1 00:00:00,040 --> 00:00:02,600 They've got close to $100 million of net cash on the 2 00:00:02,600 --> 00:00:04,360 balance sheet. They've got a huge amount of 3 00:00:04,360 --> 00:00:06,680 production growth coming up from a high quality asset. 4 00:00:06,880 --> 00:00:09,760 We see that business generating 100 million bucks of free cash 5 00:00:09,760 --> 00:00:13,400 flow on what is today an EB of 250 with a substantial. 6 00:00:13,400 --> 00:00:16,200 Mine mine. Happy Friday, money miners, and 7 00:00:16,360 --> 00:00:18,760 what a Friday it is because you always upload a long form 8 00:00:18,760 --> 00:00:22,360 conversation and Jonas and a Dick darling, you've, you've 9 00:00:22,440 --> 00:00:25,760 managed to get hold of none other than Matthew Fist, AKA 10 00:00:25,760 --> 00:00:29,320 Fisty, who we had the pleasure of interviewing like like a year 11 00:00:29,320 --> 00:00:31,560 ago with, with the live wire guys. 12 00:00:31,560 --> 00:00:34,560 And that was just a, a pleasure. But you, you managed to to pin 13 00:00:34,560 --> 00:00:35,640 him down while you're in Melbourne. 14 00:00:35,840 --> 00:00:38,600 What did you talk about? Yeah, it is hard to believe. 15 00:00:38,600 --> 00:00:41,720 It had been almost a year since we we spoke with him mate and a 16 00:00:41,720 --> 00:00:44,480 lot's happened and he he made some pretty prescient calls back 17 00:00:44,480 --> 00:00:48,080 then, which I'm sure was music to his ears for for me to repeat 18 00:00:48,080 --> 00:00:49,640 to him. But we covered a hyperground. 19 00:00:49,640 --> 00:00:52,880 We, we started with the macro, but 50 really works from the, 20 00:00:53,040 --> 00:00:56,760 from the bottom up finding, finding stocks in that small cap 21 00:00:56,760 --> 00:01:00,000 space. So yeah, it's, it's hard to miss 22 00:01:00,000 --> 00:01:02,280 all the disruptions that have happened across the commodity 23 00:01:02,280 --> 00:01:04,440 world and the, the trade war going on. 24 00:01:04,440 --> 00:01:07,400 So we get into that a bit and then we spoke a good bit about 25 00:01:07,400 --> 00:01:09,440 the Goldies, which I'm sure people will be keen to hear 26 00:01:09,440 --> 00:01:14,320 about his, he's long and strong, a few of the names that we speak 27 00:01:14,320 --> 00:01:17,040 about quite regularly. And then the, the, the 28 00:01:17,040 --> 00:01:19,720 conversation sort of ebbed and flowed its way through lithium, 29 00:01:19,720 --> 00:01:22,200 uranium. We've obviously touched on next 30 00:01:22,200 --> 00:01:25,200 Gen. when we spoke with him quite some time ago. 31 00:01:25,200 --> 00:01:28,760 And yeah, a bit sort of happened on that one and kind of 32 00:01:29,120 --> 00:01:31,560 everything in between. So plenty for the the money 33 00:01:31,560 --> 00:01:34,560 miners to to dig into in this conversation. 50 Of course, 34 00:01:35,240 --> 00:01:37,600 yeah, a portfolio manager at Fire Trail, but he used to be, 35 00:01:37,720 --> 00:01:39,080 didn't he used to be a geologist? 36 00:01:39,400 --> 00:01:43,120 Yeah, Geo scientists at at BHB of all stomping grounds. 37 00:01:43,560 --> 00:01:46,760 Geo scientists, not Geo. Well I'm I'd still be familiar 38 00:01:46,760 --> 00:01:48,960 with this problem that that geos and drillers have. 39 00:01:48,960 --> 00:01:51,560 I'm sure you know when the drill rig is just chewing through bits 40 00:01:51,560 --> 00:01:53,520 faster than you can order replacements. 41 00:01:53,560 --> 00:01:56,360 I hear it is a nightmare mate. I think you're on to something 42 00:01:56,520 --> 00:01:59,000 and there's one company that springs to mind mate. 43 00:01:59,160 --> 00:02:03,160 Black Diamond Drilling Services. BD Drill, our newest partner 44 00:02:03,160 --> 00:02:04,800 with pumped to promote these guys. 45 00:02:05,160 --> 00:02:07,680 They are the go to name for consumables. 46 00:02:07,680 --> 00:02:11,240 So born and bred in Perth, got an office in Sudbury, Canada, 47 00:02:11,600 --> 00:02:15,400 distribution hubs all across the world, even your old stomping 48 00:02:15,400 --> 00:02:17,320 ground. Trev Kalgoorlie. 49 00:02:17,640 --> 00:02:21,160 These guys are known newbies, 30 years in the industry. 50 00:02:21,280 --> 00:02:23,320 They are leading the pack at what they do. 51 00:02:23,480 --> 00:02:26,400 They are. They manufacture over 600,000 52 00:02:26,520 --> 00:02:29,160 drill bits a year I hear. And it's all under strict QA 53 00:02:29,160 --> 00:02:30,720 testing. It doesn't stop at bits. 54 00:02:30,840 --> 00:02:33,400 We're talking down the whole hammers, drill pipes, Subs, 55 00:02:33,560 --> 00:02:35,600 casing systems, even complete drill rigs. 56 00:02:35,600 --> 00:02:37,440 Plus every accessory you can dream of. 57 00:02:37,440 --> 00:02:39,160 Mate what what the BD drill not do? 58 00:02:39,560 --> 00:02:43,040 It does get better though mate, their gear goes the distance. 59 00:02:43,200 --> 00:02:46,920 It means fewer change outs, lower costs for your operation 60 00:02:47,080 --> 00:02:48,920 and that is one of the reasons why these guys have won 61 00:02:48,920 --> 00:02:53,200 contracts with the FM, JS of the World, Rios, Newmont's and heaps 62 00:02:53,200 --> 00:02:55,040 more. And here is the kick out. 63 00:02:55,040 --> 00:02:59,640 They keep inventory on site and backups in their other hubs, so 64 00:02:59,640 --> 00:03:01,880 you are never going to have downtime if you're using BD 65 00:03:01,880 --> 00:03:03,880 Drill. Lower cost per meter drill 66 00:03:03,960 --> 00:03:06,400 making up the team at BD Drill. Drill smarter, not harder. 67 00:03:06,760 --> 00:03:10,960 JD, let's RIP into you. All right, Matthew, Fist from 68 00:03:10,960 --> 00:03:13,400 Fire Trail. It's been a hell of a past 69 00:03:13,400 --> 00:03:15,400 couple weeks in market so I thought I'd start this 70 00:03:15,400 --> 00:03:19,160 conversation, but just gauging the temperature and seeing what 71 00:03:19,160 --> 00:03:23,640 the emotions have been like and what the the feeling amongst 72 00:03:23,640 --> 00:03:26,040 junior portfolio managers has been like over this little 73 00:03:26,040 --> 00:03:29,600 period. Yeah, it's certainly been 74 00:03:29,600 --> 00:03:31,480 eventful. Never a dull moment waking up to 75 00:03:31,920 --> 00:03:34,960 to something new every day. At the moment, as you know, I 76 00:03:35,680 --> 00:03:37,680 think we're measured, we're pretty calm and collected and 77 00:03:37,680 --> 00:03:39,280 we're just taking everything in our stride. 78 00:03:39,360 --> 00:03:42,200 I think heading into this period, there was a real sense 79 00:03:42,200 --> 00:03:44,960 of complacency in the market. Some people were pretty 80 00:03:44,960 --> 00:03:48,080 comfortable with high price earnings multiples. 81 00:03:48,760 --> 00:03:51,280 And I still think there's quite a bit of complacency in the 82 00:03:51,280 --> 00:03:53,360 people who are expecting a lot of these tariffs to be wound 83 00:03:53,360 --> 00:03:55,120 back or policy positions reversed. 84 00:03:55,440 --> 00:03:59,080 We're certainly not approaching our portfolio like that or any 85 00:03:59,080 --> 00:04:01,880 of the stocks in our portfolio. We're assuming that this is very 86 00:04:01,880 --> 00:04:05,520 much the status quo and and making decisions on that basis. 87 00:04:05,520 --> 00:04:09,000 But yeah, as with all market dislocations, this is what we, 88 00:04:09,000 --> 00:04:10,800 this is what we get paid for. This is what we love doing. 89 00:04:10,800 --> 00:04:14,280 And there's a lot of very, very good companies on sale both in 90 00:04:14,280 --> 00:04:17,760 in resources and industrials. So it's the onus is on us as 91 00:04:17,760 --> 00:04:20,839 portfolio managers to to make the right decisions now that 92 00:04:20,839 --> 00:04:22,360 will drive returns over the next three years. 93 00:04:22,360 --> 00:04:24,280 So it's a, it's a great time to be in markets. 94 00:04:25,080 --> 00:04:27,520 Yeah, I'm keen to keen to dive into what you said at the end 95 00:04:27,520 --> 00:04:29,400 there. You know, companies being on 96 00:04:29,400 --> 00:04:32,880 sale, how are you seeing and maybe you just clarify upfront 97 00:04:32,880 --> 00:04:35,120 for the listeners that you're running a small cap fund, so 98 00:04:35,160 --> 00:04:40,000 your benchmark is the sort of 300th to 100th biggest company 99 00:04:40,320 --> 00:04:41,240 companies. That's right. 100 00:04:41,240 --> 00:04:42,720 Yeah. I spend about 30% of my time on 101 00:04:42,720 --> 00:04:44,400 resources. So, yeah, very much looking 102 00:04:44,400 --> 00:04:45,640 across the broader market as well. 103 00:04:45,840 --> 00:04:48,880 And how are you seeing sort of valuations amongst that subset 104 00:04:48,880 --> 00:04:51,840 amongst that subset versus the the bigger names in Australia 105 00:04:52,120 --> 00:04:54,720 and even down the bottom end where you sometimes sort of pick 106 00:04:54,720 --> 00:04:58,320 a story, be nice and early? I mean, if you believe current 107 00:04:58,600 --> 00:05:01,640 market forecasts, then valuations are cheap in 108 00:05:01,640 --> 00:05:04,640 resources and in small caps relative to large. 109 00:05:04,840 --> 00:05:09,760 But the EE or the earnings is wrong clearly for many companies 110 00:05:09,760 --> 00:05:11,440 out there at the moment and that's what the market's telling 111 00:05:11,440 --> 00:05:13,720 us. So we can talk about price to 112 00:05:13,720 --> 00:05:17,080 earnings multiples for cyclical companies across the ASX or in 113 00:05:17,080 --> 00:05:20,080 resources. But given what's transpired over 114 00:05:20,080 --> 00:05:22,480 the past couple of weeks, those earnings estimates need to come 115 00:05:22,480 --> 00:05:25,200 down substantially. And you know, who knows where 116 00:05:25,240 --> 00:05:28,520 where they'll land, but it's very hard to have a Fairview on 117 00:05:28,520 --> 00:05:30,120 on valuation in these sort of markets. 118 00:05:30,400 --> 00:05:33,920 What you can do and what we do is focus on on good balance 119 00:05:33,920 --> 00:05:36,440 sheets and earning certainty. So identifying those companies 120 00:05:36,880 --> 00:05:38,720 that do have any certainty because they're they're going to 121 00:05:38,720 --> 00:05:40,320 be rare in this sort of environment. 122 00:05:41,360 --> 00:05:45,120 And, and you guys sort of by by nature a bottom up, you're 123 00:05:45,120 --> 00:05:47,520 focused on picking out the companies, right, that you 124 00:05:47,520 --> 00:05:50,640 think, you know, resources might be a bit different, but in the 125 00:05:50,640 --> 00:05:53,720 industrial space, the ones that from the from the ground up have 126 00:05:53,720 --> 00:05:56,040 have good earnings. How much time do you actually 127 00:05:56,040 --> 00:05:59,120 spend on the macro? Like it can be pretty tempting 128 00:05:59,120 --> 00:06:02,000 just to to spend all day, you know, reading what Trump's doing 129 00:06:02,000 --> 00:06:03,920 what best and what's happening at a macro level. 130 00:06:04,000 --> 00:06:05,800 How do you sort of divide your time at the moment? 131 00:06:06,320 --> 00:06:07,760 Yeah, we don't look at the macro at all. 132 00:06:07,760 --> 00:06:10,680 It's very important to understand, you know where the 133 00:06:10,680 --> 00:06:13,640 temperature of the markets are, you know hear what you're up 134 00:06:13,640 --> 00:06:15,120 against from a macro perspective. 135 00:06:15,120 --> 00:06:18,200 But we are all bottom up when it comes to resources and 136 00:06:18,200 --> 00:06:20,040 industrials as well. And we're always looking at 137 00:06:20,040 --> 00:06:22,880 valuation relative to market. We don't take a view on cash 138 00:06:22,880 --> 00:06:24,520 versus fixed income versus equities. 139 00:06:24,720 --> 00:06:27,320 We're always 100% equity market exposed. 140 00:06:27,800 --> 00:06:30,880 And as much as possible what we try and do is eliminate any sort 141 00:06:30,880 --> 00:06:32,360 of thematic risk in our portfolio. 142 00:06:32,360 --> 00:06:34,920 So we're very fortunate in small caps. 143 00:06:34,920 --> 00:06:38,280 We can have a portfolio with with very high tracking error or 144 00:06:38,280 --> 00:06:41,880 very different to the benchmark and we don't need to take factor 145 00:06:41,880 --> 00:06:43,120 bets. So we don't need to be long 146 00:06:43,120 --> 00:06:46,840 momentum growth value. We don't need to take massive 147 00:06:46,840 --> 00:06:48,600 bets on industrials versus resources. 148 00:06:48,800 --> 00:06:53,000 We can have a very active and high performing portfolio just 149 00:06:53,000 --> 00:06:55,320 with stock specific risk and that's what we're really focused 150 00:06:55,320 --> 00:06:56,440 on. And is that the core of what we 151 00:06:56,440 --> 00:06:59,160 do? So stepping away from resources 152 00:06:59,160 --> 00:07:02,480 for a moment, if we look at your portfolio, where are you sort of 153 00:07:02,520 --> 00:07:05,640 underweight slash overweight, I know you'd said in the past that 154 00:07:06,200 --> 00:07:09,320 that benchmark is sort of 30 odd percent resources, right? 155 00:07:09,320 --> 00:07:11,360 And you're about on track. If we look across the the 156 00:07:11,360 --> 00:07:13,760 spectrum, where are you? Yeah, that, that's right. 157 00:07:13,760 --> 00:07:15,560 Yeah. So dominated by gold at the 158 00:07:15,560 --> 00:07:18,880 moment as as you and all your listeners will be aware, the 159 00:07:18,880 --> 00:07:21,920 gold sector on our numbers, just looking at the latest numbers 160 00:07:21,920 --> 00:07:25,960 this morning, up to 16% or just over 16% of the small orders 161 00:07:25,960 --> 00:07:29,440 index is gold and roughly 30% is resources. 162 00:07:29,880 --> 00:07:33,720 We are pretty much in line with that on a on a benchmark basis. 163 00:07:33,880 --> 00:07:37,440 We're not trying to take a view here on yeah, macro, 164 00:07:37,520 --> 00:07:40,360 macroeconomic factors as we've talked about. 165 00:07:40,560 --> 00:07:43,120 But within that we have a huge amount of conviction in the 166 00:07:43,120 --> 00:07:46,000 particular stocks where we've selected and their ability to 167 00:07:46,000 --> 00:07:49,680 outperform both in in resources and and gold and energy as well. 168 00:07:50,840 --> 00:07:55,200 And and just to, to understand your style a bit more, how do 169 00:07:55,200 --> 00:07:58,880 you sort of view a a trading mindset versus a buy and hold? 170 00:07:58,880 --> 00:08:00,680 Yeah. You know what, What might your 171 00:08:00,680 --> 00:08:03,600 turnover be over a kind of year? How do you think about that? 172 00:08:04,360 --> 00:08:07,480 Turnover for us is an outcome. So we're not looking to make 173 00:08:07,480 --> 00:08:10,520 decisions based on on turnover. We don't try and target a 174 00:08:10,560 --> 00:08:12,000 certain turnover. If the stock reaches our 175 00:08:12,000 --> 00:08:15,080 valuation and we do have very, very strong views on valuation, 176 00:08:15,240 --> 00:08:18,880 then we will sell. Typically over the last five or 177 00:08:18,880 --> 00:08:21,000 ten years that we've been running the same strategy, 178 00:08:21,000 --> 00:08:24,240 turnovers mean about 100% per annum, but that will spark 179 00:08:24,960 --> 00:08:27,800 materially in times like this where we have a lot of market 180 00:08:27,800 --> 00:08:30,400 volatility and if there's a lot of equity capital market 181 00:08:30,400 --> 00:08:34,760 activity as well. I'm I'm curious to just to, to 182 00:08:34,760 --> 00:08:37,520 learn about the, the fun and sort of, you know, beating, 183 00:08:37,559 --> 00:08:40,320 beating your benchmark, which is obviously what you you strive to 184 00:08:40,320 --> 00:08:43,559 do. You've done well at that so far. 185 00:08:44,159 --> 00:08:47,000 How does it play in with, say, companies that are that are 186 00:08:47,000 --> 00:08:48,160 falling? There's a few in the the 187 00:08:48,160 --> 00:08:52,120 resources space that that spring to mind and also the the rises. 188 00:08:52,120 --> 00:08:55,200 My understanding is that you can play outside the bounds of the 189 00:08:55,680 --> 00:08:59,640 the benchmark a bit to yeah to the to the upside of your your 190 00:08:59,920 --> 00:09:02,000 unit holders. Absolutely, Yeah. 191 00:09:02,000 --> 00:09:04,520 So as you said, the ASX small words index which is is our 192 00:09:04,520 --> 00:09:08,920 benchmark is ASX 300 to 100. We're very happy to to play 193 00:09:08,920 --> 00:09:12,120 below that and we see a huge amount of opportunity in the 194 00:09:12,120 --> 00:09:15,000 market cap stocks as you know particularly in mining, it's a 195 00:09:15,000 --> 00:09:18,480 very inefficient market. It's under researched and that 196 00:09:18,600 --> 00:09:22,040 that is that is just amazing and we can generate a huge amount of 197 00:09:22,040 --> 00:09:25,160 excess returns there. I think in resources that's 198 00:09:25,160 --> 00:09:27,200 particularly been the case in the past couple of years in the 199 00:09:27,200 --> 00:09:31,400 gold sector in particular. And then we can also choose to 200 00:09:31,400 --> 00:09:35,720 invest in in the mid caps if we want so that ASX 51 to 100 we 201 00:09:35,720 --> 00:09:38,480 can take positions in that part of the market pretty rare for 202 00:09:38,480 --> 00:09:40,320 us. But you know, we absolutely will 203 00:09:40,320 --> 00:09:43,600 invest there and hold stocks that RIP through the small wards 204 00:09:43,600 --> 00:09:46,080 and into that mid cap part of the market if we still see some 205 00:09:46,320 --> 00:09:51,120 good valuation upside. And in, in terms of sort of 206 00:09:51,600 --> 00:09:55,480 hedging risk at the moment, I'm kind of curious it's, it brings 207 00:09:55,480 --> 00:09:58,160 to mind everyone's sort of talking about it at the moment. 208 00:09:58,160 --> 00:10:00,720 You hear a couple people that might have called it and they 209 00:10:00,720 --> 00:10:03,280 get all the plaudits. You know, it's kind of few and 210 00:10:03,280 --> 00:10:06,080 far between. But do you think about that at 211 00:10:06,080 --> 00:10:07,200 all? I know you mentioned before that 212 00:10:07,200 --> 00:10:10,520 you don't actually hold a cash pole yet you're fully invested. 213 00:10:10,880 --> 00:10:12,920 How do you think about hedging risk? 214 00:10:12,920 --> 00:10:15,200 Is it purely from a basis of picking good companies? 215 00:10:16,920 --> 00:10:19,200 When, when you say risky, talking about equity market 216 00:10:19,200 --> 00:10:22,400 risk, yeah, yeah. So we, we take the view that if 217 00:10:22,400 --> 00:10:25,120 people are allocating to our fund, they want equity market 218 00:10:25,120 --> 00:10:27,520 risk, they want small cap exposure and we'll deliver that 219 00:10:27,520 --> 00:10:29,200 to them. We'll leave it for asset 220 00:10:29,200 --> 00:10:32,440 allocators to decide if they want to be in cash fixed income. 221 00:10:32,760 --> 00:10:34,840 But if they're invested in our fund, then we take the view that 222 00:10:34,840 --> 00:10:36,640 they're paying us to be fully invested in equities. 223 00:10:36,640 --> 00:10:40,280 And that's what we deliver. At times like this, we do have a 224 00:10:40,280 --> 00:10:42,920 slightly higher cash component of the portfolio. 225 00:10:43,200 --> 00:10:47,280 So typically we'd run 3 to 4% cash at the moment or as of this 226 00:10:47,280 --> 00:10:49,320 morning anyway we're sitting at about 5%. 227 00:10:49,320 --> 00:10:52,000 So slightly overs versus the long term historical average, 228 00:10:52,240 --> 00:10:54,800 but that's fully covered with with futures. 229 00:10:54,920 --> 00:10:58,120 So it's a hundred 100% market exposed at all times. 230 00:10:58,240 --> 00:11:00,920 Yeah. And where we sit sort of today, 231 00:11:00,920 --> 00:11:03,960 are you, are you getting itchy to to deploy that extra bit of 232 00:11:04,240 --> 00:11:05,880 capital? Absolutely. 233 00:11:05,880 --> 00:11:07,800 Yeah. It's, it's always tempting, but 234 00:11:07,800 --> 00:11:10,640 I think in times like this, sometimes the hardest thing is, 235 00:11:10,640 --> 00:11:14,040 is to do nothing for a period of time and, and just let the dust 236 00:11:14,040 --> 00:11:15,400 settle. There's a massive amount of 237 00:11:15,400 --> 00:11:18,680 uncertainty out there and there are a huge amount of 238 00:11:18,680 --> 00:11:20,720 opportunities. It's pretty important to 239 00:11:20,720 --> 00:11:22,400 separate our resources here, I think from the rest of the 240 00:11:22,400 --> 00:11:25,920 market because clearly, you know, resources have their own 241 00:11:26,680 --> 00:11:28,600 own characteristics that are quite unique. 242 00:11:29,360 --> 00:11:33,080 But we are very, very excited about some of the opportunities 243 00:11:33,360 --> 00:11:35,000 that are presenting themselves at the moment. 244 00:11:35,000 --> 00:11:37,840 And as we talked about prior to this of being in WA and, and 245 00:11:37,840 --> 00:11:41,280 Adelaide in the past couple of days, meeting companies, which I 246 00:11:41,280 --> 00:11:43,440 won't tell you who they are for obvious reasons, but you know, 247 00:11:43,440 --> 00:11:47,560 share prices down 3040% in the last month alone, you know, and 248 00:11:47,560 --> 00:11:48,920 we'd love to earn them at a point in time. 249 00:11:50,000 --> 00:11:53,080 Unfortunately, them being down 30 or 40% doesn't really single 250 00:11:53,080 --> 00:11:55,840 them out too much in the moment. Yeah. 251 00:11:55,840 --> 00:11:58,960 So let's let's talk resources, right, let's let's talk 252 00:11:59,160 --> 00:12:04,320 commodities and kind of trace how the the broader macro is 253 00:12:04,320 --> 00:12:06,320 really playing into the the resources. 254 00:12:06,320 --> 00:12:09,440 So I think the, you know, the obvious connections are 255 00:12:09,720 --> 00:12:14,480 terrorists bad China hurts the biggest consumer of commodities 256 00:12:14,520 --> 00:12:17,400 globally and that can really hurt Australia. 257 00:12:17,400 --> 00:12:20,760 We've started to see it in iron ore, which had a bit of a 258 00:12:20,760 --> 00:12:23,760 delayed response. We've seen it amongst some other 259 00:12:23,760 --> 00:12:25,880 sort of commodities, some more dramatic than others. 260 00:12:25,960 --> 00:12:30,760 But what what do you make of the the notion that this trade war 261 00:12:30,760 --> 00:12:32,800 will cause a slowdown for China that's really going to hurt the 262 00:12:32,800 --> 00:12:35,880 Australian economy? I'm concerned about it, yeah. 263 00:12:35,880 --> 00:12:39,360 I think it'd be remiss of anyone not to be, you know, as an 264 00:12:39,360 --> 00:12:41,840 Australian, as an investor in resources as well. 265 00:12:42,280 --> 00:12:45,120 But I think you need to, you know, just take a step back here 266 00:12:45,120 --> 00:12:48,200 and and look at the macro and the context of the individual 267 00:12:48,200 --> 00:12:49,800 companies. We can invest in that position 268 00:12:49,800 --> 00:12:52,600 on the cost curve and what that means for longer term prices. 269 00:12:55,040 --> 00:12:58,480 The moves we're seeing in copper, zinc, aluminium in my 270 00:12:58,480 --> 00:13:02,680 view over the past 3-4 days or three, four trading sessions I 271 00:13:02,680 --> 00:13:06,600 should say, don't really reflect in our view the fundamentals of 272 00:13:06,600 --> 00:13:09,920 what is a pretty tight supply and demand, fundamentally tight 273 00:13:09,920 --> 00:13:13,080 supply and demand market. And they're more driven by 274 00:13:13,080 --> 00:13:16,280 financial market participation, which is, you know, speculating 275 00:13:16,280 --> 00:13:20,360 on a global growth slowdown. And that's that is what it is. 276 00:13:20,680 --> 00:13:23,760 But what I'd say, you know, China is the most important 277 00:13:24,080 --> 00:13:27,440 consumer of, of all commodities, just about particularly the ones 278 00:13:27,440 --> 00:13:30,280 that Australia produce. And over the last 20 years, if 279 00:13:30,280 --> 00:13:33,720 there's ever been a slowdown in the global economy or, or in the 280 00:13:33,760 --> 00:13:39,000 US, they have not hesitate, not hesitate to stimulate their 281 00:13:39,000 --> 00:13:41,480 domestic economy through construction and property and 282 00:13:41,480 --> 00:13:43,320 infrastructure. This will be no different. 283 00:13:44,000 --> 00:13:47,960 The Chinese government started that I think in September last 284 00:13:47,960 --> 00:13:49,560 year. I think we caught out last in, 285 00:13:49,640 --> 00:13:51,760 you know, late in the year after I just got back from China in 286 00:13:51,760 --> 00:13:56,080 November, Robert was hitting the the road then they've continued 287 00:13:56,080 --> 00:13:59,080 that and accelerated, accelerated post the US 288 00:13:59,080 --> 00:14:01,040 election. And this is only going to add 289 00:14:01,040 --> 00:14:04,160 further fuel to the fire. So, you know, I'd say don't get 290 00:14:04,280 --> 00:14:06,600 don't, don't get too negative and particularly don't get too 291 00:14:06,600 --> 00:14:09,360 negative on steelmaking commodities like Coke and Cola 292 00:14:09,360 --> 00:14:09,840 and on. Or. 293 00:14:09,840 --> 00:14:12,800 And yeah, in reality sense, they could actually be set up pretty 294 00:14:12,800 --> 00:14:14,560 well. You're a cool head Fisty. 295 00:14:15,400 --> 00:14:18,560 I'm keen to dive into that more the, the stimulus part, because 296 00:14:19,040 --> 00:14:21,280 one of the arguments that was made at the at the time 297 00:14:21,280 --> 00:14:24,880 September when Chinese equity markets rallied really, really 298 00:14:24,880 --> 00:14:28,360 hard, sort of 30% over the space of the week was that a lot of 299 00:14:28,360 --> 00:14:33,600 that stimulus was sort of monetary and basic kind of 300 00:14:33,600 --> 00:14:37,240 financial assets as opposed to being fiscal that's going to, 301 00:14:37,280 --> 00:14:40,840 you know, kick start property development infrastructure. 302 00:14:41,520 --> 00:14:43,920 Do you anticipate now that we're going to we're going to see more 303 00:14:43,920 --> 00:14:48,400 of this fiscal type stimulus that tries to kind of spur 304 00:14:48,400 --> 00:14:51,960 demand for for commodities as opposed to more monetary side 305 00:14:52,120 --> 00:14:55,480 stimulus? Or look, yeah, I'm trying not to 306 00:14:55,480 --> 00:14:58,000 get in the prediction game too much, even though that's my. 307 00:14:58,040 --> 00:15:00,680 Job. Yeah, you're reaching the limits 308 00:15:00,680 --> 00:15:02,920 of my macroeconomic prediction skills here. 309 00:15:03,200 --> 00:15:07,160 But let's comment about what we're actually seeing on the 310 00:15:07,160 --> 00:15:09,720 ground right now because that's what we can observe and what we 311 00:15:09,720 --> 00:15:12,160 can make decisions on as portfolio managers and 312 00:15:12,160 --> 00:15:14,800 investors. And what we're seeing, whether 313 00:15:14,800 --> 00:15:18,400 it's apartment sale numbers, machinery sales, industry 314 00:15:18,400 --> 00:15:21,520 numbers, we're seeing, you know, double digit increases year on 315 00:15:21,520 --> 00:15:24,280 year up to 20 to 30% in some in some cases. 316 00:15:25,000 --> 00:15:26,880 So last year when we were sitting here talking about 317 00:15:26,880 --> 00:15:29,280 potential stimulus in the Chinese economy, it was really 318 00:15:29,280 --> 00:15:31,800 reading the the policy tea leaves about what could 319 00:15:31,800 --> 00:15:33,840 potentially come now. Now we're seeing that hit the 320 00:15:33,840 --> 00:15:36,600 ground and it's not, you know, speculative anymore. 321 00:15:36,600 --> 00:15:40,680 This is, this is really happening and absent what's 322 00:15:40,680 --> 00:15:43,800 happened in the past week in terms of macro shocks, we think 323 00:15:43,800 --> 00:15:47,240 the commodity sector was was set up extremely well just on that 324 00:15:47,240 --> 00:15:50,080 basis, Lauren and we're going to see further, further stimulus 325 00:15:50,080 --> 00:15:52,480 come through. Very curious to hear as well 326 00:15:52,480 --> 00:15:55,800 from your, your visit there late last year, what, what were the 327 00:15:55,800 --> 00:15:59,160 other sort of takeaways, whether they be sort of specific to 328 00:15:59,160 --> 00:16:01,840 certain commodities or across the board where they were the 329 00:16:01,840 --> 00:16:05,760 things that just you didn't kind of realize were as big a trend 330 00:16:05,760 --> 00:16:07,560 or anything else that really stuck in the mind. 331 00:16:09,880 --> 00:16:12,480 Gosh, that's thinking about. Put you on the spot. 332 00:16:16,800 --> 00:16:19,280 I have to say it was a pretty good trip in terms of terms of 333 00:16:19,280 --> 00:16:21,880 read throughs and yeah, the insights that we got. 334 00:16:22,040 --> 00:16:24,880 We spent a lot of time, a lot of time in the lithium market, 335 00:16:25,000 --> 00:16:28,240 visiting some mines in a couple of different provinces, going to 336 00:16:28,240 --> 00:16:34,600 some car factories. And yeah, I came away amazed 337 00:16:34,600 --> 00:16:38,320 that they're able to mine some of the grades that they do mine 338 00:16:38,320 --> 00:16:42,640 over there and then, you know, do that at a cash cost that 339 00:16:42,640 --> 00:16:45,320 makes sense at current prices or slightly above. 340 00:16:46,240 --> 00:16:51,120 And the fact that those car and battery raw material supply 341 00:16:51,120 --> 00:16:55,840 chains are all within a very confined in a confined space. 342 00:16:55,840 --> 00:16:58,400 And so you're going from mining lithium, even though it's low 343 00:16:58,400 --> 00:17:02,000 grade to producing a battery to producing a car, you know, 344 00:17:02,000 --> 00:17:05,560 confined geographic area with cheap energy, cheap later labor 345 00:17:05,839 --> 00:17:09,160 and very good technology. And, you know, the 346 00:17:09,160 --> 00:17:12,760 competitiveness of the, the Chinese auto sector and, and 347 00:17:12,760 --> 00:17:14,680 even their lithium mines, I think is something that we're 348 00:17:14,680 --> 00:17:18,319 going to have to learn to grapple with because we're, you 349 00:17:18,319 --> 00:17:21,240 know, the, the, the WA mines, they're the high cost ones, I 350 00:17:21,240 --> 00:17:23,440 think when you take into account all the transport and that sort 351 00:17:23,440 --> 00:17:25,280 of stuff. So that was, that was a really 352 00:17:25,280 --> 00:17:28,640 interesting insight. And as anyone who's seen the BYD 353 00:17:28,760 --> 00:17:31,000 cars driving around the road so recently, we've seen those, 354 00:17:31,000 --> 00:17:33,120 those sales explode everywhere. Everywhere. 355 00:17:33,200 --> 00:17:34,080 Yeah. And they're pretty good. 356 00:17:34,320 --> 00:17:36,520 They're pretty good. One of my colleagues, Blake's 357 00:17:36,520 --> 00:17:38,000 got one, He's got the sea lion loves it. 358 00:17:39,520 --> 00:17:44,000 And you know, that is just going to be a continuation of of, I 359 00:17:44,000 --> 00:17:45,160 think we're just in the infancy of that. 360 00:17:46,000 --> 00:17:48,800 Yeah, it's crazy. You saw the the BYD shark as 361 00:17:48,800 --> 00:17:50,800 well. Six best seller in Australia 362 00:17:51,240 --> 00:17:53,880 year to date. I think that's yeah. 363 00:17:54,000 --> 00:17:56,760 I mean, we don't quite have the same tariffs the the rest of the 364 00:17:56,760 --> 00:17:59,800 world has, but you can see why it's such a important part 365 00:17:59,800 --> 00:18:02,360 because the competitiveness is is through the roof, right? 366 00:18:02,440 --> 00:18:03,240 Absolutely. Yeah. 367 00:18:03,240 --> 00:18:07,080 I think it's potentially a byproduct of what we're seeing 368 00:18:07,080 --> 00:18:10,160 at the moment in global markets is really going to be of the 369 00:18:10,160 --> 00:18:13,120 benefit to Australian consumers if we're able to access cheap 370 00:18:13,520 --> 00:18:16,160 Chinese EVs and cheap goods that otherwise might have gone to the 371 00:18:16,160 --> 00:18:19,520 US. On on the topic of EVs, taking a 372 00:18:19,520 --> 00:18:23,480 step back, how do you view the the energy transition trend? 373 00:18:23,480 --> 00:18:28,840 This was sort of all the rage over the sort of 2020 to 23 ish 374 00:18:29,240 --> 00:18:32,320 kind of period. You know, resource investors 375 00:18:32,440 --> 00:18:34,040 were not excluded from that by any means. 376 00:18:34,040 --> 00:18:36,520 You know, they were sort of leading the leading the charge, 377 00:18:36,520 --> 00:18:40,120 but it's sort of been been dialed back as other other 378 00:18:40,120 --> 00:18:42,480 issues come to the fore. How do you how do you see the 379 00:18:42,480 --> 00:18:47,280 broader narrative at the moment? I think it's progressing as as 380 00:18:47,280 --> 00:18:51,840 we forecast AV sales have been volatile, but they're increasing 381 00:18:51,840 --> 00:18:55,400 penetration globally. Yeah, everything else that I 382 00:18:55,400 --> 00:18:59,120 see, stationary storage is increasing rapidly and is going 383 00:18:59,120 --> 00:19:01,480 to become a huge driver of lithium demand and maybe even 384 00:19:01,480 --> 00:19:05,280 overtake EVs in time. So yeah, I think it's 385 00:19:05,280 --> 00:19:07,680 progressing. What's really changed is just 386 00:19:07,680 --> 00:19:10,240 the supply side dynamics. We've gone from a chronically 387 00:19:10,240 --> 00:19:14,080 undersupplied market in many of those raw materials to now being 388 00:19:14,080 --> 00:19:16,440 oversupplied and a huge part of that's come from Africa and 389 00:19:16,440 --> 00:19:18,440 China, and that's just fundamentally changed the game. 390 00:19:18,440 --> 00:19:21,120 So no, no issues on the demand side of the equation. 391 00:19:21,640 --> 00:19:25,560 It's all about supply for me. And what did it sort of leave 392 00:19:25,560 --> 00:19:29,040 you thinking about maybe a few of your exposures in the in the 393 00:19:29,040 --> 00:19:32,040 lithium basket in the in the portfolio coming back. 394 00:19:32,040 --> 00:19:35,640 Some of these names are are notably shorted, not to the same 395 00:19:35,640 --> 00:19:39,400 extent they were last year, but have you, have you taken a sort 396 00:19:39,400 --> 00:19:40,640 of against the grand view on them? 397 00:19:42,280 --> 00:19:44,840 No, we've, we've been pretty cautious on that sector for a 398 00:19:44,840 --> 00:19:48,040 while. I'd say we're starting to get 399 00:19:48,040 --> 00:19:52,000 pretty interested though, I mean, again, taking back to the 400 00:19:52,000 --> 00:19:54,080 actual companies rather than getting too caught up in the 401 00:19:54,080 --> 00:19:58,280 macro companies like IGO, which we don't own at the moment, but 402 00:19:58,680 --> 00:20:02,440 even at current prices generating huge amounts of free 403 00:20:02,440 --> 00:20:07,480 cash flow from Greenbushes. Yeah, that that, that is sort of 404 00:20:07,920 --> 00:20:10,320 hidden if it within different corporate structures and 405 00:20:10,320 --> 00:20:12,040 reinvestment in the asset at the moment. 406 00:20:12,040 --> 00:20:15,600 But yes, companies like that, there's potentially some real 407 00:20:15,720 --> 00:20:18,120 really, really good valuation opportunities emerging. 408 00:20:18,560 --> 00:20:21,120 Remain very cautious on on the higher cost producers. 409 00:20:21,120 --> 00:20:24,400 We think you are going to need to be able to compete at lithium 410 00:20:24,400 --> 00:20:25,720 prices at or around these levels. 411 00:20:25,720 --> 00:20:28,480 But if you can find an asset like Greenbushes that's 412 00:20:28,480 --> 00:20:31,560 generating good cash at current prices with the potential for a 413 00:20:31,560 --> 00:20:35,440 rebound, then to us that's when we start to get excited from an 414 00:20:35,440 --> 00:20:37,720 investment standpoint. And no one's talking about 415 00:20:37,720 --> 00:20:39,640 lithium. So it's always a good time to 416 00:20:39,640 --> 00:20:42,240 invest right when it's gone from being hated to no one's even 417 00:20:42,240 --> 00:20:44,400 talking about it. Yeah, yeah, low on the cost 418 00:20:44,400 --> 00:20:46,320 curve tends to be the, the safer way. 419 00:20:47,040 --> 00:20:49,880 Just to just to expand for a second on, on what you said 420 00:20:49,880 --> 00:20:53,200 though with, with the kind of harsh realization that we in 421 00:20:53,400 --> 00:20:57,120 Washington are much higher, you know, on aggregate and the cost 422 00:20:57,120 --> 00:21:00,680 curve than what we what we kind of thought we were. 423 00:21:00,760 --> 00:21:04,240 Is there any other kind of projects that start to tempt you 424 00:21:04,240 --> 00:21:07,120 or is it a, is it a bit touch and go and you got to kind of 425 00:21:07,240 --> 00:21:10,600 see where we where prices sort of sit and whether these 426 00:21:10,600 --> 00:21:12,960 companies can really pull in prices anymore? 427 00:21:13,640 --> 00:21:15,880 I think there's some, there's going to be some really hard 428 00:21:15,880 --> 00:21:20,280 decisions that need to get made in the next 612 months for some 429 00:21:20,280 --> 00:21:22,280 of these assets. And I think some of them 430 00:21:22,280 --> 00:21:24,640 probably need to go in to carry on maintenance to see the market 431 00:21:24,640 --> 00:21:27,960 rebalance. Yeah, when sort of go into which 432 00:21:27,960 --> 00:21:31,000 assets or anything like that. But yeah, I think, yeah, 433 00:21:31,880 --> 00:21:34,480 Australia is at the top end of the cost curve at the moment and 434 00:21:35,120 --> 00:21:39,040 some of the assets here probably do need to to to idle to see the 435 00:21:39,040 --> 00:21:43,600 market rebalance. How do you think about Aussie 436 00:21:43,920 --> 00:21:47,240 cost competitive more broadly? Not not being specific to the, 437 00:21:47,360 --> 00:21:50,320 to the lithium names, but it's something we'd spoken about on 438 00:21:50,320 --> 00:21:54,120 the show quite a bit lately with the, you know, the futurization 439 00:21:54,120 --> 00:21:56,760 of mines, the automation and, and all these sorts of things. 440 00:21:56,760 --> 00:22:00,920 But you've got very real sort of political kind of challenges, 441 00:22:00,920 --> 00:22:04,040 you know, for the for the cost structure of Australian mining 442 00:22:04,520 --> 00:22:07,960 more broadly. Are there are these sort of 443 00:22:07,960 --> 00:22:11,040 concerns pretty pressing for you or that you think that there's 444 00:22:11,040 --> 00:22:13,440 sort of shorter term quieter noises at the moment? 445 00:22:14,640 --> 00:22:17,080 Yeah. I mean, it's, it's not what I 446 00:22:17,080 --> 00:22:21,440 focus on, but as a, you know, as a participant in, in the market 447 00:22:21,440 --> 00:22:23,320 and someone who's really passionate about the mining 448 00:22:23,320 --> 00:22:27,120 sector, I think that we really need to invest and we need to 449 00:22:27,120 --> 00:22:31,800 have the right settings from a, a political and a a social 450 00:22:31,800 --> 00:22:34,800 perspective to continue to enable the mining sector to keep 451 00:22:34,800 --> 00:22:37,520 on delivering the fantastic windfall benefits that it's 452 00:22:37,520 --> 00:22:40,800 delivered really, you know, since the 1800s to, to 453 00:22:40,800 --> 00:22:43,440 Australia. And it's really concerning to me 454 00:22:43,680 --> 00:22:46,680 when I go to places overseas and see their cost structures, the 455 00:22:46,680 --> 00:22:49,480 amount of infrastructure they have, and then to come back and 456 00:22:49,480 --> 00:22:53,200 see some of our sectors here. And you know, yeah, it, it makes 457 00:22:53,200 --> 00:22:55,280 me concerned as as an investor as well. 458 00:22:55,640 --> 00:22:58,440 Yeah, for sure. Let's let's talk about gold. 459 00:22:58,440 --> 00:23:04,040 So you, you said it's not towards 16% of the of the, the 460 00:23:04,040 --> 00:23:06,920 benchmark that you follow and you know, equally a big part of 461 00:23:06,920 --> 00:23:11,440 your portfolio and I've sort of dug into it quite a bit. 462 00:23:11,440 --> 00:23:13,800 But do you consider yourself a gold bull at all? 463 00:23:13,800 --> 00:23:16,240 Or are you just working again from from the bottom up and 464 00:23:16,240 --> 00:23:19,440 picking companies you like and. Projects you like I'm a genesis 465 00:23:19,440 --> 00:23:23,640 bull I. Might hear that. 466 00:23:25,080 --> 00:23:28,680 So I mean, we we very, very much take the view that gold is a 467 00:23:28,680 --> 00:23:31,400 currency, not a commodity. Against that backdrop, it's very 468 00:23:31,400 --> 00:23:34,040 hard to have a fundamental view on supply and demand, although 469 00:23:34,040 --> 00:23:38,960 you can try, people do, but we're we're confident in our 470 00:23:38,960 --> 00:23:40,560 ability to try and pick stocks within that. 471 00:23:40,800 --> 00:23:44,320 Well, obviously when we're assessing valuation, we'll put 472 00:23:44,320 --> 00:23:47,680 in a range of different assumptions and, and look at 473 00:23:47,680 --> 00:23:51,280 what that spits out, including forward curves, broker estimates 474 00:23:51,400 --> 00:23:54,120 and spot as well and make our decisions on that view. 475 00:23:54,320 --> 00:23:57,120 But we're making decisions on a sector relative perspective from 476 00:23:57,120 --> 00:24:01,760 a sector relative perspective. So you know for the top holdings 477 00:24:01,760 --> 00:24:04,320 in our portfolio at the moment in the gold space, great land 478 00:24:04,320 --> 00:24:10,360 gold in Genesis, we see 50% upside ish route to the rest of 479 00:24:10,360 --> 00:24:13,520 the sector for those companies if they deliver what we think 480 00:24:13,520 --> 00:24:15,120 they can over the next three years. 481 00:24:15,120 --> 00:24:18,000 And so that's the basis on on which we invest and hold them, 482 00:24:18,040 --> 00:24:20,560 not a a top down view on the the gold press all. 483 00:24:21,160 --> 00:24:22,840 Right, let's let's dig into it some more. 484 00:24:22,840 --> 00:24:25,720 So, so Genesis, you've been a fan for for quite some time. 485 00:24:25,880 --> 00:24:30,000 Riley and the team have done a a pretty stellar job since they 486 00:24:30,240 --> 00:24:33,760 grabbed the wheel, you know, 3-3 or four years ago. 487 00:24:33,760 --> 00:24:37,480 Now that we go through it, you, you know, you obviously 488 00:24:37,640 --> 00:24:40,160 highlighted a, a pretty bullish outlook. 489 00:24:40,480 --> 00:24:42,840 I think you've got a much sort of stronger view on, on Tower 490 00:24:42,840 --> 00:24:47,480 Hill getting getting mined before I guess consensus does. 491 00:24:47,480 --> 00:24:51,440 You've got, you know, bullish views on each meal getting 492 00:24:51,440 --> 00:24:53,560 expanded as well in in due course. 493 00:24:53,560 --> 00:24:56,600 Can you can you go into a bit more detail on on why you are 494 00:24:56,960 --> 00:24:58,520 such a fan of the company? Yeah, sure. 495 00:24:58,520 --> 00:25:00,640 I mean, it's very simple, Genesis. 496 00:25:00,760 --> 00:25:05,160 In my view, there's 15,000,000 oz or so of resources and three 497 00:25:05,160 --> 00:25:07,600 in reserves and 3,000,000 ounces in reserves. 498 00:25:07,800 --> 00:25:10,480 The company in our view at the moment is being valued on a base 499 00:25:10,480 --> 00:25:15,920 case plan whereby the company produces at 325,000 oz into 500 00:25:15,920 --> 00:25:20,160 perpetuity or thereabouts and extracts that 3,000,000 oz. 501 00:25:20,440 --> 00:25:24,240 Given what's happened with the gold price in the past 1218 502 00:25:24,240 --> 00:25:28,240 months, even before that, that's just not a realistic scenario at 503 00:25:28,240 --> 00:25:29,920 all. If you look through Janice 504 00:25:30,040 --> 00:25:33,600 Genesis recent quarterly announcements, you can see very 505 00:25:33,600 --> 00:25:36,320 clearly that they're building or stockpiles, they're building 506 00:25:36,320 --> 00:25:37,760 inventory. They are they are meal 507 00:25:37,760 --> 00:25:40,720 constrained at the moment. When you've got that much 508 00:25:40,720 --> 00:25:43,840 inventory again 15,000,000 ounces of high quality inventory 509 00:25:44,600 --> 00:25:46,520 and you're meal constrained, there is only one thing that you 510 00:25:46,520 --> 00:25:50,880 do to to extract the cash flows bring for that MPV for 511 00:25:50,880 --> 00:25:52,960 shareholders and that is to expand meals. 512 00:25:52,960 --> 00:25:56,360 And so yeah, well, so yeah, I don't know. 513 00:25:56,360 --> 00:25:59,880 I strongly suspect that there'll be meal expansions both at 514 00:25:59,880 --> 00:26:05,280 Leonora and at Laverton in the next 12/18/24 months. 515 00:26:05,280 --> 00:26:08,760 And that will enable, you know, the company to bring forward 516 00:26:08,760 --> 00:26:12,160 Tower Hill Australia and a number of other assets as well 517 00:26:12,160 --> 00:26:15,400 that are currently not factored in by the market. 518 00:26:16,400 --> 00:26:19,000 And that will, yeah, consequently result in more 519 00:26:19,000 --> 00:26:22,120 production, more cash flow and a higher valuation. 520 00:26:22,320 --> 00:26:24,400 And we think the market's just just really playing catch up 521 00:26:24,400 --> 00:26:26,960 here. Pretty compelling. 522 00:26:27,360 --> 00:26:30,120 How do you, how do you anticipate the financing of of 523 00:26:30,120 --> 00:26:33,720 the expansions with sort of cash and time that they'll build up? 524 00:26:33,720 --> 00:26:37,360 Do you foresee, I mean, we've, we've spoken in the past about 525 00:26:37,360 --> 00:26:39,960 your views on, on companies with, with debt just to sort of 526 00:26:39,960 --> 00:26:41,960 round out the argument on, on Genesis? 527 00:26:42,880 --> 00:26:46,680 Yeah, it's it'll all be self funded if generating very strong 528 00:26:46,680 --> 00:26:48,400 cash flows given the gold price at the moment. 529 00:26:48,400 --> 00:26:50,240 I think that's probably one thing that really has changed in 530 00:26:50,240 --> 00:26:53,240 the past 12 months. And then the company will tell 531 00:26:53,240 --> 00:26:56,760 you this is they were prepared to take on debt over the next 532 00:26:56,760 --> 00:26:59,480 couple of years to to invest in those growth projects. 533 00:27:00,240 --> 00:27:03,200 There is no need for debt now, certainly no need for equity. 534 00:27:03,800 --> 00:27:06,960 And so we expect that to be all self funded and and as a 535 00:27:06,960 --> 00:27:10,080 consequence it will have a great per share impact. 536 00:27:10,600 --> 00:27:13,280 Genesis, if you guys are thinking of expanding your plant 537 00:27:13,280 --> 00:27:16,400 or any other miners out there, if you've got work that requires 538 00:27:16,400 --> 00:27:19,200 the best engineering capabilities the industry has to 539 00:27:19,200 --> 00:27:22,440 offer, it's time to call that the big guns, Quattro Project 540 00:27:22,480 --> 00:27:24,320 Engineering. JD These guys don't just 541 00:27:24,320 --> 00:27:26,920 engineer projects, they make everything run smoother. 542 00:27:27,160 --> 00:27:30,280 It's true mate, Quattro works at the surface, They work 543 00:27:30,280 --> 00:27:33,440 underground, from blue sky concepts through to the DFS 544 00:27:33,440 --> 00:27:36,760 construction and keeping the whole thing running without a 545 00:27:36,760 --> 00:27:40,040 hiccup to your operations. They'll design it, engineer it, 546 00:27:40,040 --> 00:27:41,280 source the gear, build the thing. 547 00:27:41,280 --> 00:27:43,720 Commissioner. Talk about expertise, JD. 548 00:27:44,040 --> 00:27:46,960 Mate, if you're a minor out there, you might be expanding 549 00:27:46,960 --> 00:27:49,640 your plant, you might be modernizing the circuit, or just 550 00:27:49,960 --> 00:27:52,960 tired of projects that drag on way longer than they should. 551 00:27:53,400 --> 00:27:55,160 Talk to the crew that actually gets the job done. 552 00:27:55,160 --> 00:27:58,880 Jeremy Palmer and the whole team at Quattro Project Engineering. 553 00:27:59,080 --> 00:28:01,280 Engineering experts, no headaches. 554 00:28:01,600 --> 00:28:04,040 Go Quattro. And I think the the sort of 555 00:28:04,200 --> 00:28:08,440 logical next place people would take that sort of debate is when 556 00:28:08,440 --> 00:28:11,160 they have expanded meals, where where do they look around just 557 00:28:11,160 --> 00:28:13,560 to just to fill it out if if need be. 558 00:28:13,560 --> 00:28:18,080 I know you've said they've got a a ton in in resource and and 559 00:28:18,080 --> 00:28:20,200 reserve already. Do you do you have a strong view 560 00:28:20,280 --> 00:28:22,520 here? If you speak to rally, say 561 00:28:22,520 --> 00:28:25,960 there's no need for for M and AI know he's you know can can make 562 00:28:25,960 --> 00:28:28,240 up his own mind. But how do you view that debate? 563 00:28:28,840 --> 00:28:32,320 I think it'll be assessed logically and if there's 564 00:28:32,320 --> 00:28:35,080 opportunities that make sense for shareholders such as 565 00:28:35,080 --> 00:28:38,720 ourselves and the management team who are highly aligned in 566 00:28:38,880 --> 00:28:41,480 in their equity ownership with the company, then they'll look 567 00:28:41,480 --> 00:28:43,720 to execute on them. And you know, companies like 568 00:28:43,720 --> 00:28:47,560 Magnetic Lock, Focus Lock, Bright Star, there's even some 569 00:28:47,560 --> 00:28:50,000 Anglo assets in that part of the world that I think could be 570 00:28:50,000 --> 00:28:52,520 interesting. Yeah, there's a huge amount of 571 00:28:52,520 --> 00:28:55,680 value to be created and unlocked and we'd support that. 572 00:28:56,400 --> 00:28:59,320 The obvious question I'm sure you'll ask me is on is on Vault. 573 00:29:00,920 --> 00:29:06,800 You said it just to preempt that, you know, I just don't see 574 00:29:06,800 --> 00:29:07,760 it. I don't see the relative 575 00:29:07,760 --> 00:29:11,000 valuation stacking up too well at the moment from a Genesis 576 00:29:11,000 --> 00:29:13,160 perspective. I think if the vault portfolio, 577 00:29:13,560 --> 00:29:16,040 I was, you know, singularly focused on that, that king of 578 00:29:16,040 --> 00:29:18,400 the Hills asset potentially that's when it starts to look 579 00:29:18,400 --> 00:29:20,720 more interesting from a Genesis perspective. 580 00:29:20,720 --> 00:29:24,640 But you know, back when there was a lot of speculation about 581 00:29:24,640 --> 00:29:26,440 that occurring, the gold price is much lower. 582 00:29:26,960 --> 00:29:29,720 And what that means in practical terms is the value of the mill 583 00:29:29,720 --> 00:29:33,560 was much higher. So now Genesis can go out and 584 00:29:34,440 --> 00:29:38,560 you know, build or expand their meals for a normal value of 585 00:29:38,560 --> 00:29:41,320 money compared to the the excess returns or the cash flow it's 586 00:29:41,320 --> 00:29:43,960 going to generate. Back then the value of that meal 587 00:29:43,960 --> 00:29:47,720 was was much higher in my view. So I think a lot's changed 588 00:29:47,720 --> 00:29:49,640 there. I think at a point in time 589 00:29:49,640 --> 00:29:53,640 potentially, but I think there's a lot more smaller and more 590 00:29:53,640 --> 00:29:57,840 value of creative deals to be done 1st and they also have to 591 00:29:57,840 --> 00:30:01,080 be assessed in light of what we talked about earlier with with 592 00:30:01,080 --> 00:30:04,600 their own portfolio. So, yeah, I expect them to be to 593 00:30:04,600 --> 00:30:07,520 be active in in the coming years and and that will form part of 594 00:30:07,520 --> 00:30:11,560 the part of the growth. What they really need in my view 595 00:30:11,560 --> 00:30:13,800 is some more grade around Laverton. 596 00:30:13,800 --> 00:30:18,840 So if if there was an asset that added some grade 2-3 grams per 597 00:30:18,840 --> 00:30:21,880 tonne to that meal, that could really, really see it. 598 00:30:22,360 --> 00:30:25,000 Yeah, produce some fantastic cash flows and also oxide 599 00:30:25,000 --> 00:30:27,400 material as well. So they acquired an asset called 600 00:30:27,400 --> 00:30:30,480 Bruno Lewis, good amount of oxide in there. 601 00:30:30,600 --> 00:30:34,040 As many will know oxide goes through the mill much faster 602 00:30:34,320 --> 00:30:37,240 than typical Hard Rock or. And so you meal capacity, whilst 603 00:30:37,240 --> 00:30:40,360 it might be 3.3 on paper or whatever the number is, you know 604 00:30:40,400 --> 00:30:42,800 you can often get up to 25% more if you're feeding oxide 605 00:30:42,800 --> 00:30:44,840 material. So that's another lever for some 606 00:30:44,840 --> 00:30:49,080 value creation there. You mentioned great land before 607 00:30:49,080 --> 00:30:52,360 as well and you, you did a write up not too long ago calling it 608 00:30:52,360 --> 00:30:57,200 the the deal of the decade and I think you, I think you added 609 00:30:57,200 --> 00:31:00,800 that have you, Ron is the best undeveloped resource in 610 00:31:00,800 --> 00:31:02,800 Australia. Am I right? 611 00:31:02,800 --> 00:31:05,440 I have had some people try and correct me on that since, but 612 00:31:06,000 --> 00:31:08,080 something about to stand by it, something about an iron ore 613 00:31:08,080 --> 00:31:10,720 asset, I'm not sure, but yeah, sure, I'll stand by it, yeah. 614 00:31:12,320 --> 00:31:14,000 Let's let's talk about the deal, right. 615 00:31:14,000 --> 00:31:18,080 So yeah, by by all accounts, it's it's been a pretty cracking 616 00:31:18,080 --> 00:31:19,480 deal. But firstly, just curious to 617 00:31:19,480 --> 00:31:22,840 hear it. It is still UK listed at at the 618 00:31:22,840 --> 00:31:25,200 moment, but you've been able to with the anticipation that it 619 00:31:25,200 --> 00:31:27,760 comes here in, in the June quarter get in already. 620 00:31:27,920 --> 00:31:30,280 Yeah, that's right. So we can invest up to 10% of 621 00:31:30,280 --> 00:31:34,240 our funds in what we call pre IPO opportunities, fits 622 00:31:34,240 --> 00:31:37,120 comfortably in that sleeve. Currently, I'm listed as you say 623 00:31:37,120 --> 00:31:40,200 and looking to list here June, July as we understand it, which 624 00:31:40,480 --> 00:31:44,040 we think will be fantastic for Aussie investors to be able to 625 00:31:44,440 --> 00:31:47,120 invest in Telfer and everyone. It's an amazing asset. 626 00:31:47,480 --> 00:31:49,760 For sure. And the, the, the natural 627 00:31:49,760 --> 00:31:53,360 question that that comes to mind is 20 million tons per annum at 628 00:31:53,520 --> 00:31:57,360 at Telfer. Obviously there's, there's a, a 629 00:31:57,360 --> 00:32:00,440 mine plan in place, a 15 sort of month mine plan that they've put 630 00:32:00,440 --> 00:32:04,080 forward already that is, is meant to spit out sort of over 631 00:32:04,080 --> 00:32:09,120 400,000 gold equivalent oz, a bit under 400,000 gold oz. 632 00:32:09,120 --> 00:32:12,760 And you know, the, the expansion sort of starts to to happen 633 00:32:12,760 --> 00:32:16,760 after that heavier on in in due course should come online. 634 00:32:16,760 --> 00:32:19,680 But how do you think they go about filling that meal? 635 00:32:19,680 --> 00:32:21,840 Do you do you have any reservations about it? 636 00:32:21,840 --> 00:32:23,840 Do you think from the offset there they're going to be 637 00:32:23,840 --> 00:32:26,400 filling it or doing a train, train and a half type thing? 638 00:32:26,400 --> 00:32:29,520 Yeah, I think the processing solution is still up in the air. 639 00:32:30,480 --> 00:32:32,680 There's still work happening to determine what the the best 640 00:32:32,680 --> 00:32:35,440 outcome is and the company will go through that engineering 641 00:32:35,440 --> 00:32:36,680 process. None of this stuff happens 642 00:32:36,680 --> 00:32:39,320 overnight. But what is very clear and was 643 00:32:39,320 --> 00:32:42,440 not clear to the market 612 months ago is that there is not 644 00:32:42,440 --> 00:32:45,320 going to be a production gap between Telfra and Have You On. 645 00:32:45,520 --> 00:32:48,360 That was a big concern that they'd have to idle both trains. 646 00:32:48,600 --> 00:32:52,400 There wouldn't be any free cash flow or production for a number 647 00:32:52,400 --> 00:32:56,920 of years whilst Haver On was being developed based on their 648 00:32:56,920 --> 00:33:00,640 recent resource update, mine plan update to a certain extent 649 00:33:00,920 --> 00:33:03,240 that is yeah, completely off the table. 650 00:33:03,520 --> 00:33:07,840 We and I think they'd be able to produce from Telfer at an 651 00:33:07,840 --> 00:33:12,120 annualized run rate of over 300,000 oz per annum of gold 652 00:33:12,240 --> 00:33:16,360 equivalent for the next 10 years based on the open pit stockpiles 653 00:33:16,360 --> 00:33:19,480 there as well as Telfer underground proper and West home 654 00:33:19,480 --> 00:33:22,720 underground. So we see that asset continuing 655 00:33:22,720 --> 00:33:27,560 to generate very healthy cash flows that will then fund Haver 656 00:33:27,560 --> 00:33:30,080 on to your point around Genesis earlier and what really creates 657 00:33:30,080 --> 00:33:33,000 value and resources that that self funding is, is is 658 00:33:33,000 --> 00:33:34,920 fantastic. Yeah. 659 00:33:34,920 --> 00:33:37,600 And they've got pretty hefty stockpiles as well, some some 660 00:33:37,600 --> 00:33:39,400 low grade, some some higher grade as well. 661 00:33:39,400 --> 00:33:42,840 That should help them ease their kind of way through that. 662 00:33:43,000 --> 00:33:46,720 How do you, how do you kind of benchmark their, their value 663 00:33:46,720 --> 00:33:50,320 obviously sort of 400,000 ounces is it's a decent amount. 664 00:33:50,320 --> 00:33:52,520 I think last time I looked in Aussie dollar terms they kept at 665 00:33:52,520 --> 00:33:57,640 2.7 or 2.8 ish. Dear, you know, you mentioned an 666 00:33:57,640 --> 00:34:00,840 upside there 50% before. Is that is that kind of how you 667 00:34:00,840 --> 00:34:03,400 think and how they should play in the in the Aussie market? 668 00:34:04,320 --> 00:34:06,160 Absolutely. I think it gets rewrited when it 669 00:34:06,160 --> 00:34:10,560 lists here based on where it's currently trading and and people 670 00:34:10,560 --> 00:34:13,159 getting more comfort around the sustainability of the production 671 00:34:13,159 --> 00:34:14,880 profile at Telford. There's still work to do there, 672 00:34:14,920 --> 00:34:20,239 but the the cards are out. When we look at valuation for a 673 00:34:20,239 --> 00:34:23,360 company like that, we'll assess it on a range of different 674 00:34:23,360 --> 00:34:25,679 metrics. Ultimately it's MPV, but in this 675 00:34:25,679 --> 00:34:28,080 case you need to look at the sum of the parts MPV for the 676 00:34:28,080 --> 00:34:31,719 existing Telfer asset and then have everyone at the back end 677 00:34:31,719 --> 00:34:34,600 given that it's not currently contributing to cash flows or 678 00:34:34,600 --> 00:34:36,760 production. So that's the way we assess it. 679 00:34:37,239 --> 00:34:40,560 We give a value to Telfer for the for the operations there 680 00:34:40,960 --> 00:34:44,239 that 300,000 oz or so over the next couple of years and then 681 00:34:44,480 --> 00:34:46,159 layer and have everyone over the top of that. 682 00:34:48,000 --> 00:34:50,360 If we, if we look at some of the other sort of major gold 683 00:34:50,360 --> 00:34:55,480 companies in your, your sort of ballpark you, you've said in the 684 00:34:55,480 --> 00:35:00,160 past that you, you don't hold Perseus and Wolf and you know, 685 00:35:00,160 --> 00:35:02,480 for, for jurisdiction risk, right. 686 00:35:02,480 --> 00:35:06,840 But these companies have, you know, today they've performed 687 00:35:06,840 --> 00:35:10,160 pretty, pretty strongly. But if you, if you look around 688 00:35:10,160 --> 00:35:13,520 that part of the world, there's, there's been some pretty big 689 00:35:13,520 --> 00:35:17,600 losses on, on companies that, you know, didn't draw the the 690 00:35:17,600 --> 00:35:21,360 right straw. So to say in in West Africa. 691 00:35:22,240 --> 00:35:24,240 How much of an ingrained view is that? 692 00:35:24,240 --> 00:35:27,680 Is there, is there a point where where value kind of beats out on 693 00:35:27,680 --> 00:35:29,480 these sorts of things? What's your sort of thinking 694 00:35:29,480 --> 00:35:31,800 toward African and. Jurisdictional risk, generally, 695 00:35:31,800 --> 00:35:33,760 we have an attitude across the market that we see. 696 00:35:33,760 --> 00:35:36,360 Every single stock is an opportunity for our investors as 697 00:35:36,360 --> 00:35:39,880 long as it meets a certain base level of criteria with respect 698 00:35:39,880 --> 00:35:43,320 to things like ESG and, and alignment of the board and the 699 00:35:43,320 --> 00:35:45,440 management team. And so we never rule anything 700 00:35:45,440 --> 00:35:48,880 out, never rule anything out. We just haven't felt the need to 701 00:35:48,880 --> 00:35:52,080 invest there given the the plethora of opportunities 702 00:35:52,080 --> 00:35:54,960 available in in Australia and in particular in WA. 703 00:35:56,240 --> 00:35:58,240 Yeah, continue to meet with those companies. 704 00:35:58,240 --> 00:36:03,080 Jeff and and Richard have done amazing jobs and added a huge 705 00:36:03,080 --> 00:36:05,360 amount of value, added massive amounts of cash to the balance 706 00:36:05,360 --> 00:36:07,320 sheet. You just can't ignore no matter 707 00:36:07,320 --> 00:36:10,600 where the asset's located. And you know, from our end of 708 00:36:10,600 --> 00:36:12,600 the situation, it seems like they're going to continue to do 709 00:36:12,600 --> 00:36:14,080 so. So if we'll continue to meet 710 00:36:14,080 --> 00:36:16,880 with them, if they start to stack up, maybe when Genesis 711 00:36:16,880 --> 00:36:20,200 hits 8 box or something, we'll we'll look at if we redeploy 712 00:36:20,200 --> 00:36:24,800 that capital somewhere else. Very interesting you, you speak 713 00:36:24,800 --> 00:36:28,120 a lot to quality management and you just mentioned it there 714 00:36:28,120 --> 00:36:31,440 again with with two teams that have demonstrated you've backed 715 00:36:31,440 --> 00:36:35,840 it in in Genesis and a host of other names. 716 00:36:36,560 --> 00:36:40,520 I guess the way I'd frame this question is you've, you've been, 717 00:36:40,520 --> 00:36:43,520 you've been a manager of money for, you know, the better part 718 00:36:43,520 --> 00:36:46,120 of a sort of decade and in the, the finance world for, you know, 719 00:36:46,200 --> 00:36:49,720 15 odd years or so. How has the the thinking toward 720 00:36:49,720 --> 00:36:52,840 backing proven management teams changed over that journey? 721 00:36:53,840 --> 00:36:57,520 Yeah, I think there's two things that I I value more highly the 722 00:36:58,200 --> 00:37:00,480 the further I go in my investing career and that is a good 723 00:37:00,480 --> 00:37:02,960 balance sheets and good management teams or 724 00:37:02,960 --> 00:37:05,160 conservatively managed balance sheets, I should say. 725 00:37:06,240 --> 00:37:10,440 Yeah, cannot be overstated. And you know, just knowing that 726 00:37:10,480 --> 00:37:13,400 you have a team that's highly aligned, highly competent and 727 00:37:13,400 --> 00:37:16,800 you can believe what they say is, is just yeah, it's a non 728 00:37:16,800 --> 00:37:20,160 negotiable for us and investing. And that's why we find that a 729 00:37:20,160 --> 00:37:24,200 lot of our portfolio is invested in companies both within the 730 00:37:24,200 --> 00:37:27,680 industrial space and resources where management are long term 731 00:37:27,680 --> 00:37:32,640 owners of the business, have significant skin in the game and 732 00:37:33,280 --> 00:37:35,480 you know have been there for a decent period of time as well. 733 00:37:36,840 --> 00:37:40,080 And the, and the point on debt is, is super fascinating, right? 734 00:37:40,080 --> 00:37:44,440 And it, and it feels more sort of, kind of it rings louder 735 00:37:44,440 --> 00:37:47,720 than, you know, than ever right now with everything that we've 736 00:37:47,720 --> 00:37:51,640 seen, like the, the speed at which share prices can, can 737 00:37:51,640 --> 00:37:56,720 fall, commodities can, can fall. I know you said it when we, when 738 00:37:56,720 --> 00:38:00,520 we spoke in, in Sydney a year or so ago, but a super, super clean 739 00:38:00,520 --> 00:38:03,760 balance sheet was your, your outlook in particular for, for 740 00:38:03,760 --> 00:38:08,080 single asset companies. I'm, I'm just keen to, to hear 741 00:38:08,080 --> 00:38:12,040 you expand on that because I think it's a, a point that's not 742 00:38:12,040 --> 00:38:14,640 often well enough appreciated across the market. 743 00:38:14,640 --> 00:38:16,120 I'm keen to learn more about it myself. 744 00:38:17,640 --> 00:38:19,880 I think, you know, corporate finance one O 1 will tell you 745 00:38:19,880 --> 00:38:23,680 that leverage is good and that it increases the equity IRR on a 746 00:38:23,680 --> 00:38:26,720 project in in reality that that doesn't work. 747 00:38:26,720 --> 00:38:29,120 And that particularly doesn't work in resources. 748 00:38:29,120 --> 00:38:32,120 And particularly when you have single asset resource companies, 749 00:38:32,640 --> 00:38:35,240 as you have highlighted. It's not to say it will never 750 00:38:35,240 --> 00:38:38,040 work, but you know, the track record speaks for itself. 751 00:38:38,400 --> 00:38:40,600 It's it's good for for one set of people. 752 00:38:40,600 --> 00:38:42,720 And that's the people that raise money, the investment banks, 753 00:38:43,160 --> 00:38:45,760 because they get multiple cracks of the cherry whenever this 754 00:38:45,760 --> 00:38:47,920 plays out. And so, yeah. 755 00:38:48,080 --> 00:38:49,920 I need to say where we're recording this interview from. 756 00:38:50,480 --> 00:38:51,520 That's right. Shout out to it. 757 00:38:53,760 --> 00:38:57,520 But yeah, so for, you know, we'd much rather companies, 758 00:38:57,520 --> 00:38:59,640 particularly with interest rates where they are at the moment, 759 00:39:00,160 --> 00:39:01,360 you know, pick up the phone, call us. 760 00:39:01,360 --> 00:39:05,160 We're here to provide equity. And you know, we, we don't want 761 00:39:05,160 --> 00:39:09,160 to see hedging, we don't want to see commodity or financial risk 762 00:39:09,160 --> 00:39:12,200 or leverage on top of commodity price risk and operating risk as 763 00:39:12,200 --> 00:39:13,720 well. We, we just don't think it's 764 00:39:14,280 --> 00:39:16,200 needed or appropriate in many instances. 765 00:39:16,800 --> 00:39:20,920 And so it's a key, yeah, red, red flag for us, I suppose. 766 00:39:21,040 --> 00:39:22,960 Yeah. The the point on hedging is when 767 00:39:22,960 --> 00:39:27,760 I want to tap into as well it yeah, it it ebbs and flies with 768 00:39:27,760 --> 00:39:30,680 the commodity price. And right now it's, you know, 769 00:39:30,680 --> 00:39:34,560 it's not in in fashion to have a, a big hedge book, that's for 770 00:39:34,560 --> 00:39:35,880 sure. What do you make of the, the 771 00:39:35,880 --> 00:39:38,960 trend of people actually, you know, buying them out? 772 00:39:39,640 --> 00:39:41,360 You've got it. Say there's a company you're 773 00:39:41,360 --> 00:39:43,160 invested in that that has a hedge book. 774 00:39:43,680 --> 00:39:46,280 Are you a fan of them cancelling that out? 775 00:39:46,280 --> 00:39:47,920 How do you think about? It, yeah, I mean it's easier to 776 00:39:47,920 --> 00:39:50,000 say you're not a fan of hedges when the gold price is ripped 777 00:39:50,000 --> 00:39:53,520 and they're on the nose. They definitely have a place 778 00:39:53,520 --> 00:39:57,320 from a from a risk perspective. And I think they've been used 779 00:39:57,320 --> 00:40:00,400 very effectively in the past by companies like Evolution who 780 00:40:00,400 --> 00:40:02,600 acquired assets, put in place hedging, paid it out. 781 00:40:03,040 --> 00:40:08,000 Did a great job. But you know, philosophically at 782 00:40:08,000 --> 00:40:10,000 the moment if you're investing in a gold company, it's because 783 00:40:10,000 --> 00:40:11,800 you want exposure to to the gold price. 784 00:40:11,800 --> 00:40:15,960 And I think having a management team that might have actively 785 00:40:15,960 --> 00:40:18,560 bet effectively against the gold price through a hedging profile 786 00:40:18,720 --> 00:40:19,960 is a little bit counterintuitive. 787 00:40:19,960 --> 00:40:23,520 So unless there's debt involved, which goes to our earlier point, 788 00:40:23,840 --> 00:40:24,960 I really don't see the need for it. 789 00:40:27,400 --> 00:40:30,160 Let's talk about a couple other Goldies. 790 00:40:30,160 --> 00:40:32,800 Some of them have quite a bit of hedging in place. 791 00:40:32,800 --> 00:40:36,960 I want to talk about Bellevue and tie in Spartan and Remelius. 792 00:40:36,960 --> 00:40:39,320 You made the call when we spoke and I think you're going to love 793 00:40:39,320 --> 00:40:41,440 hearing this. I mentioned it to you just 794 00:40:41,440 --> 00:40:45,320 before, but you, I think the way you sort of framed it was in 795 00:40:45,320 --> 00:40:48,520 about 3 or so years. Let's have a look again at what 796 00:40:48,520 --> 00:40:53,280 the grade is between Bellevue and the grade at Spartan is. 797 00:40:53,280 --> 00:40:57,280 And looking back, I can't remember if Pepper had been 798 00:40:57,280 --> 00:40:59,440 discovered or not at that point in time. 799 00:41:00,280 --> 00:41:03,040 But obviously Spartan has gone from strength to strength. 800 00:41:03,080 --> 00:41:04,840 And I'll disclose that I own a couple Spartan. 801 00:41:04,840 --> 00:41:09,800 But the, the other side of the coin there on, on Bellevue that 802 00:41:09,800 --> 00:41:10,920 that companies had a bit of trouble. 803 00:41:10,920 --> 00:41:15,320 They, you know, they paid down a portion of their, their debt, 804 00:41:15,320 --> 00:41:19,040 but ramp up is hard single asset companies and, and all that, 805 00:41:19,040 --> 00:41:23,600 like you, you mentioned before. What's your, what's your view on 806 00:41:24,840 --> 00:41:27,680 Bellevue? You know, I'll disclose maybe 807 00:41:27,680 --> 00:41:29,520 this interview comes out later, but they're in trading halt 808 00:41:29,520 --> 00:41:31,600 right now when we're recording this this interview. 809 00:41:31,960 --> 00:41:33,520 They're in an interesting position, right? 810 00:41:33,520 --> 00:41:36,560 They're they're one of the weakest performers today versus 811 00:41:36,560 --> 00:41:39,520 their, their benchmark. But that does, to an extent, 812 00:41:39,520 --> 00:41:42,840 make them attractive, right? Absolutely, Yeah, I mean, we're 813 00:41:42,840 --> 00:41:44,040 all waiting to see what happens there. 814 00:41:44,840 --> 00:41:47,960 We're not currently, currently shareholders, but we we know the 815 00:41:47,960 --> 00:41:49,880 guys really well, got a lot of respect for them. 816 00:41:50,400 --> 00:41:52,720 They've created a lot of value. It's looks like a great ore 817 00:41:52,720 --> 00:41:55,040 body. And so there's potentially an 818 00:41:55,040 --> 00:41:57,280 opportunity there. I think just in terms of what 819 00:41:57,280 --> 00:42:01,480 we'd really like to see from from that company from a 820 00:42:01,480 --> 00:42:06,000 disclosure perspective is what's changed with the ore body is it 821 00:42:06,000 --> 00:42:08,440 seems to be that there's the ore body that they thought was there 822 00:42:08,440 --> 00:42:11,040 fundamentally potentially is a bit different. 823 00:42:11,800 --> 00:42:15,680 And so, yeah, it's hard to at this point in time have 824 00:42:15,680 --> 00:42:18,720 confidence in in production targets and things like that 825 00:42:18,720 --> 00:42:22,640 without a recut in terms of stoke sizes dilution, you know, 826 00:42:22,920 --> 00:42:25,760 is a great appropriate, other modifying factors appropriate 827 00:42:26,160 --> 00:42:28,240 all that sort of stuff. So we'll look forward to 828 00:42:28,240 --> 00:42:31,880 engaging with the company in in hopefully the coming weeks or, 829 00:42:32,120 --> 00:42:34,280 or days and, and forming a view on that. 830 00:42:34,280 --> 00:42:36,040 And if there's a potential opportunity. 831 00:42:37,040 --> 00:42:41,360 I think there absolutely is. Yeah, that was my view sort of, 832 00:42:41,600 --> 00:42:43,720 you know, before them going into trading halt. 833 00:42:43,720 --> 00:42:45,520 There's been a production downgrade since then. 834 00:42:45,520 --> 00:42:48,120 But you know, the odd body is still there, an all time high 835 00:42:48,560 --> 00:42:50,440 gold price environment. They've got debt, they've got 836 00:42:50,440 --> 00:42:51,440 hedging that needs to be cleared. 837 00:42:51,440 --> 00:42:55,040 So we look at situations like this is a fantastic opportunity 838 00:42:55,040 --> 00:42:58,520 for our investors. Yeah, it's, it's an interesting 839 00:42:58,520 --> 00:42:59,480 one. I'm very keen to see how they 840 00:42:59,480 --> 00:43:02,200 they come out of this situation on on the flip side, we've got 841 00:43:02,200 --> 00:43:05,640 Spartan who just tied up the deal came to hear your thoughts 842 00:43:05,640 --> 00:43:09,440 on on what you make of the, the deal and the the sort of pro 843 00:43:09,440 --> 00:43:14,400 forma entity moving forward. Yeah, I think Simon Lawson and, 844 00:43:14,440 --> 00:43:18,920 and the Spartan guys have to be congratulated for, you know, not 845 00:43:18,920 --> 00:43:21,080 manufacturing, but you know, delivering such a great amount 846 00:43:21,080 --> 00:43:24,720 of value to shareholders and then rolling into Remelius and, 847 00:43:24,720 --> 00:43:26,920 and, and the value creation that they've seen since then. 848 00:43:26,920 --> 00:43:30,440 Very rarely do you get 2 entities combined or merge like 849 00:43:30,440 --> 00:43:33,160 that and, and see the share price perform as well as it has. 850 00:43:33,440 --> 00:43:36,920 And I think that's a real credit to Zappy and, and Simon, the way 851 00:43:36,920 --> 00:43:40,000 they've communicated that to the market and so on and so forth. 852 00:43:40,000 --> 00:43:42,800 We we don't own either at the moment, but. 853 00:43:43,160 --> 00:43:44,840 There might actually be synergies in this deal. 854 00:43:46,080 --> 00:43:50,360 Yeah, who knows, But yeah, it was an obvious one that had to 855 00:43:50,360 --> 00:43:51,800 happen. And it's good to say. 856 00:43:52,440 --> 00:43:55,720 It's good to say logical deals happen, is the thing I'd say 857 00:43:55,720 --> 00:43:58,520 there, yeah. And if we look across the gold 858 00:43:58,520 --> 00:44:03,520 space, M&A discipline has sort of been a theme of the minus. 859 00:44:03,520 --> 00:44:07,200 It's been sort of hammered into them since, since I guess the, 860 00:44:07,360 --> 00:44:10,880 the downfall of the 2012 cycle that that peeled off. 861 00:44:10,960 --> 00:44:13,760 And you know, you can sort of say that for the, the mining 862 00:44:13,760 --> 00:44:17,600 sort of complex more more broadly, but we have started to 863 00:44:17,600 --> 00:44:20,360 see more and more deals in, in the gold space. 864 00:44:20,360 --> 00:44:25,480 What do you make of the, the trend for, for these bigger now 865 00:44:25,520 --> 00:44:27,840 kind of mid cap dealers? Do you, do you see it playing 866 00:44:27,840 --> 00:44:31,160 through to the, the smaller end? Does it, does it worry you? 867 00:44:31,160 --> 00:44:32,840 Does it kind of excite you? How do you think about it? 868 00:44:33,480 --> 00:44:35,520 Oh, it excised me from an investment standpoint for sure. 869 00:44:35,520 --> 00:44:38,480 Yeah. I mean, would I be invested in a 870 00:44:38,480 --> 00:44:42,360 large cap company with very fully valued paper that, you 871 00:44:42,360 --> 00:44:44,760 know, was lacking production over the long term and had a 872 00:44:44,760 --> 00:44:47,560 short reserve life position? You know, we wouldn't be 873 00:44:47,560 --> 00:44:48,680 investing in those sort of companies. 874 00:44:48,680 --> 00:44:52,160 But if we can find companies that have high grade assets that 875 00:44:52,160 --> 00:44:54,760 they're drilling out like a Spartan, you know, that's a 876 00:44:54,760 --> 00:44:58,240 fantastic place to be because, you know, there's an immense 877 00:44:58,240 --> 00:44:59,840 amount of value creation that can happen there. 878 00:45:00,480 --> 00:45:03,200 So one of our recent investments in the portfolio has been a 879 00:45:03,200 --> 00:45:08,160 company called Gorilla Gold. They previously labyrinth and 880 00:45:08,160 --> 00:45:11,360 they, you know, they've got a suite of fantastic assets that 881 00:45:11,360 --> 00:45:13,600 would make sense in other people's hands. 882 00:45:13,600 --> 00:45:17,520 And we expect them to, to jewel his assets out, find more gold. 883 00:45:17,520 --> 00:45:21,040 And, you know, if it's not appropriate for them to, to 884 00:45:21,040 --> 00:45:23,280 monetize the asset through developing their own mills and, 885 00:45:23,280 --> 00:45:26,520 and, and mining them themselves, then they'll look to, to create 886 00:45:26,520 --> 00:45:28,360 value for shareholders by selling those assets. 887 00:45:28,360 --> 00:45:31,440 And so that it's an opportunity for us to recycle some of the 888 00:45:31,440 --> 00:45:34,800 capital from the Spartan into something like a gorilla. 889 00:45:34,800 --> 00:45:36,480 And Simon Lawson's involved in both. 890 00:45:37,280 --> 00:45:39,160 Some of those assets that might have only just picked up as 891 00:45:39,160 --> 00:45:41,120 well. So how do you, how do you sort 892 00:45:41,120 --> 00:45:46,080 of see the the timelines like the for instance, already just 893 00:45:46,200 --> 00:45:49,200 going going hammer and tongs with the with the drill rig and 894 00:45:49,320 --> 00:45:51,360 churning out results and stuff. Yeah, yeah, yeah. 895 00:45:51,800 --> 00:45:54,880 It's interesting, especially given that was obviously a 896 00:45:54,880 --> 00:45:59,920 Remilius asset as well. I think that history has shown 897 00:45:59,920 --> 00:46:03,840 us in WA Gold that having a different view on assets, on the 898 00:46:03,840 --> 00:46:06,400 geology, turning the jewelry around, drilling in a different 899 00:46:06,400 --> 00:46:10,920 direction, taking a different lens on on assets has created an 900 00:46:10,920 --> 00:46:13,160 immense amount of value. And so I wouldn't write any 901 00:46:13,160 --> 00:46:16,240 asset off on the basis that it's just been acquired for a certain 902 00:46:16,240 --> 00:46:18,760 price and we've just seen this so many times. 903 00:46:18,920 --> 00:46:20,280 Yeah. For sure. 904 00:46:20,440 --> 00:46:22,120 Let's talk about a couple of other commodities. 905 00:46:22,120 --> 00:46:27,040 So to start with copper, I know you said in the past year you're 906 00:46:27,040 --> 00:46:32,160 a fan of the copper dynamic. Let's go to North Queensland to 907 00:46:32,160 --> 00:46:35,720 start AIC mines, Aaron Colleron and the, and the team, you know, 908 00:46:35,920 --> 00:46:38,560 at the, at the smaller end of the spectrum, but sort of 909 00:46:38,560 --> 00:46:40,640 building a company kind of brick by brick. 910 00:46:40,760 --> 00:46:42,400 Are you, are you a shareholder there at the moment? 911 00:46:42,400 --> 00:46:42,680 We are. Yep. 912 00:46:42,680 --> 00:46:43,320 Yep. What are you? 913 00:46:43,520 --> 00:46:47,120 What are you sort of thinking going forward about the the 914 00:46:47,120 --> 00:46:49,880 assets they've got the the ability to to kind of scale that 915 00:46:49,880 --> 00:46:52,400 production? Yeah, we're excited about a one. 916 00:46:52,680 --> 00:46:54,920 I think it's a long term, long term story there. 917 00:46:55,000 --> 00:46:56,960 It's nothing's going to happen overnight. 918 00:46:57,240 --> 00:46:59,720 They're developing an asset called Jericho, which will 919 00:46:59,720 --> 00:47:02,240 double production on a on a three view. 920 00:47:02,280 --> 00:47:04,160 That's the reason why we are invested. 921 00:47:04,960 --> 00:47:06,240 It's it's a tough road to get there. 922 00:47:06,240 --> 00:47:08,720 It takes a long time to get these assets built and 923 00:47:08,720 --> 00:47:11,160 developed, but once they get there, there is going to be an 924 00:47:11,160 --> 00:47:13,520 immense amount of value for shareholders. 925 00:47:14,520 --> 00:47:17,520 We would like to see some more consolidation in that part of 926 00:47:17,520 --> 00:47:20,000 the world as well. There's a number of smaller 927 00:47:20,000 --> 00:47:24,680 assets that probably don't make sense to be listed as standalone 928 00:47:25,360 --> 00:47:28,120 entities. And so part of our thesis there 929 00:47:28,120 --> 00:47:31,000 is that Aaron will be able and the team will be able to execute 930 00:47:31,000 --> 00:47:34,440 on some some acquisitions over time and increases the size of 931 00:47:34,440 --> 00:47:36,600 that business. And to be frank, we've probably 932 00:47:36,600 --> 00:47:39,320 been a bit frustrated and I think Aaron would say he's been 933 00:47:39,760 --> 00:47:44,520 frustrated as well with how long it's taken to be able to execute 934 00:47:44,520 --> 00:47:46,720 on some of those. But you know, you can't force 935 00:47:46,720 --> 00:47:48,800 this stuff. You have to act in the best 936 00:47:48,800 --> 00:47:50,520 interest for shareholders. And if people want silly 937 00:47:50,520 --> 00:47:52,760 valuations then then you need to be prepared to walk away. 938 00:47:53,680 --> 00:47:55,560 Yeah, yeah, for sure. You kind of get the impression 939 00:47:55,560 --> 00:47:57,920 it's a it's going to be an overnight success story that 940 00:47:57,920 --> 00:47:59,720 takes kind of 10 years. I think that's for. 941 00:47:59,720 --> 00:48:03,800 That team maybe 2026 story. If we if we go to the other end 942 00:48:03,800 --> 00:48:10,320 of the the ASX copper names sand fire they've you know, it really 943 00:48:10,320 --> 00:48:14,200 does seem overnight become a very large company and they've 944 00:48:14,640 --> 00:48:18,200 yeah, since since management, new management came in in like 945 00:48:18,200 --> 00:48:21,880 21 early 22. The the assets have started to 946 00:48:21,880 --> 00:48:25,240 perform in a Matteo sort of come online and it's it's doing well. 947 00:48:25,920 --> 00:48:29,160 What do you think about the next leg for for that business? 948 00:48:32,160 --> 00:48:34,760 We're not currently investors. I think Brendan Harris has done 949 00:48:34,760 --> 00:48:36,960 an amazing job with that with that company. 950 00:48:38,680 --> 00:48:42,400 What would really sort of change the game for us, and speaking as 951 00:48:42,400 --> 00:48:46,120 a former geologist here, is some exploration success in bots. 952 00:48:46,960 --> 00:48:49,800 I think they've only very recently come to terms with some 953 00:48:49,800 --> 00:48:53,240 of the genesis of that ore body and what that means or the 954 00:48:53,240 --> 00:48:55,960 implications of how the ore body formed for exploration. 955 00:48:56,440 --> 00:48:58,840 And yeah, we're pretty excited to see what they can do and 956 00:48:58,840 --> 00:49:02,960 tracking that closely. Yeah, there's obviously, yeah, 957 00:49:02,960 --> 00:49:04,320 further acquisitions that could make. 958 00:49:04,320 --> 00:49:07,960 I'm not across the the opportunities out there for that 959 00:49:07,960 --> 00:49:09,480 company. It sort of sits above our our 960 00:49:09,680 --> 00:49:12,480 market cup spectrum. But yeah, they've done a great 961 00:49:12,480 --> 00:49:13,560 job. And I think given the 962 00:49:13,920 --> 00:49:16,560 credibility now and the valuation that the market 963 00:49:16,560 --> 00:49:19,040 subscribed to that business, he's got a lot of options to go 964 00:49:19,080 --> 00:49:20,440 out there and and do something else. 965 00:49:20,440 --> 00:49:22,440 So I'm excited to see what what that is. 966 00:49:23,480 --> 00:49:26,240 So maybe it'll be one of the other companies you're holding. 967 00:49:26,240 --> 00:49:29,240 If we look at some of the the smaller names, we've seen more 968 00:49:29,240 --> 00:49:31,520 and more of these Canadians sort of come come across. 969 00:49:31,520 --> 00:49:32,960 But what? What are the copper names that 970 00:49:33,280 --> 00:49:34,680 kind of get you excited at the moment? 971 00:49:34,880 --> 00:49:37,960 Yeah, it's, I mean, it's crazy when you look at the market at 972 00:49:37,960 --> 00:49:40,080 the moment, it's every single gold company. 973 00:49:40,080 --> 00:49:42,160 If you're producing any gold at all, it seems like you've got a 974 00:49:42,160 --> 00:49:44,160 billion dollar market cap and everyone loves you. 975 00:49:44,720 --> 00:49:48,080 You transition that to base metals and there's a number of 976 00:49:48,080 --> 00:49:49,800 companies that that no one cares about. 977 00:49:49,800 --> 00:49:52,640 We own several of them and we're excited about their prospects. 978 00:49:53,240 --> 00:49:58,200 So AMI or really metals, we own Firefly and A1M as as you 979 00:49:58,200 --> 00:50:01,080 mentioned earlier of those, the one that I'm most excited about 980 00:50:01,400 --> 00:50:05,160 over the short term is Aurelia. That company today has got a 981 00:50:05,160 --> 00:50:06,160 market cap. I haven't charged. 982 00:50:06,160 --> 00:50:07,760 It's probably down 10%. It's. 983 00:50:08,720 --> 00:50:12,640 Don't look. Yeah, very under, you know, 350 984 00:50:12,640 --> 00:50:14,680 million bucks. They've got close to $100 985 00:50:14,680 --> 00:50:16,560 million of net cash on the balance sheet. 986 00:50:16,760 --> 00:50:19,000 They've got a huge amount of production growth coming up from 987 00:50:19,000 --> 00:50:21,520 a high quality asset they're developing called Federation. 988 00:50:21,520 --> 00:50:25,920 I was on site 3 weeks ago up in COBA, which was great. 989 00:50:26,000 --> 00:50:27,680 I mean, it's all coming together very well. 990 00:50:27,720 --> 00:50:31,280 And we, we see that business generating 100 million bucks of 991 00:50:31,280 --> 00:50:35,320 free cash flow on what is today an AV of 250 with a substantial 992 00:50:35,320 --> 00:50:38,480 mine life. And so it's opportunities like 993 00:50:38,480 --> 00:50:41,160 that for us that are really, really interesting. 994 00:50:41,160 --> 00:50:44,880 And you know, potentially, you know, as if we're sitting here 995 00:50:44,880 --> 00:50:46,400 to use time, some of these companies might be more 996 00:50:46,400 --> 00:50:50,080 mainstream, like we're talking about Genesis and Vault and some 997 00:50:50,080 --> 00:50:51,160 of the other goals at the moment. 998 00:50:51,160 --> 00:50:53,560 We just think there's a massive opportunity there. 999 00:50:54,880 --> 00:50:57,640 Some people have sort of been banging the table on on 1000 00:50:57,640 --> 00:51:01,640 consolidation in, in the COBA. Is that like, is that something 1001 00:51:01,640 --> 00:51:03,960 you think needs to happen for some of these names? 1002 00:51:03,960 --> 00:51:07,160 Is it way overhyped? What do you what do you kind of 1003 00:51:07,160 --> 00:51:08,800 make of, you know, there's some bigger names. 1004 00:51:08,800 --> 00:51:11,080 There's a lot of. Smaller names, yeah, there's a 1005 00:51:11,080 --> 00:51:12,880 couple. So Poly Metals, what else you 1006 00:51:12,880 --> 00:51:15,800 got Peel Mac as well. Yeah. 1007 00:51:17,920 --> 00:51:21,440 Look, we don't invest on any company on the basis that it's 1008 00:51:21,440 --> 00:51:24,160 going to be taken over. We like to invest in companies 1009 00:51:24,160 --> 00:51:26,400 that can stand on their own 2 feet, generate a lot of cash. 1010 00:51:26,800 --> 00:51:28,640 And it really certainly fits that bill. 1011 00:51:30,480 --> 00:51:34,200 Yeah, I think Peel and, you know, makes a lot of sense for a 1012 00:51:34,200 --> 00:51:37,080 couple of companies in that region, but there's just no onus 1013 00:51:37,080 --> 00:51:40,920 on anyone to to really move. What's the, where's the, where's 1014 00:51:40,920 --> 00:51:43,600 the pressure point to say, you know, to bring companies 1015 00:51:43,600 --> 00:51:46,400 together. M and AI find anyway, it's it's, 1016 00:51:46,600 --> 00:51:49,600 you know, you need someone to be heavily motivated for, to take 1017 00:51:49,600 --> 00:51:53,440 place and sitting there trying to time time stuff, it's very, 1018 00:51:53,440 --> 00:51:55,280 very hard. So, yeah, we're not sort of 1019 00:51:56,600 --> 00:51:59,320 expecting anything imminently there, but there are deals that 1020 00:51:59,320 --> 00:52:00,600 obviously do make a lot of sense. 1021 00:52:00,600 --> 00:52:03,360 And particularly with with Peel, I mean, they've got some pretty 1022 00:52:03,360 --> 00:52:05,000 good resources and they don't have a meal. 1023 00:52:05,000 --> 00:52:07,720 So you don't need to be rocket scientists to work out that 1024 00:52:07,720 --> 00:52:10,040 there's synergies there. And they're probably not of a 1025 00:52:10,040 --> 00:52:11,920 scale that they can finance their own meal. 1026 00:52:12,680 --> 00:52:16,120 Yeah, speaks to your point on on a sort of forced or pressured 1027 00:52:16,120 --> 00:52:19,720 seller in in Newmont putting the clock on themselves with with 1028 00:52:19,720 --> 00:52:23,200 great land and it leading to a great outcome for for one party 1029 00:52:23,200 --> 00:52:24,680 at least. Yep, Yep. 1030 00:52:24,960 --> 00:52:28,400 Another company and another commodity that I'm keen to get 1031 00:52:28,400 --> 00:52:33,200 your thoughts on is Next Gen. these this is I think in your 1032 00:52:33,200 --> 00:52:37,040 words, the best undeveloped resource of any commodity 1033 00:52:37,200 --> 00:52:38,080 globally. It's. 1034 00:52:38,320 --> 00:52:42,960 As distinct from everyone here. To be clear, it's it is a 1035 00:52:42,960 --> 00:52:46,720 cracker bite by all accounts. Yeah, let's let's start with the 1036 00:52:46,720 --> 00:52:48,320 resource. They've they've done drilling 1037 00:52:48,320 --> 00:52:51,080 lately and people have got pretty excited about it. 1038 00:52:51,160 --> 00:52:55,400 I mean, the, the production profile that was already kind of 1039 00:52:55,400 --> 00:52:56,960 established was, was quite enormous. 1040 00:52:56,960 --> 00:52:58,760 But what does that kind of add to the story for you? 1041 00:53:00,560 --> 00:53:02,760 It's a good question. I mean, actually on a on a 1042 00:53:02,760 --> 00:53:04,120 spreadsheet, I don't think it adds much, right? 1043 00:53:04,400 --> 00:53:07,160 Because, you know, you're not going to build a bigger meal, 1044 00:53:07,160 --> 00:53:10,280 you're not going to increase the production rate for the 1st 10 1045 00:53:10,280 --> 00:53:13,400 years in our view anyway. So I don't think it adds much 1046 00:53:13,400 --> 00:53:15,960 from a spreadsheet, but it does make it much more strategically 1047 00:53:15,960 --> 00:53:20,400 compelling for someone like a BHP who will take a very long 1048 00:53:20,400 --> 00:53:23,760 term view on these assets and the expansion potential down the 1049 00:53:23,760 --> 00:53:25,960 track. Yeah. 1050 00:53:25,960 --> 00:53:29,440 So I think that that part of the world is underexplored and 1051 00:53:29,440 --> 00:53:32,120 they've demonstrated now that there's a, you know, highly 1052 00:53:32,120 --> 00:53:36,080 prospective second asset there that that should in time be a 1053 00:53:36,080 --> 00:53:37,960 mine. But the thing that's really 1054 00:53:37,960 --> 00:53:41,280 proving difficult there isn't the geology or the quality of 1055 00:53:41,280 --> 00:53:43,800 the resource as as you know, it's, it's the permitting 1056 00:53:43,800 --> 00:53:46,680 process and and getting it to market. 1057 00:53:46,680 --> 00:53:50,720 So, you know, we're not expecting production until 2029. 1058 00:53:50,840 --> 00:53:52,400 There's no free cash flow until then. 1059 00:53:52,720 --> 00:53:54,960 And in this sort of environment, people want free cash flow. 1060 00:53:54,960 --> 00:53:58,240 They want to see, you know, free cash or cash being added to the 1061 00:53:58,240 --> 00:54:00,280 balance sheet every quarter. And that's fair enough, but it's 1062 00:54:00,280 --> 00:54:02,120 hard for hard for those development companies at the 1063 00:54:02,120 --> 00:54:04,640 moment. We're seeing next Gen. fall from 1064 00:54:04,640 --> 00:54:09,720 what 1213 bucks to to six today. Nothing has changed in our view. 1065 00:54:10,280 --> 00:54:12,320 And so, yeah, you can probably imagine where we're taking 1066 00:54:12,320 --> 00:54:13,800 advantage of that for our investors at the moment. 1067 00:54:14,840 --> 00:54:18,920 What's a uranium place where you flush through the the decks 1068 00:54:18,920 --> 00:54:21,960 long, long term when you think about it and you you build your 1069 00:54:21,960 --> 00:54:24,400 your MPV of the the company. Yeah. 1070 00:54:24,400 --> 00:54:27,120 So we use 85 in our MPV's base case. 1071 00:54:27,120 --> 00:54:30,040 Obviously once again do a range of scenarios around that. 1072 00:54:30,680 --> 00:54:33,680 What spot today 64 term price is 80. 1073 00:54:33,680 --> 00:54:36,000 So we do see it going up over time. 1074 00:54:36,240 --> 00:54:40,320 We think 8085 is the minimum incentive prices required for 1075 00:54:40,320 --> 00:54:43,640 brownfields project like a Paladin Lang Heinrich as an 1076 00:54:43,640 --> 00:54:47,520 example. And probably 90 to 100 is, is 1077 00:54:47,520 --> 00:54:50,120 the incentive price for for greenfields projects that will 1078 00:54:50,120 --> 00:54:54,120 be required post 2030. So that's the way we're thinking 1079 00:54:54,120 --> 00:54:55,520 about it. Yeah. 1080 00:54:55,520 --> 00:54:58,320 It's, it's been a frustrating one, the uranium trade, but 1081 00:54:58,320 --> 00:55:00,680 we're we're very confident nothing's really changed from a 1082 00:55:00,680 --> 00:55:02,720 fundamental supply and demand perspective. 1083 00:55:02,720 --> 00:55:04,960 And so we're backing ourselves in on that one. 1084 00:55:06,080 --> 00:55:09,720 Politically, there's been a fair bit of upheaval in in Canada, 1085 00:55:09,880 --> 00:55:12,680 you know, at a federal level over the past kind of six 1086 00:55:12,680 --> 00:55:15,320 months. And they've got an election at 1087 00:55:15,320 --> 00:55:19,160 the end of this month already. Does does that kind of give you 1088 00:55:19,160 --> 00:55:21,520 give you hope or have you heard any kind of whispers that 1089 00:55:21,840 --> 00:55:25,160 there's a different regime? We'd already seen the, you know, 1090 00:55:25,240 --> 00:55:30,360 Carney, the new progressive, if you like, later trying to do 1091 00:55:30,360 --> 00:55:34,560 what they possibly can to to win a few votes and and push mining 1092 00:55:34,560 --> 00:55:36,840 along the kind of trajectory that it needs to be for for 1093 00:55:36,840 --> 00:55:39,000 Canada. And you can imagine on the the 1094 00:55:39,000 --> 00:55:41,280 other side of the aisle, it's even more of that kind of voice. 1095 00:55:41,280 --> 00:55:43,200 Do you, do you have faith in that kind of do? 1096 00:55:44,520 --> 00:55:50,440 You have faith in politicians. I mean, for an asset like this, 1097 00:55:50,440 --> 00:55:52,760 I mean the world. The world needs the uranium. 1098 00:55:54,040 --> 00:55:57,720 You know, it's, it's a fantastic high quality resource with low 1099 00:55:57,720 --> 00:56:00,120 environmental impacts. It's going to benefit the local 1100 00:56:00,120 --> 00:56:02,160 communities, it's going to benefit the government. 1101 00:56:02,200 --> 00:56:05,240 It's going to, you know, produce low carbon electricity for the 1102 00:56:05,240 --> 00:56:07,000 world. I'll say no reason why it 1103 00:56:07,000 --> 00:56:12,000 shouldn't be accelerated and you know, investment allowed and I'm 1104 00:56:12,000 --> 00:56:14,160 hopeful that it gets accelerated, but I I don't know 1105 00:56:14,160 --> 00:56:15,480 not. Gonna hold your breath on that 1106 00:56:15,480 --> 00:56:16,760 one. No, I won't hold my breath. 1107 00:56:16,880 --> 00:56:20,320 If if we come back to Australia on the uranium names, there are 1108 00:56:20,320 --> 00:56:24,280 some pretty, pretty hefty shorts on on Boss and and Paladin. 1109 00:56:24,560 --> 00:56:26,800 Yeah, at at the moment. What do you what do you make of 1110 00:56:26,800 --> 00:56:31,360 the the sentiment around the the uranium trade being so kind of 1111 00:56:31,360 --> 00:56:34,360 whipsaw over the past year? Yeah, yeah, it's frustrating. 1112 00:56:34,360 --> 00:56:36,880 One, I think a lot of people liken it to the lithium boom. 1113 00:56:36,880 --> 00:56:38,400 I've spoken to a lot of investors. 1114 00:56:38,400 --> 00:56:41,800 Often my mates will call me off and say, hey, what's this 1115 00:56:41,920 --> 00:56:43,520 uranium thing? Is it like lithium, you know, 1116 00:56:43,640 --> 00:56:45,640 five years ago? Should I, should I invest my 1117 00:56:45,640 --> 00:56:48,640 house in it? And they're just so 1118 00:56:48,640 --> 00:56:52,400 fundamentally different because with lithium, the demand side 1119 00:56:52,400 --> 00:56:55,280 can move around much more. It's dependent on EB sales or 1120 00:56:55,680 --> 00:56:58,840 stationary storage sales, all that sort of stuff, which is 1121 00:56:59,320 --> 00:57:02,400 susceptible to consumer sentiment in any given year. 1122 00:57:02,400 --> 00:57:05,400 And what's happening in global auto markets, once you turn a 1123 00:57:05,400 --> 00:57:07,800 nuclear power plant on, you don't turn it off, right, 1124 00:57:07,800 --> 00:57:09,440 because of the capital costs involved. 1125 00:57:09,680 --> 00:57:13,680 And so being able to forecast demand for uranium is very, very 1126 00:57:13,680 --> 00:57:17,040 easy. You know, my 4 year old could do 1127 00:57:17,040 --> 00:57:19,240 it pretty easily. It's 2 to 3% per annum or 1128 00:57:19,240 --> 00:57:21,680 slightly under at the moment, but moving to that level. 1129 00:57:22,000 --> 00:57:26,000 And so, yeah, much more steady demand outlook. 1130 00:57:26,200 --> 00:57:30,120 And then on the supply side, we've seen just a huge explosion 1131 00:57:30,480 --> 00:57:33,320 in supply that frankly we didn't see coming out of Africa in 1132 00:57:33,320 --> 00:57:35,600 lithium. And you know, the Chinese have 1133 00:57:35,600 --> 00:57:38,960 once again proven their ability to to bring on huge amounts of 1134 00:57:38,960 --> 00:57:42,880 supply very quickly to fulfil their needs in the uranium 1135 00:57:42,880 --> 00:57:44,560 space. We've just been talking about 1136 00:57:44,560 --> 00:57:46,640 next Gen. not producing until 2039. 1137 00:57:47,520 --> 00:57:52,800 There is assets like Paladin and Boss that are struggling to come 1138 00:57:52,800 --> 00:57:54,760 back into production as quickly as what we thought. 1139 00:57:54,760 --> 00:57:58,000 So on both counts, you're just looking at a very different 1140 00:57:58,000 --> 00:58:00,320 market. And we're still burning roughly 1141 00:58:00,320 --> 00:58:05,000 25% more uranium every year in power plants than is being drawn 1142 00:58:05,000 --> 00:58:07,600 out of the ground. So for us, that's just a 1143 00:58:08,000 --> 00:58:11,840 fantastic setup. Do you put it kind of to to 1144 00:58:11,840 --> 00:58:15,840 market dynamics as well the the impacts of sort of like faster 1145 00:58:15,840 --> 00:58:19,680 money if you like that these short positions can can build so 1146 00:58:19,680 --> 00:58:23,080 quickly or do you think it is kind of to your point they're 1147 00:58:23,280 --> 00:58:27,880 quite a Broadway of playing a short term bearish outlook on on 1148 00:58:27,880 --> 00:58:30,840 uranium? Look, I don't know about the 1149 00:58:30,840 --> 00:58:32,840 short, short interest. I mean, with those, both those 1150 00:58:32,840 --> 00:58:35,680 companies, they're going through ramp UPS and as as we all know, 1151 00:58:35,760 --> 00:58:39,080 any company going through a ramp up is a very high risk time and 1152 00:58:39,080 --> 00:58:40,440 more often than not, things do go wrong. 1153 00:58:40,480 --> 00:58:43,080 Unfortunately, it's rare for a company to bring on an asset 1154 00:58:43,080 --> 00:58:45,720 very smoothly. And sorry, I can understand why 1155 00:58:46,160 --> 00:58:47,400 there's that level of short interest. 1156 00:58:47,400 --> 00:58:49,840 It does surprise me though, given where the uranium price is 1157 00:58:49,840 --> 00:58:51,760 and what the outlook is over the medium term. 1158 00:58:51,760 --> 00:58:54,680 And certainly if there's any sort of positive news in both 1159 00:58:54,680 --> 00:58:58,480 those companies, then investors will be or short sellers will be 1160 00:58:58,760 --> 00:59:00,240 in for a pretty rude shock, I think. 1161 00:59:00,760 --> 00:59:03,960 But but you know, particularly in the case of Paladin, there's 1162 00:59:03,960 --> 00:59:05,720 issues potentially around funding. 1163 00:59:06,600 --> 00:59:11,440 So, yeah, so there's, I can see it from both, both sides, yeah. 1164 00:59:12,760 --> 00:59:16,800 If we if we look at a couple more commodities quickly just to 1165 00:59:16,920 --> 00:59:22,720 to fly through you called METCO your your best or your highest 1166 00:59:23,600 --> 00:59:26,040 conviction pick I believe for for 2025. 1167 00:59:26,040 --> 00:59:28,400 Yep, standing strong. Yeah, it was always AQ four 1168 00:59:28,400 --> 00:59:29,040 story man. Yeah. 1169 00:59:30,280 --> 00:59:32,040 It's going. To come in the market Q4, don't 1170 00:59:32,200 --> 00:59:33,520 worry about. That when you when you look 1171 00:59:33,520 --> 00:59:37,640 around the names out there, what White Haven like just looking at 1172 00:59:37,640 --> 00:59:41,440 it earlier today and seeing the, the, the metrics on which the 1173 00:59:41,640 --> 00:59:45,640 the 30% sale got got done. You know that that outweighs the 1174 00:59:45,640 --> 00:59:48,160 market cap of the whole company right now. 1175 00:59:48,680 --> 00:59:51,080 Is that one kind of lens you, you look at it through or do you 1176 00:59:51,080 --> 00:59:54,600 think you know, with contingent payments and and other sort of, 1177 00:59:56,240 --> 00:59:59,960 you know, costs coming up and where, where they are given 1178 00:59:59,960 --> 01:00:02,120 they're a sort of met and thermal player, there is pretty 1179 01:00:02,120 --> 01:00:04,920 valid concerns. What do you mean by concerns? 1180 01:00:05,200 --> 01:00:07,640 For for the company being able to make some of those payments 1181 01:00:07,680 --> 01:00:09,760 and. Stuff, Yeah, I mean, gosh, with 1182 01:00:09,760 --> 01:00:12,200 the with the coke and call price where it is and the thermal call 1183 01:00:12,200 --> 01:00:14,160 price where it is, I mean, there's no secret they're not 1184 01:00:14,160 --> 01:00:16,200 generating a huge amount of cash. 1185 01:00:16,520 --> 01:00:17,760 Do we think they need to raise equity? 1186 01:00:17,760 --> 01:00:20,040 Absolutely not. We, we think they'll get through 1187 01:00:20,240 --> 01:00:22,000 and, and make those payments no problems. 1188 01:00:23,160 --> 01:00:25,640 And you know, you have to look at the counterparties there as 1189 01:00:25,640 --> 01:00:27,120 well, right? They're not exactly, you know, 1190 01:00:27,120 --> 01:00:28,120 you're not dealing with Glencore. 1191 01:00:29,320 --> 01:00:31,880 So I think I think that'll be fine. 1192 01:00:32,160 --> 01:00:35,000 What's really interesting for me is just what's happened to the 1193 01:00:35,000 --> 01:00:39,680 Metco market and the fact that you now have Coronado and 1194 01:00:39,680 --> 01:00:44,880 Stanmore in far worse positions. And, and really, I mean, if 1195 01:00:44,880 --> 01:00:47,880 Whitehaven are only generating a little bit of cash, then 1196 01:00:47,880 --> 01:00:50,240 companies like Coronado and Stanmore are in a world of pain. 1197 01:00:50,240 --> 01:00:54,520 And So what does that mean for, for royalties for for costs in 1198 01:00:54,520 --> 01:00:57,000 the sector? What can we do to increase the 1199 01:00:57,000 --> 01:00:59,680 overall competitiveness and, and what does it mean for M&A as 1200 01:00:59,680 --> 01:01:01,760 well? So I think there's some, some 1201 01:01:01,760 --> 01:01:03,760 great opportunities there. The best time to invest in a 1202 01:01:03,760 --> 01:01:07,560 commodity is when it's in the cost curve like lithium now like 1203 01:01:07,560 --> 01:01:11,160 Coke and Co now it's not when it's trading 10 times marginal 1204 01:01:11,160 --> 01:01:13,080 costs like lithium was at 80,000. 1205 01:01:13,360 --> 01:01:16,000 And so these are the sorts of periods that create 1206 01:01:16,000 --> 01:01:18,720 opportunities for people that want to take a three-year view. 1207 01:01:20,240 --> 01:01:24,720 Amazing one one other commodity I know you'd talked about and 1208 01:01:24,720 --> 01:01:29,280 you were you were quite excited was kind of bauxite, aluminium 1209 01:01:29,400 --> 01:01:32,760 supply chain and Metro mining was the the name you'd 1210 01:01:32,760 --> 01:01:33,440 mentioned. Now. 1211 01:01:33,960 --> 01:01:36,560 These guys have have leverage in, in certain sort of parts. 1212 01:01:36,560 --> 01:01:40,520 They, you know, previously were heavily operationally and 1213 01:01:40,520 --> 01:01:43,240 financially leveraged, but things are kind of changed 1214 01:01:43,240 --> 01:01:45,480 there. You're still still a holder and 1215 01:01:45,480 --> 01:01:47,440 still sort of along for the journey. 1216 01:01:47,560 --> 01:01:48,320 Absolutely. Yeah. 1217 01:01:48,320 --> 01:01:52,760 We love the metros, another good example of of why debt is very 1218 01:01:52,760 --> 01:01:55,240 good for investment banks and fees and increases number of 1219 01:01:55,240 --> 01:01:57,560 shares an issue. There's a lot of shares an issue 1220 01:01:57,560 --> 01:02:00,800 for Metro Mining and we are in yes, a fair proportion of them. 1221 01:02:01,480 --> 01:02:05,200 We're very positive on the outlook their operations as far 1222 01:02:05,200 --> 01:02:08,840 as where we continue to ramp up really well post the wet season, 1223 01:02:09,200 --> 01:02:11,880 the books are prices held in incredibly well. 1224 01:02:13,040 --> 01:02:16,840 We don't expect spot bauxite pricing to stay where it is 1225 01:02:16,840 --> 01:02:19,040 forever. We value the company very 1226 01:02:19,040 --> 01:02:22,000 conservatively and on that basis we think the business can 1227 01:02:22,000 --> 01:02:26,000 generate 125 mil of post tax free cash flow per annum. 1228 01:02:27,040 --> 01:02:30,000 The the current cap is only two 5300. 1229 01:02:30,880 --> 01:02:33,960 And so yeah, we're really looking forward to seeing a 1230 01:02:33,960 --> 01:02:36,560 couple of quarters, hopefully the next two quarters where 1231 01:02:36,560 --> 01:02:39,520 there's forty $50 million put away to the balance sheet. 1232 01:02:39,520 --> 01:02:44,880 And we think that, you know, that will see a big reaction in 1233 01:02:44,880 --> 01:02:47,280 the equity or it should because people have to stand up and take 1234 01:02:47,280 --> 01:02:49,840 notice then. Fantastic. 1235 01:02:49,840 --> 01:02:52,400 I think I've taken more enough, more than enough of your time. 1236 01:02:52,400 --> 01:02:53,680 Fisty. Thanks for making the time for 1237 01:02:53,680 --> 01:02:55,320 us and coming on money of mine. No worries. 1238 01:02:55,320 --> 01:02:58,520 Thank you. Awesome, big thanks to Fisty for 1239 01:02:58,520 --> 01:03:02,360 for joining us on money of Mine and I hope the money miners out 1240 01:03:02,360 --> 01:03:03,800 there got a kick out of that one. 1241 01:03:03,800 --> 01:03:06,160 And a massive thank you as well to all our partners. 1242 01:03:06,160 --> 01:03:09,880 Firstly, JRX, get your tickets discounts in the show notes. 1243 01:03:09,880 --> 01:03:12,560 The conference will be at the back end of May. 1244 01:03:13,080 --> 01:03:16,280 And to the legend at Mineral Mining Services, Grounded Sandy 1245 01:03:16,280 --> 01:03:20,120 Ground Support, CRA Insurance, K Drew, WA Water, Quattro, Project 1246 01:03:20,120 --> 01:03:23,520 Engineering, KCA Site Services, Black Drummond Drilling 1247 01:03:23,520 --> 01:03:26,480 Services, Cross Boundary Energy, Hodoro Hodoro. 1248 01:03:27,040 --> 01:03:29,680 Information contained in this episode of Money of Mine is of 1249 01:03:29,680 --> 01:03:31,760 general nature only and does not take into account the 1250 01:03:31,760 --> 01:03:35,360 objectives, financial situation or needs of any particular 1251 01:03:35,360 --> 01:03:37,400 person. Before making any investment 1252 01:03:37,400 --> 01:03:40,480 decision, you should consult with your financial advisor and 1253 01:03:40,480 --> 01:03:43,600 consider how appropriate the advice is to your objectives, 1254 01:03:43,840 --> 01:03:45,800 financial situation and needs.