> 01:02:33,120
are all for free carried 
interest, but the leaders not 

1206
01:02:33,120 --> 01:02:37,560
like there's just so much divide
in a lot of these stories. 

1207
01:02:37,600 --> 01:02:39,440
Obviously Mcphillimy's was a bit
different. 

1208
01:02:39,440 --> 01:02:44,040
It was just a a rogue, a rogue. 
I think it's a section that 

1209
01:02:44,040 --> 01:02:45,960
wasn't a leader, I think. 
It's like these this the 

1210
01:02:46,160 --> 01:02:48,560
Mcphillimy's was Section 10 
review. 

1211
01:02:49,000 --> 01:02:51,240
I'm not sure if that was the 
same thing with Jabaluka I. 

1212
01:02:51,400 --> 01:02:52,080
Didn't. 
No, no. 

1213
01:02:52,080 --> 01:02:54,680
This was its lease coming up. 
For exactly, Yeah, I know. 

1214
01:02:54,680 --> 01:02:56,960
But the whole whole thing of 
like, you know, boss putting 

1215
01:02:57,000 --> 01:03:00,880
forward a, a proposal for a deal
and then they're like not prime 

1216
01:03:00,880 --> 01:03:03,320
minister's like nuts going into 
the National Park and we're 

1217
01:03:03,320 --> 01:03:06,880
squashing it forever. 
Yeah, it's yes, very. 

1218
01:03:06,880 --> 01:03:11,320
That's been one of the more 
topical things this year is 

1219
01:03:11,840 --> 01:03:14,600
Australian native title. 
And sovereign risk, it's been 

1220
01:03:14,600 --> 01:03:18,480
described as yeah, it's yeah. 
It is very much so. 

1221
01:03:19,560 --> 01:03:23,520
Yeah. 
Call it a day, gentlemen. 

1222
01:03:23,520 --> 01:03:25,680
That's bloody. 
She's been a RIP snorter to 

1223
01:03:25,680 --> 01:03:28,240
start the week. 
Tell you what, got some minutes 

1224
01:03:28,240 --> 01:03:29,880
out today. 
Action packed. 

1225
01:03:30,160 --> 01:03:33,440
Oh, surely since we've been 
doing this, someone's called MMS

1226
01:03:33,440 --> 01:03:36,880
for a contract like there's 
Yeah, they're at least probably 

1227
01:03:36,880 --> 01:03:40,240
getting one an hour because who 
else would you call to move to 

1228
01:03:40,240 --> 01:03:41,120
get? 
Him where we can. 

1229
01:03:41,120 --> 01:03:44,520
I don't know who else would you 
call to build a donger for you 

1230
01:03:44,880 --> 01:03:48,960
then Grounded Construction Group
and mate Timmy Taylor Jeezy can 

1231
01:03:48,960 --> 01:03:52,600
whip up a bloody hybrid power 
station quick as anything with 

1232
01:03:52,600 --> 01:03:55,440
cross boundary energy. 
Dave Sandvik, Ground Support, 

1233
01:03:57,880 --> 01:04:01,680
CRE Insurance, Rio, Get Onto 
Them, Greenlands Equipment, 

1234
01:04:01,680 --> 01:04:05,160
Turnkey Mine, Water Management, 
K Drill, the Drilling Experts, 

1235
01:04:05,160 --> 01:04:10,680
MMTS, Australian Earthworks and 
Haulage and good old Spark 

1236
01:04:10,680 --> 01:04:12,400
Charts. 
Odorow Chance. 

1237
01:04:12,880 --> 01:04:16,040
Odorow. 
Information contained in this 

1238
01:04:16,040 --> 01:04:18,800
episode of Money of Mine is of 
general nature only and does not

1239
01:04:18,800 --> 01:04:21,440
take into account the 
objectives, financial situation 

1240
01:04:21,480 --> 01:04:23,480
or needs of any particular 
person. 

1241
01:04:23,800 --> 01:04:26,840
Before making any investment 
decision, you should consult 

1242
01:04:26,840 --> 01:04:29,880
with your financial advisor and 
consider how appropriate the 

1243
01:04:29,880 --> 01:04:33,560
advice is to your objectives, 
financial situation and needs.